**Exhibit 10.4**

 

**Freddie Mac Loan Number 487810724**

 

**MULTIFAMILYNOTE**

**MULTISTATE –ADJUSTABLE RATE**

**(REVISIONDATE 3-30-2006)**

 
| US $152,926,000 | Effective Date:  October 5, 2007 |
|-----------------|---------------------------------------|

 

FOR VALUE RECEIVED, the undersigned (together with such party’s orparties’ successors and assigns, **“Borrower”**),****jointlyand severally (if more than one) promises to pay to the order of LEHMANBROTHERS HOLDINGS INC., a Delaware corporation, having an address at 399 ParkAvenue, New York, New York 10022 (**“Lehman”**), BANK OF AMERICA, N.A., anational banking association, having an address at Bank of America CorporateCenter, 214 North Tryon Street, Charlotte, North Carolina 28255 (**“BofA”**)****and BARCLAYS CAPITAL REAL ESTATEINC., a Delaware corporation, having an address at 200 Park Avenue, New York,New York 10166 (“**Barclays”**; together with Lehmanand BofA, individually and collectively, as the context may require, **“Lender”**)****the principal sumof ONE HUNDRED FIFTY-TWO MILLION NINE HUNDRED TWENTY-SIX THOUSAND AND 00/100DOLLARS ($152,926,000), with interest on the unpaid principal balance, ashereinafter provided.

 

1.             Defined Terms.

 

(a)           As used in this Note;

 

**“Adjustable Interest Rate”**means the variable annual interest ratecalculated for each Interest Adjustment Period so as to equal the Index Ratefor such Interest Adjustment Period (truncated at the fifth (5th)decimal place if necessary) plus the Margin. However, in no event will theAdjustable Interest Rate exceed the Capped Interest Rate.

 

**“Amortization Period”**means a period of 0 full consecutive calendarmonths.

 

**“Base Recourse”**means a portion of the Indebtedness equal tozero percent (0%) of the original principal balance of this Note.

 

**“Business Day”**means any day other than a Saturday, a Sundayor any other day on which Lender or the national banking associations are notopen for business.

 

**“Capped Interest Rate”**is not applicable, there is no CappedInterest Rate for the Loan.

 

**“Default Rate”**means a variable annual interest rate equalto four (4) percentage points above the Adjustable Interest Rate in effectfrom time to time. However, at no time will the Default Rate exceed the MaximumInterest Rate.

 

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**“IndexRate”**means, for any Interest Adjustment Period, the LIBORIndex Rate for such Interest Adjustment Period.

 

**“Installment Due Date”**means, for any monthly installment ofinterest only or principal and interest, the date on which such monthlyinstallment is due and payable pursuant to Section 3 of this Note. The **“First Installment Due Date”**under thisNote is December 1, 2007.

 

**“Interest Adjustment Period”**means each successive one (1) calendarmonth period until the entire Indebtedness is paid in full, except that thefirst Interest Adjustment Period is the period from the date of this Notethrough October 31, 2007. Therefore, the second Interest Adjustment Periodshall be the period from November 1, 2007 through November 30, 2007,and so on until the entire Indebtedness is paid in full.

 

**“Lender”**means the holder from time to time of this Note.

 

**“LIBOR Index”**means the British Bankers Association’s (BBA)one (1) month LIBOR Rate for United States Dollar deposits, as displayedon the LIBOR Index Page used to establish the LIBOR Index Rate.

 

**“LIBOR Index Rate”**means, for any Interest Adjustment Periodafter the first Interest Adjustment Period, the BBA’s LIBOR Rate for the LIBORIndex released by the BBA most recently preceding the first day of suchInterest Adjustment Period, as such LIBOR Rate is displayed on the LIBOR IndexPage. The LIBOR Index Rate for the first Interest Adjustment Period means theBritish Bankers Association’s (BBA) LIBOR Rate for the LIBOR Index released bythe BBA most recently preceding the first day of the month in which the firstInterest Adjustment Period begins, as such LIBOR Rate is displayed on the LIBORIndex Page.

 

**“LIBOR Index Page”**is the Bloomberg L.P., page “BBAM”, orsuch other page for the LIBOR Index as may replace page BBAM onthat service, or at the option of Lender (i) the applicable page forthe LIBOR Index on another service which electronically transmits or displaysBBA LIBOR Rates, or (ii) any publication of LIBOR rates available from theBBA. In the event the BBA ceases to set or publish a LIBOR rate/interestsettlement rate for the LIBOR Index, Lender will designate an alternativeindex, and such alternative index shall constitute the LIBOR Index Page.

 

**“Loan”**means the loan evidenced by this Note.

 

**“Lockout Period”**is not applicable, there is no Lockout Periodunder this Note.

 

**“Margin”**means one and twenty-five thousandths (1.025%) percentage points (102.5basis points).

 

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**“Maturity Date”**means the earlier of (i) November 1,2012 (the **“Scheduled Maturity Date”),**and(ii) the date on which the unpaid principal balance of this Note becomesdue and payable by acceleration or otherwise pursuant to the Loan Documents orthe exercise by Lender of any right or remedy under any Loan Document.

 

**“Maximum Interest Rate”**means the rate of interest that results inthe maximum amount of interest allowed by applicable law.

 

**“Prepayment Premium Period”**means the period during which, if aprepayment of principal occurs, a prepayment premium will be payable byBorrower to Lender. The Prepayment Premium Period is the period from andincluding the date of this Note until but not including the first day of theWindow Period.

 

**“Reference Bills®”**means the unsecured general obligations ofthe Federal Home Loan Mortgage Corporation (**“Freddie Mac”**)****designated by Freddie Mac as “ReferenceBills®Securities” and having original durations to maturity most comparable tothe term of the Reference Bill Index, and issued by Freddie Mac at regularlyscheduled auctions. In the event Freddie Mac shall at any time cease todesignate any unsecured general obligations of Freddie Mac as “Reference BillsSecurities”, then at the option of Lender (i) Lender may select fromtime to time another unsecured general obligation of Freddie Mac havingoriginal durations to maturity most comparable to the term of the ReferenceBill Index and issued by Freddie Mac at regularly scheduled auctions, and theterm “Reference Bills” as used in this Note shall mean such other unsecuredgeneral obligations as selected by Lender; or (ii) for any one or moreInterest Adjustment Periods, Lender may use the applicable LIBOR IndexRate as the Index Rate for such Interest Adjustment Period(s).

 

**“Reference Bill Index”**means the one (1) month(s) ReferenceBills. One-month reference bills have original durations to maturity ofapproximately 30 days.

 

**“Reference Bill Index: Rate”**means, for any Interest Adjustment Periodafter the first Interest Adjustment Period, the Money Market Yield for theReference Bills as established by the Reference Bill auction conducted byFreddie Mac most recently preceding the first day of such Interest AdjustmentPeriod, as displayed on the Reference Bill Index Page. The Reference Bill IndexRate for the first Interest Adjustment Period means the Money Market Yield forthe Reference Bills as established by the Reference Bill auction conducted byFreddie Mac most recently preceding the first day of the month in which thefirst Interest Adjustment Period begins, as displayed on the Reference BillIndex Page. The

 

**“Reference Bill Index Page”**is the Freddie Mac Debt Securities Web Page (accessedvia the Freddie Mac internet site at www.freddiemac.com), or at the option ofLender, any publication of Reference Bills auction results available

 

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from Freddie Mac. However, if Freddie Mac has not conducteda Reference Bill auction within the 60-calendar day period prior to the firstday of an Interest Adjustment Period, the Reference Bill Index Rate for suchInterest Adjustment Period will be the LIBOR Index Rate for such InterestAdjustment Period.

 

**“Remaining Amortization Period”**means, at any point in time, the number ofconsecutive calendar months equal to the number of months in the AmortizationPeriod minus the number of scheduled monthly installments of principal andinterest that have elapsed since the date of this Note.

 

**“Security Instrument”**means the multifamily mortgage, deed tosecure debt or deed of trust effective as of the effective date of this Note,from Borrower to or for the benefit of Lender and securing this Note.

 

**“Window Period”**means the three consecutive calendar monthperiod prior to the Scheduled Maturity Date.

 

**“Yield Maintenance Period”**is not applicable, there is no YieldMaintenance Period under this Note,

 

(b) Other capitalizedterms used but not defined in this Note shall have the meanings given to suchterms in the Security Instrument.

 

**2.****            ****Address for****Payment.**All payments due under this Note shall bepayable at Wachovia Securities, Commercial Real Estate Services, 8739 ResearchDrive, URP4, NC1075, Charlotte, NC 28262-1075, or such other place as may bedesignated by Notice to Borrower from or on behalf of Lender.

 

**3.****            ****Payments.**

 

(a)           Interestwill accrue on the outstanding principal balance of this Note at the AdjustableInterest Rate, subject to the provisions of Section 8 of this Note.

 

(b)           Interestunder this Note shall be computed, payable and allocated on the basis of anactual/360 interest calculation schedule (interest is payable for theactual number of days in each month, and each months interest is calculated bymultiplying the unpaid principal amount of this Note as of the first day of themonth for which interest is being calculated by the applicable AdjustableInterest Rate, dividing the product by 360, and multiplying the quotient by thenumber of days in the month for which interest is being calculated). Forconvenience in determining the amount of a monthly installment of principal andinterest under this Note, Lender will use a 30/360 interest calculation paymentschedule (each year is treated as consisting of twelve 30-day months).However, as provided above, the portion of the monthly installment actuallypayable as and allocated to interest will be based upon an actual/360 interestcalculation schedule, and the amount of each installment attributable toprincipal and the amount attributable to interest will vary based upon thenumber of days in the month for which such installment is

 

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paid. Each monthly payment of principal and interest will first be appliedto pay in full interest due, and the balance of the monthly payment paid byBorrower will be credited to principal.

 

(c)           Unlessdisbursement of principal is made by Lender to Borrower on the first day of acalendar month, interest for the period beginning on the date of disbursementand ending on and including the last day of such calendar month shall bepayable by Borrower simultaneously with the execution of this Note, Ifdisbursement of principal is made by Lender to Borrower on the first day of a calendarmonth, then no payment will be due from Borrower at the time of the executionof this Note. The Installment Due Date for the first monthly installmentpayment under Section 3(d) of interest only or principal andinterest, as applicable, will be the First Installment Due Date set forth in Section 1(a) ofthis Note. Except as provided in this Section 3(c) and in Section 10,accrued interest will be payable in arrears.

 

(d)           Beginningon the First Installment Due Date, and continuing until and including themonthly installment due on the Maturity Date, accrued interest only shall bepayable by Borrower in consecutive monthly installments due and payable on thefirst day of each calendar month. The amount of the monthly installment ofinterest only payable pursuant to this Section 3(d) on an InstallmentDue Date shall equal the product of (i) annual interest on the unpaidprincipal balance of this Note as of the first day of the Interest AdjustmentPeriod immediately preceding the Installment Due Date at the AdjustableInterest Rate in effect for such Interest Adjustment Period, divided by 360,multiplied by (ii) the number of days in such Interest Adjustment Period.

 

(e)           Allremaining Indebtedness, including all principal and interest, shall be due andpayable by Borrower on the Maturity Date.

 

(f)            Lendershall provide Borrower with Notice, given in the manner specified in theSecurity Instrument, of the amount of each monthly installment due under thisNote. However, if Lender has not provided Borrower with prior notice of themonthly payment due on any Installment Due Date, then Borrower shall pay onthat Installment Due Date an amount equal to the monthly installment paymentfor which Borrower last received notice. If Lender at any time determines that Borrowerhas paid one or more monthly installments in an incorrect amount because of theoperation of the preceding sentence, or because Lender has miscalculated theAdjustable Interest Rate or has otherwise miscalculated the amount of anymonthly installment, then Lender shall give notice to Borrower of suchdetermination. If such determination discloses that Borrower has paid less thanthe full amount due for the period for which the determination was made,Borrower, within 30 calendar days after receipt of the notice from Lender,shall pay to Lender the full amount of the deficiency. If such determinationdiscloses that Borrower has paid more than the full amount due for the periodfor which the determination was made, then the amount of the overpayment shallbe credited to the next installment(s) of interest only or principal andinterest, as applicable, due under this Note (or, if an Event of Default hasoccurred and is continuing, such overpayment shall be credited against anyamount owing by Borrower to Lender).

 

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(g)           All payments under this Note shall be made inimmediately available U.S. funds.

 

(h)           Any regularly scheduled monthly installmentof interest only or principal and interest payable pursuant to this Section 3that is received by Lender before the date it is due shall be deemed to havebeen received on the due date for the purpose of calculating interest due.

 

(i)            Any accrued interest remaining past due for30 days or more, at Lender’s discretion, may be added to and become part ofthe unpaid principal balance of this Note and any reference to “accruedinterest” shall refer to accrued interest which has not become part of theunpaid principal balance. Any amount added to principal pursuant to the LoanDocuments shall bear interest at the applicable rate or rates specified in thisNote and shall be payable with such interest upon demand by Lender and absentsuch demand, as provided in this Note for the payment of principal andinterest.

 

(j)            In accordance with Section 14, interestcharged under this Note cannot exceed the Maximum Interest Rate. If theAdjustable Interest Rate at any time exceeds the Maximum Interest Rate,resulting in the charging of interest hereunder to be limited to the Maximum InterestRate, then any subsequent reduction in the Adjustable Interest Rate shall notreduce the rate at which interest under this Note accrues below the MaximumInterest Rate until the total amount of interest accrued hereunder equals theamount of interest which would have accrued had the Adjustable Interest Rate atall times been in effect.

 

**4.**             **Application of Payments.** If at any time Lender receives, fromBorrower or otherwise, any amount applicable to the Indebtedness which is lessthan all amounts due and payable at such time, Lender may apply the amountreceived to amounts then due and payable in any manner and in any orderdetermined by Lender, in Lender’s discretion. Borrower agrees that neitherLender’s acceptance of a payment from Borrower in an amount that is less thanall amounts then due and payable nor Lender’s application of such payment shallconstitute or be deemed to constitute either a waiver of the unpaid amounts oran accord and satisfaction.

 

**5.**             **Security.** The Indebtedness is secured by, among otherthings, the Security Instrument, and reference is made to the SecurityInstrument for other rights of Lender as to collateral for the Indebtedness.

 

**6.**             **Acceleration.** If an Event of Default has occurred and iscontinuing, the entire unpaid principal balance, any accrued interest, anyprepayment premium payable under Section 10, and all other amounts payableunder this Note and any other Loan Document:, shall at once become due andpayable, at the option of Lender, without any prior notice to Borrower (exceptif notice is required by applicable law, then after such notice). Lender may exercisethis option to accelerate regardless of any prior forbearance. For purposes ofexercising such option, Lender shall calculate the prepayment premium as if prepaymentoccurred on the date of acceleration. If prepayment occurs thereafter, Lendershall recalculate the prepayment premium as of the actual prepayment date.

 

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**7.****            ****Late Charge.**

 

(a)           If any monthly installment of interest orprincipal and interest or other amount payable under this Note or under theSecurity Instrument or any other Loan Document is not received in full byLender within five (5) days after the installment or other amount is due,counting from and including the date such installment or other amount is due(unless applicable law requires a longer period of time before a late charge may beimposed, in which event such longer period shall be substituted), Borrowershall pay to Lender, immediately and without demand by Lender, a late chargeequal to five percent (5%) of such installment or other amount due (unlessapplicable law requires a lesser amount be charged, in which event such lesseramount shall be substituted).

 

(b)           Borrower acknowledges that its failure tomake timely payments will cause Lender to incur additional expenses inservicing and processing the Loan and that it is extremely difficult andimpractical to determine those additional expenses. Borrower agrees that thelate charge payable pursuant to this Section represents a fair andreasonable estimate, taking into account all circumstances existing on the dateof this Note, of the additional expenses Lender will incur by reason of suchlate payment. The late charge is payable in addition to, and not in lieu of,any interest payable at the Default Rate pursuant to Section 8.

 

**8.****           ****Default Rate.**

 

(a)           So long as (i) any monthly installmentunder this Note remains past due for thirty (30) days or more or (ii) anyother Event of Default has occurred and is continuing, then notwithstandinganything in Section 3 of this Note to the contrary, interest under thisNote shall accrue on the unpaid principal balance from the Installment Due Dateof the first such unpaid monthly installment or the occurrence of such otherEvent of Default, as applicable, at the Default Rate.

 

(b)           Fromand after the Maturity Date, the unpaid principal balance shall continue tobear interest at the Default Rate until and including the date on which theentire principal balance is paid in full.

 

(c)           Borroweracknowledges that (i) its failure to make timely payments will causeLender to incur additional expenses in servicing and processing the Loan, (ii) duringthe time that any monthly installment under this Note is delinquent for thirty(30) days or more, Lender will incur additional costs and expenses arising fromits loss of the use of the money due and from the adverse impact on Lender’sability to meet its other obligations and to take advantage of other investmentopportunities; and (iii) it is extremely difficult and impractical todetermine those additional costs and expenses. Borrower also acknowledges that,during the time that any monthly installment under this Note is delinquent forthirty (30) days or more or any other Event of Default has occurred and iscontinuing, Lender’s risk of nonpayment of this Note will be materiallyincreased and Lender is entitled to be compensated for such increased risk.Borrower agrees that the increase in the rate of interest payable under thisNote to the Default Rate represents a fair and reasonable estimate, taking intoaccount all circumstances existing on the date of this Note, of the additionalcosts and expenses Lender will incur by reason

 

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of the Borrower’s delinquent payment and the additional compensationLender is entitled to receive for the increased risks of nonpayment associatedwith a delinquent loan.

 

**9.****            ****Limits on Personal Liability.**

 

(a)           Except as otherwise provided in this Section 9,Borrower shall have no personal liability under this Note, the SecurityInstrument or any other Loan Document for the repayment of the Indebtedness orfor the performance of any other obligations of Borrower under the LoanDocuments and Lender’s only recourse for the satisfaction of the Indebtednessand the performance of such obligations shall be Lender’s exercise of itsrights and remedies with respect to the Mortgaged Property and to any othercollateral held by Lender as security for the Indebtedness. This limitation onBorrower’s liability shall not limit or impair Lender’s enforcement of itsrights against any guarantor of the Indebtedness or any guarantor of any otherobligations of Borrower.

 

(b)           Borrower shall be personally liable to Lenderfor the amount of the Base Recourse, plus any other amounts for which Borrowerhas personal liability under this Section 9.

 

(c)           In addition to the Base Recourse, Borrowershall be personally liable to Lender for the repayment of a further portion ofthe Indebtedness equal to any loss or damage suffered by Lender as a result ofthe occurrence of any of the following events:

 

(i)            Borrower fails to pay to Lender upon demandafter an Event of Default all Rents to which Lender is entitled under Section 3(a) ofthe Security Instrument and the amount of all security deposits collected byBorrower from tenants then in residence. However, Borrower will not bepersonally liable for any failure described in this subsection (i) ifBorrower is unable to pay to Lender all Rents and security deposits as requiredby the Security Instrument because of a valid order issued in a bankruptcy,receivership, or similar judicial proceeding.

 

(ii)           Borrower fails to apply all insurance proceeds and condemnationproceeds as required by the Security Instrument. However, Borrower will not bepersonally liable for any failure described in this subsection (ii) ifBorrower is unable to apply insurance or condemnation proceeds as required bythe Security Instrument because of a valid order issued in a bankruptcy,receivership, or similar judicial proceeding.

 

(iii)          Borrower fails to comply with Section 14(g) or (h) ofthe Security Instrument relating to the delivery of books and records,statements, schedules and reports.

 

(iv)          Borrower fails to pay when due in accordance with the terms of theSecurity Instrument the amount of any item below marked “Deferred”; providedhowever, that if no item is marked “Deferred”, this Section 9(c)(iv) shallbe of no force or effect.

 

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| [Deferred] |   | Hazard  Insurance premiums or other insurance premiums, [Deferred] Taxes,          |
|------------|--------|------------------------------------------------------------------------------------|
| [Deferred] |   | water  and sewer charges (that could become a lien on the Mortgaged Property),     |
| [N/A]      |   | ground  rents,                                                                     |
| [Deferred] |   | assessments  or other charges (that could become a lien on the Mortgaged Property) |

 

(d)           In addition to the Base Recourse, Borrower shall be personally liableto Lender for:

 

(i)            the performance of all of Borrower’sobligations under Section 18 of the Security Instrument (relating toenvironmental matters);

 

(ii)           the costs of any audit under Section 14(g) of the SecurityInstrument; and

 

(iii)          any costs and expenses incurred by Lender in connection with thecollection of any amount for which Borrower is personally liable under this Section 9,including Attorneys’ Fees and Costs and the costs of conducting any independentaudit of Borrower’s books and records to determine the amount for whichBorrower has personal liability.

 

(e)           All payments made by Borrower with respect tothe Indebtedness and all amounts received by Lender from the enforcement of itsrights under the Security Instrument and the other Loan Documents shall beapplied first to the portion of the Indebtedness for which Borrower has nopersonal liability.

 

(f)            Notwithstanding the Base Recourse, Borrowershall become personally liable to Lender for the repayment of all of theIndebtedness upon the occurrence of any of the following Events of Default:

 

(i)            Borrower’s ownership of any property oroperation of any business not permitted by Section 33 of the SecurityInstrument;

 

(ii)           a Transfer (including, but not limited to, a lien or encumbrance) thatis an Event of Default under Section 21 of the Security Instrument, otherthan a Transfer consisting solely of the involuntary removal or involuntarywithdrawal of a general partner in a limited partnership or a manager in alimited liability company; or

 

(iii)          fraud or written material misrepresentation by Borrower or any officer,director, partner, member or employee of Borrower in connection with theapplication for or creation of the Indebtedness or any request for any actionor consent by Lender.

 

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(g)           To the extent that Borrower has personalliability under this Section 9, Lender may exercise its rightsagainst Borrower personally without regard to whether Lender has exercised anyrights against the Mortgaged Property or any other security, or pursued anyrights against any guarantor, or pursued any other rights available to Lenderunder this Note, the Security Instrument, any other Loan Document or applicablelaw. To the fullest extent permitted by applicable law, in any action toenforce Borrower’s personal liability under this Section 9, Borrowerwaives any right to set off the value of the Mortgaged Property against suchpersonal liability.

 

**10.****        ****Voluntary and Involuntary Prepayments.**

 

(a)           Any receipt by Lender of principal due underthis Note prior to the Maturity Date, other than principal required to be paidin monthly installments pursuant to Section 3, constitutes a prepayment ofprincipal under this Note. Without limiting the foregoing, any application byLender, prior to the Maturity Date, of any proceeds of collateral or othersecurity to the repayment of any portion of the unpaid principal balance ofthis Note constitutes a prepayment under this Note.

 

(b)           Borrowermay not voluntarily prepay any portion of the principal balance of thisNote during the Lockout Period, if a Lockout Period is applicable to this Note.However, if any portion of the principal balance of this Note is prepaid duringthe Lockout Period by reason of the application by Lender of any proceeds ofcollateral or other security to any portion of the unpaid principal balance ofthis Note or following a determination that the prohibition on voluntaryprepayments during the Lockout Period is in contravention of applicable law,then Borrower must also pay to Lender upon demand by Lender, a prepaymentpremium equal to five percent (5.0%) of the amount of principal being prepaid.

 

(c)           Followingthe end of the Lockout Period, Borrower may voluntarily prepay all of theunpaid principal balance of this Note on an Installment Due Date so long asBorrower designates the date for such prepayment in a Notice from Borrower toLender given at least 30 days prior to the date of such prepayment. If anInstallment Due Date (as defined in Section 1(a)) falls on a day which isnot a Business Day, then with respect to payments made under this Section 10only, the term “Installment Due Date” shall mean the Business Day immediatelypreceding the scheduled Installment Due Date.

 

(d)           Notwithstandingsubsection (c) above, Borrower may voluntarily prepay all of theunpaid principal balance of this Note on a Business Day other than anInstallment Due Date if Borrower provides Lender with the Notice set forth insubsection (c) and meets the other requirements set forth in thissubsection. Borrower acknowledges that Lender has agreed that Borrower may prepayprincipal on a Business Day other than an Installment Due Date only becauseLender shall deem any prepayment received by Lender on any day other than anInstallment Due Date to have been received on the Installment Due Dateimmediately following such prepayment and Borrower shall be responsible for allinterest that would have been due if the prepayment had actually been made onthe Installment Due Date immediately following such prepayment.

 

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(e)           Unless otherwise expressly provided in theLoan Documents, Borrower may not voluntarily prepay less than all of theunpaid principal balance of this Note. In order to voluntarily prepay all orany part of the principal of this Note, Borrower must also pay to Lender,together with the amount of principal being prepaid, (i) all accrued andunpaid interest due under this Note, plus (ii) all other sums due toLender at the time of such prepayment, plus (iii) any prepayment premiumcalculated pursuant to Section 10(f).

 

(f)            Except as provided in Section 10(g), aprepayment premium shall be due and payable by Borrower in connection with anyprepayment of principal under this Note during the Prepayment Premium Period.The prepayment premium shall be 1.0% of the amount of principal being prepaid.

 

(g)           Notwithstanding any other provision of this Section 10,no prepayment premium shall be payable with respect to (i) any prepaymentmade during the Window Period, or (ii) any prepayment occurring as aresult of the application of any insurance proceeds or condemnation award underthe Security Instrument, or (iii) any prepayment of the entire principalbalance of this Note that occurs on or after the twelfth (12th) InstallmentDue Date under this Note with the proceeds of a fixed interest rate orfixed-to-float interest rate mortgage loan that is the subject of a bindingcommitment for purchase between the Freddie Mac and a Freddie Mac-approvedProgram Plus® Seller/Servicer.

 

(h)           Unless Lender agreesotherwise in writing, a permitted or required prepayment of less than theunpaid principal balance of this Note shall not extend or postpone the due dateof any subsequent monthly installments or change the amount of suchinstallments.

 

(i)            Borrower recognizesthat any prepayment of any of the unpaid principal balance of this Note,whether voluntary or involuntary or resulting from an Event of Default byBorrower, will result in Lender’s incurring loss, including reinvestment loss,additional expense and frustration or impairment of Lender’s ability to meetits commitments to third parties. Borrower agrees to pay to Lender upon demanddamages for the detriment caused by any prepayment, and agrees that it isextremely difficult and impractical to ascertain the extent of such damages.Borrower therefore acknowledges and agrees that the formula for calculatingprepayment premiums set forth in this Note represents a reasonable estimate ofthe damages Lender will incur because of a prepayment. Borrower furtheracknowledges that any lockout and the prepayment premium provisions of thisNote are a material part of the consideration for the Loan, and that theterms of this Note arc in other respects more favorable to Borrower as a resultof the Borrower’s voluntary agreement to the lockout and prepayment premiumprovisions.

 

**11.          Costs****and Expenses.**To the fullest extent allowed by applicablelaw, Borrower shall pay all expenses and costs, including Attorneys’ Fees andCosts incurred by Lender as a result of any default under this Note or inconnection with efforts to collect any amount due under this Note, or toenforce the provisions of any of the other Loan Documents, including thoseincurred in post-judgment collection efforts and in any bankruptcy proceeding(including any action for relief from the automatic stay of any bankruptcyproceeding) or judicial or non-judicial foreclosure proceeding.

 

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**12.****         ****Forbearance.** Any forbearance by Lender in exercising anyright or remedy under this Note, the Security Instrument, or any other LoanDocument or otherwise afforded by applicable law, shall not be a waiver of orpreclude the exercise of that or any other right or remedy. The acceptance byLender of any payment after the due date of such payment, or in an amount whichis less than the required payment, shall not be a waiver of Lender’s right torequire prompt payment when due of all other payments or to exercise any rightor remedy with respect to any failure to make prompt payment. Enforcement byLender of any security for Borrower’s obligations under this Note shall notconstitute an election by Lender of remedies so as to preclude the exercise ofany other right or remedy available to Lender.

 

**13.****         ****Waivers.** Borrower and all endorsers and guarantors ofthis Note and all other third party obligors waive presentment, demand, noticeof dishonor, protest, notice of acceleration, notice of intent to demand oraccelerate payment or maturity, presentment for payment, notice of nonpayment,grace, and diligence in collecting the Indebtedness.

 

**14.****         ****Loan Charges.** Neither this Note nor any of the other LoanDocuments shall be construed to create a contract for the use, forbearance ordetention of money requiring payment of interest at a rate greater than theMaximum Interest Rate. If any applicable law limiting the amount of interest orother charges permitted to be collected from Borrower in connection with theLoan is interpreted so that any interest or other charge provided for in anyLoan Document, whether considered separately or together with other chargesprovided for in any other Loan Document, violates that law, and Borrower isentitled to the benefit of that law, that interest or charge is hereby reducedto the extent necessary to eliminate that violation. The amounts, if any,previously paid to Lender in excess of the permitted amounts shall be appliedby Lender to reduce the unpaid principal balance of this Note. For the purposeof determining whether any applicable law limiting the amount of interest orother charges permitted to be collected from Borrower has been violated, allIndebtedness that constitutes interest, as well as all other charges made inconnection with the Indebtedness that constitute interest, shall be deemed tobe allocated and spread ratably over the stated term of this Note. Unlessotherwise required by applicable law, such allocation and spreading shall beeffected in such a manner that the rate of interest so computed is uniform throughoutthe stated term of this Note.

 

**15.****         ****Commercial Purpose.** Borrower represents that Borrower isincurring the Indebtedness solely for the purpose of carrying on a business orcommercial enterprise, and not for personal, family, household, or agriculturalpurposes.

 

**16.****         ****Counting of Days.** Except where otherwise specificallyprovided, any reference in this Note to a period of “days” means calendar days,not Business Days,

 

**17.****         ****Governing Law.** This Note shall be governed by the law ofthe Property Jurisdiction.

 

**18.****         ****Captions.** The captions of the Sections of this Noteare for convenience only and shall be disregarded in construing this Note.

 

**19.****         ****Notices; Written Modifications.**

 

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(a)           All Notices, demands and other communicationsrequired or permitted to be given pursuant to this Note shall be given inaccordance with Section 31 of the Security Instrument.

 

(b)           Any modification or amendment to this Noteshall be ineffective unless in writing signed by the party sought to be chargedwith such modification or amendment; provided, however, that in the event of a Transfer under the terms of theSecurity Instrument that requires Lender’s consent, any or some or all of theModifications to Multifamily Note set forth in Exhibit A to this Note may bemodified or rendered void by Lender at Lender’s option, by Notice to Borrowerand the transferee, as a condition of Lender’s consent.

 

**20.****         ****Consent to Jurisdiction andVenue.**Borrower agrees thatany controversy arising under or in relation to this Note may be litigatedin the Property Jurisdiction. The state and federal courts and authorities withjurisdiction in the Property Jurisdiction shall have jurisdiction over allcontroversies that shall arise under or in relation to this Note. Borrowerirrevocably consents to service, jurisdiction, and venue of such courts for anysuch litigation and waives any other venue to which it might be entitled byvirtue of domicile, habitual residence or otherwise. However, nothing in thisNote is intended to limit any right that Lender may have to bring anysuit, action or proceeding relating to matters arising under this Note in anycourt of any other jurisdiction.

 

**21.****         ****WAIVER OF TRIAL BY JURY.**BORROWER AND LENDER EACH (A) AGREES NOTTO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE ORTHE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OFRIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TOSUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THISWAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLYAND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

 

**22.****         ****State-Specific Provisions.**

 

None.

 

**ATTACHED EXHIBIT. The Exhibit noted below, ifmarked with an “X” in the space provided, is attached to this Note:**

 

**[X]****         ****Exhibit A****              ****Modifications to MultifamilyNote**

 

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**IN WITNESSWHEREOF,**and inconsideration of the Lender’s agreement to lend Borrower the principal amountset forth above, Borrower has signed and delivered this Note under seal or hascaused this Note to be signed and delivered under seal by its duly authorizedrepresentative.

 
|   | ASN  PARK ESSEX LLC, a Delaware limited |
|--------|-----------------------------------------|
|   | liability  company                      |
|   |                                    |
|   |                                    |
|   | By:                                     | /s/ Christine Goodgold |   |
|   | ** **                              | Name: | **Christine Goodgold** |
|   |                                    | Title: | **Authorized Signatory** |
|        |                                         |  |  |  |

 
| 90-004-2860                                  |   |
|----------------------------------------------|--------|
| Borrower’s  Social Security/Employer ID |
| Number                                       |

 

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ACKNOWLEDGMENT

 
| STATE OF New York  | )    |
|--------------------|------|
|               | )ss. |
| COUNTY OF New York | )    |

 

On this 4 day of October, 2007, before me, the undersigned notarypublic, personally appeared Christine Goodgold, proved to me throughsatisfactory evidence of identification, which were [drivers license, pictureid], to be the person whose name is signed on the preceding or attacheddocument, and acknowledged to me that [he][she] signed it voluntarily for itsstated purposes as Authorized Signatory of ASN PARK ESSEX LLC, a Delawarelimited liability company.

 

 
| /s/ R. Douglas Burleson                            | [official  signature and seal of notary] |
|----------------------------------------------------|------------------------------------------|
|                                               |
| Notary  Public (Printed Name): R. Douglas Burleson |
| My  Commission Expires:                            |

 

DOUGLAS BURLESON

Notary Public,State of New York

No. 01BU6110252

Qualified In NewYork Country

Commission ExpiresMay 24, 2006

 

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**EXHIBIT A**

 

**MODIFICATIONSTO MULTIFAMILY NOTE**

 

The following modifications are made to the text of the Note thatprecedes this Exhibit. 

 

1.             Section 1(a) is amended as follows:

 

(a)           In the definition of “Business Day”, thewords “located in New York, New York” are inserted after the words “bankingassociations”.

 

(b)           The following are added as new definitions:

 

**“CombinedDebt”**shall mean theoriginal outstanding principal balances owed by Borrower and affiliates ofBorrower under the Loans (as defined in the Cross-Collateralization Agreement).

 

**“Cross-CollateralizationAgreement”**shall meanthat certain Cross-Collateralization Agreement and Amendment to SecurityInstrument by and between Borrower and Lender and dated the date hereof.

 

**“Exit Fee”**shall mean 1.0% of the outstanding principalbalance of the Loan being repaid.

 

**“PresentValue Factor”**means:

 

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

 

Where n = the nth Installment Due Date; forexample, if the loan is prepaid on the first Installment Due Date, the SpreadMaintenance Premium would be the Spread Payment times the Present Value Factorfor each of the remaining payment dates in the Prepayment Premium Periodbeginning with n=2.

 

**“SpreadMaintenance Premium”**means,with respect to any repayment of principal of the Loan prior to the end of thePrepayment Premium Period, a payment to Lender in an amount equal to the SpreadPayment times the Present Value Factor for each of the remaining payment datesin the Prepayment Premium Period.

 

**“SpreadPayment”**equals theamount of principal being prepaid times the Margin divided by 12.

 

(c)           The definition of “Prepayment Premium Period”is deleted in its entirety and restated as follows:

 

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**“PrepaymentPremium Period”**meansthe period during which, if a prepayment of principal occurs, a SpreadMaintenance Premium and an Exit Fee will (except as otherwise expressly setforth in this Note) be payable by Borrower to Lender. The Prepayment PremiumPeriod is the period from and including the date of this Note until but notincluding the first day of the Window Period.

 

(d)           The definition of “Window Period” is deletedin its entirety and restated as follows:

 

**“WindowPeriod”**means theperiod from the twelfth (12th) Installment Due Date under this Note to theScheduled Maturity Date.

 

2.             Section 2 is amended as follows:

 

The following is hereby inserted at the end of Section 2*:*

 

Permitted options as to the method of paymentwill be provided in writing to Borrower by the Loan Servicer, if any, or byLender.

 

3.             Section 3(i) is amended as follows:

 

The words “upon demand by Lender” are deleted and the words “withinthree (3) days of Borrower’s receipt of Lender’s written demand therefor”are inserted in their place in the first sentence of Section 3(i).

 

4.             Section 6**is amended asfollows:

 

(a)           In the first sentence, the words “under the Security Instrument or anyother Loan Document or” are inserted after the words “notice is required”.

 

(b)           In the third and fourth sentences, the words “prepayment premium” aredeleted and the words “Spread Maintenance Premium and Exit Fee, if any” areinserted in their place.

 

5.             Section 7 is amended as follows:

 

The words “(other than theoutstanding principal balance due on the Maturity Date)” are inserted after thewords “or any other Loan Document”.

 

6.             Section 8(a) is amended as follows:

 

The words “the first” are deleted.

 

7.             Section 9(a) is amended as follows:

 

(a)           Inthe first sentence of Section 9(a), the words “Borrower shall have no” aredeleted and the words “neither Borrower nor any Exculpated Party shall have any”are inserted in their place.

 

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(b) The last sentence of Section 9(a) isdeleted in its entirety and restated as follows:

 

This limitation on Borrower’s and such otherparties’ liability shall not limit or impair Lender’s enforcement of its rightsagainst any guarantor of the Indebtedness or any guarantor of any obligationsof Borrower.

 

8.             Section 9(b) is amended as follows:

 

The first sentence of Section 9(b) isdeleted in its entirety and restated as follows:

 

Borrower (but not any ExculpatedParty; provided, however, the foregoing shall not affect the obligations of anyguarantor under any indemnity or guaranty executed (on or after the datehereof) in connection with the Loan) shall be personally liable to Lender forthe amount of Base Recourse, plus any other amounts for which Borrower haspersonal liability under this Section 9.

 

9.             Section 9(c) is amended as follows:

 

(a)           The first paragraph of Section 9(c) isamended as follows:

 

the words “if any”, are inserted after thewords “Base Recourse”; the words “(but not any Exculpated Party; provided,however, the foregoing shall not affect the obligations of any guarantor underany indemnity or guaranty executed (on or after the date hereof) in connectionwith the Loan)” are inserted after the word “Borrower”;

 

(b)           the word “actual” is inserted prior to theword “loss”.

 

(c)           Clause (i) is amended as follows:

 

the word “written” is inserted after thewords “pay to Lender upon”; and the word “residence” is deleted and the word “occupancy”is inserted in its place.

 

(d)           Clause (iv) is amended as follows:

 

the words “except to the extent any suchamount is being contested by Borrower in accordance with the terms of theSecurity Instrument” are inserted before the words “provided, however”;

 

(e)           The following is inserted as clause (v):

 

(v)           Borrowerfails to comply with any and all indemnification obligations contained in Section 18of the Security Instrument (relating to environmental matters).

 

(f)            The following is inserted as clause (vi):

 

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(vi)          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.

 

(g)           The following is inserted as clause (vii):

 

(vii) Borrower fails to obtain anyconsent required with respect to the transfer of the Mortgaged Property inconnection with the merger of Archstone Smith Operating Trust occurringsimultaneously herewith.

 

(h)           The following is inserted as clause (viii):

 

(viii). Borrower maintains its assets in away difficult to segregate and identify in violation of Section 33 of theSecurity Instrument.

 

10.           Section 9(d) is amended as follows:

 

(a)           The first paragraph of Section 9(d) isamended as follows: the words “if any”, are inserted after the words “BaseRecourse”; the words “(but not any Exculpated Party; provided, however, theforegoing shall not affect the obligations of any guarantor under any indemnityor guaranty executed (on or after the date hereof) in connection with the Loan)”are inserted after the word “Borrower”.

 

(b)           Clause (ii) is amended as follows: thewords “costs of” are deleted and (the words “actual out-of-pocket costsincurred by Lender to conduct” are inserted in their place.

 

(c)           Clause (iii) is amended as follows: thewords “actual out-of-pocket” are inserted before the words “costs and expenses”;and the words “costs of” are deleted and the words “actual out-of-pocket costsincurred by Lender to conduct” are inserted in their place.

 

11.           Section 9(f) is modified as follows:

 

(a)           Section 9(f) subsection (i) isdeleted and replaced with the following

 

(i)            Borrower’s ownership of any real propertyother than the Mortgaged Property or Borrower’s operation of any other businessother than the management and operation of the Mortgaged Property in violationof Section 33A of the Security Instrument.

 

(b)           Section 9(f) (iii) is modifiedto delete the phrase “or written material misrepresentation” so that the subsection readsas follows:

 

(iii)          fraudby Borrower or any officer, director, partner, member of employee of Borrowerin connection with the application for or creation of the Indebtedness or anyrequest for any action or consent by Lender.

 

(c)           The following new subsection (iv) isadded to Section 9(f):

 

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(iv)          writtenmaterial misrepresentation by Borrower or any officer, director, partner,member of employee of Borrower in connection with the application for orcreation of the Indebtedness or any request for any action or consent byLender; provided, however, Lender must have declared an Event of Default (otherthan the Event of Default set forth in Section 22(d)(i) of theSecurity Instrument) and declared the Indebtedness due and payable.

 

12.           Section 9(g) is amended as follows:

 

The following words are inserted at the end of the last sentence:

 

; provided, however, Lender’s recoveryagainst the assets of Borrower other than the Mortgaged Property plus theRelated Properties (as defined in the Cross-Collateralization Agreementexecuted by Borrower in connection with this Loan (the **“Cross-CollateralizationAgreement”**) shall not exceed the aggregate of the Indebtedness plusthe Related Indebtedness as defined in the Cross-Collateralization Agreement.Borrower’s personal liability shall not exceed the Indebtedness and the RelatedIndebtedness.

 

13.           Section 9**is further amended as follows:

 

A new subsection (h) is inserted in Section 9as follows:

 

(h)            Notwithstanding anything to the contrarycontained in this Note, the Security Instrument or any other Loan Document,none of Borrower’s direct or indirect constituent partners, members orprincipals, or any shareholder, director, officer, agent, employee or trusteeof Borrower or such constituent partners, members or principals, including,without limitation, Tishman Speyer Properties, L.P. and any shareholder,partner, member, principal, director, officer, agent, employee or trustee ofTishman Speyer Properties, L.P., its subsidiaries and affiliates (collectively,the “Exculpated Parties”), shall be personally liable for the payment ofthe Indebtedness or the performance of any of the obligations of Borrowerhereunder or under the Security Instrument or any other Loan Document, or forany claim based thereon or in respect thereof, nor shall any claim be broughtagainst any of the Exculpated Parties; provided, however, the foregoing shallnot affect the obligations of any guarantor under any indemnity or guarantyexecuted (on or after the date hereof) in connection with the Loan.

 

14.           Section 10(a) is amended as follows:

 

The word “any” is inserted after the words “other than”.

 

15.           Section 10(c) is amended as follows:

 

(a)           The words “or any portion” are inserted alterthe words “voluntarily prepay”.

 

(b)           The word “revocable” is inserted before thewords “Notice from Borrower”.

 

(c)           The following is inserted as a new sentenceat the end of such clause (c):

 

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In the event that Borrower revokes anyNotice, Borrower shall pay to Lender at the time of its notice of revocation,all actual out-of-pocket costs and expenses incurred by Lender in anticipationof the prepayment including, but not limited to, reasonable attorney’s fees andexpenses and any fees and actual out-of-pocket costs and expenses incurred byany servicer.

 

16.           Section 10(d) is amended as follows:

 

The words “or any portion” are inserted after the words “voluntarilyprepay”.

 

17.           Section 10(e) is amended as follows:

 

(a)           The first sentence is deleted in itsentirety.

 

(b)           Clause (iii) is amended by deleting thewords “prepayment premium calculated” and inserting the words “SpreadMaintenance and Exit Fee due in connection with such prepayment”.

 

18.           Section 10(f) is deleted in its entirety and restated asfollows:

 

(f)            Exceptas provided in Section 10(g), a Spread Maintenance Premium and an Exit Feeshall be due and payable by Borrower in connection with any prepayment of principalunder this Note during the Prepayment Premium Period.

 

19.           Section 10(g) is deleted in its entirety and restated asfollows:

 

(g)           Notwithstandingany other provision of this Section 10, (i) no Spread MaintenancePremium shall be payable with respect to any prepayment made during the WindowPeriod, or (ii) no Spread Maintenance Premium shall be payable withrespect to any prepayment occurring as a result of the application of anyinsurance proceeds or condemnation award under the Security Instrument; (iii) noSpread Maintenance Premium or Exit Fee shall be due in connection withprepayments of the first ten percent (10%) of the Combined Debt, provided that (A) suchprepayments occur after the sixth (6th) Installment Due Date, (B) suchprepayments occur in connection with the sale of one or more Related Properties(as defined in the Cross-Collateralization Agreement) to an unaffiliated thirdparty pursuant to an arms-length agreement(s) and (C) the Related Propertiesthat are sold are released from the lien of the Cross-Collateralization Agreementand the lien of the Related Instrument (as defined in the Cross-CollateralizationAgreement) in accordance with the terms of the Related Loan Documents (asdefined in the Cross-Collateralization Agreement) and (iv) no Exit Fee shallbe due in connection with prepayments of the first fifty percent (50%) of the CombinedDebt.

 

20.           Section 10(h) is amended as follows:

 

The phrase “or change the amount of suchinstallments” is deleted and the phrase”, but the amount of each monthlyinstallment of interest thereafter shall be

 

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recomputed to reflect such prepayment of the Indebtedness” shall beinserted after the last word of this section.

 

21.           Section 11 is amended as follows:

 

The following words “actual out-of-pocket” are inserted before thewords “expenses and costs”.

 

22.           The following words are inserted at the endof the final sentence in Section 19(b):

 

unless title to the Mortgaged Property isvested in an entity whose Controlling Interest(s) arc directly or indirectlyheld by the Tishman Speyer Control Persons and/or the Lehman entities.

 

23.           Section 20 is amended as follows:

 

The third sentence of the Section is modified to omit the word “service”.

 

24.           A new Section 23 is added, reading asfollows:

 

23.           ExhibitsIncorporated. The Exhibits attached hereto are hereby incorporated herein as a part ofthis Note with the same effect as if set forth in the body hereof. In the eventof any conflict or inconsistency between the provisions of this Note and theprovisions of Exhibit A,**theprovisions of Exhibit A shall control.

 

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