**Exhibit 10.8**

 

**MEZZANINE B 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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| **MEZZANINE B LOAN AGREEMENT** |                                                                                     | 9                                                             |
|--------------------------------|------------------------------------------------------------------------------------------|---------------------------------------------------------------|
| ** **                     |                                                                                     |                                                          |
| **I.**                         |         DEFINITIONS;  PRINCIPLES OF CONSTRUCTION |                                                          | 9 |
|                           |                                                                                     |                                                          |   |
|                           | Section 1.1                                                                              | Definitions                                                   |   | 9 |
|                           | Section 1.2                                                                              | Principles of Construction                                    |   | 41 |
|                           |                                                                                     |                                                          |   |   |
| **II.**                        |         GENERAL  TERMS                           |                                                          | 42 |
|                           |                                                                                     |                                                          |   |
|                           | Section 2.1                                                                              | Loan Commitment; Disbursement  to Borrower                    |   | 42 |
|                           | 2.1.1                                                                                    | Agreement to Lend and Borrow                                  |   | 42 |
|                           | 2.1.2                                                                                    | Single Disbursement to  Borrower                              |   | 42 |
|                           | 2.1.3                                                                                    | The Note, Pledge Agreement  and Loan Documents                |   | 42 |
|                           | 2.1.4                                                                                    | Use of Proceeds                                               |   | 42 |
|                           | Section 2.2                                                                              | Interest; Loan Payments; Late  Payment Charge                 |   | 42 |
|                           | 2.2.1                                                                                    | Payments                                                      |   | 42 |
|                           | 2.2.2                                                                                    | Interest Calculation                                          |   | 44 |
|                           | 2.2.3                                                                                    | Eurodollar Rate  Unascertainable; Illegality; Increased Costs |   | 44 |
|                           | 2.2.4                                                                                    | Intentionally Omitted                                         |   | 46 |
|                           | 2.2.5                                                                                    | Payment on Maturity Date                                      |   | 46 |
|                           | 2.2.6                                                                                    | Payments after Default                                        |   | 46 |
|                           | 2.2.7                                                                                    | Late Payment Charge                                           |   | 47 |
|                           | 2.2.8                                                                                    | Usury Savings                                                 |   | 47 |
|                           | 2.2.9                                                                                    | Foreign Taxes                                                 |   | 47 |
|                           | Section 2.3                                                                              | Prepayments                                                   |   | 49 |
|                           | 2.3.1                                                                                    | Voluntary Prepayments                                         |   | 49 |
|                           | 2.3.2                                                                                    | Liquidation Events                                            |   | 50 |
|                           | 2.3.3                                                                                    | Prepayments After Default                                     |   | 51 |
|                           | 2.3.4                                                                                    | Making of Payments                                            |   | 51 |
|                           | 2.3.5                                                                                    | Application of Principal  Prepayments                         |   | 51 |
|                           | Section 2.4                                                                              | Interest Rate Hedging  Agreement                              |   | 52 |
|                           | Section 2.5                                                                              | Intentionally Omitted                                         |   | 55 |
|                           | Section 2.6                                                                              | Release of an Individual  Property                            |   | 55 |
|                           | Section 2.7                                                                              | Intentionally Omitted                                         |   | 56 |
|                           | Section 2.8                                                                              | Release on Payment in Full                                    |   | 56 |
|                           | Section 2.9                                                                              | Substitution of Properties                                    |   | 56 |
|                                |                                                                                          |                                                               |  |  |  |

 

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| **III.** |          MORTGAGE  BORROWER DISTRIBUTIONS |                                | 64     |
|----------|----------------------------------------------------------------------------------------|-------------------------------------|--------|
|     |                                                                                   |                                |   |
|     | Section 3.1                                                                            | Mortgage Borrower  Distributions    |   | 64 |
|     |                                                                                   |                                |   |   |
| **IV.**  |          REPRESENTATIONS  AND WARRANTIES  |                                | 64     |
|     |                                                                                   |                                |   |
|     | Section 4.1                                                                            | Borrower Representations            |   | 64 |
|     | 4.1.1                                                                                  | Organization                        |   | 64 |
|     | 4.1.2                                                                                  | Proceedings                         |   | 65 |
|     | 4.1.3                                                                                  | No Conflicts                        |   | 65 |
|     | 4.1.4                                                                                  | Litigation                          |   | 65 |
|     | 4.1.5                                                                                  | Agreements                          |   | 66 |
|     | 4.1.6                                                                                  | Solvency                            |   | 66 |
|     | 4.1.7                                                                                  | Full and Accurate Disclosure        |   | 67 |
|     | 4.1.8                                                                                  | No Plan Assets                      |   | 67 |
|     | 4.1.9                                                                                  | Compliance                          |   | 67 |
|     | 4.1.10                                                                                 | Financial Information               |   | 68 |
|     | 4.1.11                                                                                 | Condemnation                        |   | 68 |
|     | 4.1.12                                                                                 | Federal Reserve Regulations         |   | 68 |
|     | 4.1.13                                                                                 | Utilities and Public Access         |   | 68 |
|     | 4.1.14                                                                                 | Not a Foreign Person                |   | 69 |
|     | 4.1.15                                                                                 | Separate Lots                       |   | 69 |
|     | 4.1.16                                                                                 | Assessments                         |   | 69 |
|     | 4.1.17                                                                                 | Enforceability                      |   | 69 |
|     | 4.1.18                                                                                 | No Prior Assignment                 |   | 69 |
|     | 4.1.19                                                                                 | Insurance                           |   | 70 |
|     | 4.1.20                                                                                 | Use of Property                     |   | 70 |
|     | 4.1.21                                                                                 | Certificate of Occupancy;  Licenses |   | 70 |
|     | 4.1.22                                                                                 | Flood Zone                          |   | 70 |
|     | 4.1.23                                                                                 | Physical Condition                  |   | 70 |
|     | 4.1.24                                                                                 | Boundaries                          |   | 71 |
|     | 4.1.25                                                                                 | Leases                              |   | 71 |
|     | 4.1.26                                                                                 | Title                               |   | 72 |
|     | 4.1.27                                                                                 | Intentionally Omitted               |   | 73 |
|     | 4.1.28                                                                                 | Filing and Recording Taxes          |   | 73 |
|          |                                                                                        |                                     |        |  |  |

 

2

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|        | 4.1.29                                                                    | Intentionally Omitted                                       |   | 73     |
|--------|---------------------------------------------------------------------------|-------------------------------------------------------------|--------|--------|
|   | 4.1.30                                                                    | Management Agreement                                        |   | 73     |
|   | 4.1.31                                                                    | Illegal Activity                                            |   | 73     |
|   | 4.1.32                                                                    | No Change in Facts or  Circumstances; Disclosure            |   | 74     |
|   | 4.1.33                                                                    | Investment Company Act                                      |   | 74     |
|   | 4.1.34                                                                    | Principal Place of Business;  State of Organization         |   | 74     |
|   | 4.1.35                                                                    | Single Purpose Entity                                       |   | 74     |
|   | 4.1.36                                                                    | Business Purposes                                           |   | 82     |
|   | 4.1.37                                                                    | Taxes                                                       |   | 82     |
|   | 4.1.38                                                                    | Forfeiture                                                  |   | 82     |
|   | 4.1.39                                                                    | Environmental Representations  and Warranties               |   | 83     |
|   | 4.1.40                                                                    | Taxpayer Identification  Number                             |   | 83     |
|   | 4.1.41                                                                    | OFAC                                                        |   | 83     |
|   | 4.1.42                                                                    | Ground Lease Representations                                |   | 83     |
|   | 4.1.43                                                                    | Deposit and Securities  Accounts                            |   | 84     |
|   | 4.1.44                                                                    | Embargoed Person                                            |   | 84     |
|   | 4.1.45                                                                    | Affiliates                                                  |   | 85     |
|   | 4.1.46                                                                    | Mortgage Borrower and  Mezzanine A Borrower Representations |   | 85     |
|   | 4.1.47                                                                    | List of Mortgage Loan  Documents                            |   | 85     |
|   | 4.1.48                                                                    | Condominium Representations                                 |   | 85     |
|   | 4.1.49                                                                    | List of Mezzanine A Loan  Documents                         |   | 85     |
|   | 4.1.50                                                                    | Mortgage Loan Event of  Default                             |   | 86     |
|   | 4.1.51                                                                    | Mezzanine A Loan Event of  Default                          |   | 86     |
|   | Section 4.2                                                               | Survival of Representations                                 |   | 86     |
|   |                                                                      |                                                        |   |   |
| **V.** |          BORROWER  COVENANTS |                                                        | 86     |
|   |                                                                      |                                                        |   |
|   | Section 5.1                                                               | Affirmative Covenants                                       |   | 86     |
|   | 5.1.1                                                                     | Existence; Compliance with  Legal Requirements              |   | 86     |
|   | 5.1.2                                                                     | Taxes and Other Charges                                     |   | 87     |
|   | 5.1.3                                                                     | Litigation                                                  |   | 89     |
|   | 5.1.4                                                                     | Access to the Properties                                    |   | 89     |
|   | 5.1.5                                                                     | Notice of Default                                           |   | 89     |
|   | 5.1.6                                                                     | Cooperate in Legal  Proceedings                             |   | 89     |
|        |                                                                           |                                                             |        |        |  |

 

3

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|        | 5.1.7       | Award and Insurance Benefits                               |   | 89  |
|--------|-------------|------------------------------------------------------------|--------|-----|
|   | 5.1.8       | Further Assurances                                         |   | 89  |
|   | 5.1.9       | Mortgage and Intangible Taxes                              |   | 90  |
|   | 5.1.10      | Financial Reporting                                        |   | 90  |
|   | 5.1.11      | Business and Operations                                    |   | 94  |
|   | 5.1.12      | Costs of Enforcement                                       |   | 94  |
|   | 5.1.13      | Estoppel Statement                                         |   | 94  |
|   | 5.1.14      | Loan Proceeds                                              |   | 96  |
|   | 5.1.15      | Performance by Borrower                                    |   | 96  |
|   | 5.1.16      | Confirmation of  Representations                           |   | 96  |
|   | 5.1.17      | Leasing Matters                                            |   | 97  |
|   | 5.1.18      | Management Agreement                                       |   | 100 |
|   | 5.1.19      | Environmental Covenants                                    |   | 102 |
|   | 5.1.20      | Alterations                                                |   | 103 |
|   | 5.1.21      | Intentionally Omitted                                      |   | 105 |
|   | 5.1.22      | OFAC                                                       |   | 105 |
|   | 5.1.23      | Ground Lease Covenants                                     |   | 105 |
|   | 5.1.24      | Mortgage Loan Reserve Funds                                |   | 106 |
|   | 5.1.25      | Notices                                                    |   | 106 |
|   | 5.1.26      | Special Distributions                                      |   | 106 |
|   | 5.1.27      | Mortgage Borrower and  Mezzanine A Borrower Covenants      |   | 106 |
|   | 5.1.28      | Mortgage Loan and Mezzanine A  Loan Estoppels              |   | 107 |
|   | 5.1.29      | Intentionally Omitted                                      |   | 108 |
|   | 5.1.30      | Condominium Covenants                                      |   | 108 |
|   | Section 5.2 | Negative Covenants                                         |   | 109 |
|   | 5.2.1       | Liens                                                      |   | 109 |
|   | 5.2.2       | Dissolution                                                |   | 110 |
|   | 5.2.3       | Change in Business                                         |   | 110 |
|   | 5.2.4       | Debt Cancellation                                          |   | 110 |
|   | 5.2.5       | Zoning                                                     |   | 111 |
|   | 5.2.6       | No Joint Assessment                                        |   | 111 |
|   | 5.2.7       | Name, Identity, Structure, or  Principal Place of Business |   | 111 |
|   | 5.2.8       | ERISA                                                      |   | 111 |
|        |             |                                                            |        |     |  |

 

4

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|                                                                           | 5.2.9                                                                                       | Affiliate Transactions                                               |   | 112    |
|---------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|----------------------------------------------------------------------|--------|--------|
|                                                                      | 5.2.10                                                                                      | Transfers                                                            |   | 113    |
|                                                                      | 5.2.11                                                                                      | Permitted Transfer                                                   |   | 116    |
|                                                                      | 5.2.12                                                                                      | Limitations on Securities  Issuances                                 |   | 118    |
|                                                                      | 5.2.13                                                                                      | Distributions                                                        |   | 118    |
|                                                                      | 5.2.14                                                                                      | Refinancing or Prepayment of  the Mortgage Loan and Mezzanine A Loan |   | 119    |
|                                                                      | 5.2.15                                                                                      | Acquisition of the Mortgage Loan  and Mezzanine A Loan               |   | 119    |
|                                                                      | 5.2.16                                                                                      | Material Agreements                                                  |   | 120    |
|                                                                      |                                                                                        |                                                                 |   |   |
| **VI.**                                                                   |          INSURANCE;  CASUALTY AND CONDEMNATION |                                                                 | 121    |
|                                                                      |                                                                                        |                                                                 |   |
|                                                                      | Section 6.1                                                                                 | Insurance                                                            |   | 121    |
|                                                                      | Section 6.2                                                                                 | Casualty                                                             |   | 127    |
|                                                                      | Section 6.3                                                                                 | Condemnation                                                         |   | 127    |
|                                                                      | Section 6.4                                                                                 | Restoration                                                          |   | 128    |
|                                                                      | Section 6.5                                                                                 | Rights of Lender                                                     |   | 128    |
|                                                                      |                                                                                        |                                                                 |   |   |
| **VII.**                                                                  |          RESERVE  FUNDS                        |                                                                 | 128    |
|                                                                      |                                                                                        |                                                                 |   |
|                                                                      | Section 7.1                                                                                 | Repairs                                                              |   | 128    |
|                                                                      | Section 7.2                                                                                 | Impositions and Imposition  Deposits                                 |   | 129    |
|                                                                      | Section 7.3                                                                                 | Replacement Reserves                                                 |   | 129    |
|                                                                      | Section 7.4                                                                                 | Debt Service Reserve Funds                                           |   | 129    |
|                                                                      | Section 7.5                                                                                 | Mortgage Debt Service Escrows                                        |   | 131    |
|                                                                      | Section 7.6                                                                                 | Interest Rate Hedging  Reserves                                      |   | 131    |
|                                                                      | Section 7.7                                                                                 | Other Mortgage Reserves                                              |   | 131    |
|                                                                      | Section 7.8                                                                                 | Reserve Funds, Generally                                             |   | 132    |
|                                                                      | Section 7.9                                                                                 | Letters of Credit                                                    |   | 133    |
|                                                                      | 7.9.1                                                                                       | Delivery of Letters of Credit                                        |   | 133    |
|                                                                      | 7.9.2                                                                                       | Provisions Regarding Letters  of Credit                              |   | 133    |
|                                                                      |                                                                                        |                                                                 |   |   |
| **VIII.**           DEFAULTS |                                                                                        | 134                                                                  |
|                                                                      |                                                                                        |                                                                 |   |
|                                                                      | Section 8.1                                                                                 | Event of Default                                                     |   | 134    |
|                                                                      | Section 8.2                                                                                 | Remedies                                                             |   | 139    |
|                                                                      | Section 8.3                                                                                 | Remedies Cumulative; Waivers                                         |   | 140    |
|                                                                      | Section 8.4                                                                                 | Right to Cure Defaults                                               |   | 140    |
|                                                                      | Section 8.5                                                                                 | Mortgage Loan Reserve Funds                                          |   | 141    |
|                                                                           |                                                                                             |                                                                      |        |        |  |

 

5

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|         | Section 8.6                                                               | Power of Attorney                                                                 |   | 141    |
|---------|---------------------------------------------------------------------------|-----------------------------------------------------------------------------------|--------|--------|
|    |                                                                      |                                                                              |   |   |
| **IX.** |          SPECIAL  PROVISIONS |                                                                              | 141    |
|    |                                                                      |                                                                              |   |
|    | Section 9.1                                                               | Sale of Notes and  Securitization                                                 |   | 141    |
|    | Section 9.2                                                               | Disclosure Document  Cooperation                                                  |   | 143    |
|    | Section 9.3                                                               | Servicer                                                                          |   | 143    |
|    | Section 9.4                                                               | Exculpation                                                                       |   | 144    |
|    | Section 9.5                                                               | Limitation on Borrower’s  Obligations                                        |   | 147    |
|    | Section 9.6                                                               | Reallocation of Loan Amounts                                                      |   | 148    |
|    | Section 9.7                                                               | Syndication                                                                       |   | 149    |
|    | 9.7.1                                                                     | Syndication                                                                       |   | 149    |
|    | 9.7.2                                                                     | Sale of Loan, Co-Lenders,  Participations and Servicing                           |   | 149    |
|    | 9.7.3                                                                     | Cooperation in Syndication                                                        |   | 152    |
|    | 9.7.4                                                                     | Payment of Agent’s, and  Co-Lender’s Expenses                           |   | 154    |
|    | 9.7.5                                                                     | Intentionally Omitted                                                             |   | 154    |
|    | 9.7.6                                                                     | No Joint Venture                                                                  |   | 154    |
|    | Section 9.8                                                               | Restructuring of Loan and/or  Mezzanine A Loan; Creation of New Mezzanine Loan(s) |   | 154    |
|    | Section 9.9                                                               | Contributions and Waivers                                                         |   | 156    |
|    | Section 9.10                                                              | Certain Additional Rights of  Lender; VCOC                                        |   | 160    |
|    | Section 9.11                                                              | Mortgage Loan Defaults                                                            |   | 161    |
|    | Section 9.12                                                              | Mezzanine A Loan Defaults                                                         |   | 162    |
|    | Section 9.13                                                              | Intentionally Omitted                                                             |   | 163    |
|    | Section 9.14                                                              | Intercreditor Agreements                                                          |   | 163    |
|    | Section 9.15                                                              | Discussions with Mortgage  Lender and Mezzanine A Lender                          |   | 164    |
|    | Section 9.16                                                              | Independent Approval Rights                                                       |   | 164    |
|    |                                                                      |                                                                              |   |   |
| **X.**  |         MISCELLANEOUS             |                                                                              | 165    |
|    |                                                                      |                                                                              |   |
|    | Section 10.1                                                              | Survival                                                                          |   | 165    |
|    | Section 10.2                                                              | Lender’s Discretion                                                          |   | 165    |
|    | Section 10.3                                                              | Governing Law                                                                     |   | 165    |
|    | Section 10.4                                                              | Modification, Waiver in  Writing                                                  |   | 166    |
|    | Section 10.5                                                              | Delay Not a Waiver                                                                |   | 166    |
|    | Section 10.6                                                              | Notices                                                                           |   | 167    |
|         |                                                                           |                                                                                   |        |        |  |

 

6

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|                                                                      | Section 10.7  | Trial by Jury                                                            |   | 168    |
|----------------------------------------------------------------------|---------------|--------------------------------------------------------------------------|--------|--------|
|                                                                 | Section 10.8  | Headings                                                                 |   | 168    |
|                                                                 | Section 10.9  | Severability                                                             |   | 168    |
|                                                                 | Section 10.10 | Preferences                                                              |   | 169    |
|                                                                 | Section 10.11 | Waiver of Notice                                                         |   | 169    |
|                                                                 | Section 10.12 | Remedies of Borrower                                                     |   | 169    |
|                                                                 | Section 10.13 | Expenses; Indemnity                                                      |   | 169    |
|                                                                 | Section 10.14 | Schedules and Exhibits  Incorporated                                     |   | 171    |
|                                                                 | Section 10.15 | Offsets, Counterclaims and  Defenses                                     |   | 171    |
|                                                                 | Section 10.16 | No Joint Venture or  Partnership; No Third Party Beneficiaries           |   | 171    |
|                                                                 | Section 10.17 | Counterparts                                                             |   | 172    |
|                                                                 | Section 10.18 | Waiver of Marshalling of  Assets; Cross-Default; Cross Collateralization |   | 172    |
|                                                                 | Section 10.19 | Waiver of Counterclaim                                                   |   | 172    |
|                                                                 | Section 10.20 | Conflict; Construction of  Documents; Reliance                           |   | 172    |
|                                                                 | Section 10.21 | Brokers and Financial  Advisors                                          |   | 173    |
|                                                                 | Section 10.22 | Prior Agreements                                                         |   | 173    |
|                                                                 | Section 10.23 | Joint and Several Liability                                              |   | 173    |
|                                                                 | Section 10.24 | USA Patriot Act                                                          |   | 173    |
|                                                                 |          |                                                                     |   |   |
| EXHIBIT A  (Borrower Entities)                                       |          | 177                                                                      |
|                                                                 |          |                                                                     |
| EXHIBIT B  (Lender Approved Standard Form of Lease)                  |          | 178                                                                      |
|                                                                 |          |                                                                     |
| EXHIBIT C  (Allocated Loan Amounts)                                  |          | 179                                                                      |
|                                                                 |          |                                                                     |
| EXHIBIT D  (Ground Leases)                                           |          | 180                                                                      |
|                                                                 |          |                                                                     |
| SCHEDULE  4.1.1 (Organizational Chart)                               |          | 181                                                                      |
|                                                                 |          |                                                                     |
| SCHEDULE  4.1.4 (Litigation)                                         |          | 182                                                                      |
|                                                                 |          |                                                                     |
| SCHEDULE  4.1.9 (Exceptions to Compliance with Legal  Requirements)  |          | 183                                                                      |
|                                                                 |          |                                                                     |
| SCHEDULE  4.1.10 (Financial Information Exceptions)                  |          | 184                                                                      |
|                                                                 |          |                                                                     |
| SCHEDULE  4.1.13 (Utilities and Public Access Exceptions)            |          | 185                                                                      |
|                                                                 |          |                                                                     |
| SCHEDULE  4.1.21 (Certificate of Occupancy and Licenses  Exceptions) |          | 186                                                                      |
|                                                                 |          |                                                                     |
| SCHEDULE  4.1.23 (Physical Condition Exceptions)                     |          | 187                                                                      |

 

7

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| SCHEDULE 4.1.25  (Lease Representation Exceptions)    |   | 188    |
|-------------------------------------------------------|--------|--------|
|                                                  |   |   |
| SCHEDULE  4.1.32 (Changes in Facts or Circumstances)  |   | 189    |
|                                                  |   |   |
| SCHEDULE  4.1.47 (List of Mortgage Loan Documents)    |   | 190    |
|                                                  |   |   |
| SCHEDULE  4.1.48 (Condominium Properties)             |   | 198    |
|                                                  |   |   |
| SCHEDULE  4.1.49 (List of Mezzanine A Loan Documents) |   | 199    |
|                                                  |   |   |
| SCHEDULE  5.1.20 (Capital Improvements)               |   | 200    |
|                                                  |   |   |
| SCHEDULE  5.2.10(c)(vii) Bank Loan Pledged Interests  |   | 201    |

 

8

----

 

**MEZZANINE B LOANAGREEMENT**

 

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

 

WHEREAS,Lender is willing to make the Loan to Borrower, subject to and in accordancewith the terms of this Agreement and the other Loan Documents (as hereinafterdefined);

 

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

 

**I.****              DEFINITIONS;PRINCIPLES OF CONSTRUCTION**

 

Section 1.1             Definitions.

 

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

 

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

 

“Accounts”shall mean, collectively, the escrow or reserve accounts established under 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.

 

9

----

 

“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 such date, without suchindividuals having made, or having any obligation to make, an independentinquiry or investigation with respect to the matter in question.

 

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

 

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

 

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

 

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

 

“AffiliatedManager” shall mean any property manager which is an Affiliate of, or in whichBorrower, Mortgage Borrower, Mezzanine A Borrower, Mezzanine A Principal,Principal or Guarantor has, directly or indirectly, any legal, beneficial oreconomic 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 isreasonably acceptable to Lender, as the same may be amended, restated,replaced, supplemented or otherwise modified from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Bank LoanIntercreditor Agreement” shall mean that certain Intercreditor Agreement, datedas of the date hereof, between and among Lender, Mezzanine A 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 adopted andpromulgated pursuant thereto (as the same may be amended from time to time), orany successor thereto.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Co-LendingAgreement” shall mean the co-lending agreement entered into between Lender,individually as a Co-Lender and as Agent and the other Co-Lenders in the eventof a Syndication, as the same may be further supplemented modified, amended orrestated.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            if such entity is alimited partnership, any general partnership interest the Transfer of whichresults in (A) one or more Lehman Entities and/or Tishman Speyer ControlPersons not having control of such entity or (B) the

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“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 B 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 or requirements,as well as common law, that, at any time, apply to Borrower or any IndividualProperty and relate to Hazardous Materials, including, without limitation, theComprehensive Environmental Response, Compensation and Liability Act and theResource Conservation and Recovery Act.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Fitch” shallmean Fitch, Inc.

 

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

 

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

 

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

 

“Gross Incomefrom Operations” shall mean the gross cash receipts derived from the ownershipand operation of the Properties, from whatever source, including, but notlimited to, the Rents, utility charges, escalations, forfeited securitydeposits (but only to the extent applied to rent payable under the applicableLease, as and when payable), interest on credit accounts, service fees orcharges, license fees, parking fees, rent concessions or credits, otherrequired pass-throughs and interest on the Reserve Funds (if and to the extentsuch interest is actually disbursed to Borrower, Mezzanine A Borrower orMortgage Borrower), but excluding sales, use and occupancy or other taxes onreceipts required to be accounted for by Mortgage Borrower to any GovernmentalAuthority, refunds and uncollectible accounts, sales of furniture, fixtures andequipment, Insurance Proceeds (other than business interruption or other lossof income insurance), Awards, unforfeited security deposits, payments receivedunder the Interest Rate Hedging Agreement (other than in connection with thedetermination of any Debt Service Shortfall), utility and other similardeposits and any disbursements to Borrower, Mezzanine A Borrower or MortgageBorrower from the Mortgage Loan Reserve Funds and any extraordinary non-recurringitems of income. Gross income shall not be diminished as a result of theSecurity Instruments or the creation of any intervening estate or interest inan Individual Property or any part thereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“InstitutionalInvestor” shall mean, in connection with any proposed Transfer, any one of thefollowing entities:  (a) a pension fund,pension trust or pension account that has total assets of at least$200,000,000, exclusive of its interest in Borrower, that are managed by an entitythat controls or manages at least $400,000,000 of real estate equity assets,exclusive of equity interests in Borrower; (b) a pension fund advisor thatcontrols 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 or similarentity that shall have been organized for the purpose of facilitatinginvestment in one or more U.S. real estate opportunities, provided such entityshall be sponsored, organized and/or controlled by one or more experienced andreputable syndicators, investment advisors and/or financial institutions andshall have received contributions or binding commitments for contributions ofnot less than $20,000,000 of investment capital; (g) any entity controlled byone or more entities each of which qualifies under at least one of clauses (a)through (f) above; (h) any individual, a citizen of and domiciled in the UnitedStates, having a net worth of at least $100,000,000 and satisfying Lender’sthen-current criteria with respect to business character and experience, asreasonably determined by Lender, and free from any pending or existingbankruptcy, reorganization or insolvency proceedings in which such party is thedebtor or any criminal charges or proceedings and shall not be, at the time ofsuch Transfer or in the past, a litigant, plaintiff or defendant in any suitbrought against or by Lender; or (i) a trust for the benefit of one or moreindividuals satisfying the criteria of clause (h) above.

 

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

 

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“Insurance Proceeds” shall mean the net amount of all insuranceproceeds after deduction of the reasonable costs and expenses (including, butnot limited to, reasonable counsel fees), if any, in collecting same.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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retention agreement, any financing leasehaving substantially the same economic effect as any of the foregoing, thefiling of any financing statement, and mechanic’s, materialmen’s and othersimilar liens and encumbrances.

 

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

 

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

 

“Loan” shall mean the loan in the original principal amount ofSIXTY-THREE MILLION FIVE HUNDRED ONE THOUSAND SEVEN HUNDRED TWENTY-NINE AND16/100 DOLLARS ($63,501,729.16) made by Lender to Borrower pursuant to thisAgreement and the other Loan Documents, as the same may hereafter beamended or split pursuant to the terms hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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“Management Agreement” shall mean, with respect to any IndividualProperty, a management agreement between the applicable Mortgage BorrowerEntity and a Qualified Manager, pursuant to which such Qualified Manager is toprovide management, leasing and other services with respect to such IndividualProperty, which management agreement shall be reasonably acceptable to Lenderin form and substance; *provided, however,*if such management agreement shall be entered into after a Securitization, thenLender, at its option, may condition its approval upon receivingconfirmation from the applicable Rating Agencies that such management agreementwill not result in a downgrade, withdrawal or qualification of the then currentrating of the Securities or any class thereof. Concurrently with theexecution and delivery of any Management Agreement with a Qualified Manager,Lender shall be provided, at Borrower’s expense, with an Agreement RegardingManagement Agreement.

 

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

 

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

 

“Material Agreement” means all agreements, other than the ManagementAgreement and the Leases, entered into by any Loan Party affecting or relatingto the Property, the Collateral, the Mezzanine A Collateral, any MortgagePrincipal’s general partner interest in the related Mortgage Borrower Entity,any Mezzanine A Principal’s general partner interest in the related Mezzanine ABorrower Entity or any other direct or indirect ownership interest of a LoanParty in the Mortgage Borrower, Mezzanine A 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.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Mortgage Borrower Formation Agreement” shall mean, with respect toeach Mortgage Borrower Entity, the Limited Partnership Agreement, LimitedLiability Company Agreement or other similar entity formation agreement of suchMortgage Borrower Entity.

 

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

 

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

 

“Mortgage Interest Rate Hedge Reserve Agreement” shall mean thatcertain Agreement to Hedge Interest Rate, Interest Rate Hedge Assignment andSecurity Agreement, dated as of the date hereof, between Mortgage Borrower andMortgage Lender, as amended, restated, replaced, supplemented or otherwisemodified from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Mortgage Title Insurance Policy” shall mean, with respect to eachIndividual Property, an ALTA mortgagee title insurance policy acceptable toMortgage Lender (or, if an Individual Property is located in a State which doesnot permit the issuance of such ALTA policy, such form as shall bepermitted in such State and acceptable to Mortgage Lender) issued with respectto such Individual Property and insuring the lien of the Security Instrumentencumbering such Individual Property.

 

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

 

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

 

“Multifamily Parallel Guarantor” shall mean Tishman SpeyerArchstone-Smith Multifamily Parallel Guarantor, L.L.C., a Delaware limitedliability company.

 

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

 

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

 

“Net Cash Flow After Debt Service” shall mean, for any period, theamount obtained by subtracting Debt Service, Mortgage Loan Debt Service andMezzanine A Debt Service for such period from Net Cash Flow for such period.

 

“Net Liquidation Proceeds After Debt Service” shall mean, with respectto any Liquidation Event, all amounts paid to or received by or on behalf ofany Mortgage Borrower Entity (or any Mezzanine A Borrower Entity) in connectionwith such Liquidation Event, including, without limitation, proceeds of anysale, refinancing or other disposition or liquidation, less (i) in theevent of a Liquidation Event consisting of a Casualty or Condemnation, Borrower’s,Mortgage Borrower’s, Mezzanine A Borrower’s, Lender’s, Mezzanine A Lender’s,and/or Mortgage Lender’s reasonable out-of-pocket costs incurred in connectionwith the recovery thereof, (ii) in the event of a Liquidation Eventconsisting of a Casualty or Condemnation, the costs incurred by MortgageBorrower in connection with a restoration of all or any portion of theapplicable Individual Property made in accordance with the Mortgage LoanDocuments, (iii) in the event of a Liquidation Event consisting of aCasualty or Condemnation or a Transfer, amounts required or permitted to bededucted therefrom and amounts paid pursuant to the Mortgage Loan Documents toMortgage Lender, (iv) in the event of a Liquidation Event consisting of aCasualty or Condemnation, the excess Insurance Proceeds or CondemnationProceeds not used for the Restoration of the applicable Individual Propertywhich are paid to Mortgage Borrower, (v) in the case of a foreclosuresale, disposition or transfer of an Individual Property in connection with realizationthereon following a Mortgage Loan Event of Default, reasonable and customaryout-of-pocket costs and expenses of sale or other disposition (includingattorneys’ fees and brokerage commissions), (vi) in the case of aforeclosure sale, disposition or transfer of the Mezzanine A Collateral inconnection with realization thereon following a Mezzanine A Loan Event ofDefault, reasonable and customary out-of-pocket costs and expenses of sale orother disposition (including attorneys’ fees and brokerage commissions), (vii) intentionallyomitted, (viii) in the case of a foreclosure sale relating to the MortgageLoan, such costs and expenses incurred by Mortgage Lender under the MortgageLoan Documents as Mortgage Lender shall be entitled to receive reimbursementfor under the terms of the Mortgage Loan Documents, (ix) in the case of aforeclosure sale relating to the Mezzanine A Loan, such costs and expensesincurred by Mezzanine A Lender under the Mezzanine A Loan Documents asMezzanine A Lender shall be entitled to receive reimbursement for under theterms of the Mezzanine A Loan Documents, (x) intentionally omitted, (xi) in thecase of a refinancing of the Mortgage Loan, such costs and expenses (includingattorneys’ fees) of such refinancing, (xii) in the case of a refinancing of theMezzanine A Loan, such costs and expenses (including attorneys’ fees) of suchrefinancing, (xiii) intentionally omitted, (xiv) the amount of any prepaymentsrequired pursuant to the Mortgage Loan Documents, the Mezzanine A Loan Documentsand/or the Loan Documents in connection with such Liquidation Event and (xv)any sums due to Mezzanine A Lender pursuant to Section 2.3.2 of theMezzanine A Loan Agreement.

 

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“Net Operating Income” shall mean, for any period, the amount obtainedby subtracting Operating Expenses for such period from Gross Income fromOperations for such period.

 

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

 

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

 

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

 

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

 

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

 

“Organizational Documents” shall mean (i) with respect to acorporation, such Person’s certificate of incorporation and by laws, and anyshareholder agreement, voting trust or similar arrangement applicable to any ofsuch Person’s authorized shares of capital stock or other organizationaldocument affecting the rights of holders of such stock, (ii) with respectto a partnership, such Person’s certificate of limited partnership, partnershipagreement, voting trusts or similar arrangements applicable to any of itspartnership interests or other organizational document affecting the rights ofholders of partnership interests, and (iii) with respect to a limitedliability company, such Person’s certificate of formation, limited liabilitycompany agreement or other organizational document affecting the rights ofholders of limited liability company interests. In each case, “OrganizationalDocuments” shall include any shareholders or other agreement among any of theowners of the entity in question.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Permitted Encumbrances” shall mean, collectively, (a) the Liensand security interests created by the Loan Documents, the Mortgage LoanDocuments and the Mezzanine A Loan Documents, (b) all Liens, encumbrancesand other matters disclosed in the Mortgage Title Insurance Policy relating toany 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, the Mortgage Loan Documents or theMezzanine A Loan Documents, (d) other Liens that are being contested ingood faith and by appropriate proceedings in accordance with the applicableprovisions of the Loan Documents, the Mortgage Loan Documents or the MezzanineA Loan Documents, (e) the rights of the lessors or secured parties underany equipment lease agreements permitted under the Mortgage Loan Documents, andany financing statements filed as evidence of such lessors’ or secured parties’rights, (f) easements, rights-of-way, restrictions, encroachments, andother minor defects or irregularities in title, in each case, which arenecessary for the operation of the Property and do not or would not have aMaterial Adverse Effect, and (g) such other title and survey exceptions asMortgage Lender has approved or may approve in writing in Mortgage Lender’ssole discretion.

 

“Permitted Investments” shall mean any one or more of the followingobligations or securities (including those issued by Servicer, the trusteeunder any Securitization or any of their respective Affiliates) acquired at apurchase price of not greater than par, and payable on demand or having amaturity date not later than the Business Day

 

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immediately prior to the date upon which suchfunds are required to be drawn and meeting one of the appropriate standards setforth below:

 

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

 

(ii)                                  FederalHousing Administration debentures;

 

(iii)                               obligationsof the following United States government sponsored agencies: Federal Home LoanMortgage Corp. (debt obligations), the Farm Credit System (consolidatedsystemwide bonds and notes), the Federal Home Loan Banks (consolidated debtobligations), the Federal National Mortgage Association (debt obligations), theFinancing Corp. (debt obligations), and the Resolution Funding Corp. (debtobligations); *provided, however*, that theinvestments described in this clause must (A) have a predetermined fixeddollar 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) ifsuch investments have a variable rate of interest, such interest rate must betied to a single interest rate index plus a fixed spread (if any) and must moveproportionately with that index, and (D) such investments must not besubject to liquidation prior to their maturity;

 

(iv)                              federalfunds, unsecured certificates of deposit, time deposits, bankers’ acceptancesand repurchase agreements with maturities of not more than 365 days of anybank, the short term obligations of which at all times are rated in the highestshort term rating category by each Rating Agency (or, if not rated by allRating Agencies, rated by at least one Rating Agency in the highest short termrating category and otherwise acceptable to each other Rating Agency, asconfirmed in writing that such investment would not, in and of itself, resultin a downgrade, qualification or withdrawal of the then current ratingsassigned to the Securities); *provided, however*,that the investments described in this clause must (A) have apredetermined fixed dollar of principal due at maturity that cannot vary orchange, (B) if rated by S&P, must not have an “r” highlighter affixedto their rating, (C) if such investments have a variable rate of interest,such interest rate must be tied to a single interest rate index plus a fixedspread (if any) and

 

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

 

(v)                                 fullyFederal Deposit Insurance Corporation insured demand and time deposits in, orcertificates of deposit of, or bankers’ acceptances with maturities of not morethan 365 days and issued by, any bank or trust company, savings and loanassociation or savings bank, the short term obligations of which at all timesare rated in the highest short term rating category by each Rating Agency (or,if not rated by all Rating Agencies, rated by at least one Rating Agency in thehighest short term rating category 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); *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 affixedto their rating, (C) if such investments have a variable rate of interest,such interest rate must be tied to a single interest rate index plus a fixedspread (if any) and must move proportionately with that index, and (D) suchinvestments must not be subject to liquidation prior to their maturity;

 

(vi)                              debtobligations with maturities of not more than 365 days and at all times rated byeach Rating Agency (or, if not rated by all Rating Agencies, rated by at leastone Rating Agency and otherwise acceptable to each other Rating Agency, asconfirmed in writing that such investment would not, in and of itself, resultin a downgrade, qualification or withdrawal of the then current ratingsassigned to the Securities) in its highest long term unsecured rating category;*provided, however*, that the investmentsdescribed in this clause must (A) have a predetermined fixed dollar ofprincipal due at maturity that cannot vary or change, (B) if rated 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 besubject to liquidation prior to their maturity;

 

(vii)                           commercialpaper (including both non interest bearing discount obligations andinterest-bearing obligations payable on demand or on a specified date not morethan one year after the date of issuance thereof) with maturities of not morethan 365 days and that at all times is 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 short term unsecured debt rating; *provided, however*,that the investments described in this clause must (A) have apredetermined fixed dollar of principal due at maturity that cannot vary orchange, (B) if rated by S&P, must not have an “r” highlighter affixedto their rating, (C) if such investments have a variable rate of interest,such interest rate must be tied to a single interest rate index plus a fixedspread (if any) and must move proportionately with that index, and (D) suchinvestments must not be subject to liquidation prior to their maturity;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Present Value Factor” means:

 

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

 

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

 

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

 

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

 

“Prohibited Person” shall mean any Person:

 

(a)                                  listedin the Annex to, or otherwise subject to the provisions of, the Executive OrderNo. 13224 on Terrorist Financing, effective September 24, 2001, andrelating to Blocking Property and Prohibiting Transactions With Persons WhoCommit, Threaten to Commit, or Support Terrorism (the “Executive Order”);

 

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

 

(c)                                  withwhom Lender is prohibited from dealing or otherwise engaging in any transactionby the Executive Order;

 

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

 

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

 

(f)                                    whois an Affiliate of a Person listed above.

 

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

 

“Properties” shall mean, collectively, the Individual Properties whichare subject to the terms of the Mortgage Loan Documents, in each case if and tothe extent that the same is encumbered by a Security Instrument and has notbeen released therefrom pursuant to the terms hereof.

 

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

 

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

 

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

 

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type and size similar to the Properties,totaling in the aggregate no less than 2500 residential units; *provided, however,* that the employment of such organizationdescribed in this clause (b) as manager of the Properties shall beconditional, (i) if it shall occur prior to the occurrence of aSecuritization, upon approval of such employment by Lender, such approval notto be unreasonably withheld, and (ii) if it shall occur after theoccurrence of a Securitization, upon Lender having received writtenconfirmation from the Rating Agencies that the employment of such manager willnot result in a downgrade, withdrawal or qualification of the initial, or ifhigher, then current ratings of the Securities.

 

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

 

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

 

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

 

“Reference Bank” shall mean aleading bank engaged in transactions in Eurodollar deposits in theinternational Eurocurrency market that has an established place of business inLondon. If any such Reference Bank should be removed from the Reuters ScreenLIBOR01 Page or in any other way fail to meet the qualifications of aReference Bank, Lender may designate alternative Reference Banks meetingthe criteria specified above.

 

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

 

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

 

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

 

“Release Price” shall mean:

 

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(i)                                     (A) inthe event that Mortgage Borrower does not pay the “Release Price” as defined inthe Mortgage Cross Collateralization Agreement, an amount equal to theAllocated Loan Amount for the applicable Individual Property being released; or(B) in the event that Mortgage Borrower does pay the “Release Price” asdefined in the Mortgage Cross Collateralization Agreement, an amount equal to110% times the Allocated Loan Amount for the applicable Individual Propertybeing released;

 

plus

 

(ii)                                  ifafter giving effect to (A) the anticipated payment of the release priceunder the Mortgage Loan, (B) the anticipated payment of the portion of therelease price as set forth in clause (i) of the definition of “ReleasePrice” in the Mezzanine A Loan Agreement and (C) the anticipated paymentof the portion of the Release Price as set forth in clause (i) of thisdefinition, the Debt Service Coverage Ratio for the Properties then remainingsubject to the Liens of the Security Instruments is not at least equal to orgreater than the Debt Service Coverage Ratio for all of the Properties(including the Individual Property to be released) immediately preceding therelease of such Individual Property (the “Required DSCR Ratio”) or theLoan to Value Ratio for the Properties then remaining subject to the Liens ofthe Security Instruments is not at least equal to or less than the Loan toValue Ratio for all of the Properties (including the Individual Property to bereleased) immediately preceding the release of such Individual Property (the “RequiredLTV Ratio”), an amount equal to (x) the quotient obtained by dividing (A) theoutstanding principal balance of the Loan by (B) the outstanding principalbalance of the Loan and the Mezzanine A Loan, multiplied by (y) the minimumamount reasonably determined by Lender which would be necessary to be appliedto the reduction of the outstanding principal balances of the Loan and theMezzanine A Loan in order to satisfy the Required DSCR Ratio and the RequiredLTV Ratio.

 

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

 

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

 

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

 

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

 

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

 

“Replacement Interest Rate Hedging Agreement” means an interest ratehedging agreement from an Acceptable Counterparty with terms in all materialrespects identical to the Interest Rate Hedging Agreement.

 

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

 

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

 

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

 

“Restoration” shall mean****the repair andrestoration of an Individual Property after a Casualty or Condemnation asnearly as possible to the condition the Individual Property was in immediatelyprior to such Casualty or Condemnation, with such alterations as may beapproved by Lender to the extent required hereunder.

 

“Restricted Party” shall mean each Guarantor, each Borrower Entity,each Principal, each Mortgage Borrower Entity, each Mortgage Principal, eachMezzanine A Borrower Entity, each Mezzanine A Principal or any AffiliatedManager or any direct or indirect shareholder, partner, member or non membermanager of any Guarantor, any Principal, any Mortgage Borrower, any MortgagePrincipal, any Mezzanine A Borrower or any Mezzanine A Principal.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Assignment of Leases and Rents and SecurityAgreement or other similar security instrument, dated as of the date hereof,executed and delivered by the applicable Mortgage Borrower Entity as securityfor the Mortgage Loan and encumbering such Individual Property, as the same may hereafterbe amended, restated, replaced, supplemented or otherwise modified from time totime.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Strike Rate” shall mean (i) a rate per annum equal to 5.75% fromthe Closing Date through and including November 1, 2010 and (ii) duringeach Extension Period, a rate per annum, which, when added to the weightedaverage of the Eurodollar Rate Margin and the applicable interest rate spreadsunder the Mortgage Loan and the Mezzanine A Loan, would produce a Debt ServiceCoverage Ratio (assuming a Eurodollar Rate Margin equal to 3.75% per annum) ofno less than (x) if only a Cap is obtained, 0.85:1.00 or (y) if only a Swap ora Swap and a Cap are obtained, 0.95:1.00, each as determined by Borrower andapproved by Lender, such approval not to be unreasonably withheld.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Tenant” shall mean the tenant under any Lease.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“UCC Title Insurance Policy” shall mean, with respect to theCollateral, a UCC title insurance policy in form acceptable to Lenderissued with respect to the Collateral and insuring the lien of the PledgeAgreement upon the Collateral.

 

“U.S. Obligations” shall mean direct non-callable obligations of theUnited States of America or other obligations which are “government securities”within the meaning of Section 2(a)(16) of the Investment Company Act of1940.

 

“USPAP” shall mean the Uniform Standard of Professional AppraisalPractice.

 

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

 

Section 1.2                                      Principlesof Construction.

 

All references to “Sections” and “Schedules” are to Sections andSchedules in or to this Agreement unless otherwise specified. All uses of theword “including” shall mean “including, without limitation” unless the contextshall indicate otherwise. Unless otherwise specified, the words “hereof,” “herein”and “hereunder” and words of similar import when used in this Agreement shallrefer to this Agreement as a whole and not to any particular provision of thisAgreement. Unless otherwise specified, all meanings attributed to defined termsherein shall be equally applicable to both the singular and plural forms of theterms so defined. All covenants, representations, terms and conditionscontained in this Agreement applicable to “Borrower” shall be deemed to applyto each Borrower Entity individually. It shall constitute an Event of Defaultif any covenant, representation, term or condition contained in this Agreementis breached (beyond any applicable notice and cure periods) with respect to anyindividual Borrower Entity. With respect to terms defined by cross-reference tothe Mortgage 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 used herein,shall mean 

 

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Borrower shall cause Mezzanine A Borrower tocause Mortgage Borrower to so act or not to so act, as applicable (or thatBorrower shall permit Mezzanine A Borrower to 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 and upon the terms and conditions set forth herein, Lenderhereby agrees to make and Borrower hereby agrees to accept the Loan on theClosing Date.

 

2.1.2                        SingleDisbursement to Borrower.

 

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

 

2.1.3                        TheNote, Pledge Agreement and Loan Documents.

 

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

 

2.1.4                        Use ofProceeds.

 

Borrower shall use the proceeds of the Loan to (a) pay costs andexpenses incurred in connection with the closing of the Loan, (b) make acapital contribution to Mezzanine A Borrower in order for Mezzanine A Borrower (i) touse such proceeds to pay costs and expenses incurred in connection with the closingof the Mezzanine A Loan and (ii) to make a capital contribution toMortgage Borrower in order for Mortgage Borrower to (1) repay anddischarge any existing loans relating to the Properties, (2) pay all pastdue Basic Carrying Costs, if any, with respect to the Properties, (3) makedeposits into the Mortgage Loan Reserve Funds on the Closing Date in theamounts provided in the Mortgage Loan Documents, (4) pay costs andexpenses incurred in connection with the closing of the Mortgage Loan, or (5) fundany working capital requirements of the Properties and/or working capitalreserves of Mortgage Borrower or (c) fund any working capital reserves ofBorrower. The balance, if any, shall be distributed by Borrower to the Personsowning the ownership interests in Borrower.

 

Section 2.2                                      Interest;Loan Payments; Late Payment Charge.

 

2.2.1                        Payments.

 

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

 

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#### and including the Maturity Date for the Interest Period in which suchPayment Date or Maturity Date occurs. The outstanding principal balance of theLoan together with all accrued and unpaid interest thereon shall be due andpayable on the Maturity Date.

####  

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

####  

##### (i)                                     noEvent of Default shall have occurred and be continuing at the time theapplicable Extension Option is exercised and on the date that the applicableExtension Period is commenced;

#####  

##### (ii)                                  Borrowershall notify Lender of its election to extend the Maturity Date as aforesaidnot earlier than one hundred twenty (120) days and no later than thirty (30)days prior to the then applicable Maturity Date; provided, however, Borrowershall be permitted to rescind and revoke its notice of extension given inaccordance with the terms hereof, provided that (i) written notice of suchrescission and revocation is received by Lender no sooner than three (3) BusinessDays prior to the applicable Maturity Date and (ii) Borrower pays Lender’sreasonable out-of-pocket costs and expenses incurred as a result of Lender’sreceipt of such notice of extension;

#####  

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

#####  

##### (iv)                              Borrowershall have paid to Lender on or prior to the commencement of each ExtensionPeriod, the Extension Fee;

#####  

##### (v)                                 allconditions to the Mezzanine A Loan Extension corresponding to the applicableExtension Period shall have been satisfied in accordance with the terms of theMezzanine A Loan Documents; and

#####  

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

 

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#### (c)                                  All references inthis Agreement and in the other Loan Documents to the Maturity Date shall meanthe applicable Extended Maturity Date in the event the applicable ExtensionOption is exercised.

####  

#### (d)                                 All payments and otheramounts due under the Note, this Agreement and the other Loan Documents shallbe made without any setoff, defense or irrespective of, and without deductionfor, counterclaims.

####  

2.2.2                        InterestCalculation.

 

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

 

2.2.3                        EurodollarRate Unascertainable; Illegality; Increased Costs.

 

#### (a)                                  (i)  In theevent that Lender shall have reasonably determined (which determination shallbe conclusive and binding upon Borrower absent manifest error) that by reasonof circumstances affecting the interbank eurodollar market, adequate andreasonable means do not exist for ascertaining LIBOR, then Lender shallforthwith give notice by telephone of such determination, to Borrower at leastone (1) Business Day prior to the last day of the related Interest Period,with a written confirmation of such determination promptly thereafter. If suchnotice is given, the Loan shall bear interest at the Adjusted Prime Ratebeginning on the first day of the next succeeding Interest Period. (ii) If,pursuant to the terms of this Section 2.2.3(a), the Loan is bearinginterest at the Adjusted Prime Rate and Lender shall reasonably determine(which determination shall be conclusive and binding upon Borrower absentmanifest error) that the event(s) or circumstance(s) which resulted in suchconversion shall no longer be applicable, Lender shall give notice thereof toBorrower by telephone of such determination, confirmed in writing, to Borroweras soon as reasonably practical, but in no event later than one (1) BusinessDay prior to the last day of the then current Interest Period. If such noticeis given, the Loan shall bear interest at the Eurodollar Rate beginning on thefirst day of the next succeeding Interest Period. Notwithstanding any provisionof this Agreement to the contrary, in no event shall Borrower have the right toelect to have the Loan bear interest at the Adjusted Prime Rate; it beingunderstood that the Loan shall bear interest at all times at the EurodollarRate except to the extent expressly provided in this Section 2.2.3.

####  

#### (b)                                 If any RegulatoryChange shall hereafter make it unlawful for Lender or any Co-Lender in goodfaith to make or maintain the portion of the Loan bearing interest at the EurodollarRate, Lender or such Co-Lender, as applicable, shall give notice thereof toBorrower, and without the need for Borrower’s consent, (I) the obligation ofLender or such Co-Lender hereunder to make the Loan bearing interest at theEurodollar Rate may be canceled forthwith and (II) the Loan shallautomatically bear interest at the Adjusted Prime Rate at the expiration of thethen current Interest Period or within such earlier period as required byApplicable Law. Upon written demand from Borrower, Lender or the applicableCo-Lender shall demonstrate in reasonable detail the circumstances giving 

 

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#### rise to Lender’s or such Co-Lender’s determination and the calculationsubstantiating the Adjusted Prime Rate by Lender or such Co-Lender in makingthe conversion. In the event that such Regulatory Change shall no longer existor be effective, Lender or such Co-Lender, as applicable, shall give noticethereof to Borrower, and without the need for Borrower’s consent, the Loanshall bear interest at the Eurodollar Rate commencing with the first day of thenext succeeding Interest Period.

####  

#### (c)                                  If, as a result ofany Regulatory Change, any reserve, special deposit or similar requirementsrelating to any extensions of credit or other assets of, or any deposits with,Lender or any Co-Lender is imposed, modified or deemed applicable and theresult is to increase the actual cost to Lender or such Co-Lender of making theLoan bearing interest at the Eurodollar Rate, or to reduce the amountreceivable by Lender hereunder in respect of any portion of the Loan bearinginterest at the Eurodollar Rate by an amount reasonably deemed by such Lenderto be material (such increases in cost and reductions in amounts receivable, “IncreasedCosts”), then Borrower agrees that it will pay to Lender or such Co-Lender(as applicable) upon Lender’s or such Co-Lender’s (as applicable) request suchadditional amount or amounts (based upon a reasonable allocation thereof byLender or such Co-Lender (as applicable) to Eurodollar Rate loans made byLender or such Co-Lender (as applicable)) as will compensate Lender of suchCo-Lender (as applicable) for such Increased Costs to the extent that suchIncreased Costs are reasonably allocable to the Loan. Lender or any Co-Lender(as applicable) will notify Borrower in writing of any event occurring afterthe Closing Date which will entitle Lender or such Co-Lender (as applicable) tocompensation pursuant to this Section 2.2.3(c) as promptly aspracticable after it obtains knowledge thereof and determines to request suchcompensation and will designate a different lending office if such designationwill avoid the need for, or reduce the amount of, such compensation and willnot, in the reasonable judgment of Lender of such Co-Lender (as applicable), beotherwise materially disadvantageous to Lender or such Co-Lender (asapplicable). If Lender or such Co-Lender (as applicable) shall fail to notifyBorrower of any such event within ninety (90) days following the date suchevent occurred, then Borrower’s liability for any amounts described in this Section 2.2.3(c) incurredby Lender or such Co-Lender (as applicable) as a result of such event shall belimited to those attributable to the period occurring subsequent to the 90thday prior to the date upon which Lender or such Lender (as applicable) actuallynotified Borrower of the occurrence of such event. Notwithstanding theforegoing, in no event shall Borrower be required to compensate Lender or anyCo-Lender for any portion of Excluded Taxes of Lender or such Co-Lender (asapplicable), whether or not attributable to payments made by Borrower. IfLender or any Co-Lender requests compensation under this Section 2.2.3(c),Borrower may, by notice to Lender or such Co-Lender (as applicable), requirethat Lender or such Co-Lender (as applicable) furnish to Borrower a statementsetting forth in reasonable detail the basis for requesting such compensationand the method for determining the amount thereof, which such statementsubmitted by Lender or such Co-Lender to Borrower shall be conclusive absentmanifest error. Lender or such Co-Lender (as applicable) shall only chargeBorrower amounts hereunder if Lender or such Co-Lender (as applicable) isgenerally charging such amounts to all similarly situated Eurodollar Rate-basedborrowers. This provision shall survive payment of the Note and thesatisfaction of all other obligations of Borrower under the Note, thisAgreement and the 

 

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#### other Loan Documents. The provisions of this Section 2.2.3(c) shallnot apply if a Securitization has occurred.

####  

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

####  

2.2.4                        IntentionallyOmitted.

 

2.2.5                        Paymenton Maturity Date.

 

Borrower shall pay to Lender on the Maturity Date the outstandingprincipal balance, all accrued and unpaid interest and all other amounts duehereunder and under the Note, the Pledge Agreement and the other LoanDocuments.

 

2.2.6                        Paymentsafter Default.

 

Upon the occurrence and during the continuance of an Event of Default, (a) intereston the outstanding principal balance of the Loan and, to the extent permittedby Applicable Law, overdue interest and other amounts due in respect of theLoan, shall accrue at the Default Rate, calculated from the date such paymentwas due without 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 

 

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accruing to Lender by reason of theoccurrence of any Event of Default; the acceptance of any payment of Net CashFlow After Debt Service shall not be deemed to cure or constitute a waiver ofany 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 any principal, interest or any other sums due under the LoanDocuments (other than the principal sum due on the Maturity Date or on anyaccelerated maturity of the Note) is not paid by Borrower on the date on whichit is due (notwithstanding any grace period hereunder, under the Note or theother Loan Documents), Borrower shall pay to Lender within five (5) daysafter Lender’s demand therefor an amount equal to the lesser of two percent(2%) of such unpaid sum or the maximum amount permitted by Applicable Law inorder to defray the expense incurred by Lender in handling and processing suchdelinquent payment and to compensate Lender for the loss of the use of suchdelinquent payment. Any such amount shall be secured by the Pledge Agreementand the other Loan Documents to the extent permitted by Applicable Law.

 

2.2.8                        UsurySavings.

 

This Agreement and the Note are subject to the express condition thatat no time shall Borrower be obligated or required to pay interest on theprincipal balance of the Loan at a rate which could subject Lender to eithercivil or criminal liability as a result of being in excess of the Maximum LegalRate. If, by the terms of this Agreement or the other Loan Documents, Borroweris at any time required or obligated to pay interest on the principal balancedue hereunder at a rate in excess of the Maximum Legal Rate, the ApplicableInterest Rate or the Default Rate, as applicable, shall be deemed to beimmediately reduced to the Maximum Legal Rate and all previous payments inexcess of 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 provisions of this Section 2.2.9 shall only apply so long as aSecuritization has not occurred. All payments made by Borrower hereunder shallbe made free and clear of, and without reduction for or on account of, ForeignTaxes or U.S. Taxes, excluding, in the case of Lender or any Co-Lender, ForeignTaxes or U.S. Taxes measured by its net income, receipts, capital, net worthand franchise taxes imposed on it, by the jurisdiction under the laws of whichLender or any Co-Lender is resident or organized, or any political subdivisionthereof and, in the case of Lender or any 

 

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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 byLender or any Co-Lender which may result from any failure or delay byBorrower to pay any such non excluded Foreign Tax or U.S. Tax when due to theappropriate taxing authority or any failure or delay by Borrower to remit toLender or any Co-Lender the required receipts or other reasonable evidence ofsuch payment, *provided, however*, thatnotwithstanding anything to the contrary contained herein (a) theobligation to pay such additional amounts required under this Section 2.2.9shall not apply to any Foreign Taxes which otherwise constitute Excluded Taxesand (b) in the event that Lender or any Co-Lender or any successor and/orassign of Lender or any Co-Lender is not incorporated under the laws of theUnited States of America or a state thereof, Lender and any such Co-Lenderagrees that, prior to the first date on which any payment is due such entityhereunder, it will deliver to Borrower (i) two duly completed copies ofUnited States Internal Revenue Service Form W-8BEN or W-8ECI or successorapplicable form, as the case may be, certifying in each case that suchentity is entitled to receive payments under the Note, without deduction orwithholding of any United States federal income taxes, or (ii) an InternalRevenue Service Form W-9 or successor applicable form, as the case may be,to establish an exemption from United States backup withholding tax on allinterest payments hereunder. Each entity required to deliver to Borrower a Form W-8BENor W-8ECI or Form W-9 pursuant to the preceding sentence furtherundertakes to deliver to Borrower two (2) further copies of such letterand W-8BEN or W-8ECI or Form W-9, or successor applicable forms, or othermanner of certification, as the case may be, on or before the date thatany such letter or form expires (which, in the case of the Form W-8ECI,is the last day of each U.S. taxable year of the non U.S. entity) or becomesobsolete or after the occurrence of any event requiring a change in the mostrecent letter and form previously delivered by it to Borrower, and suchother extensions or renewals thereof as may reasonably be requested byBorrower, certifying in the case of a Form W-8BEN or W-8ECI that such entityis entitled to receive payments under the Note without deduction or withholdingof any United States federal income taxes, unless in any such case any changein treaty, law or regulation has occurred prior to the date on which any suchdelivery would otherwise be required which renders all such forms inapplicableor which would prevent such entity from duly completing and delivering any suchletter or form with respect to it and such entity advises Borrower that itis not capable of receiving 

 

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

 

Section 2.3                                      Prepayments.

 

2.3.1                        VoluntaryPrepayments.

 

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

 

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

####  

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

 

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#### (c)                                  If the InterestShortfall was calculated based upon the Assumed Note Rate, upon determinationof LIBOR on the LIBOR Determination Date for the Interest Period in which thePrepayment Date occurred, (i) if the Applicable Interest Rate for suchInterest Period is less than the Assumed Note Rate, Lender shall promptlyrefund to Borrower the amount of the Interest Shortfall paid, calculated at arate equal to the difference between the Assumed Note Rate and the ApplicableInterest Rate, or (ii) if the Applicable Interest Rate is greater than theAssumed Note Rate, Borrower shall promptly (and in no event later than the nextoccurring Payment Date) pay Lender the amount of such additional InterestShortfall calculated at a rate equal to the excess of the Applicable InterestRate over the Assumed Note Rate; and

####  

#### (d)                                 Mezzanine A Borrowershall have simultaneously with such prepayment made a pro rata prepayment ofthe Mezzanine A Loan pursuant to and in accordance with the Mezzanine A LoanAgreement.; provided, however, Borrower may repay the Loan in full on theMaturity Date and it shall not be a requirement to such repayment thatMezzanine A Borrower also repay the Mezzanine A Loan in full on the MaturityDate.

####  

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

 

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

 

2.3.2                        LiquidationEvents.

 

#### (a)                                  In the event of (i) anyCasualty affecting all or any portion of any Individual Property, (ii) anyCondemnation of all or any portion of any Individual Property, (iii) aTransfer of any Individual Property in connection with realization thereon bythe Mortgage Lender following a Mortgage Loan Event of Default, includingwithout limitation a foreclosure sale, (iv) a Transfer of the Mezzanine ACollateral in connection with realization thereon by the Mezzanine A Lenderfollowing a Mezzanine A Loan Event of Default, including without limitation aforeclosure sale, (v) intentionally omitted or (vi) any refinancingof the Properties, the Mortgage Loan or the Mezzanine A 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). Oneach date 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 

 

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#### sentence on the next Payment Date. No prepayment consideration or anyother prepayment premium or penalty shall be due in connection with anyprepayment made as a result of any of the events described 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(other than a foreclosure sale) of an Individual Property on the date on whicha contract of sale for such sale is entered into, and a foreclosure sale, onthe date notice of such foreclosure sale is given to Borrower or MortgageBorrower, and (ii) a refinancing of an Individual Property, the MortgageLoan or the Mezzanine A Loan, on the date on which a commitment for suchrefinancing is entered into. The provisions of this Section 2.3.2 shallnot be construed to contravene in any manner the restrictions and otherprovisions regarding refinancing of the Mortgage Loan or the Mezzanine A Loanor Transfer of any Individual Property set forth in this Agreement, and theother Loan Documents, the Mortgage Loan Documents or the Mezzanine A LoanDocuments.

####  

2.3.3                        PrepaymentsAfter Default. 

 

If, following the occurrence of an Event of Default and acceleration ofthe Maturity Date, payment of all or any part of the Debt is tendered byBorrower or otherwise recovered by Lender (including, without limitation,through application of any Net Liquidation Proceeds After Debt Service, otherthan Net Liquidation Proceeds After Debt Service received in connection with aCasualty or Condemnation of all or a portion of any Individual Property), suchtender or recovery shall be deemed a voluntary prepayment by Borrower andBorrower shall pay, in addition to the Debt, (i) an amount equal to theSpread Maintenance Payment, if any; (ii) all accrued and unpaid interestcalculated at the Applicable Interest Rate on the amount of principal beingprepaid through and including the Prepayment Date; (iii) if suchPrepayment Date is a date other than a Payment Date, the Interest Shortfall; (iv) BreakageCosts, if any, without duplication of any sums paid pursuant to the precedingclause (iii); and (v) all other sums due under this Agreement, the Note orthe other Loan Documents in connection with a partial or total prepayment.

 

2.3.4                        Makingof Payments.

 

Each payment by Borrower hereunder or under the Note shall be made infunds settled through the New York Clearing House Interbank Payments System orother funds immediately available to Lender by 2:00 p.m., New York Citytime, on or prior to the date such payment is due, to Lender by deposit to suchaccount as Lender may designate by written notice to Borrower. Wheneverany payment hereunder or under the Note shall be stated to be due on a datewhich is not a Business Day, such payment shall be made on the first BusinessDay succeeding such scheduled due date.

 

2.3.5                        Applicationof Principal Prepayments.

 

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

 

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that accrued through and including thePrepayment Date, second, to the Interest Shortfall as the same may be adjustedpursuant to the last paragraph of Section 2.3.1(c) hereof, ifapplicable, with respect to the amount prepaid and third, to all other amountsthen due to Lender under this Agreement or any of the other Loan Documents andthen to the payment of principal due under the Loan.

 

Section 2.4                                      InterestRate Hedging Agreement.

 

#### (a)                                  Borrower shall obtainor cause to be obtained, and shall thereafter maintain in effect, an InterestRate Hedging Agreement with an Acceptable Counterparty, which shall (i) becoterminous with the Loan, (ii) have a notional amount which shall not atany time be less than the sum of the outstanding principal balance of the Loan,and (iii) at all times have a strike rate equal to the then applicableStrike Rate. The Counterparty shall be obligated under the Interest RateHedging Agreement to make monthly payments equal to the excess of one (1) monthLIBOR over the Strike Rate, calculated on the notional amount. The notionalamount of the Interest Rate Hedging Agreement may be reduced from time totime in amounts equal to any prepayment of the principal of the Loan inaccordance with Section 2.3 and Section 2.6 hereof. Notwithstandingthe foregoing, in the event that (i) Mortgage Lender waives therequirements of the Mortgage Loan Documents to maintain an interest ratehedging agreement with respect to the Mortgage Loan or Mortgage Borrower is inviolation of its obligations relating thereto and (ii) Mezzanine A Lenderwaives the requirements of the Mezzanine A Loan Documents to maintain aninterest rate hedging agreement with respect to the Mezzanine A Loan orMezzanine A Borrower is in violation of its obligations relating thereto,Lender may require Borrower to obtain, or cause to be obtained, and tothereafter maintain in effect, an Interest Rate Hedging Agreement in accordancewith the terms of this Section 2.4, which shall have a notional amountwhich shall not at any time be less than the outstanding principal balance ofthe Loan, the Mezzanine A Loan and the Mortgage Loan and which shall at alltimes have a strike rate equal to the Strike Rate (which shall be calculatedtaking into consideration the Mortgage Debt Service, the Mezzanine A DebtService and the Debt Service and the weighted average interest rate spread ofthe Mortgage Loan, the Mezzanine A Loan and the Loan).

####  

#### (b)                                 If any Interest RateHedging Agreement is an interest rate exchange agreement (a “Swap”),Borrower shall not be a party to such Swap and all obligations of the Affiliateof Borrower (which is the purchaser of such Swap), including, withoutlimitation, Additional Interest shall not be secured by the Lien of theCollateral, any Individual Property or any Mezzanine A Collateral. TheAffiliate of Borrower that has entered into the Swap and its creditworthinessshall be reasonably satisfactory to Lender. If any Interest Rate HedgingAgreement is an interest rate cap (a “Cap”), neither Borrower nor anyAffiliate of Borrower, as applicable, shall have any obligations under such Capother than the payment of a one time, single installment payment made at thetime of the purchase of such Cap.

####  

#### (c)                                  Borrower shallcollaterally assign to Lender pursuant to an Assignment of Interest RateHedging Agreement substantially in the form as the Assignment of InterestRate Hedging Agreement delivered on the date hereof, all of its right, titleand interest to 

 

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#### receive any and all payments under the Interest Rate Hedging Agreement(and any related guarantee, if any) and shall deliver to Lender an executedcounterpart of such Interest Rate Hedging Agreement and notify theCounterparty of such collateral assignment (either in such Interest RateHedging Agreement or by separate instrument). The Interest Rate HedgingAgreement and any Replacement Interest Rate Hedging Agreement shall be furtherassignable to any party to which the Loan may be assigned without theCounterparty’s consent. The Counterparty shall agree in writing to make allpayments it is required to make under the Interest Rate Hedging Agreement intoan account designated by Lender. At such time as the Loan is repaid in full,all of Lender’s right, title and interest in the Interest Rate HedgingAgreement shall terminate and Lender shall promptly execute and deliver atBorrower’s sole cost and expense, such documents as may be required toevidence Lender’s release of the Interest Rate Hedging Agreement and to notifythe Counterparty of such release.

####  

#### (d)                                 Borrower shall complywith all of its obligations under the terms and provisions of the Interest RateHedging Agreement, and shall cause its Affiliate (as purchaser of the Swap) to (1) payall Swap Payments and Swap Breakage in accordance with the terms of theInterest Rate Hedging Agreement and (2) perform all of such Affiliate’sother obligations under the Swap. All amounts paid by the Counterparty underthe Interest Rate Hedging Agreement shall be deposited immediately into anaccount designated by Lender. Borrower shall take all actions reasonablyrequested by Lender to enforce Lender’s rights under the Interest Rate HedgingAgreement in the event of a default by the Counterparty and shall not waive,amend or otherwise modify any of its rights thereunder.

####  

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

####  

#### (f)                                    In the event thatBorrower fails to purchase and deliver to Lender the Interest Rate HedgingAgreement or any Replacement Interest Rate Hedging Agreement as and whenrequired hereunder, Lender may purchase such Interest Rate HedgingAgreement and the cost incurred by Lender in purchasing such Interest RateHedging Agreement shall be paid by Borrower to Lender with interest thereon atthe Default Rate from the date such cost was incurred by Lender until such costis paid by Borrower to Lender.

####  

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

 

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

####  

#### (h)                                 In connection with anInterest Rate Hedging Agreement, Borrower shall obtain and deliver to Lender anopinion of counsel from counsel for the Counterparty (upon which Lender and itssuccessors and assigns may rely) which shall provide, in relevant part,that:

####  

##### (i)                                     theCounterparty is duly organized, validly existing, and in good standing underthe laws of its jurisdiction of incorporation and has the organizational powerand authority to execute and deliver, and to perform its obligationsunder, the Interest Rate Hedging Agreement;

#####  

##### (ii)                                  theexecution and delivery of the Interest Rate Hedging Agreement by theCounterparty, and any other agreement which the Counterparty has executed anddelivered pursuant thereto, and the performance of its obligations thereunderhave been and remain duly authorized by all necessary action and do notcontravene any provision of its certificate of incorporation or by-laws (orequivalent organizational documents) or any law, regulation or contractualrestriction binding on or affecting it or its property;

#####  

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

#####  

##### (iv)                              theInterest Rate Hedging Agreement, and any other agreement which the Counterpartyhas executed and delivered pursuant thereto, has been duly executed anddelivered by the Counterparty and constitutes the legal, valid and bindingobligation of the Counterparty, enforceable against the Counterparty in accordancewith its terms, subject to applicable bankruptcy, insolvency and similar lawsaffecting creditors’ rights generally, and subject, as to enforceability, togeneral principles of equity (regardless of whether enforcement is sought in aproceeding in equity or at law).

 

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Section 2.5                                      IntentionallyOmitted. 

 

Section 2.6                                      Releaseof an Individual Property. 

 

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

 

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

####  

#### (b)                                 Borrower shall provideLender with at least thirty (30) days’ but no more than ninety (90) days’ priorwritten notice of the release of any Individual Property permitted under 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 accruedand unpaid interest calculated at the Applicable Interest Rate on the amount ofprincipal being prepaid through and including the date of the release, (ii) ifsuch date is a date other than a Payment Date, the Interest Shortfall, (iii) BreakageCosts, if any, without duplication of any sums paid pursuant to the precedingclause (ii); (iv) the applicable Spread Maintenance Payment (if any); and (v) allother sums due under this Agreement, the Note or the other Loan Documents inconnection with a prepayment;

####  

#### (d)                                 Borrower shall submitto 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, effectsuch releases in accordance with the terms of this Agreement, and (iii) willnot impair or otherwise adversely affect the Liens, security interests andother rights of Lender under the Loan Documents not being released (or as tothe parties to the Loan Documents not being released);

 

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#### (e)                                  IntentionallyOmitted;

####  

#### (f)                                    IntentionallyOmitted;

####  

#### (g)                                 Intentionally Omitted;

####  

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

####  

#### (i)                                     IntentionallyOmitted; and

####  

#### (j)                                     Immediatelyfollowing such release, the Allocated Loan Amount for the Individual Propertyreleased (the “Released Individual Property”) shall be reduced to zero,and the Allocated Loan Amount for each of the Individual Properties remainingsubject to the Lien of the Security Instruments immediately following suchrelease shall be reduced by such Individual Property’s *pro rata*share of the difference between the Release Price of the Released IndividualProperty and the original Allocated Loan Amount for the Released IndividualProperty. For purposes of the immediately preceding sentence, an IndividualProperty’s “*pro rata* share” shall mean a fraction,the numerator of which is the Allocated Loan Amount for such IndividualProperty prior to giving effect to any reduction pursuant to this Section 2.6(j),and the denominator of which is the sum of the Allocated Loan Amounts, prior togiving effect to any reduction pursuant to this Section 2.6(j), for all ofthe 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 full of all principal of and interest on the Loan and all otheramounts due and payable under the Loan Documents in accordance with the termsand conditions of the Note and this Agreement, release the Lien of the PledgeAgreement and remit any remaining Reserve Funds to Borrower.

 

Section 2.9                                      Substitutionof Properties.

 

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

 

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

 

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

####  

#### (b)                                 (i) Allconditions to the release of such Individual Property and substitution of suchSubstitute Property 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 and substitution of such Substitute Property shall havebeen satisfied in accordance with the terms of Section 2.9 of theMezzanine A Loan Agreement with respect 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 anappraised value for the Substitute Property equal to or greater than theappraised value of the Release Property as of the Closing Date.

####  

#### (e)                                  IntentionallyOmitted.

####  

#### (f)                                    If the Loan is part ofa Securitization, Lender shall have received confirmation in writing from theRating 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 inwriting to such release and substitution, which consent shall be given inLender’s reasonable discretion applying the requirements of a prudentinstitutional mortgage loan lender with respect to real estate collateral of asize, scope and value substantially similar to that of the Substitute Property.

 

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####  

#### (g)                                 No Event of Defaultshall have occurred and be continuing, and Borrower shall be in compliance inall material respects with all terms and conditions set forth in this Agreementand in each other Loan Document on Borrower’s part to be observed or performed.Lender shall have received a certificate from Borrower confirming theforegoing, stating that the representations and warranties of Borrowercontained in this Agreement and the other Loan Documents are true and correctin all material respects on and as of the date of the release and substitutionwith respect to Borrower, the Properties and the Substitute Property andcontaining any other representations and warranties with respect to Borrower,the Properties, the Substitute Property or the Loan as (i) Lender(applying 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 toLender (applying the requirements of a prudent institutional mortgage loanlender) or the 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 Mezzanine ABorrower in the new property owner/mortgage borrower (such interests shallotherwise comply with the requirements of the Loan Documents and besubstantially identical in structure, form and substance as the Collateraldelivered at closing of the Loan); (ii) Borrower shall authorize Lender tofile such UCC Financing Statements required by Lender with respect to thesubstitute Collateral; (iii) Borrower shall deliver, at its sole cost andexpense, a UCC Insurance Policy insuring the new pledge agreement as a validfirst lien on the ownership interests pledged thereunder and substantiallyidentical to the UCC Insurance Policy delivered at the closing of the Loan; and(iv) Borrower shall enter into such modifications to the other LoanDocuments as Lender may reasonably request in order to reflect thesubstitution of the applicable Individual Property and the new propertyowner/mortgage borrower. The amount of the Loan allocated to the SubstituteProperty (such amount being hereinafter referred to as the “SubstituteAllocated Loan Amount”) shall equal the Allocated Loan Amount of therelated Release Property; *provided, however*,that in the event the number of Release Properties with respect to anysubstitution effected pursuant to this Section 2.9 does not equal thenumber of Substitute Properties, the Substitute Allocated Loan Amount for eachof 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 andhaving the same content as the certification of the Survey of the ReleaseProperty, prepared by a professional land surveyor licensed in the State inwhich the Substitute Property is located and acceptable to the Rating Agenciesin accordance 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

####  

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

####  

#### (k)                                  Lender shall havereceived (i) valid certificates of insurance indicating that therequirements for the policies of insurance required for an Individual Propertyhereunder have 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 II environmentalreport that would be in form and scope reasonably acceptable to a prudentinstitutional mortgage loan lender, which conclude that the Substitute Propertydoes not contain any Hazardous Materials in contravention of any applicableLegal Requirements in any material respect and is not subject to anysignificant risk of contamination from any off site Hazardous Materials incontravention of any applicable Legal Requirements in any material respect. Ifany such report discloses the presence of any Hazardous Substance incontravention of any applicable Legal Requirement in any material respect, orthe material risk of contamination from any off site Hazardous Substance incontravention of any applicable Legal Requirement in any material respect, theproposed substitution shall not be allowed without Lender’s prior writtenconsent at any time prior to a Securitization of the Loan. If, subsequent to aSecuritization of the Loan, any such report discloses the presence of anyHazardous Substance in contravention of any applicable Legal Requirement in anymaterial respect, or the risk of contamination from any off site HazardousSubstance in contravention of any applicable Legal Requirement in any materialrespect, the proposed substitution shall not be allowed unless (i) suchreport shall include an estimate of the cost of any related remediationrequired to be undertaken by an environmental consultant reasonably selected byLender, (ii) the estimated cost of remediation does not exceed ten percent(10%) of the Allocated Loan Amount for such Substitute Property, and (iii) Borrowershall have caused Mortgage Borrower or Mezzanine A Lender to deposit withMortgage Lender or Mezzanine A Lender, as applicable (A) cash, (B) aLetter of Credit, or (C) an indemnity by a reasonably acceptableindemnitor, in either event in an amount equal to one hundred twenty fivepercent (125%) of such estimated cost, which deposit shall constituteadditional security for the Mortgage Loan or the Mezzanine A Loan, asapplicable, and shall be released to Mortgage Borrower or Mezzanine A Borrower,as applicable, upon the delivery to Mortgage Lender or Mezzanine A Lender, asapplicable, 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) acertificate from Mortgage Borrower or Mezzanine A

####  

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#### Borrower, as applicable, stating that all such remediation work hasbeen paid in full or will be paid for out of the amounts reserved with MortgageLender or Mezzanine A Lender, as applicable. In the event that neither MortgageLender nor Mezzanine A Lender elects to require such deposit, Borrower shalldeliver such deposit to Lender.

####  

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

####  

#### (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 andenforceable in accordance with their terms, subject to the laws applicable tocreditors’ rights and equitable principles; (B) an opinion of counselacceptable to the Rating Agencies, if the Loan is part of aSecuritization, or reasonably acceptable to a prudent institutional mortgageloan lender, if the Loan is not part of a Securitization, stating that theLoan Documents delivered with respect to the Substitute Property pursuant tothis Section are duly authorized, executed and delivered by Borrower andthat the execution and delivery of such Loan Documents and the performance byBorrower of its obligations thereunder will not cause a breach of, or a defaultunder, any agreement, document or instrument to which Borrower is a party or bywhich it or its properties are bound; and (C) an update of the InsolvencyOpinion indicating that the substitution does not affect the opinions set forththerein.

####  

#### (o)                                 Borrower shall havecaused Mortgage Borrower to (i) have paid, (ii) have escrowed withMortgage Lender or (iii) be contesting in accordance with the termshereof, all Basic Carrying Costs relating to each of the Properties and theSubstitute Property, including without limitation, (A) accrued but unpaidInsurance Premiums relating to each of the Properties and the SubstituteProperty, and (B) currently due and payable Taxes (including any inarrears) relating to each of the Properties and the Substitute Property and (C) currentlydue and payable Other Charges relating to each of the Properties and SubstituteProperty.

####  

#### (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.

 

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#### (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 be in the form orcontaining those statements required under such Major Lease or substantially inthe 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, thereare no defaults under such Major Lease on the part of the landlord ortenant thereunder, (3) the tenant thereunder has no knowledge of anydefense or offset to the payment of rent under such Lease, (4) no rentunder such Lease has been paid more than one (1) month in advance, (5) thetenant thereunder has no option under such Lease to purchase all or any portionof the Substitute Property, and (6) all tenant improvement work requiredunder such Lease has been substantially completed and the tenant under suchLease is in actual occupancy of its leased premises. If an estoppel certificateindicates that all tenant improvement work required under the subject Lease hasnot yet been completed, Borrower shall deliver to Lender financial statementsindicating that Borrower has adequate funds to pay all costs related to suchtenant improvement work as required under such Lease.

####  

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

####  

#### (t)                                    IntentionallyOmitted.

####  

#### (u)                                 Intentionally Omitted.

####  

#### (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

 

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#### any time prior to a Securitization of the Loan. If, subsequent to aSecuritization of the Loan, any such Physical Conditions Report recommends thatany immediate repairs be made with respect to the Substitute Property, the proposedsubstitution shall not be allowed unless (i) such report shall include anestimate of the cost of such recommended repairs, (ii) the estimated costof such recommended repairs does not exceed ten percent (10%) of the AllocatedLoan Amount for such Substitute Property, and (iii) Borrower shall causeMortgage Borrower or Mezzanine A Borrower, as applicable, to deposit withMortgage Lender or Mezzanine A Lender, as applicable, (A) cash, (B) aLetter of Credit, or (C) an indemnity by a reasonably acceptableindemnitor, in each such event in an amount equal to one hundred twenty fivepercent (125%) of such estimated cost, which deposit shall constituteadditional security for the Loan and shall be released to Mortgage Borrower orMezzanine A Borrower, as applicable, upon the delivery to Lender of (1) anupdate to such Physical Conditions Report or a letter from the engineer thatprepared such Physical Conditions Report, indicating that the recommendedrepairs were completed in a good and workmanlike manner, and (2) acertificate from Mortgage Borrower or Mezzanine A Borrower, as applicable,indicating that the costs of all such repairs have been paid. In the event thatneither Mortgage Lender nor Mezzanine A Lender elects to require such deposit,Borrower shall deliver such deposit 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 requirementsof a prudent institutional mortgage loan lender), if the Loan is not part ofa Securitization.

 

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#### (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 satisfactoryto a prudent institutional mortgage loan lender.

####  

#### (aa)                            Lender shall have receivedcertified copies of all material consents, licenses and approvals of relevantGovernmental Authorities, if any, required to be obtained by Mortgage Borrowerin connection with the substitution of a Substitute Property, and evidence thatsuch consents, licenses and approvals are in full force and effect.

####  

#### (bb)                          Intentionally Omitted.

####  

#### (cc)                            Intentionally Omitted.

####  

#### (dd)                          Intentionally Omitted.

####  

#### (ee)                            If Mortgage Borrower owns aleasehold estate in the Substitute Property, Lender shall have received, (i) acertified copy of the ground lease for the Substitute Property, together withall amendments and modifications thereto and a recorded memorandum thereof,which ground lease would be reasonably satisfactory in all respects to aprudent 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 theMaturity Date, (B) that the ground lease shall not be terminated untilMortgage Lender has received notice of a default thereunder and has had areasonable opportunity to cure or complete foreclosure, and fails to do so in adiligent manner, (C) for a new lease on the same terms to Mortgage Lenderas tenant if the ground lease is terminated for any reason, (D) thenon-merger of fee and leasehold interests, and (E) that insurance proceedsand condemnation awards will be applied pursuant to the terms of thisAgreement, and (ii) a ground lease estoppel, executed by the fee owner andground lessor of the Substitute Property, in form and substance reasonablyacceptable to a prudent institutional mortgage loan lender.

####  

#### (ff)                                Intentionally Omitted.

####  

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

 

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**III.****                                 MORTGAGEBORROWER DISTRIBUTIONS**

 

Section 3.1                                      MortgageBorrower Distributions.

 

All transfers of Mortgage Borrower’s funds to or for the benefit ofMezzanine A Lender, Mezzanine A Borrower, Lender or Borrower, pursuant to thisAgreement, the Mortgage Loan Documents, the Mezzanine A Loan Documents or anyof the other Loan Documents, are intended by Borrower, Mortgage Borrower andMezzanine A Borrower to constitute and shall constitute distributions fromMortgage Borrower to Mezzanine A Borrower and from Mezzanine A Borrower toBorrower, as applicable, and, in each case, must comply with the requirementsas to distributions of the Delaware Revised Uniform Limited PartnershipAct or the Delaware Limited Liability Company Act, as applicable. No provisionof the Loan Documents shall create a debtor-creditor relationship betweenBorrower and any of Mezzanine A Lender or Mortgage Lender.

 

**IV.****                                REPRESENTATIONSAND WARRANTIES**

 

Section 4.1                                      BorrowerRepresentations.

 

Borrower represents 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 **Schedule 4.1.1**is an organizational chart of Borrower. Each Borrower Entity has delivered toLender true and correct copies of the applicable Mortgage Borrower FormationAgreement and all other Organizational Documents for the applicable MortgageBorrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal,Borrower and Principal, all of which are in full force and effect as of thedate hereof.

####  

#### (b)                                 Each Borrower Entityhas the power and authority and the requisite Ownership Interest to control theactions of Mezzanine A Borrower, and upon the realization on the Collateralunder the Pledge Agreement, Lender or any other party succeeding to theBorrower’s interest in the Collateral described in the Pledge Agreement wouldhave such control. Without limiting the foregoing, Borrower has sufficientcontrol over Mezzanine A Borrower to cause Mortgage Borrower to (i) takeany action on Mortgage Borrower’s part required by the Loan Documents andthe Mortgage Loan Documents and (ii) refrain from taking any actionprohibited by the Loan Documents and the Mortgage Loan Documents.

 

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4.1.2                        Proceedings.

 

Borrower has taken all necessary action to authorize the execution,delivery and performance of this Agreement and the other Loan Documents. ThisAgreement and the other Loan Documents have been duly executed and delivered byor on behalf of Borrower and constitute legal, valid and binding obligations ofBorrower enforceable against Borrower in accordance with their respectiveterms, subject only to applicable bankruptcy, insolvency and similar lawsaffecting rights of creditors generally, and subject, as to enforceability, togeneral principles of equity (regardless of whether enforcement is sought in aproceeding in equity or at law).

 

4.1.3                        NoConflicts.

 

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

 

4.1.4                        Litigation.

 

Except as otherwise disclosed on **Schedule 4.1.4**,there are no actions, suits or proceedings at law or in equity by or before anyGovernmental Authority or other agency now pending or, to Borrower’s ActualKnowledge, threatened against or affecting Borrower or, to Borrower’s ActualKnowledge, Mortgage Borrower, Mezzanine A Borrower, the Collateral, theMezzanine A Collateral, any Mortgage Principal’s general partner interest inthe related Mortgage Borrower Entity, any Mezzanine A Principal’s generalpartner interest in the related Mezzanine A Borrower Entity or any IndividualProperty, which actions, suits or proceedings, if determined adversely toBorrower or, to Borrower’s Actual Knowledge, Mortgage Borrower, Mezzanine ABorrower, the Collateral, the Mezzanine A Collateral, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity, any MezzanineA Principal’s general partner interest in the related Mezzanine A BorrowerEntity or any Individual Property would, individually or in the aggregate causea Material Adverse Effect. Lender acknowledges the existence of the litigationlisted in **Schedule 4.1.4** hereof (the “DisclosedLitigation”) and Borrower further represents and warrants to Lender that,notwithstanding the 

 

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Disclosed Litigation, therepresentation by Borrower contained in the preceding sentence shall continueto be true and correct.

 

4.1.5                        Agreements.

 

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

 

4.1.6                        Solvency.

 

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

 

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amounts to be payable on or inrespect of obligations of Borrower). Except as expressly disclosed to Lender inwriting, no petition under the Bankruptcy Code or similar state bankruptcy orinsolvency law has been filed against Borrower, Principal, Mortgage Borrower,Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal, Guarantor, TSPor any of their respective partners or members in the last seven (7) years,and neither Borrower, Principal, Mortgage Borrower, Mortgage Principal,Mezzanine A Borrower, Mezzanine A Principal, Guarantor, TSP nor any of theirrespective partners or members in the last seven (7) years has ever madean assignment for the benefit of creditors or taken advantage of any insolvencyact for the benefit of debtors. None of Borrower, Principal, Mortgage Borrower,Mortgage Principal, Mezzanine A Borrower, Mezzanine A 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, Mortgage Borrower’s or Mezzanine A Borrower’s assets or property,and Borrower has no Actual Knowledge of any Person contemplating the filing ofany such petition against Borrower, Principal, Mortgage Borrower, MortgagePrincipal, Mezzanine A Borrower, Mezzanine A Principal, Guarantor, TSP or anyof their respective partners or members.

 

4.1.7                        Fulland Accurate Disclosure.

 

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

 

4.1.8                        No PlanAssets

 

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

 

4.1.9                        Compliance.

 

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

 

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

 

4.1.10                  FinancialInformation. 

 

To Borrower’s Actual Knowledge, all financial data, including, withoutlimitation, the statements of cash flow and income and operating expense, thathave been delivered to Lender in respect of the Properties (i) are true,complete and correct in all material respects, (ii) accurately representin all material respects the financial condition of the Properties as of thedate of such reports, and (iii) to the extent applicable, have beenprepared in accordance with GAAP throughout the periods covered, except asdisclosed therein. Except for Permitted Encumbrances, to Borrower’s ActualKnowledge, Borrower does not have any contingent liabilities, liabilities fortaxes, unusual forward or long term commitments or unrealized or anticipatedlosses from any unfavorable commitments that are known to Borrower andreasonably likely to have a materially adverse effect on the Collateral, theMezzanine A Collateral, any Mortgage Principal’s general partner interest inthe related Mortgage Borrower Entity, any Mezzanine A Principal’s generalpartner interest in the related Mezzanine A 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.

 

4.1.11                  Condemnation.

 

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

 

4.1.12                  FederalReserve Regulations.

 

No part of the proceeds of the Loan will be used for the purposeof purchasing or acquiring any “margin stock” within the meaning of RegulationU of the Board of Governors of the Federal Reserve System or for any otherpurpose which would be inconsistent with such Regulation U or any otherRegulations of such Board of Governors, or for any purposes prohibited by LegalRequirements or by the terms and conditions of this Agreement or the other LoanDocuments.

 

4.1.13                  Utilities andPublic Access.

 

Each Individual Property has rights of access to public ways and isserved by public water, sewer, sanitary sewer and storm drain facilitiesadequate to service such Individual Property for its intended use. Except asotherwise shown on the survey with respect to any Individual Property reviewedby Lender prior to the date hereof (the “Survey”) or disclosed in **Schedule 4.1.13** annexed hereto with respect to suchIndividual

 

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Property, all public utilitiesnecessary or convenient to the full use and enjoyment of such IndividualProperty are located either in the public right of way abutting such IndividualProperty (which are connected so as to serve such Individual Property withoutpassing over other property) or in recorded easements serving such IndividualProperty and such easements are set forth in and insured by the Owner’s TitlePolicy. All public roads and streets necessary for the use of each IndividualProperty for its current purpose have been completed, are physically open andare dedicated to public use and have been accepted by all GovernmentalAuthorities.

 

4.1.14                  Not a ForeignPerson.

 

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

 

4.1.15                  SeparateLots.

 

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

 

4.1.16                  Assessments.

 

Except as disclosed in the Owner’s Title Policy, to Borrower’s ActualKnowledge, there are no pending or proposed special or other assessments forpublic 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 otherassessments.

 

4.1.17                  Enforceability.

 

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

 

4.1.18                  No PriorAssignment.

 

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

 

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4.1.19                  Insurance.

 

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

 

4.1.20                  Use ofProperty.

 

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

 

4.1.21                  Certificateof Occupancy; Licenses.

 

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

 

4.1.22                  Flood Zone.

 

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

 

4.1.23                  PhysicalCondition.

 

Except as otherwise 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 liquid andsolid waste disposal, septic and sewer systems located

 

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

 

4.1.24                  Boundaries.

 

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

 

4.1.25                  Leases.

 

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

 

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to applicable bankruptcy,insolvency, reorganization and other laws affecting creditor’s rightsgenerally, to moratorium laws from time to time in effect and to generalprinciples of equity (regardless of whether such enforceability is consideredin an action or proceeding in equity or at law); (xiv) to Borrower’s ActualKnowledge, no Lease contains an option to purchase, right of first refusal topurchase, or any other similar provision; (xv) to Borrower’s Actual Knowledge,no person or entity has any possessory interest in, or right to occupy, anyIndividual Property except under and pursuant to a Lease; (xvi) Borrower doesnot have Actual Knowledge of any currently effective unrecorded non-disturbanceagreement in favor of any Tenant under a Major Lease that would be considered unacceptableto prudent institutional lenders; (xvii) all security deposits relating to theLeases reflected on the certified rent roll delivered to Lender by Borrower arebeing held by Mortgage Borrower; and (xviii) to Borrower’s Actual Knowledge, nobrokerage commissions or finders fees are due and payable regarding any Lease(other than those for which Mortgage Lender has reserved funds under theMortgage 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 Agreement with respect tosuch Collateral and shall forever warrant and defend such title, validity andpriority to Lender against the claims of all persons whomsoever.

####  

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

 

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

####  

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

####  

#### (e)                                  Each Mezzanine APrincipal has good title to its ownership interests in the applicable MezzanineA Borrower Entity free and clear of all liens, encumbrances and chargeswhatsoever except for the Permitted Encumbrances. Borrower shall cause eachMezzanine A Principal to forever warrant, defend and preserve the title to suchownership interests in the applicable Mezzanine A Borrower Entity and toforever warrant and defend the same to Lender against the claims of all personswhomsoever.

####  

4.1.27                  IntentionallyOmitted.

 

4.1.28                  Filing andRecording Taxes.

 

All transfer taxes, deed stamps, intangible taxes or other amounts inthe nature of transfer taxes required to be paid by Borrower or, to Borrower’sActual Knowledge, any other Person under applicable Legal Requirementscurrently in effect in connection with the transfer of the Properties toMortgage Borrower, the Collateral, the making of the Mortgage Loan, theMezzanine A Loan, the Loan or the other transactions contemplated by thisAgreement have been paid. All mortgage, recording, stamp, intangible or othersimilar tax required to be paid by any Person under applicable LegalRequirements currently in effect in connection with the execution, delivery,recordation, filing, registration, perfection or enforcement of any of the LoanDocuments, including, without limitation, the Pledge Agreement, have been paid.

 

4.1.29                  IntentionallyOmitted.****

 

4.1.30                  Management Agreement.

 

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

 

4.1.31                  IllegalActivity.

 

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

 

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

 

4.1.32                  No Change inFacts or Circumstances; Disclosure.

 

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

 

4.1.33                  InvestmentCompany Act.

 

No Borrower Entity is (a) an “investment company” or a company “controlled”by an “investment company,” within the meaning of the Investment Company Act of1940, as amended; or (b) subject to any other federal or State law orregulation which purports to restrict or regulate its ability to borrow money.

 

4.1.34                  PrincipalPlace of Business; State of Organization.

 

Each Borrower Entity’s principal place of business as of the datehereof is the address set forth in the introductory paragraph of this Agreement.Each Borrower Entity is organized under the laws of the State of Delawarepursuant to a Certificate of Limited Partnership or Certification of Formationfiled with the Secretary of State of the State of Delaware, and theorganizational identification number of each Borrower Entity is set forthopposite the name of such Borrower Entity on Exhibit A annexed hereto.

 

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

 

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##### activity otherthan the ownership of its interest in the related Borrower Entity, andactivities incidental thereto;

#####  

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

#####  

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

#####  

##### (iv)                              withrespect to any Borrower Entity, (i) fail to observe its organizationalformalities or preserve its existence as an entity duly organized, validlyexisting and in good standing (if applicable) under the laws of thejurisdiction 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 LimitedLiability Company Agreement, Certificate of Formation or similar organizationaldocuments, as the case may be, whichever is applicable;

#####  

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

#####  

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

#####  

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

 

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

#####  

##### (viii)                        become insolventand fail to pay its debts and liabilities (including, as applicable, sharedpersonnel and overhead expenses) as the same shall become due; *provided, however*, the foregoing shall notrequire any partner in a Borrower Entity to make any capital contributions tosuch Borrower Entity;

#####  

##### (ix)                                (A) failto maintain its records (including financial statements), books of account andbank accounts separate and apart from those of the members, generalpartners, principals and Affiliates of any Borrower Entity or of any Principal,as the case may be, the Affiliates of a member, general partner orprincipal of any Borrower Entity or of any Principal, as the case may be,and any other Person, (B) permit its assets or liabilities to be listed asassets or liabilities on the financial statement of any other Person (exceptwhere consolidated financial statements are permitted or required by ApplicableLaw or 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) or (C) include the assets or liabilities of any otherPerson on its financial statements (except where consolidated financialstatements are permitted or required by Applicable Law or GAAP, provided thatsuch consolidated statements shall reflect that such entities are separatelegal entities and indicate that the Borrower’s assets and liabilities are notavailable to satisfy the debts and other obligations of such Affiliate or anyother Person, other than as expressly provided in the Loan Documents);

#####  

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

#####  

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

 

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

#####  

##### (xiii)                          guaranteeor become obligated for the debts of any other Person or hold itself out to beresponsible for the debts of another Person;

#####  

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

#####  

##### (xv)                            failto file its own tax returns or be included on the tax returns of any otherPerson except as required or permitted by Applicable Law;

#####  

##### (xvi)                         faileither to hold itself out to the public as a legal entity separate and distinctfrom any other Person or to conduct its business solely in its own name or aname franchised or licensed to it by an entity other than an Affiliate ofBorrower or of any Principal, as the case may be, and not as a division orpart of any other entity in order not (A) to mislead others as to theidentity with which such other party is transacting business, or (B) tosuggest that Borrower or any Principal, as the case may be, is responsiblefor the debts of any third party (including any member, general partner,principal or Affiliate of any Borrower Entity, or of any Principal, as the casemay be, or any member, general partner, principal or Affiliate thereof);

#####  

##### (xvii)                      fail toendeavor to maintain adequate capital for the normal obligations reasonablyforeseeable in a business of its size and character and in light of itscontemplated business operations; *provided,however*, the foregoing shall not require any partner in a BorrowerEntity to make any capital contributions to such Borrower Entity;

#####  

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

#####  

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

#####  

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

#####  

##### (xxi)                           [intentionallyomitted];

 

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#####  

##### (xxii)                        fail toprovide in its (i) Limited Liability Company Agreement, if it is a limitedliability company, (ii) Limited Partnership Agreement, if it is a limitedpartnership or (iii) Certificate of Incorporation, if it is a corporation,that for so long as the Loan is outstanding pursuant to the Note, thisAgreement and the other Loan Documents, it shall not file or consent to thefiling of any petition, either voluntary or involuntary, to take advantage ofany applicable insolvency, bankruptcy, liquidation or reorganization statute,or make an assignment for the benefit of creditors without the affirmative voteof the Independent Director and of all other general partners/managingmembers/directors;

#####  

##### (xxiii)                     fail to holdits assets in its own name;

#####  

##### (xxiv)                    if anyBorrower Entity or Principal is a corporation, fail to consider the interestsof such corporation’s creditors in connection with all corporate actions to theextent permitted by Applicable Law;

#####  

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

#####  

##### (xxvi)                    violate orcause to be violated the assumptions made with respect to the Borrower Entitiesand their respective Principals in the Insolvency Opinion.

#####  

#### (b)                                 Borrower covenants andagrees that, if any Borrower Entity is a single member limited liabilitycompany that complies with the requirements of Section 4.1.35(d) below,its organizational documents shall provide that such Borrower Entity shall not,and if any Borrower Entity is not a single member limited liability companythat complies with the requirements of Section 4.1.35(d) below, theorganizational documents of such Borrower Entity’s Principal shall provide thatsuch Principal shall not, fail at any time to have at least one independentmanager or director (the “Independent Director”) that is not and has notbeen for at 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, supplieror other Person who derives its purchases or revenues (other than any fee paidto such director as compensation for such director to serve as an IndependentDirector) from its activities with such Borrower Entity, such Principal or anyAffiliate of either of them (a “Business Party”); (iii) a Personcontrolling or under common control with any such stockholder, partner, member,director, officer, attorney, counsel or Business Party; or (iv) a memberof the immediate family of any such stockholder, director, officer, employee,partner, member, attorney, counsel or Business Party; *provided,however*, that a Person shall not be deemed to be a director of anAffiliate solely by reason of such Person being a director of an affiliatedsingle-purpose entity (other than Mezzanine A Borrower or Mortgage Borrower). Notwithstandingthe foregoing, no Independent Director shall also serve as (w) an IndependentDirector (as such term is defined in the Mezzanine A Loan Agreement) forMezzanine A Borrower or Principal (as such term is defined in the Mezzanine ALoan Agreement) of Mezzanine A

 

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

####  

#### (d)                                 Borrower covenants andagrees 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) uponan assignment by Member of all of its limited liability company interest insuch Borrower 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 anadditional member of such Borrower Entity or such Principal, as applicable, inaccordance 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 BorrowerEntity or such Principal, as applicable, or transfer its rights as SpecialMember unless (1) a successor Special Member has been admitted to suchBorrower Entity or such Principal, as applicable, as Special Member inaccordance with the applicable LLC Agreement and (2) such successorSpecial Member has also accepted its appointment as an Independent Director. EachLLC Agreement shall further provide that (v) Special Member shall automaticallycease to be a member of such Borrower Entity or Principal, as applicable, uponthe admission to such Borrower Entity or such Principal, as applicable, of asubstitute Member, (w) Special Member shall be a member of such Borrower Entityor such Principal, as applicable, that has no interest in the profits, lossesand capital of such Borrower Entity or such Principal, as applicable, and hasno right to receive any distributions of such Borrower Entity or Principal, asapplicable, assets, (x) pursuant to Section 18-301 of the Delaware LimitedLiability Company Act (the “Act”), Special Member shall not be required to makeany capital contributions to such Borrower

 

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#### or such Principal, as applicable, and shall not receive a limitedliability company interest in such Borrower Entity or such Principal, asapplicable, (y) Special Member, in its capacity as Special Member, may notbind such Borrower Entity or such Principal, as applicable, and (z) except as requiredby any mandatory provision of the Act, Special Member, in its capacity asSpecial Member, shall have no right to vote on, approve or otherwise consent toany action by, or matter relating to, such Borrower Entity or such Principal,as applicable, including, without limitation, the merger, consolidation orconversion 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 LLCAgreement. In order to implement the admission to any Borrower Entity or anyPrincipal, as applicable, of Special Member, Special Member shall execute acounterpart of the applicable LLC Agreement. Prior to its admission to anyBorrower Entity or any Principal, as applicable, as Special Member, no Personacting as Independent Director shall be a member of such Borrower Entity orsuch Principal, as applicable.

####  

Upon the occurrence of any event that causes the Member to cease to bea member of any Borrower Entity or any Principal, as applicable, (other than (1) uponan assignment by Member of all of its limited liability company interest insuch Borrower 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 anadditional member of such Borrower Entity or such Principal, as applicable, inaccordance with the terms of the Loan Documents and the applicable LLCAgreement), to the fullest extent permitted by law, the personal representativeof Member shall, within ninety (90) days after the occurrence of the event thatterminated the continued membership of Member in such Borrower Entity or suchPrincipal, as applicable, agree in writing (A) to continue such BorrowerEntity or such Principal, as applicable, and (B) to the admission of thepersonal representative or its nominee or designee, as the case may be, asa substitute member of such Borrower Entity or such Principal, as applicable,effective as of the occurrence of the event that terminated the continuedmembership of Member of such Borrower Entity or such Principal, as applicable. Anyaction initiated by or brought against Member or Special Member under anyCreditors Rights Laws shall not cause Member or Special Member to cease to be amember of any Borrower Entity or any Principal, as applicable, and upon theoccurrence of such an event, the business of such Borrower Entity or suchPrincipal, as applicable, shall continue without dissolution. Each LLCAgreement shall provide that each of Member and Special Member waives any rightit may have to agree in writing to dissolve any Borrower Entity or anyPrincipal, as applicable, upon the occurrence of any action initiated by orbrought against Member or Special Member under any Creditors Rights Laws, orthe occurrence of an event that causes Member or Special Member to cease to bea member of such Borrower or such 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) uponthe occurrence of

 

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#### 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 ofits partnership interest in such Borrower Entity and the admission of thetransferee in accordance with the Loan Documents and the LP Agreement, or (2) theresignation of Partner and the admission of an additional limited partner ofsuch Borrower Entity in accordance with the terms of the Loan Documents andsuch LP Agreement), any person acting as or any person that meets the definitionof Independent Director of such Borrower Entity shall, without any action ofany other Person and simultaneously with the Partner ceasing to be the Partnerof 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 suchBorrower Entity or transfer its rights as Special Limited Partner unless asuccessor Special Limited Partner has been admitted to such Borrower Entity asSpecial Limited Partner in accordance with the applicable LP Agreement. Each LPAgreement shall further provide that (v) Special Limited Partner shallautomatically cease to be a limited partner of the applicable Borrower Entityupon the admission to such Borrower Entity of a substitute Partner, (w) SpecialLimited Partner shall be a Partner of such Borrower Entity that has no interestin the profits, losses and capital of Borrower Entity and has no right toreceive any distributions or assets of such Borrower Entity (x) pursuant to theDelaware Revised Uniform Limited Partnership Act (the “LP Act”),Special Limited Partner shall not be required to make any capital contributionsto such Borrower Entity and shall not receive a limited partnership interest insuch Borrower Entity, (y) Special Limited Partner, in its capacity as SpecialLimited Partner, may not bind such Borrower Entity, and (z) except asrequired by any mandatory provision of the LP Act, Special Limited Partner, inits capacity as Special Limited Partner, shall have no right to vote on,approve or otherwise consent to any action by, or matter relating to, suchBorrower Entity including, without limitation, the merger, consolidation orconversion of Borrower. In order to implement the admission to such BorrowerEntity of Special Limited Partner, Special Limited Partner shall execute acounterpart of the applicable LP Agreement.

####  

Upon the occurrence of any event that causes Partner to cease to be alimited partner in any Borrower Entity, (other than (1) upon an assignmentby Partner of all of its partnership interest in such Borrower Entity and theadmission of the transferee in accordance with the Loan Documents and the LPAgreement, or (2) the resignation of Partner and the admission of anadditional limited partner of such Borrower Entity in accordance with the termsof the Loan Documents and such LP Agreement), to the fullest extent permittedby law, the personal representative of Partner shall, within ninety (90) daysafter the occurrence of the event that terminated the continued limitedpartnership of Partner in such Borrower Entity, agree in writing (A) tocontinue such Borrower Entity and (B) to the admission of the personalrepresentative 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 againstPartner or Special Limited Partner under any Creditors Rights Laws shall notcause Partner or Special Limited Partner to cease to be a limited partner ofany Borrower Entity, and upon the occurrence of such an event, the business ofsuch Borrower Entity shall continue without

 

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dissolution. Each LP Agreementshall provide that each of Partner and Special Limited Partner waives any rightit may have to agree in writing to dissolve the applicable Borrower Entityupon the occurrence of any action initiated by or brought against Partner orSpecial Limited Partner under any Creditors Rights Laws, or the occurrence ofan event that causes Partner or Special Limited Partner to cease to be alimited partner in such Borrower Entity.

 

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

 

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

 

4.1.36                  BusinessPurposes.

 

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

 

4.1.37                  Taxes.

 

Borrower has filed all federal, State, county, municipal, and cityincome and other tax returns required to have been filed by it and has paid alltaxes and related liabilities which have become due pursuant to such returns orpursuant to any assessments received by it. Borrower does not have ActualKnowledge of any basis for any additional assessment in respect of any suchtaxes and related liabilities for prior years.

 

4.1.38                  Forfeiture.

 

Neither Borrower nor any Affiliate of Borrower in occupancy of orinvolved with the operation or use of the Properties has committed any act oromission affording the federal government or any State or local government theright of forfeiture as against any of the Collateral, the Mezzanine ACollateral, any Mortgage Principal’s general partner interest in the relatedMortgage Borrower Entity, any Mezzanine A Principal’s general partner interestin the related Mezzanine A Borrower Entity or any Individual Property or anymaterial 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.

 

Borrower represents and warrants that, to Borrower’s Actual Knowledge,based solely upon an environmental site assessment of the Properties, a copy ofwhich has been furnished to Lender (the “Environmental Report”), exceptas otherwise disclosed or described in the Environmental Report: (a) thereare no Hazardous Materials or underground storage tanks in, on, or under anyIndividual Property, except those that are in compliance with EnvironmentalLaws and with permits issued pursuant thereto (if such permits are required); (b) thereare no past, present or threatened Releases of Hazardous Materials in violationof any Environmental Law and which would require remediation by a GovernmentalAuthority in, on, under or from any Individual Property; (c) there is nothreat of any Release of Hazardous Materials migrating to any IndividualProperty; (d) there is no past or present non-compliance with currentEnvironmental Laws, or with permits issued pursuant thereto, in connection withany Individual Property; (e) Borrower does not know of, and neitherBorrower nor Mortgage Borrower has received, any written or oral notice orother communication from any Person (including but not limited to aGovernmental Authority) relating to Hazardous Materials in, on, under or fromany Individual Property; and (f) Borrower has truthfully and fullyprovided to Lender, in writing, any and all material information relating toenvironmental conditions in, on, under or from any Individual Property known toBorrower or Mortgage Borrower or contained in Borrower’s or Mortgage Borrower’sfiles and records, including but not limited to any reports relating toHazardous Materials in, on, under or migrating to or from any IndividualProperty and/or to the environmental condition of the Properties.

 

4.1.40                  TaxpayerIdentification Number.

 

Each Borrower Entity’s United States taxpayer identification number isset forth opposite the name of such Borrower Entity on Exhibit A annexedhereto.

 

4.1.41                  OFAC.

 

None of Borrower, Mortgage Borrower, Mezzanine A Borrower, Guarantor orany of their respective Affiliates is a Prohibited Person, and Borrower,Mortgage Borrower, Mezzanine A Borrower, Guarantor and, to Borrower’s ActualKnowledge, their respective Affiliates are in full compliance with allapplicable orders, rules and regulations of The Office of Foreign AssetsControl of the U.S. Department of the Treasury.

 

4.1.42                  Ground LeaseRepresentations.

 

#### (a)                                  (i) Each GroundLease is in full force and effect and has not been modified or amended in anymanner whatsoever, (ii) there are no defaults under any Ground Lease byMortgage Borrower, or, to the best of Borrower’s knowledge, landlordthereunder, and, to the best of Borrower’s knowledge, no event has occurredwhich but for the passage of time, or notice, or both would constitute adefault under such Ground Lease, (iii) all rents, additional rents andother sums due and payable under each Ground Lease have been paid in full, and (iv) neitherMortgage Borrower nor the landlord under each

 

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#### Ground Lease has commenced any action or given or received any noticefor the purpose of terminating such Ground Lease.

####  

#### (b)                                 The Ground Leases or amemorandum thereof have been duly recorded, and there has not been any changein the terms of the Ground Leases since their recordation;

####  

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

####  

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

####  

#### (e)                                  The Ground Leases donot impose restrictions on subletting.

####  

4.1.43                  Deposit andSecurities Accounts.

 

#### (a)                                  IntentionallyOmitted;

####  

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

####  

#### (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)                                 Intentionally Omitted;

####  

#### (e)                                  Other than thesecurity interest granted to Mortgage Lender pursuant to the Mortgage LoanDocuments 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’s Actual Knowledge, as of the date hereof and at all timesthroughout the term of the Loan, including after giving effect to any Transferspermitted pursuant to the Loan Documents, (a) none of the funds or otherassets of Borrower or Principal, constitute property of, or are beneficiallyowned, directly or indirectly, by any person, entity or government subject totrade restrictions under U.S. law, including but not limited to, theInternational Emergency Economic Powers Act, 50 U.S.C. §§ 1701, et seq.,

 

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The Trading with the Enemy Act,50 U.S.C. App. 1, et seq., and any Executive Orders or regulations promulgatedthereunder with the result that the investment in Borrower or Principal, asapplicable (whether directly or indirectly), is prohibited by law or that theLoan is in violation of law (“Embargoed Person”); (b) no EmbargoedPerson has any interest of any nature whatsoever in Borrower or Principal, asapplicable, with the result that the investment in Borrower or Principal, asapplicable (whether directly or indirectly), is prohibited by law or that theLoan is in violation of law; and (c) none of the funds of Borrower orPrincipal, as applicable, have been derived from any unlawful activity with theresult 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 does not own any equity interests in any other Person otherthan the Collateral.

 

4.1.46                  MortgageBorrower and Mezzanine A Borrower Representations.

 

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

 

4.1.47                  List ofMortgage Loan Documents.

 

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

 

4.1.48                  CondominiumRepresentations.

 

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

 

4.1.49                  List ofMezzanine A Loan Documents.

 

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

 

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4.1.50                  Mortgage LoanEvent of Default.

 

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

 

4.1.51                  Mezzanine ALoan Event of Default.

 

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

 

Section 4.2                                      Survivalof Representations.

 

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

 

**V.****                                    BORROWERCOVENANTS**

 

Section 5.1                                      AffirmativeCovenants.

 

From the date hereof and until payment and performance in full of allobligations of Borrower under the Loan Documents or the earlier release of theLien encumbering the Collateral (and all related obligations) in accordancewith the terms of this Agreement and the other Loan Documents, Borrower herebycovenants and agrees with 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 and Mezzanine A Borrower, as applicable tocomply in all material respects, with all Legal Requirements applicable to it,the Collateral, the Mezzanine A Collateral, any Mortgage Principal’s generalpartner interest in the related Mortgage Borrower Entity, any Mezzanine APrincipal’s general partner interest in the related Mezzanine A Borrower Entityand the Properties. There shall never be committed by Borrower, and Borrowershall not permit or cause Mortgage Borrower to permit any other Person inoccupancy of or involved with the operation or use of the Properties any act oromission affording the federal government or any State or local government theright of forfeiture against any Individual Property or any part thereof orany monies paid in performance of Borrower’s obligations under any of the LoanDocuments. Borrower hereby covenants and agrees not to permit or cause MortgageBorrower to commit, permit or suffer to exist any act or omission affordingsuch right of forfeiture. Borrower shall at all times cause Mortgage Borrowerto maintain, preserve and protect all material franchises and trade names andpreserve all the remainder of its property used or useful in the conduct of itsbusiness and shall keep the Properties in good working order and repair, andfrom time to time make, or cause to be made, all repairs, renewals,replacements, betterments and improvements thereto

 

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

####  

#### (b)                                 After prior writtennotice to Lender, Borrower, at no expense to Lender, may, or may causeMortgage Borrower to, contest by appropriate legal proceeding, promptlyinitiated and conducted in good faith and with due diligence, the validity orapplicability of any Legal Requirements to Mortgage Borrower, Mortgage Borroweror any Individual Property, or the assertion or claim by any GovernmentalAuthority or other Person that Borrower, Mortgage Borrower or any IndividualProperty is in violation of such Legal Requirement, provided (i) no Eventof Default shall have occurred and be continuing under the Note, this Agreementor any of the other Loan Documents; (ii) such proceeding shall not violatethe provisions of any other mortgage, deed of trust or deed to secure debtaffecting such Individual Property; (iii) such proceeding shall bepermitted under and be conducted in accordance with the provisions of any otherinstrument to which Borrower, Mortgage Borrower or such Individual Property issubject and shall not constitute a default thereunder; (iv) none of theCollateral, the Mezzanine A Collateral, any Mortgage Principal’s generalpartner interest in the related Mortgage Borrower Entity, any Mezzanine APrincipal’s general partner interest in the related Mezzanine A Borrower Entityor any Individual Property, nor any part thereof or interest therein, norany of the tenants or occupants thereof, or Borrower, Mortgage Borrower, anyMortgage Principal, Mezzanine A Borrower or any Mezzanine A Principal shall beaffected in any material adverse way as a result of such proceeding; (v) non-compliancewith such Legal Requirement during the pendency of such proceeding shall notimpose civil or criminal liability on Borrower, Mortgage Borrower, Mezzanine ABorrower or Lender; and (vi) Borrower shall have furnished or causedMortgage Borrower to have furnished such security as may be required inthe 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 the provisions of the last sentence of this Section 5.1.2,Borrower shall cause Mortgage Borrower to promptly pay all Taxes, Other Chargesand utility service charges, in each case prior to the date on which suchTaxes, Other Charges or utility service charges, as the case may be, wouldotherwise become delinquent. Borrower will deliver, or cause Mortgage Borrowerto deliver, to Lender, promptly upon Lender’s request, evidence reasonablysatisfactory to Lender that the Taxes, Other Charges and utility servicecharges have been so paid or are not then delinquent (*provided,however,* that Borrower shall not be required to furnish suchreceipts for payment of Taxes or Other Charges in the event that such Taxes orOther Charges have been or are required to be paid by Mortgage Lender pursuantto the Mortgage Loan Documents). Subject to the provisions of the last sentenceof this Section 5.1.2, Borrower shall not suffer, and shall not permitMortgage Borrower to suffer, and shall cause Mortgage Borrower to pay anddischarge any lien or charge whatsoever which may be or become a Lienagainst any Individual Property, other than Permitted Encumbrances and liens infavor of Lender or

 

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Mortgage Lender, as promptly aspracticable and in any event no later than sixty (60) days after Borrower orMortgage Borrower receives written notice from any source whatsoever orotherwise has Actual Knowledge of the existence of such lien or charge. Exceptto the extent sums sufficient to pay all Taxes have been deposited withMortgage Lender in accordance with the terms of the Mortgage Loan Documents (orwith Mezzanine A Lender pursuant to a similar arrangement as set forth in theMezzanine A Loan Documents), Borrower shall furnish, or cause Mortgage Borrowerto furnish, to Lender paid receipts for the payment of the Taxes and OtherCharges or other reasonably satisfactory evidence of the payment of such Taxesand Other Charges prior to the date the same shall become delinquent. Borrowermay, at its own expense, or may cause Mortgage Borrower, at its expense,to, contest (after prior written notice to Lender, if the taxes being contestedare not paid in full prior to such contest) by appropriate legal proceedings,promptly initiated and conducted in good faith and with due diligence, theamount or validity or application in whole or in part of any of the Taxes,Other Charges or utility service charges, provided (i) no Event of Defaulthas occurred and is continuing under the Note, this Agreement or any of theother Loan Documents, (ii) such proceeding shall not violate theprovisions of any other mortgage, deed of trust or deed to secure debtaffecting any Individual Property, (iii) such proceeding shall suspend thecollection of the Taxes, Other Charges or utility service charges, asapplicable, from Mortgage Borrower and from any Individual Property or Borroweror Mortgage Borrower shall have paid all of the Taxes, Other Charges or utilityservice charges, as applicable, under protest, (iv) such proceeding shallbe permitted under and be conducted in accordance with the provisions of anyother instrument to which Borrower or Mortgage Borrower is subject and shallnot constitute a default thereunder, (v) none of the Collateral, theMezzanine A Collateral, any Mortgage Principal’s general partner interest inthe related Mortgage Borrower Entity, any Mezzanine A Principal’s generalpartner interest in the related Mezzanine A Borrower Entity or any IndividualProperty nor any part thereof or interest therein will be in danger ofbeing sold, forfeited, terminated, cancelled or lost as a result of suchproceeding, (vi) Borrower shall have, or shall have caused MortgageBorrower to, deposit with Lender adequate reserves for the payment of theTaxes, Other Charges or utility service charges, as applicable, together withall interest and penalties thereon, unless Borrower, Mortgage Borrower orMezzanine A Borrower has paid all of the Taxes, Other Charges or utilityservice charges, as applicable, under protest (*provided,however,* that with respect to Taxes, Borrower shall not be requiredto deposit such reserves with Lender, or to furnish the security required underclause (vii) below, in the event that funds sufficient to pay such Taxesshall theretofore have been deposited with or collected by Mortgage Lenderpursuant to the Mortgage Loan Documents (or with Mezzanine A Lender pursuant toa similar arrangement as set forth in the Mezzanine A Loan Documents) except asmay be required in such proceeding as set forth under clause (vii) below),and (vii) Borrower shall have furnished, or shall have caused MortgageBorrower to have furnished, the security as may be required in suchproceeding, or as may be reasonably requested by Lender to insure thepayment of any contested Taxes, Other Charges or utility service charges, asapplicable, together with all interest and penalties thereon.

 

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5.1.3                        Litigation.

 

Borrower shall give prompt written notice to Lender of any litigationor governmental proceedings pending or threatened against any Loan Party whichwould, if determined adversely to such Loan Party, materially adversely affectsuch Loan Party’s condition (financial or otherwise) or business or theProperties.

 

5.1.4                        Accessto the Properties.

 

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

 

5.1.5                        Noticeof Default. 

 

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

 

5.1.6                        Cooperatein Legal Proceedings.

 

Borrower shall, and shall cause Mortgage Borrower to, cooperate in allreasonable respects with Lender with respect to any proceedings before anycourt, board or other Governmental Authority which may in any wayadversely affect the rights of Lender hereunder or any rights obtained byLender under any of the other Loan Documents and, in connection therewith,Borrower shall, and shall cause Mortgage Borrower to, permit Lender, at itselection, to participate in any such proceedings.

 

5.1.7                        Awardand Insurance Benefits.

 

Borrower shall cooperate in all reasonable respects with Lender inobtaining for Lender the benefits of any Awards or Insurance Proceeds lawfullyor equitably payable in connection with any Individual Property, and Lendershall be reimbursed for any expenses reasonably incurred in connectiontherewith (including reasonable out-of-pocket attorneys’ fees anddisbursements, and the payment by Borrower of the expense of an appraisal onbehalf of Lender in case of Casualty or Condemnation affecting any IndividualProperty or any part thereof) out of such Award or Insurance Proceeds; *provided, however*, that in no event shall Borrower beobligated to pay for more than one (1) appraisal in connection with anysingle Casualty or Condemnation.

 

5.1.8                        FurtherAssurances.

 

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

 

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

 

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

####  

#### (b)                                 execute and deliver toLender 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 may reasonably require, including, without limitation, theauthorization of Lender to file any UCC financing statements and delivery ofCondominium Proxies; 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 shall pay all State, county and municipal recording,intangible, and all other taxes (other than income, inheritance or franchisetaxes) imposed upon the execution of the Pledge Agreement and the filing of theUCC Financing Statements and/or upon 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 anyperiod if it shall have caused Mortgage Borrower to maintain the books andrecords required under Section 14 of the Security Instrument to bemaintained by Mortgage 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 (solelyto the 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

 

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#### accompanied by an independent auditor’s report stating that thereferenced financial statements present fairly, in all material respects, thecombined financial position, results of operations and cash flows as of and forthe applicable periods in conformity with GAAP, with such certification to befree of exceptions and qualifications as to the scope of the audit as to thegoing concern nature of the business. Such combined audited financialstatements will be accompanied by an audited combined supplemental schedule ofreal estate by Individual Property as of the end of the Fiscal Year and acombined supplemental schedule of rental revenues and rental expenses byIndividual Property. The combined totals of these supplemental schedules willreconcile to the audited balance sheet and statement of operations for theFiscal Year, respectively.

####  

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

####  

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

 

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

####  

#### (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.

####  

#### (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)), MortgageBorrower, the Collateral, the Mezzanine A Collateral, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity, any MezzanineA Principal’s general partner interest in the related Mezzanine A BorrowerEntity and the Properties, whether furnished by Borrower, Mortgage Borrower,Mezzanine A Borrower, Guarantor or otherwise, as Lender reasonably determinesnecessary or desirable (the “Furnished Information”). Borrowerirrevocably waives any and all rights it may have under any ApplicableLaws to prohibit such disclosure, including but not limited to any right ofprivacy. Notwithstanding the foregoing, Lender agrees that if Borrower requestsin writing that certain of the Furnished Information be kept confidential, (i) Lenderagrees that it shall keep such Furnished Information confidential unless suchFurnished Information is required to be disclosed by Applicable Law and (ii) ifin connection with a Securitization or Syndication of the Loan, Lenderfurnishes such Furnished Information to any Investor, any Rating Agency ratingsuch participations and/or Securities, any prospective Investor, or anyorganization maintaining databases on the underwriting and performance ofcommercial mortgage or mezzanine loans, Lender shall inform any suchInvestor, Rating Agency, prospective Investor, or organization that directlyreceives such Furnished Information from Lender about the confidential natureof such Furnished Information. Notwithstanding the foregoing, Lender agreesthat it shall not, unless required by Applicable Law, disclose any financialinformation with respect to the Guarantor except (i) Guarantor’s net worthor (ii) summary financial information with respect to the Guarantor, ineach case, to a Rating Agency or Investor that requests such net worth orsummary financial information, provided that such Rating Agency or Investoragrees in writing to keep such net worth or summary financial informationconfidential.

####  

#### (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 form andsubstance reasonably satisfactory to Lender, subject, however, to theconfidentiality requirements set forth in Section 5.1.10(j) hereof.

 

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

####  

#### (m)                               All financial statementsprovided by Borrower hereunder pursuant to Section 5.1.10(n) hereof shallbe prepared in accordance with GAAP or on a federal income tax basis, and shallmeet 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 5.1.10shall be certified by Borrower, which certification shall (A) be executedon behalf of Borrower by its the chief financial officer or administrativemember, and (B) state that such financial statements meet the requirementsset forth in the first sentence of this Section 5.1.10(m).

####  

#### (n)                                 If requested by Lenderand reasonably required in connection with a Securitization, Borrower shallprovide Lender, promptly upon request (but subject to the last sentence of Section 5.1.10(j)hereof), with any other or additional financial statements, or financial,statistical or operating information, as Lender shall reasonably determine tobe required pursuant to Regulation S-K or Regulation S-X, as applicable,Regulation AB or any amendment, modification or replacement thereto or otherlegal requirements in connection with any Disclosure Document or any ExchangeAct filing in connection with or relating to a Securitization or as shallotherwise 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, suchother financial statements as Lender determines to be necessary or appropriate forsuch compliance.

####  

#### (p)                                 Lender shall have theright 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, the Mezzanine A Collateral, any Mortgage Principal’s generalpartner interest in the related Mortgage Borrower Entity, any Mezzanine APrincipal’s general partner interest in the related Mezzanine A Borrower Entityand the Properties or any Loan Party, as Lender shall reasonably determine tobe necessary or appropriate in the protection of Lender’s interest.

 

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5.1.11                  Business andOperations.

 

Borrower will cause Mortgage Borrower to continue to engage in thebusinesses presently conducted by it as and to the extent the same arenecessary for the ownership, maintenance, management and operation of theProperties. Each Borrower Entity shall cause the applicable Mortgage BorrowerEntity to remain in good standing under the laws of the State in which theIndividual Property owned by such Mortgage Borrower Entity is located, to theextent required for the ownership, maintenance, management and operation ofsuch Individual Property.

 

5.1.12                  Costs ofEnforcement.

 

In the event (a) that Lender exercises any of its rights orremedies under the Pledge Agreement or any other Loan Document as and whenpermitted thereby or (b) of the bankruptcy, insolvency, rehabilitation orother similar proceeding in respect of Borrower or any of its constituentPersons or an assignment by Borrower or any of its constituent Persons for thebenefit of its creditors, Borrower, its successors or assigns, shall bechargeable with and agrees to pay all costs of collection and defense,including reasonable out-of-pocket attorneys’ fees and costs, incurred byLender or Borrower in connection therewith and in connection with any appellateproceeding or post-judgment action involved therein, together with all requiredservice or use taxes.

 

5.1.13                  EstoppelStatement.

 

#### (a)                                  After request byLender, Borrower, within ten (10) Business Days, shall furnish Lender orany proposed assignee with a statement, duly acknowledged and certified,setting forth (i) the amount of the original principal amount of the Note,(ii) the unpaid principal amount of the Note, (iii) the ApplicableInterest Rate, (iv) the Maturity Date, (v) the date installments ofinterest and/or principal were last paid, (vi) that, except as provided insuch statement, to Borrower’s Actual Knowledge, there are no defaults or eventswhich with the passage of time or the giving of notice or both, wouldconstitute an Event of Default, (vii) that this Agreement, the Note, thePledge Agreement and the other Loan Documents are valid, legal and bindingobligations of Borrower and have not been modified or, if modified, givingparticulars of such modification, (viii) whether, to Borrower’s ActualKnowledge, any offsets or defenses exist against the obligations secured by thePledge Agreement and, if any are alleged to exist, a detailed descriptionthereof, (ix) to Borrower’s Actual Knowledge after due inquiry of theManager, all Leases are in full force and effect and have not been modified (orif modified, setting forth all modifications), (x) the date to which the Rentsthereunder have been paid pursuant to the Leases, (xi) whether or not, toBorrower’s Actual Knowledge after due inquiry of the Manager, any of thelessees under the Leases are in default under the Leases, and, if any of thelessees are in default, setting forth the specific nature of all such defaults,(xii) the amount of security deposits held by Mortgage Borrower under eachLease and that such amounts are consistent with the amounts required under eachLease, and (xiii) as to any other matters reasonably requested by Lender andreasonably related to the Obligations, the Properties, this Agreement, theCollateral, the Mezzanine A Collateral, any Mortgage Principal’s generalpartner interest in the related Mortgage

 

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#### Borrower Entity or any Mezzanine A Principal’s general partner interestin the related Mezzanine A 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) thedate installments of interest and/or principal were last received by Lender, (D) theMaturity Date, and (E) that, except as provided in such estoppelcertificate, to Lender’s knowledge, no default on the part of Borrowerunder the Note, this Agreement, the Pledge Agreement or the other LoanDocuments has occurred and is continuing. Lender shall not be required todeliver such an estoppel certificate more than one (1) time in anytwelve-month period.

####  

#### (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, Mortgage Lender or MezzanineA Lender than once in any twelve-month period, unless such request is made inconnection with a Securitization or Syndication), duly executed estoppelcertificates from the lessees under one or more Major Leases, as required byLender, attesting to such facts regarding such Major Leases as Lender may reasonablyrequire, including but not limited to attestations that each Major Leasecovered thereby is in full force and effect with no defaults thereunder on the part ofany party, 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.

####  

#### (d)                                 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 the condominium board) to obtain and deliver to Lender, promptlyupon Lender’s request (to be made no more frequently by Lender or MortgageLender than once in any twelve-month period, unless such request is made inconnection with a Securitization or Syndication), a duly executed estoppelcertificate from the applicable condominium board or the applicable IndividualProperty that is subject to a condominium regime which shall include, withoutlimitation, (i) the amount of the unpaid common charges and other amounts,if any, accrued against such Individual Property, (ii) that the applicableCondominium Documents have not been modified or amended, or, if they have, adescription of the modifications or amendments, (iii) that all paymentsdue and payable by Mortgage Borrower under the applicable Condominium Documentshave been paid in full, and (iv) that Mortgage Borrower is not in defaultunder the Condominium Documents or, if it is in default, a detailed descriptionof such default.

 

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5.1.14                  LoanProceeds.

 

Borrower shall use the proceeds of the Loan received by it on theClosing Date only for the purposes 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, termand provision of each Loan Document executed and delivered by, or applicableto, Borrower, and shall not enter into or otherwise suffer or permit anyamendment, waiver, supplement, termination or other modification of any LoanDocument executed and delivered by, or applicable to, Borrower without theprior written consent 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.

####  

#### (c)                                  Borrower shall notcause or permit Mezzanine A Borrower to enter into or otherwise suffer orpermit any amendment, waiver, supplement, termination or other modification ofany Mezzanine A Loan Document executed and delivered by, or applicable to,Mezzanine A Borrower as of the date hereof in any material respect without theprior written consent of Lender. Borrower shall cause Mezzanine A Borrower toprovide Lender with a copy of any amendment, waiver, supplement, termination orother modification to the Mezzanine A Loan Documents within five (5) daysafter the execution thereof.

####  

5.1.16                  Confirmationof Representations.

 

Borrower shall deliver, in connection with any Securitization orSyndication effected by Lender in accordance with the applicable provisions of Article IXhereof, (a) one or more Officer’s Certificates certifying as to theaccuracy in all material respects of all representations made by Borrower inthe Loan Documents as of the date of the closing of such Securitization orSyndication (or, to the extent any of such representations shall no longer beaccurate in all material respects as of the date of such closing, disclosingany material inaccuracy in such representations), and (b) certificates ofthe relevant Governmental Authorities in all relevant jurisdictions indicatingthe good standing and qualification of each Borrower Entity and each Principalas of the date of the closing of such Securitization or Syndication.

 

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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) providesfor rental rates and terms comparable or superior to existing local marketrates and terms (taking into account the type and quality of the tenant and thelocation and quality of the space to be leased) as of the date such Lease isexecuted by Mortgage Borrower (unless, in the case of a Renewal Lease or aLease covering expansion space, the rent payable during such renewal or with respectto such expansion space, as the case may be, or a formula or other methodto compute such rent, is provided for in the original Lease), (ii) is anarms-length transaction with a bona fide, independent third party tenant, (iii) doesnot have a materially adverse effect on the value or quality of the applicableIndividual Property, (iv) [intentionally omitted], (v) is written onthe standard form of residential lease approved by Lender (such approvalnot to be unreasonably withheld, delayed or conditioned) (which such standard form oflease currently approved by Lender is attached hereto as Exhibit B),unless Mortgage Borrower determines in good faith that deviations from theapproved Lease form do not materially and adversely affect MortgageBorrower’s interests under the Lease or Renewal Lease, and (vi) is not aMajor Lease. All proposed Leases which do not satisfy the requirements setforth in this Section 5.1.17 shall be subject to the prior approval ofLender (such approval not to be unreasonably withheld, delayed or conditioned),at Borrower’s expense. At Lender’s request, Borrower shall cause MortgageBorrower to promptly deliver to Lender copies of all Leases which are enteredinto pursuant to this Section 5.1.17(a), together with Borrower’s certificationthat it has satisfied or caused Mortgage Borrower to satisfy all of theconditions of this Section 5.1.17(a) (other than conditions waived inwriting by Lender) applicable to such Leases. Any Lease submitted to Lender forLender’s approval shall be deemed approved if Lender shall not have notifiedBorrower in writing of its approval or disapproval (together with a statementof the grounds of such disapproval, if applicable) within ten (10) BusinessDays (the “Approval Period”) after Lender has received such submission; *provided, however*, that upon notice to Borrower, Lendershall be entitled to a five (5) Business Day extension of the ApprovalPeriod (“Lender’s Approval Extension Period”). Notwithstanding theleasing approval procedure set forth above, to facilitate Mortgage Borrower’sleasing process, Borrower may present prospective leasing transactions toLender for its approval prior to the negotiation of a final Lease. Suchpresentation shall include a summary term sheet of all material terms of theproposed lease or a draft of the Lease, either as supplemented by anyadditional information concerning such lease or the tenant thereunder as may bereasonably requested by Lender (the “Lease Term Sheet”). Lender shallapprove or disapprove the Lease Term Sheet within ten (10) Business Daysof its receipt, provided Lender shall be entitled to Lender’s ApprovalExtension Period and such request to Lender complies with the requirements of Section 5.1.17(g) hereof,and if Lender fails to so approve or disapprove of the Lease Term Sheet withinsuch Approval Period and Lender’s Approval Extension Period, if applicable, theLease Term Sheet shall be deemed approved by Lender. If Lender approves or isdeemed to have approved the Lease Term Sheet, Lender’s prior approval shall notbe required for the final Lease, except to the extent such final Lease (i) deviatesin any material respect from the terms

 

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#### set forth on the Lease Term Sheet or contains any material terms notset forth in the Lease Term Sheet, and Borrower determines in good faith thatsuch deviation shall materially and adversely affect either (A) MortgageBorrower’s interest under the Lease or (B) Lender’s interest in the PledgeAgreement or the other Loan Documents, (ii) [intentionally omitted] or (iii) isnot fully executed within one hundred twenty (120) days after the Lease TermSheet is received by Lender; *provided, however*,that (x) nothing contained in this sentence shall be construed to requireLender’s approval of any Lease for which approval is not required by the otherprovisions of this Section 5.1.17, (y) Borrower shall cause MortgageBorrower to deliver to Lender copies of the following:  (1) the fully-executed Lease enteredinto by Mortgage Borrower in accordance with this Section 5.1.17 and (2) thefinal Lease Term Sheet, if any (to the extent that such final Lease Term Sheetcontains revisions or changes that were not contained in the Lease Term Sheetinitially reviewed and approved or deemed approved by Lender in accordance withthis Section 5.1.17(a)), and (z) Mortgage Borrower’s delivery of thedocuments 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 obligationsimposed upon the lessor under the Leases in all material respects and shall notdo or permit to be done anything to impair the value of any of the Leases assecurity for the Debt; (ii) promptly send copies to Lender of all noticesof default which Mortgage Borrower shall send or receive thereunder; (iii) enforcein a commercially reasonable manner all of the material terms, covenants andconditions contained in the Leases upon the part of the tenant thereunderto be observed or performed (except for termination of a Major Lease which,except as otherwise provided in Section 5.1.17(d) hereof, shallrequire Lender’s prior approval, such approval not to be unreasonably withheld,delayed or conditioned); (iv) not collect any of the Rents more than one (1) monthin advance except security deposits and prepayments of first month’s and lastmonth’s rent shall not be deemed Rents collected in advance; (v) depositor cause 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 inany of the Leases or the Rents (except as contemplated by the Mortgage LoanDocuments); and (vii) not consent to any assignment of or subletting underany Major Leases relating to commercial space not in accordance with theirterms, 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’sapproval, provided Lender is entitled to Lender’s Approval Extension Period andsuch request for approval complies with Section 5.1.17(g) hereof).

####  

#### (c)                                  Borrower may, withoutthe consent of Lender, cause or permit Mortgage Borrower to amend, modify orwaive the provisions of any Lease or terminate, reduce rents under, accept asurrender of space under, or shorten the term of, any Lease (including anyguaranty, 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

 

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#### planned alternative use of the affected space) does not have amaterially adverse effect on the value of the applicable Individual Propertytaken as a whole, and provided such Lease, as amended, modified or waived, isotherwise in compliance with the requirements of this Agreement. A terminationof a Lease (other than a Major Lease) with a tenant who is in default beyondapplicable notice and grace periods shall not be considered an action which hasa materially adverse effect on the value of the applicable Individual Propertytaken as a whole. Any amendment, modification, waiver, termination, rentreduction, space surrender or term shortening which does not satisfy therequirements set forth in this Subsection shall be subject to the priorapproval of Lender (such approval not to be unreasonably withheld, delayed orconditioned and to be deemed granted if Lender shall not have disapproved suchamendment, modification, waiver, termination, rent reduction, space surrenderor term shortening, as the case may be, in writing within ten (10) BusinessDays after Borrower’s request for Lender’s approval (fifteen (15) Business Daysfor any termination, rent reduction, space surrender or term shorteningrequest), provided that Lender is entitled to Lender’s Approval Extension Periodand such request for approval complies with the requirements of Section 5.1.17(g) hereof),at Borrower’s expense. Borrower shall cause Mortgage Borrower to promptlydeliver to Lender copies of all Leases, amendments, modifications and waiverswhich are entered into pursuant to this Section 5.1.17(c), together withBorrower’s certification that it has satisfied or caused to be satisfied all ofthe 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 Section 5.1.17(a) regardingLender’s approval or deemed approval of leasing transactions as well asBorrower’s rights to deliver Lease Term Sheets shall also apply to Major Leaseapprovals 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 (i) Mortgage Lender pursuant to the termsof the Mortgage Loan Documents and (ii) Mezzanine A Lender pursuant to theterms of the Mezzanine A Loan Documents, Borrower shall promptly deposit withLender any and all monies then held by Borrower representing security depositsunder the Leases (collectively, the “Security Deposits”). Borrower andnot Lender shall be liable for the delivery of security deposits to tenantsunder Leases which are not delivered to and held by Lender pursuant to this Section 5.1.17(e).Lender shall hold the Security Deposits in accordance with the terms of therespective Leases, and shall only release the Security Deposits in order toreturn a tenant’s Security Deposit to such tenant if such tenant is 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

 

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

####  

#### (f)                                    IntentionallyOmitted.

####  

#### (g)                                 Notwithstanding anythingto the contrary contained in this Section 5.1.17, to the extent Lender’sprior written approval is required pursuant to the provisions of this Section 5.1.17,Lender shall, with respect to such proposed Leases, Lease Term Sheets and/orrenewals, modifications, amendments or terminations of, or waivers with respectto, 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) BUSINESSDAYS (FIFTEEN (15) BUSINESS DAYS FOR ANY TERMINATION, RENT REDUCTION, SPACESURRENDER OR TERM SHORTENING REQUEST) OF RECEIPT OF THIS NOTICE (THE “APPROVALPERIOD”) PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED ANDLENDER; PROVIDED, HOWEVER, THAT LENDER SHALL HAVE THE RIGHT TO A FIVE (5) DAYEXTENSION OF THE APPROVAL PERIOD UPON NOTICE TO BORROWER” and the envelopecontaining the request must be marked “PRIORITY”. In the event Lender fails torespond to the proposed Lease, Lease Term Sheet and/or renewal, modification,amendment or termination of, or waiver with respect to, an existing Leasewithin such time, Lender’s approval shall be deemed given. The reasonableout-of-pocket attorneys’ fees incurred by Lender in connection with any suchproposed Lease, Lease Term Sheet and/or renewal, modification, amendment ortermination of, or waiver with respect to, an existing Lease shall be payableby Borrower to Lender within ten (10) Business Days after Lender’s writtenrequest therefor.

####  

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. Allmanagement fees payable pursuant to the Management Agreements shall be marketfees similar to those payable to managers of properties of a similar type andquality pursuant to arm’s-length management agreements, taking into accountdifferences in the quality or level of service provided; *provided,however*, that if TSP or an Affiliate of TSP is employed as Managerof the Properties, such fees payable to TSP or such Affiliate, as the case may be,shall be deemed to be market and arm’s-length. Borrower shall cause MortgageBorrower to (i) diligently perform and observe all of the materialterms, covenants and conditions of the Management Agreements on the part ofMortgage

 

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#### Borrower to be performed and observed to the end that all things shallbe done which are necessary to keep unimpaired the rights of Mortgage Borrowerunder the Management Agreements and (ii) promptly notify Lender of thegiving of any notice to Mortgage Borrower of any default by Mortgage Borrowerin the performance or observance of any of the terms, covenants or conditionsof any Management Agreement on the part of Mortgage Borrower to beperformed and observed and deliver to Lender a true copy of each such notice. Borrowershall not cause or permit Mortgage Borrower to surrender any ManagementAgreement, consent to the assignment by Manager of its interest under anyManagement Agreement, or terminate or cancel any Management Agreement or, inany respect that would have a Material Adverse Effect, modify, change,supplement, alter or amend any Management Agreement, either orally or inwriting. Notwithstanding the foregoing, Borrower shall be entitled to cause orpermit Mortgage Borrower to enforce and terminate any Management Agreement inaccordance with the terms thereof; provided, however, that if the ManagementAgreement for any Individual Property is terminated, Borrower shall cause theapplicable Mortgage Borrower Entity to simultaneously enter into a replacementManagement Agreement for such Individual Property. Subject to (x) the rights ofMortgage Lender pursuant to the terms and conditions of the Mortgage LoanDocuments and (y) the rights of Mezzanine A Lender pursuant to the terms andconditions of the Mezzanine A 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 tobe performed or observed, and such default shall continue beyond the expirationof any applicable grace or cure period, then, without limiting the generalityof the 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 actor take any action as may be appropriate to cause all the terms, covenantsand conditions of such Management Agreement on the part of MortgageBorrower to be performed or observed to be promptly performed or observed onbehalf of Mortgage Borrower, to the end that the rights of Mortgage Borrowerin, to and under such Management Agreement shall be kept unimpaired and freefrom default. Lender and any person designated by Lender shall have, and arehereby granted, the right to enter upon any Individual Property at any time andfrom time to time while an uncured Event of Default exists for the purpose oftaking any such action. If the Manager under any Management Agreement shalldeliver to Lender a copy of any notice sent to Borrower or Mortgage Borrower ofdefault under such Management Agreement, such notice shall constitute fullprotection to Lender for any action taken or omitted to be taken by Lender ingood faith, in reliance thereon. Borrower shall notify Lender if the Managersub-contracts to a third party any or all of its management responsibilitiesunder any Management Agreement. Borrower shall, from time to time, use its bestefforts (or commercially reasonable efforts, at any time when the Manager underany Management Agreement is not an Affiliate of Borrower, Mortgage Borrower,any Principal, Guarantor or TSP) to obtain from the Manager under suchManagement Agreement such certificates of estoppel with respect to complianceby Mortgage Borrower and Manager with the terms of such Management Agreement asmay be reasonably requested by Lender. Borrower shall cause MortgageBorrower to exercise each individual option, if any, to extend or renew theterm of each Management Agreement upon demand by Lender made

 

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#### at any time within one (1) year of the last day upon which anysuch option may be exercised. Any sums expended by Lender pursuant to thisSection 5.1.18(a) shall bear interest at the Default Rate from thedate which is ten (10) Business Days after the date Lender first makeswritten 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 limitation ofthe 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 or the Mezzanine A Loan Documents), without penalty or fee, ifat any time during the Loan: (i) there exists an uncured Event of Default,(ii) there exists a default by Manager (other than TSP or any otherAffiliated Manager) under such Management Agreement, which default shall havecontinued beyond the expiration of any applicable grace or cure period, (iii) theManager shall become insolvent or a debtor in any bankruptcy or insolvencyproceeding, or (iv) the Maturity Date occurs and the Loan is not paid infull. At such time as the Manager is removed as the Manager with respect to anyIndividual Property, a Qualified Manager shall assume management of suchIndividual Property pursuant to a replacement Management Agreement, and shallreceive a property management fee not to exceed then current market rates formanagers of properties of a similar type and quality pursuant to arm’s lengthmanagement agreements and taking into account differences in the quality orlevel of service provided; provided, however, that (A) if a Securitizationhas occurred, Lender shall receive written confirmation from the RatingAgencies that management of such Individual Property by such Qualified Managerwill not result in a downgrade, withdrawal or qualification of the initial, or,if higher, the then current ratings issued in connection with such Securitization,and (B) if a Securitization has not occurred, such Qualified Manager shallbe subject to the approval of Lender, such approval not to be unreasonablywithheld, delayed or conditioned.

####  

5.1.19                  EnvironmentalCovenants.

 

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

 

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#### but not limited to providing all relevant information and makingknowledgeable persons available for interviews; (vi) Borrower shall, atits sole cost and expense, cause Mortgage Borrower to perform anyenvironmental site assessment or other investigation of environmentalconditions in connection with any Individual Property, pursuant to anyreasonable written request of Lender, upon Lender’s reasonable belief that suchIndividual Property is not in compliance in all material respects with allapplicable Environmental Laws, and share with Lender the reports and otherresults thereof, and Lender and other Indemnified Parties shall be entitled torely on such reports and other results thereof; (vii) Borrower shall, atits sole cost and expense, cause Mortgage Borrower to comply with allreasonable written requests of Lender to (A) reasonably effectuateremediation of any Hazardous Materials in, on, under or from such IndividualProperty; and (B) comply with any Environmental Law applicable to suchIndividual Property; (viii) Borrower shall not knowingly cause or permitMortgage Borrower to allow any tenant or other user of any Individual Propertyto violate any Environmental Law applicable to such Individual Property; and (ix) Borrowershall immediately notify Lender in writing after it has become aware of (A) anypresence or Release or threatened Releases of Hazardous Materials in, on,under, from or migrating towards any Individual Property in violation of anyEnvironmental Law; (B) any material non-compliance with any EnvironmentalLaws related in any way to any Individual Property; (C) any actual orpotential Environmental Lien; (D) any required or proposed remediation ofenvironmental conditions relating to any Individual Property; and (E) anywritten or oral notice or other communication of which Borrower becomes awarefrom any source whatsoever (including but not limited to a GovernmentalAuthority) relating in any way to Hazardous Materials in, on, under, from ormigrating 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 provide accessto Lender and any such Person designated by Lender at all reasonable times andafter reasonable prior written notice (and subject to the rights of tenantsunder their respective Leases).

####  

5.1.20                  Alterations.

 

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

 

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condition, the use, operationor value of any Individual Property, the Collateral, the Mezzanine ACollateral, any Mortgage Principal’s general partner interest in the relatedMortgage Borrower Entity, any Mezzanine A Principal’s general partner interestin the related Mezzanine A Borrower Entity or the net operating income of anyIndividual Property 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 workperformed pursuant to the terms and conditions of a Lease and not adverselyaffecting any structural component of any Improvements, any utility or HVACsystem contained in any Improvements or (except in the case of customary tenantsignage) the exterior of any building constituting a part of any Improvements,(c) alterations performed in connection with the restoration of anIndividual Property after the occurrence of a casualty in accordance with theterms and conditions of this Agreement and the Mortgage Loan Documents or (d) thecapital improvements 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 conditionany such approval upon receipt of a certificate of compliance with ApplicableLaws from an independent architect, engineer, or other person reasonablyacceptable to Lender. If the total unpaid amounts due and payable with respectto an Alteration to the Improvements of any Individual Property (other thansuch amounts to be paid or reimbursed by tenants under the Leases orAlterations not requiring approval under clauses (a) through (d) above)shall at any time exceed an amount equal to the lesser of (x) five percent (5%)of the Allocated Loan Amount for such Individual Property and (y) $2,500,000(the “Threshold Amount”; and any such Alteration a “MaterialAlteration”), Borrower shall promptly deliver or cause to be delivered toLender, (i) as security for the payment of such amounts and as additionalsecurity for Borrower’s obligations under the Loan Documents, any of thefollowing:  (1) cash, (2) U.S.Obligations, (3) other securities having a rating reasonably acceptable toLender or, if a Securitization has occurred, the applicable Rating Agencieshave confirmed in writing that such securities delivered will not, in and ofthemselves, result in a downgrade, withdrawal or qualification of the initial,or if higher, the then current ratings assigned in connection with suchSecuritization, (4) a completion bond and performance bond or (5) aLetter of Credit (the security described in clauses (1) through (5) abovebeing sometimes referred to hereinafter, collectively, as the “MaterialAlteration Security”), and (ii) if a Securitization has occurred,written confirmation from the applicable Rating Agencies that any such MaterialAlteration shall not result in the downgrade, withdrawal or qualification ofthe initial, or, if higher, the current ratings assigned to the Securities inconnection with a Securitization. The Material Alteration Security shall be inan amount equal to the excess of (x) the total unpaid amounts with respect toMaterial Alterations to the Improvements (other than such amounts to be paid orreimbursed by Tenants under Leases or to be paid from Reserve Funds orAlterations not requiring approval under clauses (a) through (d) above)over (y) the Threshold Amount. Upon Borrower’s request therefor, Lender shalldisburse any Material Alteration Security that is cash to Borrower to pay forMaterial Alterations or permit

 

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Borrower to partially reduceany non-cash Material Alteration Security for work completed and paid for withrespect to Material Alterations from time to time, subject to the sameconditions to the release and disbursement of Required Repair Funds. Providedthat no Event of Default then exists, upon completion of the MaterialAlteration, as determined by Lender in its reasonable discretion, Lender shallcancel the Material Alteration Security or disburse or return to Borrower theMaterial Alteration Security, as applicable. **Notwithstandingthe foregoing, Borrower shall be relieved of its obligation to deposit thesecurity for certain alterations described above if either (A) MortgageBorrower is required to and does deliver such security to Mortgage Lender inaccordance with the Mortgage Loan Documents or (B) Mezzanine A Borrower isrequired to and does deliver such security to Mezzanine A Lender in accordancewith the Mezzanine A Loan Documents, and in any such case Lender has receivedevidence reasonably acceptable 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                  Ground LeaseCovenants.

 

#### (a)                                  With respect to eachGround Lease, (a) Borrower shall cause each Mortgage Borrower that is theholder of the leasehold interest under such Ground Lease to (i) pay allrents, additional rents and other sums required to be paid by such MortgageBorrower, as tenant under and pursuant to the provisions of such Ground Lease, (ii) diligentlyperform and observe in all material respects all of the terms, covenantsand conditions of such Ground Lease on the part of such Mortgage Borrower,as tenant thereunder, (iii) promptly notify Lender of the giving of anynotice by the landlord under such Ground Lease to such Mortgage Borrower of anydefault by such Mortgage Borrower, as tenant thereunder, and deliver to Lendera true copy of each such notice within five (5) Business Days of receiptand (iv) promptly notify Lender of any bankruptcy, reorganization orinsolvency of the landlord under such Ground Lease or of any notice thereof,and deliver to Lender a true copy of such notice within five (5) BusinessDays of Borrower’s receipt. Borrower shall not, without the prior consent ofLender, cause such Mortgage Borrower to surrender the leasehold estate createdby such Ground Lease or terminate or cancel such Ground Lease or modify,change, supplement, alter or amend such Ground Lease in any material respect,either orally or in writing, and if such Mortgage Borrower shall default in theperformance or observance of any term, covenant or condition of such GroundLease on the part of such Mortgage Borrower, as tenant thereunder, andshall fail to cure the same prior to the expiration of any applicable cureperiod provided thereunder, Borrower shall permit Lender to have the right topay any sums and to perform any act or take any action as may beappropriate to cause all of the terms, covenants and conditions of such GroundLease on the part of such Mortgage

 

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

####  

#### (b)                                 Subleases. Notwithstandinganything contained in any Ground Lease to the contrary, Borrower shall causeeach Mortgage Borrower that is the holder of the leasehold interest under aGround Lease to not further sublet any portion of the related IndividualProperty (other than as permitted pursuant to Section 5.1.17 hereof)without prior written consent of Lender, which consent shall not beunreasonably withheld, conditioned or delayed.

####  

5.1.24                  Mortgage LoanReserve Funds.

 

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

 

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 or Mezzanine A Loan Event ofDefault.

 

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 theOrganizational Documents of Mezzanine A Borrower to cause Mortgage Borrower tomake a distribution to Mezzanine A Borrower and then Mezzanine A Borrower tomake a distribution to Borrower, in each case in an aggregate amount such thatLender shall receive the amount required to be disbursed pursuant to theMortgage Loan Documents.

 

5.1.27                  MortgageBorrower and Mezzanine A Borrower Covenants.

 

#### (a)                                  Borrower shall causeMortgage Borrower to comply with all obligations under the Mortgage LoanDocuments (including, without limitation, the affirmative and negativecovenants set forth in the Mortgage Loan Documents) with which MortgageBorrower has expressly covenanted in the Mortgage Loan Documents to comply,whether the Mortgage Loan has been repaid or the related Mortgage Loan Documenthas been otherwise terminated (to the extent that such covenants arecross-referenced herein),

 

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#### unless otherwise consented to in writing by Lender. Borrower shallcause Mortgage Borrower to promptly notify Lender of all material noticesreceived by Mortgage Borrower under or in connection with the Mortgage Loan,including, without limitation, any notice by the Mortgage Lender to MortgageBorrower of any default by Mortgage Borrower in the performance or observanceof any of the terms, covenants or conditions of the Mortgage Loan Documents onthe part of Mortgage Borrower to be performed or observed, and shalldeliver to Lender a true copy of each such notice, together with any othermaterial consents, notices, requests or other written correspondence betweenMortgage Borrower and Mortgage Lender.

####  

#### (b)                                 Borrower shall causeMezzanine A Borrower to comply with all obligations under the Mezzanine A LoanAgreement and all other Mezzanine A Loan Documents (including, withoutlimitation, the affirmative and negative covenants set forth in the Mezzanine ALoan Agreement) with which Mezzanine A Borrower has expressly covenanted in theMezzanine A Loan Agreement to comply, whether the Mezzanine A Loan has beenrepaid or the related Mezzanine A Loan Document has been otherwise terminated(to the extent that such covenants are cross-referenced herein), unlessotherwise consented to in writing by Lender. Borrower shall cause Mezzanine ABorrower to promptly notify Lender of all material notices received byMezzanine A Borrower under or in connection with the Mezzanine A Loan,including, without limitation, any notice by the Mezzanine A Lender toMezzanine A Borrower of any default by Mezzanine A Borrower in the performanceor observance of any of the terms, covenants or conditions of the Mezzanine ALoan Documents on the part of Mezzanine A 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 Mezzanine A Borrower and Mezzanine A Lender.

####  

5.1.28                  Mortgage Loanand Mezzanine A Loan Estoppels.

 

#### (a)                                  Borrower shall, orshall cause Mortgage Borrower to, use commercially reasonable efforts from timeto time, to obtain from the Mortgage Lender such certificates of estoppel withrespect to compliance by Mortgage Borrower with the terms of the Mortgage LoanDocuments as may be reasonably requested by Lender. In the event or to theextent that Mortgage Lender is not legally obligated to deliver such certificatesof estoppel and is unwilling to deliver the same, or is legally obligated todeliver such certificates of estoppel but breaches such obligation, thenBorrower shall not be in breach of this provision so long as Borrower furnishesto Lender an estoppel certificate executed by Borrower, in which Borrower shallexpressly represent to Lender such information as may be reasonablyrequested by Lender regarding compliance by Mortgage Borrower with the terms ofthe Mortgage Loan Documents.

####  

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

 

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

####  

5.1.29                  IntentionallyOmitted.

 

5.1.30                  CondominiumCovenants.

 

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

####  

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

####  

#### (c)                                  Borrower shall notpermit any Mortgage Borrower that owns an Individual Property subject to acondominium regime to, except with the prior written consent of Lender, whichconsent shall not be unreasonably withheld, conditioned or delayed, (a) instituteany action or proceeding for partition of such Individual Property; (b) votefor or consent to any material modification of, or amendment to or materialrelaxation in the enforcement of the applicable Condominium Documents or thetermination of any condominium regime; and (c) in the event of damage toor destruction of such Individual Property, vote not to repair, restore orrebuild such Individual Property if Mortgage Borrower shall have such a votingright.

####  

#### (d)                                 Borrower shall notpermit any Mortgage Borrower that owns an Individual Property subject to acondominium regime to revoke any proxy delivered to Lender in connection withthe Loan and relating to any voting rights such Mortgage Borrower may haveas a unit owner in any condominium regime.

####  

#### (e)                                  To the extent thatany approval rights, consent rights or other rights or privileges granted to alender in the applicable Condominium Documents are conditioned upon suchapproval rights, consent rights or other rights or privileges being required or

 

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

####  

#### (f)                                    With respect to theBoston Common Individual Property, Borrower may permit Mortgage Borrowerto convert the Boston Common Individual Property to a condominium form ofownership in accordance with the terms and provisions of Section 54 of theSecurity Instrument relating to the Boston Common Individual Property so longas:

####  

##### (i)                                     (A) MortgageBorrower complies with all of such terms and provisions to the satisfaction ofLender (such compliance as independently determined by Lender in its reasonablediscretion), (B) Borrower obtains the approval of Lender for each matterrequiring the approval of Mortgage Lender under the provisions of such Section 54of the Security Instrument, and (C) Borrower causes such Mortgage Borrowerto deliver to Lender copies of all notices, instruments and documents requiredto be delivered by such Mortgage Borrower to Mortgage Lender under such Section 54of the Security Instrument;

#####  

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

#####  

##### (iii)                               Lendershall have received payment of all of Lender’s reasonable costs and expenses,including due diligence review costs and reasonable counsel fees anddisbursements incurred in connection with the conversion of the Boston CommonIndividual Property and the review and approval of the documents andinformation required to be delivered in connection therewith.

#####  

Section 5.2                                      NegativeCovenants.

 

From the date hereof until payment and performance in full of allobligations of Borrower under the Loan Documents or the earlier release of theLien on the Collateral in accordance with the terms of this Agreement and theother Loan Documents, Borrower covenants and agrees with Lender that it willnot do, directly or indirectly, any of the following:

 

5.2.1                        Liens.

 

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

 

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Mezzanine A Collateral, anyMortgage Principal’s general partner interest in the related Mortgage BorrowerEntity or any Mezzanine A Principal’s general partner interest in the relatedMezzanine A Borrower Entity, or permit any such action to be taken, other thanPermitted Encumbrances. Nothing contained in this Section 5.2.1 shallaffect Mortgage Borrower’s right to contest Liens as provided in the MortgageLoan Documents.

 

5.2.2                        Dissolution.

 

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

 

5.2.3                        Changein Business.

 

#### (a)                                  Borrower shall notenter into any line of business other than those permitted under Section 4.1.35(a) hereof,or make any material change in the scope or nature of its business objectives,purposes or operations or undertake or participate in activities other than thecontinuance 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.

####  

#### (c)                                  Borrower shall notcause Mezzanine A Borrower to enter into any line of business other than thosepermitted under Section 4.1.35of the Mezzanine A Loan Agreement, or make any material change in the scopeor nature of its business objectives, purposes or operations or undertake orparticipate in activities other than the continuance of its present business.

####  

5.2.4                        DebtCancellation.

 

Borrower shall not cancel or otherwise forgive or release any materialclaim or debt (other than termination of Leases in accordance herewith) owed toBorrower by any Person, except for adequate consideration and in the ordinarycourse of Borrower’s business. In addition, Borrower shall not permit or causeMortgage Borrower to cancel

 

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or otherwise forgive or releaseany material claim or debt (other than termination of Leases in accordance withthe Mortgage Loan Documents) owed to Mortgage Borrower by any Person, exceptfor adequate consideration and in the ordinary course of Mortgage Borrower’sbusiness.

 

5.2.5                        Zoning.

 

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

 

5.2.6                        NoJoint Assessment.

 

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

 

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

 

No Borrower Entity shall change its name (including its trade name ornames) without first giving Lender fifteen (15) days’ prior written notice. Exceptas otherwise expressly permitted under Section 5.2.10 hereof, no BorrowerEntity shall change its limited liability company, partnership or otherstructure, or the place of its organization as set forth in Section 4.1.34,without, in each case, the consent of Lender. Upon Lender’s request, Borrowershall execute and deliver additional financing statements, security agreementsand other instruments which may be necessary to effectively evidence orperfect Lender’s security interest in the Collateral as a result of such changeof principal place 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 subjectto Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32)of ERISA; (B) no Loan Party is subject to State statutes regulatinginvestments and fiduciary obligations

 

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

####  

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

#####  

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

#####  

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

#####  

5.2.9                        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, the Mezzanine ACollateral, any Mortgage Principal’s general partner interest in the relatedMortgage Borrower Entity or any Mezzanine A Principal’s general partnerinterest in the related Mezzanine A Borrower Entity in any manner between oramong any Loan Parties or their Affiliates, including the Management Agreementand any other agreement specifically related to the Property, the Collateral,the Mezzanine A Collateral, any Mortgage Principal’s general partner interestin the related Mortgage Borrower Entity, any Mezzanine A Principal’s generalpartner interest in the related Mezzanine A Borrower Entity, or any Loan Party (collectively,the “Affiliate Agreements”) shall be made on an arm’s-length basis(taking into account differences in the quality or standards of goods orservices provided); and the parties to each Affiliate Agreement shallacknowledge and agree that, to the extent not prohibited under the MortgageLoan Documents and the Mezzanine A Loan Documents, any such agreement (otherthan the Management Agreement, as to which the provisions of the AgreementRegarding Management Agreement and Section 5.1.18 hereof shall beapplicable) shall be terminable by Mortgage Borrower or Lender within ten (10) daysafter notice, without the payment of any fee, penalty, premium or liability forfuture liabilities or obligations, if an Event of Default shall have occurredand be continuing. To the extent not prohibited under the Mortgage LoanDocuments and the Mezzanine A Loan Documents, upon the occurrence and duringthe continuation of an Event of Default, if requested by Lender in writing,Borrower shall, or shall cause the applicable Loan Party or any Affiliatethereof to, terminate any existing Affiliate Agreement specified by Lenderwithin ten (10) days after delivery of Lender’s request without payment ofany penalty, premium or termination fee.

 

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5.2.10                  Transfers.

 

#### (a)                                  Except as otherwisepermitted under Section 5.2.10(c) or 5.2.11 hereof, Borrower shallnot sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grantoptions with respect to, or otherwise transfer or dispose of (directly orindirectly, voluntarily or involuntarily, by operation of law or otherwise, andwhether or not for consideration or of record) any Individual Property, theCollateral, the Mezzanine A Collateral, any Mortgage Principal’s generalpartner interest in the related Mortgage Borrower Entity, any Mezzanine APrincipal’s general partner interest in the related Mezzanine A BorrowerEntity, or any part thereof or any legal or beneficial interest therein orpermit a Sale or Pledge of any interest in any Restricted Party (collectively,a “Transfer”), without the prior written consent of Lender, other than (i) pursuantto Leases of space in the Improvements to tenants in accordance with theprovisions of Section 5.1.17 hereof, (ii) Permitted Encumbrances, and(iii) the transfer of obsolete or worn out Personal Property and fixturesthat are contemporaneously replaced by items of equal or better function andquality, which are free of liens, encumbrances and security interests otherthan those created by the Loan Documents or consented to by Lender. Thereplacement requirement in clause (iii) of the preceding sentence shallnot apply to sales or dispositions of Personal Property in any fiscal yearvalued at less than $50,000 in the aggregate, provided that Borrower shall, orshall cause Mortgage Borrower to, upon Lender’s written request, provide anannual written certification to Lender as to the value of Personal Propertysold in the prior year.

####  

#### (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 Propertiesor any part thereof or (B) Borrower agrees to sell the Collateral orany part thereof, for a price to be paid in installments; (ii) an agreementby Mortgage Borrower to lease all or substantially all of any IndividualProperty for other than actual occupancy by a space tenant thereunder or asale, assignment or other transfer of, or the grant of a security interest in,Mortgage Borrower’s right, title and interest in and to any Leases or anyRents; (iii) if a Restricted Party is a corporation, any merger,consolidation or Sale or Pledge of such corporation’s stock or the creation orissuance of new stock; (iv) if a Restricted Party is a limited or generalpartnership or joint venture, any merger or consolidation or the change,removal, resignation or addition of a managing general partner or the Sale orPledge of the partnership interest of any managing general partner or anyprofits or proceeds relating to such partnership interest, or the Sale orPledge of limited partner interests or any profits or proceeds relating to suchlimited partner interests or the creation or issuance of new limited partnerinterests; (v) if a Restricted Party is a limited liability company, anymerger or consolidation or the change, removal, resignation or addition of amanaging member or non-member manager (or if no managing member, any member) orthe Sale or Pledge of the membership interest of a managing member (or if nomanaging member, any member) or any profits or proceeds relating to suchmembership interest, or the Sale or Pledge of non-managing membership interestsor the creation or issuance of new non-managing membership interests; (vi) ifa Restricted Party is a trust or nominee trust, any merger, consolidation orthe Sale or Pledge of the legal or beneficial interest in a Restricted Party orthe creation or issuance of new legal or beneficial interests; (vii) theremoval or the resignation of the Manager

 

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#### (including, without limitation, an Affiliated Manager) other than inaccordance with the Mortgage Loan Documents, the Mezzanine A Loan Agreement andSection 5.1.18 hereof; (viii) any deed-in-lieu or consensualforeclosure relating to any Individual Property with or for the benefit ofMortgage Lender or any Affiliate thereof; (ix) any transaction, event or series oftransactions or events that result in (A) Borrower holding less than 100%of the direct limited partnership interests or limited liability companyinterests, as applicable, in Mezzanine A Borrower, or less than 100% of themembership interests in Mezzanine A Principal or (B) Mezzanine A Borrowerholding less than 100% of the direct limited partnership interests or limitedliability company interests, as applicable, in Mortgage Borrower, or less than100% of the membership interests in Mortgage Principal; or (x) any transaction,event or series of transaction or events that results in a change inControl of Borrower.

####  

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

####  

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

#####  

##### (ii)                                  intentionallyomitted;

#####  

##### (iii)                               intentionallyomitted;

#####  

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

#####  

##### (v)                                 IntentionallyOmitted;

#####  

##### (vi)                              IntentionallyOmitted;

#####  

##### (vii)                           thePledge to Bank Loan Agent for the benefit of the Bank Loan Lenders of (A) thelimited partnership or limited liability company interest in any BorrowerEntity, as applicable, held by the related Bank Loan Borrower, (B) themembership interest in any Principal held by the related Bank Loan Borrower and(C) 100% of the equity interests in each of the entities set forth on **Schedule 5.2.10(c)(vii) **annexedhereto, in each case as collateral security for the Bank Loan, or anyregistration of such Pledge or the exercise of any rights or remedies Bank LoanLender may have under the Bank Loan Documents with respect to

#####  

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#####  

##### such Pledge inaccordance with the terms of the Bank Loan Intercreditor Agreement;

#####  

##### (viii)                        IntentionallyOmitted;

#####  

##### (ix)                                IntentionallyOmitted;

#####  

##### (x)                                   IntentionallyOmitted; or

#####  

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

#####  

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

#####  

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

#####  

#### (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. Thisprovision shall apply to every Transfer regardless of whether voluntary or not,or whether or not Lender has consented to any previous Transfer. Notwithstandinganything to the contrary contained in this Section 5.2.10, (a) notransfer (whether or not such transfer shall constitute a Transfer) shall bemade to any Prohibited Person; (b) Borrower shall provide to Lender, nolater than ten (10) Business Days after written request, the name andidentity of each Person and its Affiliates which own, directly or indirectly,more than twenty percent (20%) of the legal or beneficial interest in Borroweror Principal (excluding ownership interests in any fund or other entity which (i) iscontrolled by one or more Tishman Speyer Control Persons and/or LehmanEntities, (ii) owns an indirect interest in Borrower or Principal and (iii) owns,directly or indirectly, real property assets other than the Properties), togetherwith the names of their controlling principals, and Lender, except as may berequired by Applicable Law, agrees to keep such information confidential;notwithstanding the foregoing, Lender may disclose such information to aRating Agency, 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 anytransfer (whether or not such transfer

####  

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#### shall constitute a Transfer) results in any Person that as of the datehereof owns less than forty-nine percent (49%) of the beneficial ownershipinterest in Mortgage Borrower, Mezzanine A Borrower and Borrower owning inexcess of forty-nine percent (49%) of the beneficial ownership interest inMortgage Borrower, Mezzanine A Borrower and Borrower and a Securitization hasoccurred, Borrower shall, prior to such transfer, deliver an updated InsolvencyOpinion to Lender, which opinion shall be in form, scope and substancereasonably 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 Borroweris permitted to transfer all of the Properties pursuant to Section 21 ofthe Security Instrument, 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 shall not be limited to, the following matters:

####  

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

#####  

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

#####  

##### (iii)                               Borrowershall cause the transferee to assume all of the obligations of Borrower arisingfrom and after the transfer of this Agreement, the Note and the other LoanDocuments and a replacement guarantor acceptable to Lender in all

#####  

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##### respects shallassume all of the obligations of Guarantor, accruing from and after the date ofsuch transfer, under the Guaranty, in each case, in a manner reasonablysatisfactory to Lender in all respects, including, without limitation, byentering into an assumption agreement (the “Assumption Agreement”) in form andsubstance reasonably satisfactory to Lender and delivering such legal opinionsas Lender may reasonably require;

#####  

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

#####  

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

#####  

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

#####  

##### (vii)                           Borrowershall cause the transferee to execute and deliver a pledge agreement insubstantially the same form as the Pledge Agreement in respect of theownership interests in the new property owner(s)/mortgage borrower(s). TheOwnership Interests described in this subsection (vii) shallotherwise comply with the requirements of the Loan Documents and besubstantially identical in structure, form and substance to the Collateraldelivered at closing of the Loan;

#####  

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

#####  

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

#####  

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

#####  

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

#####  

##### (xii)                             Borrowershall cause the transferee to execute and deliver such other replacement loanand closing documents in substantially the same forms as the

#####  

#####  

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##### Loan Documentsand such other closing documents as reasonably requested by Lender.

#####  

#### (b)                                 Intentionally omitted.

####  

Provided the Permitted Transferee has assumedall of Borrower’s obligations and liabilities (including, without limitation,those pursuant to the Environmental Indemnity) and a replacement guarantoracceptable to Lender in all respects has assumed all of Guarantor’s obligationsand liabilities (including, without limitation, those pursuant to the Guaranty)in a manner reasonably acceptable to Lender and all the conditions set forth inthis Section 5.2.11 have been satisfied, Lender shall (i) releaseBorrower from its obligations under the Loan Documents (other than thoseobligations expressly stated to survive) from and after the date of sale,assignment, or other transfer of the Properties to such Permitted Transferee; (ii) releaseGuarantor from its obligations under the Guaranty (other than those obligationsexpressly stated to survive) from and after the date of sale, assignment, orother transfer 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 Mezzanine ABorrower Entity or any Mezzanine A Principal to issue any **equityor ownership******interests or othersecurities other than those that have been issued as of the Closing Date.

 

5.2.13                  Distributions.

 

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

####  

#### (b)                                 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.

####  

 

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5.2.14                  Refinancingor Prepayment of the Mortgage Loan and Mezzanine A Loan.

 

#### (a)                                  Neither Borrower norMortgage Borrower shall be required to obtain the consent of Lender torefinance the Mortgage Loan, provided that the Loan shall have been (or shallsimultaneously be) paid in full in accordance with the terms of this Agreement(including any prepayment premiums and other amounts due and payable to Lenderunder the Loan Documents). Borrower shall cause Mortgage Borrower to obtain theprior written consent of Lender to enter into any other refinancing of theMortgage Loan.

####  

#### (b)                                 Neither Borrower norMezzanine A Borrower shall be required to obtain the consent of Lender torefinance the Mezzanine A Loan, provided that the Loan shall have been (orshall simultaneously be) paid in full in accordance with the terms of thisAgreement (including any amounts due and payable to Lender under the LoanDocuments). Borrower shall cause Mezzanine A Borrower to obtain the priorwritten consent of Lender to enter into any other refinancing of the MezzanineA Loan.

####  

5.2.15                  Acquisitionof the Mortgage Loan and Mezzanine A 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 ofsuch failure; (ii) shall cause any and all such prohibited partiesacquiring any interest in the Mortgage Loan Documents: (A) not to enforcethe Mortgage Loan Documents; and (B) upon the request of Lender, to theextent any of such prohibited parties has or have the power or authority to doso, to promptly: (1) cancel the promissory note evidencing the MortgageLoan, (2) re-convey and release the Lien securing the Mortgage Loan andany other collateral under the Mortgage Loan Documents, and (3) discontinueand terminate any enforcement proceeding(s) under the Mortgage Loan Documents.

####  

#### (b)                                 Lender shall have theright 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 theextent of its interest), including the right, if and when permitted under theMortgage Loan Documents, (i) to declare that the Mortgage Loan is indefault and (ii) to accelerate the Mortgage Loan indebtedness, inaccordance with the terms thereof and (iii) to pursue all remedies againstany obligor under the Mortgage Loan Documents. In addition, Borrower herebyexpressly agrees that any claims, counterclaims, defenses, offsets, deductionsor reductions of any kind which Mortgage Borrower or any other Person may haveagainst Mortgage Lender relating to or arising out of the Mortgage Loan shallbe the personal obligation of Mortgage Lender, and in no event shall MortgageBorrower be entitled to

####  

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#### bring, pursue or raise any such claims, counterclaims, defenses,offsets, deductions or reductions against Lender or any Affiliate of Lender orany other Person as the successor holder of the Mortgage Loan or any interesttherein; provided, however, that Mortgage Borrower may seek specificperformance of its contractual rights and Lender’s contractual obligationsunder the Mortgage Loan Documents.

####  

#### (c)                                  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 theMezzanine A Loan, or any portion thereof or any interest therein, or any director indirect ownership interest in the holder of the Mezzanine A 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 ofsuch failure; (ii) shall cause any and all such prohibited partiesacquiring any interest in the Mezzanine A Loan Documents: (A) not toenforce the Mezzanine A Loan Documents; and (B) upon the request ofLender, to the extent any of such prohibited parties has or have the power orauthority to do so, to promptly: (1) cancel the promissory note evidencingthe Mezzanine A Loan, (2) re-convey and release the Lien securing theMezzanine A Loan and any other collateral under the Mezzanine A Loan Documents,and (3) discontinue and terminate any enforcement proceeding(s) under theMezzanine A Loan Documents.

####  

#### (d)                                 Lender shall have theright at any time to acquire all or any portion of the Mezzanine A Loan or anyinterest in any holder of, or participant in, the Mezzanine A Loan withoutnotice or consent of Borrower or any other Loan Party, in which event Lendershall have and may exercise all rights of Mezzanine A Lender thereunder(to the extent of its interest), including the right, if and when permittedunder the Mezzanine A Loan Documents, (i) to declare that the Mezzanine ALoan is in default and (ii) to accelerate the Mezzanine A Loanindebtedness, in accordance with the terms thereof and (iii) to pursue allremedies against any obligor under the Mezzanine A Loan Documents. In addition,Borrower hereby expressly agrees that any claims, counterclaims, defenses,offsets, deductions or reductions of any kind which Mezzanine A Borrower or anyother Person may have against Mezzanine A Lender relating to or arisingout of the Mezzanine A Loan shall be the personal obligation of Mezzanine ALender, and in no event shall Mezzanine A Borrower be entitled to bring, pursueor raise any such claims, counterclaims, defenses, offsets, deductions orreductions against Lender or any Affiliate of Lender or any other Person as thesuccessor holder of the Mezzanine A Loan or any interest therein, provided thatMezzanine A Borrower may seek specific performance of its contractualrights and Lender’s contractual obligations under the Mezzanine A 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 theconsent of Mortgage Lender, if such consent shall be required under theMortgage Loan

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#### Documents, and Mezzanine A Borrower also obtaining the consent ofMezzanine A Lender, if such consent shall be required under the Mezzanine ALoan Documents. Each such Material Agreement shall be in form andsubstance reasonably acceptable to Lender in all respects, including the amountof the costs and fees thereunder.

####  

#### (b)                                 Except as specificallyset forth herein, Borrower will not, and will not permit or cause any LoanParty or any Affiliate thereof to, amend, modify, supplement, rescind orterminate 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 tobe observed 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 shall obtainand maintain, or cause Mortgage Borrower to maintain, Policies providing atleast the following coverages:

####  

##### (i)                                     comprehensiveall risk insurance, including the peril of wind (named storms) on theImprovements and the Personal Property, in each case (A) having a 100% “ReplacementCost Valuation” clause or endorsement, which for purposes of this Agreement shallmean actual replacement value of each Individual Property (exclusive of costsof excavations, foundations, underground utilities and footings), with a waiverof depreciation, (B) containing an agreed amount endorsement with respectto the Improvements and Personal Property waiving all co-insurance provisions; (C) providingfor no deductible in excess of $1,000,000 (other than with respect to wind storm coverage, whichdeductible will not exceed 5% of the total insurable value of the IndividualProperty where the physical loss or damage occurred); and (D) providingcoverage for contingent liability from Operation of Building Laws, DemolitionCosts and Increased Cost of Construction Endorsements together with an “Ordinanceor Law Coverage” or “Enforcement” endorsement if any of the Improvements or theuse of any Individual Property shall at any time constitute legalnon-conforming structures or uses;

#####  

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

#####  

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

#####  

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

#####  

##### (iv)                              ifand to the extent not covered by the insurance required to be maintainedpursuant to Section 6.1(a)(i) and Section 6.1(a)(iii) hereof,at all times during which structural construction, repairs or alterations arebeing made with respect to the Improvements (A) owner’s contingentliability insurance or its equivalent covering claims not covered by or underthe terms or provisions of the commercial general liability insurance providedfor in Section 6.1(a)(iii) hereof; 

#####  

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

#####  

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

#####  

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

#####  

##### (vii)                           ifany portion of the Improvements on any Individual Property is at any timelocated in an area identified by the Secretary of Housing and Urban Developmentor any successor thereto as an area having special flood hazards pursuant tothe National Flood Insurance Act of 1968, the Flood Disaster Protection Act of1973 or the National Flood Insurance Reform Act of 1994, as each may beamended, or any successor law (the “Flood Insurance Acts”), flood hazardinsurance of the following types and in the following amounts: (A) coverageunder Policies issued pursuant to the Flood Insurance Acts (the “Flood InsurancePolicies”) in an amount equal to the maximum limit of coverage availablefor such Individual Property under the Flood Insurance Acts, subject only tocustomary deductibles under such Policies and (B) coverage undersupplemental private Policies in an amount, which when added to the coverageprovided under the Flood Insurance Policies with respect to such IndividualProperty, is not less the aggregate amount of the Loan, the Mortgage Loan andthe Mezzanine A Loan (provided such private flood hazard insurance isgenerally available at reasonable premiums and is generally required byinstitutional lenders for similar properties);

#####  

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

#####  

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#####  

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

#####  

##### (x)                                   insuranceagainst terrorism, terrorist acts or similar acts of sabotage, but excludingacts of war (“Terrorism Insurance”) with coverage amounts of not lessthan an amount equal to the full insurable value of the Improvements and thePersonal Property (the “Terrorism Insurance Required Amount”). The businessinterruption/rent loss insurance Policy required pursuant to Section 6.1(a)(ii) hereofshall not contain an exclusion from coverage under such Policy for lossincurred as a result of an act of terrorism (but may contain an exclusionfor acts of war). If TRIA or similar statue is not in effect, then Borrowershall be required to, or Borrower shall cause Mortgage Borrower to, carryTerrorism Insurance throughout the term of the Loan, as required by thepreceding sentence, but in such event neither Borrower nor Mortgage Borrowershall be required to spend on terrorism insurance coverage more than two timesthe amount of the insurance premium that is payable at such time in respect ofthe all-risk insurance, excluding the cost of earthquake, flood and terrorismcoverage (and in such event such terrorism coverage shall be from suchinsurers, and with such coverage, as shall be acceptable to Lender in itsreasonable discretion) (the “Terrorism Insurance Cap”) and if the costof the Terrorism Insurance Required Amount exceeds the Terrorism Insurance Cap,Borrower shall, or shall cause Mortgage Borrower to, purchase the maximumamount of Terrorism Insurance obtainable for a premium equal in amount to theTerrorism Insurance Cap; and

#####  

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

#####  

#### (b)                                 All insurance providedfor 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 suchamounts as may be reasonably satisfactory to Lender. The Policies shall beissued by financially sound and responsible insurance companies authorized todo business in the State in which the Individual Property is located and havinga claims paying ability/ rating of “A” or better (and the equivalent thereof)by at least two of the Rating Agencies rating the Securities (one of whichshall be S&P, if S&P is rating the Securities, and one of which shallbe Moody’s, if Moody’s is rating the Securities), or if only one Rating Agencyis rating the Securities, then only by such Rating Agency; provided, however,that if the insurance coverage is provided by a syndicate of insurers, then (i) ifsuch syndicate consists of five or more members, (A) at least 40% of theinsurance coverage (and, subject to the remaining provisions of this Section 6.1(b),100% of the first layer of such coverage) shall be provided by insurancecompanies having a claims paying ability rating of “A” or better by S&P and20% shall be provided by insurance companies having a claims paying abilityrating of “A-” or better by S&P, and (B) the remaining 40% of thecoverage shall be provided by insurance

 

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

####  

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

####  

#### (d)                                 All Policies providedfor or contemplated by Section 6.1(a) hereof, except for the Policyreferenced in Section 6.1(a)(v) hereof, shall name Borrower, MortgageBorrower and Mezzanine A Borrower, as the case may be, as the insured andLender, Mortgage Lender and Mezzanine A Lender, as the additional insured, as theirinterests may appear, and in the case of property damage, boiler andmachinery, flood and earthquake insurance, shall contain a so called New Yorkstandard non-contributing mortgagee clause in favor of Lender, Mortgage Lenderand Mezzanine A Lender, providing that the loss thereunder shall be payabledirectly to Lender, Mortgage Lender and Mezzanine A Lender, or Lender, MortgageLender and Mezzanine A Lender, and Borrower, Mortgage Borrower and Mezzanine ABorrower, 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)                                     noact or negligence of Borrower, Mortgage Borrower or Mezzanine A Borrower, oranyone acting for Borrower, Mortgage Borrower or Mezzanine A Borrower, or anytenant or other occupant, or failure to comply with the provisions of anyPolicy, which might otherwise result in a forfeiture of the insurance or any part thereof,except for the willful misconduct of Lender, Mortgage Lender or Mezzanine ALender, in violation of the conditions of such Policy, shall in any way affectthe validity or enforceability of the insurance insofar as Lender, MortgageLender or Mezzanine A Lender is concerned;

#####  

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

#####  

##### (iii)                               intentionallyomitted; and

 

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

#####  

#### (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 and the rights of Mezzanine A Lender, to take suchaction as Lender deems necessary to protect its interest in the Properties,including, without limitation, the obtaining of such insurance coverage asLender in its sole discretion deems appropriate after three (3) BusinessDays’ notice to Borrower if prior to the date upon which any such coverage willlapse or at any time Lender deems necessary (regardless of prior notice toBorrower) to avoid the lapse of any such coverage. All premiums incurred byLender in connection with such action or in obtaining such insurance andkeeping it in effect shall be paid by Borrower to Lender upon demand and, untilpaid, shall be secured by the Collateral and shall bear interest at the DefaultRate. Lender shall use commercially reasonable efforts to give Borrowersimultaneous notice of any action taken by Lender pursuant to this Section 6.1(f);provided, however, that if Lender fails to deliver such notice, its rights andremedies under this Agreement 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 issuedby a captive insurance company, provided that, Borrower shall have the abilityto procure a portion of the insurance coverage required hereunder (includingthe so called catastrophe perils) through a “captive” insurance arrangementwith a provider that is Affiliated with TSP, provided that (i) Lender andany relevant investors with respect to the Loan are reasonably satisfied withthe formation/structure of the captive provider and the coverage provided, and (ii) Lenderhas received a Rating Agency Confirmation and a written confirmation from eachof the investors of any portion of the Loan that the use of such captiveinsurance arrangement shall not result in any adverse ratings effect upon anyapplicable certificates. Lender shall cooperate with and permit Borrower toparticipate in the presentation to the Rating Agencies or investors withrespect to any such captive insurance program. Except for the aforementionedcondition, such “captive” insurance company shall not be subject to any of theabove 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, Mezzanine ABorrower and Borrower. The insurance policies delivered pursuant to theMortgage Loan Documents shall include

 

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#### endorsements of the type described thereof, but pursuant to whichLender shall have the same protections as the Mortgage Lender as referred totherein.

####  

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

####  

Section 6.2                                      Casualty.

 

If an Individual Property shall be damaged or destroyed, in whole or inpart, by fire or other casualty (a “Casualty”), Borrower shall causeMortgage Borrower to give prompt notice of such damage to Lender and shall,promptly commence and diligently prosecute the completion of the Restoration ofsuch Individual Property as nearly as possible to the condition such IndividualProperty was in immediately prior to such Casualty, provided applicable zoninglaws in effect at the time permit such rebuilding, with such alterations as may bereasonably approved 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 shall cause Mortgage Borrower to promptly give Lender noticeof the actual or threatened commencement of any proceeding for the Condemnationof all or any part of any Individual Property and shall cause MortgageBorrower to deliver to Lender copies of any and all papers served in connectionwith such proceedings. Lender may participate in any such proceedings, andBorrower shall from time to time cause Mortgage Borrower to deliver to Lenderall instruments reasonably requested by Lender to permit such participation. Borrowershall cause Mortgage Borrower, at its expense, to diligently prosecute any suchproceedings, and shall consult with Lender, its attorneys and experts, andcooperate with them in all reasonable respects in the carrying on or defense ofany such proceedings. Notwithstanding any Condemnation by any public or quasipublic authority through eminent domain or otherwise (including, but notlimited to, any transfer made in lieu of or in anticipation of the exercise ofsuch taking), Borrower shall continue to pay the Debt at the time and in themanner provided for its payment in the Note and in this Agreement.

 

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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 Proceeds or Awardsare to be disbursed by Mortgage Lender for restoration, Borrower shall deliveror 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 and the Mezzanine A Loan havebeen paid in full and Lender receives any Insurance Proceeds or Awards, Lendershall either apply such proceeds to the Debt or to the restoration of theapplicable Individual Property in accordance with the same terms and conditionscontained in the Mortgage Loan Documents.

####  

Section 6.5                                      Rightsof Lender.

 

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

 

**VII.****                            RESERVEFUNDS**

 

Section 7.1                                      Repairs

 

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

####  

#### (b)                                 In the event (i) MortgageLender waives the requirement of Mortgage Borrower to maintain the escrowrequired to be maintained under the Mortgage Repair Agreement and Mezzanine ALender waives the requirements of Section 7.1 of the Mezzanine A LoanAgreement or (ii) the Mortgage Loan and the Mezzanine A Loan have beenrepaid in full, Lender shall have the right to require Borrower to establishand maintain an escrow that will operate in substantially the same way as theescrow required to be maintained under the Mortgage Repair Agreement, but thissentence shall not be deemed to require Borrower to maintain the escrowrequired to be maintained under the Mortgage Repair Agreement (or theapplicable portion thereof) after Mortgage Borrower

 

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

####  

Section 7.2                                      Impositionsand Imposition Deposits.

 

#### (a)                                  Borrower shall causeMortgage Borrower to comply with all of the terms and conditions set forth in Section 7(a) ofeach Security Instrument.

####  

#### (b)                                 In the event (i) MortgageLender waives the requirement of Mortgage Borrower to make the Impositions andImposition Deposits (each as defined in the Security Instrument) pursuant tothe terms of Section 7(a) of each Security Instrument and Mezzanine ALender waives the requirements of Section 7.2 of the Mezzanine A LoanAgreement or (ii) the Mortgage Loan and the Mezzanine A Loan have beenrepaid in full, Lender shall have the right to require Borrower to establishand maintain an escrow that will operate in substantially the same way as theescrow funds to which such Impositions and Imposition Deposits relate asdescribed in Section 7(a) of each Security Instrument.

####  

Section 7.3                                      ReplacementReserves.

 

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

####  

#### (b)                                 In the event (i) MortgageLender waives the requirement of Mortgage Borrower to maintain the escrowrequired to be maintained under the Mortgage Replacement Reserve Agreement andMezzanine A Lender waives the requirements of Section 7.3 of the MezzanineA Loan Agreement or (ii) the Mortgage Loan and the Mezzanine A Loan havebeen 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 required to be maintained under the Mortgage ReplacementReserve Agreement, but this sentence shall not be deemed to require Borrower tomaintain the escrow required to be maintained under the Mortgage ReplacementReserve Agreement (or the applicable portion thereof) after Mortgage Borroweris no longer obligated to maintain same under the express provisions of theMortgage Replacement Reserve Agreement.

####  

Section 7.4                                      DebtService Reserve Funds. 

 

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

####  

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

 

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#### certifying to Lender that (a) there are sufficient funds availableto Bank Loan Borrower under the Bank Loan for the purpose of paying 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 Borrower and (c) Borrower will use such funds to pay for anysuch Debt Service Shortfalls (the “Certificate Option”).

####  

#### (c)                                  In the event Borrowerelects to deliver cash under this Section 7.4, 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 event Borrowerelects to deliver a Letter of Credit under this Section 7.4 or elects theLC 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 fundsavailable to Bank Loan Borrower under the Bank Loan for the purpose of payingfor Debt Service Shortfalls as projected by Lender through the end of calendaryear 2009, (b) Bank Loan Borrower will, in the event of any such DebtService Shortfalls, borrow such funds pursuant to the Bank Loan and willcontribute such funds to Borrower and (c) Borrower will use such funds topay for any such Debt Service Shortfalls. In the event that Borrower fails tocomply with the provisions of the foregoing sentence, Borrower shall, withinfive (5) Business Days following the applicable Determination Date,deposit with Lender cash or deliver to Lender a Letter of Credit in an amountequal to the Debt Service Shortfalls as projected by Lender through the end ofthe calendar year 2009.

####  

#### (f)                                    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 7.4, to pay for Debt ServiceShortfalls. Borrower may, on written request received by Lender at least five (5) BusinessDays prior to any Payment Date, request that Lender withdraw sums held as DebtService Reserve Funds and apply such sums toward the Debt Service due on suchPayment Date, provided Borrower delivers evidence acceptable to Lender in allrespects that there is a Debt Service Shortfall. The amount permitted by Lenderto be withdrawn from the Debt Service Reserve Funds and applied to the DebtService due on such Payment Date shall not exceed the amount of such DebtService Shortfall. In the event that on any subsequent Determination Datefollowing the deposit of cash or delivery of a Letter of Credit as requiredhereunder, Borrower delivers to Lender a certificate of Bank Loan Borrower thatsatisfies the requirements of Section 7.4(e) above, Lender shallreturn to Borrower the Debt Service Reserve Funds remaining on deposit withLender or such Letter of Credit, as applicable.

 

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Section 7.5                                      MortgageDebt Service Escrows.

 

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

####  

#### (b)                                 In the event (i) MortgageLender waives the requirement of Mortgage Borrower to maintain the escrowrequired to be maintained under the Mortgage Debt Service Escrow Agreement andMezzanine A Lender waives the requirements of Section 7.5 of the MezzanineA Loan Agreement or (ii) the Mortgage Loan and the Mezzanine A Loan havebeen 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 required to be maintained under the Mortgage Debt ServiceEscrow Agreement, but this sentence shall not be deemed to require Borrower tomaintain the escrow required to be maintained under the Mortgage Debt ServiceEscrow Agreement (or the applicable portion thereof) after Mortgage Borrower isno longer obligated to maintain same under the express provisions of theMortgage Debt Service Escrow Agreement.

####  

Section 7.6                                      InterestRate Hedging Reserves.

 

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

####  

#### (b)                                 In the event (i) MortgageLender waives the requirement of Mortgage Borrower to maintain the escrowrequired to be maintained under the Mortgage Interest Rate Hedge ReserveAgreement and Mezzanine A Lender waives the requirements of Section 7.6 ofthe Mezzanine A Loan Agreement or (ii) the Mortgage Loan and the MezzanineA Loan have been repaid in full, Lender shall have the right to requireBorrower to establish and maintain an escrow that will operate in substantiallythe same way as the escrow required to be maintained under the MortgageInterest Rate Hedge Reserve Agreement, but this sentence shall not be deemed torequire Borrower to maintain the escrow required to be maintained under the MortgageInterest Rate Hedge Reserve Agreement (or the applicable portion thereof) afterMortgage Borrower is no longer obligated to maintain same under the expressprovisions of the Mortgage Interest Rate Hedge Reserve Agreement.

####  

Section 7.7                                      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 ofthis Article VII (the “Other Mortgage Reserves”).

####  

#### (b)                                 In the event (i) MortgageLender waives the requirement of Mortgage Borrower to maintain any OtherMortgage Reserves pursuant to the terms of the Mortgage Loan Documents andMezzanine A Lender waives the requirements of Section 7.7 of the MezzanineA Loan Agreement or (ii) the Mortgage Loan and the Mezzanine A Loan havebeen repaid in full, Lender shall have the right to require Borrower toestablish

 

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

####  

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 becommingled with 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.

####  

#### (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 claimunless an Event of Default has occurred and remains uncured.

 

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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 7.4 hereof if Borrower did not elect todeliver a Letter of Credit in lieu thereof. In the event that a Letter ofCredit is delivered in lieu of any portion of the Debt Service Reserve Funds,Borrower shall be responsible for the direct payment of any Debt ServiceShortfalls that would otherwise have been payable from such portion of the DebtService Reserve Funds. Lender shall not draw on any Letter of Credit deliveredin lieu of any portion of the Debt Service Reserve Funds unless (i) Borrowerfails to pay any Debt Service Shortfall or (ii) an Event of Default hasoccurred and is continuing.

####  

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

####  

7.9.2                        ProvisionsRegarding Letters of Credit.

 

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

####  

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

####  

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

 

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

#####  

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

#####  

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

 

#### (c)                                  If any Letter ofCredit or Letters of Credit delivered pursuant to Section 7.4 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 with the Loan, which new opinionshall be in form and substance reasonably acceptable to Lender, and, if aSecuritization has occurred, to the Rating Agencies.

####  

**VIII.****                        DEFAULTS**

 

Section 8.1                                      Eventof Default. 

 

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

####  

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

#####  

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

 

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

#####  

##### (iv)                              ifBorrower transfers or encumbers any Individual Property (or any portionthereof), the Collateral, the Mezzanine A Collateral, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity or anyMezzanine A Principal’s general partner interest in the related Mezzanine ABorrower Entity in violation of the provisions of Section 5.2.10 hereof orthe Pledge Agreement (excluding the removal or resignation of Manager, providedthe replacement manager is a Qualified Manager and Borrower employs suchmanager in accordance with Section 5.1.18 hereof);

#####  

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

#####  

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

#####  

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

#####  

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

#####  

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

 

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##### (x)                                   intentionallyomitted;

#####  

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

#####  

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

#####  

##### (xiii)                          if anyIndividual Property becomes subject to any mechanic’s, materialman’s or otherLien (other than a Lien for local real estate taxes and assessments not thendue and payable) and, subject to Section 5.2.1 hereof, such Lien shallremain undischarged of record (by payment, bonding or otherwise) for a periodof sixty (60) days after Borrower or Mortgage Borrower shall have receivedwritten notice of such Lien;

#####  

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

#####  

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

#####  

##### (xvi)                         ifBorrower shall fail to deliver to Lender, within thirty (30) days after requestby Lender, the estoppel certificates required pursuant to the terms of Section 5.1.13(a) hereof;

#####  

##### (xvii)                      intentionallyomitted;

#####  

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

 

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

#####  

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

#####  

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

#####  

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

#####  

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

#####  

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

#####  

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

#####  

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

#####  

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

 

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

#####  

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

#####  

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

#####  

##### (xxx)                         aMezzanine A Loan Event of Default shall occur, and shall not have been waivedor settled by Mezzanine A Lender or cured by Mezzanine A Borrower, or ifMezzanine A Borrower enters into or otherwise suffers or permits any amendment,waiver, supplement, termination, extension, renewal, replacement or othermodification of any Mezzanine A Loan Document without the prior written consentof Lender, to the extent that such consent is required to be obtainedhereunder.

#####  

#### (b)                                 Upon the occurrence ofan 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, inaddition to any other rights or remedies available to it pursuant to thisAgreement and the other Loan Documents or at law or in equity, Lender may takesuch action, without notice or demand (except for such notice or demand as may beexpressly required under the Note, this Agreement, the Pledge Agreement or theother Loan Documents), that Lender deems advisable to protect and enforce itsrights against Borrower and in and to the Collateral, including, withoutlimitation, declaring the Debt to be immediately due and payable, and Lender may enforceor avail 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

 

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

####  

Section 8.2                                      Remedies.

 

#### (a)                                  Upon the occurrenceof an Event of Default, all or any one or more of the rights, powers,privileges and other remedies available to Lender against Borrower under thisAgreement or any of the other Loan Documents executed and delivered by, orapplicable to, Borrower or at law or in equity may be exercised by Lenderat any time and from time to time, whether or not all or any of the Debt shallbe declared due and payable, and whether or not Lender shall have commenced anyforeclosure proceeding or other action for the enforcement of its rights andremedies under any of the Loan Documents with respect to all or any part ofthe Collateral. Any such actions taken by Lender shall be cumulative andconcurrent and may be pursued independently, singly, successively,together or otherwise, at such time and in such order as Lender may determinein its sole discretion, to the fullest extent permitted by Applicable Law,without impairing or otherwise affecting the other rights and remedies ofLender permitted by Applicable Law, equity or contract or as set forth hereinor in the other Loan Documents. Without limiting the generality of theforegoing, Borrower agrees that if an Event of Default is continuing all Liensand other rights, remedies or privileges provided to Lender with respect to theCollateral shall remain in full force and effect until Lender has exhausted allof its remedies against the Collateral, and the Pledge Agreement has beenforeclosed, sold and/or otherwise realized upon in satisfaction of the Debt, orthe 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 outof the Collateral or any part thereof, in its absolute discretion inrespect of the Debt. In addition, Lender shall have the right from time to timeto partially 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 eventBorrower defaults beyond any applicable grace period in the payment of one (1) ormore scheduled payments of principal and interest, Lender may forecloseupon any portion of the Collateral to recover such delinquent payments, or (ii) inthe event Lender elects to accelerate less than the entire outstandingprincipal balance of the Loan, Lender may foreclose upon the Collateral torecover so much of the principal balance of the Loan as Lender may accelerateand such other 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 have theright, from time to time, to sever the Note, the Pledge Agreement and the otherLoan Documents into one or more separate notes, pledges and other securitydocuments (the “Severed Loan Documents”) in such denominations as Lendershall determine in its sole discretion for purposes of evidencing and enforcingits rights and remedies provided hereunder. Borrower shall execute and deliverto Lender from time to time, promptly after the written request of Lender, aseverance agreement and such other documents as Lender shall reasonably requestin order to effect the severance described in the preceding sentence, all in form andsubstance reasonably satisfactory to Lender. The Severed Loan Documents shallnot (x) contain any representations, warranties or covenants not contained inthe Loan Documents (and any such representations and warranties contained inthe Severed Loan Documents will be given by Borrower only as of the ClosingDate) or (y) change the Applicable Interest Rate or the Maturity Date, or (z)otherwise amend or modify any other material term of the Note, this Agreement,the Pledge Agreement or the other Loan Documents.

####  

#### (d)                                 Any amounts recoveredfrom the Collateral after an Event of Default may be applied by Lendertoward the payment of any interest and/or principal of the Loan and/or anyother 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 becumulative and not exclusive of any other right, power or remedy which Lender may haveagainst Borrower pursuant to this Agreement or the other Loan Documents, orexisting at law or in equity or otherwise. No delay or omission to exercise anyremedy, right or power accruing upon an Event of Default shall impair any suchremedy, right or power or shall be construed as a waiver thereof, but any suchremedy, right or power may be exercised from time to time and as often as may bedeemed expedient. A waiver of one or more Defaults or Events of Default withrespect to Borrower shall not be construed to be a waiver of any subsequentDefault or Event of Default by Borrower or to impair any remedy, right or powerconsequent thereon.

 

Section 8.4                                      Rightto Cure Defaults.

 

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

 

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Event of Default or such failed payment oract or in appearing in, defending, or bringing any action or proceeding shallbear interest, at the Default Rate, for the period after notice from Lenderthat such cost or expense was incurred to the date of payment to Lender. Allsuch costs and expenses incurred by Lender, together with interest thereoncalculated at the Default Rate, shall be deemed to constitute a portion of theDebt and to be secured by the liens, claims and security interests provided toLender under the Loan Documents and shall be immediately due and payable upondemand by Lender therefor.

 

Section 8.5                                      MortgageLoan Reserve Funds.

 

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

 

Section 8.6                                      Powerof Attorney.

 

Upon the occurrence and during the continuation of an Event of Default,for the purpose of carrying out the provisions and exercising the rights,powers and privileges granted in this Article VIII, Borrower herebyirrevocably appoints the Lender as its true and lawful attorney-in-fact toexecute, acknowledge and deliver any instruments and do and perform anyacts such as are referred to in this subsection in the name and on behalfof Borrower. This power of attorney is a power coupled with an interest andcannot be revoked.

 

**IX.****                                SPECIALPROVISIONS**

 

Section 9.1                                      Saleof Notes and Securitization

 

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

 

#### (a)                                  (i) provide suchfinancial and other information with respect to the Properties, the Collateral,the Mezzanine A Collateral, Borrower, Mortgage Borrower, Mezzanine A Borrower,Principal, Mortgage Principal, Mezzanine A Principal, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity and anyMezzanine A Principal’s general partner interest in the related Mezzanine ABorrower Entity as may be required to be delivered pursuant to Section 5.1.10hereof (subject to the provisions of Section 5.1.10(g) hereof), (ii) causeMortgage Borrower to provide (A) the information set forth on **Schedule 9.1** annexed hereto and (B) theannual operating budgets relating to the Properties in accordance with therequirements of the 

 

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

####  

#### (b)                                 if required by theRating Agencies, deliver (i) an Insolvency Opinion reasonably satisfactoryto Lender and the Rating Agencies, (ii) revised opinions of counsel,reasonably satisfactory to Lender and the Rating Agencies, as to due executionand enforceability with respect to the Loan Documents, the Collateral, anyBorrower Entity and any Principal, and (iii) amendments, reasonablysatisfactory to Lender and the Rating Agencies, to the Organizational Documentsfor any Borrower Entity or any Principal or any other Loan Party, provided suchamendments shall relate exclusively to the single purpose bankruptcy remotenature of such Borrower Entity or such Principal or such other Loan Party, asthe 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,subordination agreements or other agreements shall be reasonably satisfactoryto Lender and the Rating Agencies;

####  

#### (d)                                 subject in all casesto the applicable provisions of Section 9.5 hereof, execute suchamendments to the Loan Documents as may be reasonably requested by theholder of the Note or the Rating Agencies or otherwise to effect theSecuritization;

####  

#### (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 rate spreads, principalamounts and maturities, Borrower agrees to cooperate with Lender in connectionwith the foregoing 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 rate spreads, so long as the weighted average of such interest ratespreads does not exceed the Eurodollar Rate Margin (except for any deviationattributable to the imposition of any rate of interest at the Default Rate orprepayments pursuant to Section 2.3.2 or 2.3.3 hereof);

####  

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

 

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

####  

All third party costs and expenses and out-of-pocket expenses incurredby Lender in connection with this Agreement and the Securitization shall bepaid by Lender (except as otherwise expressly set forth herein). These shallinclude, but not be limited to, fees and disbursements of legal counsel,accountants, and other professionals retained by Lender and fees and expensesincurred for producing any offering documents or any other materials (includingtravel by Lender and its agents, design, printing, photograph and documentproduction costs). Solely for the purposes of this Section 9.1, Lendershall reimburse Borrower for all of its actual out-of-pocket costs and expenses(other than the fees and expenses of Borrower’s counsel) that Borrower incursin connection with complying with a request made by Lender or any other Personacting on behalf of Lender under this Section 9.1 in connection with aSecuritization. Notwithstanding the foregoing, the provisions of this paragraphshall in no way limit or affect any Borrower obligation to pay any costsexpressly required to be paid by Borrower pursuant to any other Sections ofthis Agreement.

 

Section 9.2                                      DisclosureDocument Cooperation.

 

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

 

Section 9.3                                      Servicer.

 

At the option of Lender, the Loan may be serviced by aservicer/trustee (the “Servicer”) selected by Lender and Lender may delegateall or any portion of its responsibilities under this Agreement and the otherLoan Documents to the Servicer pursuant to a servicing agreement (the “ServicingAgreement”) between Lender and Servicer, provided that in no event shallsuch delegation operate to relieve Lender from its obligations hereunder. Lenderwill notify Borrower of the appointment of any Servicer on or prior to the datesuch appointment shall become effective. Borrower shall 

 

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not be obligated to pay, or reimburse Lenderfor, any servicing fee or other compensation payable to the Servicer.

 

Section 9.4                                      Exculpation.

 

#### (a)                                  Except as otherwiseexpressly provided in this Section 9.4, Lender shall not enforce theliability and obligation of Borrower to perform and observe theobligations contained in this Agreement, the Note or the Pledge Agreement orany other Loan Document by any action or proceeding against Borrower or anyExculpated Party, except that Lender may bring a foreclosure action,action for specific performance or other appropriate action or proceeding toenable Lender to enforce and realize upon this Agreement, the Note, the PledgeAgreement, the other Loan Documents, and the Collateral and any othercollateral for the Debt in which a security interest is granted to Lender bythis Agreement, the Pledge Agreement or the other Loan Documents; *provided, however*, that any judgment in any such action orproceeding shall be enforceable against Borrower only to the extent of Borrower’sinterest in the Collateral, and in any other collateral in which a securityinterest is granted to Lender by this Agreement, the Pledge Agreement or theother Loan Documents. Lender, by accepting this Agreement, the Note and thePledge Agreement, agrees that it shall not, except as otherwise expresslyprovided in this Section 9.4, sue for, seek or demand any deficiency orother money judgment against Borrower, any direct or indirect member, manager,shareholder, partner, beneficiary or other owner of beneficial ownershipinterests in Borrower, or any affiliate, director, officer, employee, trusteeor agent of any of the foregoing (each, an “Exculpated Party” and,collectively, the “Exculpated Parties”) in any such action orproceeding, under or by reason of or under or in connection with thisAgreement, the Note, the Pledge Agreement or the other Loan Documents. Theprovisions of this Section shall not, however, (i) constitute awaiver, release or impairment of any obligation evidenced or secured by thisAgreement, the Note, the Pledge Agreement or the other Loan Documents; (ii) impairthe right of Lender to name Borrower as a party defendant in any action or suitfor judicial foreclosure and sale under the Pledge Agreement (subject, however,to the aforesaid limitation on Lender’s right to sue, seek or demand adeficiency or other money judgment against Borrower or any other ExculpatedParty); (iii) affect the validity or enforceability of any indemnity(including, without limitation, the Environmental Indemnity), guaranty, masterlease or similar instrument made in connection with this Agreement, the Note,the Pledge Agreement, or the other Loan Documents (subject, however, to anyexculpatory or non-recourse provisions appearing in such indemnity, guaranty orsimilar instrument); (iv) impair the right of Lender to obtain theappointment of a receiver; (v) [intentionally omitted]; (vi) impairthe right of Lender to enforce the provisions of Sections 4.1.8, 4.1.28, 5.1.9and 5.2.8 hereof (subject, however, to the aforesaid limitation on Lender’sright to sue, seek or demand a deficiency or other money judgment againstBorrower or any other Exculpated Party which such limitation, with respect toBorrower, shall not apply to the Environmental Indemnity); or (vii) impairthe right of Lender to obtain a deficiency judgment or other judgment on theNote against Borrower if and to the extent necessary to obtain any insuranceproceeds or condemnation awards to which Lender would otherwise be entitledunder this Agreement; provided however, that Lender shall only be 

 

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#### entitled to enforce such judgment to the extent of the insuranceproceeds and/or condemnation awards.

####  

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

####  

##### (i)                                     anyfraud committed by Borrower, Mezzanine A Borrower, Mortgage Borrower or by anyof their Affiliates or agents in connection with the Loan, the Mezzanine A Loanor Mortgage Loan;

#####  

##### (ii)                                  anyintentional and material misrepresentation by Borrower, Mezzanine A Borrower orMortgage Borrower in any of the Loan Documents, the Mezzanine A Loan Documentsor the Mortgage Loan Documents;

#####  

##### (iii)                               themisappropriation by Borrower, Mezzanine A Borrower, Mortgage Borrower or any oftheir Affiliates or agents of any funds (including misappropriation of Rents,security deposits and/or Net Proceeds);

#####  

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

#####  

##### (v)                                 theintentional and material breach of any representation in the EnvironmentalIndemnity or in Sections 4.1.39 or 5.1.19 hereof;

#####  

##### (vi)                              anyvoluntary filing by Borrower, Mezzanine A Borrower, Mezzanine A Principal,Mortgage Borrower, Mortgage Principal or Principal under the Bankruptcy Code orany other federal or state bankruptcy or insolvency law;

#####  

##### (vii)                           anyinvoluntary filing against Borrower, Mezzanine A Borrower, Mezzanine APrincipal, Mortgage Borrower, Mortgage Principal or Principal under theBankruptcy Code or any other federal or state bankruptcy or insolvency law byany Person acting at the request or under the direction of Borrower, MezzanineA Borrower, Mortgage Borrower or any of their Affiliates or agents;

#####  

##### (viii)                        MezzanineA Borrower, Mezzanine A Principal, Mortgage Borrower, Mortgage Principal,Borrower or Principal consents to or acquiesces in or joins in an applicationfor the appointment of a custodian, receiver, trustee or examiner for MezzanineA Borrower, Mezzanine A Principal, Mortgage Borrower, Mortgage Principal,Borrower or Principal or any portion of the Property, the Mezzanine ACollateral or the Collateral;

#####  

##### (ix)                                Borrower’smaking a distribution to its equity owners after the occurrence and during thecontinuance of an Event of Default;

 

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

#####  

##### (xi)                                anyintentional physical waste of the Property or the Mezzanine A Collateral byMezzanine A Borrower, Mezzanine A Principal, Mortgage Borrower, MortgagePrincipal, Borrower or Principal or any of their Affiliates or agents;

#####  

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

#####  

##### (xiii)                          MortgageBorrower’s failure to obtain any consent required with respect to the transferof the applicable Properties in connection with the merger of Archstone SmithOperating Trust occurring simultaneously herewith.

#####  

#### (c)                                  IntentionallyOmitted.

####  

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

####  

The term “Reorganization Proceeding” for purposes of this Section 9.4shall mean a case, proceeding or other action (i) under any existing orfuture law of any jurisdiction, domestic or foreign, relating to bankruptcy,insolvency, reorganization or relief of debtors, seeking to have an order forrelief entered with respect to any Person, or seeking to adjudicate such Personas bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,winding-up, liquidation, dissolution, composition or other relief with respectto such Person or such Person’s debts, or (ii) seeking appointment of areceiver, trustee, custodian or other similar official for such Person or forall or any substantial part of such Person’s assets, or the making of ageneral assignment for the benefit of such Person’s creditors.

 

The term “Lien” for purposes of this Section 9.4 shall meanany mortgage, pledge, hypothecation, assignment, deposit arrangement,encumbrance, lien (statutory or other), or preference, priority or othersecurity agreement or interest or preferential arrangement of any kind ornature whatsoever (including, without limitation, any conditional sale or othertitle retention agreement, any financing lease (except equipment leaseagreements), and the filing of any UCC financing statement (but only to theextent any such financing statement purports to record the grant of a securityinterest and not including any financing statements filed for notice purposesonly) under the UCC or comparable law of any jurisdiction in respect of any foregoing.)

 

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Section 9.5                                      Limitationon Borrower’s Obligations.

 

Notwithstanding anything to the contrary in Section 9.1, Section 9.7,Section 9.8 or any other provision of this Agreement or any other Loan Document,Borrower shall not be obligated to agree to any modification of the Note, thisAgreement, the Pledge Agreement or the other Loan Documents, or of Borrower’sOrganizational Documents, or to take any other action, that would:

 

#### (a)                                  increase the reportingrequirements of Borrower, Mortgage Borrower, Mezzanine A Borrower, Guarantor orany other Person pursuant to Section 5.1.10 hereof;

####  

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

####  

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

####  

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

####  

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

####  

#### (f)                                    alter in any waythe transfer restrictions relating to direct or indirect interests in theProperties, the Collateral, the Mezzanine A Collateral, any Mortgage Principal’sgeneral partner interest in the related Mortgage Borrower Entity or anyMezzanine A Principal’s general partner interest in the related Mezzanine ABorrower Entity (including any equity interests in the direct or indirectowners of Borrower), except to address any transfer restrictions necessary inconnection with the creation of any New Mezzanine Loan(s) pursuant to Section 9.8hereof; *provided, however*, that there shall beno greater restrictions than those applicable to transfers by Borrower ofinterests that it owns in Mezzanine A Borrower and transfers by Mezzanine ABorrower of interests that it owns in Mortgage Borrower;

####  

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

####  

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

####  

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

####  

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

 

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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;

####  

#### (m)                               affect Borrower’s,Mezzanine A Borrower’s or Mortgage Borrower’s right to enter into, modify orterminate Leases or contracts;

####  

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

####  

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

####  

#### (p)                                 add additional Eventsof Default, or shorten any grace or cure period applicable to an existing Eventof Default;

####  

#### (q)                                 require Borrower orany other Person (including Mezzanine A 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 of Section 9.4hereof);

####  

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

####  

#### (s)                                  materially change anyobligation of Borrower pursuant to the actions taken herein or pursuant heretoor in connection herewith;

####  

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

####  

#### (u)                                 otherwise adverselyaffect Borrower or any of its Affiliates (including, without limitation,Mezzanine A Borrower, Mortgage Borrower, Bank Loan Borrower, Principal orGuarantor) in any material way.

####  

Section 9.6                                      Reallocationof Loan Amounts.

 

In the event that Mezzanine A Lender exercises its right to reallocatethe amount of the Loan and the Mezzanine A Loan pursuant to Section 9.6 ofthe Mezzanine A Loan Agreement, Borrower agrees to reasonably cooperate tofacilitate such reallocation; *provided, however*,that (i) the aggregate principal amount of the Loan and the Mezzanine ALoan immediately following such reallocation shall equal the outstanding principalbalance of the Loan and the Mezzanine A Loan immediately prior to suchreallocation; 

 

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(ii) the weighted average interest ratespread of the Loan and the Mezzanine A Loan immediately following suchreallocation shall not exceed the weighted average interest rate spread whichwas applicable to the Loan and the Mezzanine A Loan immediately prior to suchreallocation (except for any deviation attributable to the imposition of anyrate of interest at the Default Rate or prepayments pursuant to Section 2.3.2or 2.3.3 hereof). Borrower shall cooperate with all reasonable requests ofLender in order to reallocate the amount of the Loan and the Mezzanine A Loanand shall execute and deliver such documents as shall reasonably be required byLender in connection therewith, including, without limitation, amendments tothe Loan Documents and the Mezzanine A Loan Documents and endorsements to theUCC title insurance policies, all in form and substance reasonablysatisfactory to Lender. Borrower shall cause Mezzanine A Borrower to cooperatewith all reasonable requests of Mezzanine A Lender in connection with thereallocation of the amount of the Loan and the Mezzanine A Loan, and shallexecute and deliver such documents as shall reasonably be required by MezzanineA Lender in connection therewith, including opinions of counsel and UCCinsurance, all in form and substance reasonably satisfactory to Lender. Solelyfor the purposes of this Section 9.6, Lender shall reimburse Borrower forall of its reasonable out-of-pocket costs and expenses (including, anyadditional mortgage recording tax due and payable by Borrower in connectionwith such restructuring and any title or UCC insurance premiums, costs andexpenses incurred in connection with the issuance of the insurance policies andendorsements required to be delivered by Borrower pursuant to this Section 9.6,but excluding the fees and expenses of Borrower’s counsel) that Borrower incursin connection with complying with any request made by Lender under this Section 9.6.Notwithstanding the foregoing, the provisions of this Section 9.6 shall inno way limit, increase or otherwise affect any Borrower obligation to pay anycosts expressly required to be paid by Borrower pursuant to any other Sectionsof this Agreement. It shall be an Event of Default hereunder if Borrower failsto comply with any of the terms, covenants or conditions of this Section 9.6and such failure shall continue for more than ten (10) Business Days afterBorrower shall have received written notice thereof.

 

Section 9.7                                      Syndication.

 

9.7.1                        Syndication.

 

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

 

9.7.2                        Sale ofLoan, Co-Lenders, Participations and Servicing.

 

#### (a)                                  Lender and anyCo-Lender may, at their option, without Borrower’s consent (but with notice toBorrower), sell with novation all or any part of their right, title andinterest in, and to, and under the Loan (the “Syndication”), to one ormore additional lenders (each a “Co-Lender”). Each additional Co-Lendershall enter into an assignment and assumption agreement (the “Assignment andAssumption”) assigning a portion of Lender’s or Co-Lender’s rights andobligations under the Loan, and pursuant to which the additional Co-Lenderaccepts such assignment and assumes the assigned obligations. 

 

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#### From and after the effective date specified in the Assignment andAssumption (i) each Co-Lender shall be a party hereto and to each LoanDocument to the extent of the applicable percentage or percentages set forth inthe Assignment and Assumption and, except as specified otherwise herein, shallsucceed to the rights and obligations of Lender and the Co-Lenders hereunderand thereunder in respect of the Loan, and (ii) Lender, as lender and eachCo-Lender, as applicable, shall, to the extent such rights and obligations havebeen assigned by it pursuant to such Assignment and Assumption, relinquish itsrights and be released from its obligations hereunder and under the LoanDocuments.

####  

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

####  

#### (c)                                  Borrower agrees thatit shall, in connection with any sale of all or any portion of the Loan,whether in whole or to an additional Co-Lender or Participant, within ten (10) BusinessDays after requested by Lender, furnish Lender with the certificates requiredunder Sections 5.1.10 and 5.1.13 hereof and such other information asreasonably requested by any additional Co-Lender or Participant in performingits due diligence in connection with its purchase of an interest in the Loan.

####  

#### (d)                                 Lender (or anAffiliate of Lender) shall act as administrative agent for itself and theCo-Lenders (together with any successor administrative agent, the “Agent”)pursuant to this Section 9.7. Borrower acknowledges that Lender, as Agent,shall have the sole and exclusive authority to execute and perform thisAgreement and each Loan Document on behalf of itself, as Lender and as agentfor itself and the Co-Lenders until replaced as Agent pursuant to the terms ofthe Co-Lending Agreement; *provided, however*,(i) so long as no Event of Default shall then exist or (ii) Agentshall not be in default under the Co-Lending Agreement (which would entitle theCo-Lenders to replace Agent), Borrower shall have the right to approve anyreplacement or successor Agent, which such approval shall not be unreasonablywithheld or delayed. Lender acknowledges that Lender, as Agent, shall retainthe exclusive right to grant all approvals and give consents with respect tothe operating budgets required to be delivered hereunder and with respect tomatters concerning the establishment and administration of the Accounts. Exceptas otherwise provided herein, Borrower shall have no obligation to recognize ordeal directly with any Co-Lender, and no Co-Lender shall have any right to dealdirectly with Borrower with respect to the rights, benefits and obligations ofBorrower under this Agreement, the Loan Documents or any one or more documentsor instruments in respect thereof. Borrower may rely conclusively on theactions of Lender as Agent to bind Lender and the Co-Lenders, notwithstandingthat the particular action in question may, pursuant to this Agreement or theCo-Lending Agreement be subject to the consent or direction of some or all ofthe Co-Lenders. Lender may resign as Agent of the Co-Lenders, in its solediscretion or if required to by the Co-Lenders in accordance with the term ofthe Co-Lending Agreement, in each case without the consent of Borrower. Uponany such resignation, a successor Agent shall be determined pursuant to theterms of the Co-Lending Agreement. The term Agent shall mean any successorAgent.

 

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#### (e)                                  Notwithstanding anyprovision to the contrary in this Agreement, the Agent shall not have anyduties or responsibilities except those expressly set forth herein (and in theCo-Lending Agreement) and no covenants, functions, responsibilities, duties,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)                                    Except to theextent its obligations hereunder and its interest in the Loan have beenassigned pursuant to one or more Assignments and Assumption, Lender, as Agent,shall have the same rights and powers under this Agreement as any otherCo-Lender and may exercise the same as though it were not Agent,respectively. The term “Co-Lender” or “Co-Lenders” shall, unless otherwiseexpressly indicated, include Lender in its individual capacity. Lender and theother Co-Lenders and their respective Affiliates may accept deposits from,lend money to, act as trustee under indentures of, and generally engage in anykind of business with, Borrower, or any Affiliate of Borrower and any Personwho may do business with or own securities of Borrower or any Affiliate ofBorrower, all as if they were not serving in such capacities hereunder andwithout any duty to account therefor to each other.

####  

#### (g)                                 If required by anyCo-Lender, Borrower hereby agrees to execute supplemental notes in theprincipal amount of such Co-Lender’s pro rata share of the Loan in the same form ofthe Note (provided any such supplemental note or notes do not represent any newor additional indebtedness), and such supplemental note shall (i) bepayable to order of such Co-Lender, (ii) be dated as of the Closing Date,and (iii) mature on the Maturity Date. Such supplemental note shallprovide that it evidences a portion of the existing indebtedness hereunder andunder the Note and not any new or additional indebtedness of Borrower (it beingunderstood that the aggregate face amount and aggregate principal balance ofsuch supplemental notes together with any other note evidencing the Loan shallnot exceed the then-outstanding principal balance of the Loan at the time ofthe execution of such supplemental notes). Simultaneously with the execution ofsuch supplemental note or notes, Lender shall return the original Note toBorrower. The term “Note” as used in this Agreement and in all the otherLoan Documents shall include all such supplemental notes.

####  

#### (h)                                 Lender, as Agent,shall maintain at its domestic lending office or at such other location asLender, as Agent, shall designate in writing to each Co-Lender and Borrower acopy of each Assignment and Assumption delivered to and accepted by it and aregister for the recordation of the names and addresses of the Co-Lenders, theamount of each Co-Lender’s proportionate share of the Loan and the name andaddress of each Co-Lender’s agent for service of process (the “Register”).The entries in the Register shall be conclusive and binding for all purposes,absent manifest error, and Borrower, Lender, as Agent, and the Co-Lenders may treateach Person whose name is recorded in the Register as a Co-Lender hereunder forall purposes of this Agreement. The Register shall be available for inspectionand copying by Borrower or any Co-Lender during normal business hours uponreasonable prior notice to the Agent. A Co-Lender may change its addressand its agent for service of process upon written notice to Lender, as Agent,which notice shall only be effective upon actual receipt by Lender, as Agent,which receipt will be acknowledged by Lender, as Agent, upon request.

 

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#### (i)                                     Notwithstandinganything herein to the contrary, any financial institution or other entity may besold a participation interest in the Loan by Lender or any Co-Lender withoutBorrower’s consent (such financial institution or entity, a “Participant”)(x) if such sale is without novation and (y) if the other conditions set forthin this paragraph are met. No Participant shall be considered a Co-Lenderhereunder or under the Note or the Loan Documents. No Participant shall haveany rights under this Agreement, the Note or any of the Loan Documents and theParticipant’s rights in respect of such participation shall be solely againstLender or Co-Lender, as the case may be, as set forth in the participationagreement executed by and between Lender or Co-Lender, as the case may be,and such Participant. No participation shall relieve Lender or Co-Lender, asthe case may be, from its obligations hereunder or under the Note or theLoan Documents and Lender or Co- Lender, as the case may be, shall remainsolely responsible for 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 under thisAgreement (including, without limitation, amounts owing to it in favor of anyFederal Reserve Bank in accordance with Regulation A of the Board of Governorsof the Federal Reserve System), provided that no such security interest or theexercise by the secured party of any of its rights thereunder shall releaseLender or Co-Lender from its funding obligations hereunder.

####  

9.7.3                        Cooperationin Syndication.

 

#### (a)                                  Borrower agrees touse commercially reasonable efforts to assist Lender in completing Syndicationsatisfactory to Lender. Such assistance shall include (i) direct contactbetween senior management and advisors of Borrower and the proposed Co-Lenders,(ii) assistance in the preparation of a confidential informationmemorandum and other marketing materials to be used in connection with theSyndication, (iii) the hosting, with Lender, of one (1) or moremeetings of prospective Co-Lenders or with the Rating Agencies, (iv) thedelivery of appraisals reasonably satisfactory to Lender if required, and (v) workingwith Lender to procure a rating for the Loan by the Rating Agencies.

####  

#### (b)                                 Lender shall manageall aspects of the Syndication of the Loan, including decisions as to theselection of institutions to be approached and when they will be approached,when their commitments will be accepted, which institutions will participate,the allocations of the commitments among the Co-Lenders and the amount anddistribution of fees among the Co-Lenders. To assist Lender in its Syndicationefforts, Borrower agrees promptly to prepare and provide to Lender allinformation with respect to Borrower, Manager, and the Properties contemplatedhereby, including all financial information and projections (the “Projections”),as Lender may reasonably request in connection with the Syndication of theLoan. Borrower hereby represents and covenants that (i) all informationother than the Projections (the “Information”) that has been or will bemade available to Lender by Borrower or any of its representatives is or willbe, to Borrower’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 

 

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#### order to make the statements contained therein not materiallymisleading in light of the circumstances under which such statements are madeand (ii) the Projections that have been or will be made available toLender by Borrower or any of its representatives have been or will be preparedin good faith based upon reasonable assumptions. Borrower understands that inarranging and syndicating the Loan, Lender, the Co-Lenders and, if applicable,the Rating Agencies, may use and rely on the Information and Projectionswithout independent verification thereof.

####  

#### (c)                                  If required inconnection 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 bedelivered pursuant to Section 5.1.10 hereof) and other informationreasonably required by Lender (as may be required to be delivered pursuantto 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 and reportsdelivered to Lender prior to the Closing Date, at Lender’s sole cost andexpense, 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 to or upon a Syndication, to split the Loan into two (2) or moreparts, or the Note into multiple component notes or tranches which may havedifferent interest rate spreads, principal amounts, maturities, and priorities,Borrower agrees to reasonably 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 to effectuatethe same. Such notes or components or tranches may be assigned differentinterest rate spreads, so long as the weighted average of such interest ratespreads does not exceed the Eurodollar Rate Margin (except for any deviationattributable to the imposition of any rate of interest at the Default Rate orprepayments pursuant to Section 2.3.2 or 2.3.3 hereof);

#####  

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

#####  

##### (vi)                      amend theOrganizational Documents of Mezzanine A Borrower and Mezzanine A Principal to “optinto” Article 8 of the UCC and in connection therewith, certificate theinterests comprising the Collateral, 

 

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##### deliver suchcertificates to Lender in accordance with the Pledge Agreement and deliver toLender “springing control” endorsements (or the equivalent thereof) to the UCCTitle Insurance Policy.

#####  

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

 

All third party costs and expenses and out-of-pocket expenses incurredby Lender in connection with this Agreement and the Syndication shall be paidby Lender (except as otherwise expressly set forth herein). These shallinclude, but not be limited to, fees and disbursements of legal counsel,accountants, and other professionals retained by Lender and fees and expensesincurred for producing any offering documents or any other materials (includingtravel by Lender and its agents, design, printing, photograph and documentproduction costs). Solely for the purposes of this Section 9.7, Lendershall reimburse Borrower for all of its actual out-of-pocket costs and expenses(other than the fees and expenses of Borrower’s counsel) that Borrower incursin connection with complying with a request made by Lender under this Section 9.7in connection with a Syndication. Notwithstanding the foregoing, the provisionsof this paragraph shall in no way limit or affect any Borrower obligation topay any costs expressly required to be paid by Borrower pursuant to any otherSections of this Agreement.

 

9.7.5                        IntentionallyOmitted.

 

9.7.6                        NoJoint Venture.

 

Notwithstanding anything to the contrary herein contained, neitherAgent, nor any Co-Lender by entering into this Agreement or by taking anyaction pursuant hereto, will be deemed a partner or joint venturer withBorrower.

 

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

 

In the event that Mezzanine A Lender exercises its right to restructurethe Loan and the Mezzanine A Loan (the “Restructuring Option”) pursuantto Section 9.8 of the Mezzanine A Loan Agreement, Lender shall cooperatewith Mezzanine A Lender to divide the Loan and/or the Mezzanine A Loan into two(2) or more (but****no more thanfive (5))****parts (the “New Mezzanine Loan(s)”)as required by Mezzanine A Lender. The principal amounts of the New MezzanineLoan(s) shall equal the aggregate outstanding principal balance of the Loan andthe Mezzanine A Loan immediately prior to the creation of the New MezzanineLoan(s). In effectuating the foregoing, the lender under the New Mezzanine Loan(the “New Mezzanine Lender”) will make a loan to the direct equityowners of Borrower (the “New Mezzanine Borrower”); the New MezzanineBorrower will contribute the amount of such New Mezzanine Loan to Borrower, and(i) Borrower will contribute the amount of such New Mezzanine Loan toMezzanine A Borrower, and Mezzanine A Borrower will apply the contribution topay down the Mezzanine A Loan and/or (ii) Borrower will apply such newloan to pay down the 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 

 

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conditions set forth in this Agreement, theNote, the Pledge Agreement and the other Loan Documents, and/or the Mezzanine ALoan Documents except as follows:

 

(a)                                  MezzanineA Lender shall have the right to establish different interest rate spreads forthe New Mezzanine Loan(s) and to require the payment of the New MezzanineLoan(s) in such order of priority as may be designated by Mezzanine ALender; *provided, however*, that (i) thetotal loan amounts for the New Mezzanine Loan(s) shall equal the aggregateoutstanding principal amount of the Loan and the Mezzanine A Loan immediatelyprior to the creation of the New Mezzanine Loan(s); (ii) the weightedaverage interest rate spread of the New Mezzanine Loan(s) shall equal the weightedaverage interest rate spread which was applicable to the Loan and the MezzanineA Loan prior to the creation of the New Mezzanine Loan(s) (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); (iii) [intentionallyomitted]; and (iv) no additional recording tax shall be payable as aresult of the creation of the New Mezzanine Loan(s) (or, if such additionalrecording tax is payable, Mezzanine A Lender shall pay the same). The NewMezzanine Loan(s) will be governed by the terms of an intercreditor agreementbetween or among the respective holders of the New Mezzanine Loan(s).

 

(b)                                 MezzanineA Borrower, Borrower and New Mezzanine Borrower shall be a special purpose,bankruptcy remote entity pursuant to applicable Rating Agency criteria andshall own directly or indirectly one hundred percent (100%) of MortgageBorrower, Mezzanine A Borrower or Borrower, as applicable. The security for theNew Mezzanine Loan(s) shall be a pledge of one hundred percent (100%) of thedirect and indirect ownership interests held by such entity.

 

(c)                                  MezzanineA Borrower, Borrower and New Mezzanine Borrower shall cooperate, in allcommercially reasonable respects, with all reasonable requests of Mezzanine ALender in order to divide the Loan and/or the Mezzanine A Loan into one or moreNew Mezzanine Loan(s) and shall execute and deliver such customary documents asshall reasonably be required by Mezzanine A Lender and any Rating Agency inconnection therewith, including, without limitation, (i) the delivery ofnon-consolidation opinions, (ii) the modification of Loan Documents solelyto reflect the existence of, and/or the terms and provisions of, the NewMezzanine Loan(s) and the modification of organizational documents, providedsuch amendments shall relate exclusively to the single purpose bankruptcyremote nature of Borrower, Mezzanine A Borrower or New Mezzanine Borrower, (iii) authorizeMezzanine A Lender to file any UCC-1 Financing Statements reasonably requiredby Mezzanine A Lender to perfect its security interest in the collateralpledged as security for the New Mezzanine Loan(s), (iv) subject in allcases to the applicable provisions of Section 9.5 hereof, execute suchother documents reasonably required by Mezzanine A Lender in connection withthe creation of the New Mezzanine Loan(s), including, without limitation, aguaranty substantially similar in form and substance to the Mezzanine AGuaranty delivered on the date hereof in connection with the Mezzanine A Loan,an environmental indemnity substantially similar in form and substance tothe Mezzanine A Environmental Indemnity delivered on the date hereof inconnection with the Mezzanine A Loan and an agreement regarding the 

 

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management agreement substantially similar inform and substance to the Agreement Regarding Management Agreement, ifany, delivered in connection with the Mezzanine A Loan, (v) deliverappropriate authorization, execution and enforceability opinions with respectto the New Mezzanine Loan(s) and amendments to the Loan solely to reflect theexistence of, and/or the terms and provisions of, the New Mezzanine Loan(s),and (vi) deliver such title insurance policies, “Eagle 9” or equivalentUCC title insurance policies, satisfactory to Mezzanine A Lender, insuring theperfection and priority of the lien on the collateral pledged as security forthe New Mezzanine Loan(s).

 

It shall be an Event of Default hereunder if Borrower, Mezzanine ABorrower or New Mezzanine Borrower fails to comply with any of the terms,covenants or conditions of this Section 9.8 and such failure shallcontinue for more than ten (10) Business Days after Borrower, Mezzanine ABorrower or New Mezzanine Borrower, as the case may be, shall havereceived written notice thereof.

 

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

 

Section 9.9                                      Contributionsand Waivers.

 

##### (i)                                     Asa result of the transactions contemplated by this Agreement, each BorrowerEntity will benefit, directly and indirectly, from each other Borrower Entity’sobligation to pay the Debt and perform its Obligations and inconsideration thereof the Borrower Entities desire to enter into an allocationand contribution agreement among themselves as set forth in this Section 9.9to allocate 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 ofrecourse by Lender against any Collateral of a Borrower Entity and applicationof proceeds 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 Section 548of the Bankruptcy Code or any comparable provisions of any State law.

 

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##### (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 theother Borrower Entities hereunder and under the Loan Documents to the extentsuch other Borrower Entities have pledged their respective Pledged Interests(as defined in the Pledge Agreement) to secure the Obligations of such BorrowerEntity to Lender.

#####  

##### (v)                                 EachBorrower Entity shall be liable to a Funding Borrower in an amount equal to thegreater of (A) the (i) ratio of the Benefit Amount of such BorrowerEntity to the total amount of Obligations, multiplied by (ii) the amountof Obligations paid by such Funding Borrower, and (B) ninety-five percent(95%) of the excess of the fair saleable value of the assets of such Borrowerover the total liabilities of such Borrower Entity (including the maximumamount reasonably expected to become due in respect of contingent liabilities)determined as of the date on which the payment made by a Funding Borrower isdeemed made for purposes hereof (giving effect to all payments made by other FundingBorrowers as of such date in a manner to maximize the amount of suchContributions).

#####  

##### (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 bedeemed to be a Funding Borrower to the extent of such excess and shall beentitled to a Reimbursement Contribution from the other Borrowers in accordancewith the provisions of this Section 9.9.

#####  

##### (vii)                           EachBorrower Entity acknowledges that the right to Reimbursement Contributionshereunder shall constitute an asset in favor of the Borrower Entity to whichsuch Reimbursement Contribution is owing.

#####  

##### (viii)                        NoReimbursement Contribution payments payable by a Borrower pursuant to the termsof this Section 9.9 shall be paid until all amounts then due and payableby all of Borrowers to Lender, pursuant to the terms of the Loan 

 

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##### Documents, arepaid in full in Cash. Nothing contained in this Section 9.9 shall limit oraffect in any way the Obligations of any Borrower to Lender under this Note orany other Loan 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 at anytime or to pursue any other remedy in Lender’s power before proceeding againstany 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;

######  

###### (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 begiven in 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, 

 

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###### any failure ofLender to conduct a commercially reasonable sale or other disposition of anycollateral;

######  

###### (J)                                   anydefense based upon any election by Lender, in any bankruptcy proceeding, of theapplication or non-application of Section 1111(6)(2) of theBankruptcy Code or any 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 under Section 364of 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;

######  

###### (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 havedestroyed such Borrower Entity’s rights of subrogation and reimbursementagainst 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 

 

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###### other LoanDocuments, including, without limitation, any of the following: (i) anyright of subrogation, reimbursement, exoneration, contribution (other than theright to contribution provided for in this Section 9.9), orindemnification; or (ii) any right to participate in any claim or remedyof Lender against any other Borrower Entity or any collateral securitytherefor, whether or not such claim, remedy or right arises in equity or undercontract, statute or common law.

######  

Section 9.10                                CertainAdditional Rights of Lender; VCOC.

 

Subject to the terms hereof, Lender shall have the right:

 

#### (a)                                  to routinely consultwith Borrower’s management regarding the significant business activities andbusiness and financial developments of Borrower; provided, however, that suchconsultations shall not include discussions of environmental complianceprograms or disposal of hazardous substances. Routine consultation meetings may occurno more frequently than quarterly, with Lender having the right to call specialmeetings at any reasonable time (but not more frequently than once per quarter)and upon reasonable advance notice. Borrower shall have no obligation to adhereto any advice proposed by Lender, except where otherwise specifically requiredelsewhere in the Loan Documents;

####  

#### (b)                                 in accordance with theterms of this Agreement, to examine the books and records of Borrower at anyreasonable times upon reasonable notice;

####  

#### (c)                                  in accordance withthe terms of this Agreement, to receive financial reports and other statementsas provided in Section 5.1.10 hereof;

####  

#### (d)                                 in accordance with theterms of this Agreement, but without restricting any other rights of Lenderunder this Agreement (including any similar right), to approve any acquisitionby Borrower of any other significant property;

####  

#### (e)                                  in accordance withthe terms of this Agreement, but without restricting any other rights of Lenderunder this Agreement (including any similar right), to restrict the transfer ofinterests in Borrower, except for any such transfer that is a permittedtransfer, including, without limitation those transfers not deemed “Transfers”under Section 5.2.10(c) hereof;

####  

#### (f)                                    in accordance withthe terms of this Agreement, but without restricting any other rights of Lenderunder this Agreement (including any similar right), to restrict financing to beobtained in connection with future property transactions, refinancing of anyacquisition financings, and unsecured debt;

####  

#### (g)                                 in accordance with theterms of the Agreement Regarding Management Agreement, but without restrictingany other right of Lender under this Agreement (including any similar right),to restrict, upon the occurrence of an Event of Default, Borrower’s payments ofmanagement fees to Manager; and

 

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#### (h)                                 in accordance with theterms of this Agreement, but without restricting any other right of Lenderunder this Agreement (including any similar right), to exercise certainapproval rights with respect to the proposed annual operating budgets asprovided in Section 5.1.10(e) hereof.

####  

The rights described above may be exercised by any entity whichowns and controls, directly or indirectly, substantially all of the interestsin Lender. Nothing contained in this Section 9.10 is intended (i) toconfer upon Lender any rights or privileges greater than those inuring toLender under the other provisions of this Agreement, (ii) to impose uponBorrower any duties, obligations or liabilities greater than or in addition tothose owed by Borrower under the other provisions of this Agreement, or (iii) toconstitute Lender a partner or member of Borrower or a third-party beneficiaryof Borrower’s Organizational Documents.

 

Section 9.11                                MortgageLoan Defaults.

 

#### (a)                                  Without limiting thegenerality of the other provisions of this Agreement, and without waiving orreleasing Borrower from any of its obligations hereunder, if there shall occurany Mortgage Loan Event of Default, and without regard to any other defenses oroffset rights Mortgage Borrower may have against Mortgage Lender, Borrowerhereby expressly agrees that Lender shall have the immediate right, without noticeto or demand on Borrower or Mortgage Borrower, but shall be under noobligation: (i) to pay all or any part of the Mortgage Loan, and anyother sums, that are then due and payable and to perform any act or takeany action on behalf of Mortgage Borrower, as may be appropriate, to causeall of the terms, covenants and conditions of the Mortgage Loan Documents onthe part of Mortgage Borrower to be performed or observed thereunder to betimely performed or observed; and (ii) to pay any other amounts and takeany other action as Lender shall reasonably determine to be necessary toprotect or preserve the rights and interests of Lender in the Loan and/or theCollateral. Lender shall have no obligation to complete any cure or attemptedcure undertaken or commenced by Lender. All sums so paid and the costs andexpenses incurred by Lender in exercising rights under this Section (including,without limitation, reasonable attorneys’ and other professional fees), withinterest at the Default Rate, for the period from the date of demand by Lenderto Borrower for such payments to the date of payment to Lender, shallconstitute a portion of the Debt, shall be secured by the Pledge Agreement andshall be due and payable to Lender within ten (10) days following demandtherefor.

####  

#### (b)                                 Subject to the rightsof tenants, Borrower hereby grants, and shall cause Mortgage Borrower to grant,Lender and any Person designated by Lender the right to enter upon the Propertyat any time for the purpose of carrying out the rights granted to Lender underthis Section 9.11.

####  

#### (c)                                  Borrower shallindemnify and hold harmless Lender from and against all actual out-of-pocketliabilities, obligations, losses, damages, penalties, assessments, actions, orcauses of action, judgments, suits, claims, demands, costs, expenses(including, without limitation, reasonable attorneys’ and other professionalfees, whether 

 

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#### or not suit is brought, and settlement costs), and disbursements of anykind or nature whatsoever which may be imposed on, incurred by or assertedagainst Lender as a result of the foregoing actions described in Section 9.11(a) otherthan liabilities, obligations, losses, damages, penalties, assessments,actions, or causes of action, judgments, suits, claims, demands, costs,expenses and disbursements arising out of the fraud, illegal acts, grossnegligence or willful misconduct of Lender. Lender shall have no obligation toBorrower, Mortgage Borrower or any other party to make any such payment orperformance. Borrower shall not impede, interfere with, hinder or delay, andshall cause Mortgage Borrower to not impede, interfere with, hinder or delay,any effort or action on the part of Lender to cure any default or asserteddefault under the Mortgage Loan, or to otherwise protect or preserve Lender’sinterests in the Loan and the Collateral following a default or asserteddefault under the Mortgage Loan, in either case, in accordance with theprovisions of this Agreement and the other Loan Documents.

####  

#### (d)                                 If Lender shallreceive a copy of any notice of a Mortgage Loan Event of Default sent byMortgage Lender to Mortgage Borrower, such notice shall constitute fullprotection to Lender for any action taken or omitted to be taken by Lender, ingood faith, in reliance thereon. As a material inducement to Lender’s makingthe Loan, Borrower hereby absolutely and unconditionally releases and waivesall claims against Lender arising out of Lender’s exercise of its rights andremedies provided in this Section other than claims arising out of thefraud, illegal acts, gross negligence or willful misconduct of Lender. In theevent that Lender makes any payment in respect of the Mortgage Loan, Lendershall be subrogated, to the extent of such payment, to all of the rights ofMortgage Lender under the Mortgage Loan Documents against the Property, inaddition to all other rights it may have under the Loan Documents.

####  

Section 9.12                                MezzanineA Loan Defaults.

 

#### (a)                                  Without limiting thegenerality of the other provisions of this Agreement, and without waiving orreleasing Borrower from any of its obligations hereunder, if there shall occurany Mezzanine A Event of Default, Borrower hereby expressly agrees that Lendershall have the immediate right, without notice to or demand on Borrower orMezzanine A Borrower, but shall be under no obligation: (i) to pay all orany part of the Mezzanine A Loan, and any other sums, that are then dueand payable and to perform any act or take any action on behalf ofMezzanine A Borrower, as may be appropriate, to cause all of the terms,covenants and conditions of the Mezzanine A Loan Documents on the part ofMezzanine A Borrower to be performed or observed thereunder to be timelyperformed or observed; and (ii) to pay any other amounts and take anyother action as Lender shall reasonably determine to be necessary to protect orpreserve the rights and interests of Lender in the Loan and/or the Collateral. Lendershall have no obligation to complete any cure or attempted cure undertaken orcommenced by Lender. All sums so paid and the costs and expenses incurred byLender in exercising rights under this Section (including, withoutlimitation, reasonable attorneys’ and other professional fees), with interestat the Default Rate, for the period from the date of demand by Lender toBorrower for such payments to the date of payment to Lender, shall constitute aportion of the Debt, shall be secured by the Pledge Agreement and shall be dueand payable to Lender within ten (10) days following demand therefor.

 

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#### (b)                                 Subject to the rightsof tenants, Borrower hereby grants, and shall cause Mezzanine A Borrower togrant, Lender and any Person designated by Lender the right to enter upon theProperty at any time for the purpose of carrying out the rights granted toLender under this Section 9.12.

####  

#### (c)                                  Borrower shallindemnify and hold harmless Lender from and against all out-of-pocketliabilities, obligations, losses, damages, penalties, assessments, actions, orcauses of action, judgments, suits, claims, demands, costs, expenses(including, without limitation, reasonable attorneys’ and other professionalfees, whether or not suit is brought, and settlement costs), and disbursementsof any kind or nature whatsoever which may be imposed on, incurred by orasserted against Lender as a result of the foregoing actions described in Section 9.12(a) otherthan liabilities, obligations, losses, damages, penalties, assessments,actions, or causes of action, judgments, suits, claims, demands, costs,expenses and disbursements arising out of the fraud, illegal acts, grossnegligence or willful misconduct of Lender. Lender shall have no obligation toBorrower, Mezzanine A Borrower or any other party to make any such payment orperformance. Borrower shall not impede, interfere with, hinder or delay, andshall cause Mezzanine A Borrower to not impede, interfere with, hinder ordelay, any effort or action on the part of Lender to cure any default orasserted default under the Mezzanine A Loan, or to otherwise protect orpreserve Lender’s interests in the Loan and the Collateral following a defaultor asserted default under the Mezzanine A Loan, in either case, in accordancewith the provisions of this Agreement and the other Loan Documents.

####  

#### (d)                                 If Lender shallreceive a copy of any notice of a Mezzanine A Event of Default sent byMezzanine A Lender to Mezzanine A 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 thefraud, illegal acts, gross negligence or willful misconduct of Lender. In theevent that Lender makes any payment in respect of the Mezzanine A Loan, Lendershall be subrogated, to the extent of such payment, to all of the rights ofMezzanine A Lender under the Mezzanine A Loan Documents against the Mezzanine ACollateral, in addition to all other rights it may have under the LoanDocuments.

####  

Section 9.13                                IntentionallyOmitted.

 

Section 9.14                                IntercreditorAgreements.

 

#### (a)                                  Lender, MortgageLender, Mezzanine A Lender and Bank Loan Agent are parties to one or moreintercreditor agreements dated as of the date hereof (collectively, the “IntercreditorAgreements”) memorializing their relative rights and obligations withrespect to the Mortgage Loan, the Loan, the Mezzanine A Loan, the Bank Loan,Mortgage Borrower, Borrower, Mezzanine A Borrower, Bank Loan Borrower and theProperties. Borrower hereby acknowledges and agrees that (i) suchIntercreditor Agreements are intended solely for the benefit of Lender,Mezzanine A Lender, 

 

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#### Mortgage Lender and Bank Loan Agent and (ii) Borrower, MortgageBorrower, Mezzanine A Borrower and Bank Loan Borrower are not intendedthird-party beneficiaries of any of the provisions therein and shall not beentitled to rely on any of the provisions contained therein. Lender, MortgageLender, Mezzanine A Lender and Bank Loan Agent shall have no obligation todisclose to Borrower, Mortgage Borrower, Mezzanine A Borrower or Bank LoanBorrower the contents of the Intercreditor Agreements. Borrower’s obligationshereunder are independent of such Intercreditor Agreements and remainunmodified by the terms and provisions thereof.

####  

#### (b)                                 In the event theLender is required pursuant to the terms of the Intercreditor Agreements to payover to Mortgage Lender or Mezzanine A Lender any payment or distribution ofassets, whether in cash, property or securities which is applied to the Debt,including, without limitation, any proceeds of the Properties previouslyreceived by Lender on account of the Loan, then Borrower shall indemnify Lenderfor any amounts so paid, and any amount so paid shall continue to be owingpursuant to the Loan Documents as part of the Debt notwithstanding theprior receipt of such payment by Lender.

####  

Section 9.15                                Discussionswith Mortgage Lender and Mezzanine A Lender.

 

#### (a)                                  In connection withthe exercise of its rights set forth in the Loan Documents, Lender shall havethe right at any time to discuss the Properties, the Mortgage Loan, the Loan,the Mezzanine A Loan, or any other matter directly with Mortgage Lender orMortgage Lender’s consultants, agents or representatives without notice to orpermission from Borrower or any other Loan Party. Lender shall not have anyobligation to disclose such discussions or the contents thereof with Borroweror any other Loan Party.

####  

#### (b)                                 In connection with theexercise of its rights set forth in the Loan Documents, Lender shall have theright at any time to discuss the Properties, the Mortgage Loan, the Mezzanine ALoan, the Loan or any other matter directly with Mezzanine A Lender orMezzanine A Lender’s consultants, agents or representatives without notice toor permission from Borrower or any other Loan Party. Lender shall not have anyobligation to disclose such discussions or the contents thereof with Borroweror any other Loan Party.

####  

Section 9.16                                IndependentApproval Rights.

 

If any action, proposed action or other decision is consented to orapproved by Mortgage Lender or Mezzanine A Lender, such consent or approvalshall not, except as otherwise expressly provided in this Agreement or theother Loan Documents, be binding or controlling on Lender. Borrower herebyacknowledges and agrees that (i) the risks of Mortgage Lender in makingthe Mortgage Loan are different from the risks of Lender in making the Loan, (ii) therisks of Mezzanine A Lender in making the Mezzanine A Loan are different fromthe risks of Lender in making the Loan, (iii) [intentionally omitted], (iv) indetermining whether to grant, deny, withhold or condition any requested consentor approval Mortgage Lender, Mezzanine A Lender and Lender may reasonablyreach 

 

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different conclusions, and (v) Lenderhas an independent right to grant, deny, withhold or condition any requestedconsent or approval based on its own point of view, subject, however, to anyrequirements of reasonableness or good faith expressly set forth in thisAgreement or the other Loan Documents. Further, the denial by Lender of arequested consent or approval shall not, provided such denial shall notconstitute a default by Lender under this Agreement, create any liability orother obligation of Lender if the denial of such consent or approval resultsdirectly or indirectly in a default under the Mortgage Loan or the Mezzanine ALoan and Borrower hereby waives any claim of liability against Lender arisingfrom any such denial, provided such denial shall not constitute a default byLender under this Agreement. Notwithstanding anything to the contrary containedin this Section 9.16, to the extent that Mortgage Lender requires MortgageBorrower to perform, or refrain from performing, any action pursuant to theterms of the Mortgage Loan Documents, Lender shall not withhold its consent tothe performance or, or the refraining from performing, such action only if suchfailure to act or refrain from acting by Mortgage Borrower (after theexpiration of any applicable notice and cure periods) would be a Mortgage LoanEvent of Default.

 

**X.****                                    MISCELLANEOUS**

 

Section 10.1                                Survival.

 

This Agreement and all covenants, agreements, representations andwarranties made herein and in the certificates delivered pursuant hereto shallsurvive the making by Lender of the Loan and the execution and delivery toLender of the Note, and shall continue in full force and effect so long as allor any of the Debt is outstanding and unpaid, unless a longer period isexpressly set forth herein or in the other Loan Documents. Whenever in thisAgreement any of the parties hereto is referred to, such reference shall bedeemed to include the legal representatives, successors and assigns of suchparty. All covenants, promises and agreements in this Agreement, by or onbehalf of Borrower, shall inure to the benefit of the legal representatives,successors and assigns of Lender.

 

Section 10.2                                Lender’sDiscretion.

 

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

 

Section 10.3                                GoverningLaw.

 

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

 

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####  

#### (b)                                 WITH RESPECT TO ANYCLAIM OR ACTION ARISING HEREUNDER OR UNDER THIS AGREEMENT, THE NOTE, OR THEOTHER LOAN DOCUMENTS, EACH OF BORROWER AND LENDER (A) IRREVOCABLY SUBMITSTO THE 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) IRREVOCABLYWAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING ON VENUEOF 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 SUCHCOURT AND IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDINGBROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING INTHIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS INSTRUMENT WILL BE DEEMEDTO PRECLUDE LENDER OR BORROWER FROM BRINGING AN ACTION OR PROCEEDING WITHRESPECT HERETO IN ANY OTHER JURISDICTION.

####  

Section 10.4                                Modification,Waiver in Writing.

 

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

 

Section 10.5                                DelayNot a Waiver.

 

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

 

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Section 10.6                                Notices.

 

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

 
| If to Borrower: | c/o Archstone-Smith Operating Trust     |
|-----------------|-----------------------------------------|
|            | 9200 E. Panorama Circle, Suite 400 |
|            | Englewood, Colorado 80112               |
|            | Attention: General Counsel              |
|            | Facsimile No.: (303) 708-6954           |
|            |                                    |
| with a copy to: | Tishman Speyer                          |
|            | 45 Rockefeller Plaza                    |
|            | New York, New York 10111                |
|            | Attention: Chief Legal Officer          |
|            | Facsimile No.: (212) 895-0353           |
|            |                                    |
| and to:         | Tishman Speyer                          |
|            | 45 Rockefeller Plaza                    |
|            | New York, New York 10111                |
|            | Attention: Chief Financial Officer      |
|            | Facsimile No.: (212) 895-0314           |
|            |                                    |
| and to:         | Schulte Roth & Zabel LLP       |
|            | 919 Third Avenue                        |
|            | New York, New York 10022                |
|            | Attention: Andrew J. Dady, Esq.    |
|            | Facsimile No.: (212) 593-5955           |
|            |                                    |
| If to Lender:   | Lehman Brothers Holdings Inc.           |
|            | 399 Park Avenue                         |
|            | New York, New York 10022                |
|            | Attention: Charles Manna                |
|            | Facsimile No.: (646) 758-5366           |
|            |                                    |
| and to:         | Bank of  America, N.A.                  |
|            | Capital  Markets Servicing Group        |
|            | 900 West  Trade Street, Suite 650  |
|            | Mail Code:  NC1-026-06-01               |
|            | Charlotte,  North Carolina 28255        |

 

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|            | Attention:  Dean B. Roberson                |
|-----------------|---------------------------------------------|
|            | Facsimile  No.: (704) 317-4501              |
|            |                                        |
| and to:         | Barclays Capital Real Estate Finance Inc.   |
|            | 200 Park Avenue, 4th Floor                  |
|            | New York, New York 10166                    |
|            | Attention: Lori Ann Rung                    |
|            | Facsimile No.: (212) 412-1664               |
|            |                                        |
| with a copy to: | Thacher  Proffitt & Wood LLP       |
|            | Two World  Financial Center                 |
|            | New York,  New York 10281                   |
|            | Attention:  Mitchell G. Williams, Esq. |
|            | Facsimile  No.: (212) 912-7751              |

 

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

 

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

 

Section 10.7                                Trialby Jury.

 

EACH OF BORROWER AND LENDER HEREBY AGREES NOT TO ELECT A TRIAL BY JURYOF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURYFULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITHREGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTIONARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVENKNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASSINDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BYJURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OFTHIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THEOTHER PARTY.

 

Section 10.8                                Headings.

 

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

 

Section 10.9                                Severability.

 

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

 

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

 

Section 10.10                          Preferences.

 

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

 

Section 10.11                          Waiverof Notice.

 

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

 

Section 10.12                          Remediesof Borrower.

 

In the event that a claim or adjudication is made that Lender or itsagents have acted unreasonably or unreasonably delayed acting in any case whereby law or under this Agreement or the other Loan Documents, Lender or suchagent, as the case may be, has an obligation to act reasonably orpromptly, Borrower agrees that neither Lender nor its agents shall be liablefor any monetary damages, and Borrower’s sole remedies shall be limited tocommencing an action seeking injunctive relief or declaratory judgment. Theparties hereto agree that any action or proceeding to determine whether Lenderhas acted reasonably shall be determined by an action seeking declaratoryjudgment.

 

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 ofreceipt of written notice from Lender, for all reasonable out-of-pocket costsand expenses (including reasonable out-of-pocket attorneys’ fees anddisbursements) incurred by Lender in connection with (i) [intentionallyomitted]; (ii) Borrower’s ongoing performance of and compliance withBorrower’s agreements and covenants contained in this Agreement and the otherLoan Documents on its part to be performed or complied with after theClosing Date, including, without limitation, confirming compliance withenvironmental and insurance requirements; (iii) Lender’s ongoingperformance and

 

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#### compliance with all agreements and conditions contained in thisAgreement and the other Loan Documents on its part to be performed orcomplied with after the Closing Date; (iv) the negotiation, preparation,execution, delivery and administration of any consents, amendments, waivers orother modifications to this Agreement and the other Loan Documents and anyother documents or matters reasonably requested by Lender; (v) securingBorrower’s compliance with any requests made pursuant to the provisions of thisAgreement; (vi) the filing and recording fees and expenses, titleinsurance and reasonable fees and expenses of counsel for providing to Lenderall required legal opinions, and other similar expenses incurred in creatingand perfecting the Liens in favor of Lender pursuant to this Agreement and theother Loan Documents; (vii) enforcing or preserving any rights, inresponse to third party claims or the prosecuting or defending of any action orproceeding or other litigation, in each case against, under or affectingBorrower, this Agreement, the other Loan Documents, the Collateral, theMezzanine A Collateral, any Mortgage Principal’s general partner interest inthe related Mortgage Borrower Entity, any Mezzanine A Principal’s generalpartner interest in the related Mezzanine A Borrower Entity, the Properties orany other security given for the Loan; and (viii) enforcing anyobligations of or collecting any payments due from Borrower under thisAgreement, the other Loan Documents or with respect to the Collateral or inconnection with any refinancing or restructuring of the credit arrangementsprovided under this Agreement in the nature of a “workout” or of any insolvencyor 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,incurred by, or asserted against Lender in any manner relating to or arisingout of (i) any breach by Borrower of its obligations under, or anymaterial misrepresentation by Borrower contained in, this Agreement or theother Loan Documents, or (ii) the use or intended use of the proceeds ofthe Loan (collectively, the “Indemnified Liabilities”); *provided, however*, that Borrower shall not have anyobligation to Lender hereunder to the extent that such liabilities,obligations, losses, damages, penalties, actions, judgments, suits, claims,costs, expenses or disbursements, as the case may be, arise from the grossnegligence, illegal acts, fraud or willful misconduct of Lender. To the extentthat the undertaking to indemnify, defend and hold harmless set forth in thepreceding sentence may be unenforceable because it violates any law orpublic policy, Borrower shall pay the maximum portion that it is permitted topay and satisfy under Applicable Law to the payment and satisfaction of all IndemnifiedLiabilities incurred by Lender.

####  

#### (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

 

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#### the investigation, defense, and settlement of losses incurred incorrecting any prohibited transaction or in the sale of a prohibited loan, andin obtaining any individual prohibited transaction exemption under ERISA, theCode, any State statute or other similar law that may be required, inLender’s sole discretion) that Lender may incur, directly or indirectly,as a result of a default under Sections 4.1.8 or 5.2.8 hereof.

####  

#### (d)                                 Except as 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 Schedules and Exhibits annexed hereto are hereby incorporatedherein as a part of this Agreement with the same effect as if set forth inthe body hereof.

 

Section 10.15                          Offsets,Counterclaims and Defenses.

 

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

 

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

 

#### (a)                                  Borrower and Lenderintend that the relationship created hereunder and under the other LoanDocuments be solely that of borrower and lender. Nothing herein or therein isintended to create a joint venture, partnership, tenancy in common, or jointtenancy relationship between Borrower and Lender.

####  

#### (b)                                 This Agreement and theother 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

 

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#### be freely waived in whole or in part by Lender if, in Lender’ssole discretion, Lender deems it advisable or desirable to do so.

####  

Section 10.17                          Counterparts.

 

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

 

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

 

#### (a)                                  To the fullest extentpermitted 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)                                 Borrower acknowledgesthat Lender has made the Loan to Borrower upon the security of its collectiveinterest in the Collateral and in reliance upon the aggregate of the Collateraltaken together being of greater value as collateral security than the sum ofany portion of the Collateral taken separately.

####  

Section 10.19                          Waiverof Counterclaim.

 

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

 

Section 10.20                          Conflict;Construction of Documents; Reliance.

 

In the event of any conflict between the provisions of this Agreementand any of the other Loan Documents, the provisions of this Agreement shallcontrol. The parties hereto acknowledge that they were represented by competentcounsel in connection with

 

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the negotiation, drafting and execution ofthe Loan Documents and that the Loan Documents shall not be subject to theprinciple of construing their meaning against the party which drafted same. Borroweracknowledges that, with respect to the Loan, Borrower shall rely solely on itsown judgment and advisors in entering into the Loan without relying in anymanner on any statements, representations or recommendations of Lender or anyparent, 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 may acquirein Borrower, and Borrower hereby irrevocably waives the right to raise anydefense or take any action on the basis of the foregoing with respect to Lender’sexercise of any such rights or remedies. Borrower acknowledges that Lenderengages in the business of real estate financings and other real estate transactionsand investments which may be viewed as adverse to or competitive with thebusiness of Borrower or its Affiliates.

 

Section 10.21                          Brokersand Financial Advisors.

 

Borrower hereby represents that it has dealt with no financialadvisors, brokers, underwriters, placement agents, agents or finders inconnection with the transactions contemplated by this Agreement. Borrowerhereby agrees to indemnify, defend and hold Lender harmless from and againstany and all claims, liabilities, costs and expenses of any kind (includingLender’s reasonable out-of-pocket attorneys’ fees and expenses) in any wayrelating to or arising from a claim by any Person that such Person acted onbehalf of Borrower or Lender in connection with the transactions contemplatedherein. The provisions of this Section 10.21 shall survive the expirationand termination of this Agreement and the payment of the Debt.

 

Section 10.22                          PriorAgreements.

 

This Agreement and the other Loan Documents contain the entireagreement of the parties hereto and thereto in respect of the transactionscontemplated hereby and thereby, and all prior agreements among or between suchparties, whether oral or written, between Borrower and/or its Affiliates andLender are superseded by the terms of this Agreement and the other LoanDocuments.

 

Section 10.23                          Jointand Several Liability.

 

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

 

Section 10.24                          USAPatriot Act.

 

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

 

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information includes the name and address ofeach Borrower and other information that will allow such Lender to identifyeach Borrower in accordance with such Act.

 

**[NOFURTHER TEXT ON THIS PAGE]**

 

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

 

BORROWER:

 

**[BORROWER]**

 

----

 
|   | LENDER:                                                                |
|--------|------------------------------------------------------------------------|
|   |                                                                   |
|   | **LEHMAN BROTHERS HOLDINGS INC.**,  a  Delaware corporation            |
|   |                                                                   |
|   |                                                                   |
|   | By:                                                                    |   |
|   |                                                                   | Name: |
|   |                                                                   | Title: |
|   |                                                                   |
|   |                                                                   |
|   | **BANK OF AMERICA, N.A.**,  a national banking  association            |
|   |                                                                   |
|   |                                                                   |
|   | By:                                                                    |   |
|   |                                                                   | Name: |
|   |                                                                   | Title: |
|   |                                                                   |
|   |                                                                   |
|   | **BARCLAYS CAPITAL REAL ESTATE  FINANCE INC.**, a Delaware corporation |
|   |                                                                   |
|   | By:                                                                    |   |
|   |                                                                   | Name: |
|   |                                                                   | Title: |

 

----

 

EXHIBIT A

 

(Borrower Entities)

 
| **Borrower Entity**                                                 | ** ** | **Organizational  Identification Number** | ** ** | **Tax Identification No.** |
|--------------------------------------------------------------------------|------------|------------------------------------------------|------------|--------------------------------------|
| Tishman  Speyer Archstone-Smith City Place Mezzanine II, L.L.C.          |       | 4431673                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Harbour Pointe Mezzanine II, L.L.C.      |       | 4431675                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Northcreek Mezzanine II, L.L.C.          |       | 4431676                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Redmond Campus Mezzanine II, L.L.C.      |       | 4431679                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Redmond Park Mezzanine II, L.L.C.        |       | 4431687                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Warner Center Mezzanine II, L.L.C.       |       | 4431691                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Wall Street Towers Mezzanine II, L.L.C.  |       | 4431696                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Redmond Court Mezzanine II, L.L.C.       |       | 4431700                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Vanoni Ranch Mezzanine II, L.L.C.        |       | 4431702                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Vanoni Ranch Mezzanine Lessee II, L.L.C. |       | 4432700                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Fox Plaza Mezzanine II, L.L.C.           |       | 4431703                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Boston Common Mezzanine II, L.L.C.       |       | 4431704                                        |       | 90-0042860                           |
|                                                                     |       |                                           |       |                                 |
| Tishman  Speyer Archstone-Smith Thousand Oaks Crest Mezzanine II, L.L.C. |       | 4432674                                        |       | 90-0042860                           |

 

----

 

EXHIBIT B

 

(Lender ApprovedStandard Form of Lease)

 

None

 

----

 

EXHIBIT C

 

(Allocated LoanAmounts)

 
| **Property Name**     | ** ** | **Amount** | ** **    |
|----------------------------|------------|------------|---------------|
|                       |       |       |          |
| Archstone Boston Common    |       | $          | 15,587,637.60 |   |
| Archstone City Place       |       | $          | 0.00          |   |
| Archstone Vanoni Ranch     |       | $          | 6,330,034.97  |   |
| Archstone Warner Center    |       | $          | 11,198,986.09 |   |
| Archstone Fox Plaza        |       | $          | 6,907,673.79  |   |
| Archstone Harbour Pointe   |       | $          | 0.00          |   |
| Archstone Northcreek       |       | $          | 6,034,220.74  |   |
| Archstone Redmond Campus   |       | $          | 6,556,893.70  |   |
| Oakwood Village            |       | $          | 0.00          |   |
| Archstone Redmond Park     |       | $          | 3,667,803.20  |   |
| The Flats at Dupont Circle |       | $          | 0.00          |   |
| Stone Creek at Bellevue    |       | $          | 2,228,604.24  |   |
| Wall Street Tower          |       | $          | 4,989,874.83  |   |

 

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EXHIBIT D

 

(Ground Leases)

 

1.                                       ArchstoneVanoni Ranch, 10676 Veronica Lane, Ventura, California

 

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SCHEDULE 4.1.1

 

(OrganizationalChart)

 

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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 (whichproperties may include one or more Properties), owned by Mortgage Borroweror other entities affiliated with Archstone-Smith Operating Trust, as havingpotential construction/design violations under the Fair Housing Act and theAmericans with Disabilities Act.

 

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SCHEDULE 4.1.9

 

(Exceptions toCompliance with Legal Requirements)

 

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

 

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SCHEDULE 4.1.10

 

(FinancialInformation Exceptions)

 

None

 

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SCHEDULE 4.1.13

 

(Utilities andPublic Access Exceptions)

 

None

 

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SCHEDULE 4.1.21

 

(Certificate ofOccupancy and Licenses Exceptions)

 

None

 

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SCHEDULE 4.1.23

 

(Physical ConditionExceptions)

 

None

 

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SCHEDULE 4.1.25

 

(LeaseRepresentation Exceptions)

 

None

 

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SCHEDULE 4.1.32

 

(Changes in Facts orCircumstances)

 

None

 

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SCHEDULE 4.1.47

 

(List of MortgageLoan Documents)

 

**Archstone Vanoni Ranch**

 

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

 

2. Loan Agreement between Vanoni Borrower and Lender

 

3. Deed of Trust between Vanoni Borrower and Lender

 

4. Replacement Reserve Agreement between Vanoni Borrower and Lender

 

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

 

6. Cross CollateralizationAgreement between Vanoni Borrower and Lender

 

7. Post Closing Letter executedby Vanoni Borrower

 

8. Escrow Agreement executed byVanoni Borrower and Lender

 

9. Hedge Agreement between VanoniBorrower and Lender

 

10. ADA Agreement between VanoniBorrower and Lender

 

11. California Guarantyexecuted by Guarantor

 

**Archstone Warner Center**

 

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

 

2. Loan Agreement between Warner Borrower and Lender

 

3. Deed of Trust between Warner Borrower and Lender

 

4. Replacement Reserve Agreement between Warner Borrower and Lender

 

5. Guaranty executed by Guarantor

 

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6. Cross CollateralizationAgreement between Warner Borrower and Lender

 

7. Post Closing Letter executedby Warner Borrower

 

8. Escrow Agreement executed byWarner Borrower and Lender

 

9. Hedge Agreement between WarnerBorrower and Lender

 

10. Debt Service Escrow Agreementbetween Warner Borrower andLender

 

11. California Guarantyexecuted by Guarantor

 

**Archstone City Place**

 

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

 

2. Loan Agreement between City Place Borrower and Lender

 

3. Deed of Trust between City Place Borrower and Lender

 

4. Replacement Reserve Agreement between City Place Borrower and Lender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between City Place Borrower and Lender

 

7. Post Closing Letter executedby City Place Borrower

 

8. Escrow Agreement executed byCity Place Borrower andLender

 

9. Hedge Agreement between CityPlace Borrower and Lender

 

10. California Guarantyexecuted by Guarantor

 

**Archstone Fox Plaza**

 

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

 

2. Loan Agreement between Fox Borrower and Lender

 

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3. Deed of Trust between Fox Borrower and Lender

 

4. Replacement Reserve Agreement between Fox Borrower and Lender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between Fox Borrower and Lender

 

7. Post Closing Letter executedby Fox Borrower

 

8. Escrow Agreement executed byFox Borrower and Lender

 

9. Hedge Agreement between FoxBorrower and Lender

 

10. Repair Agreement between FoxBorrower and Lender

 

11. California Guarantyexecuted by Guarantor

 

**Archstone Boston Common**

 

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

 

2. Loan Agreement between Boston Borrower and Lender

 

3. Mortgage between Boston Borrower and Lender

 

4. Replacement Reserve Agreement between Boston Borrower and Lender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between Boston Borrower and Lender

 

7. Post Closing Letter executedby Boston Borrower

 

8. Escrow Agreement executed byBoston Borrower and Lender

 

9. Debt Service EscrowAgreement between Boston Borrower and Lender

 

10. Hedge Agreement between BostonBorrower and Lender

 

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**ArchstoneRedmond Campus**

 

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

 

2. Loan Agreement between Redmond Campus Borrower and Lender

 

3. Mortgage between Redmond Campus Borrower and Lender

 

4. Replacement Reserve Agreement between Redmond Campus Borrower andLender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between Redmond Campus Borrower and Lender

 

7. Post Closing Letter executedby Redmond Campus Borrower

 

8. Escrow Agreement executed byRedmond Campus Borrower andLender

 

9. Hedge Agreement between RedmondCampus Borrower and Lender

 

**Archstone Harbour Pointe**

 

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

 

2. Loan Agreement between Harbour Pointe Borrower and Lender

 

3. Mortgage between Harbour Pointe Borrower and Lender

 

4. Replacement Reserve Agreement between Harbour Pointe Borrower andLender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between Harbour Pointe Borrower and Lender

 

7. Post Closing Letter executedby Harbour Pointe Borrower

 

8. Escrow Agreement executed byHarbour Pointe Borrower andLender

 

9. Hedge Agreement between HarbourPointe Borrower and Lender

 

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**Archstone Northcreek**

 

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

 

2. Loan Agreement between Northcreek Borrower and Lender

 

3. Mortgage between Northcreek Borrower and Lender

 

4. Replacement Reserve Agreement between Northcreek Borrower and Lender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between Northcreek Borrower and Lender

 

7. Post Closing Letter executedby Northcreek Borrower

 

8. Escrow Agreement executed byNorthcreek Borrower andLender

 

9. Hedge Agreement between NorthcreekBorrower and Lender

 

10. ADA Agreement betweenBorrower and Lender

 

**Archstone Redmond Park**

 

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

 

2. Loan Agreement between Redmond Park Borrower and Lender

 

3. Mortgage between Redmond Park Borrower and Lender

 

4. Replacement Reserve Agreement between Redmond Park Borrower andLender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between Redmond Park Borrower and Lender

 

7. Post Closing Letter executedby Redmond Park Borrower

 

8. Escrow Agreement executed byRedmond Park Borrower andLender

 

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9. Hedge Agreement between RedmondPark Borrower and Lender

 

**Stone Creek at Bellevue (Redmond Court)**

 

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

 

2. Loan Agreement between Stone Creek Borrower and Lender

 

3. Mortgage between Stone Creek Borrower and Lender

 

4. Replacement Reserve Agreement between Stone Creek Borrower andLender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between Stone Creek Borrower and Lender

 

7. Post Closing Letter executedby Stone Creek Borrower

 

8. Escrow Agreement executed byStone Creek Borrower andLender

 

9. Hedge Agreement between StoneCreek Borrower and Lender

 

**Wall Street Tower**

 

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

 

2. Loan Agreement between Wall Street Borrower and Lender

 

3. Mortgage between Wall Street Borrower and Lender

 

4. Replacement Reserve Agreement between Wall Street Borrower andLender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between Wall Street Borrower and Lender

 

7. Post Closing Letter executedby Wall Street Borrower

 

8. Escrow Agreement executed byWall Street Borrower andLender

 

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9. Hedge Agreement between WallStreet Borrower and Lender

 

**Archstone Thousand Oaks Crest (aka OakwoodVillage)**

 

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

 

2. Loan Agreement between Oakwood Borrower and Lender

 

3. Deed of Trust between Oakwood Borrower and Lender

 

4. Replacement Reserve Agreement between Oakwood Borrower and Lender

 

5. Guaranty executed by Guarantor

 

6. Cross CollateralizationAgreement between Oakwood Borrower and Lender

 

7. Post Closing Letter executedby Oakwood Borrower

 

8. Escrow Agreement executed byOakwood Borrower and Lender

 

9. Hedge Agreement between OakwoodBorrower and Lender

 

10. Repair Agreement between OakwoodBorrower and Lender

 

11. Completion Guarantyexecuted by Guarantor

 

12. California Guarantyexecuted by Guarantor

 

**The Flats at Dupont Circle**

 

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

 

2. Loan Agreement between Dupont Borrower and Lender

 

3. Deed of Trust between Dupont Borrower and Lender

 

4. Replacement Reserve Agreement between Dupont Borrower and Lender

 

5. Guaranty executed by Guarantor

 

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6. Cross CollateralizationAgreement between Dupont Borrower and Lender

 

7. Post Closing Letter executedby Dupont Borrower

 

8. Escrow Agreement executed byDupont Borrower and Lender

 

9. Hedge Agreement between DupontBorrower and Lender

 

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SCHEDULE 4.1.48

 

(CondominiumProperties)

 

1.                                       ArchstoneFox Plaza, 1390 Market Street, San Francisco, California

 

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SCHEDULE 4.1.49

 

(List of Mezzanine ALoan Documents)

 

1. Mezzanine A Promissory Notemade by the entities set forth on Schedule 2 (together, the “Borrower”),as borrower in favor of Lehman Brothers Holdings Inc.; Bank of America, N.A.;Barclays Capital Real Estate Finance Inc. (together, the “Lender”), as lender,in the original principal amount of $71,939,553.23

 

2. Mezzanine A Loan Agreementbetween Borrower and Lender

 

3. Mezzanine A Pledge andSecurity Agreement between Borrower and Lender

 

4. Mezzanine A Guaranty ofRecourse Obligations executed by Tishman SpeyerArchstone-Smith Multifamily Holdings I, L.P. (“Guarantor”)

 

5. Mezzanine A EnvironmentalIndemnity Agreement executed by Borrower

 

6. Mezzanine A Assignment ofInterest Rate Cap Agreement and Security Agreement between Borrower and Lender

 

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SCHEDULE 5.1.20

 

(CapitalImprovements)

 

None

 

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SCHEDULE 5.2.10(c)(vii)

 

Bank Loan PledgedInterests

 

All entities that have pledged their assets as collateral for the BankLoan pursuant to the Bank Loan Documents.

 

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