10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    .

Commission file number 1-10272

Archstone

(Exact name of Registrant as Specified in Its Charter)

MARYLAND	90-0042860
(State or other jurisdiction of	(IRS employer
incorporation or organization)	identification no.)

9200 E. Panorama Circle, Suite 400
Englewood, Colorado 80112
(Address of principal executive office)
(303) 708-5959
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o (Note: The registrant filed a Form 15 on December 14, 2007 to terminate the registration of our Series O Preferred Units, and a Form 15 on January 2, 2008 immediately suspending our reporting obligations under Section 15(d) of the Securities Exchange Act of 1934.)

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

      Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o  Accelerated filer o  Non-accelerated filer   þ
(Do not check if a smaller reporting company) Smaller Reporting Company o 

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     At June 30, 2007, there were approximately 26.2 million Class A-1 Common Units outstanding held by non-affiliates. At March 30, 2008, none of the Common Units were held by non-affiliates. There was no established trading market for such Common Units at June 30, 2007 or subsequent to that date.

DOCUMENTS INCORPORATED BY REFERENCE

None

Table of Contents

Item	Description	Page
	PART I
	Glossary	3
1.	Business	9
1A.	Risk Factors	12
1B.	Unresolved Staff Comments	18
2.	Properties	19
3.	Legal Proceedings	21
4.	Submission of Matters to a Vote of Security Holders	24
	PART II
5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
6.	Selected Financial Data	25
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
7A.	Quantitative and Qualitative Disclosures About Market Risk	44
8.	Financial Statements and Supplementary Data	47
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	47
9A.	Controls and Procedures	47
9B.	Other Information	48
	PART III
10.	Directors, Executive Officers and Corporate Governance	49
11.	Executive Compensation	51
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	79
13.	Certain Relationships and Related Transactions and Director Independence	79
14.	Principal Accounting Fees and Services	81
	PART IV
15.	Exhibits and Financial Statement Schedules	82
Articles of Amendment of Amended and Restated Declaration of Trust
Letter Agreement, dated October 5, 2007
Letter Agreement, dated November 27, 2007
Credit Agreement (Affiliate Borrower I-A)
Credit Agreement (Affiliate Borrower I-B)
Credit Agreement (Affiliate Borrower II - Revolving Credit Facility)
Employment Agreement - R. Scot Sellers
Award Agreement
Unit Award Agreement
Unit Award Agreement
Unit Award Agreement
Separation and General Release Agreement
Amendment to Separation and General Release Agreement
Subsidiaries
Certification of Chief Executive Officer Pursuant to Section 302
Certification of Chief Financial Officer Pursuant to Section 302
Certification of Chief Executive Officer Pursuant to Section 906
Certification of Chief Financial Officer Pursuant to Section 906

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GLOSSARY

     The following abbreviations, acronyms or defined terms used in this document are defined below:

Abbreviation, Acronym or Defined Term	Definition/Description
401(k) Plan	Archstone’s 401(k) Plan.
A-1 Common Unitholders	Holders of A-1 Common Units.
A-1 Common Units	Archstone class A-1 common units of beneficial interest, par value $0.01 per unit, which prior to the Merger were redeemable for cash or, at the option of Archstone-Smith, Common Shares. A-1 Common Units are the common units of Archstone not held by Archstone-Smith or, after the Merger, Series I Trust.
A-2 Common Units	Archstone class A-2 common units of beneficial interest, par value $0.01 per unit. Series I Trust is the sole holder of A-2 Common Units.
ADA	Americans with Disabilities Act, as amended.
Ameriton	AMERITON Properties Incorporated, which was a taxable REIT subsidiary of Archstone prior to the Merger that engaged in the opportunistic acquisition, development and eventual disposition of real estate with a shorter-term investment horizon. Ameriton merged into Archstone-Smith on October 5, 2007.
Annual Report	This Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2007.
Archstone or Operating Trust	Archstone, an entity organized as a real estate investment trust under Maryland law (formerly Archstone-Smith Operating Trust).
Archstone-Smith	Archstone-Smith Trust, an entity organized as a real estate investment trust under Maryland law, which was a publicly traded entity and our sole trustee and owned 89.5% of our Common Units immediately prior to the Merger.
Archstone-Smith Board	The Board of Trustees of Archstone-Smith.
Board	Refers to the Archstone-Smith Board for periods prior to the Merger or to the Series I Trust Board for periods after the Merger.
Buyer Parties	Subsidiaries of an entity jointly controlled by Tishman Speyer Real Estate Venture VII, L.P., and Lehman Brothers Holdings, Inc.
Common Share(s)	Archstone-Smith common shares of beneficial interest, par value $0.01 per share.
Common Units	The A-1 Common Units and the A-2 Common Units.
Common Unitholders	Holders of Common Units.
Compensation Committee	The Management Development and Executive Compensation Committee of the Archstone-Smith Board in office prior to completion of the Merger.
Convertible Debt	$575 million exchangeable senior unsecured notes that were exchangeable into Common Shares prior to completion of the Merger.
Declaration of Trust	Archstone’s Amended and Restated Declaration of Trust, as filed with the State of Maryland on October 4, 2007, as amended and supplemented.

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Abbreviation, Acronym or Defined Term	Definition/Description
Deferred Compensation Plan	Archstone-Smith’s Deferred Compensation Plan, which was terminated upon completion of the Merger.
DEU	Dividend Equivalent Unit; an amount credited to the account of holders of certain options and RSU’s under Archstone-Smith’s long-term incentive plan.
Distributions	Distributions paid on Archstone Common Units or Preferred Units.
DeWAG	DeWAG Deutsche WohnAnlage GmbH.
DRIP	Archstone-Smith’s Dividend Reinvestment and Share Purchase Plan.
Fannie Mae Mezzanine Lenders	Lehman Brothers Holdings Inc., Bank of America, N.A. and Barclays Capital Real Estate Finance Inc.
Freddie Mac Mezzanine Lenders	Lehman Brothers Holdings Inc., Bank of America, N.A. and Barclays Capital Real Estate Finance Inc.
FASB	Financial Accounting Standards Board.
FHA	Fair Housing Act, as amended.
Fund GP	Tishman Speyer Archstone-Smith Multifamily (GP), L.P., a Delaware limited partnership and the sole general partner of Tishman Speyer Archstone-Smith Multifamily JV, L.P.
Fund II GP	Tishman Speyer Archstone-Smith Multifamily Parallel (GP), L.P., a Delaware limited partnership and the sole general partner of Tishman Speyer Archstone-Smith Multifamily Parallel JV, L.P.
GAAP	Generally accepted accounting principles in the United States.
Governance GP	Collectively, Tishman Speyer Real Estate Venture VII (Governance), L.P., a Delaware limited partnership, which is the sole general partner of the Fund GP, and Tishman Speyer Real Estate Venture VII Parallel (Governance), L.P., a Delaware limited partnership, which is the sole general partner of the Fund II GP
High-Rise	Those communities with five or more above-ground floors.
Independent Trustees	Members of the Archstone-Smith Board meeting the New York Stock Exchange definition of “Independent Director.”
In Planning	Represents parcels of land owned or Under Control, which are in the development planning process, upon which construction of apartments is expected to commence subsequent to the completion of the entitlement and building permit processes.
International	Refers to our operational and investment activities in Europe. Our real estate investments to date have been limited to Germany.
International Fund	Combined group of Luxembourg, Dutch and German entities in which we have a minority ownership interest.
Junior Mezz Borrower	Tishman Speyer Archstone-Smith Multifamily Junior Mezz Borrower, L.P., an affiliate of the Venture.
Lease-Up	The phase during which newly constructed apartment units are being leased for the first time, but prior to the community becoming Stabilized.
Lehman Sponsor	REPE Archstone GP Holdings LLC, a Delaware limited partnership.

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Abbreviation, Acronym or Defined Term	Definition/Description
LIBOR	London Interbank Offered Rate.
Long-Term Unsecured Debt	Collectively, Archstone’s long-term unsecured senior notes payable and unsecured tax-exempt bonds.
LTIP	Archstone-Smith’s Long Term Incentive Plan.
Master Credit Facility	Credit agreement with Lehman Brothers Inc., Banc of America Securities LLC, Bank of America, N.A., Barclays Capital Real Estate, Inc., and Lehman Commercial Paper Inc. and other lenders from time to time parties thereto which was entered into on October 5, 2007 and amended and restated on November 27, 2007.
Merger(s)	A series of transactions which included (a) the merger on October 4, 2007 of River Trust Acquisition (MD), LLC with and into Archstone, with Archstone surviving (the “Operating Trust Merger”), and (b) the merger on October 5, 2007 of Archstone-Smith with and into Series I Trust, with Series I Trust surviving (the “Archstone-Smith Merger”).
Merger Agreement	The Agreement and Plan of Merger, dated as of May 28, 2007, among Archstone-Smith, Archstone, River Holding, LP, River Acquisition (MD), LP and River Trust Acquisition (MD), LLC, as amended by Amendment No. 1 thereto.
Net Operating Income or NOI	Represents rental revenues less rental expenses and real estate taxes. We rely on NOI for purposes of making decisions about resource allocations and assessing segment performance. We also believe NOI is a valuable means of comparing period-to-period property performance. NOI is a non-GAAP financial measure. See a reconciliation of NOI to Earnings from Operations in this Annual Report in Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Quantitative Summary.
Oakwood or Oakwood Worldwide	The terms used in reference to a group of partnerships coordinated by a common sponsor who contributed a group of apartment communities to Archstone in 2005.
Oakwood Master Leases	Refers to thirteen communities acquired from Oakwood and one community we previously owned and operated that were leased in their entirety to affiliates of Oakwood Worldwide under master lease agreements with seven year terms, subject to Oakwood’s right to terminate individual leases under certain circumstances after the one year anniversary of the acquisition.
Outside Trustees	Trustees of Archstone-Smith who were not employees of Archstone-Smith or Archstone.
Outside Trustee Plan	Archstone-Smith’s Equity Plan for Outside Trustees
Predecessor	Archstone before the Operating Trust Merger.
Preferred Units or Perpetual Preferred Units	The Series I, O, P, Q-1 and Q-2 Preferred Units.
REIT	Real estate investment trust. This term is also used to refer to consolidated subsidiaries of Archstone, but excluding taxable and International subsidiaries unless the context indicates otherwise.
Restricted Share Unit or RSU	A unit representing an interest in one Common Share, subject to certain vesting provisions, granted to an associate through Archstone-Smith’s long-term incentive plan.
Same-Store	Term used to refer to a group of operating communities in the United States that had attained Stabilization and were fully operating

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Abbreviation, Acronym or Defined Term	Definition/Description
	during the entire time two periods are being compared. Excludes communities which were not eligible for inclusion due to (i) recent acquisition or development, (ii) major redevelopment, or (iii) a significant number of non-operational units (fires, floods, etc.). Also excludes Ameriton properties, due to their short-term holding periods, and International properties.
Series A Preferred Units	Archstone Series A Cumulative Preferred Units of Beneficial Interest, par value $0.01 per unit, which were redeemed in full in November 2003.
Series D Preferred Units	Archstone Series D Cumulative Perpetual Preferred Units of Beneficial Interest, par value $0.01 per unit, which were redeemed in full in August 2004.
Series E Perpetual Preferred Units	Archstone Series E 8.375% Cumulative Perpetual Preferred Units, par value $0.01, which were redeemed in full in February 2005.
Series F Perpetual Preferred Units	Archstone Series F 8.125% Cumulative Perpetual Preferred Units, par value $0.01, which were redeemed in full in September 2004.
Series G Perpetual Preferred Units	Archstone Series G 8.625% Cumulative Perpetual Preferred Units, par value $0.01, which were redeemed in full in March 2005.
Series H Preferred Units	Archstone Series H Cumulative Convertible Perpetual Preferred Units of Beneficial Interest, par value $0.01 per unit, which were converted into Common Units in full in May 2003.
Series I Preferred Units	Archstone Series I Cumulative Redeemable Preferred Units of Beneficial Interest, par value $0.01 per unit, redeemable in February 2028.
Series K Preferred Units	Archstone Series K Cumulative Convertible Perpetual Preferred Units of Beneficial Interest, par value $0.01 per unit, which were converted into Common Units in September 2004.
Series L Preferred Units	Archstone Series L Cumulative Convertible Perpetual Preferred Units of Beneficial Interest, par value $0.01 per unit, which were converted into Common Units in December 2004.
Series M Preferred Unit	Archstone Series M Preferred Unit of Beneficial Interest, par value $0.01 per unit. The Series M Preferred Unit was converted into a Series P Preferred Unit as of the Merger, on materially the same terms and conditions.
Series N-1 Preferred Units	Archstone Series N-1 Convertible Redeemable Preferred Units of Beneficial Interest, par value $0.01 per unit. Each Series N-1 Preferred Unit was converted into a Series Q-1 Preferred Unit as of the Merger, on materially the same terms and conditions.
Series N-2 Preferred Units	Archstone Series N-2 Convertible Redeemable Preferred Units of Beneficial Interest, par value $0.01 per unit. Each Series N-2 Preferred Unit was converted into a Series Q-2 Preferred Unit as of the Merger, on materially the same terms and conditions.
Series O Preferred Units	Archstone Series O Preferred Units of Beneficial Interest, par value $0.01 per unit.

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Abbreviation, Acronym or Defined Term	Definition/Description
Series P Preferred Units	Archstone Series P Preferred Units of Beneficial Interest, par value $0.01 per unit.
Series Q-1 Preferred Units	Archstone Series Q-1 Preferred Units of Beneficial Interest, par value $0.01 per unit.
Series Q-2 Preferred Units	Archstone Series Q-2 Preferred Units of Beneficial Interest, par value $0.01 per unit.
Series I Trust	Tishman Speyer Archstone-Smith Multifamily Series I Trust, a Maryland real estate investment trust, which is the sole holder of the A-2 Common Units and sole trustee of Archstone after the Merger.
Series I Trust Board	The Board of Trustees of Series I Trust.
Series II LLC	Tishman Speyer Archstone-Smith Multifamily Series II, L.L.C.
Series III LLC	Tishman Speyer Archstone-Smith Multifamily Series III, L.L.C.
Smith Merger	The series of transactions in October 2001 whereby Archstone-Smith merged with Smith Residential, and Archstone Communities Trust (now, Archstone) merged with Smith Partnership.
Smith Partnership	Charles E. Smith Residential Realty L.P.
Smith Residential	Charles E. Smith Residential Realty, Inc.
SFAS	Statement of Financial Accounting Standards.
Stabilized or Stabilization	The classification assigned to an apartment community that has achieved 93% occupancy, and for which development, new management and new marketing programs (or development and marketing in the case of a newly developed community) have been completed.
Successor	Archstone after the Merger
Tishman Speyer Sponsor	Tishman Speyer Real Estate Venture VII, L.P., a Delaware limited partnership.
Trustees	Members of the Archstone-Smith Board prior to the Merger and the members of the Series I Trust Board after the Merger.

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Abbreviation, Acronym or Defined Term	Definition/Description
Under Control	A term used to identify land parcels which Archstone does not own, yet has an exclusive right through contingent contract or letter of intent during a contractually agreed upon time period to acquire the land, subject to satisfaction of contingencies during the due diligence and entitlement processes.
Unitholders	The holders of Common Units and Preferred Units.
Venture	Collectively, Tishman Speyer Archstone-Smith Multifamily JV, L.P., a Delaware limited partnership, and Tishman Speyer Archstone-Smith Multifamily Parallel JV, L.P., a Delaware limited partnership, together with any other parallel entity organized to own an interest in the entire portfolio.

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Forward-Looking Statements

     Certain statements in this Annual Report that are not historical facts are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, beliefs, assumptions, estimates and projections about the industry and markets in which we operate. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. Information concerning expected investment balances, expected funding sources, planned investments, forecasted dates and revenue and expense growth assumptions are examples of forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. Therefore, actual outcomes and results may differ materially from what is expressed, forecasted or implied in such forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

     Our operating results depend primarily on income from apartment communities, which is substantially influenced by supply and demand for apartment units, operating expense levels, property level operations and the pace and price at which we develop, acquire or dispose of apartment communities. Capital and credit market conditions, which affect our cost of capital, also influence operating results. See “Risk Factors” in Item 1A of this Annual Report for a more complete discussion of the various risk factors that could affect our future performance.

     EXPLANATORY NOTE: On December 14, 2007, we filed a Form 15 with the Securities and Exchange Commission to terminate the registration of our Series O Preferred Units, which termination became effective 90 days after the filing of such Form 15. On January 2, 2008, we filed a Form 15 with the Securities and Exchange Commission to immediately suspend our reporting obligations under Section 15(d) of the Securities Exchange Act of 1934, as amended. As a result of these filings, our obligations to file annual, quarterly and periodic reports, other than our obligation to file this Annual Report, and our obligations with respect to certain Unitholder communications and the obligations of certain Unitholders to report their ownership of and transactions in our Units, have terminated. The statements and information set forth in this Annual Report are qualified by reference to the foregoing.

PART I

Item 1. Business

     References in this Annual Report to “Archstone,” the “Operating Trust”, “Company,” “company, “we” or “us” refer to Archstone (formerly Archstone-Smith Operating Trust), a Maryland real estate investment trust, organized in 1963.

     Unless indicated otherwise, the financial information presented in this Annual Report relates to the Successor after October 4, 2007 and to the Predecessor prior to October 5, 2007. See “Item 1. Business — Consummation of Merger” for further information regarding our recent Merger.

Overview

     Archstone’s business is focused primarily on creating value for our unitholders by acquiring, developing, redeveloping and operating apartments in markets characterized by protected locations with limited land for new housing construction, expensive single-family home prices, and a strong, diversified economic base with significant employment growth potential.

     As of December 31, 2007, we owned or had an ownership position in 56,896 units, including 1,053 units under construction. At year-end, our operating portfolio was concentrated in protected locations in the following core markets,

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based on NOI for the three months ended December 31, 2007, excluding International investments and joint ventures:

Washington, D.C. metropolitan area	40.7	%
Southern California	21.6
San Francisco Bay Area, California	14.4
New York City metropolitan area	8.6
Boston, Massachusetts	7.4
Seattle, Washington	4.7
Total	97.4	%

     We define our garden communities and High-Rise properties each as an operating segment. In addition, prior to the Merger, we defined the activities from Ameriton as an individual operating segment as its focus was the opportunistic acquisition, development and eventual disposition of assets with a shorter investment horizon. For information regarding our business segments and our international operations, see “Item 15. Exhibits and Financial Statement Schedules.”

Consummation of Merger

     As of October 4, 2007 approximately 89.5% of our outstanding Common Units were owned by Archstone-Smith and the remaining 10.5% of the outstanding Common Units were owned by minority interest holders. Archstone-Smith was a publicly traded equity REIT organized under the laws of the State of Maryland.

     On May 29, 2007, Archstone-Smith announced it had signed the Merger Agreement, whereby both Archstone-Smith and Archstone would be acquired by the Buyer Parties. The transactions contemplated by the Merger Agreement were consummated on October 4 and 5, 2007. As a result of the transactions contemplated by the Merger Agreement, the sole trustee of Archstone, effective as of October 5, 2007, is Series I Trust, which along with Series II LLC and Series III LLC owns 100% of Archstone’s outstanding Common Units.

     Under the terms of the Merger Agreement, all outstanding Common Shares of Archstone-Smith were acquired by Series I Trust, Series II LLC and Series III LLC for $60.75 in cash, without interest and less applicable withholding taxes, for each Common Share issued and outstanding immediately prior to the effective time of the Merger. With respect to the outstanding Series I Preferred Shares, the Buyer Parties elected to replace them with substantially identical Series I Preferred Shares of Series I Trust.

     As part of the transaction, Archstone merged on October 4, 2007 with River Trust Acquisition (MD), LLC, a subsidiary of the Buyer Parties. A total of 39.6 million Common Units remain outstanding. Approximately 3.9 million A-1 Common Units, held by less than 300 holders, were converted into newly issued Series O Preferred Units, whereas holders of approximately 22.2 million A-1 Common Units elected to exchange their A-1 Common Units for cash consideration of $60.75 without interest and less applicable withholding taxes. Each Series O Preferred Unit has a redemption price of $60.75 and bears cumulative preferential distributions payable quarterly at an annual rate of 6%. During any period of time after we incur indebtedness in excess of $10 million in principal amount (excluding draws on our line of credit or refinancings of existing indebtedness) and as a result of which our loan to value ratio exceeds 85%, until such time as our loan to value ratio no longer exceeds 85%, the distribution rate on our Series O Preferred Units shall increase from 6% per annum to 8% per annum. The Series O Preferred Units, which have only limited voting rights, are redeemable by the holder or Archstone under certain circumstances. The Series I Preferred Units remain outstanding and unchanged. The Series M Preferred Unit and each Series N-1 and N-2 Preferred Unit was converted into the right to receive one newly issued Series P Preferred Unit, Series Q-1 Preferred Unit and Series Q-2 Preferred Unit, respectively, of Archstone.

     In summary, the total purchase consideration paid by the Buyer Parties for the assets owned by Predecessor immediately prior to the Mergers was $22.1 billion which consisted of cash equity of $4.9 billion (net of capital raising costs), replacement or issuance of Preferred Units of $0.3 billion, borrowings of $15.2 billion in new debt, assumption of $0.9 billion of existing debt and the assumption of trade payables and other accrued liabilities of $0.8 billion. The accrued liabilities included a payment of $0.1 billion related to Predecessor employee stock awards under the LTIP. We incurred $1.0 billion of transaction-related costs that were financed through our borrowings. Although Archstone is the surviving entity, River Trust Acquisition (MD), LLC was viewed as the acquirer for accounting purposes due to the resulting change in control. As such, the total purchase consideration was allocated to the fair value of the net assets acquired through the application of purchase accounting in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations.” The majority of our fair value adjustments pertained to real estate and lease-related intangibles. The financial statements in this Annual Report include the operations of the Predecessor for periods prior to the Merger on October 4, 2007 and the Successor for periods after the Merger. In connection with the Merger, through a series of legal transactions, the Buyer Parties caused Predecessor to make certain material distributions to affiliated entities. These assets consisted primarily of communities that are not subject to unitholder tax protection agreements, domestic joint ventures, communities under development and communities formerly owned by Ameriton.

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Following is a summary of the fair values of assets and liabilities owned by Successor as compared to the fair value attributable to the assets and liabilities distributed to and owned by affiliated entities at October 5, 2007 (in thousands):

			Fair Value Attributable to
	Aggregate Fair Value		Affiliates			Successor
Real estate	$	18,662,371	$	3,641,083		$	15,021,288
Investment in unconsolidated entities		1,018,725		550,399			468,326
Lease and other intangibles		594,306		91,439			502,867
Other assets		1,840,255		116,021			1,724,234
Intercompany assets (liabilities)		—		(12,873	)		12,873
Total assets	$	22,115,657	$	4,386,069		$	17,729,588
Debt	$	16,108,709	$	2,013,815		$	14,094,894
Other liabilities		834,452		120,757			713,695
Other Preferred Units		285,944		—			285,944
Net assets at fair value	$	4,886,552	$	2,251,497		$	2,635,055

     The purchase price allocation reflected above was based on preliminary estimates and is subject to change as we obtain more complete information regarding land, building and lease intangible values.

Officers of Archstone

Executive officers of Archstone are:

Name	Title
R. Scot Sellers	Chief Executive Officer
J. Lindsay Freeman*	Chief Operating Officer
Charles E. Mueller, Jr.	Chief Financial Officer (Chief Operating Officer effective January 1, 2008)
Caroline Brower*	General Counsel and Secretary
Alfred G. Neely	Chief Development Officer

* Retired as of December 31, 2007.

     Please refer to “Item 10. Directors, Executive Officers, and Corporate Governance” for further information.

Employees

     We currently employ approximately 2,659 individuals, of whom approximately 2,038 are focused on the site-level operation of our garden communities and High-Rise properties. Of the site-level associates, approximately 130 are subject to collective bargaining agreements with two unions in New York. The balance are professionals who manage corporate and regional operations, including our investment program, property operations, financial activities and other support functions. We consider our relationship with our employees to be very good.

Insurance

     We carry comprehensive general liability coverage on our owned communities, with limits of liability customary within the industry to insure against liability claims and related defense costs. Similarly, we are insured against the risk of direct physical damage in amounts necessary to reimburse the company on a replacement cost basis for costs incurred to repair or rebuild each property, including loss of rental income during the reconstruction period. Our property policies for all United States operating and development communities and certain International communities include coverage for the perils of flood and earthquake shock with limits and deductibles customary in the industry. We also obtain title insurance policies when acquiring new properties, which insure fee title to our real properties. We currently have coverage for losses incurred in connection with both domestic and foreign terrorist-related activities. The terms of our property and general liability policies may exclude certain mold-related claims or other types of claims based on the specific circumstances and allegations. Should an uninsured loss arise against the company, we would be required to use our own funds to resolve the issue, including litigation costs. In addition, for our United States communities we self-insure certain portions of our insurance program

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through a wholly-owned captive insurance company, and therefore use our own funds to satisfy those limits, when applicable.

Competition

     There are numerous commercial developers, real estate companies and other owners of real estate that we compete with in seeking land for development, apartment communities for acquisition and disposition and residents for apartment communities. All of our apartment communities are located in developed areas that include other apartment communities. The number of competitive apartment communities in a particular area could have a material adverse effect on our ability to lease units and on the rents charged. In addition, single-family homes and other residential properties provide housing alternatives to residents and potential residents of our apartment communities.

Available Information and Code of Ethics

     Our website is http://www.archstonesmith.com. We make available free of charge, on or through our website, this Annual Report, our prior annual, quarterly and current reports, as well as any amendments to these reports, as soon as reasonably practicable after electronically filing these reports with the Securities and Exchange Commission. To the extent we are required to file reports in the future, we will also make available free of charge on or through our website, any future annual, quarterly and current reports and any amendments to such reports. The Archstone-Smith Board adopted, and we continue to operate under, a Code of Ethics and Business Conduct applicable to our officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller. A copy of our Code of Ethics and Business Conduct is available through our website or at no charge upon written request to Investor Relations, 9200 East Panorama Circle, Suite 400, Englewood, Colorado 80112. Any amendments to or waivers of our Code of Ethics and Business Conduct that apply to the principal executive officer, principal financial officer and principal accounting officer or controller and that relate to any matter enumerated in Item 406(b) of Regulation S-K, will be disclosed on our website to the extent we are subject to the requirements of Regulation S-K. Any reference to our website in this Annual Report does not incorporate by reference the information contained in the website and such information should not be considered a part of this Annual Report.

Item 1A. Risk Factors

     The following factors could affect our future financial performance:

Risks Associated with our Operations

  We have restrictions on the sale of certain properties which could limit our operating flexibility.

     A taxable sale of any of the properties contributed to us could result in increased costs to us in light of the tax-related obligations made to the contributors, including the Smith Partnership Unitholders and the Oakwood Unitholders. The restrictions applicable to the Smith Partnership Unitholders last until January 1, 2022. We have similar restrictions with respect to the properties acquired from Oakwood Worldwide in 2005. The Oakwood restrictions last until the earlier of (a) such time as 99% of the contributing partners have sold, redeemed or otherwise disposed of their Series O Preferred Units in a taxable event and (b) the later to occur of (x) 10 years from the closing of the contribution of such properties and (y) the last to die of Howard Ruby and Ed Broida. Mr. Broida died in 2006. During the period of time that these restrictions apply, it may be cost-prohibitive for us to sell one or more of these properties even though such sale may be in our Unitholders’ best interests. The built in gain on communities subject to tax protection is estimated to be approximately $350 million at December 31, 2007.

  We depend on our key personnel.

     Our success depends on our ability to attract and retain the services of executive officers, senior officers and company managers. There is substantial competition for qualified personnel in the real estate industry and the loss of several of our key personnel could have an adverse effect on us.

  We do not have access to public equity capital which could adversely affect our cash flows.

     Our Trustee is no longer a publicly traded entity and does not have securities listed on a national stock exchange. Because we no longer have access to the public equity markets, we will have to rely on alternative financing sources to undertake new investment activities, including debt and private equity. These alternative sources of financing may be more costly than raising funds in the public equity markets. Further, if we cannot access sufficient funds through debt, the private

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equity markets or other sources, we may need to rely upon the Venture participants for capital contributions. However, the Venture participants are not obligated to provide additional capital and there is no assurance that the Venture participants would contribute adequate funds to capitalize us and our operations.

  We have a limited operating history under our current ownership.

     The Merger was completed in October 2007. We have only a limited operating history under our current ownership. Although our current chief executive officer and several key officers remain with Archstone after the Merger, until recently, the Venture was not involved in our operation or performance of our business. We cannot guarantee that changes associated with the Merger will yield favorable results or that we will realize the benefits anticipated in connection with the Merger. As a result, we cannot be sure how we will be operated or will perform financially. Furthermore, the new ownership has retained flexibility to change our investment strategy, for any reason, including changing conditions in the real estate investment and capital markets and changes in general economic conditions. Any such strategy changes could adversely affect our financial condition and results of operations and our ability to pay distributions to our Unitholders.

  There is no public market for our units.

     There is currently no public market for our units. On December 14, 2007, we filed a Form 15 with the Securities and Exchange Commission to terminate the registration of our Series O Preferred Units, which termination became effective 90 days after the filing of such Form 15. Our declaration of trust contains limited rights of our Unitholders to request our redemption of their Units, but we have no current obligation to repurchase Units from or make distributions to our Unitholders other than upon a Unitholder’s death. There can be no assurances that we will be able to liquidate our investments in the event of an emergency.

There may be limited or no public information available about us or our Unitholders in the future.

     On December 14, 2007, we filed a Form 15 with the Securities and Exchange Commission to terminate the registration of our Series O Preferred Units, which termination became effective 90 days after the filing of such Form 15. On January 2, 2008, we filed a Form 15 with the Securities and Exchange Commission to immediately suspend our reporting obligations under Section 15(d) of the Securities Exchange Act of 1934, as amended. As a result of these filings, our obligations to file annual, quarterly and periodic reports, other than our obligation to file this Annual Report on Form 10-K, and our obligations with respect to certain Unitholder communications and the obligations of certain Unitholders to report their ownership of and transactions in our Units, have terminated. As a result, we anticipate that there will be limited, if any, publicly available information about us and our Unitholders in the future. The limited availability or lack of such publicly available information may have an adverse impact on your ability to assess the value of your investment in the Company and make determinations regarding your ownership of our Units.

Risks Associated with our Indebtedness and Financing

  Continued volatility in the debt market could make it more difficult or costly for us to borrow money to finance our business.

     Recently, the residential mortgage market in the United States has experienced a number of difficulties and changed economic conditions that may adversely affect the credit markets generally, including the commercial lending market. We rely on national and regional institutions including Fannie Mae and Freddie Mac to provide financing for our acquisitions and development projects. These institutions may originate mortgage loans and may have suffered financial difficulties as a result of these changing market conditions. As a result, these institutions may become insolvent or may tighten their lending standards, which could make it more difficult for us to obtain financing on favorable terms or at all. If we are unable to obtain financing on favorable terms or at all from these institutions, our financial condition and results of operations would be adversely affected.

  Debt financing could adversely affect our performance and our ability to make distributions to our Unitholders.

     We are subject to risks associated with debt financing and preferred equity. These risks include the following:

• We may not have sufficient cash flow from operations to meet required payments of principal and interest or to pay distributions on our securities at expected rates.

• We may be unable to refinance current or future indebtedness.

• The terms of any refinancing may not be as favorable as the terms of existing indebtedness.

• We may be unable to make necessary investments in new business initiatives due to lack of available funds.

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• If we are unable to make required payments on indebtedness that is secured by a mortgage on our property, the asset may be transferred to the lender with a consequent loss of income and value to us.

     We do not plan on making distributions in the near term, and it is uncertain when any distributions will be made.

  We have significant debt, which could have important adverse consequences.

     We had $13.9 billion in total debt outstanding as of December 31, 2007, all of which was directly or indirectly secured by real estate assets and $8.1 billion ($1.0 billion when including the effect of interest rate hedges) was subject to variable interest rates, including $60.0 million outstanding on our revolving credit facilities. On March 20, 2008, the revolver portion of our credit facilities had a drawn balance of $445.0 million and we had $163.7 million outstanding under letters of credit, leaving available borrowing capacity on the revolving portion of our Master Credit Facility of $141.3 million. In addition, as of March 20, 2008, we had unfunded term loan commitments of $242.5 million. This debt level could limit our flexibility in planning for, or reacting to, changes in our business and our industry in general. The substantial amount of debt and the amount needed to service our debt obligations could place us at a disadvantage compared to our competitors which are less highly-leveraged. This high degree of leverage could adversely affect our ability to obtain additional financing in the future on favorable terms or at all for working capital, capital expenditures, acquisitions, development or other general corporate purposes, making us more vulnerable to a downturn in business or the economy in general. We may not have sufficient cash flow from operations or capital transactions to service our indebtedness and we may be unable to incur additional indebtedness without violating various financial ratios contained in our debt agreements. If we cannot meet required payments under our debt agreements or cannot comply with the covenants contained in these agreement, the lenders may declare us in default and may seek available remedies under the agreements, which may include transferring properties to the lender under indebtedness which is secured by real property.

  Our debt agreements include restrictive covenants relating to our operations, which could limit our ability to respond to changing market conditions and our ability to make distributions.

     Our debt agreements contain customary covenants which, among other things, restrict our ability to incur additional indebtedness and, in certain instances, restrict our ability to engage in material asset sales, mergers, consolidations and acquisitions, and restrict our ability to make capital expenditures. These debt agreements also require us to maintain various financial ratios. Our Master Credit Facility required the establishment of a funded interest reserve of $500 million to facilitate compliance with debt service coverage ratios under the facility. We expect that we will need to draw on these reserves in 2008 to maintain compliance with these ratios. Some loans under our major credit facilities are cross-collateralized and contain cross default provisions with other material loans. Due to this cross-collateralization, a failure or default with respect to certain properties could have an adverse impact on us or our properties that are subject to the cross-collateralization under the applicable debt instrument. Failure to comply with these covenants could cause a default under the agreements and result in a requirement to repay the indebtedness prior to its maturity, which could have an adverse effect on our cash flow and ability to make distributions to our Unitholders.

  Variable rate debt is subject to interest rate risk which could adversely affect our ability to pay distributions to our Unitholders.

     As of December 31, 2007, we had $8.1 billion ($1.0 billion when including the effect of interest rate hedges) of debt outstanding under instruments which bear interest at variable rates. Increases in interest rates would increase our interest expense under these instruments and would increase the cost of refinancing these instruments and issuing new debt. As a result, higher interest rates would adversely affect cash flow and our ability to service our indebtedness and to make distributions to our Unitholders.

  Possible increases in interest and other costs in connection with the syndication of some of our debt could adversely affect our results of operation, our ability to satisfy our debt obligations and our ability to pay distributions to our Unitholders.

     A significant portion of our debt is subject to increases in interest and borrowing costs and payment of fees to lenders in connection with the potential syndication of such debt. Specifically, the lenders under our Master Credit Facility and our mezzanine loans provided by the Fannie Mae Mezzanine Lenders and the Freddie Mac Mezzanine Lenders have the option to syndicate or sell the outstanding principal amount under such agreements to other investors at a discount and may revise the interest rate spread or discount or increase fees to a level necessary to facilitate syndication based on current market conditions at the syndication date. As of December 31, 2007, $5.6 billion in outstanding principal indebtedness under these loans was subject to syndication and the increased borrowing costs described above. The cost associated with any incremental interest or additional fees, as well as any original issue discount realized, is required to be born by the Company.

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These same lenders have committed to lend us up to $148.8 million to fund such costs, although we can make no assurance that we will be able to incur these additional borrowings without violating the financial covenants under our debt agreements or obtaining covenant waivers. As of March 20, 2008, we had approximately $73.0 million set aside in restricted cash to fund syndication discounts. As of March 20, 2008, $43.0 million of principal had been syndicated at a discount of 3%. The deterioration of the residential mortgage market has caused a widening of the credit spreads on both commercial mortgage-backed securities and commercial real estate collateralized debt obligations recently. If these conditions continue or worsen, the lenders may be required to increase the pricing or fees. Such increases in interest and payments would adversely affect our cash flow, our ability to satisfy our debt obligations and our ability to make distributions to our Unitholders.

  A reduction in the value of our assets or an increase in indebtedness could trigger an increased distribution rate and a redemption right of our Series O preferred unitholders, which could adversely effect our cash flows.

     During any period of time after we incur indebtedness in excess of $10 million in principal amount (excluding draws on our line of credit or refinancings of existing indebtedness) and as a result of which our loan to value ratio exceeds 85%, until such time as our loan to value ratio no longer exceeds 85%, the distribution rate on our Series O Preferred Units shall increase from 6% per annum to 8% per annum. Further, if at any time prior to January 1, 2022, either (1) our loan to value ratio is higher than 85% and we make a distribution to the holders of Common Units; or (2) we incur indebtedness in excess of $10 million in principal amount (excluding draws on our line of credit or refinancings of existing indebtedness) and after such borrowing our loan to value ratio is higher than 85% and we have made a distribution to our Common Units in contemplation of the incurrence of that indebtedness, then each holder of a Series O Preferred Unit will have the right to exercise an immediate redemption right, including payment of any tax protection amount (as defined in our Declaration of Trust) with respect to the Series O Preferred Units being redeemed. If we were required to pay this higher distribution or to redeem a material portion of the outstanding Series O Preferred Units, our cash flows and our ability to satisfy our debt obligations would be materially adversely affected. As of December 31, 2007, we have Series O Preferred Units outstanding with an aggregate redemption value of $235.7 million.

  A default by our affiliated entities on intercompany loans could adversely affect our cash flows, ability to satisfy our debt obligations and our ability to make distributions to our Unitholders.

     We have intercompany transactions with affiliated entities and record a receivable from affiliated entities when they borrow from Archstone or we pay billings on their behalf. We charge interest on balances owed by affiliates to Archstone under the intercompany loans at the same rate that we are paying and therefore do not recognize any profit from our affiliated entities. As of December 31, 2007, there was an aggregate of $393.8 million outstanding under all such transactions. Furthermore, Archstone’s employees render services for affiliated entities where Archstone is reimbursed based on an estimate of the allocable cost. We also record a payable to our affiliates when we receive funds on the affiliated entity’s behalf or the affiliate pays bills on our behalf. A default by one or more of the affiliated entities on payments to us under our intercompany balances would adversely affect our ability to satisfy our debt obligations and our ability to make distributions to our Unitholders. Further, because of the way the Venture’s credit facilities and intracompany loans are structured, a failure or default with respect to one or more affiliate entities’ properties could have an adverse impact on us or our other properties.

Risks Associated with Real Estate

  Unfavorable changes in economic conditions could adversely affect our results of operation.

     Changes in the general economic climate, local, regional or national conditions (such as an oversupply of communities or a reduction in rental demand in a specific area) could adversely affect real estate values and the cash flow of the properties, which would in turn have an adverse impact on our results of operations and ability to make distributions to our Unitholders. Specifically, several of the markets in which we operate have recently experienced a decrease in job growth. If job growth continues to slow in these markets, our market rental rates could be adversely affected.

  We are subject to additional risks inherent in ownership of real estate.

     Real estate, cash flows and values are affected by a number of additional factors, including the quality and philosophy of management, competition from other available properties and the ability to provide adequate property maintenance and insurance and to control operating costs. Real estate cash flows and values are also affected by such factors as government regulations, including zoning, usage and tax laws, caps on rent and rent increases, interest rate levels, the availability of financing, property tax rates, utility expenses, potential liability under environmental and other laws and changes in environmental and other laws. Although we seek to minimize these risks through our market research and property management capabilities, they cannot be totally eliminated.

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  We have a concentration of investments in certain markets.

     As shown in the United States Geographic Distribution table below in “Item 2. Properties,” our most significant investment concentrations are in the Washington, D.C. metropolitan area, Southern California, the New York City metropolitan area and the San Francisco Bay Area. Southern California is the geographic area comprising the Los Angeles County, San Diego, Orange County, Ventura County and the Inland Empire markets. We are, therefore, subject to increased exposure (positive or negative) from economic and other competitive factors specific to markets within these geographic areas. Some of these areas have recently experienced a decrease in job growth and depressed conditions in the local real estate market. To the extent general economic conditions worsen in one or more of these markets, or if any of these areas experience a natural disaster, the value of our portfolio and our market rental rates could be adversely affected. As a result, our results of operations, cash flow, cash available for distribution, including cash available to pay distributions to our Unitholders and our ability to satisfy our debt obligations could be materially adversely affected.

  We are subject to risks inherent in real estate development.

     We have developed or commenced development on a substantial number of apartment communities and expect to develop additional apartment communities in the future. Real estate development involves risks in addition to those involved in the ownership and operation of established communities, including the risks that financing, if needed, may not be available on favorable terms, construction may not be completed on schedule, contractors may default, estimates of the costs of developing apartment communities may prove to be inaccurate, the costs and availability of materials may be adversely affected by global supply and demand, and communities may not be leased or rented on profitable terms or in the time frame anticipated. Timely construction may be affected by local weather conditions, local moratoria on construction, local or national strikes and local or national shortages in materials, building supplies or energy and fuel for equipment. These risks may cause the development project to fail to perform as expected.

  Our business is subject to extensive competition.

     There are numerous commercial developers, real estate companies and other owners of real estate that we compete with in seeking land for development, apartment communities for acquisition and disposition and residents for apartment communities. All of our apartment communities are located in developed areas that include other apartment communities. The number of competitive apartment communities in a particular area could have a material adverse effect on our ability to lease units and on the rents charged. In addition, single-family homes and other residential properties provide housing alternatives to residents and potential residents of our apartment communities.

  Real estate investments are relatively illiquid and we may not be able to recover our investments.

     Equity real estate investments are relatively illiquid, which may tend to limit our ability to react promptly to changes in economic or other market conditions. Our ability to dispose of assets in the future will depend on prevailing economic and market conditions. We intend to repay a portion of our debt obligations with proceeds from sales of our assets. Our inability to sell our properties on favorable terms or at all could have a material adverse effect on our results of operations and our ability to satisfy our debt obligations. Furthermore, our mezzanine loans to real estate investors may not be recoverable if those investors are unable to monetize the underlying asset at underwritten amounts.

  We could be subject to acts of terrorism.

     Periodically, we receive alerts from government agencies that apartment communities could be the target of both domestic and foreign terrorism. Although we currently have insurance coverage for losses incurred in connection with terrorist-related activities, losses could exceed our coverage limits and have a material adverse affect on our operating results.

  Compliance with laws and regulatory requirements may be costly.

     We must comply with certain accessibility, environmental, building, and health and safety laws and regulations related to the ownership, operation, development and acquisition of apartments. Under those laws and regulations, we may be liable for, among other things, the costs of bringing our properties into compliance with the statutory and regulatory requirements. Non-compliance with certain of these laws and regulations may impose liability without regard to fault, and could give rise to actions brought against us by governmental entities and/or third parties who claim to be or have been damaged as a consequence of an apartment not being in compliance with the subject laws and regulations. As part of our due diligence procedures in connection with the acquisition of a property, whether it is an apartment community or land to be developed, we conduct an investigation of the property’s compliance with known laws and regulatory requirements with which we must comply once we acquire a property, which investigation includes performing a Phase I environmental

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assessment of the property and a Phase II assessment if recommended in the Phase I report. We hire architects and general contractors to design and build our development projects, and we rely on them to design and build in accordance with all legal requirements. We cannot, however, give any assurance that our investigations and these assessments have revealed all potential non-compliance issues or related liabilities, or that our development properties have been designed and built in accordance with all applicable legal requirements.

  Costs associated with moisture infiltration and resulting mold remediation may be costly.

     As a general matter, concern about indoor exposure to mold continues as such exposure has been alleged to have a variety of adverse effects on health. As a result, there have been a number of lawsuits in our industry against owners and managers of apartment communities relating to moisture infiltration and resulting mold. We have implemented guidelines and procedures to address moisture infiltration and resulting mold issues if and when they arise. We believe that these measures will minimize the potential for any adverse effect on our residents, but such adverse effects cannot be completely eliminated. Specifically, several tenants have filed complaints against entities related to us in connection with moisture infiltration at Archstone Westbury, an apartment community in Westbury, NY. We estimate that remediation of moisture infiltration at Archstone Westbury described in this report, will require that the apartments be vacated during the remediation, which is expected to take approximately twelve to eighteen months, with a resulting loss of rental revenue during this period. The terms of our property and general liability policies after June 30, 2002, may exclude certain mold-related claims. Should an uninsured loss arise against the company, we would be required to use our own funds to resolve the issue, including litigation costs. We can make no assurance that liabilities resulting from moisture infiltration and the presence of or exposure to mold will not have a future material impact on our financial results.

  Changes in laws may result in increased cost.

     We may not be able to pass on increased costs resulting from increases in real estate taxes, income taxes or other governmental requirements directly to our residents. Substantial increases in rents, as a result of those increased costs, may affect the ability of a resident to pay rent, causing increased vacancy.

  We are subject to losses that may not be covered by insurance.

     There are certain types of losses (such as from war) that may be uninsurable or not economically insurable. Additionally, many of our communities in California are located in the general vicinity of active earthquake fault lines. Although we maintain insurance to cover most reasonably likely risks, including earthquakes and hurricanes, if an uninsured loss or a loss in excess of insured limits occurs, we could lose both our invested capital in, and anticipated profits from, one or more communities. We may also be required to continue to repay mortgage indebtedness or other obligations related to such communities. The terms of our property and general liability policies after June 30, 2002, may exclude certain mold-related claims. We can make no assurance that liabilities resulting from moisture infiltration and the presence of or exposure to mold will not have a future material impact on our financial results. Should an uninsured loss arise against the company, we would be required to use our own funds to resolve the issue, including litigation costs. Any such loss could materially adversely affect our business, financial condition and results of operations.

  Ownership of properties located outside of the United States subjects us to foreign currency risks which may adversely impact our ability to make distributions.

     We currently own or have a minority ownership interest in properties located outside of the United States, which subjects us to risk from fluctuations in exchange rates between foreign currencies and the U.S. dollar. We expect that our principal foreign currency exposure will be to the Euro. Changes in the relation of these currencies to U.S. dollars may affect the fair values and earnings streams of our international holdings, and therefore our revenues and operating margins on our non-dollar denominated foreign holdings. These fluctuations in foreign currency exchange rates may materially adversely impact our financial condition, results of operations, cash flow, cash available for distribution, including cash available to pay distributions, and ability to satisfy our debt obligations.

     We intend to attempt to mitigate the risk of currency fluctuation by financing our properties in the local currency denominations, although we cannot assure you that we will be able to do so or that this will be effective. We have engaged, and may continue to engage, in direct hedging activities to mitigate the risks of exchange rate fluctuations. We do not currently have any foreign currency hedges in place.

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  Acquisition and ownership of foreign properties may involve risks greater than those faced by us in the United States.

     Foreign real estate investments generally involve certain risks not associated with investments in the United States. Our international acquisitions and operations are subject to a number of risks, including acquisition risk resulting from less knowledge of local real estate markets, economies, and business practices and customs; our limited knowledge of and relationships with sellers in these markets; higher due diligence, transaction and structuring costs than those we may face in the United States; additional accounting and control expenses; complexity and costs associated with managing international operations; difficulty in hiring qualified management, leasing personnel and service providers in a timely fashion; multiple, conflicting and changing legal, regulatory, tax and treaty environments, including land use, zoning and environmental laws, as well as the enactment of laws prohibiting or restricting the foreign ownership of property; exposure to increased taxation, confiscation or expropriation; currency transfer restrictions and limitations on our ability to distribute cash earned in foreign jurisdictions to the United States; difficulty in enforcing agreements in non-United States jurisdictions, including those entered into in connection with our acquisitions; and change in the availability, cost and terms of property financing resulting from varying national economic policies or changes in interest rates. Our inability to overcome these risks could adversely affect our foreign operations and could harm our business and results of operations.

Risks Associated with Tax Laws

  We intend to qualify as a partnership, but we cannot guarantee that we will qualify.

     We intend to qualify as a partnership for federal income tax purposes. However, we will be treated as an association taxable as a corporation for federal income tax purposes if we are deemed to be a publicly traded partnership, unless at least 90% of our income is qualifying income as defined in the tax code. Qualifying income for our 90% test generally includes passive income, such as real property rents, distributions and interest. We believe that we will meet this qualifying income test, but cannot guarantee that we will. If we were to be taxed as a corporation, we would incur substantial tax liabilities and our ability to raise additional capital would be impaired.

Item 1B. Unresolved Staff Comments

     None.

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Item 2. Properties

United States Geographic Distribution

          At December 31, 2007, the geographic distribution for our six core markets based on NOI for the three months ended December 31, 2007 was as follows:

Washington, D.C. metropolitan area	40.7	%
Southern California	21.6
San Francisco Bay Area, California	14.4
New York City metropolitan area	8.6
Boston, Massachusetts	7.4
Seattle, Washington	4.7
Total	97.4	%

     The following table summarizes the geographic distribution for 2007, 2006 and 2005 based on NOI:

	Successor			Predecessor
	Total Portfolio(1)
	December 31,
	2007			2006			2005
Core Markets
Washington, D.C. metropolitan area		40.7	%		34.6	%		36.6	%
Southern California		21.6			25.8			24.9
San Francisco Bay Area, California		14.4			11.5			8.2
New York City metropolitan area		8.6			12.5			6.8
Boston, Massachusetts		7.4			5.0			4.7
Seattle, Washington		4.7			4.2			3.9
Total Core Markets		97.4	%		93.6	%		85.1	%
Non-Core Markets (2)
Chicago, Illinois		2.4	%		2.0	%		4.3	%
Southeast Florida		—			2.2			4.0
Houston, Texas		—			—			1.3
Denver, Colorado		—			—			1.1
Other		0.2			2.2			4.2
Total Non-Core Markets		2.6	%		6.4	%		14.9	%
Total All Markets		100	%		100	%		100	%

(1)	Based on NOI for the fourth quarter of each calendar year, excluding NOI from communities disposed of during the period. See Item 7 under the caption “Property-level operating results – 2007 compared to 2006” for a discussion on why we believe NOI is a meaningful measure and the caption for “Quantitative Summary” for a reconciliation of NOI to Earnings from Operations.
(2)	Markets that represent 1.0% or less of NOI in any year are included in Other for that year.

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Real Estate Portfolio

          We are a leading multifamily company focused primarily on the operation, development, redevelopment, acquisition, and management of apartment communities in protected markets throughout the United States. The following information summarizes Successor’s wholly owned real estate portfolio as of December 31, 2007 and includes information about our operating segments – garden communities and High Rise properties (dollar amounts in thousands). Additional information on our real estate portfolio is contained in “Schedule III, Real Estate and Accumulated Depreciation” and in our audited financial statements contained in this Annual Report:

	Number of		Number of				Percentage
	Communities		Units		Investment		Leased(1)
OPERATING APARTMENT COMMUNITIES:
Garden Communities:
Boston, Massachusetts		5		1,164	$	425,883		97.7	%
Inland Empire, California		1		300		66,888		92.7	%
Los Angeles County, California(2)		21		7,518		2,548,929		90.6	%
San Diego, California		3		468		120,474		95.9	%
San Francisco Bay Area, California		20		6,855		1,920,372		93.0	%
Seattle, Washington		8		2,327		465,617		95.2	%
Ventura County, California(2)		7		1,773		537,582		91.3	%
Washington, D.C. metropolitan area		15		5,867		1,486,902		95.4	%
Garden Community Subtotal/Average		80		26,272	$	7,572,647		93.6	%
High-Rise Properties:
Boston, Massachusetts(2)		6		1,519	$	677,873		89.0	%
Chicago, Illinois		2		304		134,277		N/A
Los Angeles County, California		3		1,073		392,427		93.9	%
New York City metropolitan area		7		1,974		1,595,411		95.7	%
Philadelphia, Pennsylvania		1		80		15,967		N/A
San Francisco Bay Area, California		2		853		313,495		94.4	%
Seattle, Washington		3		694		180,224		94.7	%
Washington, D.C. metropolitan area		34		11,239		3,779,097		95.8	%
High-Rise Subtotal/Average		58		17,736	$	7,088,771		95.0	%
Operating Apartment Communities Subtotal /Average		138		44,008	$	14,661,418		94.2	%
APARTMENT COMMUNITIES UNDER CONSTRUCTION:
High-Rise Properties:
Boston, Massachusetts		1		426	$	206,070		N/A
APARTMENT COMMUNITIES IN PLANNING:(3)
Garden Communities:
Los Angeles County, California		2		568		37,740
San Francisco Bay Area, California		2		416		—
High-Rise Communities:
Boston, Massachusetts		1		341	$	19,595
Total Apartment Communities In Planning(3) Subtotal/Average		5		1,325	$	57,335
Total Communities		144		45,759	$	14,924,823
INTERNATIONAL PORTFOLIO:
German Operating Apartment Communities		10		807		53,458
OTHER REAL ESTATE ASSETS(4)		—		—	$	90,791
Total Real Estate Owned at December 31, 2007		154		46,566	$	15,069,072

See notes on following page.

(1) Represents the percentage leased as of December 31, 2007. For communities in Lease-Up, the percentage leased is based on leased units divided by total number of units in the community (completed and under

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	construction) as of December 31, 2007. The “N/A” for the Philadelphia and Chicago markets in the High-Rise operating community section indicates that the market is entirely comprised of Oakwood Master Lease communities or ground lease properties. Oakwood Master Leased communities and ground lease properties have been excluded from the Percentage Leased calculation for other markets that have both Oakwood Master Leased communities and communities with traditional resident leases. A “N/A” related to Boston indicates the community is under construction where Lease-Up has not yet commenced.
(2)	Lower average occupancy is due to the inclusion of certain recently completed development communities which are in Lease-Up and therefore not yet Stabilized.
(3)	As of December 31, 2007, we had three investments representing $0.5 million or 780 units classified as In Planning and Under Control. Our investment in these communities is reflected in the “Other assets” caption of our Balance Sheet.
(4)	Includes land that is not In Planning and other real estate assets.

Item 3. Legal Proceedings

Shareholder Litigation

          On May 30, 2007, two separate purported shareholder class-action lawsuits related to the Merger Agreement and the transactions contemplated thereby were filed naming Archstone-Smith and each of Archstone-Smith’s trustees as defendants. One of these lawsuits, Seymour Schiff v. James A. Cardwell, et al. (Case No. 2007cv1135), was filed in the United States District Court for the District of Colorado. The other, Mortimer J. Cohen v. Archstone-Smith Trust, et al. (Case No. 2007cv1060), was filed in the District Court, County of Arapahoe, Colorado. On May 31, 2007, two additional purported shareholder class-action lawsuits related to the Merger Agreement and the transactions contemplated thereby were filed in the District Court, County of Arapahoe, Colorado. The first, Howard Lasker v. R. Scot Sellers, et al. (Case No. 2007cv1073), names Archstone-Smith, each of Archstone-Smith’s trustees and one of Archstone-Smith’s senior officers as defendants. The second, Steamship Trade Association/International Longshoremen’s Association Pension Fund v. Archstone-Smith Trust, et al. (Case No. 2007cv1070), names Archstone-Smith, each of Archstone-Smith’s trustees, Tishman Speyer and Lehman Brothers as defendants. On June 11, 2007, an additional purported shareholder class-action lawsuit related to the Merger Agreement, Doris Staehr v. Archstone-Smith Trust, et al. (Case No. 2007cv1081), was filed in the District Court, County of Arapahoe, Colorado, naming Archstone-Smith and each of Archstone-Smith’s trustees as defendants. All five lawsuits allege, among other things, that Archstone-Smith’s trustees violated their fiduciary duties to Archstone-Smith’s shareholders in approving the Mergers.

          On June 21, 2007, the District Court, County of Arapahoe, Colorado entered an order consolidating the Lasker, Steamship Trade Association/International Longshoremen’s Association Pension Fund and Staehr actions into the Cohen action, under the caption In re Archstone-Smith Trust Shareholder Litigation.

          On August 17, 2007, Archstone-Smith and the other defendants entered into a memorandum of understanding with the plaintiffs regarding the settlement of both the Schiff and the consolidated action captioned In re Archstone-Smith Trust Shareholder Litigation. In connection with the settlement, Archstone-Smith agreed to make certain additional disclosures to its shareholders. Subject to the completion of certain confirmatory discovery by counsel to the plaintiffs, the memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to Archstone-Smith’s shareholders and consummation of the Merger. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement, which, if finally approved by the court, will resolve all of the claims that were or could have been brought in the actions being settled, including all claims relating to the Merger, the Merger Agreement and any disclosure made in connection therewith. In addition, in connection with the settlement, the parties contemplate that plaintiffs’ counsel will petition the court for an award of attorneys’ fees and expenses to be paid by us, up to $1.0 million. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the court will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated. The settlement will not affect the amount of the Merger consideration that the plaintiffs are entitled to receive in the Merger. Archstone-Smith and the other defendants vigorously deny all liability with respect to the facts and claims

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alleged in the lawsuits, and specifically deny that any modifications to the Merger Agreement or any further supplemental disclosure was required under any applicable rule, statute, regulation or law. However, to avoid the risk of delaying or adversely affecting the Merger and the related transactions, to minimize the expense of defending the lawsuits, and to provide additional information to Archstone-Smith shareholders at a time and in a manner that would not cause any delay of the Merger, Archstone-Smith and the Archstone-Smith Trustees agreed to the settlement described above. Archstone-Smith and the other defendants further considered it desirable that the actions be settled to avoid the substantial burden, expense, risk, inconvenience and distraction of continued litigation and to fully and finally resolve the settled claims.

Clinton Green

          The Clinton Green project is a mixed-use apartment, condominium, and retail complex in New York City on 10th Avenue between 51st and 53rd Streets. The Clinton Green Project is owned by Clinton Green Holdings, LLC (“CG Holdings”), a joint venture consisting of our wholly-owned indirect subsidiary (“ASN-CG Member”) and an affiliate of The Dermot Company (“Dermot Member”). The Clinton Green Project also includes a small condominium component that is separately owned by Clinton Green Condo, LLC (“CG Condo”), a joint venture of the ASN-CG Member and the Dermot Member. In addition to other investments in CG Holdings and CG Condo, we provided a letter of credit under our pre-Merger Credit Facility to support tax-exempt bonds issued to finance the CG Project.

          On September 21, 2007, the Dermot Member filed a lawsuit captioned Clinton Green Holdings, LLC and DPIC Clinton Green, LLC v. Archstone-Smith Operating Trust, ASN Clinton Green Member, LLC, and Ameriton Properties Incorporated, Index No. 07/603154, Supreme Court of the State of New York, County of New York. The Dermot Member alleges (a) that the Merger caused a breach of the CG Holdings Operating Agreement because the transfer violated certain covenants in the Pre-Merger Credit Facility and also breached a provision of the CG Holdings Operating Agreement prohibiting a change of control of ASN-CG Member, (b) that the Merger caused a breach of a Put-Call Agreement under which the Dermot Member is entitled to be bought out of CG Holdings by ASN-CG Member through a tax-free contribution to us for an interest that could be converted into Archstone-Smith’s publicly traded stock and (c) that the Merger caused a breach of the CG Condo Operating Agreement as a result of a change in control of Ameriton. The Dermot Member is seeking unspecified damages as well as the ability to have CG Holdings dissolved.

          Prior to the Merger, the ASN-CG Member reached agreement with the Dermot Member and the lenders under the Pre-Merger Credit Facility to waive any breach of covenants for a period of six months. The agreement involved certain immaterial payments and concessions to the Dermot Member. The Dermot Member has also agreed to an extension of the date by which the Archstone defendants must respond to the Complaint until April 30, 2008.

Tax Protection Agreements and Unitholder Claims

          Prior to the Mergers, Archstone and several related parties had entered into tax protection agreements and other contracts with various holders of the A-1 Common Units. Those tax protection and related agreements provided such Unitholders, among other things, with the right to tax protection payments under specified circumstances detailed in such agreements. Archstone has received various tax claim notices and other communications from various former Unitholders asserting that those former Unitholders are owed tax protection payments and alleging a variety of other claims. Other former Unitholders may assert similar or additional claims in the future. The tax protection agreements generally provide that, after a Unitholder sends a tax claim notice to Archstone, Archstone may reject such claims (as it has with respect to tax claim notices sent to date). Following such rejection, unless the parties are able to negotiate an amicable resolution, the parties are generally required to submit to arbitration with respect to claims for tax protection payments. It is expected that arbitrations will be commenced in the future.

          In addition, on November 30, 2007, a purported class action lawsuit related to the Mergers, captioned Steven A. Stender and Infinity Clark Street Operating v. James A. Cardwell, et al. (Case no. 2007cv2503), was filed in the United States District Court for the District of Colorado. The lawsuit names, among others, Archstone, Archstone-Smith, certain of their former trustees and officers, Lehman Brothers Holdings Inc. and Tishman Speyer Development Corporation as defendants. This action was brought by certain former Unitholders, individually and

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purportedly on behalf of all former holders of A-1 Common Units as of the Mergers, and alleges, among other things: (i) that Archstone and Archstone-Smith entered into enforceable property contribution agreements and partnership agreements with such Unitholders; (ii) that Archstone and Archstone-Smith agreed not to enter into any transactions or dispose of any interest in the property contributed by such Unitholders that would result in such Unitholders realizing a taxable gain, and agreed to provide such Unitholders with the ability to receive dividends and also to liquidate their units by receiving cash or converting them to common shares in the publicly traded Archstone-Smith; (iii) that Archstone and Archstone-Smith failed to perform their duties under the Declaration of Trust, contribution and partnership agreements, and statutory and common law partnership principles in connection with the Mergers; (iv) that such failures discharge such Unitholders’ obligations to defendants (as noted above, the former Unitholders undertook certain obligations to arbitrate with respect to claimed rights to tax protection payments); and (v) that Archstone-Smith and former trustees and officers, aided and abetted by Lehman Brothers and Tishman Speyer, violated their fiduciary duties owed to such Unitholders in connection with the Mergers. The purported class action seeks an unspecified amount of damages. Although Archstone and the Venture believe that the claims that have been asserted are without merit, there can be no assurance that the disposition of such claims will not result in material liability to Archstone.

FHA/ADA

          During the second quarter of 2005, we entered into a full and final settlement in the United States District Court for the District of Maryland with three national disability organizations and agreed to make capital improvements in a number of our communities in order to make them fully compliant with the FHA and ADA. The litigation, settled by this agreement, alleged lack of full compliance with certain design and construction requirements under the two federal statutes at 71 of our wholly-owned and joint venture communities, of which we or our affiliates still own or have an interest in 18. As part of the settlement, the three disability organizations all recognized that Archstone had no intention to build any of its communities in a manner inconsistent with the FHA or ADA.

          The amount of the capital expenditures required to remediate the communities named in the settlement was estimated at $47.2 million and was accrued as an addition to real estate during the fourth quarter of 2005. The settlement agreement approved by the court allows us to remediate each of the designated communities over a three-year period, and also provides that we are not restricted from selling any of our communities during the remediation period. We agreed to pay damages totaling $1.4 million, which included legal fees and costs incurred by the plaintiffs. We had $10.9 million of the original accrual remaining on December 31, 2007.

Water Intrusion-Florida

          We are subject to various claims filed in 2002 and 2003 in connection with moisture infiltration and resulting mold issues at certain High-Rise properties we once owned in Southeast Florida. These claims generally allege that water infiltration and resulting mold contamination resulted in the claimants having personal injuries and/or property damage. Although certain of these claims continue to be in various stages of litigation, with respect to the majority of these claims, we have either settled the claims and/or we have been dismissed from the lawsuits that had been filed. With respect to the lawsuits that have not been resolved, we continue to defend these claims in the normal course of litigation.

Water Intrusion — Westbury

          In November, 2007, we began notifying residents of Archstone Westbury that, due to water intrusion and some related mold growth, we had concluded that the appropriate course of action was to perform necessary remediation and reconstruction at the community. Further, we determined it would be necessary to terminate every tenant’s lease, effective March 31, 2008, to ensure the safety of tenants during the potentially year-long construction project. As a consequence, four complaints were filed by tenants at Westbury against entities related to us and various other entities allegedly involved in the design, construction and ownership of the Project. These cases are Andrea Sorrentino, et al. v. ASN Roosevelt Center LLC d/b/a Archstone Westbury, et al., filed on November 28, 2007, in the Supreme Court of the State of New York, County of Nassau, Case No. 07-021135, removed on February 8, 2008 to U.S. Federal District Court for the Eastern District of New York; Richardo Francois v. ASN Roosevelt Center LLC D/B/A Archstone Westbury, filed on December 7, 2007, in the Supreme Court of the State of

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New York, County of Nassau, Case No. 07-021967; Pasquale Marchese, et al. v. ASN Roosevelt Center LLC, et al., filed on December 7, 2007, but not yet served on us; and John DiGiovanna and Farideh DiGiovanna vs. ASN Roosevelt Center LLC d/b/a Archstone Westbury, filed on January 7, 2008, in the Supreme Court of the State of New York, County of Nassau, Case No. 08-000347. In addition to the foregoing cases, there are a number of threatened lawsuits. Plaintiffs in the filed cases seek monetary damages and equitable relief alleging, among other things, that water damage and mold has caused the tenants at Westbury personal harm and property damage. Although no assurances can be given with respect to the outcome of these lawsuits, we intend to vigorously defend against the claims alleged in these lawsuits.

Other

          We are a party to various other claims and routine litigation arising in the ordinary course of business. We do not believe that the results of any such claims or litigation, individually or in the aggregate, will have a material adverse effect on our business, financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

          No matters were submitted to a vote of our security holders during the quarter ended December 31, 2007.

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PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

          Our Common Units are not traded in any public market. At the effective time of the Operating Trust Merger, under the Merger Agreement, holders of our A-1 Common Units were entitled to receive at their election one newly-issued Series O Preferred Unit or $60.75 for each of their Class A-1 Common Units. Each of the A-1 Common Units that were not converted to Series O Preferred Units, and all of the A-2 Common Units outstanding (other than A-1 Common Units and A-2 Common Units held by Archstone-Smith, its subsidiaries and certain affiliates of the Buyer Parties) immediately prior to the Operating Trust Merger, were converted into, and canceled in exchange for the right to receive $60.75 in cash, without interest and less applicable withholding tax. There have been no transfers of any Common Units since October 4, 2007. Following the Mergers, Series I Trust, Series II LLC and Series III LLC are the only holders of our common equity.

          In 2006, distributions were declared and paid quarterly on our common units. The annual distribution for 2006 was $1.74 per common unit. In 2007, distributions were declared and paid during the first and second quarter at a rate of $0.4525 per common unit. No distributions have been declared or paid since the second quarter. We do not plan on making distributions in the near term, and it is uncertain when any distributions will be made.

          As of December 31, 2007, no securities were authorized for issuance under any equity compensation plans.

          During 2007, we redeemed 1,108,323 A-1 Common Units at an average price of $59.16 per Common Unit. In connection with the Mergers, holders of 22.2 million A-1 Common Units elected to receive the merger consideration of $60.75 per Common Unit.

Item 6. Selected Financial Data

          The following table provides selected financial data relating to our historical financial condition and results of operations as of and for each of the years ending December 31, 2003 to 2006, and the periods January 1, 2007 through October 4, 2007 (Predecessor) and October 5, 2007 through December 31, 2007 (Successor). This data is qualified in its entirety by, and should be read in conjunction with, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes that have been included or incorporated by reference in this Annual Report. Prior year’s amounts have been restated for amounts classified within discontinued operations (in thousands, except per unit data):

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	Combined
	Successor and
	Predecessor			Successor			Predecessor
				Period from			Period from
				October 5, 2007			January 1, 2007
	Year Ended			Through			Through					Year Ended
	December 31,			December 31,			October 4,					December 31,
	2007			2007			2007			2006		2005		2004		2003
Operations Summary(1):
Total revenues(2)	$	945,432		$	255,271		$	690,161		$	759,825	$	513,855	$	405,681	$	333,063
Property operating expenses (rental expenses and real estate taxes)		296,063			76,348			219,715			225,822		148,640		130,725		100,242
Net Operating Income(3)		562,044			137,429			424,615			456,593		309,185		255,748		213,487
Depreciation on real estate investments		329,323			162,427			166,896			177,264		115,997		97,396		67,745
Interest expense		422,237			255,709			166,528			161,231		75,968		56,240		53,183
General and administrative expense		84,765			24,160			60,605			68,188		58,604		55,479		49,838
Earnings (loss) from operations		(232,413	)		(268,062	)		35,649			109,615		61,370		47,907		26,795
Income from unconsolidated entities		(12,974	)		(7,680	)		(5,294	)		36,316		22,432		17,902		5,745
Net earnings (loss) from discontinued operations(4)(5)		707,015			(7,816	)		714,831			686,806		588,895		518,192		461,651
Preferred Unit distributions		2,917			—			2,917			3,829		4,572		16,254		26,153
Net earnings (loss) attributable to Common Units(6):
— Basic		354,325			(413,475	)		767,800			831,246		696,932		596,369		468,038
— Diluted		374,541			(413,475	)		788,016			842,385		696,932		600,124		480,910
Common Unit distributions		—			—			227,868			432,592		397,466		603,553		277,035
Per Unit Data:(15)
Net earnings (loss) attributable to Common Units:
— Basic		—			—		$	3.07		$	3.35	$	3.01	$	2.71	$	2.20
— Diluted		—			—			3.03			3.33		3.00		2.69		2.18
Common Unit cash distributions paid(7)		—			—			0.9050			1.74		1.73		2.72		1.71
Cash distributions paid per unit:
Series A Preferred Unit(8)		—			—			—			—		—		—		2.11
Series D Preferred Unit(9)		—			—			—			—		—		1.31		2.19
Series E Preferred Unit(9)		—			—			—			—		2.09		2.09		2.09
Series F Preferred Unit(9)		—			—			—			—		—		1.50		2.03
Series G Preferred Unit(9)		—			—			—			—		2.16		2.16		2.16
Series H, J, K, and L Preferred Unit(9)(10)		—			—			—			—		—		—		3.38
Series I Preferred Unit(11)		—			—			5,745			7,660.00		7,660.00		7,660.00		7,660.00
Series P Preferred Unit(12)		—			—			228.81			457.62		364.74		—		—
Series Q-1 Preferred Unit(13)		—			—			10.08			20.16		3.54		—		—
Series Q-2 Preferred Unit(14)		—			—			4.32			8.64		1.52		—		—
Weighted average Common Units outstanding:
— Basic		—			—			250,223			248,314		231,642		220,053		212,288
— Diluted		—			—			260,026			253,308		232,608		223,187		220,758

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(1)	Net earnings from discontinued operations have been reclassified to reflect communities classified as discontinued operations as of December 31, 2007 for all years presented.
(2)	Annual revenues and other income, inclusive of discontinued operations, for 2007 (combined Successor and Predecessor), 2006, 2005, 2004 and 2003 were $1.2 billion, $1.3 billion, $1.1 billion, $1.0 billion and $1.0 billion, respectively.
(3)	Defined as rental revenues less rental expenses and real estate taxes. We believe that net earnings (loss) attributable to Common Units and NOI are the most relevant measures of our operating performance and allow investors to evaluate our business against our industry peers and against all publicly traded companies as a whole. We rely on NOI for purposes of making decisions about resource allocations and assessing segment performance. We also believe NOI is a valuable means of comparing period-to-period property performance. See Item 7 of this Annual Report under Results of Operations for a reconciliation of NOI to Earnings from Operations, and to obtain the required information to recalculate NOI from continuing operations.
(4)	Gains on the disposition of real estate investments classified as held for sale after January 1, 2003 are included in discontinued operations.
(5)	Represents property-specific components of net earnings and gains/(losses) related to real estate sold or classified as held for sale at December 31, 2007.
(6)	Includes $131.0 million of unrealized derivative losses from interest rate hedges for the period of October 5, 2007 through December 31, 2007 recorded in Other non-operating income (loss).
(7)	Includes a $1.00 per unit special distribution issued to our Common Unitholders in December 2004.
(8)	The Series A Preferred Units were called for redemption during October 2003; of the 2.9 million Series A Preferred Units then outstanding, 2.8 million were converted to Common Units and the remaining were redeemed.
(9)	All of the outstanding Series D, Series E, Series F, Series G and Series J Preferred Units were redeemed at liquidation value plus accrued distributions.
(10)	The Series L Preferred Units were converted into Common Units during December 2004 and the distribution paid during 2004 prior to conversion was $3.40 per unit. In September 2004, the Series K Preferred Units were converted into Common Units and the distribution paid during 2004 prior to conversion was $2.55 per unit. The Series H Preferred Units were converted into Common Units during May 2003 and the distribution paid during 2003 prior to conversion was $1.27 per unit.
(11)	Series I Preferred Units have a par value of $0.01 per unit.
(12)	The Series P Preferred Unit replaced the Series M Preferred Unit in connection with the Merger.
(13)	The Series Q-1 Preferred Unit replaced the Series N-1 Preferred Unit in connection with the Merger.
(14)	The Series Q-2 Preferred Unit replaced the Series N-2 Preferred Unit in connection with the Merger.
(15)	Per unit data is not presented for the Successor as a result of the Merger.

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	Successor			Predecessor
	December 31,			December 31,			December 31,			December 31,			December 31,
	2007			2006			2005			2004			2003
Financial Position:
Real estate owned, at cost	$	14,680,183		$	12,967,709		$	11,142,311		$	9,006,114		$	8,785,004
Real estate held for sale(1)		388,890			219,931			216,953			215,924			214,176
Investments in and advances to unconsolidated entities		297,113			235,323			132,728			111,481			86,367
Total assets		17,154,659			13,259,127			11,462,095			9,061,280			8,916,591
Revolving credit facilities		60,000			84,723			394,578			19,000			103,790
Long-Term Unsecured Debt		—			3,355,699			2,540,036			2,094,358			1,866,861
Term Loans		4,591,822			—			—			—			—
Property Mortgages Payable		9,212,648			2,776,234			2,393,652			2,031,505			1,960,827
Total Liabilities		14,635,771			6,956,789			5,693,305			4,469,994			4,179,488
Other Common Unitholders’ interest (at redemption value)		—			1,718,017			1,420,491			885,400			707,924
Series O Preferred Units		235,944			—			—			—			—
Perpetual Preferred Units		50,000			50,000			50,000			69,522			210,120
Total unitholders’ equity		2,282,944			4,584,321			4,348,299			3,703,826			4,017,669
Number of Common Units outstanding		39,565			249,661			246,324			222,694			220,063
	Combined Successor and Predecessor			Predecessor
	December 31,			December 31,			December 31,			December 31,			December 31,
	2007			2006			2005			2004			2003
Other Data:
Net cash flows provided by (used in):
Operating activities	$	411,355		$	537,428		$	414,019		$	399,897		$	343,696
Investing activities		14,657			(506,264	)		(964,621	)		528,253			428,166
Financing activities		(452,245	)		3,853			360,985			(730,125	)		(779,478	)

(1) Previous years have been restated to include assets that were classified as held for sale as of December 31, 2007.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     Please refer to “Item 1. Business — Consummation of Mergers” for important information regarding the recent Mergers. Unless indicated otherwise, the following discussion of our “Results of Operations” is based on the combined operating results of the Successor and Predecessor for 2007 and the Predecessor’s operating results for 2006 and 2005. Unless indicated otherwise, the “Liquidity and Capital Resources” discussion is based on the liquidity and capital resources of the Successor entity. Our analysis includes discussion of areas where comparability was significantly impacted by the Merger.

Results of Operations

Reconciliation of Quantitative Summary to Consolidated Statements of Earnings

     The following schedule is provided to reconcile our consolidated statements of earnings to the information presented in the “Quantitative Summary” provided in the next section:

	Combined Successor and Predecessor									Predecessor
	2007									2006									2005
	Continuing			Discontinued						Continuing			Discontinued						Continuing			Discontinued
	Operations			Operations			Total			Operations			Operations			Total			Operations			Operations			Total
Rental revenue	$	858,107		$	286,768		$	1,144,875		$	682,415		$	513,218		$	1,195,633		$	457,825		$	559,584		$	1,017,409
Other income		87,325			—			87,325			77,410			—			77,410			56,030			—			56,030
Property operating expenses (rental expenses and real estate taxes)		(296,063	)		(92,165	)		(388,228	)		(225,822	)		(178,542	)		(404,364	)		(148,640	)		(209,329	)		(357,969	)
Depreciation on real estate investments		(329,323	)		(53,033	)		(382,356	)		(177,264	)		(111,032	)		(288,296	)		(115,997	)		(122,791	)		(238,788	)
Interest expense		(422,237	)		(73,067	)		(495,304	)		(161,231	)		(114,595	)		(275,826	)		(75,968	)		(141,600	)		(217,568	)
General and administrative expenses		(84,765	)		—			(84,765	)		(68,188	)		—			(68,188	)		(58,604	)		—			(58,604	)
Other expense		(45,457	)		(6,356	)		(51,813	)		(17,705	)		(19,815	)		(37,520	)		(53,276	)		(18,903	)		(72,179	)
Income from unconsolidated entities		(12,974	)		—			(12,974	)		36,316			—			36,316			22,432			—			22,432
Other non-operating income (loss)		(98,929	)		—			(98,929	)		2,338			—			2,338			28,807			—			28,807
Gains, net of disposition costs		—			644,868			644,868			—			597,572			597,572			—			521,934			521,934
Net earnings	$	(344,316	)	$	707,015		$	362,699		$	148,269		$	686,806		$	835,075		$	112,609		$	588,895		$	701,504

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Quantitative Summary

     This summary is provided for reference purposes and is intended to support and be read in conjunction with the narrative discussion of our results of operations. This quantitative summary includes all operating activities, including those classified as discontinued operations for GAAP reporting purposes. This information is presented to correspond with the manner in which we analyze the business. We have historically reinvested disposition proceeds into new developments and operating communities and therefore believe it is most useful to analyze continuing and discontinued operations on a combined basis. The impact of communities classified as “discontinued operations” for GAAP reporting purposes is discussed separately in a later section under the caption “Discontinued Operations Analysis.”

	Combined
	Successor and									2007 vs. 2006			2006 vs. 2005
	Predecessor			Predecessor						Increase /			Increase /
	2007			2006			2005			(Decrease)			(Decrease)
Rental revenues:
Same-Store (1)	$	435,286		$	413,989		$	387,213		$	21,297		$	26,776
Non Same-Store		647,952			714,758			588,857			(66,806	)		125,901
Ameriton		9,921			20,869			33,986			(10,948	)		(13,117	)
International		43,660			34,920			—			8,740			34,920
Non-multifamily		8,056			11,097			7,353			(3,041	)		3,744
Total revenues		1,144,875			1,195,633			1,017,409			(50,758	)		178,224
Property operating expenses (rental expenses and real estate taxes):
Same-Store (1)		139,713			130,545			124,545			9,168			6,000
Non Same-Store		216,165			243,721			214,394			(27,556	)		29,327
Incremental operating expenses related to the Merger (2)		4,975			—			—			4,975			—
Ameriton		4,963			10,619			17,038			(5,656	)		(6,419	)
International		21,625			16,225			—			5,400			16,225
Non-multifamily		787			3,254			1,992			(2,467	)		1,262
Total operating expenses		388,228			404,364			357,969			(16,136	)		46,395
Net Operating Income (rental revenues less property operating expenses)		756,647			791,269			659,440			(34,622	)		131,829
Margin (NOI/rental revenues):		66.1	%		66.2	%		64.8	%		(0.1	%)		1.4	%
Average occupancy during period: (3)		92.4	%		93.9	%		94.6	%		(1.5	%)		(0.7	%)
Other income		87,325			77,410			56,030			9,915			21,380
Depreciation of real estate investments		382,356			288,296			238,788			94,060			49,508
Interest expense		533,679			327,634			256,679			206,045			70,955
Capitalized interest		38,375			51,808			39,111			(13,433	)		12,697
Net interest expense		495,304			275,826			217,568			219,478			58,258
General and administrative expenses		84,765			68,188			58,604			16,577			9,584
Other expense		51,813			37,520			72,179			14,293			(34,659	)
Earnings from continuing and discontinued operations		(170,266	)		198,849			128,331			(369,115	)		70,518
Equity in earnings from unconsolidated entities		(12,974	)		36,316			22,432			(49,290	)		13,884
Other non-operating income (loss)		(98,929	)		2,338			28,807			(101,267	)		(26,469	)
Gains on disposition of real estate investments, net of disposition costs:
Taxable subsidiaries		16,891			51,245			75,248			(34,354	)		(24,003	)
Non-taxable transactions		627,977			546,327			446,686			81,650			99,641
Net earnings	$	362,699		$	835,075		$	701,504		$	(472,376	)	$	133,571

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(1)	Reflects revenues and operating expenses for Same-Store communities that were owned on December 31, 2007 and fully operating during all three years in the comparison period.
(2)	Reflects incremental real estate taxes triggered by revaluations stemming from the Merger and the amortization of an intangible related to below market ground leases.
(3)	Does not include occupancy associated with properties owned by Ameriton, operated under the Oakwood Master Leases or International.

Property-level operating results — 2007 compared to 2006

     We utilize NOI as the primary measure to evaluate the performance of our operating communities and for purposes of making decisions about resource allocations and assessing segment performance. We also believe NOI is a valuable means of comparing period-to-period property performance. In analyzing the performance of our operating portfolio, we evaluate Same-Store communities separately from Non Same-Store communities and other properties.

Same-Store Analysis

     The following table reflects revenue, expense and NOI growth in 2007 as compared to 2006 for Same-Store communities that were owned on December 31, 2007 and fully operating during all three years.

	Same-Store			Same-Store
	Revenue			Expense			Same-Store
	Growth			Growth			NOI Growth
Garden		5.6	%		6.6	%		5.1	%
High-Rise		4.8	%		7.3	%		3.5	%
Total		5.1	%		7.0.	%		4.3	%

     Same-Store revenues were up 5.1% in 2007 as compared to 2006 due primarily to an increase in average rental revenue per unit partially offset by a reduction in the occupancy rate. Same-Store expenses were up 7.0% for the comparison period, primarily due to higher real estate taxes and increased personnel costs. These changes in revenues and expenses resulted in an increase in Same-Store NOI of 4.3% driven principally by strong revenue growth in Seattle, Southern California, the New York City Metropolitan Area and the San Francisco Bay Area, which collectively represented 49.3% of the company’s portfolio at December 31, 2007.

Non Same-Store and Other Analysis

     The $39.3 million decrease in NOI in the Non Same-Store portfolio for the 2007 as compared to 2006 is primarily attributable to a $98.2 million decrease related to community dispositions and a $29.5 million decrease due to assets sold to affiliated entities at the date of the Merger. These decreases were offset by a $48.6 million increase related to acquisitions, a $23.7 million increase related to recently stabilized development communities and communities in lease-up, a $16.2 million increase due to the Oakwood Master Leases and ground lease revenue on three new ground leases and other non same-store assets. The $5.0 million in incremental operating expenses related to the Merger reflects real estate taxes triggered by revaluations stemming from the Merger and the amortization of an intangible related to below-market ground leases.

Ameriton

     The decrease in NOI from Ameriton apartment communities in 2007 as compared to 2006 is primarily attributable to dispositions. Ameriton was liquidated in connection with the Mergers which also contributed to the decrease.

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International

     NOI from International operations for 2007 increased $3.3 million as compared to 2006 due primarily to the DeWAG acquisition that occurred in July 2006. The increase was partially offset by a decrease related to the contribution of the majority of our international operations to the International Fund on June 29, 2007 at which date the results of operations from the International Fund are included in income from unconsolidated entities rather than NOI since we do not control this entity.

Property-level operating results — 2006 compared to 2005

Same-Store Analysis

     The following table reflects revenue, expense and NOI growth in 2006 as compared to 2005 for Same-Store communities that were owned on December 31, 2007 and fully operating during all three years.

	Same-Store			Same-Store
	Revenue			Expense			Same-Store
	Growth			Growth			NOI Growth
Garden		7.6	%		6.8	%		8.0	%
High-Rise		6.3	%		3.3	%		7.8	%
Total		6.9	%		4.8	%		7.9	%

     Same-Store revenues were up 6.9% in 2006 as compared to 2005 due primarily to an increase in average rental revenue per unit. Same-Store expenses were up 4.8% for the comparison period, primarily due to higher insurance costs, real estate taxes and personnel costs. These changes in revenues and expenses resulted in an increase in Same-Store NOI of 7.9% driven principally by strong growth in the Washington, D.C. metropolitan area, Southern California and the New York City metropolitan area which represented approximately 72% of the Company’s portfolio at December 31, 2006.

Non Same-Store and Other Analysis

     The $96.6 million NOI increase in the non Same-Store portfolio for 2006 as compared to 2005 is primarily attributable to (i) $86.6 million related to acquisitions; (ii) $15.6 million related to newly developed apartment communities, including Lease-Ups; (iii) $33.3 million related to the Oakwood Master Leases; and offset by (iv) $39.2 million related to community dispositions.

Ameriton

     The $6.7 million NOI decrease from Ameriton apartment communities for 2006 as compared to 2005 is primarily attributable to a $10.3 million decline related to community dispositions, including the sale of new developments, partially offset by $3.5 million increase from community acquisitions.

International

     The increase in NOI from International operations of $18.7 million for 2006 as compared to 2005 is primarily attributable to the DeWAG acquisition that occurred in July 2006.

Non Multi-family

     The $2.5 million NOI increase from non-multifamily assets for 2006 as compared to 2005 is primarily attributable to commercial/retail income associated with an asset purchased by Ameriton in July 2005.

Other Income

     Other income was higher in 2007 as compared to 2006 due to a $32.4 million increase in interest income due to increased restricted cash balances resulting from our recent Merger and a $9.6 million management fee

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increase from the German management company. This increase is offset by $22.4 million decrease related to higher 2006 gains on land sales and a $10.9 million decrease in insurance recoveries.

     The increase in other income during 2006 as compared to 2005 resulted primarily from a $19.0 million increase in interest income on mortgage loans to third parties and other interest bearing instruments and a $19.6 million increase in gains on land sales, primarily in Ameriton. These increases were offset by a $21.9 million decrease in 2006 related to insurance recoveries.

Depreciation Expense

     In 2007, the increase in depreciation expense is primarily attributable to the fair market value adjustment which increased the basis of our real estate and the amortization of in place lease intangible values established in connection with the Merger.

     In 2006, the depreciation increase was primarily related to the increase in the size of the real estate portfolio. A few of the major drivers are amortization of the value associated with in-place leases over the lease term on our new acquisitions; disposition of assets with a lower depreciable basis at significant gains, and reinvestment of the proceeds into assets with a higher depreciable basis partially offset by cessation of depreciation on assets sold or classified as held for sale.

Interest Expense

     Gross interest expense increased in 2007 as compared to 2006 due to a substantial increase in borrowings related to our recent Merger, interest charges related to our international operations that began material operations in July 2006 and higher borrowings on our lines of credit which carry a higher effective interest rate as compared to our long-term debt and mortgages. These increases were partially offset by the impact of the deconsolidation of the majority of our international operations as of July 1, 2007. Capitalized interest decreased in 2007 primarily as a result of the distribution of most of our communities under development to affiliated entities in connection with the Merger transactions.

     The increase in gross interest expense during 2006 as compared to 2005 is due to higher average debt levels associated with the increased size of the real estate portfolio combined with higher average interest rates on our unsecured credit facilities and other debt instruments. The International transactions were the most significant drivers of the portfolio increase in 2006. Capitalized interest also increased significantly as a result of the increase in the size and number of communities under construction and, to a lesser extent, higher average interest rates in 2006.

General and Administrative Expenses

     General and administrative expenses were higher in 2007 as compared to 2006 due primarily to higher personnel-related costs associated with our international expansion that began material operations in July 2006 and higher payroll-related costs and professional fees. Our post-Merger expenses were also higher due to certain bonuses paid in lieu of equity awards which would have otherwise been issued under Archstone-Smith’s long-term incentive plan and amortized over three years.

     The increase in the general and administrative expenses during 2006 as compared to 2005 is principally due to higher personnel-related costs related to our International expansion.

Other Expenses

     Other expense in 2007 was higher as compared to 2006 due principally a $17.6 million charge for transaction costs related to the Merger and a $17.1 million increase in impairment charges. The 2007 impairment charge related primarily to a community in New York which will require significant renovation due to a water intrusion issue. These costs were offset by $20.7 million in lower income tax expense related to Ameriton dispositions.

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     The decrease in other expenses during 2006 as compared to 2005 is primarily attributable to a $14.3 million decrease in early debt extinguishment costs; an $8.5 million decrease in legal expenses; a $1.5 million decrease in taxes in our taxable REIT subsidiaries; a $7.8 million decrease in hurricane related charges; a $2.8 million writeoff of a loan to a prior affiliate in 2005; and a $1.5 million impairment related to a non-core asset in 2005 offset by a $4.3 million impairment charge on that asset in 2006.

Equity in Income from Unconsolidated Entities

     Earnings from unconsolidated entities were lower in 2007 as compared to 2006 primarily due to a $29.2 million decrease in gains on the sale of joint venture assets and losses on the International Fund due primarily to the initial formation costs. In addition, the majority of our domestic joint ventures were sold or distributed to affiliated entities in connection with the Merger.

     The increase in income from unconsolidated entities during 2006 as compared to 2005 is due primarily to more income from community dispositions and related venture liquidations.

Other Non-Operating Income (Loss)

     In 2007, we had a non-operating loss compared to non-operating income in 2006, due to a $131.0 million unrealized loss on our interest rate swaps which were not designated as hedges for accounting purposes by the Successor entity. These derivative losses were partially offset by foreign currency gains on our international investments and gains recognized on the sale of International Fund shares.

     Other non-operating income during 2006 consists primarily of a $1.7 million of gain from the sale of our Rent.com investment which was recorded upon the resolution of certain contingencies.

Gains on real estate dispositions

     See “Discontinued Operations Analysis” below for discussion of gains.

Discontinued Operations Analysis

     Included in the overall results discussed above are the following amounts associated with properties which have been sold or were classified as held for sale as of December 31, 2007 (dollars in thousands).

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Year Ended
	December 31,			October 4,			December 31,
	2007			2007			2006			2005
Rental revenue	$	10,795		$	275,973		$	513,218		$	559,584
Rental expenses		(1,719	)		(66,326	)		(129,685	)		(150,604	)
Real estate taxes		(904	)		(23,216	)		(48,857	)		(58,725	)
Depreciation on real estate investments		(3,171	)		(49,862	)		(111,032	)		(122,791	)
Interest expense(1)		(10,118	)		(62,949	)		(114,595	)		(141,600	)
Income taxes from taxable REIT subsidiaries		—			(1,126	)		(5,982	)		(11,556	)
Provision for possible loss on real estate investment		—			—			(4,328	)		(1,500	)
Debt extinguishment costs related to dispositions		(2,694	)		(2,536	)		(9,505	)		(5,847	)
Gain from the disposition of REIT real estate investments, net		—			629,444			548,187			448,358
Internal Disposition Costs — REIT transactions		—			(1,462	)		(1,860	)		(1,672	)
Gain from the dispositions of taxable REIT subsidiary real estate investments, net		(5	)		17,769			54,728			76,326
Internal Disposition Costs — Taxable REIT subsidiary transactions		—			(878	)		(3,483	)		(1,078	)
Total discontinued operations	$	(7,816	)	$	714,831		$	686,806		$	588,895

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(1) Interest expense included in discontinued operations is allocated to properties based on each asset’s cost in relation to the company’s leverage ratio and the average effective interest rate for each respective period.

     As a result of the execution of our strategy of managing our invested capital through the selective sale of apartment communities in non-core locations and redeploying the proceeds to fund investments with higher anticipated growth prospects in our core markets, we had significant disposition activity in all three years. The resulting gains, net of disposition costs, were the biggest driver of overall earnings from discontinued operations. The relative level of gains in each year were primarily attributable to the volume of disposition activity. Revenues and expense levels related to communities sold or classified as held-for-sale are primarily dependent on the number of communities meeting the held-for-sale criteria and the period of time they were owned. Prior to the Merger, income taxes fluctuated in relation to the taxable gains associated with communities sold by our taxable REIT subsidiaries.

Preferred Unit Distribution Analysis

     Preferred Unit distributions were lower in 2007 as compared to 2006 as no distributions have been declared or paid since the second quarter of 2007. Preferred Unit distributions were lower in 2006 as compared to 2005 due to redemptions during 2005.

Liquidity and Capital Resources

     We generally finance a portion of our long-term investing and operating activities with long-term debt. In connection with the recent Merger, we paid off most of our pre-Merger debt and entered into several new loans and credit agreements to finance a significant portion of the transaction. Our leverage ratio after the Merger is significantly higher and interest rates on the new credit facilities are generally higher than those of the Predecessor entity. As a result of the cash flow generated by our operations, the available capacity under our credit facilities and term loans, available cash balances, draws on our interest reserve, expected proceeds from the planned disposition of real estate or from joint venture formations and our anticipated ability to secure additional financing, we believe our liquidity and financial condition are sufficient to meet all of our reasonably anticipated cash flow needs during the next 12 months. Please refer to the Consolidated Statement of Cash Flows for detailed information of our sources and uses of cash for 2007, 2006 and 2005. The 2007 cash flow statement combines pre and post Merger information.

Scheduled Debt Maturities and Interest Payment Requirements

     On October 5, 2007 we borrowed approximately $13.8 billion under various credit facilities with third party lenders to, among other things, finance a portion of the cost of the Merger and refinance a portion of our existing indebtedness. As of December 31, 2007 we had total outstanding debt of $13.9 billion with a weighted average nominal interest rate of 6.94%. As of March 20, 2008 we had $14.0 billion of total outstanding debt with a weighted average nominal interest rate of 6.12 %.

Master Credit Facility

     Our Master Credit Facility was entered into on October 5, 2007 as subsequently amended or restated from time to time thereafter. The amendments, among other things, increased the amount of Tranche B Term Loans (see further detail below) available under the Master Credit Facility. The Master Credit Facility provides a $750 million revolving credit facility, which includes a $75 million swing line and a letter of credit commitment with a maximum of $425 million for the first year, which decreases thereafter. The revolving credit facility bears interest at (a) 2.0% plus the greater of (i) the prime rate or (ii) the federal funds rate plus 0.50% or, at our option, (b) LIBOR plus 3.00%, and has a maturity date of October 5, 2011. The swing line bears interest at the same rate as the revolving credit facility. The Master Credit Facility also includes a $1.75 billion term loan (“Tranche A Term Loan”) maturing on October 5, 2011, bearing interest at (a) 2.0% plus the greater of (i) the prime rate or (ii) the federal funds rate plus 0.50% or, at our option, (b) LIBOR plus 3.00%, and a $3.0 billion term loan (“Tranche B Term Loan”) maturing on October 5, 2012, bearing interest at (a) 2.25% plus the greater of (i) the prime rate or (ii) the federal funds rate plus 0.50% or, at our option, (b) LIBOR plus 3.25%. All interest rates are subject to a 1.0% increase if the combined leverage ratio,

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tangible net worth test and, on or prior to December 31, 2008, the consolidated debt service coverage ratio covenants are not satisfied as provided in the agreement. The Tranche A Term Loan is payable in four annual installments, beginning on October 5, 2008. The lenders under our Master Credit Facility and our mezzanine loans provided by the Fannie Mae Mezzanine Lenders and the Freddie Mac Mezzanine Lenders have the option to syndicate or sell the outstanding principal amount under such agreements to other investors at a discount and may revise the interest rate spread or discount or increase fees to a level necessary to facilitate syndication based on current market conditions at the syndication date. As of December 31, 2007, $5.6 billion in outstanding principal indebtedness under these loans was subject to syndication and the increased borrowing costs described above. The cost associated with any incremental interest or additional fees, as well as any original issue discount realized, is required to be born by the Company. These same lenders have committed to lend us up to $148.8 million to fund such costs, at any time prior to December 31, 2008. As of March 20, 2008, we had approximately $73.0 million set aside in restricted cash to fund syndication discounts. As of March 20, 2008, $43.0 million of principal had been syndicated at a discount of 3%.

     The Master Credit Facility also provides that, if certain conditions are satisfied, the Company may request up to an aggregate principal amount of $242.5 million of new term loans, which may be used for syndication costs, working capital, including refinancing revolving loans, and which otherwise have substantially the same terms as the Tranche B Term Loan. The lenders under the Master Credit Facility have committed to lend us up to $242.5 million of such new term loans, $148.8 million of which may be used for syndication costs as described above and the remaining $93.7 million of which may be used to pay additional transaction costs and other miscellaneous costs and expenses. Nothing was drawn on the incremental facility at December 31, 2007. Further, if certain conditions are satisfied, the Company may request up to an aggregate principal amount of $250 million increase in the revolving credit facility, provided that the total revolving credit commitments may not exceed $1.0 billion at any time.

     The Master Credit Facility loans are prepayable by us in whole or in part without penalty. The following amounts are required to be applied to prepay the Master Credit Facility loans, subject to certain carve-outs: (i) 100% of net cash proceeds from the sale or issuance of certain equity or incurrence of certain indebtedness, (ii) 100% of net cash proceeds from any sale or other disposition of any assets yielding gross proceeds in excess of $500,000 in any fiscal year, subject to certain exceptions after $500,000,000 of net cash proceeds have been applied to prepay the Tranche A Term Loan, including capacity for reinvestment of an amount not exceeding 50% of such net cash proceeds and (iii) 100% of excess cash flow for each fiscal year. After the Tranche A Term Loan has been repaid in full, if the combined leverage ratio is less than or equal to 60% and the consolidated debt service coverage ratio is greater than or equal to 1.25 to 1.00, then the foregoing percentages shall be reduced from 100% to 25%. Subject to certain exceptions, all such amounts shall be applied first, to the Tranche A Term Loan, second, to the Tranche B Term Loan and third, to the Revolving Loans and, the replacement or cash collateralization of outstanding letters of credit.

     In addition to the mandatory prepayments described above, if at the end of any fiscal quarter, the leverage ratio is greater than the ratio required by the Master Credit Facility, the tangible net worth test is less than the amount required by the Master Credit Facility or, on or prior to December 31, 2008, the consolidated debt service coverage ratio is less than the ratio required by the Master Credit Facility, then the Company is generally required to cause the Master Credit Facility loans to be prepaid by an amount necessary to cause the combined leverage ratio, tangible net worth test and consolidated debt service coverage ratio to be in compliance on or prior to the later of January 1, 2009 and the last day of the fiscal quarter ending immediately after the initial fiscal quarter. All such mandatory prepayments may be made with the net cash proceeds of any sale or other disposition of assets or the sale or issuance of certain equity. Although failure to comply with the leverage ratio, tangible net worth test or, on or prior to December 31, 2008, consolidated debt service coverage ratio generally is not an event of default until the later of January 1, 2009 and the last day of the fiscal quarter ending immediately after the initial fiscal quarter as described above, until such time as the Company is in compliance with the combined leverage ratio, tangible net worth test, and consolidated debt service coverage ratio (i) the Company would not be permitted to incur certain types of indebtedness, make certain investments (other than those investments committed to be made prior to such failure) or pay certain dividends and (ii) the applicable margin with respect to the Master Credit Facility loans will increase by 1.00%.

     Loans under the Master Credit Facility are secured, subject to permitted liens and other agreed upon exceptions, by substantially all of our owned assets, including (i) all of our properties other than those properties which are prohibited from being pledged as collateral pursuant to our and our subsidiaries existing contractual obligations, as well as any real property acquired by us or our subsidiaries in the future that is valued at $5.0 million or more and (ii) all the ownership interests in our subsidiaries held by us. Further, we and various parent and subsidiary guarantors, including our trustee, entered into a guarantee and collateral agreement, whereby the guarantors guarantee our obligations under the Master Credit Facility and we guarantee the guarantors’ obligations under certain pledge agreements with the lenders and their affiliates contemplated by the Master Credit Facility. The guarantees are secured by pledges of each such entity’s personal property, including all ownership interests held by such entity.

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     The Master Credit Facility required the establishment of a funded interest reserve of $500 million to facilitate compliance with certain debt service coverage ratios. We anticipate that we will need to draw on such reserves during 2008 to maintain compliance with such ratios. As of December 31, 2007 the balance in this restricted cash account was $427.9 million.

     A summary of our Master Credit Facility Debt outstanding at December 31, 2007 is as follows (dollar amounts in thousands):

				Successor
				Balance at		Average
	Nominal			December 31,		Remaining
Type of Debt	Interest Rate(3)			2007		Life (Years)
Term loans(1)(2)		8.18	%	$	4,591,822		4.42
Revolving credit facility(2)		7.95	%		60,000		3.76
Total/average		8.18	%	$	4,651,822		4.41

(1)	Includes Tranche A and Tranche B of the Master Credit Facility. The interest rates for both instruments are described above.
(2)	The interest rates for these instruments are described above.
(3)	The effective interest rates for the term loans and revolving credit facility are 8.42% and 28.31%, respectively, which includes the effect of loan cost amortization and other ongoing fees and expenses, where applicable. The effective interest rate on the revolving credit facility is high due primarily to the fees on the unfunded commitment. The higher the average outstanding drawn balance, the lower the effective interest.

Property Mortgages

     In connection with the Merger, we entered into a $7.1 billion credit facility (“Fannie Facility”) provided by Fannie Mae, which is secured by 105 of our properties. This facility is divided into 9 loan pools. Pools 1 through 3, totaling $2.5 billion at issuance, mature on November 1, 2017 and bear interest at 6.256%. Pool 4, totaling $963.5 million at issuance, matures on November 1, 2014, and bears interest at 5.883%. Pools 5 through 7, totaling $2.3 billion at issuance, matures on November 1, 2012 and bears interest at 6.193%. Pools 8 and 9, totaling $1.3 billion at issuance, matures on November 1, 2009 and bears interest at LIBOR plus 1.265%. The variable rate loans are prepayable without penalty after October 31, 2008. Fixed rate loans are subject to a prepayment premium equal to the greater of 1% of the principal being repaid or a market rate present value determined in accordance with the loan’s terms. In addition to the Fannie Facility, the Fannie Mae Mezzanine Lenders have provided $768.9 million of mezzanine loans subordinate to each of the nine Fannie Facility pools. The interest rates on these mezzanine loans range from LIBOR plus 2.65% to LIBOR plus 2.85%. The Fannie Mae Mezzanine Lenders have the option to syndicate or sell the debt to other investors at a discount and may revise the interest rate spread or discount or fees to a level necessary to facilitate syndication based on current market as further described above.

     Also in connection with the Merger, we entered in to an $847 million facility (“Freddie Facility”) provided by the Federal Home Loan Mortgage Corporation (“Freddie Mac”), which is secured by 13 of our properties. This facility matures on November 1, 2012 and bears interest at LIBOR plus 1.025%. The Freddie Facility is subject to a prepayment premium of 1% of the principal amount being repaid. In addition to the Freddie Facility, Freddie Mac Mezzanine Lenders, have provided $135.4 million of mezzanine loans subordinate to the Freddie Facility. The interest rate on the mezzanine loans is LIBOR plus 3.00%. The Freddie Mac Mezzanine Lenders have the option to syndicate or sell the debt to other investors at a discount and may revise the interest rate spread or discount or fees to a level necessary to facilitate syndication based on current market as further described above.

     In addition to the property mortgages originated in connection with the Merger, the Successor entity assumed $479.3 million in existing pre-Merger tax-exempt bonds and mortgages.

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Covenants

     Our debt instruments are generally secured by real estate and other tangible assets and contain covenants common to the type of facility or borrowing, including financial covenants establishing minimum debt service coverage and tangible net worth ratios and maximum leverage ratios. The covenant limits under certain of our credit facilities become more restrictive beginning in 2009. We were in compliance with all required financial ratios pertaining to our debt instruments as of December 31, 2007. In addition to financial and other negative covenants certain of our debt facilities contain restrictions on our operations, including our ability to make capital expenditures over certain amounts and our ability to make distributions or voluntarily redeem or prepay any of our outstanding Preferred Units. While we will endeavor to maintain compliance with all required financial ratios during 2008 and beyond, we face risks that could impact our ability to do so and some of these risks are beyond our direct control. See “Item 1A. Risk Factors” for further discussion of risks associated with our indebtedness and financing. In the event of non-compliance, we can not provide any assurance as to whether such violations would be waived or the effect non-compliance would have on us.

Unitholder Distribution Requirements

     From January 1, 2007 to September 30, 2007, we paid distributions of $230.8 million related to our Common and Preferred Units. There have been no distributions declared or paid on Common Units or Preferred Units subsequent to the October 5, 2007 Merger date. As of December 31, 2007, we had Preferred Units with a redemption value of approximately $285.9 million. These securities generally provide for a cumulative distribution. The undeclared and unaccrued distribution as of December 31, 2007 aggregated approximately $5.5 million.

     Each holder of a Series O Preferred Unit will have the right to exercise an immediate put right, including payment of any tax protection amount (as defined in our Declaration of Trust) with respect to the Series O Preferred Units being redeemed, if at any time prior to January 1, 2022, (1) our loan to value ratio is higher than 85% and we make a distribution to the holders of Common Units; or (2) we incur indebtedness in excess of $10 million in principal amount (excluding draws on our line of credit or refinancings of existing indebtedness) and after such borrowing our loan to value ratio is higher than 85% and we have made a distribution to our Common Units in contemplation of the incurrence of that indebtedness. During any period of time after we incur indebtedness in excess of $10 million in principal amount (excluding draws on our line of credit or refinancings of existing indebtedness) and as a result of which our loan to value ratio exceeds 85%, until such time as our loan to value ratio no longer exceed 85%, the distribution rate on our Series O Preferred Units shall increase from 6% per annum to 8% per annum.

Planned Investments

     Following is a summary of planned investments as of December 31, 2007, excluding joint ventures. The amounts labeled “Discretionary” represent future investments that we plan to make, although there is not a contractual commitment to do so. The amounts labeled “Committed” represent the approximate amount that we are contractually committed to fund in accordance with contracts with general contractors.

	Planned Investments
	(in thousands)
	Discretionary		Committed
Communities under redevelopment	$	103,566	$	—
Communities under construction		—		24,975
Communities In Planning and owned		359,897		—
Communities In Planning and Under Control		117,452		—
FHA/ADA settlement capital accrual		—		10,883
Total	$	580,915	$	35,858

     In addition to the planned investments noted above, we expect to make additional investments relating to planned expenditures on recently acquired communities as well as recurring expenditures to improve and maintain our established operating communities.

     We anticipate completion of most of the communities that are currently under construction and the planned operating community improvements by the end of 2008. No assurances can be given that planned developments will actually occur. In addition, actual costs incurred could be greater or less than our current estimates.

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Funding Sources

     We anticipate financing our planned investment and operating needs primarily with cash flow from operating activities, disposition proceeds, draws on interest reserves, joint venture or fund formations and borrowings under our credit facilities and term loans. On March 20, 2008, the revolver portion of our credit facilities had a drawn balance of $445.0 million and we had $163.7 million outstanding under letters of credit, leaving available borrowing capacity on the revolving portion of our Master Credit Facility of $141.3 million. In addition, as of March 20, 2008, we had unfunded term loan commitments of $242.5 million. In addition, we expect the proceeds from dispositions to exceed our investment in new operating community acquisitions in 2008 because net proceeds from dispositions are expected to be utilized to repay debt and fund other cash needs. We therefore believe that the dispositions proceeds related to discontinued operations will have a favorable impact on our liquidity in the foreseeable future.

Litigation and Contingencies

Shareholder Litigation

     On May 30, 2007, two separate purported shareholder class-action lawsuits related to the Merger Agreement and the transactions contemplated thereby were filed naming Archstone-Smith and each of Archstone-Smith’s trustees as defendants. One of these lawsuits, Seymour Schiff v. James A. Cardwell, et al. (Case No. 2007cv1135), was filed in the United States District Court for the District of Colorado. The other, Mortimer J. Cohen v. Archstone-Smith Trust, et al. (Case No. 2007cv1060), was filed in the District Court, County of Arapahoe, Colorado. On May 31, 2007, two additional purported shareholder class-action lawsuits related to the Merger Agreement and the transactions contemplated thereby were filed in the District Court, County of Arapahoe, Colorado. The first, Howard Lasker v. R. Scot Sellers, et al. (Case No. 2007cv1073), names Archstone-Smith, each of Archstone-Smith’s trustees and one of Archstone-Smith’s senior officers as defendants. The second, Steamship Trade Association/International Longshoremen’s Association Pension Fund v. Archstone-Smith Trust, et al. (Case No. 2007cv1070), names Archstone-Smith, each of Archstone-Smith’s trustees, Tishman Speyer and Lehman Brothers as defendants. On June 11, 2007, an additional purported shareholder class-action lawsuit related to the Merger Agreement, Doris Staehr v. Archstone-Smith Trust, et al. (Case No. 2007cv1081), was filed in the District Court, County of Arapahoe, Colorado, naming Archstone-Smith and each of Archstone-Smith’s trustees as defendants. All five lawsuits allege, among other things, that Archstone-Smith’s trustees violated their fiduciary duties to Archstone-Smith’s shareholders in approving the Mergers.

     On June 21, 2007, the District Court, County of Arapahoe, Colorado entered an order consolidating the Lasker, Steamship Trade Association/International Longshoremen’s Association Pension Fund and Staehr actions into the Cohen action, under the caption In re Archstone-Smith Trust Shareholder Litigation.

     On August 17, 2007, Archstone-Smith and the other defendants entered into a memorandum of understanding with the plaintiffs regarding the settlement of both the Schiff and the consolidated action captioned In re Archstone-Smith Trust Shareholder Litigation. In connection with the settlement, Archstone-Smith agreed to make certain additional disclosures to its shareholders. Subject to the completion of certain confirmatory discovery by counsel to the plaintiffs, the memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to Archstone-Smith’s shareholders and consummation of the Merger. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement, which, if finally approved by the court, will resolve all of the claims that were or could have been brought in the actions being settled, including all claims relating to the Merger, the Merger Agreement and any disclosure made in connection therewith. In addition, in connection with the settlement, the parties contemplate that plaintiffs’ counsel will petition the court for an award of attorneys’ fees and expenses to be paid by us, up to $1.0 million. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the court will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated. The settlement will not affect the amount of the Merger consideration that the plaintiffs are entitled to receive in the Merger. Archstone-Smith and the other defendants vigorously deny all liability with respect to the facts and claims alleged in the lawsuits, and specifically deny that any modifications to the Merger Agreement or any further supplemental disclosure was required under any applicable rule, statute, regulation or law. However, to avoid the

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risk of delaying or adversely affecting the Merger and the related transactions, to minimize the expense of defending the lawsuits, and to provide additional information to Archstone-Smith shareholders at a time and in a manner that would not cause any delay of the Merger, Archstone-Smith and the Archstone-Smith Trustees agreed to the settlement described above. Archstone-Smith and the other defendants further considered it desirable that the actions be settled to avoid the substantial burden, expense, risk, inconvenience and distraction of continued litigation and to fully and finally resolve the settled claims.

Clinton Green

     The Clinton Green project is a mixed-use apartment, condominium, and retail complex in New York City on 10th Avenue between 51st and 53rd Streets. The Clinton Green Project is owned by Clinton Green Holdings, LLC (“CG Holdings”), a joint venture consisting of our wholly-owned indirect subsidiary (“ASN-CG Member”) and an affiliate of The Dermot Company (“Dermot Member”). The Clinton Green Project also includes a small condominium component that is separately owned by Clinton Green Condo, LLC (“CG Condo”), a joint venture of the ASN-CG Member and the Dermot Member. In addition to other investments in CG Holdings and CG Condo, we provided a letter of credit under our pre-Merger Credit Facility to support tax-exempt bonds issued to finance the CG Project.

     On September 21, 2007, the Dermot Member filed a lawsuit captioned Clinton Green Holdings, LLC and DPIC Clinton Green, LLC v. Archstone-Smith Operating Trust, ASN Clinton Green Member, LLC, and Ameriton Properties Incorporated, Index No. 07/603154, Supreme Court of the State of New York, County of New York. The Dermot Member alleges (a) that the Merger caused a breach of the CG Holdings Operating Agreement because the transfer violated certain covenants in the Pre-Merger Credit Facility and also breached a provision of the CG Holdings Operating Agreement prohibiting a change of control of ASN-CG Member, (b) that the Merger caused a breach of a Put-Call Agreement under which the Dermot Member is entitled to be bought out of CG Holdings by ASN-CG Member through a tax-free contribution to us for an interest that could be converted into Archstone-Smith’s publicly traded stock and (c) that the Merger caused a breach of the CG Condo Operating Agreement as a result of a change in control of Ameriton. The Dermot Member is seeking unspecified damages as well as the ability to have CG Holdings dissolved.

     Prior to the Merger, the ASN-CG Member reached agreement with the Dermot Member and the lenders under the Pre-Merger Credit Facility to waive any breach of covenants for a period of six months. The agreement involved certain immaterial payments and concessions to the Dermot Member. The Dermot Member has also agreed to an extension of the date by which the Archstone defendants must respond to the Complaint until April 30, 2008.

Tax Protection Agreements and Unitholder Claims

     Prior to the Mergers, Archstone and several related parties had entered into tax protection agreements and other contracts with various holders of the A-1 Common Units. Those tax protection and related agreements provided such Unitholders, among other things, with the right to tax protection payments under specified circumstances detailed in such agreements. Archstone has received various tax claim notices and other communications from various former Unitholders asserting that those former Unitholders are owed tax protection payments and alleging a variety of other claims. Other former Unitholders may assert similar or additional claims in the future. The tax protection agreements generally provide that, after a Unitholder sends a tax claim notice to Archstone, Archstone may reject such claims (as it has with respect to tax claim notices sent to date). Following such rejection, unless the parties are able to negotiate an amicable resolution, the parties are generally required to submit to arbitration with respect to claims for tax protection payments. It is expected that arbitrations will be commenced in the future.

     In addition, on November 30, 2007, a purported class action lawsuit related to the Mergers, captioned Steven A. Stender and Infinity Clark Street Operating v. James A. Cardwell, et al. (Case no. 2007cv2503), was filed in the United States District Court for the District of Colorado. The lawsuit names, among others, Archstone, Archstone-Smith, certain of their former trustees and officers, Lehman Brothers Holdings Inc. and Tishman Speyer Development Corporation as defendants. This action was brought by certain former Unitholders, individually and purportedly on behalf of all former holders of A-1 Common Units as of the Mergers, and alleges, among other things: (i) that Archstone and Archstone-Smith entered into enforceable property contribution agreements and

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partnership agreements with such Unitholders; (ii) that Archstone and Archstone-Smith agreed not to enter into any transactions or dispose of any interest in the property contributed by such Unitholders that would result in such Unitholders realizing a taxable gain, and agreed to provide such Unitholders with the ability to receive dividends and also to liquidate their units by receiving cash or converting them to common shares in the publicly traded Archstone-Smith; (iii) that Archstone and Archstone-Smith failed to perform their duties under the Declaration of Trust, contribution and partnership agreements, and statutory and common law partnership principles in connection with the Mergers; (iv) that such failures discharge such Unitholders’ obligations to defendants (as noted above, the former Unitholders undertook certain obligations to arbitrate with respect to claimed rights to tax protection payments); and (v) that Archstone-Smith and former trustees and officers, aided and abetted by Lehman Brothers and Tishman Speyer, violated their fiduciary duties owed to such Unitholders in connection with the Mergers. The purported class action seeks an unspecified amount of damages. Although Archstone and the Venture believe that the claims that have been asserted are without merit, there can be no assurance that the disposition of such claims will not result in material liability to Archstone.

FHA/ADA

     During the second quarter of 2005, we entered into a full and final settlement in the United States District Court for the District of Maryland with three national disability organizations and agreed to make capital improvements in a number of our communities in order to make them fully compliant with the FHA and ADA. The litigation, settled by this agreement, alleged lack of full compliance with certain design and construction requirements under the two federal statutes at 71 of our wholly-owned and joint venture communities, of which we or our affiliates still own or have an interest in 18. As part of the settlement, the three disability organizations all recognized that Archstone had no intention to build any of its communities in a manner inconsistent with the FHA or ADA.

     The amount of the capital expenditures required to remediate the communities named in the settlement was estimated at $47.2 million and was accrued as an addition to real estate during the fourth quarter of 2005. The settlement agreement approved by the court allows us to remediate each of the designated communities over a three-year period, and also provides that we are not restricted from selling any of our communities during the remediation period. We agreed to pay damages totaling $1.4 million, which included legal fees and costs incurred by the plaintiffs. We had $10.9 million of the original accrual remaining on December 31, 2007.

Water Intrusion-Florida

     We are subject to various claims filed in 2002 and 2003 in connection with moisture infiltration and resulting mold issues at certain High-Rise properties we once owned in Southeast Florida. These claims generally allege that water infiltration and resulting mold contamination resulted in the claimants having personal injuries and/or property damage. Although certain of these claims continue to be in various stages of litigation, with respect to the majority of these claims, we have either settled the claims and/or we have been dismissed from the lawsuits that had been filed. With respect to the lawsuits that have not been resolved, we continue to defend these claims in the normal course of litigation.

Water Intrusion — Westbury

     In November, 2007, we began notifying residents of Archstone Westbury that, due to water intrusion and some related mold growth, we had concluded that the appropriate course of action was to perform necessary remediation and reconstruction at the community. Further, we determined it would be necessary to terminate every tenant’s lease, effective March 31, 2008, to ensure the safety of tenants during the potentially year-long construction project. As a consequence, four complaints were filed by tenants at Westbury against entities related to us and various other entities allegedly involved in the design, construction and ownership of the Project. These cases are Andrea Sorrentino, et al. v. ASN Roosevelt Center LLC d/b/a Archstone Westbury, et al., filed on November 28, 2007, in the Supreme Court of the State of New York, County of Nassau, Case No. 07-021135, removed on February 8, 2008 to U.S. Federal District Court for the Eastern District of New York; Richardo Francois v. ASN Roosevelt Center LLC D/B/A Archstone Westbury, filed on December 7, 2007, in the Supreme Court of the State of New York, County of Nassau, Case No. 07-021967; Pasquale Marchese, et al. v. ASN Roosevelt Center LLC, et al., filed on December 7, 2007, but not yet served on us; and John DiGiovanna and Farideh DiGiovanna vs. ASN

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Roosevelt Center LLC d/b/a Archstone Westbury, filed on January 7, 2008, in the Supreme Court of the State of New York, County of Nassau, Case No. 08-000347. In addition to the foregoing cases, there are a number of threatened lawsuits. Plaintiffs in the filed cases seek monetary damages and equitable relief alleging, among other things, that water damage and mold has caused the tenants at Westbury personal harm and property damage. Although no assurances can be given with respect to the outcome of these lawsuits, we intend to vigorously defend against the claims alleged in these lawsuits.

Other

     We are a party to various other claims and routine litigation arising in the ordinary course of business. We do not believe that the results of any such claims or litigation, individually or in the aggregate, will have a material adverse effect on our business, financial position or results of operations.

Critical Accounting Policies

     We define critical accounting policies as those accounting policies that require our management to exercise their most difficult, subjective and complex judgments. Our management has discussed the development and selection of all of these critical accounting policies with our audit committee, and the audit committee has reviewed the disclosure relating to these policies. Our critical accounting policies relate principally to the following key areas:

Business Combinations

     From time to time, we are involved in transactions that are deemed to be business combinations. The purchase price for such allocations is allocated to the various components of the combination based on their respective fair value. The components typically include land, building, debt and other assumed liabilities and intangibles related to in-place leases, above and below market leases, technology, management agreements and non-compete agreements as well as other assets and liabilities. If the acquisition relates to multiple properties or entities, we must also allocate the purchase price among the acquired group. In the allocation of purchase price, management makes significant assumptions as it relates to expected future cash flows or replacement cost from which the fair value is derived. Subsequent adjustments made to the initial purchase price allocation are made within the allocation period, which typically does not exceed one year.

     Valuation of Real Estate

     Long-lived assets to be held and used are carried at cost and evaluated for impairment when events or changes in circumstances indicate such an evaluation is warranted. We also evaluate assets for potential impairment when we deem them to be held-for-sale. Valuation of real estate is considered a “critical accounting estimate” because the evaluation of impairment and the determination of fair values involve a number of management assumptions relating to future economic events that could materially affect the determination of the ultimate value, and therefore, the carrying amounts of our real estate. Furthermore, decisions regarding when a property should be classified as held-for-sale under SFAS No. 144 requires significant management judgment. There are many phases to the disposition process ranging from the initial market research to being under contract with non-refundable earnest money to closing. Deciding when management is committed to selling an asset is therefore highly subjective.

     When determining if there is an indication of impairment for assets intended to be held and used, we estimate the asset’s NOI over the anticipated holding period on an undiscounted cash flow basis and compare this amount to its carrying value. Estimating the expected NOI and holding period requires significant management judgment. If it is determined that there is an indication of impairment for assets to be held and used, or if an asset is deemed to be held-for-sale, we then determine the estimated fair value of the asset.

     The apartment industry uses capitalization rates and NOI as the primary components to measure fair value. Specifically, annual NOI for a community is divided by an estimated capitalization rate to determine the fair value of the community. Determining the appropriate capitalization rate requires significant judgment and is typically based on many factors including the prevailing rate for the market or submarket, as well as the quality and location of the properties. Further, capitalization rates can fluctuate up or down due to a variety of factors in the overall economy or within local markets. If the actual capitalization rate for a community is significantly different from our estimated rate, the impairment evaluation for an individual asset could be materially affected.

     Capital Expenditures and Depreciable Lives

     We incur costs relating to redevelopment initiatives, revenue-enhancing and expense-reducing capital expenditures, and recurring capital expenditures that are capitalized as part of our real estate. These amounts are capitalized and depreciated over estimated useful lives determined by management. We allocate the cost of newly acquired properties between net tangible and identifiable intangible assets. The primary intangible asset associated with an apartment community acquisition is the value of the existing lease agreements. When allocating cost to an acquired property, we first allocate costs to the estimated intangible value of the existing lease agreements and then to the estimated value of the land, building and fixtures assuming the property is vacant. We estimate the intangible

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value of the lease agreements by determining the lost revenue associated with a hypothetical lease-up. We depreciate the building and fixtures based on the expected useful life of the asset and amortize the intangible value of the lease agreements over the average remaining life of the existing leases.

     Determining whether expenditures meet the criteria for capitalization, the assignment of depreciable lives and determining the appropriate amounts to allocate between tangible and intangible assets for property acquisitions requires our management to exercise significant judgment and is therefore considered a “critical accounting estimate.”

     Consolidation vs. Equity Method of Accounting for Ventures

     From time to time, we make co-investments in real estate ventures with third parties and are required to determine whether to consolidate or use the equity method of accounting for the venture. FASB Interpretation No. 46R, “ Consolidation of Variable Interest Entities,” (as revised) and Emerging Issues Task Force issued EITF No. 04-5, “ Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights,” are the two primary sources of accounting guidance in this area. Appropriate application of these relatively complex rules requires substantial management judgment, which we believe, makes the choice of the appropriate accounting method for these ventures a “critical accounting estimate.”

Off Balance Sheet Arrangements

     Our real estate investments in entities that do not qualify as variable interest entities, variable interest entities where we are not the primary beneficiary and entities we do not control through majority economic interest are not consolidated and are reported as investments in unconsolidated entities. Our investments in and advances to unconsolidated entities at December 31, 2007 aggregated $297.1 million. Please refer to Note 6 to the financial statements included in this report, Investments in and Advances to Unconsolidated Entities, for additional information.

     As part of the Smith Merger, the Oakwood transaction and other unit-related contributions of property to us, we are required to indemnify certain Unitholders for any personal income tax expense resulting from the sale of properties identified in tax protection agreements. We intend to minimize or eliminate exposure to tax protection payments under the terms of the indemnification agreements by holding and using these properties through the term of the indemnification period or disposing of assets through tax-deferred exchanges. The built in gain subject to tax protection is estimated to be approximately $350 million as of December 31, 2007.

Contractual Commitments

     The following table summarizes information contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in our audited financial statements in this Annual Report regarding contractual commitments as of December 31, 2007 (amounts in millions).

	Amount of Commitment Expiration Per Period
			2009		2011		2013
	2008		and 2010		and 2012		thru 2096		Total
Scheduled debt maturities	$	331	$	2,310	$	6,948	$	4,215	$	13,804
Revolving credit facilities		—		—		60		—		60
Interest on indebtedness		978		1,768		1,521		268		4,535
Development expenditures		25		—		—		—		25
Performance bonds		67		1		—		1		69
FHA/ADA Settlement(1)		11		—		—		—		11
Lease commitments and other(2)		227		17		11		184		439
Total	$	1,639	$	4,096	$	8,540	$	4,668	$	18,943

(1) Represents the estimated capital spending associated with the FHA and ADA settlement assuming the remainder will be spent evenly over the next year. Certain communities impacted by the settlement may be

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	sold, which could impact the ultimate timing and amounts spent.
(2)	Includes letters of credit and lease commitments relating principally to ground lease payments as of December 31, 2007.

New Accounting Pronouncements

     In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. The statement does not require new fair value measurements, but is applied to the extent other accounting pronouncements require or permit fair value measurements. The statement emphasizes fair value as a market-based measurement which should be determined based on assumptions market participants would use in pricing an asset or liability. We will be required to disclose the extent to which fair value is used to measure assets and liabilities, the inputs used to develop the measurements, and the effect of certain of the measurements on earnings (or changes in net assets) for the period. SFAS No. 157 is effective for our fiscal year beginning January 1, 2008. In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP FAS 157-2”), that delays the effective date of SFAS 157’s fair value measurement requirements for nonfinancial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis. Fair value measurements identified in FSP FAS 157-2 will be effective for our fiscal year beginning January 1, 2009. The adoption of SFAS 157 will primarily impact the valuation of our financial instruments, and is not expected to materially impact our financial position and results of operations.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value on an instrument-by-instrument basis (i.e., the fair value option), which are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes in fair value must be recorded in earnings. Additionally, SFAS No. 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning retained earnings. This statement is effective for fiscal years beginning after November 15, 2007. We do not anticipate the adoption of this statement will have a material impact on our financial position, results of operations or cash flows.

     In December 2007, the FASB issued SFAS No. 141R, “ Business Combinations” (“SFAS 141R”) and SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — An Amendment of ARB No. 51” (“SFAS 160”). SFAS 141R and 160 require most identifiable assets, liabilities, noncontrolling interests, and goodwill acquired in a business combination to be recorded at “full fair value” and require noncontrolling interests (previously referred to as minority interests) to be reported as a component of equity, which changes the accounting for transactions with noncontrolling interest holders. The provisions of SFAS 141R and 160 are effective for our fiscal year beginning January 1, 2009. SFAS 141R will be applied to business combinations occurring after the effective date and SFAS 160 will be applied prospectively to all noncontrolling interests, including any that arose before the effective date. We are currently assessing what impact the adoption of SFAS 141R and 160 will have on our financial position and results of operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Stock Investments

     From time to time we make public and private investments in equity securities. The publicly traded equity securities are classified as “available for sale securities” and carried at fair value, with unrealized gains and losses reported as a separate component of Unitholders’ equity. The private investments, for which we lack the ability to exercise significant influence, are accounted for at cost. Declines in the value of public and private investments that our management determines are other than temporary, are recorded as a provision for possible loss on investments. Our evaluation of the carrying value of these investments is primarily based upon a regular review of market valuations (if available), each company’s operating performance and assumptions underlying cash flow forecasts. In addition, our management considers events and circumstances that may signal the impairment of an investment.

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Interest Rate Hedging Activities

     We are exposed to the impact of interest rate changes and will occasionally utilize interest rate swaps and interest rate caps as hedges with the objective of lowering our overall borrowing costs. Prior to the Merger, these derivatives were designated as either cash flow or fair value hedges. Subsequent to the Merger we have entered into interest rate swaps and caps to fix the rates associated with various debt instruments. These derivatives were not designated as hedges for accounting purposes and the resulting gains and losses are recorded as other non-operating income or expense. We do not use these derivatives for trading or other speculative purposes. Further, as a matter of policy, we only enter into contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, we have not, nor do we expect to sustain a material realized loss from the use of these hedging instruments. In 2007, we recorded an unrealized loss of $131.0 million on interest rate swaps established in connection with the Merger that were not designated as hedges for accounting purposes. This loss is included in other non-operating income (loss) in our Consolidated Statement of Operations.

     During the period January 1, 2007 through October 4, 2007 and years ended December 31, 2006 and 2005 the Predecessor recorded an increase/(decrease) to interest expense of $168,000, $372,000 and $(174,000), respectively, for hedge ineffectiveness caused by a difference between the interest rate index on a portion of our outstanding variable rate debt and the underlying index of the associated interest rate swap. We pursue hedging strategies that we expect will result in the lowest overall borrowing costs.

     To determine the fair values of derivative and other financial instruments, we use a variety of methods and assumptions that are based on market value conditions and risks existing at each balance sheet date. These methods and assumptions include standard market conventions and techniques such as discounted cash flow analysis, option pricing models, replacement cost and termination cost. All methods of assessing fair value result in a general approximation of value, and therefore, are not necessarily indicative of the actual amounts that we could realize upon disposition.

     The following table summarizes the notional amount, carrying value and estimated fair value of our derivative financial instruments used to hedge interest rates, as of December 31, 2007 (dollar amounts in thousands). The notional amount represents the aggregate amount of a particular security that is currently hedged at one time, but does not represent exposure to credit, interest rate or market risks.

					Carrying and
	Notional		Maturity		Estimated
	Amount		Date Range		Fair Value
Cash flow hedges:
Interest rate caps	$	3,033,498		2008 - 2011	$	3,326
Interest rate swaps		4,001,155		2010 - 2017		(155,262	)
Total cash flow hedges	$	7,034,653		2008 - 2017	$	(151,936	)
Fair value hedges:
Total rate of return swaps		49,600		2011		166
Total hedges	$	7,084,253			$	(151,770	)

Foreign Currency Hedging Activities

     We are exposed to foreign-exchange related variability and earnings volatility on our foreign investments. There are no forward contracts outstanding at December 31, 2007.

Energy Contract Hedging Activities

     We are exposed to price risk associated with the volatility of natural gas, fuel oil and electricity rates. During 2007 and 2006, we entered into contracts with several of our suppliers to fix our payments on set quantities of natural gas, fuel oil and electricity. If the contract meets the criteria of a derivative, we designate these contracts as cash flow hedges of the overall changes in floating-rate payments made on our energy purchases. As of December 31, 2007, none of the contracts met the definition of a derivative as they are considered normal purchases and sales.

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Equity Securities Hedging Activities

     We were exposed to price risk associated with changes in the fair value of certain equity securities. During 2006, we entered into forward sale agreements with an aggregate notional amount, which represents the fair value of the underlying marketable securities, of approximately $6.6 million and an aggregate fair value of the forward sale agreements of approximately ($0.3) million, to protect against a reduction in the fair value of these securities. We designated this forward sale as a fair value hedge. There were no forward sale agreements outstanding as of December 31, 2007.

Interest Rate Sensitive Liabilities

     The table below provides information about our liabilities that are sensitive to changes in interest rates as of December 31, 2007. As the table incorporates only those exposures that existed as of December 31, 2007, it does not consider those exposures or positions that could arise after that date.

     Moreover, because there were no firm commitments to actually sell these instruments at fair value as of December 31, 2007, the information presented herein is an estimate and has limited predictive value. As a result, our ultimate realized gain or loss, if any, will depend on the exposures that arise during future periods, hedging strategies, prevailing interest rates and other market factors existing at the time. The debt classification and interest rates shown below give effect to other fees or expenses, where applicable (in thousands):

																			Total			Estimated
	2008			2009			2010			2011			2012			Thereafter			Balance			Fair Value(1)
Interest rate sensitive liabilities:
Revolving credit facilities	$	—		$	—		$	—		$	60,000		$	—		$	—		$	60,000		$	58,292
Average nominal interest rate(2)		—			—			—			8.1	%		—			—			8.1	%
Term Loans:
Fixed rate	$	—		$	—		$	—		$	230		$	—		$	—		$	230			230
Average nominal interest rate(2)		—			—			—			4.0	%		—			—			4.0	%
Variable rate	$	327,592		$	350,000		$	300,000		$	600,000		$	3,014,000		$	—		$	4,591,592		$	4,460,880
Average nominal interest rate(2)		8.3	%		8.3	%		8.3	%		8.3	%		8.5	%		—			8.4	%
Property Mortgages payable:
Fixed rate debt	$	—		$	—		$	—		$	—		$	2,302,961		$	3,482,335		$	5,785,296		$	5,785,840
Average nominal interest rate(2)		—			—			—			—			6.2	%		6.1	%		6.2	%
Variable rate debt	$	3,608		$	1,520,558		$	139,672		$	4,577		$	1,026,118		$	732,819		$	3,427,352		$	3,427,352
Average nominal interest rate(2)		3.5	%		6.8	%		8.1	%		3.5	%		6.3	%		5.9	%		6.5	%

(1)

The estimated fair value for each of the liabilities listed was calculated by discounting the actual principal payment stream at prevailing interest rates (obtained from third party financial institutions) currently available on debt instruments with similar terms and features.

(2)

Reflects the weighted average nominal interest rate on the liabilities outstanding during each period, giving effect to principal payments and final maturities during each period, if any. The nominal rates for variable rate mortgages payable have been held constant during each period presented based on the actual variable rates as of December 31, 2007. The weighted average effective interest rate on the revolving credit facilities, term loans and property mortgages payable was 28.3%, 8.4% and 6.8%, respectively, as of December 31, 2007. The effective interest rate on the revolving credit facility is high due primarily to the fees on the unfunded commitment. The higher the average outstanding drawn balance, the lower the effective interest. The amount drawn as of December 31, 2007 was $60 million.

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     The lenders under our Master Credit Facility and our mezzanine loans provided by the Fannie Mae Mezzanine Lenders and the Freddie Mac Mezzanine Lenders have the option to syndicate or sell the outstanding principal amount under such agreements to other investors at a discount and may revise the interest rate spread or discount or increase fees to a level necessary to facilitate syndication based on current market conditions at the syndication date. As of December 31, 2007, $5.6 billion in outstanding principal indebtedness under these loans was subject to syndication and the increased borrowing costs described above. The cost associated with any incremental interest or additional fees, as well as any original issue discount realized, is required to be born by the Company. These same lenders have committed to lend us up to $148.8 million to fund such costs. As of March 20, 2008, we had approximately $73.0 million set aside in restricted cash to fund syndication discounts. As of March 20, 2008, $43.0 million of principal had been syndicated at a discount of 3%.

Item 8. Financial Statements and Supplementary Data

     Our Balance Sheets as of December 31, 2007 and 2006, and our Statements of Operations, Unitholders’ Equity, other Common Unitholders’ Interest and Comprehensive Income (Loss) and Cash Flows for each of the years in the three-year period ended December 31, 2007, Schedule III — Real Estate and Accumulated Depreciation and Schedule IV – Mortgage Loans on Real Estate, together with the reports of KPMG LLP, Independent Registered Public Accounting Firm, are included under Item 15 of this Annual Report and are incorporated herein by reference. Unaudited selected quarterly financial data is presented in Note 13 of our audited financial statements in this Annual Report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

     Not applicable.

Item 9A. Controls and Procedures

     An evaluation was carried out under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d — 15(e) under the Securities Exchange Act of 1934, as amended). Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were, to the best of their knowledge, effective as of December 31, 2007, to ensure that information required to be disclosed in reports that are filed or submitted under the Securities Exchange Act of 1934, as amended, are recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Management’s Report on Internal Control Over Financial Reporting

     Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) or 15d – 15(f) under the Securities Exchange Act of 1934, as amended). Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2007. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. Our management has concluded that, as of December 31, 2007, our internal control over financial reporting was effective based on these criteria.

     There was no change to our internal control over financial reporting during the fourth quarter ended December 31, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

     Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of their inherent

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limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Archstone have been detected.

     This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

/s/ R. Scot Sellers

R. Scot Sellers

Chief Executive Officer (principal executive officer)

/s/ Charles E. Mueller, Jr.

Charles E. Mueller, Jr.

Chief Financial Officer (principal financial officer); Chief Operating Officer effective January 1, 2008

Item 9B. Other Information

     None.

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Part III

Item 10. Directors, Executive Officers and Corporate Governance

Trustees and Executive Officers

     Set forth below are the Trustees of Series I Trust, which is our sole Trustee, as of December 31, 2007. As of the date hereof Mr. David Augarten is the sole Trustee of Series I Trust. Mr. Augarten shall remain in office until the first annual meeting of the shareholders of the Series I Trust and until pursuant to the Declaration of Trust, as amended, of Series I Trust, his successor is duly elected and qualifies.

				Trustee
Trustee	Age		Business Experience	Since
David Augarten		52	Mr. Augarten has served as a trustee of Series I Trust since October 2007 and serves as the sole member of the Series I Trust Audit Committee. Mr. Augarten also directs Tishman Speyer’s global portfolio management and investor relations activities. Mr. Augarten is a member of the Management, Investment, and Compensation committees of Tishman Speyer. In 1984, Mr. Augarten joined Tishman Speyer as the director of taxes. While at Tishman Speyer, he has also worked in the acquisitions and development areas prior to serving as treasurer from 1993 to 1996 and chief financial officer from 1996 to 2000.		2007
Jerry I. Speyer		67	Jerry I. Speyer served as a trustee of Series I Trust from October 2007 until March of 2008. Mr. Speyer is one of the two founding partners of Tishman Speyer and served as president and CEO since its formation in 1978, prior to assuming the role of CEO and Chairman in September 2007. Mr. Speyer also serves as chairman of the Board of Directors of the Federal Reserve Bank of New York; chairman of the Museum of Modern Art; vice chairman of New York Presbyterian Hospital; chairman emeritus of Columbia University; chairman emeritus of the Real Estate Board of New York; and chair emeritus of the Venture for New York City. Mr. Speyer also serves on the Boards of Siemens AG, Yankee Global Enterprises and Carnegie Hall.
Robert J. Speyer		38	Robert J. Speyer served as a trustee of Series I Trust from October 2007 until March of 2008. Mr. Speyer was named president of Tishman Speyer in September 2007. Since he joined Tishman Speyer in 1996, he has worked in senior positions in each of its major spheres of activity, including acquisitions, development and leasing. He is a member of the Board of Visitors of Columbia College (emeritus), the Board of Trustees of the New York City Police Foundation, and the Executive Committee of the Board of Governors of the Real Estate Board of New York.

Executive Officers:

Executive
Officer	Age		Business Experience
R. Scot Sellers, Chief Executive Officer		51	Chairman and Chief Executive Officer of Archstone from June 1997 to July 1998 and since December 1998, with overall responsibility for Archstone’s strategic direction, investments and operations; Co-Chairman and Chief Investment Officer of Archstone from July 1998 to December 1998; other executive management positions within Archstone and its predecessors and affiliates since 1993; Member, Executive Committee of the Board of Governors and, during 2006, Chairman, National Association of Real Estate Investment Trusts; Member, Executive Committee of the Board of Directors of the National Multi Housing Council; Director, Christian International Scholarship Foundation; Director of CEO Forum; and Director, Alliance for Choice in Education.
J. Lindsay Freeman, Chief Operating Officer		62	Chief Operating Officer of Archstone since September 2002, with responsibility for managing all investment and operating activities for Archstone; President – East Division of Archstone, from October 2001 to September 2002, with responsibility for all investments and operations of the East Division; other executive management positions with Archstone and its predecessors and affiliates since May 1994. Mr. Freeman retired on December 31, 2007.
Charles E. Mueller, Jr., Chief Financial Officer		44	Chief Financial Officer of Archstone since December 1998, with responsibility for the planning and execution of Archstone’s financial strategy, balance sheet management and corporate operations, and oversight of the company’s accounting/financial reporting, corporate finance, investor relations, corporate and property tax, due diligence, risk management, human resources, national marketing and ancillary services functions; various other management positions with Archstone and its predecessors and affiliates since April 1994; Member, Executive Committee of the Board of Directors of the National Multi Housing Council Executive Committee; Director, Colorado UpLIFT; Director, Denver K-Life. Mr. Mueller assumed the position of Chief Operating Officer of Archstone as of January 1, 2008.
Alfred G. Neely, Chief Development Officer		62	President, Charles E. Smith Residential Division of Archstone, since February 2005; Chief Development Officer of Archstone since April 2003, with responsibility for the oversight and direction of all Archstone residential development projects; Executive Vice President of Archstone, and, prior to November 2001, Charles E. Smith Residential Realty, Inc. (a predecessor of Archstone-Smith) from April 1989 to April 2003 with responsibility for oversight and direction of High-Rise and garden residential development projects.
Caroline Brower, General Counsel and Secretary		59	General Counsel and Secretary of Archstone since September 1999, with responsibility for legal and corporate governance; from September 1998 to September 1999, President of Ameriton; prior thereto, Ms. Brower was a partner of Mayer, Brown & Platt (now Mayer, Brown, Rowe & Maw, LLP) where she practiced transaction and real estate law. Ms. Brower retired on December 31, 2007.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Exchange Act requires our Trustees, executive officers and prior to the Merger, beneficial owners of more than ten percent of the outstanding A-1 Common Units and, following the Merger, beneficial owners of more than ten percent of the outstanding Series O Preferred Units, to file reports of ownership

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and changes in ownership of the Common Units or Series O Preferred Units, as applicable, with the SEC and to send copies of those reports to us. Based solely on a review of those reports and amendments thereto furnished to us and on representations made to us by our trustee and executive officers, we believe that no such person failed to file any such report or report any transaction on a timely basis during 2007, except that, after the consummation of the Merger, each of Messrs. Sellers, Mueller, Freeman, and Neely and Ms. Brower, as the executive officers of the Company, and Series I Trust as our sole trustee, failed to timely file an initial statement of beneficial ownership of securities on Form 3. These forms have now been filed.

Code of Ethics

     Archstone-Smith adopted a Code of Business Conduct and Ethics which remains applicable to our officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller. To the extent we are subject to the requirements of Item 406 of Regulation S-K, a copy of our Code of Business Conduct and Ethics is posted on our website, www.archstonesmith.com. Any amendments to or waivers of our Code of Business Conduct and Ethics that apply to the principal executive officer, principal financial officer and principal accounting officer or controller and that relate to any matter enumerated in Item 406(b) of Regulation S-K, will be disclosed on our website.

Nomination Procedures

     Series I Trust, as the holder of 100% of our A–2 Common Units, has the sole authority to elect our trustee.

Audit Committee

     The Board of Trustees of Series I Trust has an Audit Committee, which as of December 31, 2007 is comprised of its sole member, David Augarten. Mr. Augarten is not an “audit committee financial expert.” Because, Series I Trust is not a listed company, the Common Units are privately held by affiliates of Series I Trust, and, as of January 1, 2008, our reporting obligations were automatically suspended, the Board determined that it was not necessary for the Audit Committee to include an “audit committee financial expert”.

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Item 11. Executive Compensation

Compensation of Trustees

Trustees Fees

     Prior to the consummation of the Archstone-Smith Merger on October 5, 2007, our Trustee was Archstone-Smith, which received no compensation for acting as our Trustee. The Outside Trustees received an annual retainer of $25,000, prorated for service of less than one year, plus meeting fees as follows: Outside Trustees received $1,500 for each Archstone-Smith Board meeting attended and $1,000 for each committee meeting attended. In addition, each Outside Trustee was awarded 2,000 RSUs on May16, 2007. The Chairman of any committee of the Archstone-Smith Board also received $7,500 per year per committee chaired. The Lead Independent Trustee of Archstone-Smith was paid an annual fee of $7,500. Retainers and meeting fees were paid quarterly. The Archstone-Smith Trustees were reimbursed for commercial airfare (or, if private air transportation is used, the cost such Trustee would have incurred for a commercial flight) and other travel expenses incurred in connection with attendance at Board meetings. In connection with the Archstone-Smith Merger, each outstanding share option held by the Trustees became fully vested and exercisable and was exchanged for a cash payment equal to the product of the number of shares subject to the option and the excess, if any, of $60.75 cash consideration per share, referred to as the “common share merger consideration,” over the exercise price of the option. Further, each RSU, DEU and phantom common share held by the Trustees became fully vested and was exchanged for the common share merger consideration.

     On October 5, 2007, our Trustee, Archstone-Smith, merged with and into Series I Trust. Series I Trust does not receive any compensation for acting as our Trustee. The Trustee of Series I Trust, Mr. David Augarten, does not receive any compensation for his service as a Trustee.

Outside Trustees Plan

     The purpose of the Outside Trustees Plan was to enable the Outside Trustees to increase their ownership in Archstone-Smith and thereby increase the alignment of their interests with those of the other shareholders. The Outside Trustees Plan provided for grants of RSUs, which converted into Common Shares on a one-to-one basis when they vested, provided the Outside Trustee had not opted to defer settlement of such units. RSUs awarded prior to 2006 were entitled to accrue DEUs, which in turn accrued further DEUs. RSUs granted in 2006 and later no longer were entitled to earn DEUs but instead received a quarterly cash payment equal in amount to the dividend paid on the Common Shares. Such payments were payable on RSUs granted in 2006 or later which were held as of each dividend record date for the Common Shares. Additionally, the Outside Trustees continued to earn DEUs on any outstanding option grants which were made between 1999 and 2001, and DEUs continued to be credited on these DEUs. Our Secretary administered the Outside Trustees Plan.

     On the date of each annual meeting of the Archstone-Smith shareholders, each Outside Trustee was granted 2,000 RSUs. A Trustee elected other than at an annual meeting was granted a pro rata award for the period of time between the date of election and the anticipated date of the next annual meeting. The RSUs vested at the rate of 25% per year for grants made prior to July 2002 and at 33.33% per year for grants made after June 2002, with vesting beginning on the first anniversary date of the grant.

     DEUs were earned on options granted between 1999 and 2001, RSUs and DEUs, and were determined as soon as practicable after each January 1. For options, the number of new DEUs earned was determined by multiplying the average of the number of options held as of each dividend record date in the prior year by the difference between the average annual dividend yield on Common Shares for the prior year and the average annual dividend yield for the Standard & Poor’s 500 Stock Index for the prior year. For RSUs, the number of new DEUs earned was determined by multiplying the average of the number of RSUs held as of each dividend record date in the prior year by the average annual dividend yield on Common Shares for the prior year. The number of DEUs earned on previously earned DEUs was determined by multiplying the number of DEUs held as of December 31 of the prior year by the annual dividend yield on Common Shares for the prior year. The DEUs associated with any given award vested in accordance with the vesting schedule applicable to that award.

     Settlement of DEUs earned by Outside Trustees could be triggered by exercise of the associated options, settlement of the associated RSUs, or cessation of service as a Trustee. Upon settlement, DEUs converted to

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Common Shares on a one-to-one basis. The settlement of RSU awards and DEU awards under the Outside Trustees Plan could be deferred pursuant to the Deferred Compensation Plan, which is described below. The Outside Trustees Plan was terminated as of the effective date of the Merger. As discussed above under “Trustees Fees,” all outstanding share options, RSUs, and DEUs awarded pursuant to the Outside Trustees Plan became fully vested in connection with the Merger and were exchanged for cash pursuant to the merger agreement, as set forth in the “Trustee Compensation Summary” below.

Deferred Compensation Plan

     Under the Deferred Compensation Plan, described in more detail later in this section, Outside Trustees could elect to defer payment of their eligible cash fees and settlement of their RSUs and DEUs. Prior to 2006, an Outside Trustee could elect to defer eligible cash fees into phantom Common Shares. If fees were deferred into phantom Common Shares they were entitled to earn additional phantom Common Shares following each dividend payable date for Common Shares. Such additional phantom Common Shares were determined by multiplying the number of phantom Common Shares held as of the dividend record date by the amount of the dividend paid on a Common Share, and dividing by the fair market value of a share on the dividend payable date. Beginning in 2006, Outside Trustees could no longer defer fees earned in 2006 or later in the form of phantom Common Shares, but could defer such fees into another investment under the Deferred Compensation Plan, including our stock. Any phantom Common Shares remaining on account continued to earn additional phantom Common Shares, as described above, until they were settled. Phantom Common Shares were settled based upon the date elected by the Outside Trustee in accordance with the Deferred Compensation Plan. Upon settlement, phantom Common Shares converted to Common Shares on a one-to-one basis. Shares available under the Outside Trustees Plan were used to satisfy this obligation. The Deferred Compensation Plan was terminated in connection with the Merger, and all outstanding RSUs, DEUs and phantom Common Shares deferred pursuant to the Deferred Compensation Plan were exchanged for cash pursuant to the merger agreement, as set forth in the “Trustee Compensation Summary” below.

Trustee Compensation Summary

     Total compensation received by the Archstone-Smith Outside Trustees for the period January 1, 2007 through consummation of the Merger on October 5, 2007 is set forth below:

							All Other
	Fees Earned or		Stock Awards		Option		Compensation
Trustee(1)	Paid in Cash		($)(2)		Awards ($)		($)(3)		Total ($)
Mr. Cardwell(4)	$	30,840	$	41,840	$	—	$	—	$	72,680
Mr. Demeritt	$	71,090	$	32,660	$	—	$	201,386	$	305,136
Mr. Gerardi	$	63,590	$	56,576	$	—	$	255,472	$	375,638
Ms. Gillis	$	75,317	$	56,576	$	—	$	685,660	$	817,553
Mr. Holmes	$	70,067	$	56,576	$	—	$	794,796	$	921,439
Mr. Kogod(5)	$	—	$	—	$	—	$	—	$	—
Mr. Polk	$	79,590	$	56,576	$	—	$	892,110	$	1,028,276
Mr. Richman(4)	$	34,590	$	41,840	$	—	$	1,478,482	$	1,554,912
Mr. Schweitzer	$	89,549	$	56,576	$	—	$	1,132,608	$	1,278,733
Mr. Smith(6)	$	—	$	—	$	189,900	$	2,382,658	$	2,572,558

(1)	Mr. Sellers did not receive additional compensation for his service as a Trustee. For information on Mr. Sellers’ compensation, see the “Summary Compensation Table” below.
(2)	Each Outside Trustee was awarded 2,000 RSUs on May 16, 2007, the date of the Archstone-Smith annual shareholder meeting. The value shown above reflects the amount expensed during fiscal year 2007 for grants made to Outside Trustees in 2007 and prior years. The grant date fair value of the May 16, 2007 grant of 2,000 RSUs to each Outside Trustee, computed in accordance with FAS 123R, was $106,100 for each RSU award. All outstanding RSUs were redeemed at $60.75 per RSU in connection with the Merger, and the value of the redemptions is included in the column for “All Other Compensation”.
(3)	Includes a payment of $12,000 to Messrs. Schweitzer and Polk for their service on the Board of Directors of Ameriton. Includes amounts paid in connection with the Merger upon redemption of outstanding RSUs, DEUs, options and phantom shares as follows: Mr. Demeritt $201,386; Mr. Gerardi $255,472; Ms. Gillis $685,660; Mr. Holmes $794,796; Mr. Polk $880,110; Mr. Richman $1,478,482; Mr. Schweitzer $1,120,608;

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	and Mr. Smith $2,382,658. Such phantom shares were earned on existing phantom shares on each dividend payable date in 2007, and originally stemmed from the deferral of trustee fees. Because each of these phantom shares was redeemed at $60.75 per phantom share in connection with the Merger, the amounts under this column include the actual amounts paid to the Outside Trustees in connection with the Merger rather than the expensed amounts.
(4)	Retired on May 16, 2007.
(5)	Mr. Kogod was an employee of ours prior to October 5, 2007. Pursuant to the Shareholders’ Agreement (see “Certain Relationships and Transactions — Shareholders’ Agreement”), Mr. Kogod received a salary of $80,769 for his services in 2007.
(6)	Mr. Smith was an employee of Archstone-Smith prior to October 5, 2007. Pursuant to the Shareholders’ Agreement (see “Certain Relationships and Transactions — Shareholders’ Agreement”), Mr. Smith received a salary of $250,068 for his services in 2007. In addition, pursuant to the terms of the Shareholders’ Agreement, Mr. Smith was awarded 100,000 options on February 23, 2007. All of Mr. Smith’s outstanding options vested and were redeemed in connection with the Merger, which cash payment is included under “All Other Compensation.” The value shown above under “Option Awards” reflects the amount expensed during fiscal year 2007 for options. The grant date fair value of each of the 2007 option awards, calculated under the Black-Scholes-Merton model, included in the “Options Awards” column is set forth below:

Grant Date	Options Granted		Fair Value
February 23, 2007		100,000	$	759,600

Compensation Discussion and Analysis

Introduction

     As discussed earlier in this report, we and Archstone-Smith completed the Mergers on October 4 and 5, 2007. The following discussion is set forth in three sections. The first section will provide information relating to the historical practices of Archstone-Smith prior to October 5, 2007. The second section will outline what compensation arrangements were made in connection with the Merger. Finally, the third section will discuss compensation arrangements in effect after October 5, 2007.

     When we refer in this discussion to the “Compensation Committee”, we are referring to the Management Development and Executive Compensation Committee of the Archstone-Smith Board in office prior to completion of the Mergers. After October 5, 2007, “Series I Trust Compensation Committee” refers to the Compensation Committe of Series I Trust. The following table lists the members of the Compensation Committee before the 2007 annual meeting, after the 2007 annual meeting and after the Merger:

Before May 16, 2007 Annual Meeting	After May 16, 2007 Annual Meeting	After October 5, 2007 Merger, members of Series I Trust Compensation Committee
John C. Schweitzer, Chairman	John C. Schweitzer, Chairman	David Augarten
James H. Polk, III	Stephen R. Demeritt
John M. Richman	Ned S. Holmes
	James H. Polk, III

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Compensation Discussion and Analysis Prior to October 5, 2007 Merger

Compensation Policy Objectives and Process

Philosophy

     Prior to the Merger, the Compensation Committee was committed to a compensation philosophy that placed significant emphasis on rewarding our Named Executive Officers on the basis of our success in attaining corporate objectives and/or those officers’ success in attaining individual financial and qualitative performance objectives that advance the overall success of the company. The committee’s compensation philosophy was intended to encourage the Named Executive Officers to aggressively pursue company goals in order to generate better long term returns for Archstone-Smith’s shareholders relative to our peer group of multifamily real estate investment trusts and to reward, and therefore encourage, decisions that caused the company to achieve better overall levels of shareholder returns relative to our peer group. Individual performance goals were different for each of our executive officers, based on their varying job responsibilities. Some of the goals involved standard business objectives that were in place year over year, while others were non-routine-items specific to the company’s business plan for that year. The goals were determined at the beginning of each calendar year by the executive and the Compensation Committee.

     The pre-Merger Archstone-Smith compensation program was designed to:

• attract, reward and retain highly qualified employees.

• align shareholder and employee interests.

• reward long term career contributions to Archstone-Smith.

• emphasize the variable portion of total compensation (cash and equity) as an individual’s level of responsibility increases.

• provide fully competitive compensation opportunities consistent with performance.

• encourage teamwork.

     The Compensation Committee last conducted a review of its compensation objectives and the levels of compensation for Messrs. Sellers, Freeman and Mueller and Ms. Brower in October 2005, and based on that review, established base salary levels and performance metrics and levels of achievement for incentive awards for Messrs. Sellers, Freeman and Ms. Brower for 2006 through 2008 and Mr. Mueller for 2006, with Mr. Mueller’s 2007 and 2008 levels established in mid-2006. While the performance metrics and levels of achievement for incentive awards were established by the Compensation Committee at such time, the actual grants of RSUs and cash bonus awards based on such metrics were not made by the Compensation Committee until the beginning of each year based on such employee’s and Archstone-Smith’s performance for the prior year. The Compensation Committee chose a three year period in order to focus senior management on building long term value rather than achieving short term results, such as quarterly results, and secondarily, to minimize the frequency with which the Compensation Committee would need to conduct a thorough evaluation and benchmarking analysis. The Compensation Committee believed that three years was a reasonably long period of time to allow measurement of progress without focusing on short term metrics. The Compensation Committee retained FPL Associates to assist it in the review of this three year compensation program. Although Mr. Sellers participated in a majority of the meetings of the Compensation Committee and provided the committee with his thoughts on compensation matters, the final design for the three year compensation program and annual compensation decisions were made solely by the Compensation Committee.

Benchmarking

     As part of its review of the compensation package for Messrs. Sellers, Freeman and Mueller and Ms. Brower, the Compensation Committee examined salaries and incentive compensation paid to equivalent officers at two peer groups. The first peer group consisted of the following eight largest publicly-traded multifamily real estate investment trusts, based on total market capitalization as of June 30, 2005: Apartment Investment and Management Company, Avalon Bay Communities, Inc., BRE Properties, Inc., Camden Property Trust, Equity Residential, Essex Property Trust, Inc., Home Properties, Inc. and United Dominion Realty Trust, Inc. The second peer group consisted of ten real estate companies with total market capitalization as of June 30, 2005 similar to us, and included real estate investment companies that invested in both multifamily and non-multifamily assets. The size-based peer

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group companies were: Apartment Investment and Management Company, Boston Properties, Inc., Developers Diversified Realty Corporation, Equity Residential, Hilton Hotels Corporation, Marriott International, Inc., Kimco Realty Corporation, The Mills Corporation, ProLogis, and Public Storage, Inc. Since most of the companies in the asset-based peer group had a significantly smaller total capitalization than we had prior to the Merger, the Compensation Committee placed a larger emphasis on the compensation paid to equivalent officers at companies in the size-based peer group, where we were in the 66^th percentile.

     The combination of base salary and annual cash bonus, and the combination of base salary, annual target level cash bonus and annual target level incentive stock award, were each designed to deliver a base level of total annual cash compensation slightly higher than the median for companies in the size-based peer group, consistent with our size being slightly larger than the median. To the extent that we outperformed the NAREIT Apartment Index, the cash bonus and incentive stock award portions of compensation for certain of the Named Executive Officers increased as described in more detail below and could result in overall compensation being higher than the median for the size-based peer group. If we underperformed the NAREIT Apartment Index, then the annual incentive stock award would be at less than the target amount. The Compensation Committee believed that this approach to compensation fostered achievement by the executives of the company’s objectives.

     Based upon this benchmarking analysis, Mr. Sellers’ base salary and incentive awards at each level of achievement are considerably higher than the amounts for the other Named Executive Officers. As with all other Named Executive Officers included in the benchmarking analysis, the base salary and annual cash bonus amounts set by the Compensation Committee for Mr. Sellers were designed to deliver a base level of total annual compensation slightly higher than the median for companies in the size-based peer group. The Compensation Committee determined that Mr. Sellers’ total compensation was appropriate in light of his central role within the company, including his overall responsibility for developing the company’s strategy, implementation of that strategy and the ultimate performance of the company under his leadership.

Compensation Committee Discretion

     Awards earned under the program could be further adjusted up or down at the discretion of the Compensation Committee based on the quality of the results, extraordinary circumstances, and other subjective factors that the Compensation Committee deemed relevant.

     As discussed below, Mr. Sellers’ cash bonus could be reduced by the Compensation Committee if it determined that he had not fully met his performance goals. A portion of the performance units that Mr. Sellers could earn under the special long term incentive program discussed below were discretionary. Because a portion of the cash bonus for Messrs. Freeman and Mueller and Ms. Brower, and a portion of the annual stock award for Messrs. Sellers, Freeman and Mueller and Ms. Brower were based on achievement of individually-established goals, the Compensation Committee also exercised some discretion in determining the extent to which the specific goals for an officer had been attained or exceeded and, consequently, the determination of the portion of the cash bonus and annual stock award to be made.

Mr. Neely’s Compensation

     Mr. Neely is principally responsible for overseeing the company’s nationwide development activities. His compensation was based upon the extent to which we have the opportunity to evaluate appropriate development opportunities available in our markets, we obtain approvals on those land parcels the company was working to entitle, and we were successful in building high quality properties on time and on budget given variations in the market. Consequently, his compensation program was designed to foster and reward achievement in these areas, although the same objectives regarding compensation and the compensation policies described above are applied by management and the Compensation Committee to Mr. Neely’s compensation.

     Mr. Neely’s base salary and his target cash bonus and target annual RSU award were established annually. No benchmarking was performed with respect to Mr. Neely’s compensation during the past five years. The Compensation Committee believed that an annual evaluation was appropriate because the development goals for the company, and all of the employees reporting to Mr. Neely on those projects, were determined and reviewed on an annual basis. Each year Messrs. Sellers and Freeman reviewed Mr. Neely’s performance of the goals and objectives established for him for the year by Messrs. Sellers and Freeman with respect to the company’s development activities, as well as with respect to personnel development within these areas of the company. Also taken into consideration were events and circumstances that arose during the year, but which had not been anticipated in determining the goals and objectives for the year. Based on this evaluation, Messrs. Sellers and Freeman made a

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recommendation to the Compensation Committee with respect to the base salary to be paid Mr. Neely for the following year and the target bonus and target RSU award for the following year, as well as the actual cash bonus and RSU award to be made for the previous year. The actual cash bonus and RSU award granted to Mr. Neely are included in the Summary Compensation Table or the notes to the Summary Compensation Table, as appropriate.

Elements of Compensation

     Prior to the Merger, the key elements of our executive compensation program consisted of base salary, annual cash and stock incentives and long term incentives. Other forms of potential compensation existing prior to the Merger, including potential change in control/post-employment payments, are discussed in the compensation tables.

Base Salary

     Pre-Merger base salaries were based on an overall assessment of the executive’s responsibilities and contribution to our success. Base salaries were set at a level which, together with the target level annual cash bonus, was sufficient to provide the officer with a competitive level of basic income. As discussed above, the base salary and annual cash bonus were designed to deliver a base level of total annual compensation slightly higher than the median for companies in the size-based peer group. The base salaries established by the Compensation Committee through 2008 were set in 2005 and were based on a number of factors, including: (i) Archstone-Smith’s overall performance and the executive’s responsibilities and contribution to the company’s success, (ii) a comparison of base salaries and cash bonuses of executives who perform similar functions at REITs in the size-based peer group, and (iii) a determination that a base salary and cash bonus at a level slightly higher than the median for the size-based peer group was appropriate for each such executive given our slightly larger size compared to the peer group or a determination that a different level was appropriate based on other factors unique to Archstone-Smith.

Cash Bonus

     Prior to the Merger, our Named Executive Officers were eligible for an annual cash bonus based on their individual and/or our performance. The combination of base salary and cash bonus was paid to provide rewards to these officers for achievement of specific personal and corporate goals during the relevant period of measurement and were not tied to future retention of a given officer, beyond a given calendar year. The description of the factors considered in connection with a determination of base salary also applied to the determination of the cash bonus level.

Long Term Incentive Awards

     Prior to the Merger, our Named Executive Officers were eligible for an annual stock award under Archstone-Smith’s LTIP. These types of awards provide the Named Executive Officers with incentives for achievement by linking these officers to shareholders’ goals through stock ownership and encouraging officer retention through the three year vesting. The incentive stock awards included options coupled with an annual award of DEUs, options without a DEU component, RSUs with a DEU component, and RSUs with a quarterly cash payment instead of a DEU component. From January 1, 2002 through October 5, 2007, Messrs. Sellers, Freeman and Mueller and, from January 1, 2005 through October 5, 2007, Ms. Brower, were also eligible for special long term incentive awards in the form of performance units, which, if earned, were convertible on a one-for-one basis in Archstone-Smith common shares.

Historical Criteria for Awards

     A significant portion of the total compensation for Messrs. Sellers, Freeman and Mueller and Ms. Brower through October 5, 2007 was based on annual and long term performance-based incentive compensation and less on salary and employee benefits, creating the potential for greater variability in the individual’s compensation level from year to year. The mix, level and structure of performance-based incentive elements reflected market industry practices as well as the executive’s role and relative impact on business results consistent with our variable pay-for-performance philosophy. The base salary and target annual cash bonus levels for each named executive officer were set at levels consistent with their executive counterparts at companies within our peer group. The target cash bonus levels were intended to encourage the retention of key executives by providing competitive compensation in immediately available funds, with higher cash bonus levels available to reward superior performance.

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Base Salary

     As noted above, base salaries through 2008 for Messrs. Sellers, Freeman and Mueller and Ms. Brower were established as part of a three year program described above, with an adjustment to Mr. Mueller’s base salary made in mid-2006. Also as noted above, Mr. Neely’s base salary is adjusted annually in line with adjustments for our other senior officers.

Annual and Long Term Incentives

     Incentive levels for the annual cash bonuses for Messrs. Freeman, Mueller and Ms. Brower for 2006 and for the annual stock awards for Messrs. Sellers, Freeman and Mueller and Ms. Brower for 2006, were established as part of the three year program described above. The determination of the 2006 annual cash bonus for Mr. Sellers, and Mr. Neely’s 2006 annual cash bonus and annual incentive stock awards, are discussed below.

Cash Bonus and RSU Grants for 2006

     The actual annual cash bonus paid to Messrs. Freeman and Mueller and Ms. Brower for 2006, and the annual RSU awards granted to Messrs. Sellers, Freeman and Mueller and Ms. Brower for 2006, were each based on four criteria: (1) achievement of specific corporate goals articulated in writing at the beginning of each year, (2) Archstone-Smith’s compounded annualized total shareholder return (“TSR”) for the three preceding calendar years, compared to the TSR for companies in the NAREIT Apartment Index for the same period, (3) Archstone-Smith’s funds from operation (“FFO”) growth for the calendar year, compared to the weighted average FFO growth for the companies included in the NAREIT Apartment Index for the same period, and (4) Archstone-Smith’s absolute FFO growth for the year compared to the long term growth targets established by the Compensation Committee and the Board. The Compensation Committee selected the NAREIT Apartment Index as the appropriate peer group index because all of the multifamily real estate investment trusts used by the Compensation Committee for benchmarking were included in this index, it measures performance of real estate investment trusts that invest in multifamily residential apartment projects, and it is weighted based on size of the companies included.

     The Compensation Committee believed that total shareholder return was the most important factor in determining incentive compensation for officers with overall corporate responsibilities since it most effectively aligned the interests of these officers with the interests of the Archstone-Smith shareholders. TSR was determined by comparing our daily TSR on the last trading day of December of the second prior calendar year to our daily TSR on the last trading day of December of the current compensation calendar year (e.g., to determine TSR for 2006, the comparison was December 31, 2003 to December 29, 2006). The Compensation Committee looked at a three year average in order to reduce the impact of one-time events. To the extent that these officers provided a better overall return for our shareholders, compared to the shareholder return of comparable companies in the real estate industry, as measured by the NAREIT Apartment Index, they should be rewarded for those accomplishments. The committee’s use of TSR measured over three years as a metric also focused these officers on long term value creation rather than short term earnings. Because of its importance, 50% of the cash bonus for Messrs. Freeman and Mueller and Ms. Brower and 50% of the RSU grants for Messrs. Sellers, Freeman and Mueller and Ms. Brower for the year was based on this TSR calculation.

     For the cash bonus allocable to this metric for Messrs. Freeman and Mueller and Ms. Brower, three levels of achievement were defined:

•	Target:	Performance up to the 50th percentile
•	Target Plus:	At or above the 65th percentile
•	High:	At or above the 80th percentile

If our performance was between specified levels, the amount of the cash bonus for the TSR component would equal the interpolated amount based on the actual percentile achieved as compared to the bonus amount for the specified target levels directly above and below the actual percentile achieved (e.g., assuming the bonus based on TSR for the Target level is $100,000 and the bonus for the Target Plus level is $150,000, the actual bonus payout for the TSR component would equal $126,667, if the actual percentile achieved were 58%).

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     The committee believed that Messrs. Sellers, Freeman and Mueller and Ms. Brower should receive an RSU award each year — since these awards aligned the officers’ interests to shareholders’ goals through stock ownership and they encouraged officer retention through the three year vesting — but the amounts should be lower if target performance relative to the NAREIT Apartment Index and the other corporate and individual performance metrics were not achieved. However, since the Compensation Committee did not consider the RSU award to be part of base compensation, it incorporated two lower levels of performance — Threshold and Threshold Plus — so that performance at lower than the target level would result in a lower RSU award.

     For the RSU award allocable to this metric for Messrs. Sellers, Freeman and Mueller and Ms. Brower, the criteria for TSR relative to the NAREIT Apartment Index were as follows:

•	Threshold:	Up to the 20th percentile
•	Threshold Plus:	At or above the 35th percentile
•	Target:	At or above the 50th percentile
•	Target Plus:	At or above the 65th percentile
•	High:	At or above the 80th percentile

If our performance was between specified levels, the amount of the RSU award for the TSR component would equal the interpolated amount based on the actual percentile achieved as compared to the amount of the RSU award for the specified levels directly above and below the actual percentile achieved (e.g., assuming the RSU award based on TSR for the Target level is $100,000 and the RSU award for the Target Plus level is $150,000, the actual RSU award for the TSR component would equal $126,667, if the actual percentile achieved were 58%). The actual TSR percentile achieved for 2006 awards was the 81st percentile.

     A second measure commonly used in the real estate industry to measure performance is FFO growth. FFO is a non-GAAP measure that is commonly used in the real estate industry to assist investors and analysts in comparing results of real estate companies. FFO adjusts GAAP net earnings to exclude depreciation and gains and losses from the sales of previously depreciated properties. Our calculation of FFO included (i) gains and losses from dispositions of properties acquired or developed by our taxable REIT subsidiaries such as Ameriton, as the fundamental purpose of these entities is to take advantage of short-term investment opportunities, (ii) gains and losses from our international subsidiaries, and (iii) promote incentive fee income resulting from the liquidation of unconsolidated joint ventures, if any. If they related to a disposition, we excluded prepayment penalties and included the cost or benefit of unamortized purchase accounting-related debt adjustments. Our share of the FFO relating to our unconsolidated entities was calculated on the same basis. The Compensation Committee used two measures of FFO growth, each applicable to 15% of the cash bonus for Messrs. Freeman and Mueller and Ms. Brower, and 15% of the RSU award for Messrs. Sellers, Freeman and Mueller and Ms. Brower. First, the Compensation Committee looked at Archstone-Smith’s FFO growth compared to the FFO growth of our peers, using the NAREIT Apartment Index. As with TSR, the Compensation Committee believed that these officers should be rewarded for outperforming our peers in this area. The second FFO measurement looked at Archstone-Smith’s absolute FFO growth for the year compared to the long term growth targets established by the Compensation Committee and the Archstone-Smith Board. To the extent that these officers exceeded the long term FFO growth targets, they were rewarded for that achievement. Like the TSR calculation described above, the FFO growth measurements included Target, Target Plus, and High thresholds for the cash bonus, and Threshold, Threshold Plus, Target, Target Plus and High thresholds for the RSU awards.

     Achievement of the FFO-based performance criteria in any given year depended on a number of factors. However, since the same metrics were used over a three year period, we believe that an analysis of how often the various target levels were achieved during the past three years will provide guidance as to the likelihood that a particular target level would have been met in future years. The charts below set forth in which years each level of achievement was paid for the FFO-based performance metrics for the cash bonus for Messrs. Freeman and Mueller

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and Ms. Brower and the RSU awards for Messrs. Sellers, Freeman and Mueller and Ms. Brower, respectively, during 2004 through 2006:

	Years in which each Achievement Level was Paid
Cash Bonus Metric	Target		Target Plus		High
Comparative FFO Growth		2005, 2006				2004
Absolute FFO Growth		2005		2006		2004

	Years in which each Achievement Level was Paid
			Threshold
RSU Award Metric	Threshold		Plus		Target	Target Plus		High
Comparative FFO Growth		2005		2006					2004
Absolute FFO Growth				2005			2006		2004

     The final 20% of the cash bonus for Messrs. Freeman and Mueller and Ms. Brower, and the final 20% of the RSU award for Messrs. Sellers, Freeman and Mueller, and Ms. Brower, was determined based on the individual officer’s accomplishment of specific written goals established in cooperation with the Compensation Committee for that officer at the beginning of each calendar year. This portion of each award was designed to award each individual officer to the extent the officer achieves those specific goals. Because many of these goals were not defined by meeting specific financial goals, the committee exercised some discretion in determining the extent to which the specific goals for an officer had been attained and, consequently, the portion of the bonus and RSU award allocated to this metric that was awarded. The Compensation Committee awarded the target amount allocated to this metric provided that the officer had performed at the appropriate level and to the satisfaction of the Committee, including achievement in all material respects of the goals established for that officer. To the extent that an officer’s performance during the year exceeded the goals established for a specific officer, then the committee considered an award at a higher level. The goals for 2006 included, among others, meeting budgeted revenue and growth in net operating income, adding a specific volume of new development transactions to the pipeline, meeting the budget for Ameriton performance, completing the disposition of the majority of our non-core assets during 2006, maintaining a high level of corporate morale, and maintaining an industry-leading position in innovation and continuous improvements in our operating platform - which resulted in the portion of the RSU awards tied to the achievement of each officer’s individual corporate goals at slightly above the target plus level for each of these officers.

     The Compensation Committee believed that the allocation described above created the proper incentives for Messrs. Sellers, Freeman and Mueller and Ms. Brower. A significant portion of the cash bonus and/or RSU award of Messrs. Sellers, Freeman and Mueller and Ms. Brower was based on achievement of individual goals and the ability of the company, under the leadership of these officers, to meet the TSR and FFO growth goals established by the Compensation Committee. Sixty-five percent of the cash bonus for Messrs. Freeman and Mueller and Ms. Brower, and 65% of the RSU award for these officers and for Mr. Sellers, was based on how well our company performed with respect to these metrics compared to other companies in the multifamily real estate industry, as measured by the NAREIT Apartment Index, and, therefore, rewarded these officers based on performance relative to those peer companies.

     Based on the foregoing criteria, the maximum cash bonus that Messrs. Freeman and Mueller and Ms. Brower could earn, subject to the discretion of the Compensation Committee to modify an award for unusual circumstances or extraordinary performance, for each of 2006, 2007 and 2008, prior to any changes made in connection with the Merger, was as follows:

Executive	Target		Target Plus		High
Mr. Freeman	$	360,000	$	480,000	$	640,000
Mr. Mueller (2006)	$	280,000	$	420,000	$	560,000
Mr. Mueller (2007-2008)	$	315,000	$	475,000	$	635,000
Ms. Brower	$	180,000	$	245,000	$	310,000

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     The target level was intended to be the minimum amount Messrs. Freeman and Mueller and Ms. Brower would receive as long as he or she was doing a good job in his or her role consistent with the goals agreed to by the Compensation Committee. Messrs. Freeman and Mueller and Ms. Brower could earn above the target level based on the company’s performance under their leadership. The Compensation Committee set the amount for each level of achievement of cash bonus and RSU awards based on the analysis of the compensation levels of similarly situated executive officers in our peer groups provided by FPL Associates in October 2005.

     Based on the foregoing criteria, the RSU award that Messrs. Sellers, Freeman and Mueller and Ms. Brower could earn, subject to the discretion of the Compensation Committee to modify an award for unusual circumstances or extraordinary performance, for each of 2006, 2007 and 2008, prior to any changes made in connection with the Merger, was as follows:

			Threshold
Executive	Threshold		Plus		Target		Target Plus		High
Mr. Sellers	$	1,207,500	$	1,811,250	$	2,415,000	$	3,018,750	$	3,622,500
Mr. Freeman	$	525,000	$	682,500	$	840,000	$	997,500	$	1,155,000
Mr. Mueller (2006)	$	315,000	$	472,500	$	630,000	$	787,500	$	945,000
Mr. Mueller (2007-2008)	$	355,000	$	534,000	$	710,000	$	890,000	$	1,070,000
Ms. Brower	$	157,500	$	210,000	$	262,500	$	315,000	$	367,500

     Prior to the Merger, the annual cash bonus paid to Mr. Sellers was set at $1,750,000 per year provided he executed in an appropriate and exemplary manner, and to the satisfaction of the Compensation Committee, his managerial responsibilities as the company’s chief executive officer, including developing and executing the company’s strategic plans, overseeing personnel and fostering good morale and retention, succession planning for key positions within the company, providing technology leadership, creating an atmosphere that encourages innovation, maintaining the company’s outstanding development capability, creating value through development activity in our core markets, overseeing our acquisition activity and the repositioning of our portfolio, and creating long term value. The Compensation Committee recognized that the appropriate and exemplary execution of these goals would not necessarily be immediately reflected in the company’s comparative performance metrics, but believed that they were essential to the long term success of the company. Because we expect our chief executive officer to focus on all aspects of the company’s performance, including the cultural and subjective elements of success as well as objective financial performance, the Compensation Committee believed it was appropriate and in the best interests of our company and the Archstone-Smith shareholders to consider all of these elements in determining Mr. Sellers’ total compensation. If the Compensation Committee determined that Mr. Sellers had not fully met these goals, then the committee could reduce the bonus by up to $400,000, for a minimum annual cash bonus of $1,350,000.

     Mr. Neely’s target cash bonus and target annual RSU award was set annually in line with those awarded to our other senior officers. As noted above, the amount actually awarded to him by the Compensation Committee was based on the review of his performance undertaken by Messrs. Sellers and Freeman and their recommendation to the Compensation Committee. Mr. Neely’s target cash bonus for 2006 was $275,000, and his target cash bonus for 2007 was $286,000. The target RSU award for Mr. Neely for 2006 was $500,000 and his target RSU award for 2007 was $650,000. As discussed above, the actual amount of each award was based on Mr. Neely’s performance in overseeing and directing the development activities of the company.

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Performance Units — Special Long Term Incentive Program for 2006

     The table set forth below identifies the number of performance units awarded under our Special Long Term Incentive Program to Messrs. Sellers, Freeman and Mueller and Ms. Brower for the 2006-2008 performance period. As noted above, Mr. Neely was not a participant in this program. Under the terms of the Special Long Term Incentive Program, the actual number of performance units awarded to each executive that would vest would have been determined by the Compensation Committee in January or February 2009, based upon certain performance measures tied to Total Shareholder Return and, in the case of Mr. Sellers, individual performance criteria, as described in the Proxy Statement of Archstone-Smith filed with the SEC on April 11, 2007. However, as discussed below under “Compensation Related to the October 5, 2007 Merger,” the Compensation Committee determined that all of these units should vest at the Merger.

	Performance Units
	Awarded for
Name	2006-2008 (#)
Mr. Sellers		170,908
Mr. Freeman		50,633
Mr. Mueller		39,878
Ms. Brower		15,000

Other Compensation Features

Change in Control Arrangements

     On August 12, 2002, we entered into change in control agreements with each of the Named Executive Officers other than Mr. Neely, with whom we entered into such an agreement on December 8, 2003. Each change in control agreement had a term of one year, which is automatically renewed unless the Board elected to terminate it. To avoid an unintended windfall to management upon a friendly change in control, the Named Executive Officers would each be entitled to a payment only if there was a change in control and thereafter the Named Executive Officer’s employment was terminated without cause or for good reason during a protected period. All of the change in control agreements were amended on August 3, 2007 to clarify how the cash bonus calculation was to be made in the event of a change in control. In addition, the change in control agreements for Messrs. Sellers and Mueller and Ms. Brower were amended to provide that a material adverse change in their title or the nature or scope of their authority, duties or responsibilities by virtue of the fact that Archstone-Smith was not a public company would be deemed a termination without cause. The protections of all of the change in control agreements came into force as a result of the Merger. Mr. Freeman’s change in control agreement terminated upon his retirement on December 31, 2007. In lieu of the amounts due to Mr. Freeman under his change in control agreement, he was entitled to the amounts set forth in his separation and general release agreement, as amended. See “Post-Employment Payments.” Ms. Brower’s retirement on December 31, 2007 resulted in a full payment under her change in control agreement. Mr. Sellers’ change in control agreement was superseded by his employment agreement (see discussion immediately below). For more detailed information on the conditions to payments and regarding the payments that could be made under each change in control agreement, see “Post-Employment Payments” below.

Employment Agreements

     Prior to the Mergers, we did not have employment agreements with any of our employees. In connection with the Mergers, we entered into an employment agreement with Mr. Sellers, which is described below in “Compensation Discussion and Analysis after October 5, 2007; Other Compensation Features; Employment Agreement with R. Scot Sellers”.

Deferred Compensation

     Each of our Named Executive Officers is eligible to participate in our 401(k) Plan.

     Under the 401(k) Plan, each employee, including the Named Executive Officers, could contribute up to $15,000 of his or her salary in 2006 and up to $15,500 of his or her salary in 2007. Contributions equal to 6% of a contributing employee’s salary (not to exceed $15,000), including contributions by the Named Executive Officers, receive a matching contribution by Archstone-Smith in Common Shares prior to October 5, 2007 and in cash

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thereafter. Each year, we test the 401(k) Plan to ensure that our highly compensated employees, which include all of the Named Executive Officers, do not receive more benefits than our non-highly compensated employees. If the benefits to the highly compensated employees exceed the benefits to the non-highly compensated employees by more than 2%, then a portion of the contributions made by the highly compensated employees is returned to those highly compensated employees until the benefits meet the test. These excess contributions are returned to the employee.

     Under the Deferred Compensation Plan, which terminated at the time of the Merger, the Named Executive Officers could elect to defer payment of up to 75 percent of their base salary, 90 percent of their cash bonuses and certain amounts which could not be contributed to our 401(k) Plan due to limitations of the Internal Revenue Code. The minimum deferral for any calendar year was generally $5,000. The Deferred Compensation Plan was funded into a “rabbi trust” and participants in the Deferred Compensation Plan were treated as our unsecured general creditors. Each of our Named Executive Officers participated in the Deferred Compensation Plan.

     Amounts deferred under the Deferred Compensation Plan earned a rate of return based on a hypothetical investment in investment choices selected by the Named Executive Officer from alternatives we provided. Although we were not required to do so, our Deferred Compensation Plan did actually invest in the selected investments. Any actual investment we made, in our discretion, was treated as part of our general assets.

     Participants in the Deferred Compensation Plan received payment of deferred amounts as of the date selected by the participant, which generally had to be at least three years after the date on which the amount would otherwise have been payable to the individual. (This did not apply to settlements of RSUs or DEUs deferred into the Deferred Compensation Plan, which are described below.) All amounts were paid upon a participant’s termination of employment (although delayed payment could be provided in certain cases). Payments were made in the form of a lump sum or installments over a period not exceeding 5 years (15 years in the case of a participant whose employment terminates after the sum of his or her age and years of service equals at least 55). If the value of a participant’s account balance was less than $10,000, it was paid in a lump sum. Payment prior to the deferred date elected by a participant (or prior to termination of employment) was permitted only in limited circumstances. Except as described below (or as discussed above with respect to Outside Trustees), all payments from the Deferred Compensation Plan were made in cash.

     Certain benefits under the Deferred Compensation Plan were potentially subject to Section 409A of the Internal Revenue Code. We intended to administer the plan in a manner that complied with section 409A and to amend the plan as and when needed in order to conform to the requirements of Section 409A, all as set forth in applicable IRS guidance when issued.

     Prior to 2002, a Named Executive Officer receiving an award of RSUs under the LTIP could elect to defer settlement of such RSUs to a future date so that upon vesting, the RSUs would remain deferred under the Deferred Compensation Plan rather than being settled in the form of Common Shares. Such deferred RSUs would continue to earn DEUs in accordance with a formula applicable to the award under the LTIP. Options granted to Senior Executive Officers prior to 2000 also earned DEUs. DEUs thus earned also earned DEUs in accordance with the LTIP. Upon the settlement date selected by the Named Executive Officer in accordance with the Deferred Compensation Plan, the RSUs and/or DEUs would convert to Common Shares on a one-to-one basis. Common Shares available under the LTIP Plan were used to satisfy this obligation. With respect to awards granted after January 1, 2002, an individual receiving an award of RSUs could either elect to defer the vesting of such units as described above, or upon vesting elect to have the cash value of the RSUs deferred into the Deferred Compensation Plan.

Compensation Related to the October 5, 2007 Merger

     The Merger Agreement included several provisions, all approved and/or ratified by the Compensation Committee, relating to payments that would be made to certain of our officers and employees, including the Named Executive Officers, in connection with the Merger.

Vesting of all Outstanding Options, RSUs and DEUs

     In connection with the Mergers each outstanding share option held by all officers and employees, including the Named Executive Officers, became fully vested and exercisable and was exchanged for a cash payment equal to

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the product of the number of shares subject to the option and the excess, if any, of the common share merger consideration over the exercise price of the option. Further, each RSU and DEU held by the Named Executive Officers became fully vested and was exchanged for the common share merger consideration.

Grant of Cash Awards in Lieu of RSU Awards

     Pursuant to the terms of the three-year compensation plan, the same criteria described under "Historical Criteria for Awards” were to apply to cash and annual RSU awards for 2007 and 2008. The Compensation Committee typically made annual awards of RSUs to the Named Executive Officers at the beginning of each fiscal year in consideration of an employee’s and our performance for the prior fiscal year. As a result of the Merger, which closed in the third quarter of 2007, the full year’s performance of Archstone-Smith would not have been available to calculate the awards, and Archstone-Smith would no longer be a public company after the Merger. Because of these considerations, the Merger Agreement provided that the Named Executive Officers, other than Mr. Freeman who was to be compensated in accordance with the terms of his separation and general release agreement, would receive the cash equivalent of the RSU awards for 2007, based on 75% of such officer’s award of RSUs for the 2006 fiscal year. Since Archstone-Smith would not be a public company at December 31, 2007, there was no basis for determining the award that these officers would have been entitled to under the then-existing compensation program. Therefore, the Compensation Committee determined that the best way to approximate the value created during 2007 was to make the same award as was made in 2006. This award was intended to compensate these officers on a pro rated basis for 2007 performance prior to the Merger and was paid as of the Merger date.

     The cash awards our executive officers received upon the consummation of the Merger, in lieu of an RSU grant for 2007, are as follows:

Executive Officers	Amount of Cash Award
R. Scot Sellers	$	2,454,962
Charles E. Mueller, Jr.		637,273
Caroline Brower		256,931
Alfred G. Neely		487,484

     Pursuant to his separation and general release agreement, Mr. Freeman was entitled to receive a cash award in lieu of a 2007 RSU award for the same reasons described above for the other Named Executive Officers.

Cash Payment to Holders of certain RSUs, Share Options and DEUs

     Archstone-Smith employees who were granted RSUs, share options with a DEU feature and DEUs prior to 2006 earned and were entitled to receive DEUs on such awards based on amounts equal to, and to correspond with, the dividends that Archstone-Smith paid to its common shareholders. The DEUs earned for each year had typically been credited in January of the year following the year in which dividends have been paid. As the Mergers were scheduled to close prior to the end of 2007, the Merger Agreement provided that each of our employees holding restricted share units, share options and dividend equivalent units that would otherwise have been entitled to a DEU award on January 1, 2008 would receive a cash payment on the Archstone-Smith Merger date equal to the value of the dividend equivalent units that such individual would have earned based on the dividends that we paid in the first and second quarters of 2007. Such cash payments to our Named Executive Officers were as follows:

Executive Officers	Amount of Cash Payment
R. Scot Sellers	$	85,205
J. Lindsay Freeman		139,906
Charles E. Mueller, Jr.		57,733
Caroline Brower		15,379
Alfred G. Neely		22,397

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Performance Units

     The Merger Agreement provided that each of the performance units granted to each Named Executive Officer would vest immediately prior to the closing of the Archstone-Smith Merger and was to be considered a Common Share of Archstone-Smith. As a result, each Named Executive Officer received the cash merger consideration for each such Common Share. The table below sets forth the number of performance units previously awarded to each Named Executive Officer that vested in connection with the Archstone-Smith Merger and the compensation received for those performance units.

	Performance Units
	Awarded for		Compensation Received
Name	2006-2008 (#)		at Merger
Mr. Sellers		170,908	$	10,382,661
Mr. Freeman		50,633	$	3,075,955
Mr. Mueller		39,878	$	2,422,589
Ms. Brower		15,000	$	1,730,464

Compensation Discussion and Analysis After October 5, 2007

Compensation Objectives, Elements Of Compensation, Criteria For Award

     As a newly-formed private company, the Series I Trust Compensation Committee intends to continue the existing compensation philosophy of rewarding contributions to our success, but measuring our success in terms of a privately owned enterprise. For the period following the Merger through December 31, 2007, the Series I Trust Compensation Committee, other than with respect to Mr. Sellers, generally continued the compensation for our Named Executive Officers at the same levels as were in place prior to the Merger. Where compensation would historically have been based on our 2007 performance, the Series I Trust Compensation Committee either used 2006 awards as a basis for making a 2007 award or approved awards based on the discretionary review of a particular officer’s performance during 2007. The Series I Trust Compensation Committee decisions with respect to base salary, cash bonuses, and incentive compensation with respect to our Named Executive Officers for the period following the Merger through December 31, 2007 are set forth below.

Base Salary

     With the exception of Mr. Mueller, the base salaries of each Named Executive Officer was continued at the same level as before the Merger. Effective October 5, 2007, the salary for Mr. Mueller was increased to $500,000 per year. This raise was in recognition of the fact that Mr. Mueller was increasingly taking on additional responsibilities as he prepared to take on the role of Chief Operating Officer on January 1, 2008.

Cash Bonuses

     Mr. Sellers was not awarded a cash bonus for 2007 in accordance with the terms of his employment agreement. Since Archstone-Smith would not be a public company at December 31, 2007, there was no basis for determining the cash bonus that Mr. Freeman would have been entitled to under the then-existing compensation program. Therefore, the Series I Trust Compensation Committee determined that the best way to approximate the value created during 2007 was to award the same cash bonus as was made in 2006. With respect to Mr. Mueller, his cash bonus of $606,475 was determined following a review of his performance by Mr. Augarten and Mr. Sellers. Mr. Mueller’s bonus was based on the significant role he played in negotiating the Merger Agreement and overseeing the overall transaction, as well as his oversight of the integration process after completion of the Mergers. A cash bonus equal to the High amount was awarded to Ms. Brower in accordance with the terms of her change in control agreement. A cash bonus of $436,000, which was $150,000 over the target bonus amount for 2007 of $286,000, was awarded to Mr. Neely based on a review of his 2007 performance undertaken by Messrs. Augarten, Sellers and Freeman. Mr. Neely’s bonus was based on his excellent accomplishments with respect to our development projects during 2007.

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Incentive Grants

     No incentive stock awards were made to any of the Named Executive Officers as part of their 2007 compensation. They did receive cash compensation in connection with the Merger with respect to a portion of the RSU award that they could have earned for 2007 as discussed above. In addition, each Named Executive Officer, other than Mr. Freeman who was to be compensated in accordance with the terms of his separation and general release agreement, as amended, was paid in January, 2008, an amount equal to 25% of such officer’s award of RSUs for the 2006 fiscal year. As with the cash payments in lieu of RSU awards made in connection with the Merger, this payment was intended to approximate the value created during 2007 by making the same award as was made in 2006. Mr. Freeman received $1,071,788 in lieu of an RSU award for 2007 pursuant to his separation and general release agreement, as amended. These amounts are included in the Summary Compensation Table below.

Performance Units

     As part of his employment agreement, the Series I Trust Compensation Committee awarded Mr. Sellers (a) 4,800 Class C Units in Tishman Speyer Archstone-Smith Multifamily Participants, L.L.C, an affiliate of the Venture, and (b) 100 non-voting units in each of three affiliates of the Venture with an aggregate value of approximately $11.25 million as of October 5, 2007 (see “Other Compensation Features; Employment Agreement with R. Scot Sellers” and “Grant of Plan Based Awards”).

Other Compensation Features

Change in Control Agreements

     Mr. Mueller amended his change in control agreement on January 4, 2008 to clarify the circumstances under which Mr. Mueller may terminate employment and receive the severance payments provided for in the agreement, revise the severance payments that Mr. Mueller would be entitled to pursuant to the terms of the agreement, and confirm Mr. Mueller’s post-Merger compensation as described below. Mr. Sellers’ employment agreement described immediately below superseded his change in control agreement, other than the provision regarding the calculation of any gross-up payment due.

Employment Agreement with R. Scot Sellers

     With the exception of Mr. Sellers, we do not have employment agreements with any of our Named Executive Officers or with any of our other employees. We entered into an employment agreement with Mr. Sellers on October 5, 2007. The Series I Trust Compensation Committee determined that an employment agreement would assist in retaining Mr. Sellers, whose continued service as chief executive officer was deemed crucial to the successful implementation of its post-merger strategy and goals. The employment agreement supersedes Mr. Sellers’ change in control employment agreement, other than the provision regarding the calculation of any gross-up payment due.

     Pursuant to the employment agreement, Mr. Sellers agreed to continue to serve as our Chief Executive Officer following the Merger. The initial term of Mr. Sellers’ employment agreement will end on December 31, 2010, but will automatically be extended for consecutive one year periods upon the expiration of the initial term (or any extension thereof) unless either party provides no less than 90 days notice of its intention not to renew. Mr. Sellers is entitled to an initial annual base salary of $750,000. Assuming he is employed on the last day of the fiscal year to which the guaranteed bonus relates, Mr. Sellers is guaranteed a bonus of $4.0 million for the fiscal year ending December 31, 2008 and $2.0 million for each subsequent fiscal year, and will be entitled to an additional incremental bonus of up to $3.125 million per year based on the achievement of certain equity raising milestones. Mr. Sellers will have the right to reinvest up to 50% of his annual guaranteed bonus into phantom interests in affiliates/subsidiaries of the Venture including the Junior Mezz Borrower.

     Mr. Sellers’ base salary remained unchanged after the Mergers. The Series I Trust Compensation Committee divided the annual cash bonus into two parts. The first part, a guaranteed minimum cash bonus, was set at a level slightly higher than was in effect prior to the Mergers to take into account the increased responsibilities

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Mr. Sellers would have as the chief executive officer of Successor. The second part of the bonus, which is based on the achievement of certain equity raising milestones, and the equity awards discussed below, are designed to align Mr. Sellers’ interest with those of other investors in the Venture.

     Termination payments to Mr. Sellers depend upon the timing and circumstances of any termination of his employment, and generally include the payment of (i) certain “accrued obligations,” (ii) any vested benefits, and (iii) amounts based upon Mr. Sellers’ base salary and bonuses he earned, or otherwise would in the future be entitled to receive, depending on the timing of such termination. Certain payments are contingent on Mr. Sellers’ execution and non-revocation of a release of claims against us and certain of our affiliates. In the event that any payments made in connection with the Mergers subject Mr. Sellers to a “golden parachute” excise tax, Mr. Sellers will be made whole for such excise tax. Mr. Sellers is subject to one-year or two-year (depending on the date of termination) post-termination non-solicit and non-hire covenants and a one-year post-termination non-competition covenant. These termination payments are described in greater detail in “Change in Control and Post-Termination Arrangements with Mr. Sellers.”

     In connection with his entry into the employment agreement, and in addition to Mr. Sellers’ $4.1 million investment in Governance GP, Mr. Sellers purchased 21.75 non-voting Class A Units of Junior Mezz Borrower for an aggregate purchase price of $2,290,444. The Non-voting Class A Units are fully vested as of the date of purchase.

     In connection with his entry into the employment agreement, Mr. Sellers was also granted non-voting equity interests in three affiliates of the Venture with an aggregate value of approximately $11.25 million as of October 5, 2007. Mr. Sellers’ equity interests in the three affiliates cliff vest in full on October 5, 2010, subject to earlier vesting in full upon a termination of his employment without “cause” or for “good reason” or certain liquidations or dissolutions of the granting entity.

     Mr. Sellers was also granted 4,800 Class C Units in Tishman Speyer Archstone-Smith Multifamily Participants, L.L.C, an affiliate of the Venture. The value of these units depends on the return on investments generated by partners in the Venture (other than partners which are affiliates of the Venture’s sponsor), and they generally have no value unless such partners achieve an 8% gross IRR. The Class C Units granted to Mr. Sellers generally vest ratably on each of the first seven anniversaries of October 5, 2007, provided, that vesting accelerates upon a certain changes in control of Fund GP and Fund II GP upon the Lehman Sponsor or the Tishman Speyer Sponsor selling all or substantially all of their limited partner interests in the Venture and/or certain other affiliates thereof and certain liquidations or dissolutions of the granting entity. In the event of a termination of Mr. Sellers’ employment without “cause” or for “good reason” (each as defined, and in accordance with the procedures described, in Mr. Sellers’ employment agreement), the Class C Units that would have vested in the one-year period following the date of termination of his employment will immediately vest upon such termination. All Class C Units that are not vested upon termination of employment will be forfeited, subject to any prior vesting or acceleration. An additional 3,200 Class C Units are currently reserved for future grant to other of our employees.

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POST-EMPLOYMENT PAYMENTS

     The first table below discloses the potential payments that would be provided to each Named Executive Officer other than Mr. Sellers in the event of a termination of employment or a change in control of the Company on December 31, 2007. Payments are listed for Mr. Freeman only in the “Termination without change in control” section of the table since he was not entitled to any change in control protection after his retirement on December 31, 2007, and the amounts given are the actual amounts accrued or paid to him, which amounts are included in the “Summary Compensation Table” under “All Other Compensation”. Payments listed for Ms. Brower in the “Change in control and termination without cause within protected period” section of the table reflect actual amounts accrued or paid to her based on the change of control as a result of the Merger and her deemed termination “without cause” upon her retirement on December 31, 2007, which amounts are included in the “Summary Compensation Table” under “All Other Compensation”. The second table discloses the potential payments that would be provided to Mr. Sellers in the event of a termination of employment or a change in control of the Company on December 31, 2007, which payments are based on the terms of our employment agreement with Mr. Sellers.

Event	Consideration	Mr. Freeman		Mr. Mueller		Ms. Brower		Mr. Neely
Termination without change in control, with or without cause, or upon death or disability	Cash severance		—		—		—		—
	Accrued bonus and long term compensation		—		—		—		—
	Unvested equity awards		—		—		—		—
	401(k) account balance	$	291,146	$	281,046	$	234,784	$	572,953
	Health care benefits		—		—		—		—
	Excise tax gross-up		—		—		—		—
	Outplacement services		—		—		—		—
	Personal benefits		—		—		—		—
	Total:	$	291,146	$	281,046	$	234,784	$	572,953
Change in control and termination without cause within protected period	Cash severance		—	$	2,270,000	$	1,290,000	$	390,000
	Accrued bonus and long term compensation		—		606,475		310,000		436,000
	Unvested equity awards (1)		—		—		—		—
	401(k) account balance		—		281,046		234,784		572,953
	Health care benefits (2)		—		32,532		8,960		14,609
	Excise tax gross-up		—		—		—		—
	Outplacement services		—		15,000		—		10,000
	Personal benefits (3)		—		8,054		—		6,471
	Total:		—	$	3,213,107	$	1,843,744	$	1,430,033

(1)	All unvested options, RSUs and DEUs vested and were redeemed in connection with the Merger. As a result, none of these NEOs held unvested equity awards at December 31, 2007.
(2)	This amount includes medical insurance, disability income protection, life insurance coverage and death benefits during the applicable protected period for each Named Executive Officer, valued at the incremental cost to us of providing such benefits.
(3)	None of these Named Executive Officers received personal benefits in excess of $10,000 in 2007. For purposes of calculating the personal benefits, we used the approximate value of the personal benefits received in 2007 multiplied by the Multiple.

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Event	Consideration	Mr. Sellers
Termination by Company without cause or by Mr. Sellers for good reason, without change in control	Accrued obligations (1)	$	0
	Severance amount	$	5,500,000
	Unvested equity awards	$	11,250,000
	401(k) account balance	$	287,626
	Excise tax gross-up	$	0
	Total:	$	17,037,626
Death or disability	Accrued obligations (1)	$	0
	401(k) account balance	$	287,626
	Excise tax gross-up	$	0
	Total:	$	287,626
Termination by Company without cause or by Mr. Sellers for good reason, with a change in control	Accrued obligations (1)	$	0
	Severance amount	$	5,500,000
	Unvested equity awards	$	11,250,000
	401(k) account balance	$	287,626
	Excise tax gross-up	$	0
	Total:	$	17,037,626
Termination by Company for cause or by Mr. Sellers without good reason	Accrued obligations, excluding prorated annual cash bonus (1)	$	0
	401(k) account balance	$	287,626
	Total:	$	287,626

(1) Accrued obligations are defined as the sum of the following amounts: (a) annual base salary through the date of termination, (b) any unpaid guaranteed bonus and any unpaid incremental annual bonus earned for any fiscal year ended prior to the fiscal year in which the date of termination occurs, (c) prorated guaranteed annual cash bonus from January 1 through the date of termination, (d) reimbursed of expenses incurred, and (e) all other compensation and benefits under any compensation or benefit plan. The foregoing table assumes that Mr. Sellers’ last paycheck in 2007 covered the period ending on December 31, 2007.

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     We entered into a severance and release agreement with Mr. Freeman in 2007. We will pay Mr. Freeman a base salary of $450,000 for the period from January 1, 2008 through December 31, 2008, in consideration for which Mr. Freeman will be available as a consultant and advisor to us upon our request. There will be no written consulting agreement relating to these services. Mr. Freeman will not be eligible for any cash bonus for his services performed during 2008, but was paid $554,000 in January, 2008 as a cash bonus for 2007, $1,071,788 in lieu of an RSU award for 2007 and $1,000,000 in January, 2008 for remaining employed through December 31, 2007. We will provide Mr. Freeman with health insurance coverage, at a cost to us of $142 per month, in accordance with our policy for full-time employees.

Change in Control Arrangement with Messrs. Mueller and Neely and Ms. Brower

     Except with respect to Mr. Sellers (see "Compensation Discussion and Analysis after October 5, 2007; Other Compensation Features; Employment Agreement with R. Scot Sellers"), we have not entered into an employment contract with any Named Executive Officer, nor are our Named Executive Officers subject to our Severance Plan. Upon a termination of employment, whether voluntary or involuntary (but excluding a termination following a change in control, which is discussed below) or the result of retirement, death or disability, we have no contractual obligation to give a Named Executive Officer anything over and above what he or she has contributed previously to accounts under the 401(k) Plan (including vested matching contributions) and earnings on the amounts contributed. As of December 31, 2007, the value of the currently vested accounts for each Named Executive Officer is included in the table above.

     As noted above, we entered into change in control agreements with each of the Named Executive Officers. The Named Executive Officers would each be entitled to a payment only if there is both a change in control and thereafter the Named Executive Officer’s employment is terminated, or effectively terminated, without cause, as more fully described below. Mr. Sellers’ employment agreement (see "Compensation Discussion and Analysis after October 5, 2007; Other Compensation Features; Employment Agreement with R. Scot Sellers") superseded and replaced any benefit to which he would be entitled under his change in control agreement in connection with the Merger, other than the provisions regarding the calculation of any gross-up payment due. Mr. Freeman’s change in control agreement terminated upon his retirement on December 31, 2007. A severance payment was made to Ms. Brower following her deemed termination “without cause” upon her retirement on December 31, 2007.

     Under these agreements, a “change in control” occurred if the Archstone-Smith shareholders approved (a) the merger of Archstone-Smith or of Archstone with or into another entity, (b) the sale by Archstone of substantially all of its assets, or (c) a plan of liquidation of either Archstone-Smith or Archstone and, following the consummation of the approved transaction, the original shareholders of Archstone-Smith did not constitute 75% of the shareholders of the resulting entity. A change of control also occurred if (i) a third party acquired over 25% of the outstanding Common Shares of Archstone-Smith, other than in a transaction where Archstone-Smith issued the shares to such third party, or (ii) there was a change in a majority of the trustees of Archstone-Smith during any period of two consecutive years, other than as a result of the election, or nomination for election by Archstone-Smith’s shareholders, of a person whose nomination was approved by a two-thirds majority of the Trustees who were in office at the beginning of such two year period. A “change in control” occurred as a result of the Merger.

     A protective period has been established for each of our Named Executive Officers: twenty-four (24) months in the case of Mr. Mueller and Ms. Brower, and twelve (12) months in the case of Mr. Neely. The applicable protective period was set based on the officer’s level of responsibility. During the protective period, if the Named Executive Officer’s employment is terminated without cause, other than as a result of the officer’s death or disability, or if the officer resigns as a result of, among other matters, a material adverse change in the nature or scope of the officer’s duties or authority, then the officer will be entitled to receive a lump-sum payment. Mr. Mueller and Ms. Brower’s change in control agreements also provide that a change in their duties as a result of our not being a public company would constitute a termination without cause. In addition, the officer will be entitled to the continuation during the applicable protective period following the date of termination of medical insurance, disability income protection, life insurance and death benefits, and perquisites, or personal benefits, equivalent to those available to the officer on the date of termination. The terminated officer will also receive outplacement services of up to $15,000 in the case of Mr. Mueller and Ms. Brower, and $10,000 in the case of Mr. Neely.

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     The severance payment will be equal to a multiple — 2 in the case of Mr. Mueller and Ms. Brower, and 1 in the case of Mr. Neely (the "Multiple") — of base salary for the year in which termination occurs plus the Multiple times the greater of (i) the officer’s target cash bonus for the year in which termination occurs, based on the highest applicable performance targets having been met, or (ii) the actual cash bonus awarded to the officer for the year immediately preceding the year in which termination occurs. Each Named Executive Officer will also receive, if terminated within the protective period, an amount equal to the officer’s unpaid pro-rated salary through the date of termination, the pro-rated target bonus that would be paid to the officer if the highest applicable performance targets were met for the year of termination, and an additional payment required to compensate the officer for any excise taxes imposed upon the severance payments made under the officer’s agreement.

Change in Control and Post-Termination Arrangements with Mr. Sellers

     Termination payments to Mr. Sellers are made pursuant to the terms and conditions of his employment agreement dated as of October 5, 2007. Depending upon the timing and circumstances of any termination of his employment, as explained in more detail below, he is generally entitled to (i) amounts earned but unpaid, (ii) any vested benefits, and (iii) amounts based upon Mr. Sellers’ base salary and bonuses he earned, or otherwise would in the future be entitled to receive, depending on the timing of such termination.

     If Mr. Sellers is terminated without cause or resigns for good reason prior to December 31, 2010, Mr. Sellers would receive a lump sum cash payment, to the extent not previously paid, equal to (A) the “Accrued Obligations,” which consist of (i) his base salary through the date of termination, (ii) any unpaid guaranteed bonus and any unpaid incremental bonus for any prior fiscal year, (iii) a pro-rated guaranteed bonus for the year in which the termination occurs; (iv) any unpaid or unreimbursed expenses, and (v) benefits owed pursuant to any benefits plan; plus (B) the lesser of (i) the sum of (1) two times his base salary, (2) $4.0 million and (3) two times his incremental bonus, based on the achievement of certain equity raising milestones as of the termination date, and (ii) the sum of (1) one times his base salary, (2) $2.0 million, (3) his incremental bonus, based on the achievement of certain equity raising milestones as of the termination date, and (4) the remaining base salary, guaranteed bonus and incremental bonus, based on the achievement of certain equity raising milestones as of the termination date, to which Mr. Sellers would have been entitled through December 31, 2010, had he remained employed through such date.

     If Mr. Sellers is terminated without cause or resigns for good reason on or after December 31, 2010, Mr. Sellers would receive a lump sum cash payment equal to (A) the Accrued Obligations; plus (B) the sum of (i) one times his base salary, (ii) $2.0 million, and (iii) his incremental bonus, based on the achievement of certain equity raising milestones through October 5, 2008.

     Notwithstanding the above, if Mr. Sellers is terminated without cause or resigns for good reason after a change in control, Mr. Sellers would receive a lump sum cash payment equal to (A) the Accrued Obligations; plus (B) the sum of (i) two times his base salary, (ii) $4.0 million and (iii) two times his incremental bonus, based on the achievement of certain equity raising milestones as of the termination date. Under Mr. Sellers’ agreement, a “change in control” generally occurs if Tishman Speyer and/or Lehman execute one or more sales of their interests such that neither maintains a controlling interest in the Venture following the transactions.

     Upon a change in control, Mr. Sellers is also entitled to acceleration of the vesting of all of his Class C Units in Tishman Speyer Archstone-Smith Multifamily Participants, L.L.C. or, if no change in control occurs and he is terminated by the Company without cause or he terminates his employment for good reason, acceleration of the vesting of the Class C Units that would have vested during the one year period following termination. Upon a termination of his employment without cause or for good reason, or upon certain liquidations or dissolutions of the granting entity, Mr. Sellers unvested non-voting equity interests in three affiliates of the Venture would immediately vest.

     If Mr. Sellers terminates his employment without good reason or the Company terminates him for cause, Mr. Sellers would receive a lump sum cash payment, to the extent not previously paid, equal to (i) his base salary through the date of termination, and (ii) any unpaid guaranteed bonus and any unpaid incremental bonus for any prior fiscal year. Any unvested equity awards would be forfeited. Under Mr. Sellers’ agreement, “cause” generally includes (i) willful and continued failure by Mr. Sellers to substantially perform his duties, (ii) willful conduct that is injurious to the Company monetarily or otherwise, and (iii) conduct involving serious moral turpitude. Under Mr. Sellers’ agreement “good reason” generally includes (i) a material adverse change in Mr. Sellers’ title or position,

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including the duties he performs, (ii) a reduction or the failure to pay Mr. Sellers’ base salary, guaranteed bonus or incremental bonus, (iii) the failure of the Company to grant or settle an equity award on previously determined terms, and (iv) the relocation of the Company’s offices to a location more than five miles from its current location.

     If Mr. Sellers is disabled or upon his death, he or his estate, respectively, would receive a lump sum cash payment, to the extent not previously paid, equal to the Accrued Obligations.

     Certain payments are contingent on Mr. Sellers’ execution and non-revocation of a release of claims against us and certain of our affiliates. Mr. Sellers is subject to one-year or two-year (depending on the date of termination) post-termination non-solicit and non-hire covenants and a one-year post-termination non-competition covenant.

TAX IMPLICATIONS OF COMPENSATION

     In making compensation decisions, the Archstone-Smith Compensation Committee took into account the applicability of and the limitations imposed by Section 162(m) of the Internal Revenue Code on the deductibility of compensation paid to certain executives to the extent such compensation exceeds $1 million per executive. The law exempts compensation paid under plans that relate compensation to performance. Although our plans were designed to relate compensation to performance, certain elements of the plans may not meet the tax law’s requirements because they allowed the Archstone-Smith Compensation Committee to exercise discretion in setting compensation.

2006 AND 2007 EXECUTIVE COMPENSATION

     The following table sets forth the information required by Item 402 of Regulation S-K, promulgated by the SEC. The amounts shown represent a summary of all compensation paid to our Named Executive Officers for the fiscal years ended December 31, 2007 and 2006. The cash bonuses awarded to the Named Executive Officer on February 23, 2007 (as part of 2006 compensation) and January 4, 2008 (as part of 2007 compensation), are included in the Summary Compensation Table below, under the “Bonus” or “Non-Equity Incentive Plan Compensation” column, as appropriate. The basis for making both the RSU awards and the cash bonus awards to these officers is detailed in Notes (1), (2) and (3) to this table.

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SUMMARY COMPENSATION TABLE

									Non-Equity
							Stock		Incentive Plan		All Other
Name and Principal			Salary		Bonus		Awards		Compensation		Compensation		Total
Position	Year		($)		($)(1)		($)(2)		($)(3)		($)(4)		($)
R. Scot Sellers, Chief Executive Officer		2007	$	750,000		—	$	2,358,945		—	$	35,636,045	$	36,386,045
		2006	$	750,000	$	1,750,000	$	2,937,500		—	$	602,034	$	6,039,534
J. Lindsay Freeman, Chief Operating Officer		2007	$	450,000	$	1,554,000	$	772,257		—	$	16,977,924	$	18,981,924
		2006	$	450,000		—	$	969,572	$	554,000	$	409,738	$	2,383,310
Charles E. Mueller, Jr. Chief Financial Officer		2007	$	446,493	$	606,475	$	614,827		—	$	11,354,320	$	12,407,288
		2006	$	380,000		—	$	765,536	$	475,300	$	212,690	$	1,833,526
Caroline Brower, General Counsel		2007	$	335,000	$	310,000	$	244,967		—	$	5,885,582	$	6,530,582
		2006	$	335,000		—	$	304,933	$	276,075	$	90,721	$	1,006,729
Alfred G. Neely, President – Charles E. Smith Residential Division & Chief Development Officer		2007	$	390,000	$	436,000	$	475,005		—	$	3,455,939	$	4,281,939
		2006	$	375,000	$	412,500	$	550,012		—	$	102,185	$	1,439,697

(1)	Includes amounts earned in 2007 that were paid in 2008 and 2006 that were paid in 2007, as applicable. Under the terms of his employment agreement, Mr. Sellers was not paid a cash bonus for 2007. The 2006 bonus amount for Mr. Sellers was based on the Compensation Committee’s determination that he had executed his managerial responsibilities as the company’s chief executive officer in an appropriate and exemplary manner. The 2007 cash bonus for Mr. Freeman was awarded at the same level as his 2006 cash bonus. The bonus for Mr. Mueller was awarded based on the significant role he played in negotiating the Merger Agreement and overseeing the overall transaction, as well as his oversight of the integration process after completion of the Merger. Ms. Brower was awarded a bonus at the High amount under the pre-Merger compensation program in accordance with the terms of her change in control agreement. Mr. Neely was awarded a 2007 cash bonus of $436,000, which is $150,000 over the target amount, and he was awarded a 2006 cash bonus of $412,500, or $137,500 over the target amount, based in each year on his excellent accomplishments with respect to the Company’s development projects.
(2)	Consists of the compensation expense recognized by the company in the applicable year related to long-term equity incentive awards computed in accordance with FAS 123R. The amounts include the expense recorded in the applicable year relating to the amortization of awards made in earlier years as well as the expense relating to the amortization of awards granted in such year. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For more information on this calculation, see note 11. The expense amounts shown for 2007 cover the expense taken from January 1, 2007 through the Merger on October 5, 2007. The cash received by each Named Executive Officer upon the redemption of all outstanding stock awards is included in the “All Other Compensation” column and, for purposes of calculating Total Compensation, we have not included the amounts for 2007 in the Stock Awards column to avoid double counting those payments.
(3)	Includes amounts earned in 2006 that were paid in 2007. Bonus amounts for 2006 for Messrs. Freeman and Mueller and Ms. Brower were based on our achieving TSR placing us in the 81st percentile, compared to the NAREIT Apartment Index, FFO growth relative to the NAREIT Apartment Index that resulted in an award at the target amount, and absolute FFO growth slightly above the target plus amount.

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(4) Personal benefits paid on behalf of Mr. Sellers during 2007 in the amount of $273,903, which included (a) $266,142 in legal fees for counsel to represent him in the negotiation of his employment agreement, (b) $540 for parking, (c) $3,915 for supplemental disability insurance, (d) $490 for personal use of a cellphone, and (e) $432 for personal use of a country club membership. In accordance with Mr. Freeman’s severance and release agreement, we paid him $1,071,788 in lieu of an RSU award for 2007; this amount is equal to the RSU award made to Mr. Freeman for 2006. For Ms. Brower, this amount includes $1,290,000, which was paid to her in 2008 as a severance amount due under her change in control agreement. In addition, this amount also includes the following amounts:

2006 Amounts

	401(k)				Quarterly Cash
	Company				Payments on		DEUs Earned
Officer	Match		Life Insurance		RSUs (a)		(b)		TOTAL
Mr. Sellers	$	4,537	$	810	$	119,307	$	477,380	$	602,034
Mr. Freeman	$	4,537	$	3,564	$	60,992	$	340,645	$	409,738
Mr. Mueller	$	4,537	$	540	$	31,120	$	176,493	$	212,690
Ms. Brower	$	4,537	$	2,322	$	12,380	$	71,482	$	90,721
Mr. Neely	$	4,537	$	3,564	$	24,814	$	69,270	$	102,185

(a)	Quarterly cash payments equal in amount to the dividend paid on Archstone-Smith Common Shares were earned on outstanding RSUs granted in 2006.
(b)	DEUs were earned on January 1, 2007 on outstanding RSUs granted prior to 2006, DEUs previously earned and options granted between 1997 and 1999 as follows:

			DEUs earned on		DEUs earned
	DEUs earned on Vested		Unvested RSUs		on Vested		Total DEUs
Officer	RSUs and DEUs (#)		and DEUs (#)		Options (#)		earned (#)
Mr. Sellers		6,650		1,020		531		8,201
Mr. Freeman		4,729		333		790		5,852
Mr. Mueller		2,765		267		—		3,032
Ms. Brower		372		105		751		1,228
Mr. Neely		988		202		—		1,190

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2007 Amounts

							Cash
					Quarterly		Award in
	401(k)				Cash		Lieu of
	Company		Life		Payments		2007 RSU		Merger-Related
Officer	Match		Insurance		on RSUs (a)		Grant (b)		Compensation (c)		TOTAL
Mr. Sellers	$	6,750	$	1,242	$	112,587	$	818,321	$	34,423,242	$	35,362,142
Mr. Freeman		6,750		3,564		48,270		—		15,847,552		15,906,136
Mr. Mueller		6,750		540		29,304		212,424		11,105,302		11,354,320
Ms. Brower		6,750		2,322		9,581		85,644		4,491,318		4,595,615
Mr. Neely		6,750		3,564		18,638		162,516		3,264,471		3,455,939

(a)	Two quarterly cash payments, equal in amount to the dividend paid on Archstone-Smith Common Shares, were earned in February and May, 2007 on outstanding RSUs granted in 2007.
(b)	This amount equals 25% of the 2006 RSU award made to the Named Executive Officer.
(c)	Amounts include the following:

	Performance						Share		Cash in lieu		Cash in lieu
	Unit		RSU		DEU		Option		of 2007		of 2007
Officer	Cashout(a)		Cashout(a)		Cashout(a)		Cashout(a)		RSUs(b)		DEUs(a)(c)		TOTAL
Mr. Sellers	$	10,382,661	$	13,137,066	$	140,136	$	8,223,212	$	2,454,962	$	85,205	$	34,423,242
Mr. Freeman	$	3,075,955	$	10,910,457	$	1,721,234		—		—	$	139,906	$	15,847,552
Mr. Mueller	$	2,422,589	$	5,810,981	$	31,537	$	2,145,189	$	637,273	$	57,733	$	11,105,302
Ms. Brower	$	1,730,464	$	823,588	$	391,503	$	1,273,453	$	256,931	$	15,379	$	4,491,318
Mr. Neely		—	$	2,447,435	$	307,155		—	$	487,484	$	22,397	$	3,264,471

(a)	Payments were calculated as follows: (i) $60.75 for each vested and unvested RSU, DEU, and performance unit outstanding on October 4, 2007, and (ii) $60.75 less the strike price for each share option outstanding on October 4, 2007.
(b)	This amount equals 75% of the 2006 RSU award made to the Named Executive Officer.
(c)	This amount represents the value of DEUs that would have been earned on the deemed 2007 RSU award.

GRANTS OF PLAN BASED AWARDS

     The following table sets forth information with respect to plan-based awards granted in or for 2007 to the Named Executive Officers. The “Estimated Possible Payouts under Non-Equity Incentive Plan Awards” column in the table reflects the target, target plus and high amounts that Messrs. Freeman and Mueller and Ms. Brower were eligible to earn as an annual cash bonus for 2007. The “Estimated Possible Payouts under Equity Incentive Plan Awards” column in the table reflects the threshold, target and high amounts that Messrs. Sellers, Freeman and Mueller and Ms. Brower were eligible to earn as an annual RSU award for 2007. See “Compensation Discussion and Analysis – Historical Criteria for Awards – Annual and Long Term Incentives – Cash Bonus and RSU Grants for 2006.” The “All Other Stock Awards” column reflects the RSUs awarded on February 23, 2007 as part of each officer’s compensation for 2006. Information regarding the performance units awarded under our special long-term incentive program on October 4, 2005 is included in “Compensation Discussion and Analysis – Historical Criteria for Awards – Annual and Long Term Incentives – Performance Units–Special Long Term Incentive Program.”

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															All Other
			Estimated Possible Payouts Under Non-						Estimated Possible Payouts Under						Stock Awards:
			Equity Incentive Plan Awards(1)						Equity Incentive Plan Awards(1)						Number of		Grant Date
			Threshold		Target		Maximum		Threshold		Target		Maximum		Shares of Stock		Fair Value of
Name	Grant Date		($)		($)		($)		($)		($)		($)		or Units (#)(2)		Award ($)(3)
Mr. Sellers		—								1,207,500		2,415,000		3,622,500
		2/23/07														68,567		3,125,284
		10/5/07														4,800			(4)
		10/5/07														100			(4)
		10/5/07														100			(4)
		10/5/07														100			(4)
Mr. Freeman		—		360,000		480,000		640,000		525,000		840,000		1,155,000
		2/23/07														22,492		1,025,185
Mr. Mueller		—		315,000		475,000		635,000		355,000		710,000		1,070,000
		2/23/07														17,885		815,198
Ms. Brower		—		180,000		245,000		310,000		157,500		262,500		367,500
		2/23/07														7,115		324,302
Mr. Neely		2/23/07														14,261		650,016

(1)	These columns consist of the potential annual cash bonus awards and annual stock awards under our Long Term Incentive Plan for fiscal 2007 pursuant to the performance levels established by the Compensation Committee in October 2005 and, for Mr. Mueller, in mid-2006. For cash awards, the “Threshold,” “Target,” and “Maximum” columns represent the amounts payable when the “Target,” “Target Plus,” and “High” performance, respectively, is met, as described in “Compensation Discussion & Analysis — Historical Criteria for Awards – Annual and Long Term Incentives – Cash Bonus and RSU Grants for 2006.” For stock awards, the “Threshold,” “Target,” and “Maximum” columns represent the amounts payable when the “Threshold,” “Target,” and “High” performance, respectively, is met, as described in “Compensation Discussion & Analysis — Historical Criteria for Awards – Annual and Long Term Incentives – Cash Bonus and RSU Grants for 2006.” Two additional performance levels, Threshold Plus, and Target Plus, for the stock awards are not reflected in this table, but are described in “Compensation Discussion & Analysis — Historical Criteria for Awards – Annual and Long Term Incentives – Cash Bonus and RSU Grants for 2006.” Actual cash bonus amounts received for fiscal 2007 are discussed in “Compensation Discussion & Analysis After October 5, 2007 – Compensation Objectives, Elements of Compensation, Criteria for Award.” The Named Executives Officers received cash payments in lieu of 2007 RSU awards, which are discussed in “Compensation Related to the October 5, 2007 Merger” and “Compensation Discussion & Analysis After October 5, 2007 – Compensation Objectives, Elements of Compensation, Criteria for Award.”
(2)	Reflects the RSU awards made on February 3, 2007 pursuant to the Company’s Long Term Incentive Plan for performance in 2006. The Compensation Committee approved the performance levels for these awards on October 4, 2005. These RSU awards were to vest ratably on December 4, 2007, December 4, 2008 and December 4, 2009. All RSUs vested in connection with the Merger and the holders received $60.75 per RSU.
(3)	Through 2006, the grant date fair value on grants made under the Long-Term Incentive Plan was defined as the closing price of Archstone-Smith Common Shares on the New York Stock Exchange on the business day immediately preceding the grant date. Beginning January 1, 2007, the grant date fair value was defined as the closing price of Archstone-Smith Common Shares on the New York Stock Exchange on the date of grant. The relevant closing price for grants made on February 23, 2007 was $53.05.
(4)	Pursuant to his employment agreement, Mr. Sellers was awarded 4,800 Class C Units in Tishman Speyer Archstone-Smith Multifamily Participants, L.L.C, an affiliate of the Venture, and 100 Class B Units in each of Tishman Speyer Archstone-Smith Junior Mezz Borrower, L.P., Tishman Speyer Archstone-Smith Parallel Guarantor, L.P., Tishman Speyer Archstone-Smith Parallel Guarantor, I L.P., and Tishman Speyer Archstone-Smith Parallel Guarantor II, L.P. The Class B Units and Class C Units were issued on October 5, 2007. There is no public market for these units, which has made it difficult for the company to complete as of the filing date the calculations required to establish a grant date fair value. Furthermore, such units were issued by the Venture or affiliates rather than Archstone.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table sets forth information with respect to outstanding equity awards held by the Named Executive Officers as of December 31, 2007:

	Option Awards			Stock Awards
				Number				Equity Incentive
				of Shares		Equity Incentive		Plan Awards:
	Number of			or Units		Plan Awards:		Market or Payout
	Securities			of Stock	Market value	Number of		value of
	Underlying			that have	of Shares or	Unearned Shares,		Unearned Shares,
	Unexercised	Option	Option	Not	Units of Stock	Units or Other		Units or Other
	Options (#)	Exercise	Expiration	Vested	that have not	Rights that have		Rights that have
Officer	Exercisable	Price ($)	Date	(#)	Vested ($)	not Vested (#)		not Vested ($)
Mr. Sellers							4,800		(1)
Mr. Sellers							100		(1)
Mr. Sellers							100		(1)
Mr. Sellers							100		(1)

(1) Pursuant to his employment agreement, Mr. Sellers was awarded 4,800 Class C Units in Tishman Speyer Archstone-Smith Multifamily Participants, L.L.C, an affiliate of the Venture, and 100 Class B Units in each of Tishman Speyer Archstone-Smith Junior Mezz Borrower, L.P., Tishman Speyer Archstone-Smith Parallel Guarantor, L.P., Tishman Speyer Archstone-Smith Parallel Guarantor, I L.P., and Tishman Speyer Archstone-Smith Parallel Guarantor II, L.P. The Class B Units and Class C Units were issued on October 5, 2007. There is no public market for these units, which has made it difficult for the company to complete as of the filing date the calculations required to establish a grant date fair value. Furthermore, such units were issued by the Venture or affiliates rather than Archstone.

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OPTION EXERCISES AND STOCK VESTED

The following table sets forth information with respect to the exercise of stock options during 2007, and the vesting of restricted stock as of December 31, 2007 by the Named Executive Officers.

	Option Awards				Stock Awards
	Number of Shares		Value Realized on		Number of Shares
	Acquired on		Exercise		Acquired on Vesting		Value Realized on
Officer	Exercise (#)(1)		($)(1)		(#)(2)		Vesting ($)(2)
Mr. Sellers		218,354	$	8,223,212		302,380	$	18,369,585
Mr. Freeman		—		—		94,421	$	5,736,076
Mr. Mueller		56,962	$	2,145,189		74,355	$	4,517,066
Ms. Brower		32,761	$	1,273,453		28,762	$	1,747,292
Mr. Neely		—		—		40,679	$	2,471,256

(1)	The share options included in this column became fully vested in connection with the Merger; valuation is based on the product of the number of shares subject to the option and the excess, if any, of $60.75 per share, over the exercise price per share of the option.
(2)	This column includes the value of all performance units, RSUs and DEUs that were vested, or became fully vested, in connection with the Merger. The amounts paid for performance units is described above in “Compensation Related to October 5, 2007 Merger.” The valuation included in the table below for RSUs and DEUs is based on a redemption price of $60.75 per RSU or DEU.

Officer	RSUs		DEUs		Total RSU/DEUs		Value Realized
Mr. Sellers		130,377		995		131,372	$	7,980,872
Mr. Freeman		42,693		1,095		43,788	$	2,660,109
Mr. Mueller		33,958		519		34,477	$	2,094,486
Ms. Brower		13,557		205		13,762	$	836,013
Mr. Neely		40,287		392		40,679	$	2,471,256

The foregoing table also includes the following DEUs that became vested on January 1, 2007, with the values indicated based on the December 29, 2006 closing price of Archstone-Smith Common Shares of $58.21: Mr. Mueller, 701 units, valued at $40,781; Ms. Brower, 10,190 units valued at $593,160; and Mr. Neely, 901 units valued at $52,437.

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NON-QUALIFIED DEFERRED COMPENSATION

     As described in more detail in “Compensation Discussion and Analysis Prior to October 5, 2007 Merger — Other Compensation Features – Deferred Compensation”, our Named Executive Officers could elect to participate in our Deferred Compensation Plan until the Merger, at which time the Deferred Compensation Plan was terminated. The Named Executive Officers could elect to defer payment of up to 75 percent of base salary, 90 percent of cash bonuses and certain amounts which could not be contributed to our 401(k) Plan due to Internal Revenue Code limitations. We did not match contributions made by any employee, including the Named Executive Officers, to the Deferred Compensation Plan. Deferrals could be made to the Deferred Compensation Plan from cash compensation paid in the form of current base salary, annual cash bonuses, and excess 401(k) Plan contributions. In addition, RSUs and DEUs that had been awarded to a Named Executive Officer could, upon vesting, be deferred to the Deferred Compensation Plan either in the form of RSUs and DEUs or the cash equivalent. Cash equivalents are subject to FICA taxation prior to transfer into the Deferred Compensation Plan. All amounts deferred represent cash compensation earned in 2007 and DEUs which vested in 2007. The following table sets forth information with respect to non-qualified deferred compensation of the Named Executive Officers as of December 31, 2007.

	Executive Contributions in						Aggregate Earnings in						Aggregate Balance at Last FYE ($)
	Last FY ($)						Last FY ($)				Aggregate		Aggregate		Aggregate
	Deferred		Deferred		Registrant		Deferred		Deferred		Withdrawals/		Deferred		Deferred		Aggregate
	Stock		Cash		Contributions in		Stock		Cash		Distributions		Stock		Cash		Balance of
Name	Awards(1)		Amounts(2)		Last FY ($)		Awards(1)		Amounts(3)		($)(4)		Awards		Amounts		all Deferrals
Mr. Sellers		—	$	5,328	$	0		—	$	1,036,980	$	12,717,612	$	0	$	0	$	0
Mr. Freeman		—		—	$	0		—	$	145,075		2,632,060	$	0	$	0	$	0
Mr. Mueller		—		—	$	0		—	$	123,629		1,221,215	$	0	$	0	$	0
Ms. Brower		—	$	105,017	$	0		—	$	115,101		1,827,023	$	0	$	0	$	0
Mr. Neely		—	$	38,623	$	0		—	$	59,353		646,056	$	0	$	0	$	0

(1)	None of the Named Executive Officers deferred any RSUs or DEUs into the Deferred Compensation Plan during 2007.
(2)	This column includes amounts deferred by Mr. Sellers from the refund of excess 401(k) contributions; by Ms. Brower from her salary, cash bonus, the quarterly cash settlement of RSUs, and the refund of excess 401(k) contributions; and Mr. Neely from his salary, quarterly cash payments on RSUs, and the refund of excess 401(k) contributions. All of the foregoing amounts are included in the Summary Compensation Table under “All Other Compensation”.
(3)	Includes earnings or losses on mutual fund investments.
(4)	Withdrawals for 2007 represent the amounts paid to each Named Executive Officer in connection with the termination of the Deferred Compensation Plan as of the Merger on October 5, 2007.

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     The members of the Compensation Committee and the Series I Trust Compensation Committee are set forth under “Compensation Discussion and Analysis – Introduction.” The Series I Trust Compensation Committee consists of Mr. Augarten. Mr. Augarten has not served as an officer of the Company or any of its subsidiaries. Except as described under “Certain Relationships and Related Transactions,” no member of the Series I Trust Compensation Committee or the Compensation Committee prior to the Merger, has or had any other business relationship or affiliation with the Company or any of its subsidiaries (other than his or her service as a Trustee).

COMPENSATION COMMITTEE REPORT

     Series I Trust Compensation Committee, has reviewed and discussed with management the Compensation Discussion and Analysis. Based on that review and discussion, the Series I Trust Board approved the inclusion of the Compensation and Discussion Analysis in the Company’s Annual Report for 2007.

David Augarten

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

     None of our securities are authorized for issuance in connection with any equity compensation plan.

     None of the Trustees of Series I Trust and none of our executive officers hold any of our securities. The following table sets forth, as of March 20, 2008, the beneficial ownership of Common Units for each person known to us to have been the beneficial owner of more than five percent of the outstanding Common Units. The address for each of the listed beneficial owners is 9200 E. Panorama Circle, Englewood, Colorado. All of the Common Units are pledged as collateral for the Tranche A Term Loan and the Tranche B Term Loan.

	Number of Common Units		Percentage of all
Name of Beneficial Owner	Beneficially Owned		Common Units
Series I Trust		7,444,435		18.81	%
Series II LLC		25,202,745		63.70	%
Series III LLC		6,917,971		17.49	%
TOTAL		39,565,151		100	%

     See “Item 11. Executive Compensation” for information regarding change of control provisions.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Shareholders’ Agreement

     In connection with our merger with the Smith Partnership in 2001, we entered into a Shareholders’ Agreement with Robert H. Smith and Robert P. Kogod, pursuant to which Robert H. Smith, Robert P. Kogod and Ernest A. Gerardi, Jr. became members of the Archstone-Smith Board. In accordance with the Shareholders’ Agreement, throughout Mr. Smith’s employment with us he was entitled to receive an annual minimum salary of $300,000 and an annual minimum bonus of $150,000. Throughout Mr. Kogod’s employment with us he was entitled to receive an annual minimum salary of $100,000. In addition, during each year of his employment with us, Mr. Smith was entitled to receive options to purchase not less than 100,000 of our Common Shares. The Shareholders’ Agreement terminated on October 5, 2007.

Related Party Transaction Policy

     The Archstone-Smith Board adopted a written policy for the approval of all “related person” transactions that remain applicable to us. Under this policy, “related persons” include trustees, executive officers, immediate family members of trustees and executive officers, certain entities in which a trustee, executive officer, or one of the immediate family members is employed, is a principal or owns a controlling interest, charities in which a trustee, executive officer or one of the immediate family members is employed or is on the managing board, and

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shareholders who held more than 5% of Archstone-Smith’s Common Shares upon conversion of their Units. Other than certain pre-approved transactions described in the policy, any transaction in which we are a participant and in which any related person (other than a shareholder) has a material interest having a value in excess of $120,000 must be reviewed and approved by the Archstone-Smith Board’s Audit Committee (now the Series I Trust Board’s Audit Committee).

Related Party Transactions

     On April 8, 2002, we entered into an Office Space Easement and Cost Sharing Arrangement with CESM, Inc. and others. CESM, Inc. is controlled by, Mr. Smith and Mr. Kogod, who were trustees of Archstone-Smith until October 5, 2007.  During 2007, CESM, Inc. paid to us a total of $23,325 for office services provided by us to CESM, Inc. and $26,607 for certain employee expenses. For that same period, we paid to CESM, Inc. $200,720 for a portion of the rent due for the executive suites that CESM, Inc. leases and that was utilized by Mr. Smith and Mr. Kogod while working for us and $35,771 for certain employee expenses to support Mr. Smith and Mr. Kogod. Messrs. Smith and Kogod ceased to be related persons on October 5, 2007.

     Affiliates of the lenders under the Master Credit Facility, the Fannie Mae Mezzanine Lenders and the Freddie Mac Mezzanine Lenders hold limited partnership interests in the Venture and an affiliate of Lehman Brothers Inc. holds a limited partnership interest in the general partner of the Venture. We have paid fees of approximately $216 million to the Buyer Parties and the lenders under the Master Credit Facility in connection with the Merger. As of December 31, 2007 and March 20, 2008, respectively, there was a total of $5.6 billion and $5.6 billion, respectively, outstanding under the Master Credit Facility, the Fannie Mae Mezzanine loans and the Freddie Mac Mezzanine loans. Through December 31, 2007, we paid $76.8 million in interest and $237.7 million in principal under these facilities. Please refer to “Item 15. Financial Statements – Note 8 – Borrowings” for a description of the terms.

     The lease for our corporate office, which was negotiated prior to the Merger, is with an affiliate of Tishman Speyer. For the period from October 5, 2007 through December 31, 2007 we paid $463,918 in rent to that affiliate.

     We have intercompany transactions with affiliated entities and record a receivable from affiliated entities when they borrow from Archstone or we pay billings on their behalf. We charge interest on balances owned by affiliates to Archstone at the same rate that we are paying and therefore do not recognize any profit from our affiliated entities. As of December 31, 2007, there was an aggregate of $393.8 million outstanding under all such transactions. Furthermore, Archstone’s employees render services for affiliated entities where Archstone is reimbursed based on an estimate of the allocable cost. We also record a payable to our affiliates when we receive funds on the affiliated entity’s behalf or the affiliate pays bills on our behalf. As of December 31, 2007 there was an aggregate of $256.7 million outstanding under such transactions.

     Our Chief Executive Officer has entered into an employment agreement which includes equity awards granted by the Venture or affiliated entities. Please refer to “Item 11. Executive Compensation – Employment Agreement with R. Scot Sellers.”

Pre-Merger Trustee Independence

     The Archstone-Smith Board undertook its annual review of trustee independence in March 2007. In determining independence, the Archstone-Smith Board affirmatively determined whether Trustees had any “material relationship” with Archstone-Smith. When assessing the “materiality” of a Trustee’s relationship with Archstone-Smith, the Board considered, among other things, the independence standards set forth in the New York Stock Exchange corporate governance listing standards (including the special requirements for members of the Audit Committee) and all other relevant facts and circumstances, not merely from the Trustee’s standpoint, but from that of the persons or organizations with which the Trustee had an affiliation, including transactions and relationships between each Trustee or any member of his or her immediate family and Archstone-Smith and its subsidiaries and affiliates, between Trustees or their affiliates and members of Archstone-Smith’s senior management or their affiliates and those items reported under “Certain Relationships and Transactions”. The Board also examined the frequency or regularity of the services underlying any such transactions, whether the services were being carried out at arm’s length in the ordinary course of business and whether the services were being provided substantially on the same terms to Archstone-Smith as those prevailing at the time from unrelated parties for comparable transactions. Material relationships can include certain commercial, banking, industrial, consulting, legal, accounting, charitable and familial relationships. During the Archstone-Smith Board’s review of independence of Trustees, the Board

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examined the relationships each of the Trustees had with Archstone-Smith and any of its affiliates and affirmatively determined, based on that examination and the criteria described above, that each of Ms. Gillis and Messrs. Cardwell, Demeritt, Gerardi, Holmes, Polk, Richman and Schweitzer had no material relationship with Archstone-Smith and each was “independent” in accordance with the applicable corporate governance listing standards of the New York Stock Exchange. The Board also determined that Messrs. Sellers, Smith and Kogod were not “independent”, because of their employment with Archstone-Smith.

Post-Merger Trustee Independence

     Effective as of October 5, 2007, Series I Trust and the Trustee of Series I Trust are not independent.

Item 14. Principal Accounting Fees and Services

     The Audit Committee has selected KPMG LLP, certified public accountants, to serve as the auditors of our books and records for the coming year. KPMG LLP has served as our auditors since 1980.

     The fees billed by KPMG LLP in 2007 and 2006 for services provided to Archstone-Smith were as follows:

	2007		2006
Audit Fees(1)	$	1,735,450	$	1,459,722
Audit-Related Fees(2)		185,000		202,421
Tax Fees(3)		341,861		93,508
All Other Fees(4)		—		—
TOTAL	$	2,262,311	$	1,755,651

(1)	“Audit Fees” are the aggregate fees billed by KPMG LLP for professional services rendered for the audit of Archstone-Smith’s annual financial statements for the years ended December 31, 2007 and December 31, 2006 and the reviews of the financial statements included in Archstone-Smith’s quarterly reports on Form 10-Q during 2007 and 2006. These fees include fees billed in connection with KPMG LLP’s analysis of the effectiveness of our internal controls. “Audit Fees” for 2006 also includes amounts billed relating to our international operations, which totaled $96,622. In addition, “Audit Fees” includes amounts billed for registration statements filed and related comfort letters and consents amounting to $45,490 and $96,300 in 2007 and 2006, respectively.
(2)	“Audit-related fees” include fees billed for assurance and related services that are reasonably related to the performance of the audit and not included in the “audit fees” described above, including audits of joint ventures and unconsolidated and consolidated subsidiaries.
(3)	“Tax Fees” are fees billed by KPMG LLP in either 2007 or 2006 for tax services, including tax compliance, tax advice or tax planning.
(4)	“All Other Fees” are fees billed by KPMG LLP in 2007 or 2006 that are not included in the above classifications.

     All services provided by KPMG LLP in 2007 and 2006 were permissible under applicable laws and regulations and have been, pre-approved by the Archstone-Smith Audit Committee. All audit and permissible non-audit services are pre-approved by the Archstone-Smith Audit Committee or fall within guidelines that have been pre-approved by the Archstone-Smith Audit Committee. In particular, the Archstone-Smith Audit Committee approved the engagement of KPMG LLP for non-audit services, consisting of certain specified tax-related services during 2005, 2006 and 2007, provided that the fees for these services did not exceed $400,000 in the aggregate or $100,000 for any one service.

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Part IV

Item 15. Exhibits and Financial Statement Schedules

(a) Financial Statements and Schedules:

1. Financial Statements

See Index to Financial Statements and Schedules on page 83 of this report, which is incorporated herein by reference.

2. Financial Statement Schedules:

See Schedule III on page 127 of this report, which is incorporated herein by reference.

See Schedule IV on page 129 of this report, which is incorporated herein by reference.

All other schedules have been omitted since the required information is presented in the financial statements and the related notes or is not applicable.

3. Exhibits

See Index to Exhibits on page 142 of this report, which is incorporated herein by reference.

(b) Exhibits:

The Exhibits required by Item 601 of Registration S-K are listed in the Index to Exhibits on page 141 of this Annual Report, which is incorporated herein by reference.

The accompanying notes are an integral part of these consolidated financial statements.

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INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

	Page
Report of Independent Registered Public Accounting Firm		84
Consolidated Balance Sheets as of December 31, 2007 and 2006		85
Consolidated Statements of Operations for the periods January 1, 2007 through October 4, 2007 and October 5, 2007 through December 31, 2007 and years ended December 31, 2006 and 2005		86
Consolidated Statements of Unitholders’ Equity, Other Common Unitholders’ Interest, Preferred Units and Comprehensive Income (Loss) for the years ended December 31, 2007, 2006 and 2005		87
Consolidated and Combined Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005		88
Notes to Consolidated Financial Statements		89
Report of Independent Registered Public Accounting Firm on Supplementary Information		126
Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2007		127
Schedule IV – Mortgage Loans on Real Estate as of December 31, 2007		129
Signatures		130
Index to Exhibits

The accompanying notes are an integral part of these consolidated financial statements.

83

Report of Independent Registered Public Accounting Firm

The Trustee of Archstone and the Board of Trustees of the Trustee

     We have audited the consolidated balance sheet of Archstone and subsidiaries (Successor) as of December 31, 2007 and the consolidated balance sheet of Archstone-Smith Operating Trust and subsidiaries (Predecessor) as of December 31, 2006, and the related consolidated statements of operations, unitholders’ equity, other common unitholders’ interest, preferred units and comprehensive income (loss) of the Successor for the period October 5, 2007 through December 31, 2007 and of the Predecessor for the period January 1, 2007 through October 4, 2007 and for the years ended December 31, 2006 and 2005, and the related consolidated and combined statement of cash flows of the Successor and the Predecessor for the year ended December 31, 2007 and the related consolidated statements of cash flows of the Predecessor for the years ended December 31, 2006 and 2005. These consolidated and combined financial statements are the responsibility of Archstone and subsidiaries management. Our responsibility is to express an opinion on these consolidated and combined financial statements based on our audits.

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated and combined financial statements referred to above present fairly, in all material respects, the financial positions of the Successor as of December 31, 2007 and of the Predecessor as of December 31, 2006, and the results of the Successor’s operations for the period October 5, 2007 through December 31, 2007 and the results of the Predecessor’s operations for the period January 1, 2007 through October 4, 2007 and for the years ended December 31, 2006 and 2005, and the cash flows of the Successor and Predecessor for the year ended December 31, 2007 and of the Predecessor for the years ended December 31, 2006 and 2005, in conformity with U.S. Generally Accepted Accounting Principles.

/s/ KPMG LLP

Denver, Colorado
March 31, 2008

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CONSOLIDATED BALANCE SHEETS
(In thousands, except unit data)

	Successor			Predecessor
	December 31,			December 31,
	2007			2006
ASSETS
Real estate	$	14,680,182		$	12,967,709
Real estate — held for sale		388,890			219,931
Less accumulated depreciation		77,384			957,146
		14,991,688			12,230,494
Investments in and advances to unconsolidated entities		297,113			235,323
Net real estate investments		15,288,801			12,465,817
Cash and cash equivalents		22,422			48,655
Restricted cash		579,097			319,312
Due from affiliated entities		393,841			—
Other assets		870,498			425,343
Total assets	$	17,154,659		$	13,259,127
LIABILITIES AND UNITHOLDERS’ EQUITY
Liabilities:
Revolving credit facilities	$	60,000		$	84,723
Long-term Unsecured Debt		—			3,339,462
Long-term Unsecured Debt – held for sale		—			16,237
Term Loan – International		—			235,771
Term loan – domestic		4,591,822			—
Property mortgages payable		9,194,835			2,743,081
Property mortgages payable — held for sale		17,813			33,153
Due to affiliated entities		256,666			—
Accounts payable		25,690			71,967
Accrued expenses and other liabilities		488,945			432,395
Total liabilities		14,635,771			6,956,789
Series O and other Preferred Units (3,878,131 units, Liquidation value of $61.75 per unit)		235,944			—
Other common unitholders’ interest, at redemption value (A-1 Common Units: 29,514,128 in 2006)		—			1,718,017
Unitholders’ equity (450,000,000 units authorized):
Perpetual Preferred Units (Liquidation value of $103,830 per unit)		50,000			50,000
Common unitholders’ equity (39,565,151 units in 2007 and 220,147,167 units in 2006)		2,635,056			4,530,801
Accumulated other comprehensive income		5,906			3,520
Retained deficit		(408,018	)		—
Total unitholders’ equity		2,282,944			4,584,321
Total liabilities and unitholders’ equity	$	17,154,659		$	13,259,127

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per unit amounts)

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Year Ended
	December 31,			October 4,			December 31,			December 31,
	2007			2007			2006			2005
Revenues:
Rental revenues	$	213,777		$	644,330		$	682,415		$	457,825
Other income		41,494			45,831			77,410			56,030
		255,271			690,161			759,825			513,855
Expenses:
Rental expenses		49,024			157,452			163,195			106,657
Real estate taxes		27,324			62,263			62,627			41,983
Depreciation on real estate investments		162,427			166,896			177,264			115,997
Interest expense		255,709			166,528			161,231			75,968
General and administrative expenses		24,160			60,605			68,188			58,604
Other expenses		4,689			40,768			17,705			53,276
		523,333			654,512			650,210			452,485
Earnings (loss) from operations		(268,062	)		35,649			109,615			61,370
Income (loss) from unconsolidated entities		(7,680	)		(5,294	)		36,316			22,432
Other non-operating income (loss)		(124,460	)		25,531			2,338			28,807
Net earnings (loss) before discontinued operations		(400,202	)		55,886			148,269			112,609
Net earnings (loss) from discontinued operations		(7,816	)		714,831			686,806			588,895
Net earnings (loss)		(408,018	)		770,717			835,075			701,504
Preferred Unit Distributions		-0-			(2,917	)		(3,829	)		(4,572	)
Undeclared and unaccrued Preferred Unit Distributions		(5,457	)		-0-			-0-			-0-
Net earnings attributable to Common Units — Basic	$	(413,475	)		767,800			831,246			696,932
Interest on Convertible Debt					20,216			11,139			—
Net earnings attributable to Common Units — Diluted				$	788,016		$	842,385		$	696,932
Weighted average Common Units outstanding:
Basic					250,223			248,314			231,642
Diluted					260,026			253,308			232,608
Net earnings per Common Units — Basic:
Net earnings before discontinued operations				$	0.21		$	0.58		$	0.47
Discontinued operations, net					2.86			2.77			2.54
Net earnings				$	3.07		$	3.35		$	3.01
Net earnings per Common Unit — Diluted:
Net earnings before discontinued operations				$	0.21		$	0.58		$	0.47
Discontinued operations, net					2.82			2.75			2.53
Net earnings				$	3.03		$	3.33		$	3.00
Distributions paid per Common Unit				$	0.9050		$	1.74		$	1.73

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF UNITHOLDERS’ EQUITY, OTHER COMMON
UNITHOLDERS’ INTEREST, PREFERRED UNITS AND COMPREHENSIVE INCOME (LOSS)
Years Ended December 31, 2007, 2006 and 2005
(In thousands)

	Perpetual
	Preferred
	Units at									Accumulated						Other
	Aggregate			Common						Other			Total			Common			Series O
	Liquidation			Unitholders’			Retained			Comprehensive			Unitholders’			Unitholders’			Preferred
	Preference			Equity			Deficit			Earnings (Loss)			Equity			Interest			Units		Total
Balances at December 31, 2004	$	69,522		$	3,638,729			—		$	(4,425	)	$	3,703,826		$	885,400			—	$	4,589,226
Comprehensive income:
Net earnings		—			616,172			—			—			616,172			85,332			—		701,504
Change in fair value of cash flow hedges		—			—			—			4,211			4,211			—			—		4,211
Change in fair value of marketable securities		—			—			—			(1,214	)		(1,214	)		—			—		(1,214	)
Foreign currency exchange translation		—			—			—			(292	)		(292	)		—					(292	)
Comprehensive income attributable to Common Units																						704,209
Preferred Unit distribution					(4,572	)		—			—			(4,572	)		—			—		(4,572	)
Common Unit distributions		—			(353,623	)		—			—			(353,623	)		(43,843	)		—		(397,466	)
A-1 Common Units converted into A-2 Common Units		—			8,415			—			—			8,415			(8,415	)		—		—
A-2 Common Unit repurchases					(56,495	)		—			—			(56,495	)		—			—		(56,495	)
Preferred Unit repurchases		(19,522	)		—			—			—			(19,522	)		—			—		(19,522	)
Exercise of Options		—			41,566			—			—			41,566			—			—		41,566
Issuance of A-1 Common Units under Compensation Plans		—			14,670			—			—			14,670			—			—		14,670
Issuance of A-1 Common Units in exchange for real estate		—			—			—			—			—			408,292			—		408,292
Issuance of A-2 Common Units					491,398			—			—			491,398			—			—		491,398
Adjustment to redemption value		—			(93,725	)		—			—			(93,725	)		93,725			—		—
Other, net		—			(2,516	)		—			—			(2,516	)		—			—		(2,516	)
Balances at December 31, 2005	$	50,000		$	4,300,019			—		$	(1,720	)	$	4,348,299		$	1,420,491			—	$	5,768,790
Comprehensive income:
Net earnings		—			727,434			—			—			727,434			107,641			—		835,075
Change in fair value of cash flow hedges		—			—			—			1,058			1,058			—			—		1,058
Change in fair value of marketable securities		—			—			—			1,638			1,638			—			—		1,638
Foreign currency exchange translation		—			—			—			2,544			2,544			—			—		2,544
Comprehensive income attributable to Common Units																						840,315
Preferred Unit distribution					(3,829	)		—			—			(3,829	)		—			—		(3,829	)
Common Unit distributions		—			(377,513	)		—			—			(377,513	)		(55,079	)		—		(432,592	)
A-1 Common Units converted into A-2 Common Units		—			143,404			—			—			143,404			(143,404	)		—		—
Issuance of Common Units under Dividend Reinvestment Plan		—			27,100			—			—			27,100			—			—		27,100
Exercise of Options		—			27,716			—			—			27,716			—			—		27,716
Issuance of A-1 Common Units in exchange for real estate		—			—			—			—			—			81,401			—		81,401
Accrual of equity-classified awards under Compensation Plans		—			10,681			—			—			10,681			—			—		10,681
Adjustment to redemption value		—			(306,967	)		—			—			(306,967	)		306,967			—		—
Other, net		—			(17,244	)		—			—			(17,244	)		—			—		(17,244	)
Balances at December 31, 2006	$	50,000		$	4,530,801			—		$	3,520		$	4,584,321		$	1,718,017			—	$	6,302,338
Comprehensive income:
Net earnings		—			686,371			—			—			686,371			84,346					770,717
Change in fair value of cash flow hedges		—			—			—			(60	)		(60	)		—			—		(60	)
Reclassification adjustment for realized net gains on marketable securities		—			—			—			(1,794	)		(1,794	)		—			—		(1,794	)
Change in fair value of marketable securities					—			—			(14	)		(14	)		—			—		(14	)
Foreign currency exchange translation		—			—			—			8,263			8,263			—			—		8,263
Comprehensive income attributable to Common Units																						777,112
Preferred Unit distribution		—			(2,917	)		—			—			(2,917	)		—			—		(2,917	)
Common Unit distributions		—			(202,471	)		—			—			(202,471	)		(25,397	)		—		(227,868	)
A-1 Common Units converted into A-2 Common Units		—			55,378			—			—			55,378			(55,378	)		—		—
Issuance of Common Units under Dividend Reinvestment Plan		—			20,493			—			—			20,493			—			—		20,493
Exercise of Options					11,489			—			—			11,489								11,489
Issuance of A-1 Common Units in exchange for real estate		—			—			—			—			—			1,067			—		1,067
Accrual of equity-classified awards under Compensation Plans		—			7,882			—			—			7,882								7,882
Adjustment to redemption value		—			69,810			—			—			69,810			(69,810	)		—		—
Common Unit Redemptions		—			—			—			—			—			(1,416,901	)		—		(1,416,901	)
Other, net		—			9,612			—			—			9,612			—			—		9,612
Balances at October 4, 2007	$	50,000		$	5,186,448			—		$	9,915		$	5,246,363		$	235,944			—	$	5,482,307
Reclassification in connection with the Merger		—			(2,551,392	)		—			(9,915	)		(2,561,307	)		(235,944	)		235,944		(2,561,307	)
Comprehensive income:
Net loss		—			—			(408,018	)		—			(408,018	)		—			—		(408,018	)
Foreign currency exchange translation		—			—			—			5,906			5,906			—			—		5,906
Comprehensive (loss) attributable to Common Units																						(402,112	)
Balances at December 31, 2007	$	50,000		$	2,635,056		$	(408,018	)	$	5,906		$	2,282,944		$	—		$	235,944	$	2,518,888

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(In thousands)

	Combined
	Successor and
	Predecessor			Predecessor
	Year Ended			Year Ended			Year Ended
	December			December			December
	31, 2007			31, 2006			31, 2005
Operating activities:
Net earnings	$	362,699		$	835,075		$	701,504
Adjustments to reconcile net earnings to net cash flow provided by operating activities:
Depreciation and amortization		389,759			302,495			252,174
Gains on dispositions of depreciated real estate		(647,208	)		(602,915	)		(524,684	)
Gains on sale of marketable equity securities		(1,867	)		(1,673	)		(27,948	)
Provisions for possible loss on investments		7,490			4,328			9,803
Gains on sale of International Fund shares		(13,145	)		—			—
Foreign currency gains on International investments		(15,221	)		—			—
Unrealized losses on derivatives		130,176			—			—
Equity in earnings from unconsolidated entities		16,168			(6,118	)		6,605
Interest accrued on Mezzanine loans		(4,587	)		(9,781	)		(5,224	)
Change in other assets		(199,624	)		(14,786	)		7,132
Change in accounts payable, accrued expenses and other liabilities		368,652			49,067			7,663
Other, net		18,063			(18,264	)		(13,006	)
Net cash flow provided by operating activities		411,355			537,428			414,019
Investing activities:
Real estate investments, net		(2,318,291	)		(2,216,598	)		(2,016,573	)
Purchase of DeWAG net of cash acquired of $20,364		—			(252,428	)		—
Change in investments in unconsolidated entities, net		(43,464	)		(76,366	)		(10,991	)
Proceeds from disposal of International Fund shares		98,857			—			—
Change in investment in International Fund		72,124			—			—
Proceeds from dispositions		1,995,941			1,888,341			1,538,839
Change in restricted cash		198,236			175,962			(375,179	)
Change in notes receivable, net		(44,051	)		(82,414	)		(98,909	)
Proceeds from notes receivable		89,300			46,081			36,654
Other, net		(33,995	)		11,158			(38,462	)
Net cash flow provided by (used in) investing activities		14,657			(506,264	)		(964,621	)
Financing activities:
Proceeds from Long-Term Unsecured Debt		5,204,448			859,385			695,724
Payments on Long-Term Unsecured Debt		(3,552,067	)		(51,250	)		(251,250	)
Principal repayment of mortgages payable, including prepayment penalties		(1,380,231	)		(324,700	)		(500,963	)
Regularly scheduled principal payments on mortgages payable		(11,058	)		(12,949	)		(15,067	)
Proceeds from Unsecured Loans – International		142,657			272,792			—
Principal repayments on Unsecured Loans – International		(378,428	)		(37,021	)		—
Proceeds from mortgage notes payable		9,832,621			—			33,807
Proceeds from (payments on) unsecured credit facilities, net		80,914			(309,855	)		375,578
Change in amounts due from affiliated entities		1,191,706			—			—
Change in interest receivable from funds in escrow		(9,467	)		—			—
Change in restricted cash		(486,949	)		—			—
Proceeds from issuance of A-2 Common Units, net		—			—			491,398
Proceeds from Common Units issued under DRIP and employee stock options		29,933			57,773			41,566
Repurchase of Common Units and Preferred Units		(14,949,328	)		—			(56,495	)
Repurchase of Series E and F Perpetual Preferred Units		—			—			(19,522	)
Cash distributions paid on Common Units		(227,868	)		(432,592	)		(417,267	)
Cash distributions paid on Preferred Units		(2,916	)		(3,829	)		(4,572	)
Equity Contribution		4,886,552			—			—
Transaction costs related to the Merger		(697,040	)		—			—
Termination of the Long Term Incentive Plan in connection with the Merger		(134,626	)		—			—
Other, net		8,902			(13,901	)		(11,952	)
Net cash flow provided by (used in) financing activities		(452,245	)		3,853			360,985
Net change in cash and cash equivalents		(26,233	)		35,017			(189,617	)
Cash and cash equivalents at beginning of period		48,655			13,638			203,255
Cash and cash equivalents at end of period	$	22,422		$	48,655		$	13,638

These consolidated statements of cash flows combine cash flows from discontinued operations with cash flows from continuing operations. See Note 17 for supplemental information on non-cash investing and financing activities.

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2007, 2006 and 2005
(The glossary included in this Annual Report is hereby incorporated by reference)

(1) Description of Business and Summary of Significant Accounting Policies

Business

     Archstone’s business is focused primarily on creating value for our unitholders by acquiring, developing, redeveloping and operating apartments in markets characterized by protected locations with limited land for new housing construction, expensive single-family home prices, and a strong, diversified economic base with significant employment growth potential. As used herein, references to “Archstone,” the “Operating Trust”, “Company,” “company, “we” or “us” refer to Archstone (formerly Archstone-Smith Operating Trust), a Maryland real estate investment trust, organized in 2001.

Consummation of Merger

     As of October 4, 2007 approximately 89.5% of our outstanding Common Units were owned by Archstone-Smith and the remaining 10.5% of the outstanding Common Units were owned by minority interest holders. Archstone-Smith was a publicly traded equity REIT organized under the laws of the State of Maryland.

     On May 29, 2007, Archstone-Smith announced it had signed the Merger Agreement, whereby both Archstone-Smith and Archstone would be acquired by the Buyer Parties. The transactions contemplated by the Merger Agreement were consummated on October 4 and 5, 2007. As a result of the transactions contemplated by the Merger Agreement, the sole trustee of Archstone, effective as of October 5, 2007, is Series I Trust, which along with Series II LLC and Series III LLC owns 100% of Archstone’s outstanding Common Units.

     Under the terms of the Merger Agreement, all outstanding Common Shares of Archstone-Smith were acquired by Series I Trust, Series II LLC and Series III LLC for $60.75 in cash, without interest and less applicable withholding taxes, for each Common Share issued and outstanding immediately prior to the effective time of the Merger. With respect to the outstanding Series I Preferred Shares, the Buyer Parties elected to replace them with substantially identical Series I Preferred Shares of Series I Trust.

     As part of the transaction, Archstone merged on October 4, 2007 with River Trust Acquisition (MD), LLC, a subsidiary of the Buyer Parties. A total of 39.6 million Common Units remain outstanding. Approximately 3.9 million A-1 Common Units, held by less than 300 holders, were converted into newly issued Series O Preferred Units, whereas holders of approximately 22.2 million A-1 Common Units elected to exchange their A-1 Common Units for cash consideration of $60.75 without interest and less applicable withholding taxes. Each Series O Preferred Unit has a redemption price of $60.75 and bears cumulative preferential distributions payable quarterly at an annual rate of 6%. During any period of time after we incur indebtedness in excess of $10 million in principal amount (excluding draws on our line of credit or refinancings of existing indebtedness) and as a result of which our loan to value ratio exceeds 85%, until such time as our loan to value ratio no longer exceeds 85%, the distribution rate on our Series O Preferred Units shall increase from 6% per annum to 8% per annum. The Series O Preferred Units, which have only limited voting rights, are redeemable by the holder or Archstone under certain circumstances. The Series I Preferred Units remain outstanding and unchanged. The Series M Preferred Unit and each Series N-1 and N-2 Preferred Unit was converted into the right to receive one newly issued Series P Preferred Unit, Series Q-1 Preferred Unit and Series Q-2 Preferred Unit, respectively, of Archstone.

     In summary, the total purchase consideration paid by the Buyer Parties for the assets owned by Predecessor immediately prior to the Mergers was $22.1 billion which consisted of cash equity of $4.9 billion (net of capital raising costs), replacement or issuance of Preferred Units of $0.3 billion, borrowings of $15.2 billion in new debt, assumption of $0.9 billion of existing debt and the assumption of trade payables and other accrued liabilities of $0.8 billion. The accrued liabilities included a payment of $0.1 billion related to Predecessor employee stock awards under the LTIP. We incurred $1.0 billion of transaction-related costs that were financed through our borrowings. Although Archstone is the surviving entity, River Trust Acquisition (MD), LLC was viewed as the acquirer for accounting purposes due to the resulting change in control. As such, the total purchase consideration was allocated to the fair value of the net assets acquired through the application of purchase accounting in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations.” The majority of our fair value adjustments pertained to real estate and lease-related intangibles. The financial statements in this Annual Report include the operations of the Predecessor for periods

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prior to the Merger on October 4, 2007 and the Successor for periods after the Merger. In connection with the Merger, through a series of legal transactions, the Buyer Parties caused Predecessor to make certain material distributions to affiliated entities. These assets consisted primarily of communities that are not subject to unitholder tax protection agreements, domestic joint ventures, communities under development and communities formerly owned by Ameriton. Following is a summary of the fair values of assets and liabilities owned by Successor as compared to the fair value attributable to the assets and liabilities distributed to and owned by affiliated entities at October 5, 2007 (in thousands):

			Fair Value Attributable to
	Aggregate Fair Value		Affiliates			Successor
Real estate	$	18,662,371	$	3,641,083		$	15,021,288
Investment in unconsolidated entities		1,018,725		550,399			468,326
Lease and other intangibles		594,306		91,439			502,867
Other assets		1,840,255		116,021			1,724,234
Intercompany assets (liabilities)		—		(12,873	)		12,873
Total assets	$	22,115,657	$	4,386,069		$	17,729,588
Debt	$	16,108,709	$	2,013,815		$	14,094,894
Other liabilities		834,452		120,757			713,695
Other Preferred Units		285,944		—			285,944
Net assets at fair value	$	4,886,552	$	2,251,497		$	2,635,055

     The purchase price allocation reflected above was based on preliminary estimates and is subject to change as we obtain more complete information regarding land, building and lease intangible values.

Principles of Consolidation

     The accounts of Archstone and its controlled subsidiaries are consolidated in the accompanying financial statements. All significant inter-company accounts and transactions have been eliminated. We use the equity method to account for investments that do not qualify as variable interest entities, variable interest entities where we are not the primary beneficiary and entities that we do not control, or where we do not own a majority of the economic interest, but have the ability to exercise significant influence over the operating and financial policies of the investee. We also use the equity method when we function as the managing member and our partner does not have substantive participating rights or we can be replaced by a partner if we are the managing member. For an investee accounted for under the equity method, our share of net earnings or losses of the investee is reflected in income as earned and distributions are credited against the investment as received.

Business Combinations

     From time to time, we are involved in transactions that are deemed to be business combinations. The purchase price for such allocations is allocated to the various components of the combination based on their respective fair value. The components typically include land, building, debt and other assumed liabilities and intangibles related to in-place leases, above and below market leases, technology, management agreements and non-compete agreements as well as other assets and liabilities. If the acquisition relates to multiple properties or entities, we must also allocate the purchase price among the acquired group. In the allocation of purchase price, management makes significant assumptions as it relates to expected future cash flows or replacement cost from which the fair value is derived. Subsequent adjustments made to the initial purchase price allocation are made within the allocation period, which typically does not exceed one year.

Use of Estimates

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported in the financial statements and the related notes. Actual results could differ from management’s estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period they are determined to be necessary.

Discontinued Operations

     For properties accounted for under SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets,” the results of operations for properties sold during the period or classified as held for sale at the end of the current period are required to be classified as discontinued operations in the current and prior periods. The property-specific components of net earnings that are classified as discontinued operations include rental revenue, rental expense, real estate tax, depreciation expense and a pro-rata allocation of interest expense. The net gain or loss and the related internal disposition costs on the eventual disposal of the held for sale properties are also classified as

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discontinued operations. Land sales and properties sold by our unconsolidated entities are not included in discontinued operations and related gains or losses are reported as a component of other income and income from unconsolidated entities, respectively. Operating communities transferred through sale or distribution to affiliated entities in connection with the Merger are treated as discontinued operations in the accompanying Statements of Operations.

Cash and Cash Equivalents

     Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions and short-term, highly liquid investments. We consider all highly liquid instruments with maturities when purchased of three months or less to be cash equivalents.

Restricted Cash

     In most cases, disposition proceeds are set aside and designated to fund future tax-deferred exchanges of qualifying real estate investments. If these proceeds are not redeployed to qualifying real estate investments within 180 days, these funds are redesignated as cash and cash equivalents. We generally decide if we are not going to do an exchange within 45 days and it is therefore rare for cash to remain in escrow for the full 180 days. Cash proceeds from bond financings held in escrow to fund future development costs and cash held as security deposits are classified as restricted cash.

     As of December 31, 2007 $428.0 million of our restricted cash balances related to an interest reserve required under the terms of certain borrowing agreements.

Marketable Securities and Other Investments

     All publicly traded equity securities are classified as “available for sale” and carried at fair value, with unrealized gains and losses reported as a separate component of Unitholders’ equity. Private investments, for which we do not have the ability to exercise significant influence, are accounted for at cost. Declines in the value of public and private investments that management determines are other than temporary are recorded as a provision for loss on investments.

     As of December 31, 2007, we had $0.0 million in public and private equity securities.

Real Estate and Depreciation

     Real estate, other than properties held for sale, is carried at depreciated cost. In connection with the Merger our real estate was recorded at fair value which resulted in a real estate carrying value increase of $5.8 billion. Long-lived assets designated as being held for sale are reported at the lower of their carrying amount or estimated fair value less cost to sell, and thereafter are no longer depreciated. Costs associated with acquisition efforts are recorded in other assets and the unsuccessful acquisition efforts are expensed at the time the pursuit is abandoned.

     We allocate the cost of newly acquired properties between net tangible and identifiable intangible assets. When allocating cost to an acquired property, we first allocate costs to the estimated intangible value of the existing lease agreements and then to the estimated value of the land, building and fixtures assuming the property is vacant. We estimate the intangible value of the lease agreements by determining the lost revenue associated with a hypothetical lease-up. We depreciate the building and fixtures based on the expected useful life of the asset and amortize the intangible value of the lease agreements over the average remaining life of the existing leases. This amortization expense is included in depreciation on real estate investments in our consolidated statements of operations

     In accordance with SFAS No. 144, long-lived assets, such as property, plant, and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset, including the estimated proceeds upon ultimate disposition. If the carrying amount of

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an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. When an operating asset is placed under contract, we reclassify it to held for sale as this is the point in time that we believe the requirements for held for sale classification are met. Held for sale assets are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities classified as held for sale are presented separately in the appropriate asset and liability sections of the balance sheet.

     We have an investment organization that is responsible for development and redevelopment of apartment communities. Consistent with GAAP, all direct and certain indirect costs, including interest and real estate taxes, incurred during development and redevelopment activities are capitalized. Interest is capitalized on real estate assets that require a period of time to get them ready for their intended use. The amount of interest capitalized is based upon the average amount of accumulated development expenditures during the reporting period and the cost of related borrowings. Included in capitalized costs are management’s estimates of the direct and incremental personnel costs and indirect project costs associated with our development and redevelopment activities. Indirect project costs consist primarily of personnel costs associated with construction administration and development accounting, legal fees, and various office costs that clearly relate to projects under development.

     Depreciation and amortization is computed over the expected useful lives or contractual term of the depreciable property or intangible on a straight-line basis as follows:

Building and related land improvements	15-40 years
Furniture, fixtures, equipment and other	3-10 years
Intangible value of retail and commercial lease agreements	1-20 years
Intangible value of residential lease agreements	6-48 months

Interest

     During 2007, the total interest paid in cash on all outstanding debt was $296.5 million for the period of January 1, 2007 through October 4, 2007 and $211.8 million for October 5, 2007 through December 31, 2007. Interest paid in cash on all outstanding debt in 2006 and 2005 was $315.5 million and $263.5 million, respectively.

     We capitalize interest during the construction period as part of the cost of apartment communities under development. Interest capitalized during 2007 aggregated $38.1 million for the period of January 1, 2007 through October 4, 2007 and $0.3 million for October 5, 2007 through December 31, 2007. Interest capitalized during 2006 and 2005 aggregated $51.8 million and $39.1 million, respectively.

Cost of Raising Capital

     Costs incurred in connection with the issuance of equity securities are deducted from Unitholders’ equity. Costs incurred in connection with the issuance or renewal of debt is subject to the provisions of EITF 96-19, Debtors’ Accounting for a Modification or Exchange of Debt Instruments. Accordingly, if the terms of the renewed or modified debt instrument are deemed to be substantially different (i.e., a 10 percent or more difference in the present value of the remaining cash flows), all unamortized loan costs associated with the extinguished debt are charged against earnings during the current period; otherwise, costs are capitalized as other assets and amortized into interest expense over the term of the related loan or the renewal period. The balance of any unamortized loan costs associated with retired debt is expensed upon retirement. We utilize the straight-line method to amortize debt issuance costs as it approximates the effective interest method required under SFAS No. 91. Amortization of loan costs included in interest expense was $8.3 million for the period of January 1, 2007 through October 4, 2007 and $12.1 million for the period of October 5, 2007 through December 31, 2007. Amortization of loan costs included in interest expense for 2006 and 2005 was $6.1 million and $4.2 million, respectively.

Moisture Infiltration and Mold Remediation Costs

     We estimate and accrue costs related to the correction of moisture infiltration and related mold remediation when we anticipate incurring such remediation costs because of the assertion of a legal claim or threatened litigation. When we incur remediation costs at our own discretion, the cost is recognized as incurred. Costs of addressing moisture infiltration and resulting mold remediation issues are only capitalized, subject to recoverability,

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when it is determined by management that such costs also extend the life, increase the capacity, or improve the safety or efficiency of the property relative to when the community was originally constructed or acquired, if later. All other related costs are expensed.

Intangibles

     Intangible assets consist primarily of lease-related intangibles and non-compete agreements and all of the intangibles were recorded in connection with our Merger. The market value of above and below market leases are based on our estimate of current market rents as compared to the rent that we are receiving and is recorded in either other assets or other liabilities. These assets are charged and liabilities are credited to rental income over the estimated term of the lease. We also recognize the value of our in-place residential lease agreements and amortize these assets into depreciation on real estate investments over the estimated term of the lease.

     The following is a summary of the domestic intangibles and the corresponding amortization we expect to record (dollar amounts in thousands).

					Weighted
	Gross Carrying		Accumulated		Average Useful Life
	Amount		Amortization		(in years)
In-place leases	$	261,387	$	87,396		0.8
Above-market leases		2,269		169		5.0
Non-compete agreements		15,600		557		7.0
Ground lease intangibles		199,971		1,134		46.0
Total intangible assets	$	479,227	$	89,256
Below-market leases	$	30,771	$	735		14.0
Total intangible liabilities	$	30,771	$	735

Estimated net amortization for the year ending
2008	$	178,729
2009	$	4,739
2010	$	4,739
2011	$	4,739
2012	$	4,739

     In connection with the Merger, we have recorded an indefinite-lived intangible asset related to the Archstone trademark of $10.7 million.

     We will perform an impairment test annually, or more frequently, if events or changes in circumstances indicate impairment of our intangible assets, which are included in other assets.

Insurance Recoveries

     We recognize insurance recovery proceeds as other income if the recovery is related to items that were originally expensed, such as, legal settlements, legal expenses and repairs that did not meet capitalization guidelines. For recoveries of property damages that were eligible for capitalization, we reduce the basis of the property or if the property has subsequently been sold, we recognize the proceeds as an additional gain on sale. We recognize insurance recoveries at such time that we believe the recovery is probable and we have sufficient information to make a reasonable estimate of proceeds, except in cases where we have to pursue recovery via litigation. In this circumstance, we recognize the recovery when we have a signed, legally binding agreement with the insurance carrier.

Derivative Financial Instruments

     We utilize derivative financial instruments to manage our interest rate risk, foreign currency exchange risk, exposure to changes in the fair value of certain investments in equity securities and exposure to volatile energy prices. During 2003, we adopted SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” Under SFAS No. 149, the resulting assets and liabilities associated with derivative financial instruments are carried on our financial statements at estimated fair value at the end of each reporting period. When

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our derivatives are designated as hedges under the provisions of SFAS 149, the changes in the fair value of a fair value hedge and the fair value of the items hedged are generally recorded in earnings for each reporting period. When designated, the change in the fair value of effective cash flow hedges and foreign currency hedges are carried on our financial statements as a component of accumulated other comprehensive income (loss). In connection with the Merger we did not re-designate derivative instruments accounted for as hedges, resulting in all fair value changes being recorded in earnings. All amounts in accumulated other comprehensive income (loss) related to derivative instruments accounted for as hedges by the Predecessor were reduced to zero as part of the Merger.

     We review our debt and equity instruments for embedded derivatives that may require bifurcation under SFAS No. 149. The Master Credit Facility contains a feature giving the lenders the right to reprice the loans in certain instances. The lenders do not have the right to change the repayment terms or maturity date unless we agree, in our sole discretion, to such structural changes. For accounting purposes, the lender’s right to reprice the loan is considered an embedded derivative that is clearly and closely related to the debt host and has not been bifurcated and accounted for separately. See Note 8 Borrowings.

Revenue and Gain Recognition

     We generally lease our apartment units under operating leases with terms of one year or less.

     During 2007 we entered into three new ground leases for which we expect to receive an average of $6.0 million per year in lease payments over the next five years. As of December 31, 2007 we expect to record $17.4 million in lease revenue per year over the life of the lease using the straight-line method in accordance with SFAS No. 13, “Accounting for Leases” (“SFAS No. 13”). Communities subject to the Oakwood Master Leases entered into in 2005 have a seven year term, expiring between July 2012 and March 2013, subject to Oakwood’s right to terminate individual leases under certain circumstances. As of December 31, 2007, none of the Oakwood Master Lease Communities has been returned to the company. The aggregate annual contractual base rent due under these leases is $73.9 million and is subject to annual adjustments on January 1st of each year equal to the percentage change in the average Same-Store NOI growth for certain other specified properties. Rental income related to leases is recognized in the period earned over the lease term in accordance with Statement of Financial Accounting Standards SFAS No.13, Rent concessions are recognized as an offset to revenues collected over the term of the underlying lease.

     We use the full accrual method of profit recognition in accordance with SFAS No. 66 to record gains on sales of real estate. If we sell improvements and retain a lease on the underlying land that covers substantially all of the economic life of the improvements, then we defer the profit associated with the land and record the profit ratably over the life of the lease. Accordingly, we evaluate the related GAAP requirements in determining the profit to be recognized at the date of each sale transaction (i.e., the profit is determinable and the earnings process is complete). We recognize deferred gains when a property is sold to a third party. Further, during periods when our ownership interests in an investee decrease, we will recognize gains related to previously deferred proceeds to coincide with our new ownership interest in the investee.

Rental Expenses

     Rental expenses shown on the accompanying Statements of Operations include costs associated with on-site and property management personnel, utilities, repairs and maintenance, property insurance, marketing, landscaping and other on-site and related administrative costs. Utility reimbursements from residents, which are recorded as offsets to utility expenses, aggregated $18.1 million and $4.4 million for the periods January 1, 2007 through October 4, 2007 and October 5, 2007 through December 31, 2007, respectively. Utility reimbursements from residents, which are recorded as offsets to utility expenses, aggregated $25.4 million and $19.2 million for 2006 and 2005, respectively.

Legal Fees

     We generally recognize legal expenses as incurred; however, if such fees are related to the accrual for an estimated legal settlement, we accrue for the related incurred and anticipated legal fees at the same time we accrue the estimated cost of settlement.

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Foreign Currency Translation

     Assets and liabilities of the company’s foreign operations are translated into U. S. dollars at the exchange rate in effect at the balance sheet date. Revenue and expenses are translated at average rates in effect during the period. The resulting translation adjustment is reflected as accumulated other comprehensive income (loss), a separate component of Unitholders’ equity on the Consolidated Balance Sheets. The functional currency utilized for these subsidiaries is the local foreign currency.

Stock-Based Compensation

     Prior to the Merger we accounted for our stock based compensation using SFAS No. 123R, “Share-Based Payment” and expensed the grant date fair value of the stock options and other equity based compensation issued to employees. All stock-based compensation plans were terminated in connection with the Merger.

Income Taxes

     We have made an election to be taxed as a partnership under the Internal Revenue Code of 1986, as amended, and we believe we qualify as a partnership. See Note 15 for more information on income taxes.

     Prior to the Merger, income taxes for our taxable REIT subsidiaries were accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. A valuation allowance for deferred income tax expense is provided if we believe that we will not realize the tax benefit. Our taxable REIT subsidiaries were liquidated in the Merger and our partnerships no longer are required to provide for deferred taxes.

     An Interpretation of FASB Statement No. 109 (“FIN 48”) was issued. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The new standard also provides guidance on various income tax accounting issues, including derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The provisions of FIN 48 were effective for our fiscal year beginning January 1, 2007 and were applied to all tax positions upon initial adoption. Under FIN 48, we may recognize the tax benefit from an uncertain tax position only if it is “more-likely-than-not” that the tax position will be sustained on examination by taxing authorities. We adopted the provisions of FIN 48 and, as a result, we did not recognize any additional increase in the liability for unrecognized tax benefits.

     The unrecognized tax benefit liability, which is defined in FIN 48 as the difference between a tax position taken or expected to be taken in a tax return and the benefit measured and recognized in the financial statements, at December 31, 2007 and 2006, which includes accrued interest and penalties of zero and $2.0 million, respectively, principally consists of estimated state income tax liabilities associated with our former taxable REIT subsidiaries.

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     A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Unrecognized Tax Benefits:
Balance at January 1, 2007	$	2,021
Current period interest		111
Balance at October 4, 2007		2,132
October 5, 2007 Merger-related restructuring		(2,132	)
Balance at December 31, 2007	$	0

Comprehensive Income

     Comprehensive income, which is defined as net earnings and all other non-owner changes in equity, is displayed in the accompanying consolidated Statements of Unitholders’ Equity, Other Common Unitholders’ Interest and Comprehensive Income (Loss). Other comprehensive income (loss) reflects unrealized holding gains and losses on the available-for-sale investments, changes in the fair value of effective cash flow hedges and gains and losses on long-term foreign currency transactions (see Derivative Financial Instruments).

     Our accumulated other comprehensive income (loss) for the period of January 1, 2007 through October 4, 2007 and October 5, 2007 through December 31, 2007 and the years ended December 31, 2006 and 2005 is as follows (in thousands).

	Net
	Unrealized									Accumulated
	Gains on						Foreign			Other
	Marketable			Cash Flow			Currency			Comprehensive
	Securities			Hedges			Translation			Income/(Loss)
Balance at December 31, 2004	$	1,398		$	(5,823	)	$	—		$	(4,425	)
Change in fair value of hedges		—			4,211			—			4,211
Change in fair value of marketable securities		865			—			—			865
Reclassification adjustments for realized net gains		(2,079	)		—			—			(2,079	)
Foreign currency exchange translation		—			—			(292	)		(292	)
Balance at December 31, 2005	$	184		$	(1,612	)	$	(292	)	$	(1,720	)
Change in fair value of hedges		—			1,058			—			1,058
Change in fair value of marketable securities		1,638			—			—			1,638
Foreign currency exchange translation		—			—			2,544			2,544
Balance at December 31, 2006	$	1,822		$	(554	)	$	2,252		$	3,520
Change in fair value of hedges		—			(60	)		—			(60	)
Change in fair value of marketable securities		(14	)		—			—			(14	)
Reclassification adjustments for realized net gains		(1,794	)		—			—			(1,794	)
Foreign currency exchange translation		—			—			8,263			8,263
Balance at October 4, 2007		14			(614	)		10,515			9,915
Reclassification in connection with the Merger		(14	)		614			(10,515	)		(9,915	)
Foreign currency exchange translation		—			—			5,906			5,906
Balance at December 31, 2007	$	—		$	—		$	5,906		$	5,906

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Per Unit Data

     Following is a reconciliation of basic net earnings attributable to Common Units to diluted net earnings formerly attributable to Common Units for the periods indicated (in thousands):

	Predecessor
	Period from
	January 1, 2007
	through		Year Ended
	October 4,		December 31,
	2007		2006		2005
Reconciliation of numerator between basic and diluted net earnings per Common Unit(1):
Net earnings (loss) attributable to Common Units — Basic	$	767,800	$	831,246	$	696,932
Interest on Convertible Debt		20,216		11,139		—
Net earnings (loss) attributable to Common Units — Diluted	$	788,016	$	842,385	$	696,932
Reconciliation of denominator between basic and diluted net earnings per Common Unit(1):
Weighted average number of Common Units outstanding — Basic		250,223		248,314		231,642
Assumed conversion of Convertible Debt into Common Units		9,039		4,210		—
Incremental options		764		784		966
Weighted average number of Common Units outstanding — Diluted		260,026		253,308		232,608

(1) Excludes the impact of potentially dilutive equity securities during periods in which they are anti-dilutive.

Market Concentration Risk

     Approximately 40.7%, 21.6%, 8.6% and 14.4% of our apartment communities are located in the Washington, D.C. metropolitan area, Southern California, New York City metropolitan area and the San Francisco Bay Area of California, based on NOI for the three months ended December 31, 2007, exclusive of Ameriton and International properties. Southern California is the geographic area comprising Los Angeles County, San Diego, Orange County, Ventura County and the Inland Empire. We are, therefore, subject to increased exposure (positive or negative) from economic and other competitive factors specific to markets within these geographic areas.

Preferred Unit Redemptions

     When redeeming preferred units, we recognize share issuance costs as a charge to preferred unit distributions in accordance with Financial Accounting Standards Board (“FASB”) — Emerging Issues Task Force (“EITF”) Topic D-42, “The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock.” In July 2003, the Securities and Exchange Commission (“SEC”) staff issued a clarification of the SEC’s position on the application of FASB-EITF Topic D-42. The SEC staff’s position, as clarified, is that in applying Topic D-42, the carrying value of preferred units that are redeemed should be reduced by the amount of original issuance costs, regardless of where in Unitholders’ equity those costs are reflected.

Reclassifications

     Certain prior year amounts have been reclassified to conform to the current presentation.

New Accounting Pronouncements

     In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. The statement does not require new fair value measurements, but is applied to the extent other accounting pronouncements require or permit fair value measurements. The statement emphasizes fair value as a market-based measurement which should be determined based on assumptions market participants would use in pricing an asset or liability. We will be required to disclose the extent to which fair value is used to measure assets and liabilities, the inputs used to develop the measurements, and the effect of certain of the measurements on earnings (or changes in net assets) for the period. SFAS No. 157 is effective for our fiscal year beginning January 1,

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2008. In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP FAS 157-2”), that delays the effective date of SFAS 157’s fair value measurement requirements for nonfinancial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis. Fair value measurements identified in FSP FAS 157-2 will be effective for our fiscal year beginning January 1, 2009. The adoption of SFAS 157 will primarily impact the valuation of our financial instruments, and is not expected to materially impact our financial position and results of operations.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value on an instrument-by-instrument basis (i.e., the fair value option), which are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes in fair value must be recorded in earnings. Additionally, SFAS No. 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning retained earnings. This statement is effective for fiscal years beginning after November 15, 2007. We do not anticipate the adoption of this statement will have a material impact on our financial position, results of operations or cash flows.

     In December 2007, the FASB issued SFAS No. 141R, “ Business Combinations” (“SFAS 141R”) and SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — An Amendment of ARB No. 51” (“SFAS 160”). SFAS 141R and 160 require most identifiable assets, liabilities, noncontrolling interests, and goodwill acquired in a business combination to be recorded at “full fair value” and require noncontrolling interests (previously referred to as minority interests) to be reported as a component of equity, which changes the accounting for transactions with noncontrolling interest holders. The provisions of SFAS 141R and 160 are effective for our fiscal year beginning January 1, 2009. SFAS 141R will be applied to business combinations occurring after the effective date and SFAS 160 will be applied prospectively to all noncontrolling interests, including any that arose before the effective date. We are currently assessing what impact the adoption of SFAS 141R and 160 will have on our financial position and results of operations.

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(2) Real Estate

Investments in Real Estate

     Investments in real estate, at cost, were as follows (dollar amounts in thousands):

	Successor				Predecessor
	2007				2006
	Investment(1)		Units(2)		Investment		Units(2)
Apartment Communities:
Operating communities	$	14,661,418		44,008	$	11,208,052		60,839
Communities under construction		206,070		426		406,881		2,150
Development communities In Planning(3)		57,335		1,325		75,538		1,841
Total apartment communities		14,924,823		45,759		11,690,471		64,830
Ameriton(3)		—		—		585,524		8,144
International		53,458		807		851,593		8,334
Other real estate assets(4)		90,791		—		60,052		—
Total real estate	$	15,069,072		46,566	$	13,187,640		81,308

(1)	Successor real estate cost was adjusted to fair value in connection with the Merger.
(2)	Unit information is based on management’s estimates and has not been audited by our Independent Registered Public Accounting Firm.
(3)	Includes development communities In Planning — Owned and In Planning — Under Control. Our investment as of December 31, 2007 and December 31, 2006 for development communities In Planning — Under Control was $0.5 million and $7.6 million, respectively, and is reflected in the “Other assets” caption of our Consolidated Balance Sheets. Ameriton was dissolved in connection with the Merger.
(4)	Includes land that is not In Planning and other real estate assets.

Capital Expenditures

     In conjunction with the underwriting of each acquisition of an operating community, we prepare acquisition budgets that encompass the incremental capital needed to achieve our investment objectives. These expenditures, combined with the initial purchase price and related closing costs, are capitalized and classified as “acquisition-related” capital expenditures, as incurred.

     As part of our operating strategy, we periodically evaluate each community’s physical condition relative to established business objectives and the community’s competitive position in its market. In conducting these evaluations, we consider our return on investment in relation to our long-term cost of capital as well as our research and analysis of competitive market factors. Based on these factors, we make decisions on incremental capital expenditures, which are classified as either “redevelopment” or “recurring.”

     The redevelopment category includes: (i) redevelopment initiatives, which are intended to reposition the community in the marketplace and include items such as significant upgrades to the interiors, exteriors, landscaping and amenities; (ii) revenue-enhancing expenditures, which include investments that are expected to produce incremental community revenues, such as building garages, carports and storage facilities or gating a community; and (iii) expense-reducing expenditures, which include items such as water submetering systems and xeriscaping that reduce future operating costs.

     Recurring capital expenditures consist of significant expenditures for items having a useful life in excess of one year, which are incurred to maintain a community’s long-term physical condition at a level commensurate with our operating standards. Examples of recurring capital expenditures include roof replacements, certain make-ready expenditures, parking lot resurfacing and exterior painting.

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     The change in investments in real estate, at cost, consisted of the following (in thousands):

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Year Ended
	December 31,			October 4,			December 31,
	2007			2007			2006
Balance at beginning of period(1)	$	15,021,288		$	13,187,640		$	11,359,264
Acquisition-related expenditures		226,133			1,419,633			2,530,459
Redevelopment expenditures		20,494			37,328			57,414
Recurring capital expenditures		9,765			30,340			46,354
Development expenditures, excluding initial acquisition costs		16,038			348,844			388,502
Acquisition and improvement of land for development					213,708			209,916
International Fund Formation		—			(1,034,524	)		—
Dispositions		(226,903	)		(1,195,068	)		(1,403,858	)
Provision for possible loss on investment		—			(7,490	)		(4,328	)
Change in estimated hurricane retirements		—			—			4,496
Other		2,257			820			7,987
Net apartment community activity		47,784			(186,409	)		1,836,942
Change in other real estate assets		—			(42,733	)		(8,566	)
Balance at end of period	$	15,069,072		$	12,958,498		$	13,187,640

(1) The beginning balance of the period October 5, 2007 through December 31, 2007 includes a fair value adjustment of $5.8 billion in connection with the Merger, net of distributions to affiliates of $3.6 billion.

     At December 31, 2007, we had unfunded contractual commitments of $25.0 million related to communities under construction.

(3) DeWAG Acquisition and International Fund Formation

     On July 27, 2006, we acquired 94% of the shares and 94% of an outstanding shareholder loan of DeWAG Deutsche WohnAnlage GmbH (“DeWAG”), a company that specializes in the acquisition, ownership, operation and re-sale of quality residential properties in the major metropolitan areas of Southern and Western Germany, as well as West Berlin. Our purchase price consisted of approximately $271 million plus the assumption of approximately $509 million in DeWAG liabilities, based on the exchange rate on the transaction date. We finalized our purchase price allocation related to the acquisition and there were no significant adjustments to the original allocation.

     Effective June 29, 2007, we contributed our ownership in certain German real estate entities, including those in DeWAG, into a German real estate fund. In this report we refer to the combined group of entities in which we have ownership interests as the “International Fund.” The combined total assets and third-party liabilities associated with the contribution were $1.1 billion and $0.8 billion, respectively. We recognized a gain of $13.1 million on the shares that were sold, which is included in other non-operating income. As of December 31, 2007, approximately 74% of the International Fund’s common equity was owned by third-party investors with the remainder owned by Archstone. We do not control the International Fund and therefore recognize our proportionate share of the earnings or losses using the equity method of accounting. The accompanying Consolidated Balance Sheet as of December 31, 2007 reflects the International Fund on the equity method as a result of deconsolidation, whereas the Consolidated Balance Sheet as of December 31, 2006 reflects our German real estate entities contributed to the International Fund on a consolidated basis. The accompanying Consolidated Statements of Operations reflect operations associated with entities contributed to the International Fund on a consolidated basis through June 30, 2007 and on an equity method basis subsequent to June 30, 2007.

     As part of our DeWAG acquisition in 2006, we acquired a management company which is now known as DeWAG Management GmbH (“DMG”). Prior to the Merger, the assets of DMG consisted principally of the

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goodwill created in the DeWAG transaction and non-compete agreements entered into with certain key officers of DeWAG. We concluded that the goodwill was primarily attributable to the people and processes which comprise the investing and the operating platform we acquired in the DeWAG transaction, none of which were contributed to the International Fund. The goodwill was eliminated in connection with the application of purchase accounting for the Merger. DMG earns fees for acting as the manager of the International Fund, including fees for asset management, acquisition, disposition, financing, accounting and administrative activities. We may also earn incentive performance fees if certain investor returns are achieved over a specified period.

     The changes in the carrying amount of goodwill are as follows (in thousands):

Balance at December 31, 2006	$	35,450
Purchase accounting and fund formation adjustments		6,131
Change in foreign currency translation		3,661
Balance at October 4, 2007		45,242
Merger adjustment		(45,242	)
Balance at December 31, 2007	$	0

(4) Oakwood Asset Acquisition

     During 2005 we acquired 35 communities, comprising 12,696 units, for a total purchase price of $1.5 billion from Oakwood Worldwide. We funded the acquisitions with a combination of $362.8 million or 10.1 million A-1 Common Units, $250,000 or 1,000 N-1 and N-2 Preferred Units, $581.2 million of assumed mortgage debt and the remainder through cash. We acquired two additional communities, comprising 533 units, for a total purchase price of $69.3 million from Oakwood during 2006. We funded the acquisitions with a combination of $15.8 million or 0.4 million A-1 Common Units, $28.1 million of assumed mortgage debt and the remainder through cash.

     Fourteen of the communities acquired and one community we previously owned and operated were leased back to an affiliate of Oakwood Worldwide under the Oakwood Master Leases, which have seven-year terms, expiring between July 2012 and March 2013, subject to Oakwood’s right to terminate individual leases under certain circumstances after the one-year anniversary of the acquisition, with one exception for which the right to terminate exists throughout the term. As of December 31, 2007, none of the Oakwood Master Lease Communities have been returned to the Company. The aggregate contractual base rent due under these leases is $73.9 million and is subject to annual adjustments on January 1st of each year equal to the percentage change in the average same-store NOI growth for certain other specified properties. We are responsible for payment of real estate taxes, insurance and certain capital expenditures. We have engaged an affiliate of Oakwood to manage the retail portion of each community, if applicable. The real estate cost and net book value associated with the communities subject to the Oakwood Master Leases aggregated $1.53 billion and $1.52 billion, respectively, as of December 31, 2007. Approximately 6.6% of our total 2007 rental revenue was earned from the Oakwood Master Leases.

(5) Discontinued Operations

     The results of operations for properties sold during the period or designated as held-for-sale at the end of the period are required to be classified as discontinued operations. The property specific components of net earnings that are classified as discontinued operations include rental revenues, rental expenses, real estate taxes, depreciation expense, income taxes, the net gain or loss on the disposition of properties and a pro-rata allocation of interest expense.

     We had six operating apartment communities, representing 1,571 units (unaudited), classified as held for sale under the provisions of SFAS No. 144, at December 31, 2007. Accordingly, we have classified the operating earnings from these six properties within discontinued operations for the periods January 1, 2007 through October 4, 2007 and October 5, 2007 through December 31, 2007 and the years ended December 31, 2006 and 2005. During the periods January 1, 2007 through October 4, 2007 and October 5, 2007 through December 31, 2007 we sold 27 and 3 operating communities, respectively. In connection with the Merger we transferred 43 properties to affiliated

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entities. The operating results of the transferred communities have been included in discontinued operations. During the years ended December 31, 2006 and 2005 we sold 42 and 35 operating communities, respectively. The operating results of the sold communities and the related gain/loss on sale are also included in discontinued operations for 2007, 2006 and 2005.

     The following is a summary of net earnings from discontinued operations (in thousands):

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Year Ended
	December 31,			October 4,			December 31,
	2007			2007			2006			2005
Rental revenue	$	10,795		$	275,973		$	513,218		$	559,584
Rental expenses		(1,719	)		(66,326	)		(129,685	)		(150,604	)
Real estate taxes		(904	)		(23,216	)		(48,857	)		(58,725	)
Depreciation on real estate investments		(3,171	)		(49,862	)		(111,032	)		(122,791	)
Interest expense(1)		(10,118	)		(62,949	)		(114,595	)		(141,600	)
Income taxes from taxable REIT subsidiaries(3)		—			(1,126	)		(5,982	)		(11,556	)
Provision for possible loss on real estate investment		—			—			(4,328	)		(1,500	)
Debt extinguishment costs related to dispositions		(2,694	)		(2,536	)		(9,505	)		(5,847	)
Gain from the disposition of REIT real estate investments, net		—			629,444			548,187			448,358
Internal Disposition Costs — REIT transactions(2)		—			(1,462	)		(1,860	)		(1,672	)
Gain from the dispositions of taxable REIT subsidiary real estate investments, net		(5	)		17,769			54,728			76,326
Internal Disposition Costs — Taxable REIT subsidiary transactions(2)(3)		—			(878	)		(3,483	)		(1,078	)
Total discontinued operations	$	(7,816	)	$	714,831		$	686,806		$	588,895

(1)	Interest expense included in discontinued operations is allocated to properties based on each asset’s cost in relation to the company’s leverage ratio and the average effective interest rate for each respective period.
(2)	Represents the direct and incremental compensation and related costs associated with the employees dedicated to our significant disposition activity.
(3)	Taxable REIT subsidiaries were liquidated in connection with the Merger.

     The balances associated with operating communities classified as held for sale as of December 31, 2007 are designated “held for sale” in the accompanying Consolidated Balance Sheets.

     The disposition proceeds associated with the sales of individual rental units by our International subsidiaries prior to formation of the International Fund in July 2007, were included in continuing operations as other income as such sales did not meet the requirements under SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” to be reflected as discontinued operations.

     We may dispose of properties in the future, but as of December 31, 2007 we have not committed to sell specific assets. The ultimate gain or loss realized will depend on market conditions at the date of disposition.

(6) Investments in and Advances to Unconsolidated Entities

Real Estate Joint Ventures

     At December 31, 2007, we had investments in three real estate joint ventures. Our ownership percentage of economic interests ranges from 24.9% to 66.7%. Major decisions are generally subject to the approval of all members, and we generally handle day-to-day decisions. Economic interest in the ventures varies depending upon the ultimate return of the venture. The joint ventures do not qualify as variable interest entities as neither partner is deemed to individually receive substantially all the benefits from the joint venture. Accordingly, we utilize the guidance provided by SOP 78-9, “Accounting for Investments in Real Estate Ventures,” when determining the basis of accounting for these ventures. Because we do not control the voting interest of these joint ventures, we account for these entities using the equity method. At December 31, 2007, the investment balance was $297.1 million, which includes $108.8 million related to the International Fund. At

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December 31, 2006, the investment balance was $199.7 million in Archstone joint ventures and $35.6 million in Ameriton joint ventures. Our combined weighted average percentage of ownership in joint ventures based on total assets at December 31, 2007 was 34.5%. Ameriton was dissolved in connection with the Merger. The purchase price allocated to certain development joint ventures and the International Fund was based on preliminary estimates and is subject to change as more complete information is obtained.

Summary Financial Information

     Combined summary balance sheet data for our investments in unconsolidated entities presented on a stand-alone basis follows as of December 31, 2007 and 2006 (in thousands):

	Successor		Predecessor
	2007		2006
Assets:
Real estate	$	1,441,721	$	1,530,659
Other assets		244,018		213,569
Total assets	$	1,685,739	$	1,744,228
Liabilities and owners’ equity:
Inter-company debt payable to Archstone	$	—	$	1,519
Mortgages payable(1)		1,124,603		1,063,451
Other liabilities		131,676		126,048
Total liabilities		1,256,279		1,191,018
Owners’ equity		429,460		553,210
Total liabilities and owners’ equity	$	1,685,739	$	1,744,228

(1) Archstone guarantees $294.3 million of the outstanding debt balance as of December 31, 2007 and is committed to guarantee another $34.0 million upon funding of additional debt.

     Selected summary results of operations for our unconsolidated investees presented on a stand-alone basis follows (in thousands):

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Year Ended
	December 31,			October 4,			December 31,
	2007			2007			2006		2005
Archstone joint venture revenues	$	4,670		$	121,580		$	132,671	$	128,844
Net earnings (loss)(1)		(4,247	)		1,951			69,341		57,141
Ameriton joint venture revenues	$	—		$	584		$	340	$	4,080
Net earnings(2)		—			3,626			17,790		12,507
International Fund revenues		20,462			20,640			—		—
Net loss(3)		(12,225	)		(10,373	)		—		—
Total revenues	$	25,132		$	142,804		$	133,011	$	132,924
Net earnings (loss)	$	(16,472	)	$	(4,796	)	$	87,131	$	69,648

(1)	Includes gains associated with dispositions aggregating $4.2 million, $4.0 million, $68.4 million and $31.6 million during the periods January 1, 2007 through October 4, 2007, October 5, 2007 through December 31, 2007, and years ended 2006 and 2005, respectively.
(2)	Includes pre-tax gains associated with the disposition of real estate joint venture assets. These gains totaled $4.0 million, $0.0 million, $19.8 million and $14.2 million during the periods January 1, 2007 through October 4, 2007, October 5, 2007 through December 31, 2007, and years ended 2006 and 2005, respectively.
(3)	The International Fund was formed at the end of June 2007 and the related earnings/(loss) for periods prior to formation are therefore incorporated into our consolidated results.

     Our investment in and income from unconsolidated entities differs from the stand-alone amounts of the investees presented above due to various accounting adjustments made in accordance with GAAP. Examples of

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these differences include: (i) only recording our proportionate share of realizable net earnings in the unconsolidated investees; (ii) the impact of certain eliminating inter-company transactions; (iii) timing differences in income recognition due to deferral of gains on contribution of properties to joint ventures and (iv) fair value adjustments made to our investment as a result of the Merger. Additionally, we have incurred certain joint venture formation costs at the investor level which we account for as outside basis as these costs are not reflected on the stand-alone financial statements of the joint venture. These amounts are reflected on our consolidated financial statements and are amortized over the estimated life of the assets owned by the underlying ventures.

     Except as disclosed, we generally do not guarantee third party debt incurred by our unconsolidated investees. Investee third-party debt consists principally of mortgage notes payable. Generally, mortgages on real estate assets owned by our unconsolidated investees are secured by the underlying properties. Occasionally, the investees and/or Archstone are required to guarantee the mortgages along with all other venture partners. As of December 31, 2007, we have not been required to perform under any guarantees provided to our joint ventures.

     Prior to the Merger, we closed an operating apartment joint venture transaction in 2006 committing $150 million of capital for 80% of the equity and $37.5 million of capital for the remaining 20%. Through the date of the Merger we had invested $25.1 million. This joint venture was sold to an affiliated entity in connection with the Merger.

(7) Mortgage and Other Notes Receivable

     The change in mortgage and other notes receivable, which are included in other assets, during the periods of January 1, 2007 through October 4, 2007 and October 5, 2007 through December 31, 2007 and the year ended December 31, 2006 consisted of the following (in thousands):

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Year Ended
	December 31,			October 4,			December 31,
	2007			2007			2006
Balance at beginning of period	$	89,213		$	123,261		$	74,396
Funding of additional notes		32,862			13,097			85,165
Accrued interest		2,254			5,153			9,781
Repayments and sales of notes		(39,822	)		(52,298	)		(46,081	)
Balance at end of period	$	84,507		$	89,213		$	123,261

     We have a commitment to fund an additional $56.2 million under existing agreements. Our rights to the underlying collateral on these notes in the event of default are generally subordinate to the primary mortgage lender. We evaluate the collectibility of our mezzanine and other notes receivable on a quarterly basis. We recognized interest income associated with notes receivable of $9.3 million, $3.7 million, $17.4 million, and $7.2 million for the periods of January 1, 2007 through October 4, 2007 and October 5, 2007 through December 31, 2007 and the years ended December 31, 2006 and 2005, respectively. The weighted average interest rate on these notes as of December 31, 2007 was 15.8%.

(8) Borrowings

Master Credit Facility

     Our Master Credit Facility was entered into on October 5, 2007 as subsequently amended or restated from time to time thereafter. The amendments, among other things, increased the amount of Tranche B Term Loans (see further detail below) available under the Master Credit Facility. The Master Credit Facility provides a $750 million revolving credit facility, which includes a $75 million swing line and a letter of credit commitment with a maximum of $425 million for the first year, which decreases thereafter. The revolving credit facility bears interest at (a) 2.0% plus the greater of (i) the prime rate or (ii) the federal funds rate plus 0.50% or, at our option, (b) LIBOR plus 3.00%, and has a maturity date of October 5, 2011. The swing line bears interest at the same rate as the revolving credit facility. The Master Credit Facility also includes a $1.75 billion term loan (“Tranche A Term Loan”) maturing on October 5, 2011, bearing interest at (a) 2.0% plus the greater of (i) the prime rate or (ii) the federal funds rate plus 0.50% or, at our option, (b) LIBOR plus 3.00%, and a $3.0 billion term loan (“Tranche B Term Loan”) maturing on October 5, 2012, bearing interest at (a) 2.25% plus the greater of (i) the prime rate or (ii) the federal funds rate plus 0.50% or, at our option, (b) LIBOR plus 3.25%. All interest rates are subject to a 1.0% increase if the combined leverage ratio,

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tangible net worth test and, on or prior to December 31, 2008, the consolidated debt service coverage ratio covenants are not satisfied as provided in the agreement. The Tranche A Term Loan is payable in four annual installments, beginning on October 5, 2008. The lenders under our Master Credit Facility and our mezzanine loans provided by the Fannie Mae Mezzanine Lenders and the Freddie Mac Mezzanine Lenders have the option to syndicate or sell the outstanding principal amount under such agreements to other investors at a discount and may revise the interest rate spread or discount or increase fees to a level necessary to facilitate syndication based on current market conditions at the syndication date. As of December 31, 2007, $5.6 billion in outstanding principal indebtedness under these loans was subject to syndication and the increased borrowing costs described above. The cost associated with any incremental interest or additional fees, as well as any original issue discount realized, is required to be born by the Company. These same lenders have committed to lend us up to $148.8 million to fund such costs, at any time prior to December 31, 2008. As of March 20, 2008, we had approximately $73.0 million set aside in restricted cash to fund syndication discounts. As of March 20, 2008, $43.0 million of principal had been syndicated at a discount of 3%.

     The Master Credit Facility also provides that, if certain conditions are satisfied, the Company may request up to an aggregate principal amount of $242.5 million of new term loans, which may be used for syndication costs, working capital, including refinancing revolving loans, and which otherwise have substantially the same terms as the Tranche B Term Loan. The lenders under the Master Credit Facility have committed to lend us up to $242.5 million of such new term loans, $148.8 million of which may be used for syndication costs as described above and the remaining $93.7 million of which may be used to pay additional transaction costs and other miscellaneous costs and expenses. Nothing was drawn on the incremental facility at December 31, 2007. Further, if certain conditions are satisfied, the Company may request up to an aggregate principal amount of $250 million increase in the revolving credit facility, provided that the total revolving credit commitments may not exceed $1.0 billion at any time.

     The Master Credit Facility loans are prepayable by us in whole or in part without penalty. The following amounts are required to be applied to prepay the Master Credit Facility loans, subject to certain carve-outs: (i) 100% of net cash proceeds from the sale or issuance of certain equity or incurrence of certain indebtedness, (ii) 100% of net cash proceeds from any sale or other disposition of any assets yielding gross proceeds in excess of $500,000 in any fiscal year, subject to certain exceptions after $500,000,000 of net cash proceeds have been applied to prepay the Tranche A Term Loan, including capacity for reinvestment of an amount not exceeding 50% of such net cash proceeds and (iii) 100% of excess cash flow for each fiscal year. After the Tranche A Term Loan has been repaid in full, if the combined leverage ratio is less than or equal to 60% and the consolidated debt service coverage ratio is greater than or equal to 1.25 to 1.00, then the foregoing percentages shall be reduced from 100% to 25%. Subject to certain exceptions, all such amounts shall be applied first, to the Tranche A Term Loan, second, to the Tranche B Term Loan and third, to the Revolving Loans and, the replacement or cash collateralization of outstanding letters of credit.

     In addition to the mandatory prepayments described above, if at the end of any fiscal quarter, the leverage ratio is greater than the ratio required by the Master Credit Facility, the tangible net worth test is less than the amount required by the Master Credit Facility or, on or prior to December 31, 2008, the consolidated debt service coverage ratio is less than the ratio required by the Master Credit Facility, then the Company is generally required to cause the Master Credit Facility loans to be prepaid by an amount necessary to cause the combined leverage ratio, tangible net worth test and consolidated debt service coverage ratio to be in compliance on or prior to the later of January 1, 2009 and the last day of the fiscal quarter ending immediately after the initial fiscal quarter. All such mandatory prepayments may be made with the net cash proceeds of any sale or other disposition of assets or the sale or issuance of certain equity. Although failure to comply with the leverage ratio, tangible net worth test or, on or prior to December 31, 2008, consolidated debt service coverage ratio generally is not an event of default until the later of January 1, 2009 and the last day of the fiscal quarter ending immediately after the initial fiscal quarter as described above, until such time as the Company is in compliance with the combined leverage ratio, tangible net worth test, and consolidated debt service coverage ratio (i) the Company would not be permitted to incur certain types of indebtedness, make certain investments (other than those investments committed to be made prior to such failure) or pay certain dividends and (ii) the applicable margin with respect to the Master Credit Facility loans will increase by 1.00%.

     Loans under the Master Credit Facility are secured, subject to permitted liens and other agreed upon exceptions, by substantially all of our owned assets, including (i) all of our properties other than those properties which are prohibited from being pledged as collateral pursuant to our and our subsidiaries existing contractual obligations, as well as any real property acquired by us or our subsidiaries in the future that is valued at $5.0 million or more and (ii) all the ownership interests in our subsidiaries held by us. Further, we and various parent and subsidiary guarantors, including our trustee, entered into a guarantee and collateral agreement, whereby the guarantors guarantee our obligations under the Master Credit Facility and we guarantee the guarantors’ obligations

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under certain pledge agreements with the lenders and their affiliates contemplated by the Master Credit Facility. The guarantees are secured by pledges of each such entity’s personal property, including all ownership interests held by such entity.

     The Master Credit Facility required the establishment of a funded interest reserve of $500 million to facilitate compliance with certain debt service coverage ratios. We anticipate that we will need to draw on such reserves during 2008 to maintain compliance with such ratios. As of December 31, 2007 the balance in this restricted cash account was $427.9 million.

     A summary of our Master Credit Facility Debt outstanding at December 31, 2007 is as follows (dollar amounts in thousands):

				Successor		Average
	Nominal			Balance at		Remaining
Type of Debt	Interest Rate(3)			December 31, 2007		Life (Years)
Term loans(1)(2)		8.18	%	$	4,591,822		4.42
Revolving credit facility(2)		7.95	%		60,000		3.76
Total/average		8.18	%	$	4,651,822		4.41

(1)	Includes Tranche A and Tranche B of the Master Credit Facility. The interest rates for both instruments are described above.
(2)	The interest rates for these instruments are described above.
(3)	The effective interest rates for the term loans and revolving credit facility are 8.42% and 28.31%, respectively, which includes the effect of loan cost amortization and other ongoing fees and expenses, where applicable. The effective interest rate on the revolving credit facility is high due primarily to the fees on the unfunded commitment. The higher the average outstanding drawn balance, the lower the effective interest.

Property Mortgages

     In connection with the Merger, we entered into a $7.1 billion credit facility (“Fannie Facility”) provided by Fannie Mae, which is secured by 105 of our properties. This facility is divided into 9 loan pools. Pools 1 through 3, totaling $2.5 billion at issuance, mature on November 1, 2017 and bear interest at 6.256%. Pool 4, totaling $963.5 million at issuance, matures on November 1, 2014, and bears interest at 5.883%. Pools 5 through 7, totaling $2.3 billion at issuance, matures on November 1, 2012 and bears interest at 6.193%. Pools 8 and 9, totaling $1.3 billion at issuance, matures on November 1, 2009 and bears interest at LIBOR plus 1.265%. The variable rate loans are prepayable without penalty after October 31, 2008. Fixed rate loans are subject to a prepayment premium equal to the greater of 1% of the principal being repaid or a market rate present value determined in accordance with the loan’s terms. In addition to the Fannie Facility, the Fannie Mae Mezzanine Lenders have provided $768.9 million of mezzanine loans subordinate to each of the nine Fannie Facility pools. The interest rates on these mezzanine loans range from LIBOR plus 2.65% to LIBOR plus 2.85%. The Fannie Mae Mezzanine Lenders have the option to syndicate or sell the debt to other investors at a discount and may revise the interest rate spread or discount or fees to a level necessary to facilitate syndication based on current market as further described above.

     Also in connection with the Merger, we entered in to an $847 million facility (“Freddie Facility”) provided by the Federal Home Loan Mortgage Corporation (“Freddie Mac”), which is secured by 13 of our properties. This facility matures on November 1, 2012 and bears interest at LIBOR plus 1.025%. The Freddie Facility is subject to a prepayment premium of 1% of the principal amount being repaid. In addition to the Freddie Facility, Freddie Mac Mezzanine Lenders, have provided $135.4 million of mezzanine loans subordinate to the Freddie Facility. The interest rate on the mezzanine loans is LIBOR plus 3.00%. The Freddie Mac Mezzanine Lenders have the option to syndicate or sell the debt to other investors at a discount and may revise the interest rate spread or discount or fees to a level necessary to facilitate syndication based on current market as further described above.

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     In addition to the property mortgages originated in connection with the Merger, the Successor entity assumed $479.3 million in existing pre-Merger tax-exempt bonds and mortgages.

     Our property mortgages payable generally feature either monthly interest and principal payments or monthly interest-only payments with balloon payments due at maturity (see Scheduled Debt Maturities). Early repayment of mortgages is generally subject to prepayment penalties. A summary of property mortgages payable outstanding for the years ending December 31, 2007 and 2006 follows (dollar amounts in thousands):

	Successor					Predecessor
	Outstanding					Outstanding
	Balance at		Effective			Balance at		Effective
	December 31,		Interest			December 31,		Interest
	2007		Rate(1)			2006(2)		Rate(3)
Secured floating rate debt:
Tax-exempt debt	$	363,042		4.8	%	$	935,536		4.9	%
Fannie Facility debt		1,210,542		7.8	%		—		N/A
Fannie Mae Mezzanine debt		742,490		8.5	%		—		N/A
Freddie Facility debt		846,908		6.4	%		—		N/A
Freddie Mac Mezzanine debt		135,441		8.6	%		—		N/A
Conventional mortgages		52,929		4.4	%		167,020		4.6	%
Other secured debt		76,000		8.0	%		—		N/A
Total Floating		3,427,352		7.3	%		1,102,556		4.9	%
Secured fixed rate debt:
Tax-exempt debt		49,600		5.6	%		3,086		6.4	%
Fannie Facility debt		5,733,242		6.5	%		—		N/A
Conventional mortgages		—		N/A			1,651,650		5.8	%
Other secured debt		2,454		3.6	%		18,942		3.2	%
Total Fixed		5,785,296		6.5	%		1,673,678		5.8	%
Total debt outstanding at end of period	$	9,212,648		6.8	%	$	2,776,234		5.4	%

(1)	Includes the effect of credit enhancement fees, debt issuance costs, and other related costs, where applicable.
(2)	Includes the unamortized fair market value adjustment associated with assumption of fixed rate mortgages in connection with real estate acquisitions. The unamortized balance aggregated $43.9 million at December 31, 2006, and was eliminated in connection with the application of purchase accounting for the Merger.
(3)	Includes the effect of cash flow and fair value hedges, credit enhancement fees, the amortization of fair market value purchase adjustment, and other related costs, where applicable.

     The change in property mortgages payable during 2007 and 2006 consisted of the following (in thousands):

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through
	December 31,			October 4,
	2007			2007			2006
Balance at beginning of period (1)	$	1,931,858		$	2,776,234		$	2,393,652
Proceeds from mortgage notes payable		8,896,534			—			—
Mortgage assumptions related to property acquisitions		—			15,000			728,484
Regularly scheduled principal amortization		(1,069	)		(10,760	)		(12,949	)
Prepayments, final maturities and other (1)		(1,614,675	)		(224,286	)		(332,953	)
International Fund formation (See Note 3)		—			(624,330	)		—
Balance at end of period	$	9,212,648		$	1,931,858		$	2,776,234

(1) The beginning balance for Successor includes approximately $1.0 billion that was prepaid in connection with the Merger.

Pre-Merger Debt

     In connection with the Merger, we repaid outstanding balances of $500 million on an unsecured credit facility led by JPMorgan Chase Bank, N.A., $75 million on our short-term unsecured borrowing agreement with

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JPMorgan Chase Bank, N.A., $500 million on an unsecured revolving line of credit agreement with Morgan Stanley Senior Funding, Inc., $2.37 billion in long-term unsecured senior notes, and the majority of our exchangeable senior unsecured notes.

     We assumed $479.3 million in existing pre-Merger tax-exempt bonds and mortgages. As of December 31, 2007 the only additional pre-Merger debt facilities outstanding were $230,000 of exchangeable senior unsecured notes. As part of the Merger we have set aside funds in an escrow account to redeem these senior unsecured notes at the option of the holder.

Scheduled Debt Maturities

     Approximate principal payments due during each of the next five calendar years and thereafter, are as follows (in thousands):

	Term Loans & Revolver				Property Mortgages Payable
	Regularly				Regularly
	Scheduled		Final		Scheduled		Final
	Principal		Maturities		Principal		Maturities
	Amortization		and Other		Amortization		And Other		Total
2008	$	327,592	$	—	$	3,608	$	—	$	331,200
2009		350,000		—		3,911		1,516,647		1,870,558
2010		300,000		—		4,231		135,441		439,672
2011		—		660,230		4,577		—		664,807
2012		—		3,014,000		4,953		3,324,126		6,343,079
Thereafter(1)		—		—		182,315		4,032,839		4,215,154
Total	$	977,592	$	3,674,230	$	203,595	$	9,009,053	$	13,864,470

(1) The average annual principal payments due from 2013 to 2040 are $150.5 million per year.

Covenants

     Our debt instruments are generally secured by real estate and other tangible assets and contain covenants common to the type of facility or borrowing, including financial covenants establishing minimum debt service coverage and tangible net worth ratios and maximum leverage ratios. The covenant limits under certain of our credit facilities become more restrictive beginning in 2009. We were in compliance with all required financial ratios pertaining to our debt instruments as of December 31, 2007. In addition to financial and other negative covenants certain of our debt facilities contain restrictions on our operations, including our ability to make capital expenditures over certain amounts and our ability to make distributions or voluntarily redeem or prepay any of our outstanding Preferred Units. While we will endeavor to maintain compliance with all required financial ratios during 2008 and beyond, we face risks that could impact our ability to do so and some of these risks are beyond our direct control. We may not have sufficient cash flow from operations or capital transactions to service our indebtedness and we may be unable to incur additional indebtedness without violating various financial ratios contained in our debt agreements. If we cannot meet required payments under our debt agreements or cannot comply with the covenants contained in these agreement, the lenders may declare us in default and may seek available remedies under the agreements, which may include transferring properties to the lender under indebtedness which is secured by real property. In the event of non-compliance, we can not provide any assurance as to whether such violations would be waived or the effect non-compliance would have on us.

(9) Distributions to Unitholders

     The payment of distributions is subject to the discretion of the Board and is dependent upon our strategy, financial condition and operating results. We have not declared or paid any distributions on Common Units and Preferred Units since the Merger date.

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     The following table summarizes the cash distributions paid per unit on Common Units and Preferred Units during 2007, 2006 and 2005:

	Successor		Predecessor
	Period from		Period from
	October 5, 2007		January 1, 2007
	through		through
	December 31,		October 4,
	2007		2007		2006		2005
Common Units and A-1 Units	$	—	$	0.9050	$	1.74	$	1.73
Series I Preferred Units(1)		—		5,745.00		7,660.00		7,660.00
Series O Preferred Units		—		N/A		N/A		N/A
Series P Preferred Units(2)		—		228.81		457.62		364.74
Series Q-1 Preferred Units(3)		—		10.08		20.16		3.54
Series Q-2 Preferred Units(4)		—		4.32		8.64		1.52

(1)	The Series I Preferred Units have a par value of $0.01.
(2)	The Series P Preferred Units replaced the Series M Preferred Units in connection with the Merger.
(3)	The Series Q-1 Preferred Units replaced the Series N-1 Preferred Units in connection with the Merger.
(4)	The Series Q-2 Preferred Units replaced the Series N-2 Preferred Units in connection with the Merger.

(10) Unitholders’ Equity

Common Units

Units of Beneficial Interest

     Our Declaration of Trust authorizes us to issue 450,000,000 units with a par value of $0.01 per unit. Our Declaration of Trust allows us to issue Common Units, Preferred Units and such other units of beneficial interest as our Trustee, the Board, may create and authorize from time to time. The Board may classify or reclassify any unissued units from time to time by setting or changing the preferences, conversion rights, voting powers, restrictions, limitations as to distributions, qualifications of terms or conditions of redemption.

     As of December 31, 2007 the Successor has 39.6 million Common Units outstanding, beneficially owned as follows:

	Number of Common Units		Percentage of all
Name of Beneficial Owner	Beneficially Owned		Common Units
Series I Trust		7,444,435		18.81	%
Series II LLC		25,202,745		63.70	%
Series III LLC		6,917,971		17.49	%
TOTAL		39,565,151		100	%

Common Unit Repurchase and Issuances

     In 2007 and 2006, we repurchased 1,108,323 and 204,877 Common Units for an average price of $59.16 and $58.90 per unit, including commissions, respectively.

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Preferred Units

     A summary of our Preferred Units outstanding at December 31, 2007 and 2006, including their significant rights, preferences, and privileges follows (dollars in thousands, except per unit amounts):

									Successor		Predecessor
					Cumulative
					Dividends in		Annual		Notional at		Notional at
	Redemption		Liquidation		Arrears but		Distribution		December 31,		December 31,
Description	Date(1)		Value(2)		not declared		Rate Per Unit		2007		2006
Series I Preferred Units; 500 units issued and outstanding at December 31, 2007 and 2006, respectively (1)		02/01/28		51,915		1,915		7,660	$	50,000	$	50,000
Series O Preferred Units: 3,877,130 units issued and outstanding at December 31, 2007		10/05/12		239,229		3,535		3.65		235,694		0
Series P Preferred Unit; 1 unit issued and outstanding at December 31, 2007 and 2006, respectively (3)		N/A		10.20		0.2		960.05	$	10	$	10
Series Q-1 Preferred Unit; 300 units issued and outstanding at December 31, 2007 and 2006, respectively (4)		N/A		123.2		3.2		42.27	$	120	$	120
Series Q-2 Preferred Unit; 700 units issued and outstanding at December 31, 2007 and 2006, respectively (5)		N/A		123.2		3.2		18.11	$	120	$	120

(1)	Series I Preferred Units may be redeemed for cash at our option, in whole or in part, at a redemption price equal to the liquidation price per unit, plus accrued and unpaid distributions, if any, on or after the redemption date indicated.
(2)	Liquidation value includes cumulative dividends in arrears but not declared.
(3)	Series P Preferred Units replaced the Series M Preferred Units in connection with the Merger.
(4)	Series Q-1 Preferred Units replaced the Series N-1 Preferred Units in connection with the Merger.
(5)	Series Q-2 Preferred Units replaced the Series N-2 Preferred Units in connection with the Merger.

     The holders of our Preferred Units do not have preemptive rights over the holders of Common Units, but do have limited voting rights under certain circumstances. The Preferred Units have no stated maturity are not subject to any sinking fund requirements. Holders of the Preferred Units are entitled to receive cumulative preferential cash distributions, when and as declared and authorized by the Board, out of funds legally available for the payment of distributions. All Preferred Unit distributions are cumulative from date of original issue, and due and unpaid distributions accumulate and compound quarterly at the applicable distribution rate in effect from time to time. No distributions have been declared or paid on Preferred Units since the second quarter of 2007. We do not plan on making distributions in the near term and it is uncertain when any distributions will be made.

Series I Preferred Units

     Series I Preferred Units are entitled to receive cash distributions equal to $7,660 per unit per annum. The Series I Preferred Units are entitled to $100,000 per unit liquidation preference over junior units. If the Series I Trust is required to redeem or repurchase any Series I Preferred Shares under the terms of Series I Trust’s declaration of trust, an equivalent number of Series I Preferred Units will be redeemed for consideration equal to that payable upon redemption of the Series I Preferred Shares. The holders of Series I Preferred Units do not have any voting rights except as required by law.

Series O Preferred Units

     Each holder of a Series O Preferred Unit will have the right to exercise an immediate put right, including payment of any tax protection amount (as defined in our Declaration of Trust) with respect to the Series O Preferred Units being redeemed, if at any time prior to January 1, 2022, (1) our loan to value ratio is higher than 85% and we make a distribution to the holders of our Common Units; or (2) we incur indebtedness in excess of $10 million

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(excluding draws on our line of credit or refinancings of existing indebtedness) and after such borrowing our loan to value ratio is higher than 85% and we have made a distribution to our Common Units in contemplation of the incurrence of that indebtedness. During any period of time after we incur indebtedness in excess of $10 million in principal amount (excluding draws on our line of credit or refinancings of existing indebtedness) and as a result of which our loan to value ratio exceeds 85%, until such time as our loan to value ratio no longer exceeds 85%, the distribution rate on our Series O Preferred Units shall increase from 6% per annum to 8% per annum. The Units are redeemable by the holders under certain circumstances.

Series P Preferred Unit

     In December 2004, Archstone issued one Series M Preferred Unit in exchange for cash. The Series M Preferred Unit was converted into a Series P Preferred Unit in connection with the Merger on materially the same terms. This unit is redeemable at the option of the holder of such unit and/or Archstone under certain circumstances. If the holder of the Series P Preferred Unit requests redemption or Archstone is required to redeem the Series P Preferred Unit, the redemption price will be paid in cash. The redemption value under such circumstances is based on the performance of the related real estate asset, as outlined in the contribution agreement. The Series P Preferred Unit is entitled to a distribution equivalent to the same distribution paid on 263 Series O Preferred Units. The holder of the Series P Preferred Unit does not have preemptive rights over the holders of Common Units and does not have any voting right except as required by law. The Series P Preferred Unit has no stated maturity and is not subject to any sinking fund requirements.

Series Q-1 and Q-2 Preferred Units

     Three-hundred N-1 and 700 N-2 Preferred Units were issued as partial consideration for land acquired in one of the Oakwood acquisitions. These units were converted in connection with the Merger to 300 Q-1 and 700 Q-2 Preferred Units on materially the same terms. If certain entitlements related to the land are obtained, the Q-1 and Q-2 units have the potential to convert to Series O Preferred Units at a rate of $70,000 and $30,000, respectively, per entitled apartment unit. As of December 31, 2007, no entitlements have been obtained. The Series Q-1 Preferred Units are entitled to a distribution equivalent to the same distribution paid on 11.58 Series O Preferred Units. The Series Q-2 Preferred Units are entitled to a distribution equivalent to the same distribution paid on 4.96 Series O Preferred Units. The holders of the Series Q-1 and Q-2 Preferred Units do not have preemptive rights over the holders of Common Units and do not have any voting rights except as required by law. The Series Q-1 and Q-2 Preferred Units have no stated maturity and are not subject to any sinking fund requirements.

(11) Benefit Plans and Implementation of SFAS 123R

     Our long-term incentive plan was approved in 1997, modified in connection with the Smith Merger and terminated in connection with the Merger. There have been seven types of awards under the plan: (i) options with a DEU feature (only awarded prior to 2000); (ii) options without the DEU feature (generally awarded after 1999); (iii) RSU awards with a DEU feature (awarded prior to 2006); (iv) RSU awards with a cash dividend payment feature (awarded after 2005); (v) employee share purchase program with matching options without the DEU feature, granted only in 1997 and 1998; (vi) performance units, which are convertible into Common Shares upon vesting, issued to certain named executives under a Special Long-Term Incentive Program; and (vii) stock appreciation rights.

     No more than 20.0 million share or option awards in the aggregate could be granted under the plan, and no individual could be awarded more than 1.0 million share or option awards in any one-year period.

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A summary of share option activity for the options and RSUs is presented below:

	Option Awards				RSU Awards
			Weighted				Weighted
			Average				Average Grant
	Options		Exercise Price		Units		Price
Balance, December 31, 2005		2,702,026	$	24.94		948,735	$	27.77
Granted		426,977		45.61		310,855		45.85
Exercised/Settled		1,249,089		23.96		296,215		33.23
Forfeited		48,559		35.86		16,760		34.31
Expired		—		—		—		—
Balance, December 31, 2006		1,831,355	$	30.14		946,615	$	31.82
Granted		392,119		58.56		187,176		58.26
Exercised/Settled		329,222		30.04		138,780		28.55
Forfeited		50,811		46.75		23,633		48.61
Expired		—		—		—		—
Balance, October 4, 2007		1,843,441	$	34.92		971,378	$	36.99
Granted		—		—		—		—
Exercised/Settled		1,843,441		34.92		971,378		36.99
Forfeited		—		—		—		—
Expired		—		—		—		—
Balance, December 31, 2007		—	$	—		—	$	—

Options

     During the period January 1, 2007 through October 4, 2007 and years ended December 31, 2006 and 2005 the share options granted to associates had a calculated fair value of $8.44, $5.52 and $4.19 per option, respectively. The historical exercise patterns of the associate groups receiving option awards are similar, and therefore we used only one set of assumptions in calculating fair value for each period. For the period January 1, 2007 through October 4, 2007 the calculated fair value was determined using the Black-Scholes-Merton valuation model, using a weighted average risk-free interest rate of 4.44%, a weighted average dividend yield of 3.39%, a volatility factor of 18.62% and a weighted average expected life of four years. For the year ended December 31, 2006, the calculated fair value was determined using the Black-Scholes-Merton valuation model, using a weighted average risk-free rate interest rate of 4.66%, a weighted average dividend yield of 4.57%, a volatility factor of 18.3% and a weighted average expected life of four years. For the year ended December 31, 2005, the calculated fair value was determined using the Black-Scholes-Merton valuation model, using a weighted average risk-free interest rate of 3.77%, a weighted average dividend yield of 5.63%, a volatility factor of 21.97% and a weighted average expected life of five years. The options vested in connection with the Merger and we have no unamortized compensation costs.

     The total intrinsic value of the share options exercised during the period from January 1, 2007 through October 4, 2007 and the years ended December 31, 2006 and 2005 were $9.9 million, $30.7 million and $22.9 million, respectively. The intrinsic value is defined as the difference between the realized fair value of the share or the quoted fair value at the end of the period, less the exercise price of the option.

Restricted Share Units

     Also during the period January 1, 2007 through October 4, 2007 we issued RSUs to senior officers and trustees of the Company with a weighted average grant date fair value of $58.26 per unit. The units vested in connection with the Merger and we have no unamortized compensation costs.

Special Long Term Incentive Plan

     Effective January 1, 2006, a special long-term incentive program related to the achievement of total unitholder return performance targets was established for certain of our executive officers. We issued approximately 300,000 performance units which vested in connection with the Merger and we have no unamortized compensation costs.

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Summary

     The compensation cost associated with all awards for the period January 1, 2007 through October 4, 2007 was approximately $10.0 million, of which approximately $7.9 million was charged to operating expenses, and approximately $2.1 million related to dedicated investment personnel was capitalized with respect to development and other qualifying investment activities. The compensation cost associated with all awards for the year ended December 31, 2006 was approximately $11.3 million, of which approximately $8.5 million was charged to operating expenses, and approximately $2.8 million related to dedicated investment personnel and was capitalized to development and other qualifying investment activities. The compensation cost associated with all awards for the year ended December 31, 2005 was approximately $8.5 million, of which approximately $6.5 million was charged to operating expenses, and approximately $2.0 million related to dedicated investment personnel and was capitalized to development and other qualifying investment activities.

Dividend Equivalent Units

     Under the modified long-term incentive plan, participants who were awarded options prior to 2000 and RSUs prior to 2006 were credited with DEUs equal to the amount of distributions paid on Common Units with respect to such awards. The DEUs vested under substantially the same terms as the underlying share options or RSUs.

     DEUs earned on options were calculated by taking the average number of options held at each record date and multiplying by the difference between the average annual distribution yield on Common Units and the average dividend yield for the Standard & Poor’s 500 Stock Index. DEUs earned on RSUs were calculated by taking the average number of RSUs held at each record date and multiplying by the average annual distribution yield on Common Units. DEUs earned on existing DEUs were calculated by taking the number of DEUs at December 31 and multiplying by the average annual distribution yield on Common Units.

     Certain of the options and all RSUs included in the table above have a DEU feature. All of these options were settled in connection with the Merger. During the period from January 1, 2007 through October 4, 2007 and the year ended December 31, 2006, we recorded $185,000 and $486,800, respectively, as a charge to operating expense related to unvested DEUs and $1.6 million and $1.7 million, respectively, of common unit distributions related to vested DEUs.

401(k) Plan

     In December 1997, the Archstone-Smith Board established a 401(k) plan and a nonqualified savings plan, which both became effective on January 1, 1998. The 401(k) plan provides for matching employer contributions of fifty cents for every dollar contributed by the employee, up to 6% of the employee’s annual contribution. Contributions by employees to the 401(k) plan were subject to federal limitations of $15,500 during 2007. Subsequent to June 2007 the matching employer contributions are made in cash, which vest based on years of service at 20% per year. We terminated our nonqualified deferred compensation plan in connection with the Merger.

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(12) Financial Instruments and Hedging Activities

Fair Value of Financial Instruments

     At December 31, 2007 and 2006, the fair values of cash and cash equivalents, restricted cash held in a tax-deferred exchange escrow accounts, receivables (including related party receivables) and accounts payable (including related party payables) approximated their carrying values because of the short-term nature of these instruments. The estimated fair values of other financial instruments subject to fair value disclosures were determined based on available market information and valuation methodologies believed to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, therefore, are not necessarily indicative of the actual amounts that we could realize upon disposition. The following table summarizes these financial instruments (in thousands):

	Successor						Predecessor
	Balance at December 31, 2007						Balance at December 31, 2006
	Carrying			Estimated			Carrying			Estimated
	Amounts			Fair Value			Amounts			Fair Value
Marketable equity securities	$	—		$	—		$	6,600		$	6,600
Borrowings:
Revolving credit facilities	$	60,000		$	58,292		$	84,723		$	84,723
Term Loan — International		—			—			235,771			235,771
Term Loan — Domestic		4,591,822			4,460,880			—			—
Long-Term Unsecured Debt		—			—			3,355,699			3,436,902
Property mortgages payable		9,212,648			9,213,192			2,776,234			2,801,342
Interest rate contracts:
Interest rate swaps	$	(155,096	)	$	(155,096	)	$	6,818		$	6,818
Interest rate caps		3,326			3,326			809			809
Forward contracts:
Forward sale agreement	$	—		$	—		$	(313	)	$	(313	)
Foreign currency forward		—			—			(1,172	)		(1,172	)
Energy contracts:
Electricity contracts	$	—		$	—		$	(8	)	$	(8	)
Natural gas contracts		—			—			(1,047	)		(1,047	)

     From time to time we make public and private investments in equity securities. The publicly traded equity securities are classified as “available for sale securities” and carried at fair value, with unrealized gains and losses reported as a separate component of Unitholders’ equity. The private investments, for which we lack the ability to exercise significant influence, are accounted for at cost. Declines in the value of public and private investments that our management determines are other than temporary, are recorded as a provision for possible loss on investments. Our evaluation of the carrying value of these investments is primarily based upon a regular review of market valuations (if available), each company’s operating performance and assumptions underlying cash flow forecasts. In addition, our management considers events and circumstances that may signal the impairment of an investment.

Interest Rate Hedging Activities

     We are exposed to the impact of interest rate changes and will occasionally utilize interest rate swaps and interest rate caps as hedges with the objective of lowering our overall borrowing costs. Prior to the Merger, these derivatives were designated as either cash flow or fair value hedges. Subsequent to the Merger we have entered into interest rate swaps and caps to fix the rates associated with various debt instruments. These derivatives were not designated as hedges for accounting purposes and the resulting gains and losses are recorded as other non-operating income or expense. We do not use these derivatives for trading or other speculative purposes. Further, as a matter of policy, we only enter into contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, we have not, nor do we expect to sustain a material realized loss from the use of these hedging instruments. In 2007, we recorded an unrealized loss of $131.0 million on interest rate swaps established in connection with the Merger that were not designated as hedges for accounting purposes. This loss is included in other non-operating income (loss) in the accompanying Consolidated Statement of Operations.

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     During the period January 1, 2007 through October 4, 2007 and years ended December 31, 2006 and 2005 the Predecessor recorded an increase/(decrease) to interest expense of $168,000, $372,000 and $(174,000), for hedge ineffectiveness caused by a difference between the interest rate index on a portion of our outstanding variable rate debt and the underlying index of the associated interest rate swap. We pursue hedging strategies that we expect will result in the lowest overall borrowing costs.

     To determine the fair values of derivative and other financial instruments, we use a variety of methods and assumptions that are based on market value conditions and risks existing at each balance sheet date. These methods and assumptions include standard market conventions and techniques such as discounted cash flow analysis, option pricing models, replacement cost and termination cost. All methods of assessing fair value result in a general approximation of value, and therefore, are not necessarily indicative of the actual amounts that we could realize upon disposition.

     The following table summarizes the notional amount, carrying value and estimated fair value of our derivative financial instruments used to hedge interest rates, as of December 31, 2007 (dollar amounts in thousands). The notional amount represents the aggregate amount of a particular security that is currently hedged at one time, but does not represent exposure to credit, interest rate or market risks.

					Carrying and
	Notional		Maturity		Estimated
	Amount		Date Range		Fair Value
Cash flow hedges:
Interest rate caps	$	3,033,498		2008-2011	$	3,326
Interest rate swaps		4,001,155		2010-2017		(155,262	)
Total cash flow hedges	$	7,034,653		2008-2017	$	(151,936	)
Fair value hedges:
Total rate of return swaps		49,600		2011		166
Total hedges	$	7,084,253			$	(151,770	)

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Foreign Currency Hedging Activities

     We are exposed to foreign-exchange related variability and earnings volatility on our foreign investments. There are no foreign currency forward contracts outstanding at December 31, 2007.

Energy Contract Hedging Activities

     We are exposed to price risk associated with the volatility of natural gas, fuel oil and electricity rates. During 2007 and 2006, we entered into contracts with several of our suppliers to fix our payments on set quantities of natural gas, fuel oil and electricity. If the contract meets the criteria of a derivative, we designate these contracts as cash flow hedges of the overall changes in floating-rate payments made on our energy purchases. As of December 31, 2007, none of the contracts met the definition of a derivative as they are considered normal purchases and sales.

Equity Securities Hedging Activities

     We were exposed to price risk associated with changes in the fair value of certain equity securities. During 2006, we entered into forward sale agreements with an aggregate notional amount, which represents the fair value of the underlying marketable securities, of approximately $6.6 million and an aggregate fair value of the forward sale agreements of approximately ($0.3) million, to protect against a reduction in the fair value of these securities. We designated this forward sale as a fair value hedge. There were no forward sale agreements outstanding as of December 31, 2007.

(13) Selected Quarterly Financial Data (Unaudited)

     Selected quarterly financial data (in thousands, except per share amounts) for 2007 and 2006 is summarized below. The sum of the quarterly earnings per Common Unit amounts may not equal the annual earnings per Common Unit amounts due primarily to changes in the number of Common Units outstanding from quarter to quarter.

	3/31(1)		6/30(1)			9/30(1)			10/1 - 10/4(1)			10/5 - 12/31(1)
2007:
Total revenues	$	218,660	$	228,679		$	229,967		$	12,855		$	255,271
Earnings (loss) from operations		22,597		11,889			19,832			(18,669	)		(268,062	)
Income (loss) from unconsolidated entities		695		307			(4,542	)		(1,754	)		(7,680	)
Other non-operating income		2,026		(84	)		26,488			(2,899	)		(124,460	)
Plus net earnings (loss) from discontinued operations		299,609		56,910			357,261			1,051			(7,816	)
Less Preferred Unit distributions		958		958			958			43			—
Net earnings (loss) attributable to Common Units — Basic	$	323,969	$	68,064		$	398,081		$	(22,314	)	$	(408,018	)
Net earnings per Common Unit(2): Basic	$	1.30	$	0.27		$	1.59		$	(0.09	)
Diluted (loss)	$	1.27	$	0.27		$	1.56		$	(0.09	)

	3/31(1)		6/30(1)		9/30(1)		12/31(1)
2006:
Total revenues	$	164,389	$	171,918	$	208,916	$	214,602
Earnings (loss) from operations		21,219		25,253		34,862		28,281
Income from unconsolidated entities		18,878		10,518		2,088		4,832
Other non-operating income		176		243		1,718		201
Plus net earnings (loss) from discontinued operations		103,619		156,740		111,443		315,004
Less Preferred Unit distributions		958		957		957		957
Net earnings (loss) attributable to Common Units — Basic	$	142,934	$	191,797	$	149,154	$	347,361
Net earnings (loss) per Common Unit(2): Basic	$	0.58	$	0.77	$	0.60	$	1.39
Diluted	$	0.58	$	0.77	$	0.60	$	1.36

(1)	Net earnings from discontinued operations have been reclassified for all periods presented.
(2)	Due to the independent calculations of quarterly and annual earnings per unit and rounding, the sum of the quarterly per unit amounts may not equal the year-to-date totals.

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(14) Segment Data

     We define our garden communities and high-rise properties each as individual operating segments. We have determined that each of our garden communities and each of our High-Rise properties have similar economic characteristics and also meet the other GAAP criteria, which permit the garden communities and High-Rise properties to be aggregated into two reportable segments. Additionally, prior to the Merger we defined the activity from Ameriton as an individual operating segment as its primary focus was the opportunistic acquisition, development and eventual disposition of real estate with a short term investment horizon. Ameriton was dissolved in connection with the Merger. NOI is defined as rental revenues less rental expenses and real estate taxes. We rely on NOI for purposes of making decisions about resource allocations and assessing segment performance. We also believe NOI is a valuable means of comparing year-to-year property performance.

     Following are reconciliations, which exclude the amounts classified as discontinued operations, of each reportable segment’s (i) revenues to consolidated revenues; (ii) NOI to consolidated earnings from operations; and (iii) assets to consolidated assets, for the periods indicated (in thousands).

	Successor		Predecessor
	Period from		Period from
	October 5, 2007		January 1, 2007
	through		through		Years Ended
	December 31,		October 4,		December 31,
	2007		2007		2006		2005
Reportable apartment communities segment rental revenues:
Same-Store:
Garden communities	$	43,928	$	135,661	$	169,331	$	157,178
High-Rise properties		55,745		174,218		219,455		206,406
Non Same-Store:
Garden communities		61,472		153,439		137,110		43,579
High-Rise properties		48,945		135,535		117,223		47,017
Ameriton		—		160		—		13
Other non-reportable operating segment revenues		3,687		45,317		39,296		3,632
Total segment and consolidated rental revenues	$	213,777	$	644,330	$	682,415	$	457,825

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Years Ended
	December 31,			October 4,			December 31,
	2007			2007			2006			2005
Reportable apartment communities segment NOI:
Same-Store:
Garden communities	$	28,406		$	94,265		$	117,636		$	108,826
High-Rise properties		37,258			115,726			148,310			137,425
Non Same-Store:
Garden communities		37,443			99,611			92,739			29,185
High-Rise properties		31,805			90,540			76,229			30,690
Ameriton		—			57			(17	)		(91	)
Other non-reportable operating segment NOI		2,517			24,416			21,696			3,150
Total segment and consolidated NOI		137,429			424,615			456,593			309,185
Reconciling items:
Other income		41,494			45,831			77,410			56,030
Depreciation on real estate investments		(162,427	)		(166,896	)		(177,264	)		(115,997	)
Interest expense		(255,709	)		(166,528	)		(161,231	)		(75,968	)
General and administrative expenses		(24,160	)		(60,605	)		(68,188	)		(58,604	)
Other expenses		(4,689	)		(40,768	)		(17,705	)		(53,276	)
Consolidated earnings (loss) from operations	$	(268,062	)	$	35,649		$	109,615		$	61,370

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	Successor		Predecessor
	As of		As of
	December 31,		December 31,
	2007		2006
Reportable operating communities segment assets:
Same-Store:
Garden communities	$	2,733,756	$	1,262,150
High-Rise properties		3,550,978		1,848,298
Non Same-Store:
Garden communities		4,466,925		5,134,042
High-Rise properties		3,609,604		3,028,840
Ameriton		—		477,056
FHA/ADA settlement capital accrual		—		29,185
International		53,189		48,438
Other non-reportable operating segment assets		188,346		217,960
Total segment assets		14,602,798		12,045,969
Real estate held for sale, net		388,890		184,525
Total segment assets		14,991,688		12,230,494
Reconciling items:
Investment in and advances to unconsolidated entities		297,113		235,323
Cash and cash equivalents		22,422		48,655
Restricted cash		579,097		319,312
Due from affiliated entities		393,841		—
Other assets		870,498		425,343
Consolidated total assets	$	17,154,659	$	13,259,127

     Total capital expenditures for garden communities excluding communities sold or held for sale, were $59.3 million and $43.2 million for the years ended December 31, 2007 and 2006, respectively. Total capital expenditures for High-Rise properties excluding communities sold or held for sale were $63.5 million and $59.8 million for the years ended December 31, 2007 and 2006, respectively. Total capital expenditures for Ameriton properties excluding communities sold or held for sale, were $1.3 million and $0.8 million for the period of January 1, 2007 through October 4, 2007. Ameriton was dissolved in connection with the Merger.

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(15) Income Taxes

     Archstone is a Maryland real estate investment trust that has filed a federal tax election to be treated as a partnership. For income tax purposes, the company and subsequent partnerships were subject to regulations under the Internal Revenue Code pertaining to REITs from October 31, 2001 through October 5, 2007. In either case, as a REIT or a partnership, our income is not generally subject to federal income taxes.

     As a partnership, we make distributions and allocate our taxable income to our partners. The following table reconciles net earnings (loss) to taxable income (loss) for the years ended December 31 (in thousands):

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Years Ended
	December 31,			October 4,			December 31,
	2007			2007			2006			2005
	(Estimated)			(Estimated)
GAAP net earnings (loss)	$	(408,018	)	$	770,717		$	835,075		$	701,504
Book to tax differences:
Depreciation and amortization(1)		37,122			8,470			(23,459	)		14,927
Gain or loss from capital transactions		293			(383,510	)		(412,493	)		(303,550	)
Deferred compensation and other reserves		(3,245	)		(2,251	)		6,440			8,682
Gain or loss from Foreign Exchange/Derivatives		127,093			142			230			164
Other, net		3,681			46,304			(4,919	)		(33,665	)
Taxable income, including capital gains	$	(243,074	)	$	439,872		$	400,874		$	388,062

(1) We use accelerated depreciable lives for tax purposes. This results in higher depreciation expense on newly acquired assets for tax purposes relative to GAAP. This is offset by the Smith Merger in 2001 and the Oakwood transaction in 2005 as GAAP depreciation expense for the related assets is based on fair value and tax depreciation is based on a lower historical tax basis.

Distributions have been made as follows:

	Successor		Predecessor
	Period from		Period from
	October 5, 2007		January 1, 2007
	through		through		Years Ended
	December 31,		October 4,		December 31,
	2007		2007		2006		2005
Distributions to Partners	$	—	$	228,659	$	433,885	$	398,044
Total Distributions	$	—	$	228,659	$	433,885	$	398,044

     The following table summarizes the taxability of our distributions for the period of January 1, 2007 through October 4, 2007 and the years ended 2006 and 2005:

	Predecessor
	Period from
	January 1, 2007
	through			Years Ended
	October 4,			December 31,
	2007			2006			2005
Ordinary Income		44	%		75	%		65	%
Capital gains(1)		56	%		25	%		35	%
		100	%		100	%		100	%

(1) Includes 0%, 11.4% and 34.3% of unrecaptured Section 1250 gains in 2007, 2006, and 2005, respectively.

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     With respect to Archstone-Smith Trust, for federal income tax purposes, distributions may consist of ordinary income, capital gains, non-taxable return of capital or a combination thereof. Distributions that exceed our current and accumulated earnings and profits constitute a return of capital rather than ordinary income and reduce the shareholder’s basis in the Common Shares. To the extent that a distribution exceeds both current and accumulated earnings and profits and the shareholder’s basis in the Common Shares, it will generally be treated as a gain from the sale or exchange of that shareholder’s Common Shares. We notify our shareholders annually of the taxability of distributions paid during the preceding year. The following table summarizes the taxability of cash distributions paid on the Common Shares in 2007, 2006 and 2005:

     For tax purposes, the following summary reflects the taxability of distributions paid on our common units:

	Predecessor
	Period from
	January 1, 2007
	through		Years Ended
	October 4,		December 31,
	2007		2006		2005
Per Common Unit:
Ordinary Income		0.40		1.31		1.12
Capital gains		0.50		0.43		0.61
Total		0.90		1.74		1.73

     In connection with the Merger, holders of approximately 22.2 million Common Units elected to exchange their Common Units for cash consideration of $60.75 without interest and less applicable taxes.

     For tax purposes, the following summary reflects the taxability of distributions paid on our preferred units:

	Predecessor
	Period from
	January 1, 2007
	through		Years Ended
	October 4,		December 31,
	2007		2006		2005
Per Preferred Unit:
Ordinary Income		2,541		5,778		4,959
Capital gains		3,204		1,882		2,701
Total		5,745		7,660		7,660

     During certain steps taken in the Merger, Ameriton was liquidated and deferred taxes are not provided for in the Successor period.

(16) Commitments and Contingencies

Commitments

     At December 31, 2007 we were a lessee under seven non-cancelable ground leases for certain apartment communities and buildings that expire between 2042 and 2077. Each ground lease generally provides for a fixed annual rental payment plus additional rental payments based on the properties’ operating results. Additionally, we lease certain office space under non-cancelable operating leases with fixed annual rental payments.

     The future minimum lease payments payable under non-cancelable leases are as follows at December 31, 2007 (in thousands):

2008		8,341
2009		7,861
2010		8,922
2011		6,422
2012		4,167
Thereafter (2013 - 2077)	$	184,403
Total	$	220,116

See Note 2 for real estate-related commitments.

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Guarantees and Indemnifications

     Investee third-party debt consists principally of mortgage notes payable. Generally, mortgages on real estate assets owned by our unconsolidated investees are secured by the underlying properties. We generally do not guarantee third party debt incurred by our unconsolidated investees; however, the investees and/or the Archstone are occasionally required to guarantee the mortgages along with all other venture partners. We guarantee $294.3 million of the outstanding debt balance related to an unconsolidated development joint venture and are committed to guarantee another $34.0 million upon funding of additional debt. As of December 31, 2007 we have not been required to perform under any guarantees provided to our joint ventures.

     As part of the Smith Merger and the Oakwood transaction, we are required to indemnify certain Unitholders for any personal income tax expense resulting from the sale of properties identified in tax protection agreements. We do not believe that we will be required to perform under the terms of the indemnification agreements due to our ability and intent to hold and use these properties through the term of the indemnification period or our ability to dispose of assets through tax-deferred exchanges. The built in gain subject to tax protection is estimated to be approximately $350 million at December 31, 2007.

Litigation and Contingencies

Shareholder Litigation

     On May 30, 2007, two separate purported shareholder class-action lawsuits related to the Merger Agreement and the transactions contemplated thereby were filed naming Archstone-Smith and each of Archstone-Smith’s trustees as defendants. One of these lawsuits, Seymour Schiff v. James A. Cardwell, et al. (Case No. 2007cv1135), was filed in the United States District Court for the District of Colorado. The other, Mortimer J. Cohen v. Archstone-Smith Trust, et al. (Case No. 2007cv1060), was filed in the District Court, County of Arapahoe, Colorado. On May 31, 2007, two additional purported shareholder class-action lawsuits related to the Merger Agreement and the transactions contemplated thereby were filed in the District Court, County of Arapahoe, Colorado. The first, Howard Lasker v. R. Scot Sellers, et al. (Case No. 2007cv1073), names Archstone-Smith, each of Archstone-Smith’s trustees and one of Archstone-Smith’s senior officers as defendants. The second, Steamship Trade Association/International Longshoremen’s Association Pension Fund v. Archstone-Smith Trust, et al. (Case No. 2007cv1070), names Archstone-Smith, each of Archstone-Smith’s trustees, Tishman Speyer and Lehman Brothers as defendants. On June 11, 2007, an additional purported shareholder class-action lawsuit related to the Merger Agreement, Doris Staehr v. Archstone-Smith Trust, et al. (Case No. 2007cv1081), was filed in the District Court, County of Arapahoe, Colorado, naming Archstone-Smith and each of Archstone-Smith’s trustees as defendants. All five lawsuits allege, among other things, that Archstone-Smith’s trustees violated their fiduciary duties to Archstone-Smith’s shareholders in approving the Mergers.

     On June 21, 2007, the District Court, County of Arapahoe, Colorado entered an order consolidating the Lasker, Steamship Trade Association/International Longshoremen’s Association Pension Fund and Staehr actions into the Cohen action, under the caption In re Archstone-Smith Trust Shareholder Litigation.

     On August 17, 2007, Archstone-Smith and the other defendants entered into a memorandum of understanding with the plaintiffs regarding the settlement of both the Schiff and the consolidated action captioned In re Archstone-Smith Trust Shareholder Litigation. In connection with the settlement, Archstone-Smith agreed to make certain additional disclosures to its shareholders. Subject to the completion of certain confirmatory discovery by counsel to the plaintiffs, the memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to Archstone-Smith’s shareholders and consummation of the Merger. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the court will consider the fairness, reasonableness and adequacy of the settlement, which, if finally approved by the court, will resolve all of the claims that were or could have been brought in the actions being settled, including all claims relating to the Merger, the Merger Agreement and any disclosure made in connection therewith. In addition, in connection with the settlement, the parties contemplate that plaintiffs’ counsel will petition the court for an award of attorneys’ fees and expenses to be paid by us, up to $1.0 million. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the court will approve the settlement even if the parties were to enter into such stipulation. In such

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event, the proposed settlement as contemplated by the memorandum of understanding may be terminated. The settlement will not affect the amount of the Merger consideration that the plaintiffs are entitled to receive in the Merger. Archstone-Smith and the other defendants vigorously deny all liability with respect to the facts and claims alleged in the lawsuits, and specifically deny that any modifications to the Merger Agreement or any further supplemental disclosure was required under any applicable rule, statute, regulation or law. However, to avoid the risk of delaying or adversely affecting the Merger and the related transactions, to minimize the expense of defending the lawsuits, and to provide additional information to Archstone-Smith shareholders at a time and in a manner that would not cause any delay of the Merger, Archstone-Smith and the Archstone-Smith Trustees agreed to the settlement described above. Archstone-Smith and the other defendants further considered it desirable that the actions be settled to avoid the substantial burden, expense, risk, inconvenience and distraction of continued litigation and to fully and finally resolve the settled claims.

Clinton Green

     The Clinton Green project is a mixed-use apartment, condominium, and retail complex in New York City on 10th Avenue between 51st and 53rd Streets. The Clinton Green Project is owned by Clinton Green Holdings, LLC (“CG Holdings”), a joint venture consisting of our wholly-owned indirect subsidiary (“ASN-CG Member”) and an affiliate of The Dermot Company (“Dermot Member”). The Clinton Green Project also includes a small condominium component that is separately owned by Clinton Green Condo, LLC (“CG Condo”), a joint venture of the ASN-CG Member and the Dermot Member. In addition to other investments in CG Holdings and CG Condo, we provided a letter of credit under our pre-Merger Credit Facility to support tax-exempt bonds issued to finance the CG Project.

     On September 21, 2007, the Dermot Member filed a lawsuit captioned Clinton Green Holdings, LLC and DPIC Clinton Green, LLC v. Archstone-Smith Operating Trust, ASN Clinton Green Member, LLC, and Ameriton Properties Incorporated, Index No. 07/603154, Supreme Court of the State of New York, County of New York. The Dermot Member alleges (a) that the Merger caused a breach of the CG Holdings Operating Agreement because the transfer violated certain covenants in the Pre-Merger Credit Facility and also breached a provision of the CG Holdings Operating Agreement prohibiting a change of control of ASN-CG Member, (b) that the Merger caused a breach of a Put-Call Agreement under which the Dermot Member is entitled to be bought out of CG Holdings by ASN-CG Member through a tax-free contribution to us for an interest that could be converted into Archstone-Smith’s publicly traded stock and (c) that the Merger caused a breach of the CG Condo Operating Agreement as a result of a change in control of Ameriton. The Dermot Member is seeking unspecified damages as well as the ability to have CG Holdings dissolved.

     Prior to the Merger, the ASN-CG Member reached agreement with the Dermot Member and the lenders under the Pre-Merger Credit Facility to waive any breach of covenants for a period of six months. The agreement involved certain immaterial payments and concessions to the Dermot Member. The Dermot Member has also agreed to an extension of the date by which the Archstone defendants must respond to the Complaint until April 30, 2008.

Tax Protection Agreements and Unitholder Claims

     Prior to the Mergers, Archstone and several related parties had entered into tax protection agreements and other contracts with various holders of the A-1 Common Units. Those tax protection and related agreements provided such Unitholders, among other things, with the right to tax protection payments under specified circumstances detailed in such agreements. Archstone has received various tax claim notices and other communications from various former Unitholders asserting that those former Unitholders are owed tax protection payments and alleging a variety of other claims. Other former Unitholders may assert similar or additional claims in the future. The tax protection agreements generally provide that, after a Unitholder sends a tax claim notice to Archstone, Archstone may reject such claims (as it has with respect to tax claim notices sent to date). Following such rejection, unless the parties are able to negotiate an amicable resolution, the parties are generally required to submit to arbitration with respect to claims for tax protection payments. It is expected that arbitrations will be commenced in the future.

     In addition, on November 30, 2007, a purported class action lawsuit related to the Mergers, captioned Steven A. Stender and Infinity Clark Street Operating v. James A. Cardwell, et al. (Case no. 2007cv2503), was filed

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in the United States District Court for the District of Colorado. The lawsuit names, among others, Archstone, Archstone-Smith, certain of their former trustees and officers, Lehman Brothers Holdings Inc. and Tishman Speyer Development Corporation as defendants. This action was brought by certain former Unitholders, individually and purportedly on behalf of all former holders of A-1 Common Units as of the Mergers, and alleges, among other things: (i) that Archstone and Archstone-Smith entered into enforceable property contribution agreements and partnership agreements with such Unitholders; (ii) that Archstone and Archstone-Smith agreed not to enter into any transactions or dispose of any interest in the property contributed by such Unitholders that would result in such Unitholders realizing a taxable gain, and agreed to provide such Unitholders with the ability to receive dividends and also to liquidate their units by receiving cash or converting them to common shares in the publicly traded Archstone-Smith; (iii) that Archstone and Archstone-Smith failed to perform their duties under the Declaration of Trust, contribution and partnership agreements, and statutory and common law partnership principles in connection with the Mergers; (iv) that such failures discharge such Unitholders’ obligations to defendants (as noted above, the former Unitholders undertook certain obligations to arbitrate with respect to claimed rights to tax protection payments); and (v) that Archstone-Smith and former trustees and officers, aided and abetted by Lehman Brothers and Tishman Speyer, violated their fiduciary duties owed to such Unitholders in connection with the Mergers. The purported class action seeks an unspecified amount of damages. Although Archstone and the Venture believe that the claims that have been asserted are without merit, there can be no assurance that the disposition of such claims will not result in material liability to Archstone.

FHA/ADA

     During the second quarter of 2005, we entered into a full and final settlement in the United States District Court for the District of Maryland with three national disability organizations and agreed to make capital improvements in a number of our communities in order to make them fully compliant with the FHA and ADA. The litigation, settled by this agreement, alleged lack of full compliance with certain design and construction requirements under the two federal statutes at 71 of our wholly-owned and joint venture communities, of which we or our affiliates still own or have an interest in 18. As part of the settlement, the three disability organizations all recognized that Archstone had no intention to build any of its communities in a manner inconsistent with the FHA or ADA.

     The amount of the capital expenditures required to remediate the communities named in the settlement was estimated at $47.2 million and was accrued as an addition to real estate during the fourth quarter of 2005. The settlement agreement approved by the court allows us to remediate each of the designated communities over a three-year period, and also provides that we are not restricted from selling any of our communities during the remediation period. We agreed to pay damages totaling $1.4 million, which included legal fees and costs incurred by the plaintiffs. We had $10.9 million of the original accrual remaining on December 31, 2007.

Water Intrusion-Florida

     We are subject to various claims filed in 2002 and 2003 in connection with moisture infiltration and resulting mold issues at certain High-Rise properties we once owned in Southeast Florida. These claims generally allege that water infiltration and resulting mold contamination resulted in the claimants having personal injuries and/or property damage. Although certain of these claims continue to be in various stages of litigation, with respect to the majority of these claims, we have either settled the claims and/or we have been dismissed from the lawsuits that had been filed. With respect to the lawsuits that have not been resolved, we continue to defend these claims in the normal course of litigation.

Water Intrusion — Westbury

     In November, 2007, we began notifying residents of Archstone Westbury that, due to water intrusion and some related mold growth, we had concluded that the appropriate course of action was to perform necessary remediation and reconstruction at the community. Further, we determined it would be necessary to terminate every tenant’s lease, effective March 31, 2008, to ensure the safety of tenants during the potentially year-long construction project. As a consequence, four complaints were filed by tenants at Westbury against entities related to us and various other entities allegedly involved in the design, construction and ownership of the Project. These cases are Andrea Sorrentino, et al. v. ASN Roosevelt Center LLC d/b/a Archstone Westbury, et al., filed on November 28,

123

2007, in the Supreme Court of the State of New York, County of Nassau, Case No. 07-021135, removed on February 8, 2008 to U.S. Federal District Court for the Eastern District of New York; Richardo Francois v. ASN Roosevelt Center LLC D/B/A Archstone Westbury, filed on December 7, 2007, in the Supreme Court of the State of New York, County of Nassau, Case No. 07-021967; Pasquale Marchese, et al. v. ASN Roosevelt Center LLC, et al., filed on December 7, 2007, but not yet served on us; and John DiGiovanna and Farideh DiGiovanna vs. ASN Roosevelt Center LLC d/b/a Archstone Westbury, filed on January 7, 2008, in the Supreme Court of the State of New York, County of Nassau, Case No. 08-000347. In addition to the foregoing cases, there are a number of threatened lawsuits. Plaintiffs in the filed cases seek monetary damages and equitable relief alleging, among other things, that water damage and mold has caused the tenants at Westbury personal harm and property damage. Although no assurances can be given with respect to the outcome of these lawsuits, we intend to vigorously defend against the claims alleged in these lawsuits. An affiliated entity has accrued $14.1 million for the estimated remediation costs associated with this community as of December 31, 2007.

Other

     Unless indicated otherwise above, we have not accrued any cost for the legal contingencies referenced as we have concluded that they do not meet the accounting criteria for accrual. We are a party to various other claims and routine litigation arising in the ordinary course of business. We do not believe that the results of any such claims or litigation, individually or in the aggregate, will have a material adverse effect on our business, financial position or results of operations.

124

(17) Supplemental Cash Flow Information

     Significant non-cash investing and financing activities for the years ended December 31, 2007, 2006 and 2005 consisted of the following:

• Recorded the following purchase accounting-related adjustments and non-cash related party transactions in connection with the Merger (See Note 1):

• Real estate includes an increase related to a fair value adjustment of 5.8 billion;

• Net assets of $2.3 billion were distributed to Archstone’s affiliated entities;

• Assumption of Predecessor property mortgages of $0.9 billion and trade payables and other accrued liabilities of $0.8 billion;

• Preferred Units issued in connection with the Merger of $0.3 billion;

• Reclassification of Unitholders’ equity balance of $2.6 billion

• Issued $1.1 million, $81.4 million and $408.0 million of A-1 Common Units as partial consideration for properties acquired during 2007, 2006 and 2005, respectively;

• Issued $250,000 of Series N-1 and N-2 Preferred Units ($125,000 each) as partial consideration for real estate during 2005;

• Converted $55.4 million, $143.4 million and $8.4 million A-1 Common Units to A-2 Common Units during 2007, 2006 and 2005, respectively;

• Assumed mortgage debt of $15.0 million, $728.5 million and $864.2 million during 2007, 2006 and 2005, respectively, in connection with the acquisition of apartment communities;

• Recorded accruals of $3.0 million and $47.2 million for anticipated capital spending to bring properties named in the FHA and ADA settlement into compliance in 2007 and 2005, respectively;

• See Notes 3 and 4 for further discussion regarding the non-cash financing components of the International Fund Formation and the DeWAG and Oakwood acquisitions.

(18) Related Party Transactions

     The Archstone-Smith Board adopted a written policy for the approval of all “related person” transactions that remains applicable to us. Under this policy, “related persons” include trustees, executive officers, immediate family members of trustees and executive officers, certain entities in which a trustee, executive officer, or one of the immediate family members is employed, is a principal or owns a controlling interest, charities in which a trustee, executive officer or one of the immediate family members is employed or is on the managing board, and shareholders who held more than 5% of Archstone-Smith’s Common Shares upon conversion of their Units. Other than certain pre-approved transactions described in the policy, any transaction in which we are a participant and in which any related person (other than a shareholder) has a material interest having a value in excess of $120,000 must be reviewed and approved by Archstone-Smith Board’s Audit Committee (now the Series I Trust Board’s Audit Committee).

     Affiliates of the lenders under the Master Credit Facility, the Fannie Mae Mezzanine Lenders and the Freddie Mac Mezzanine Lenders hold limited partnership interests in the Venture and an affiliate of Lehman Brothers Inc. holds a limited partnership interest in the general partner of the Venture. We have paid fees of approximately $216 million to the Buyer Parties and the lenders under the Master Credit Facility in connection with the Merger. As of December 31, 2007 and March 20, 2008, respectively, there was a total of $5.6 billion and $5.6 billion, respectively, outstanding under the Master Credit Facility, the Fannie Mae Mezzanine loans and the Freddie Mac Mezzanine loans. Through December 31, 2007, we paid $76.8 million in interest and $237.7 million in principal under these facilities. Please refer to “Note 8 — Borrowings” for a description of the terms.

     The lease for our corporate office, which was negotiated prior to the Merger, is with an affiliate of Tishman Speyer. For the period from October 5, 2007 through December 31, 2007 we paid $463,918 in rent to that affiliate.

     We have intercompany transactions with affiliated entities and record a receivable from affiliated entities when they borrow from Archstone or we pay billings on their behalf. We charge interest on balances owned by affiliates to Archstone at the same rate that we are paying and therefore do not recognize any profit from our affiliated entities. As of December 31, 2007, there was an aggregate of $393.8 million outstanding under all such transactions. Furthermore, Archstone’s employees render services for affiliated entities where Archstone is reimbursed based on an estimate of the allocable cost. We also record a payable to our affiliates when we receive funds on the affiliated entity’s behalf or the affiliate pays bills on our behalf. As of December 31, 2007 there was an aggregate of $256.7 million outstanding under such transactions.

     Our Chief Executive Officer has entered into an employment agreement which includes equity awards granted by the Venture or affiliated entities. These awards vest over a three to seven year period.

125

Report of Independent Registered Public Accounting Firm on Supplementary Information

   The Trustee of Archstone and the Board of Trustees of the Trustee

     Under date of March 31, 2008, we reported on the consolidated balance sheet of Archstone and subsidiaries (Successor) as of December 31, 2007 and the consolidated balance sheet of Archstone-Smith Operating Trust and subsidiaries (Predecessor) as of December 31, 2006, and the related consolidated statements of operations, unitholders’ equity, other common unitholders’ interest, preferred units and comprehensive income (loss) of the Successor for the period October 5, 2007 through December 31, 2007 and of the Predecessor for the period January 1, 2007 through October 4, 2007 and for the years ended December 31, 2006 and 2005, and the related consolidated and combined statement of cash flows of the Successor and the Predecessor for the year ended December 31, 2007 and the related consolidated statements of cash flows of the Predecessor for the years ended December 31, 2006 and 2005. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedules, Schedule III — Real Estate and Accumulated Depreciation (Schedule III) and Schedule IV — Mortgage Loans on Real Estate (Schedule IV). Schedule III and Schedule IV are the responsibility of Archstone’s management. Our responsibility is to express an opinion on Schedule III and Schedule IV based on our audits.

     In our opinion, Schedule III and Schedule IV, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

Denver, Colorado
March 31, 2008

126

ARCHSTONE

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2007
(Dollar amounts in thousands)

									Cost
					Initial Cost to Archstone				Capitalized		Gross Amount at Which Carried at Year End
			Encum-				Buildings &		Subsequent to				Buildings &				Accumulated			Construction		Year
	Units		brances		Land		Improvements		Acquisition		Land		Improvements		Totals(4)		Depreciation			Year(1)		Acquired(3)
Apartment Communities:
Garden Communities:
Boston, Massachusetts		1,164		296,771		50,312		375,066		505		50,312		375,571		425,883		(2,763	)		1898-2006		2007
Inland Empire, California		300		46,075		18,000		48,640		248		18,000		48,888		66,888		(352	)		1990		2007
Los Angeles, California		7,518		1,549,147		882,950		1,660,343		5,636		883,060		1,665,869		2,548,929		(12,381	)		1969-2007		2007
San Diego, California		468		57,945		38,400		81,180		894		38,432		82,042		120,474		(624	)		1987-2002		2007
San Francisco Bay Area, California		6,855		1,220,989		611,240		1,162,039		147,092		647,288		1,273,083		1,920,371		(9,529	)		1909-2007		2007
Seattle, Washington		2,327		316,944		101,245		362,155		2,218		101,359		364,259		465,618		(2,646	)		1976-2001		2007
Ventura County, California		1,773		368,828		182,900		352,670		2,012		183,042		354,540		537,582		(2,689	)		1971-2007		2007
Washington, D.C. metropolitan area		5,867		771,593		383,000		1,101,464		2,438		383,076		1,103,826		1,486,902		(6,691	)		1970-2007		2007
Garden Communities Total		26,272		4,628,292		2,268,047		5,143,557		161,043		2,304,569		5,268,078		7,572,647		(37,675	)
High-Rise Properties:
Boston, Massachusetts		1,945		466,782		108,432		760,649		14,861		108,451		775,491		883,942		(5,148	)		1901-2006		2007
Chicago, Illinois		304		77,467		74,000		59,785		492		74,004		60,273		134,277		(449	)		1988		2007
Los Angeles, California		1,073		281,214		64,000		328,123		304		64,005		328,422		392,427		(2,472	)		1934-2004		2007
New York City metropolitan area		1,974		824,560		718,100		870,747		6,564		718,102		877,309		1,595,411		(6,520	)		1974-2001		2007
Philadelphia, Pennsylvania		80		8,945		4,000		11,908		59		4,000		11,967		15,967		(93	)		1945		2007
San Francisco Bay Area, California		853		218,066		45,100		266,466		1,929		45,100		268,395		313,495		(2,000	)		1966-1986		2007
Seattle, Washington		694		114,445		33,000		146,644		580		33,015		147,209		180,224		(1,081	)		1949-1998		2007
Washington, D.C. metropolitan area		11,239		2,552,048		1,018,235		2,683,095		77,768		960,600		2,818,498		3,779,098		(21,423	)		1929-2005		2007
High-Rise Properties Total		18,162		4,543,527		2,064,867		5,127,417		102,557		2,007,277		5,287,564		7,294,841		(39,186	)
Germany(2)		807		40,829		7,636		43,564		2,258		7,972		45,486		53,458		(269	)		1967-1970		2007
FHA/ADA Settlement Capital Accrual
Total Apartment Communities — Operating and Under Construction		45,241		9,212,648		4,340,550		10,314,538		265,858		4,319,818		10,601,128		14,920,946		(77,130	)
Other:
Development communities In Planning and Owned		545		—												57,335		(10	)
Hotel, retail and other assets		—		—												90,791		(244	)
Total real estate assets		45,786		9,212,648												15,069,072		(77,384	)

(1)	Represents the date that the building structure was originally completed. For phased developments, it represents the date the earliest phase was constructed.
(2)	Our German portfolio is concentrated primarily in the Federal States of North-Rhine Westphalia, Hesse, Baden-Wurttemburg and Berlin.
(3)	In connection with the Merger we revalued all of the properties at October 5, 2007.
(4)	The tax basis at December 31, 2007 of our assets for federal income tax purposes was approximately $10.0 billion (unaudited).

127

SCHEDULE III

     The following is a reconciliation of the carrying amount and related accumulated depreciation of Archstone’s investment in real estate, at cost (in thousands):

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Years Ended
	December 31,			October 4,			December 31,
	2007			2007			2006			2005
Carrying Amounts
Balance at beginning of period(1)	$	15,021,288		$	13,187,640		$	11,359,264		$	9,221,038
Apartment communities:
Acquisition-related expenditures		226,133			1,419,633			2,530,459			2,671,112
Redevelopment expenditures		20,494			37,328			57,414			106,264
Recurring capital expenditures		9,765			30,340			46,354			48,311
Development expenditures, excluding land acquisitions		16,038			348,844			388,502			324,740
Acquisition and improvement of land for development		—			213,708			209,916			81,340
International fund formation		—			(1,034,524	)		—			—
Dispositions		(226,903	)		(1,195,068	)		(1,403,858	)		(1,175,834	)
Provision for possible loss on investment		—			(7,490	)		(4,328	)		(1,500	)
Change in estimated hurricane retirements		—			—			4,496			—
Other		2,257			820			7,987			(8,303	)
Net apartment community activity	$	47,784		$	(186,409	)	$	1,836,942		$	2,046,130
Other:
Change in other real estate assets		—			(42,733	)		(8,566	)		92,096
Balance at end of period	$	15,069,072		$	12,958,498		$	13,187,640		$	11,359,264

(1) The beginning balance of the period October 5, 2007 through December 31, 2007 includes a fair value adjustment of $5.8 billion in connection with the Merger, net of distributions to affiliates of $3.6 billion.

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Years Ended
	December 31,			October 4,			December 31,
	2007			2007			2006			2005
Accumulated Depreciation
Balance at beginning of period	$	—		$	957,146		$	836,693		$	763,542
Depreciation for the period(1)		78,146			203,147			266,589			220,770
Accumulated depreciation on real estate dispositions		(762	)		(153,243	)		(146,136	)		(147,619	)
Balance at end of period	$	77,384		$	1,007,050		$	957,146		$	836,693

(1) Depreciation is net of $87.4 million and $21.7 million for intangible assets related to the value of leases in place for real estate acquired in 2007 and 2006, respectively.

128

SCHEDULE IV

ARCHSTONE

MORTGAGE LOANS ON REAL ESTATE

December 31, 2007
(Dollar amounts in thousands)

					Face
					Amount of		Carrying
		Final			Mortgages		Amount
		Maturity	Periodic Payment	Prior	(amount		of
Description	Interest Rate	Date	Term	Liens	committed)		Mortgages
Mortgage and Other
Notes Receivable:
Florida	LIBOR + 8.5%	2/21/10	(1)	(3)	$	10,631	$	5,643
Georgia	LIBOR + 8%	7/6/10	(1)	(3)		10,767		7,958
Massachusetts	LIBOR + 7%	2/07/11	(1)	(3)		34		34
New York	LIBOR + 7%	6/22/09	(1)	(3)		42,070		30,216
New York	(4)	11/10/12	(1)	(3)		36,459		25,026
Texas	LIBOR + 9%	8/11/10	(1)	(3)		25,937		1,947
Washington, D.C.	18%	7/17/07	(1)	(3)		7,332		7,334
Washington, D.C.	14%	6/03/09	(1)	(3)		7,524		6,349
					$	140,754	$	84,507

	Successor			Predecessor
	Period from			Period from
	October 5, 2007			January 1, 2007
	through			through			Year Ended
	December 31,			October 4,			December 31,
	2007			2007			2006
Balance at Beginning of Period	$	89,213		$	123,261		$	74,396
New Mortgage Loans		32,862			13,097			85,165
Collections of Principal		(39,822	)		(52,298	)		(46,081	)
Other(2)		2,254			5,153			9,781
Balance at End of Period	$	84,507		$	89,213		$	123,261

(1)	Outstanding principal plus accrued and unpaid interest is generally due on the maturity date unless specified as payable monthly in the loan agreement. Partial prepayment is required to the extent the borrower receives proceeds from the sale of constructed units in accordance with contracted terms.
(2)	A portion of the accrued interest amount is added to the principal amount on a monthly basis on the majority of the loans.
(3)	Our rights to the underlying collateral in the event of default are subordinate to a primary mortgage lender.
(4)	The interest rate is divided into two tranches: Tranche A of LIBOR + 7.5% and Tranche B of LIBOR + 10%.

129

ARCHSTONE

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ARCHSTONE
By:	/s/ R. Scot Sellers
	R. Scot Sellers
	Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

Signature	Title	Date
/s/ R. Scot Sellers R. Scot Sellers	Chief Executive Officer (principal executive officer)	March 31, 2008
/s/ Charles E. Mueller, Jr. Charles E. Mueller, Jr.	Chief Financial Officer (principal financial officer); Chief Operating Officer effective January 1, 2008	March 31, 2008
/s/ Ash K. Atwood Ash K. Atwood	Controller and Group Vice President (principal accounting officer)	March 31, 2008
TISHMAN SPEYER ARCHSTONE-SMITH SERIES I TRUST
By: /s/ David Augarten Trustee	Trustee	March 31, 2008

130

INDEX TO EXHIBITS

     Certain of the following documents are filed herewith. Certain other of the following documents have been previously filed with the Securities and Exchange Commission and, pursuant to Rule 12b-32, are incorporated herein by reference:

Number	Description
2.1	Agreement and Plan of Merger, dated as of May 28, 2007, by and among Archstone-Smith Trust, Archstone-Smith Operating Trust, River Holding, LP, River Acquisition (MD), LP, and River Trust Acquisition (MD), LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Archstone-Smith Trust with the SEC on June 1, 2007)
2.2	Amendment No. 1, dated as of August 5, 2007, to Agreement and Plan of Merger dated as of May 28, 2007, by and among Archstone-Smith Trust, Archstone-Smith Operating Trust, River Holding, LP, River Acquisition (MD), LP, and River Trust Acquisition (MD), LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Archstone-Smith Trust with the SEC on August 6, 2007)
3.1	Amended and Restated Declaration of Trust of Archstone (formerly known as Archstone-Smith Operating Trust) (incorporated by reference to Exhibit 3.1 to Archstone-Smith Operating Trust’s Current Report on Form 8-K filed with the SEC on October 5, 2007)
3.2	Articles of Amendment of Amended and Restated Declaration of Trust of Archstone, as filed with the Maryland Department of Assessments and Taxation on January 4, 2008
3.3	Bylaws of Archstone (formerly known as Archstone-Smith Operating Trust) (incorporated by reference to Exhibit 4.2 to Archstone-Smith Trust’s Current Report on Form 8-K filed with the SEC on June 2, 2006)
3.4	Amendment No. 1 to Bylaws of Archstone (formerly known as Archstone-Smith Operating Trust) (incorporated by reference to Exhibit 3.1 to Archstone-Smith Trust’s Current Report on Form 8-K filed with the SEC on June 1, 2007)
4.1	Indenture, dated as of February 1, 1994, between Archstone (formerly known as Archstone-Smith Operating Trust and Property Trust of America) and Morgan Guaranty Trust Company of New York, as Trustee relating to Archstone’s unsecured senior debt securities (incorporated by reference to Exhibit 4.1 of Archstone-Smith Trust’s Annual Report on Form 10-K for the year ended December 31, 2006)
4.2	Fourth Supplemental Indenture, dated as of October 5, 2007, to the Indenture, dated as of February 1, 1994, by and between the Archstone (formerly known as Archstone-Smith Operating Trust) and the U.S. Bank National Association, as supplemented by the First Supplemental Indenture, dated as of February 2, 1994, the Second Supplemental Indenture, dated as of August 2, 2004, and the Third Supplemental Indenture, dated as of July 14, 2006 (incorporated by reference to Exhibit 4.1 to Archstone’s Current Report on Form 8-K, dated October 5, 2007)
10.1	Amended and Restated Credit Agreement, dated as of June 21, 2006, by and among Archstone-Smith Operating Trust, as borrower, and Archstone-Smith Trust as parent, and J.P. Morgan Chase Bank, as administrative agent,, J.P. Morgan Europe Limited, as administrative agent for foreign currencies, Bank of America, N.A., and Wells Fargo Bank, N.A., as syndication agents, and Suntrust Bank and Citicorp North America, Inc. as documentation agents and the various banks signatory thereto (incorporated by reference to Exhibit 10.2 to Archstone-Smith’s Current Report on Form 8-K filed with the SEC on June 27, 2006)

Number	Description
10.2	Guaranty, dated as of June 21, 2006, by Archstone-Smith Trust, as guarantor, for the benefit of J.P. Morgan Chase Bank, as administrative agent, J.P. Morgan Europe Limited, as administrative agent for foreign currencies, Bank of America, N.A., and Wells Fargo Bank, N.A., as syndication agents, and Suntrust Bank and Citicorp North America, Inc. as documentation agents and the various banks signatory thereto (incorporated by reference to Exhibit 10.1 to Archstone-Smith’s Current Report on Form 8-K filed with the SEC on June 27, 2006)
10.3	Amended and Restated Master Credit Facility Agreement, dated as of November 27, 2007, by and among certain subsidiaries of Archstone-Smith Operating Trust, as borrowers, and Lehman Brothers Holdings Inc., Bank of America, N.A., and Barclays Capital Real Estate Inc., as initial lender (collectively, the “Credit Facility Lenders”), and assigned to the Federal National Mortgage Association (incorporated by reference to Exhibit 10.1 of Archstone’s Current Report on Form 8-K filed with the SEC on December 3, 2008)
10.4	Form of Promissory Note for loan, dated as of October 5, 2007, to certain subsidiaries of Archstone-Smith Operating Trust from Lehman Brothers Holdings Inc., Bank of America, N.A., and Barclays Capital Real Estate Inc., as initial lender, and assigned to the Federal Home Loan Mortgage Corporation (incorporated by reference to Exhibit 10.4 of Archstone’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
10.5	Guarantee and Collateral Agreement made by Archstone-Smith Operating Trust and certain of its subsidiaries and parent guarantors in favor of Lehman Commercial Paper Inc. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Archstone-Smith Operating Trust with the SEC on December 3, 2007).
10.6	Form of Cross-Collateralization Agreement for loan, dated as of October 5, 2007, to certain subsidiaries of Archstone-Smith Operating Trust from Lehman Brothers Holdings Inc., Bank of America, N.A., and Barclays Capital Real Estate Inc., as initial lender, and assigned to the Federal Home Loan Mortgage Corporation (incorporated by reference to Exhibit 10.5 of Archstone’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
10.7	Schedule of Cross-Collateralized Agreements and Promissory Notes (pursuant to Instruction 2 to Item 601 of Regulation S-K) (incorporated by reference to Exhibit 10.6 of Archstone’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
10.8	Mezzanine Loan A Agreement (Fannie Bucket 1), dated as of October 5, 2007, by and among certain subsidiaries of Archstone-Smith Operating Trust, as borrowers, and Lehman Brothers Holdings Inc., Bank of America, N.A., and Barclays Capital Real Estate Finance Inc., as lender (incorporated by reference to Exhibit 10.9 to Archstone-Smith Operating Trust’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2007).
10.9	Mezzanine Loan B Agreement (Fannie Bucket 1), dated as of October 5, 2007, by and among certain subsidiaries of Archstone-Smith Operating Trust, as borrowers, and Lehman Brothers Holdings Inc., Bank of America, N.A., and Barclays Capital Real Estate Finance Inc., as lender (incorporated by reference to Exhibit 10.10 to Archstone-Smith Operating Trust’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2007).
10.10	Schedule of Additional Mezzanine Loans for the Fannie Portfolio (pursuant to Instruction 2 to Item 601 of Regulation S-K) (incorporated by reference to Exhibit 10.11 to Archstone-Smith Operating Trust’s Quarterly Report on Form 10-Q filed with the SEC on November 9, 2007).
10.11	Mezzanine Loan A Agreement, dated as of October 5, 2007, by and among certain subsidiaries of Archstone-Smith Operating Trust, as borrowers, and Lehman Brothers Holdings Inc., Bank of America, N.A., and Barclays Capital Real Estate Finance Inc., as initial lender (collectively, the “Mezz Loan A Lenders”), and assigned to the Federal Home Loan Mortgage Corporation (incorporated by reference to Exhibit 10.7 of Archstone’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)

Number	Description
10.12	Mezzanine Loan B Agreement, dated as of October 5, 2007, by and among certain subsidiaries of Archstone-Smith Operating Trust, as borrowers, and Lehman Brothers Holdings Inc., Bank of America, N.A., and Barclays Capital Real Estate Finance Inc., as initial lender (collectively, the “Mezz Loan B Lenders”), and assigned to the Federal Home Loan Mortgage Corporation (incorporated by reference to Exhibit 10.8 of Archstone’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)
10.13	Letter agreement, dated October 5, 2007, from the Credit Facility Lenders, Mezz Loan A Lenders, Mezz Loan B Lenders and certain lenders under other loan agreements, to the borrowers thereunder. Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment.
10.14	Letter agreement, dated November 27, 2007, amending the letter agreement dated October 5, 2007, from the Credit Facility Lenders, Mezz Loan A Lenders, Mezz Loan B Lenders and certain lenders under other loan agreements, to the borrowers thereunder. Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment.
10.15	Credit Agreement (Affiliate Borrower I-A), dated October 5, 2007, between Tishman Speyer Archstone-Smith Multifamily Holdings I (Borrower-A), L.P., as borrower, and Archstone-Smith Operating Trust, as lender
10.16	Credit Agreement (Affiliate Borrower I-B), dated October 5, 2007, between Tishman Speyer Archstone-Smith Multifamily Holdings I (Parent Borrower-B), L.P., as borrower, and Archstone-Smith Operating Trust, as lender
10.17	Credit Agreement (Affiliate Borrower II — Revolving Credit Facility), dated October 5, 2007, between Tishman Speyer Archstone-Smith Multifamily Holdings II (Borrower), L.P., as borrower, and Archstone-Smith Operating Trust, as lender
10.18	Employment Agreement, dated October 5, 2007, between R. Scot Sellers, as Chief Executive Officer, Archstone-Smith Communities LLC, as employer, and Archstone (formerly known as Archstone-Smith Operating Trust), as guarantor
10.19	Award Agreement, dated October 5, 2007, between R. Scot Sellers and Tishman Speyer Archstone-Smith Multifamily Participants, L.L.C.
10.20	Unit Award Agreement, dated October 5, 2007, between R. Scot Sellers and Tishman Speyer Archstone-Smith Junior Mezz Borrower, L.P.
10.21	Unit Award Agreement, dated October 5, 2007, between R. Scot Sellers and Tishman Speyer Archstone-Smith Parallel Guarantor I, L.L.C.
10.22	Unit Award Agreement, dated October 5, 2007, between R. Scot Sellers and Tishman Speyer Archstone-Smith Parallel Guarantor II, L.L.C.
10.23	Separation and General Release Agreement, dated April 2, 2007, between J. Lindsay Freeman, Archstone-Smith Operating Trust and Archstone-Smith Trust
10.24	Amendment to Separation and General Release Agreement, dated June 1, 2007, between J. Lindsay Freeman, Archstone-Smith Operating Trust and Archstone-Smith Trust
10.25	Amended and Restated Archstone-Smith Trust Equity Plan for Outside Trustee and all amendments thereto (incorporated by reference to Exhibits 10.5, 10.6 and 10.7 to Archstone-Smith Trust’s Current Report on Form 8-K filed with the SEC on December 12, 2006)
10.26	Archstone-Smith Trust 2001 Long-Term Incentive Plan and all amendments thereto (incorporated by reference to Exhibit 10.1, 10.2, 10.3 and 10.4 to Archstone-Smith Trust’s Current Report on Form 8-K filed with the SEC on December 12, 2006)
10.27	Archstone-Smith Deferred Compensation Plan (incorporated by reference to Exhibit 10.5 to Archstone-Smith’s Annual Report on Form 10-K for the year ended December 31, 2001)

Number	Description
10.28	Form of Non-Qualified Share Option Agreement for Archstone-Smith Trust 2001 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of Archstone-Smith Trust’s Annual Report on Form 10-Q for the Quarter Ended September 30, 2004)
10.29	Form of Restricted Share Unit Agreement for Archstone-Smith Trust 2001 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 of Archstone-Smith Trust’s Annual Report on Form 10-Q for the Quarter Ended September 30, 2004)
10.30	Form of Restricted Share Unit Agreement for Archstone-Smith Trust Equity Plan for Outside Trustees (incorporated by reference to Exhibit 10.3 of Archstone-Smith Trust’s Annual Report on Form 10-Q for the Quarter Ended September 30, 2004)
10.31	Form of Indemnification Agreement entered into between Archstone-Smith Trust and each of its officers and Trustees (incorporated by reference to Exhibit 10.6 to Archstone-Smith Trust’s Annual Report on From 10K for the year ended December 31, 2003)
10.32	Form of Change in Control Agreement between Archstone-Smith Trust and certain of its officers (incorporated by reference to Exhibit 10.7 to Archstone-Smith’s Annual Report on Form 10-K for the year ended December 31, 2002)
10.33	Form of Amendment No. 1 to Change in Control Agreement between Archstone-Smith Trust and certain of its officers (incorporated by reference to Exhibit 10.12 to Archstone-Smith Operating Trust’s registration statement on Form S-4 (File No. 333-144717))
21	Subsidiaries of Archstone
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-3.2

Exhibit 3.2

STATE OF MARYLAND
ARTICLES OF AMENDMENT
OF
AMENDED AND RESTATED DECLARATION OF TRUST
OF
ARCHSTONE-SMITH OPERATING TRUST

THIS IS TO CERTIFY THAT:

     FIRST: Pursuant to Section 8-501 of the Maryland REIT Law (which references Section 2-605 of the Maryland General Corporation Law), Archstone-Smith Operating Trust desires to amend its Amended and Restated Declaration of Trust as currently in effect and as hereinafter amended.

     SECOND: Subsection A of Article 1, Section 1.1 of the Amended and Restated Declaration of Trust shall be amended as follows:

The name of the Trust is “Archstone” (the “Trust”). The Trustee may change the name of the Trust at its sole discretion, without any approval of Unitholders of the Trust.

     THIRD: These Articles of Amendment have been approved by the sole trustee of Archstone-Smith Operating Trust.

     FOURTH: The undersigned Group Vice President and Associate General Counsel acknowledges these Articles of Amendment to be the act of the Trust and as to all matters or facts required to be verified under oath, the undersigned Group Vice President and Associate General Counsel acknowledges that, to the best of his knowledge, information, and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

     IN WITNESS WHEREOF, Archstone-Smith Operating Trust has caused the foregoing amendment of the Amended and Restated Declaration of Trust to be signed in its name and on its behalf by its Group Vice President and Associate General Counsel and attested to by its Assistant Secretary on this 4th day of January, 2008.

ARCHSTONE-SMITH OPERATING TRUST
By:	/s/ Thomas S. Reif
	Thomas S. Reif
	Group Vice President and Associate General Counsel

ATTEST:
By:	/s/ Richard P. Ruby
	Richard P. Ruby
	Assistant Secretary

EX-10.13

Exhibit 10.13

October 5, 2007

CONFIDENTIAL PORTIONS MARKED [*******] HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Archstone-Smith Operating Trust and its affiliates
identified on the signature pages hereto

Ladies and Gentlemen:

     This side letter is written in connection with (i) the Credit Agreement, dated the date hereof (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Archstone-Smith Operating Trust, a Maryland real estate investment trust (the “Borrower”), the lenders party thereto (the lenders party thereto, the “Senior Lenders”), Lehman Commercial Paper Inc., as administrative agent, and other parties party thereto, (ii) the Mezzanine A Loan Agreement, dated the date hereof (the “Mezzanine A Loan Agreement”), between the entities identified in Schedule I hereto (the “Mezzanine A Borrowers”) and Lehman Brothers Holdings Inc. (“LBHI”), Bank of America, N.A. (“BofA”), and Barclays Capital Real Estate Finance Inc. (“Barclays” and, together with LBHI and BofA, the “Mezzanine A Lenders”), (iii) the Mezzanine B Loan Agreement, dated the date hereof (the “Mezzanine B Loan Agreement” and, together with the Mezzanine A Loan Agreement, the “Mezzanine Loan Agreements”), between, the entities identified in Schedule II hereto (the “Mezzanine B Borrowers” and, together with the Mezzanine A Borrowers, the “Mezzanine Borrowers”) and LBHI, BofA and Barclays (collectively, the “Mezzanine B Lenders” and, together with the Mezzanine A Lenders, the “Mezzanine Lenders”), (iv) the Credit Agreement, dated the date hereof (as amended, supplemented or otherwise modified from time to time, the “Development Loan Agreement”), among Tishman Speyer Archstone-Smith Multifamily Holdings I (Development Borrower), L.P., a Delaware limited partnership (the “Development Borrower”), the lenders party thereto (the lenders party thereto, the “Development Lenders”), Lehman Commercial Paper Inc., as administrative agent, and other parties party thereto (the “Development Loan Agreement”) and (iv) the Loan Agreement, dated the date hereof (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Ground Lease Loan Agreement” and, together with the Credit Agreement, the Mezzanine Loan Agreements and the Development Loan Agreement, the “Loan Agreements”), between Tishman Speyer Archstone-Smith One Superior Place, L.L.C. (“One Superior”), Tishman Speyer Archstone-Smith Marina Terrace, L.L.C. (“Marina Terrace”) and Tishman Speyer Archstone-Smith Fairfax, L.L.C. (“Fairfax” and, together with One Superior and Marina Trace, the “Ground Lease Borrower”), the lenders party thereto (the lenders party thereto, the “Ground Lease Lenders”), Lehman Brothers Holdings Inc., d/b/a Lehman Capital, a division of Lehman Brothers Holdings, Bank of America, N.A., and Barclays Capital Real Estate Inc. Senior Lenders, Development Lenders, Mezzanine Lenders and Ground Lease Lenders are referred to herein collectively as the “Lenders”. Each capitalized term used and not otherwise defined herein shall have the meaning given to such term in the applicable Credit Agreement. The documents evidencing, securing or pertaining to each of the related Loans are referred to herein collectively as the “Loan Documents”.

     In connection with, and in consideration of the agreements contained in the Loan Agreements, each of the Borrower, the Development Borrower, the Ground Lease Borrower and the Mezzanine Borrower (collectively, the “Borrowers”), hereby agrees that each of the Senior Lenders, the Mezzanine Lenders, the Ground Lease Lenders and the Development Lenders shall have the right to change, and the Borrowers hereby agree to reasonably cooperate in amending the Loan Documents to change, the pricing, fees, terms and structure of the Tranche A Term Loans, the Tranche B Term Loans, the Revolving Credit Facility, the “Mezzanine Loans” (as defined in Exhibit A), the term loans made pursuant to the Development Loan Agreement (the “Development Loans”), and the loan made pursuant to the Ground Lease Financing Agreement (the “Ground Lease Loan”), as applicable, on the terms and subject to the conditions described below.

     1. Tranche A Term Loans. Tranche A Term Loan Lenders party to the Credit Agreement shall have the right to require the Borrower to amend the pricing (including the spread or margin) or fees with respect to such Tranche A Term Loans (but not including structural changes that increase the obligations or liabilities of the Borrower (other than ministerial and other changes which do not affect the Borrower in more than a de minimis manner), except as allowed by Paragraph 8 below), and Borrower shall cooperate with such Tranche A Term Loan Lenders in all reasonable respects in amending the pricing (including the spread or margin) or fees with respect to such Loans, such that such Tranche A Term Loan Lenders are able to achieve a Successful Syndication of the Tranche A Term Loans, ************************************************************************* ****************************************************************************************************** ****************************************************************************************************** ****************************************************************************************************** ****************************************************************************************************** ****************************************************************************************************** ************************************************************************************* Any discount realized by such Tranche A Term Loan Lenders from any sale, assignment or transfer of the Tranche A Term Loans to any person (other than to an affiliate of such Tranche A Term Loan Lender except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) by the relevant Borrower and shall be paid from sources of funds described in Paragraph 9. ************************************** ********************************************************************************************************* *************************************************** For the avoidance of doubt, any increase in the interest for the Tranche A Term Loans shall be applied to all outstanding Tranche A Term Loans.

     2. Tranche B Term Loans. ********************* Tranche B Term Loan Lenders party to the Credit Agreement shall have the right to require Borrower to amend the pricing (including the spread or margin) or fees with respect to the Tranche B Term Loans (but not including structural changes that increase the obligations or liabilities of the Borrower (other than ministerial and other changes which do not affect the Borrower in more than a de minimis manner), except as allowed by Paragraph 8 below), and Borrower shall cooperate with such Tranche B Term Loan Lenders in all reasonable respects in amending the pricing (including the spread or margin) or fees with respect to such Loans, such that such Tranche B Term Loan Lenders are able to achieve a Successful Syndication of the Tranche B Term Loans. ***

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******* * **** **** ******* ***** ** ** ****** ********* ***** **** **** *** ***** ** **** *** ******* ********* ** *** ********* ******** ***** ** ***** *** **** **** *** ******* ** ********* ** *** **** *********** Any discount realized by such Tranche B Term Loan Lenders from any sale, assignment or transfer of any Tranche B Loan to any person (other than to an affiliate of such Tranche B Term Loan Lender except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9. For the avoidance of doubt, any increase in the interest for any portion of the Tranche B Term Loans shall be applied to all outstanding Tranche B Term Loans.

     3. Development Loans. ***** ***** *** ***** Development Lenders shall have the right to require Borrower to amend the pricing (including the spread or margin) or fees with respect to the Development Loans (but not including structural changes that increase the obligations or liabilities of the Borrower (other than ministerial and other changes which do not affect the Borrower in more than a de minimis manner), except as allowed by Paragraph 8 below), and Borrower shall cooperate with Development Lenders in all reasonable respects in amending the pricing (including the spread or margin) or fees with respect to such Loans, such that Development Lenders are able to achieve a Successful Syndication of the Development Loans. *** *********** ******* ***** **** **** *** ***** ** ** **** *** ******* ******* ** *** ********* ******** ***** ** ***** *** **** **** *** ******* ** ********* ** *** **** *********** Any discount realized by Development Lenders from any sale, assignment or transfer of any Development Loan to any person (other than to an affiliate of such Development Lender except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9. For the avoidance of doubt, any increase in the interest for any portion of the Development Loans shall be applied to all outstanding Development Loans.

     4. Revolving Credit Commitments. ***** ***** *** ***** Revolving Credit Lenders party to the Credit Agreement shall have the right to require Borrower to amend the pricing (including the spread or margin) or fees with respect to the Revolving Credit Facility (but not including structural changes that increase the obligations or liabilities of the Borrower (other than ministerial and other changes which do not affect the Borrower in more than a de minimis manner), except as allowed by Paragraph 8 below), and Borrower shall cooperate with such Revolving Credit Lenders in all reasonable respects in amending the pricing (including the spread or margin) or fees with respect to such Loans, such that such Revolving Credit Lenders are able to achieve a Successful Syndication of the Revolving Credit Facility. *** ********* ****** ******* ***** ** *** ****** ********* ***** **** **** *** ***** ** ** **** *** ******* ********* ** *** ********* ****** ***** ** ***** *** **** **** *** ******* ** ********* ** *** **** *********** Any discount realized by such Revolving Credit Lenders from any sale, assignment or transfer of any Revolving Credit Commitments to any person (other than to an affiliate of such Revolving Credit Lenders except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9. For the avoidance of doubt, any increase in the interest for any portion of the Revolving Credit Facility shall be applied to all outstanding amounts due under the Revolving Credit Facility.

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     5. Mezzanine Loans. Mezzanine Lenders shall have the right to require Borrower to amend the pricing (including the spread or margin) or fees with respect to the Mezzanine Loans (but not including structural changes that increase the obligations or liabilities of the Borrower (other than ministerial and other changes which do not affect the Borrower in more than a de minimis manner), except as allowed by Paragraph 8 below), and Borrower shall cooperate with Mezzanine Lenders in all reasonable respects in amending the pricing (including the spread or margin) or fees with respect to such Loans, such that Mezzanine Lenders are able to achieve a Successful Syndication of Mezzanine Loans; ************************************************** *************************************************************************************************** *************************************************************************************************** *************************************************************************************************** *************************************************************************************************** **************************************************************************************************** ************************************* Any discount realized by Mezzanine Lenders from any sale, assignment or transfer of any Mezzanine Loan shall be borne by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9. For the avoidance of doubt, any increase in the interest for the Mezzanine Loans identified in any column set forth in Schedule III shall be applied to all outstanding Mezzanine Loans in such column.

     6. Ground Lease Loan. ********************* Ground Lease Lenders shall have the right to require Borrower to amend the pricing (including the spread or margin) or fees or with respect to the Ground Lease Loans (but not including structural changes that increase the obligations or liabilities of the Borrower (other than ministerial and other changes which do not affect the Borrower in more than a de minimis manner), except as allowed by Paragraph 8 below), and Borrower shall cooperate with Ground Lease Lenders in all reasonable respects in amending the pricing (including the spread or margin) or fees with respect to such Loans, such that Ground Lease Lenders are able to achieve a Successful Syndication of Ground Lease Loans. ******************************************************************************************************************************** ************************************************************************************************ ********************************************************************************* Any discount realized by Ground Lease Lenders from any sale, assignment or transfer of any Ground Lease Loan to any person (other than to an affiliate of such Tranche A Term Loan Lender except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9. For the avoidance of doubt, any increase in the interest for any portion of the Ground Lease Loans shall be applied to all outstanding Ground Lease Loans.

     7. Successful Syndication. As used herein, “Successful Syndication” shall mean (i) with respect to each type of Loan other than the Revolving Credit Commitments, that the Lenders shall have succeeded in placing all of the Loans of such type, and (ii) with respect to Revolving Credit Commitments, that the Lenders shall have succeeded in placing all of the aggregate commitments under the Revolving Credit Facility *******************************

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******************************************************************************************** *********************************************************************** For the avoidance of doubt, each Lender has been paid in full in cash its full profit margin on each Loan on the date hereof, and therefore, there shall be no markup on the Loans above the terms necessary to achieve a Successful Syndication (other than such cash payments being made on the date hereof).

     8. Changes to Terms and Structure. In the event that the Senior Lenders, the Development Lenders, the Mezzanine Lenders or the Ground Lease Lenders desire to modify the structure of any applicable Loan so as to achieve more favorable pricing for the relevant Borrower, the Senior Lenders, the Development Lenders, the Mezzanine Lenders or the Ground Lease Lenders, as applicable, shall provide the related Borrower with a statement, prepared in good faith, of (i) the pricing (including spread or margins), fees and other economic terms that Lenders reasonably anticipate will apply if no such structural change is made, and (ii) the pricing (including spread or margins), fees and other economic terms that Lenders reasonably anticipate will apply if such structural changes are made. The related Borrowers shall have the right to elect in their sole discretion whether the applicable Lender will proceed under clause (i) or (ii). For the avoidance of doubt, neither Senior Lenders, the Development Lenders, the Mezzanine Lenders nor the Ground Lease Lenders shall be permitted to modify the structure of any applicable Loan in a manner that would increase the obligations or liabilities (other than ministerial and other changes which do not affect the Borrower in more than a de minimis manner) of any Borrower without the consent of the relevant Borrower, in its sole discretion.

     9. Reserves. (a) In order to provide a source of funds (which may be additional debt, additional equity or a combination thereof) for each related Borrower (x) to make any required payments to any applicable Lender arising as a result of any sale or assignment of a Loan at any reasonably anticipated discount as provided for in this letter agreement or (y) in the amount approximately equal to $34,933,133 to purchase ASOT Units, the Lenders and Borrowers shall negotiate with each other promptly after the date hereof so as to agree upon a source of funds, which may be structured as (as agreed by all parties) any or all of (i) an incremental term loan facility (subject to any necessary Lender approvals), (ii) an increase in the Revolving Credit Commitments (subject to any necessary Lender approvals), or (iii) an incremental term loan facility under the Loan Documents related to the Development Loans (subject to any necessary Lender approvals). The parties shall select a source of funds described above which is reasonably satisfactory to the related Lenders and Borrowers within thirty (30) days after the date hereof.

     (b) On the Closing Date, the Borrower shall cause funds in an amount equal to *********** to be deposited into a reserve account (the “BofA Account”)************************************ ************************************** to the Lenders and used, established and maintained by Bank of America, N.A. for the benefit of Bank of America, N.A., as a Senior Lender. The parties hereto hereby agree that the amounts on deposit in the BofA Account shall be subject to an agreement (the “Reserve Escrow Account Agreement”) in form and substance reasonably satisfactory to all parties hereto, provided that, until the Reserve Escrow Account Agreement has been approved by all parties, the amounts on deposit in the BofA Account shall not be withdrawn unless consented to by all parties hereto. *********************************** ****************************************************************************************** *********************************************************************************

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     10. Credit Agreement Covenants and Cure. Notwithstanding anything contained in the Credit Agreement, if at any time the Combined Group Members are not in compliance with the covenants contained in Section 7.1(a) and 7.1(c), then the failure to be in compliance shall not be deemed to be a Default or Event of Default under the Credit Agreement or any other ancillary agreements. The Combined Group Members and the Senior Lenders hereby agree to use their commercially reasonable best efforts to negotiate promptly and in good faith the remedial actions the Borrower will take within 180 days of such failure.

     11. Marketing. ************************************** set forth in various provisions of this letter agreement, nothing contained herein shall prevent the applicable Lenders from marketing the Initial Tranche A Term Loans and the Mezzanine Loans *********************** so long as any sale, assignment or transfer which is prohibited *********************** without the consent of the applicable Borrower, in its sole discretion, does not occur before such date. The Lenders shall not be permitted to market any other Loans **************************************************************************************.

     12. Amendments, etc. (a) Reference is hereby made to the Underwriting Fee Letter, dated as of May 28, 2007 (the “Underwriting Fee Letter”), among Lehman Brothers Inc., Lehman Commercial Paper Inc., Banc of America Securities LLC and Banc of America Strategic Ventures, Inc., as commitment parties, and Property Asset Management Inc. and Tishman Speyer Development Corporation, as sponsors. The parties hereto agree that this letter shall amend and restate the third to last full paragraph of the Underwriting Fee Letter and, except as expressly modified herein, all of the terms and provisions of the Underwriting Fee Letter and, except as expressly modified herein, all of the terms and provisions of the Underwriting Fee Letter are and shall remain in full force and effect. The amendments herein shall not be construed as a waiver or amendment of any other provision of the Underwriting Fee Letter or for any purpose except as expressly set forth herein or a consent to any further or future action on a part of the Borrower, the Mezzanine Borrower, the Development Borrower or the Ground Lease Borrower that would be necessary to give effect to the provisions of this side letter. In the event of any conflict or inconsistency between the terms of any Loan Agreement or ancillary agreement and the terms of this side letter, this side letter shall prevail.

     (b) The Borrower, the Mezzanine Borrower, the Development Borrower and the Ground Lease Borrower shall enter into such amendments to the applicable loan documents as may be reasonably requested by the Senior Lenders, the Mezzanine Lenders, the Development Lenders and the Ground Lease Lenders, as applicable, to document any changes to the Tranche A Term Loans, the Tranche B Term Loans, the Revolving Credit Facility, the Development Loans, the Mezzanine Loans and the Ground Lease Loans made in accordance with this letter.

     13. Sell-downs. Nothing in this side letter is intended to affect or affects any of the Lenders’ rights to sell down the Loans provided that the purchasers or assignees, as the case may be, are in all respects subject to the terms and conditions of this side letter as if a party hereto.

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     Notwithstanding anything appearing to the contrary in this letter, neither the Administrative Agent nor any Lender shall be entitled to enforce the liability and obligation of the undersigned to pay, perform and observe the obligations contained in this letter by any action or proceeding against any member, shareholder, partner, manager, director, officer, agent, affiliate, beneficiary, trustee or employee of the undersigned (or any direct or indirect member, shareholder, partner or other owner of any such member, shareholder, partner, manager, director, officer, agent, affiliate or employee of the undersigned , or any director, officer, employee, agent, manager or trustee of any of the foregoing); provided that, nothing in this paragraph shall have the effect of exculpating from liability an entity that is itself an undersigned entity.

     This letter may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the parties hereto may execute this letter by signing any such counterpart. Delivery of an executed signature page of this letter by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

     This letter shall be governed by, and constructed in accordance with, the laws of the State of New York.

     The parties hereto hereby waive any right to a trial by jury in any proceeding arising from this letter or the transactions contemplated hereby.

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     Please confirm that the foregoing is our mutual understanding by signing an executed counterpart of this letter.

Very truly yours, SENIOR LENDERS/DEVELOPMENT LENDERS: LEHMAN COMMERCIAL PAPER INC.,    as Senior Lender and Development Lender
By:	/s/ Paul A. Hughson
	Name:	Paul A. Hughson
	Title:	Authorized Signatory

BANK OF AMERICA, N.A., as Senior Lender and    Development Lender
By:	/s/ Dean C. Ravosa
	Name:	Dean C. Ravosa
	Title:	Managing Director

BARCLAYS CAPITAL REAL ESTATE INC., as    Senior Lender and Development Lender
By:	/s/ LoriAnn Rung
	Name:	LoriAnn Rung
	Title:	Vice President

GROUND LEASE LENDERS: LEHMAN BROTHERS HOLDINGS INC.,    a Delaware corporation
By:	/s/ Paul A. Hughson
	Name:	Paul A. Hughson
	Title:	Authorized Signatory

BANK OF AMERICA, N.A.,    a national banking association
By:	/s/ Dean C. Ravosa
	Name:	Dean C. Ravosa
	Title:	Managing Director

BARCLAYS CAPITAL REAL ESTATE INC.,    a Delaware corporation
By:	/s/ LoriAnn Rung
	Name:	LoriAnn Rung
	Title:	Vice President

MEZZANINE LENDERS: LEHMAN BROTHERS HOLDINGS INC.,    a Delaware corporation
By:	/s/ Paul A. Hughson
	Name:	Paul A. Hughson
	Title:	Authorized Signatory

BANK OF AMERICA, N.A.,    a national banking association
By:	/s/ Dean C. Ravosa
	Name:	Dean C. Ravosa
	Title:	Managing Director

BARCLAYS CAPITAL REAL ESTATE FINANCE INC.,    a Delaware corporation
By:	/s/ LoriAnn Rung
	Name:	LoriAnn Rung
	Title:	Vice President
UNDERWRITING FEE LETTER PARTIES: LEHMAN COMMERCIAL PAPER INC.,    as party to Underwriting Fee Letter
By:	/s/ Paul A. Hughson
	Name:	Paul A. Hughson
	Title:	Authorized Signatory
LEHMAN BROTHERS INC.,    as party to Underwriting Fee Letter
By:	/s/ Paul A. Hughson
	Name:	Paul A. Hughson
	Title:	Authorized Signatory
BANC OF AMERICA STRATEGIC VENTURES, INC.,    as party to Underwriting Fee Letter
By:	/s/ Dean C. Ravosa
	Name:	Dean C. Ravosa
	Title:	Managing Director

ACCEPTED AND AGREED TO
AS THE DATE FIRST ABOVE WRITTEN:
ASOT:
ARCHSTONE-SMITH OPERATING TRUST
By:	/s/ Michael B. Benner Name: Michael B. Benner
	Title:
UNDERWRITING FEE LETTER PARTIES:
PROPERTY ASSET MANAGEMENT INC.
By:	/s/ Paul A. Hughson Name: Paul A. Hughson
	Title Authorized Signatory
TISHMAN SPEYER DEVELOPMENT CORPORATION
By:	/s/ Michael B. Benner Name: Michael B. Benner
	Title

DEVELOPMENT BORROWER
TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS I (DEVELOPMENT BORROWER), L.P.
By: Tishman Speyer Archstone-Smith Multifamily Holdings I (Development Borrower) GP, L.L.C., its general partner
By:	/s/ Michael B. Benner Name: Michael B. Benner
	Title:

GROUND LEASE BORROWERS:
TISHMAN SPEYER ARCHSTONE-SMITH FAIRFAX, L.L.C.
By:	/s/ Michael B. Benner Name: Michael B. Benner
	Title:
TISHMAN SPEYER ARCHSTONE-SMITH MARINA TERRACE, L.L.C.
By:	/s/ Michael B. Benner
	Name: Michael B. Benner
	Title:
TISHMAN SPEYER ARCHSTONE-SMITH ONE SUPERIOR PLACE, L.L.C.
By:	/s/ Michael B. Benner
	Name: Michael B. Benner
	Title:

EX-10.14

Exhibit 10.14

CONFIDENTIAL PORTIONS MARKED [*******] HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

November 27, 2007

Archstone-Smith Operating Trust and its affiliates
identified on the signature pages hereto

Ladies and Gentlemen:

     Reference is made to (i) the side letter, dated as of October 5, 2007, executed by the undersigned lender and borrower entities party hereto (the “Flex Side Letter”) and (ii) the Commitment Letter, dated as of November 8, 2007 (the “Commitment Letter”), among Archstone-Smith Operating Trust (the “ASOT Borrower”), Lehman Brothers Inc., Lehman Commercial Paper Inc., Banc of America Securities LLC, Bank of America, N.A. and Barclays Capital Real Estate Inc. Each capitalized term used and not otherwise defined herein shall have the meaning given to such term in the Flex Side Letter.

     The parties hereto hereby agree to amend the Flex Side Letter and to the other terms and conditions set forth herein.

     1. Tranche A Term Loans. (a)  The amount “************” referenced in Paragraph 1 of the Flex Side Letter is hereby deleted and shall be replaced with the amount “*************”.

          (b) The second sentence of Section 1 is hereby deleted in its entirety and replaced with the following: “Any discount realized by such Tranche A Term Loan Lenders from any sale, assignment or transfer of the Tranche A Term Loans to any person (other than to an affiliate of such Tranche A Term Loan Lender except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) shall be borne by the relevant Borrower and shall be paid from sources of funds described in Paragraph 9.”

     2. Tranche B Term Loans. The third sentence of Section 2 is hereby deleted in its entirety and replaced with the following: “Any discount realized by such Tranche B Term Loan Lenders from any sale, assignment or transfer of any Tranche B Loan to any person (other than to an affiliate of such Tranche B Term Loan Lender except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) shall be borne by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9.”

     3. Development Loans. The third sentence of Section 3 is hereby deleted in its entirety and replaced with the following: “Any discount realized by Development Lenders from any sale, assignment or transfer of any Development Loan to any person (other than to an affiliate of such Development Lender except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold

2

in comparable third-party transactions) shall be borne by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9.”

     4. Revolving Credit Commitments. The third sentence of Section 4 is hereby deleted in its entirety and replaced with the following: “Any discount realized by such Revolving Credit Lenders from any sale, assignment or transfer of any Revolving Credit Commitments to any person (other than to an affiliate of such Revolving Credit Lenders except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) shall be borne by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9.”

     5. Mezzanine Loans. The third sentence of Section 5 is hereby deleted in its entirety and replaced with the following: “Any discount realized by Mezzanine Lenders from any sale, assignment or transfer of any Mezzanine Loan to any person (other than to an affiliate of such Mezzanine Lenders except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) shall be borne by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9.”

     6. Ground Lease Loan. The third sentence of Section 6 is hereby deleted in its entirety and replaced with the following: “Any discount realized by Ground Lease Lenders from any sale, assignment or transfer of any Ground Lease Loan to any person (other than to an affiliate of such Ground Lease Lender except for any sale, assignment or transfer to affiliates on the same terms, at the same price and in similar aggregate amounts as such Loans have been sold in comparable third-party transactions) shall be borne by the applicable Borrower and shall be paid from sources of funds described in Paragraph 9.”

     7. Reserves.

A. Pursuant to the Commitment Letter, the Lead Banks (as defined in the Commitment Letter) committed to provide the amount of $149,000,000 (the “Committed Amount”) of the Additional Term Loan Facilities (as defined in the Commitment Letter) to fund Syndication Costs (as defined in the Commitment Letter). The Committed Amount is being provided by the Lenders as contemplated by Paragraph 9(a) of the Flex Side Letter following negotiation with the ASOT Borrower and the parties’ mutual agreement upon the source of funds to enable the ASOT Borrower to make the payments referred to in clause (x) of Paragraph 9(a) of the Flex Side Letter. In the event that the aggregate amount of required payments by the ASOT Borrower to the Lenders of Syndication Costs pursuant to the Flex Side Letter exceeds the sum of ************************************************************************************* ************************************************************************************* ******** then the Lenders and the ASOT Borrower will remain obligated to negotiate with each other to ascertain a source of funds to pay such excess Syndication Costs (the “Excess Syndication Costs”). Notwithstanding the foregoing, and for the avoidance of doubt, (i) the ASOT Borrower hereby acknowledges and agrees that the Lenders’ commitment to provide the Committed Amount does not constitute a course of dealing and does not

3

otherwise create any express or implied commitment to fund additional loans to pay such Excess Syndication Costs and (ii) each party hereto hereby acknowledges and agrees that none of the other parties hereto, by their acceptance of this letter agreement, waive any of their respective rights under the Flex Side Letter.

B. The Borrowers hereby agree that the Additional Tranche B Term Loans (as defined in the Commitment Letter) committed to be provided by the Lead Banks (as defined in the Commitment Letter) to fund the ASOT PS Purchase (as defined in the Commitment Letter) satisfies the agreement of the Lenders under Paragraph 9(a) of the Flex Side Letter to negotiate with the ASOT Borrower so as to agree upon the a source of funds to enable the ASOT Borrower to make the payments referred to in clause (y) of Paragraph 9(a) of the Flex Side Letter.

     8. Defined Terms.

A. References to the “Loans” in the Flex Side Letter shall mean any of the Tranche A Term Loans, the Tranche B Term Loans, the loans made under the Revolving Credit Facility, the “Mezzanine Loans” (as defined in Exhibit A to the Flex Side Letter), the Development Loans and the Ground Lease Loans, as applicable. For the avoidance of doubt, (a) any reference to the Tranche A Term Loans, the Tranche B Term Loans, Revolving Credit Facility, the Mezzanine Loans, the Development Loans and the Ground Lease Loans, as applicable, in the Flex Side Letter shall include any other tranches of loans, componentized notes, senior and subordinated loans or other types of financings such Loans have been restructured into with the approval of the applicable Borrower in accordance with Paragraph 8 of the Flex Side Letter and (b) in connection with any such restructuring of any Loan, references in the Flex Side Letter to the Tranche A Term Loan Lenders, the Tranche B Term Loan Lenders, the Revolving Credit Lenders, the Development Lenders, the Mezzanine Lenders and the Ground Lease Lenders shall also include any additional Lenders for such restructured Loan.

B. References to the “Borrower” or the “Borrowers” in the Flex Side Letter shall mean any of the ASOT Borrower, the Mezzanine Borrowers, the Development Borrower and the Ground Lease Borrower, as applicable.

     9. Scrivener’s Error. The parties hereto acknowledge and agree that Property Asset Management Inc. being a party to the Flex Side Letter, the Structuring Fee Letter, dated as of May 28, 2007, and the Underwriting Fee Letter was a scrivener’s error and the correct party to such documents and this amendment is Real Estate Private Equity Inc.

     Notwithstanding anything appearing to the contrary in this letter, neither the Administrative Agent nor any Lender shall be entitled to enforce the liability and obligation of the undersigned to pay, perform and observe the obligations contained in this letter by any action or proceeding against any member, shareholder, partner, manager, director, officer, agent, affiliate, beneficiary, trustee or employee of the undersigned (or any direct or indirect member, shareholder, partner or other owner of any such member, shareholder, partner, manager, director, officer, agent, affiliate or employee of the undersigned , or any director, officer, employee, agent, manager or trustee of any of the foregoing); provided that, nothing in this paragraph shall have

4

the effect of exculpating from liability an entity that is itself an undersigned entity.

     This letter may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the parties hereto may execute this letter by signing any such counterpart. Delivery of an executed signature page of this letter by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

     This letter shall be governed by, and constructed in accordance with, the laws of the State of New York.

     The parties hereto hereby waive any right to a trial by jury in any proceeding arising from this letter or the transactions contemplated hereby.

[Remainder of page intentionally left blank.]

     Please confirm that the foregoing is our mutual understanding by signing an executed counterpart of this letter.

Very truly yours, SENIOR LENDERS/DEVELOPMENT LENDERS: LEHMAN COMMERCIAL PAPER INC.,    as Senior Lender and Development Lender
By:	/s/ Francis X. Gilhool
	Name:	Francis X. Gilhool
	Title:	Authorized Signatory

BANK OF AMERICA, N.A.,    as Senior Lender and Development Lender
By:	/s/ Lesa Butler
	Name:	Lesa Butler
	Title:	SVP

BARCLAYS CAPITAL REAL ESTATE INC.,    as Senior Lender and Development Lender
By:	/s/ LoriAnn Rung
	Name:	LoriAnn Rung
	Title:	Vice President

GROUND LEASE LENDERS: LEHMAN BROTHERS HOLDINGS INC.,    a Delaware corporation
By:	/s/ Charlene Thomas
	Name:	Charlene Thomas
	Title:	Authorized Signatory

[Signature Page to Amendment to Flex Loan Side Letter]

BANK OF AMERICA, N.A.,    a national banking association
By:	/s/ Lesa Butler
	Name:	Lesa Butler
	Title:	SVP

BARCLAYS CAPITAL REAL ESTATE INC.,    a Delaware corporation
By:	/s/ LoriAnn Rung
	Name:	LoriAnn Rung
	Title:	Vice President

MEZZANINE LENDERS: LEHMAN BROTHERS HOLDINGS INC.,    a Delaware corporation
By:	/s/ Charlene Thomas
	Name:	Charlene Thomas
	Title:	Authorized Signator

BANK OF AMERICA, N.A.,    a national banking association
By:	/s/ Lesa Butler
	Name:	Lesa Butler
	Title:	SVP

BARCLAYS CAPITAL REAL ESTATE FINANCE INC.,    a Delaware corporation
By:	/s/ LoriAnn Rung
	Name:	LoriAnn Rung
	Title:	Vice President

[Signature Page to Amendment to Flex Loan Side Letter]

UNDERWRITING FEE LETTER PARTIES: LEHMAN COMMERCIAL PAPER INC.,    as party to Underwriting Fee Letter
By:	/s/ Francis X. Gilhool
	Name:	Francis X. Gilhool
	Title:	Authorized Signatory

LEHMAN BROTHERS INC.,    as party to Underwriting Fee Letter
By:	/s/ Francis X. Gilhool
	Name:	Francis X. Gilhool
	Title:	Authorized Signatory

BANK OF AMERICA, N.A.,    as party to Underwriting Fee Letter
By:	/s/ Lesa Butler
	Name:	Lesa Butler
	Title:	SVP

BANC OF AMERICA SECURITIES LLC,    as party to Underwriting Fee Letter
By:	/s/ Mark D. Monte
	Name:	Mark D. Monte
	Title:	Managing Director

[Signature Page to Amendment to Flex Loan Side Letter]

ACCEPTED AND AGREED TO
AS THE DATE FIRST ABOVE WRITTEN:
ASOT:
ARCHSTONE-SMITH OPERATING TRUST
By:	/s/ Jim Rosenthal
	Name: Jim Rosenthal
	Title:
UNDERWRITING FEE LETTER PARTIES:
REAL ESTATE PRIVATE EQUITY INC.
By:	/s/ Coburn Packard Name: Coburn Packard
	Title:   SVP
TISHMAN SPEYER DEVELOPMENT CORPORATION
By:	/s/ Jim Rosenthal Name: Jim Rosenthal
	Title:

[Signature Page to Amendment to Flex Loan Side Letter]

DEVELOPMENT BORROWER
TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS I (DEVELOPMENT BORROWER), L.P.
By:	Tishman Speyer Archstone-Smith Multifamily Holdings I (Development Borrower) GP, L.L.C., its general partner
	By:	/s/ Jim Rosenthal Name: Jim Rosenthal
		Title:

[Signature Page to Amendment to Flex Loan Side Letter]

GROUND LEASE BORROWERS:
TISHMAN SPEYER ARCHSTONE-SMITH FAIRFAX, L.L.C.
By:	/s/ Jim Rosenthal Name: Jim Rosenthal
	Title:
TISHMAN SPEYER ARCHSTONE-SMITH MARINA TERRACE, L.L.C.
By:	/s/ Jim Rosenthal Name: Jim Rosenthal
	Title:
TISHMAN SPEYER ARCHSTONE-SMITH ONE SUPERIOR PLACE, L.L.C.
By:	/s/ Jim Rosenthal Name: Jim Rosenthal
	Title:

[Signature Page to Amendment to Flex Loan Side Letter]

EX-10.15

Exhibit 10.15

EXECUTION VERSION

$750,000,000
CREDIT AGREEMENT
(AFFILIATE BORROWER I-A)

among

TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS I (BORROWER-A), L.P.,
as Borrower,

and

ARCHSTONE-SMITH OPERATING TRUST,
as Lender

Dated as of October 5, 2007

TABLE OF CONTENTS

			Page
SECTION 1 DEFINITIONS				1
	1.1	Defined Terms		1
	1.2	Other Definitional Provisions		22
SECTION 2 AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENT				22
	2.1	[Intentionally Omitted]		22
	2.2	[Intentionally Omitted]		22
	2.3	[Intentionally Omitted]		22
	2.4	Revolving Credit Commitment		22
	2.5	Procedure for Revolving Credit Borrowing		22
	2.6	[Intentionally Omitted]		23
	2.7	[Intentionally Omitted]		23
	2.8	Repayment of Loans; Evidence of Debt		23
	2.9	Commitment Fees, etc		23
	2.10	Termination or Reduction of Revolving Credit Commitment		23
	2.11	Optional Prepayments		24
	2.12	[Intentionally Omitted]		24
	2.13	Conversion and Continuation Options		24
	2.14	Minimum Amounts and Maximum Number of Eurodollar Tranches		24
	2.15	Interest Rates and Interest Payment Dates		25
	2.16	Computation of Interest and Fees		25
	2.17	Inability to Determine Interest Rate		26
	2.18	Payments		26
	2.19	Requirements of Law		27
	2.20	Taxes		28
	2.21	Indemnity		29
	2.22	Illegality		30
	2.23	[Intentionally Omitted]		30
	2.24	[Intentionally Omitted]		30
	2.25	[Intentionally Omitted]		30
	2.26	[Intentionally Omitted]		30
	2.27	Exculpation		30
SECTION 3 LETTERS OF CREDIT				32
	3.1	L/C Commitment		32
	3.2	Procedure for Issuance of Letter of Credit		33
	3.3	Fees and Other Charges		33
	3.4	[Intentionally Omitted]		33
	3.5	Reimbursement Obligation of the Borrower		34
	3.6	[Intentionally Omitted]		34
	3.7	Obligations Absolute		34

-i- 

			Page
	3.8	Letter of Credit Payments		34
	3.9	Applications		35
SECTION 4 REPRESENTATIONS AND WARRANTIES				35
	4.1	[Intentionally Omitted]		35
	4.2	No Change		35
	4.3	Corporate Existence; Compliance with Law		35
	4.4	Corporate Power; Authorization; Enforceable Obligations		35
	4.5	No Legal Bar		36
	4.6	No Material Litigation		36
	4.7	No Default		36
	4.8	Ownership of Property; Liens		36
	4.9	Intellectual Property		36
	4.10	Taxes		36
	4.11	Federal Regulations		37
	4.12	Labor Matters		37
	4.13	ERISA		37
	4.14	Investment Company Act; Other Regulations		37
	4.15	Subsidiaries		38
	4.16	Use of Proceeds		38
	4.17	Environmental Matters		38
	4.18	Accuracy of Information, etc		39
	4.19	Security Documents		39
	4.20	Solvency		40
	4.21	Regulation H		40
SECTION 5 CONDITIONS PRECEDENT				40
	5.1	Conditions to Initial Extension of Credit		40
	5.2	Conditions to Each Extension of Credit		42
SECTION 6 AFFIRMATIVE COVENANTS				43
	6.1	[Intentionally Omitted]		43
	6.2	Certificates; Other Information		43
	6.3	Payment of Obligations		44
	6.4	Conduct of Business and Maintenance of Existence; Compliance		44
	6.5	Maintenance of Property; Insurance		44
	6.6	Inspection of Property; Books and Records; Discussions		44
	6.7	Notices		44
	6.8	Environmental Laws		45
	6.9	[Intentionally Omitted]		46
	6.10	Additional Collateral, etc		46
	6.11	Further Assurances		47
	6.12	Post-Closing Covenants		48
	6.13	[Intentionally Omitted]		48
	6.14	[Intentionally Omitted]		48
	6.15	[Intentionally Omitted]		48

-ii- 

			Page
	6.16	[Intentionally Omitted]		48
	6.17	Additional Development Properties		48
SECTION 7 NEGATIVE COVENANTS				48
	7.1	[Intentionally Omitted]		48
	7.2	Limitation on Indebtedness		48
	7.3	Limitation on Liens		52
	7.4	Limitation on Fundamental Changes		54
	7.5	Limitation on Disposition of Property		55
	7.6	Limitation on Restricted Payments		56
	7.7	Limitation on Maintenance Capital Expenditures and Renovation Capital Expenditures		58
	7.8	Limitation on Investments		59
	7.9	[Intentionally Omitted]		61
	7.10	Limitation on Transactions with Affiliates		61
	7.11	Limitation on Sales and Leasebacks		61
	7.12	Limitation on Changes in Fiscal Periods		61
	7.13	Limitation on Negative Pledge Clauses		61
	7.14	Limitation on Restrictions on Subsidiary Distributions		62
	7.15	Limitation on Lines of Business		62
	7.16	[Intentionally Omitted]		62
	7.17	Limitation on Amendments to Other Documents		62
	7.18	[Intentionally Omitted]		62
	7.19	[Intentionally Omitted]		62
	7.20	Limitation on Hedge Agreements		62
SECTION 8 EVENTS OF DEFAULT				62
SECTION 9 [INTENTIONALLY OMITTED]				66
SECTION 10 MISCELLANEOUS				66
	10.1	Amendments and Waivers		66
	10.2	Notices		66
	10.3	No Waiver; Cumulative Remedies		67
	10.4	Survival of Representations and Warranties		68
	10.5	Payment of Expenses		68
	10.6	Successors and Assigns; Participations and Assignments		69
	10.7	[Intentionally Omitted]		69
	10.8	Counterparts		69
	10.9	Severability		69
	10.10	Integration		69
	10.11	Governing Law		70
	10.12	Submission to Jurisdiction; Waivers		70
	10.13	Acknowledgments		70
	10.14	Confidentiality		71
	10.15	Release of Collateral and Guarantee Obligations		71
	10.16	[Intentionally Omitted]		71
	10.17	[Intentionally Omitted]		71
	10.18	Waivers of Jury Trial		72
	10.19	Exculpation		72

-iii- 

SCHEDULES:

1.1A	[Intentionally Omitted]
1.1B	Real Property
1.1C	[Intentionally Omitted]
1.1D	Property Owners
4.15	Subsidiaries
4.19	Uniform Commercial Code Filing Jurisdictions
7.2(d)	Existing Indebtedness
7.3(f)	Existing Liens

EXHIBITS:

A	Form of Guarantee and Collateral Agreement
B	Form of Compliance Certificate
C	Form of Closing Certificate
D	[Intentionally Omitted]
E	[Intentionally Omitted]
F	[Intentionally Omitted]
G	[Intentionally Omitted]
H	[Intentionally Omitted]
I	[Intentionally Omitted]
J	Form of Borrowing Notice

-iv- 

          CREDIT AGREEMENT (AFFILIATE BORROWER I-A), dated as of October 5, 2007, among TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS I (BORROWER-A), L.P., a Delaware limited partnership (the “Borrower”), and ARCHSTONE-SMITH OPERATING TRUST, a Maryland real estate investment trust (the “Lender”).

WITNESSETH:

          WHEREAS, Tishman Speyer Archstone-Smith Multifamily Holdings I (Development Borrower), L.P., a Delaware corporation and a wholly-owned subsidiary of the Borrower (the “Development Subsidiary-A”) desires to purchase from Archstone-Smith Trust, a Maryland real estate investment trust (the “Company”) and the Company will sell to the Development Subsidiary-A (the “Development Asset Acquisition”), those real estate assets and equity interests specified in the purchase agreement, dated as of the date hereof, between the Development Subsidiary-A and the Company (as amended, supplemented or otherwise modified from time to time, the “Development Asset Purchase Agreement”); and

          WHEREAS, the Borrower has requested the Lender make available a revolving credit loan facility to provide for the general corporate needs of the Borrower and its Subsidiaries, including, without limitation, the ongoing development and construction costs related to the real property purchased by the Development Subsidiary-A pursuant to the Development Asset Acquisition and any additional real property acquired by the Borrower and its subsidiaries hereafter; and

          WHEREAS, the Lender is willing to make such credit facility available upon and subject to the terms and conditions hereinafter set forth;

          NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

          1.1 Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

          “Additional Fund”: each “Fund” that is the direct or indirect parent of an ASOT Additional Parent Guarantor.

          “Administration Fee”: on any date of determination, an amount equal to the “Administration Fee” due and payable by the Combined Group Members to the Funds pursuant to Section 6.14 of their respective Fund Agreements on such date, as applicable.

          “Administration Fee Agreement”: the Administration Fee Agreement, by and among the Funds, to the extent applicable, in favor of the ASOT Administrative Agent, to be

2

entered into pursuant to Section 6.12(b), as amended, supplemented or otherwise modified from time to time in accordance with this Agreement.

          “Affiliate”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

          “Affiliate Borrower I-B”: Tishman Speyer Archstone-Smith Multifamily Holdings I (Borrower-B), L.P., a Delaware limited partnership.

          “Affiliate Borrower I-B Credit Agreement”: the Credit Agreement (Affiliate Borrower I-B), dated as of the date hereof, among the Affiliate Borrower I-B, as borrower, and Secured Note LLC, as lender, as amended, supplemented or otherwise modified from time to time in accordance with this Agreement.

          “Affiliate Borrower I-B GP”: Tishman Speyer Archstone-Smith Multifamily Holding I (Borrower-B) GP, L.L.C., a Delaware limited liability company.

          “Affiliate Borrower I-B Loan Documents”: the “Loan Documents” as defined in the Affiliate Borrower I-B Credit Agreement.

          “Affiliate Borrower I-B Parent”: Tishman Speyer Archstone-Smith Multifamily Holding I (Parent Borrower-B), L.P., a Delaware limited partnership.

          “Affiliate Borrower I-B Parent Credit Agreement”: the Credit Agreement (Parent Borrower I-B), dated as of the date hereof, among the Affiliate Borrower I-B Parent, as borrower, and the ASOT Borrower, as lender, as amended, supplemented or otherwise modified from time to time.

          “Affiliate Borrower I-B Parent Loan Documents”: the “Loan Documents” as defined in the Affiliate Borrower I-B Parent Credit Agreement.

          “Affiliate Borrower II”: Tishman Speyer Archstone-Smith Multifamily Holdings II (Borrower), L.P., a Delaware limited partnership.

          “Affiliate Borrower II Credit Agreement”: collectively, (i) the Credit Agreement (Affiliate Borrower II-Term Loan), dated as of October 5, 2007, among the Affiliate Borrower II, as borrower, and Secured Note LLC, as lender, and (ii) the Credit Agreement (Affiliate Borrower II-Revolving Credit Loan), dated as of October 5, 2007, among the Affiliate Borrower II, as borrower, and the Lender, as lender, in each case, as amended, supplemented or otherwise modified from time to time.

          “Affiliate Borrower II Loan Documents”: the “Loan Documents” as defined in the Affiliate Borrower II Credit Agreement.

3

          “Affiliate Borrower Credit Agreements”: the collective reference to the Affiliate Borrower I-B Parent Credit Agreement, the Affiliate Borrower II Credit Agreement and the ASOT Credit Agreement.

          “Affiliate Borrower Group Members”: the collective reference to the ASOT Parent/Affiliate Guarantors and their respective Subsidiaries (other than the Group Members).

          “Affiliate Borrower Loan Documents”: collectively, the Affiliate Borrower I-B Parent Loan Documents, the Affiliate Borrower II Loan Documents and the ASOT Loan Documents.

          “Affiliate Borrowers”: collectively, the Affiliate Borrower I-B Parent, the Affiliate Borrower II and the ASOT Borrower.

          “Affiliate Revolving Notes”: as defined in the ASOT Credit Agreement.

          “Agreement”: this Credit Agreement (Affiliate Borrower I-A), as amended, supplemented or otherwise modified from time to time.

          “Applicable JV Investment Percentage”: as defined in the ASOT Credit Agreement.

          “Applicable Margin”: as defined in the ASOT Credit Agreement.

          “Application”: an application, in such form as the relevant Issuing Lender may specify from time to time, requesting such Issuing Lender to issue a Letter of Credit.

          “ASOT Additional Parent Guarantors”: the “Additional Parent Guarantors” as defined in the ASOT Credit Agreement.

          “ASOT Administrative Agent”: the “Administrative Agent” as defined in the ASOT Credit Agreement.

          “ASOT Available Revolving Credit Commitment”: the “Available Revolving Credit Commitment” as defined in the ASOT Credit Agreement.

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

          “ASOT Credit Agreement”: the Credit Agreement dated as of the date hereof, among the ASOT Borrower, as borrower, the several banks and other financial institutions or entities from time to time parties thereto, as lenders, Lehman Brothers Inc. and Banc of America Securities LLC, as joint lead arrangers and joint bookrunners, Bank of America, N.A., as syndication agent, Barclays Capital Real Estate Inc., as documentation agent, the ASOT Administrative Agent, as administrative agent, and others, as amended, supplemented or otherwise modified from time to time.

4

          “ASOT Guarantee and Collateral Agreement”: the “Guarantee and Collateral Agreement” as defined in the ASOT Credit Agreement.

          “ASOT L/C Commitment”: the “L/C Commitment” as defined in the ASOT Credit Agreement.

          “ASOT L/C Obligations”: the “L/C Obligations” as defined in the ASOT Credit Agreement.

          “ASOT Lender”: any lender party to the ASOT Credit Agreement.

          “ASOT Loan Default”: a “Default” as defined in the ASOT Credit Agreement.

          “ASOT Loan Event of Default”: an “Event of Default” as defined in the ASOT Credit Agreement.

          “ASOT Loan Documents”: the “Loan Documents” as defined in the ASOT Credit Agreement.

          “ASOT Majority Facility Lenders”: the “Majority Facility Lenders” as defined in the ASOT Credit Agreement.

          “ASOT Parent/Affiliate Guarantors”: the “Parent/Affiliate Guarantors” as defined in the ASOT Credit Agreement.

          “ASOT Required Lenders”: the “Required Lenders” as defined in the ASOT Credit Agreement.

          “ASOT Revolving Credit Commitment”: the “Revolving Credit Commitment” as defined in the ASOT Credit Agreement.

          “ASOT Revolving Credit Commitment Period”: the “Revolving Credit Commitment Period” as defined in the ASOT Credit Agreement.

          “ASOT Revolving Credit Lenders”: the “Revolving Credit Lenders” as defined in the ASOT Credit Agreement.

          “ASOT Secured Parties”: the “Secured Parties” as defined in the ASOT Guarantee and Collateral Agreement.

          “ASOT Term Loans”: the “Term Loans” as defined in the ASOT Credit Agreement.

          “ASOT Tranche A Term Loans”: the “Tranche A Term Loans” as defined in the ASOT Credit Agreement.

          “ASTM”: as defined in Section 5.1(m).

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          “Available Revolving Credit Commitment”: an amount equal to the excess, if any, of (a) the Revolving Credit Commitment then in effect over (b) the Revolving Extensions of Credit then outstanding.

          “Base Rate”: for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus ¹/2 of 1%. For purposes hereof: “Prime Rate” shall mean the prime lending rate as set forth on the Reuters Screen RTRTSY1 Page (or such other comparable publicly available page as may, in the reasonable opinion of the Lender in consultation with the ASOT Administrative Agent after notice to the Borrower, replace such page for the purpose of displaying such rate if such rate no longer appears on the Reuters Screen RTRTSY1 Page), as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually available. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

          “Base Rate Loans”: Loans for which the applicable rate of interest is based upon the Base Rate.

          “Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

          “Borrower”: as defined in the preamble hereto.

          “Borrowing Date”: any Business Day specified by the Borrower as a date on which the Borrower requests the Lender to make the Loans hereunder.

          “Borrowing Notice”: with respect to any request for borrowing of the Loans hereunder, a notice from the Borrower, substantially in the form of, and containing the information prescribed by, Exhibit J, delivered to the Lender.

          “Business Day”: (a) for all purposes other than as covered by clause (b) below, a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (a) and which is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.

          “CapEx Controlled”: with respect to any Joint Venture directly and indirectly owned by the Combined Group Members, the ability of the Combined Group Members, directly or indirectly, to control all decisions relating to Renovation Capital Expenditures without the consent of any other Person.

          “Capital Expenditures”: for any period, with respect to any Person, the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets (other than Real Property) or additions to equipment (including replacements, capitalized repairs and improvements during such period) which are required to be capitalized under GAAP on a balance sheet of such Person. For purposes of this definition, the

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purchase price of equipment or other fixed assets that are purchased simultaneously with the trade-in of existing assets or with insurance proceeds or proceeds from a casualty event or condemnation proceeding shall be included in Capital Expenditures only to the extent of the gross amount by which such purchase price exceeds the credit granted by the seller of such assets for the assets being traded in at such time or the amount of such insurance proceeds or such casualty event or condemnation proceeds, as the case may be (but shall at no time be greater than the amount required by GAAP to be included or reflected by such capital assets on the balance sheet of the applicable Person).

          “Capital Lease Obligations”: with respect to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP; and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

          “Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

          “Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of one year or less from the date of acquisition issued by any ASOT Lender or by any commercial bank organized under the laws of the United States of America or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-2 by S&P or P-2 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within one year from the date of acquisition; (d) repurchase obligations of any ASOT Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any ASOT Lender or any commercial bank satisfying the requirements of clause (b) of this definition; and (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.

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          “Change of Control”: the occurrence of any of the following events: (a) the Permitted Investors shall cease to have the power, directly or indirectly, to vote or direct the voting of securities having a majority of the ordinary voting power for the election of directors of Guarantor 1 GP, Guarantor 2 GP and the ASOT Additional Parent Guarantors (in each case, determined on a fully diluted basis); (b) TSREV and its respective Affiliates shall cease to own of record and beneficially partnership interests of each of Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors equal to at least 4.9% of the partnership interests of Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors, taken as a whole; (c) the board of directors of Guarantor 1 GP, Guarantor 2 GP or any ASOT Additional Parent Guarantor shall cease to consist of a majority of Continuing Directors; (d) Guarantor 1 GP shall (i) fail to control, directly or indirectly, the general partner of Guarantor 1 or (ii) fail to control the management and policies of Guarantor 1; (e) Guarantor 2 GP shall (i) fail to control, directly or indirectly, the managing member of Guarantor 2 or (ii) fail to control the management and policies of Guarantor 2; (f) Guarantor 2 and the ASOT Additional Parent Guarantors shall (i) fail to own of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of Holdings I Corp or (ii) fail to control the management and policies of Holdings I Corp; or (g) Holdings I Corp, Guarantor 1 and the ASOT Additional Parent Guarantors shall (i) fail to control the management and policies of the Borrower or (ii) cease to own and control, of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of the Borrower.

          “Closing Date”: the date on which the conditions precedent set forth in Section 5.1 shall have been satisfied.

          “Code”: the Internal Revenue Code of 1986, as amended from time to time.

          “Collateral”: all Property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document.

          “Combined Group Members”: as defined in the ASOT Credit Agreement.

          “Commonly Controlled Entity”: an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under Section 414 of the Code.

          “Company”: as defined in the recitals hereto.

          “Completed Property”: any Operating Property (or phase of an Operating Property) that is Construction-in-Process until the completion of such Operating Property (or phase thereof) as evidenced by the issuance of a temporary or permanent certificate of occupancy (whichever occurs first) for such Operating Property or any phase thereof.

          “Compliance Certificate”: a certificate duly executed by a Responsible Officer, on behalf of the Borrower substantially in the form of Exhibit B.

          “Construction-in-Process”: on any date of determination, all Real Properties that are under construction or with respect to which construction is reasonably anticipated to commence during the period of six full fiscal quarters immediately following such date that are not Completed Properties.

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          “Construction Related Indebtedness”: Indebtedness incurred to finance construction of specific Real Estate Under Construction and which is secured by such Real Estate Under Construction.

          “Continuing Directors”: the directors of Guarantor 1 GP or Guarantor 2 GP, as applicable, on the Closing Date, after giving effect to the Holdings Merger and the other transactions contemplated hereby, and each other director of Guarantor 1 GP or Guarantor 2 GP, as applicable, if, in each case, such other director’s nomination for election to the board of directors of Guarantor 1 GP or Guarantor 2 GP, as applicable, is recommended by at least a majority of the then Continuing Directors or such other director receives the vote of the Permitted Investors in his or her election by the shareholders of Guarantor 1 GP or Guarantor 2 GP, as applicable.

          “Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

          “Cure Period”: as defined in the ASOT Credit Agreement.

          “Default”: any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

          “Derivatives Counterparty”: as defined in Section 7.6.

          “Development Asset Acquisition”: as defined in the recitals.

          “Development Asset Purchase Agreement”: as defined in the recitals.

          “Development Loan Administrative Agent”: the “Administrative Agent” as defined in the Development Loan Credit Agreement.

          “Development Loan Borrower”: Tishman Speyer Archstone-Smith Multifamily Holding I (Development Borrower), L.P., a Delaware limited partnership.

          “Development Loan Credit Agreement”: the Credit Agreement (Development Loan), dated as of the date hereof, among the Development Loan Borrower, as borrower, the several banks and other financial institutions or entities from time to time parties thereto, as lenders, Lehman Brothers Inc. and Banc of America Securities LLC, as joint lead arrangers and joint bookrunners, Bank of America, N.A., as syndication agent, Barclays Capital Real Estate Inc., as documentation agent, and the Development Loan Administrative Agent, as amended, supplemented or otherwise modified from time to time in accordance with the terms of the Development Loan Intercreditor Agreement.

          “Development Loan Intercreditor Agreement”: the Intercreditor Agreement (Development Loan), dated as of the date hereof, among the Development Loan Administrative Agent and the ASOT Administrative Agent, as amended, supplemented or otherwise modified from time to time.

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          “Development Subsidiary-A”: as defined in the recitals.

          “Development Term Loans”: as defined in the ASOT Credit Agreement.

          “Disposition”: with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof; and the terms “Dispose” and “Disposed of” shall have correlative meanings.

          “Distributable Affiliate Proceeds”: as defined in the ASOT Credit Agreement.

          “Dollars” and “$”: dollars in lawful currency of the United States of America.

          “Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States of America, any state thereof or the District of Columbia.

          “Eligible Land”: land (and any Improvements thereon) which is zoned or, intended by the Group Members to be zoned, for use as a residential rental apartment community or a mixed use community (which includes land zoned for use as a residential rental apartment community).

          “Environmental Laws”: any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, agreements or other legally enforceable requirements (including, without limitation, common law) of any international authority, foreign government, the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health, or employee health and safety, as has been, is now, or may at any time hereafter be, in effect.

          “Environmental Permits”: any and all permits, licenses, approvals, registrations, notifications, exemptions and other authorizations required under any Environmental Law.

          “ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.

          “ESA”: as defined in Section 5.1(m).

          “Eurocurrency Reserve Requirements”: as defined in the ASOT Credit Agreement.

               “Eurodollar Base Rate”: with respect to each day during each Interest Period, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time) two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on the Reuters Screen LIBOR01 Page (or otherwise on such screen), the “Eurodollar Base Rate” for purposes of this definition shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Lender in consultation with the ASOT Administrative Agent.

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          “Eurodollar Loans”: Loans for which the applicable rate of interest is based upon the Eurodollar Rate.

          “Eurodollar Rate”: with respect to each day during each Interest Period, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100^th of 1%):

Eurodollar Base Rate

1.00 — Eurocurrency Reserve Requirements

          “Eurodollar Tranche”: the collective reference to Eurodollar Loans the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

          “Event of Default”: any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

          “Excluded Foreign Subsidiary”: any Foreign Subsidiary in respect of which either (a) the pledge of all of the Capital Stock of such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower, result in adverse tax consequences to the Borrower.

          “Federal Funds Effective Rate”: for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the ASOT Administrative Agent from three federal funds brokers of recognized standing selected by it.

          “Financial Reporting Parties”: as defined in the ASOT Credit Agreement.

          “Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic Subsidiary.

          “Fund Agreements”: the agreement of limited partnership of each Fund, as in effect on the date hereof or, in the case of Funds formed after the Closing Date, on the date of such formation.

          “Funds”: collectively, (i) Tishman Speyer Archstone-Smith Multifamily JV, L.P., a Delaware limited partnership, (ii) Tishman Speyer Archstone-Smith Multifamily Parallel JV, L.P., a Delaware limited partnership, (iii) Tishman Speyer Archstone-Smith Multifamily Parallel Fund I JV, L.P., a Delaware limited partnership, (iv) Tishman Speyer Archstone-Smith Multifamily Parallel Fund II JV, L.P., a Delaware limited partnership, and (v) each Additional Fund.

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          “GAAP”: generally accepted accounting principles in the United States of America as in effect from time to time.

          “Governmental Authority”: any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).

          “Gross Asset Value”: as defined in the ASOT Credit Agreement.

          “Group Members”: the Borrower and its Subsidiaries.

          “Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement (Affiliate Borrower I-A) to be executed and delivered by the Borrower and each Subsidiary Guarantor, if any, substantially in the form of Exhibit A, as the same may be amended, supplemented or otherwise modified from time to time.

          “Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing person that guarantees or in effect guarantees, or which is given to induce the creation of a separate obligation by another Person (including any bank under any letter of credit) that guarantees or in effect guarantees any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term “Guarantee Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

          “Guarantor 1”: Tishman Speyer Archstone-Smith Multifamily Guarantor, L.P., a Delaware limited partnership.

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          “Guarantor 1 GP”: Tishman Speyer Archstone-Smith Multifamily (GP), L.P., a Delaware limited partnership.

          “Guarantor 2”: Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor, L.L.C., a Delaware limited liability company.

          “Guarantor 2 GP”: Tishman Speyer Archstone-Smith Multifamily Parallel (GP), L.P., a Delaware limited partnership.

          “Hedge Agreements”: all interest rate or currency swaps, caps or collar agreements, foreign exchange agreements, commodity or currency futures contracts, options to purchase or sell a commodity or currency, or option, warrant or other right with respect to a commodity or currency futures contract or similar arrangements entered into by the Borrower or its Subsidiaries providing for protection against fluctuations in interest rates, currency exchange rates, commodity prices or the exchange of nominal interest obligations, either generally or under specific contingencies.

          “Holdings I”: Tishman Speyer Archstone-Smith Multifamily Holdings I, L.P., a Delaware limited partnership.

          “Holdings I Corp”: Tishman Speyer Archstone-Smith Multifamily Holdings I Corp., a Delaware corporation.

          “Holdings Merger”: as defined in the ASOT Credit Agreement.

          “Improvements”: all buildings, fixtures, structures, parking areas, landscaping and other improvements whether existing now or hereafter constructed, together with all machinery and mechanical, electrical, HVAC and plumbing systems presently located thereon and used to the operation thereof, excluding (a) any such items owned by utility service providers, (b) any such items owned by tenants or other third parties unaffiliated with the Combined Group Members or their Subsidiaries and (c) any items of personal property.

          “Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of Property or third-party services (other than trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under acceptance, letter of credit, surety bond or similar facilities, (g) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Capital Stock of such Person, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of others of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on Property (including, without limitation, accounts and contract rights)

13

owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, but limited to the lesser of the fair market value of such property and the aggregate amount of the obligations so secured, and (j) for the purposes of Section 8(e) only, all obligations of such Person in respect of Hedge Agreements. The “Indebtedness” of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor. For purposes of clause (j) above, the principal amount of Indebtedness in respect of Hedge Agreements shall equal the amount that would be payable (giving effect to netting) at such time if such Hedge Agreement were terminated. For the avoidance of doubt, “Indebtedness” as defined hereunder shall not include (i) prepaid rents or security deposits made under tenant leases or (ii) obligations arising from agreements of the Borrower or any Subsidiary providing for (1) customary indemnification, guarantees or adjustments of purchase or acquisition price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets permitted under this Agreement (except as specified in clause (b) above) or (2) with respect to any syndication of federal low-income housing tax credits and benefits generated under section 42 of the Code by apartment projects owned by the Borrower or any Subsidiary, indemnification or guarantees of obligations to maintain such tax credits and benefits.

          “Indemnified Liabilities”: as defined in Section 10.5.

          “Indemnitee”: as defined in Section 10.5.

          “Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

          “Insolvent”: pertaining to a condition of Insolvency.

          “Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

          “Interest Payment Date”: (a) as to any Base Rate Loan, the last day of each March, June, September and December to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or shorter, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Loan (other than any Loan that is a Base Rate Loan), the date of any repayment or prepayment made in respect thereof.

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          “Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as determined by the Lender in its sole discretion prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

     (1) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

     (2) any Interest Period that would otherwise extend beyond the Revolving Credit Termination Date shall end on the Revolving Credit Termination Date; and

     (3) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period.

          “Investments”: as defined in Section 7.8.

          “Issuing Lender”: any financial institution designated by the Lender as the “Issuing Lender” hereunder.

          “Joint Venture”: any Person in which the Borrower owns, directly or indirectly, Capital Stock (other than publicly traded Capital Stock) and which is not a Wholly Owned Subsidiary of the Borrower.

          “Joint Venture Property”: each parcel of real property owned or leased by any Joint Venture.

          “L/C Commitment”: as defined in the ASOT Credit Agreement.

          “L/C Fee Payment Date”: the last day of each March, June, September and December and the last day of the Revolving Credit Commitment Period.

          “L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.5.

          “L/C Participants”: as defined in the ASOT Credit Agreement.

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          “Lender”: as defined in the preamble hereto.

          “Letters of Credit”: as defined in Section 3.1(a).

          “Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

          “Limited Guaranty”: the Limited Guaranty (Affiliate Borrower I-A), dated as of the date hereof, made by Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors in favor of the Lender.

          “Loan Documents”: this Agreement, the Security Documents, the Applications, the Administration Fee Agreement, the Limited Guaranty, the Subordination of Limited Guaranty and the Development Loan Intercreditor Agreement.

          “Loan Parties”: the Borrower and each Subsidiary of the Borrower that is a party to a Loan Document.

          “Loans”: as defined in Section 2.4.

          “Maintenance Capital Expenditures”: for any period, with respect to any Person, the Capital Expenditures of such Person for such period that constitute expenditures for recurring value-retention Capital Expenditures representing costs that are typically incurred on a regular basis during the life of a community, such as expenditures for carpet, vinyl flooring, appliances, mechanical equipment, fixtures, roof replacement, parking lot resurfacing, exterior painting and siding replacement. It is understood and agreed that “Maintenance Capital Expenditures” shall not include (a) Renovation Capital Expenditures, (b) Capital Expenditures incurred in connection with requirements under the Fair Housing Act or the Americans with Disabilities Act, (c) Capital Expenditures representing tenant improvements awarded to any tenant in connection with any commercial or office lease and (d) repair or restoration of major damage to a community that resulted from an event such as a fire, flood, hurricane, earthquake or terrorist event.

          “Material Adverse Effect”: a material adverse effect on (a) the business, assets, property, results of operations or financial condition of the Combined Group Members, taken as a whole, or (b) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights or remedies of the Lender hereunder or thereunder; provided that, solely on the Closing Date and with respect to the representations and warranties to be made by the Loan Parties on the Closing Date and the closing certificates to be delivered pursuant to Section 5.1(n) on the Closing Date, “Material Adverse Effect” shall mean a “Material Adverse Effect” as defined in the Development Asset Purchase Agreement.

          “Material Environmental Amount”: an amount or amounts payable by the Group Members, in the aggregate in excess of $50,000,000 for: costs to comply with any Environmental Law; costs of any investigation, and any remediation, of any Material of Environmental Concern; and compensatory damages (including, without limitation, damages to natural resources), punitive damages, fines, and penalties pursuant to any Environmental Law.

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          “Materials of Environmental Concern”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products (virgin or unused), polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity, and any other materials, substances or forces of any kind, whether or not any such material, substance or force is defined as hazardous or toxic under any Environmental Law, that is regulated pursuant to or could reasonably be expected to give rise to liability under any Environmental Law.

          “Merger Agreement”: as defined in the ASOT Credit Agreement.

          “Moody’s”: Moody’s Investors Service, Inc.

          “Mortgaged Properties”: the real properties as to which the Lender shall be granted a Lien pursuant to one or more Mortgages at any time and from time to time after the Closing Date pursuant to Section 6.10(b).

          “Mortgages”: each of the mortgages, deeds of trust and deeds to secure debt made by any Loan Party in favor of, or for the benefit of, the Lender, in form and substance reasonably satisfactory to the ASOT Administrative Agent as the same may be amended, supplemented or otherwise modified from time to time.

          “Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

          “Non-Excluded Taxes”: as defined in Section 2.20(a).

          “Non-Recourse Subsidiary Borrower”: a Subsidiary of the Borrower that is a special purpose entity whose only assets are the assets securing Indebtedness incurred in accordance with Section 7.2(l).

          “Obligations”: the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans, the Reimbursement Obligations and all other obligations and liabilities of the Borrower to the Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees, charges and disbursements of counsel to the Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.

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          “OC/SD JV Holdings LLC”: Tishman Speyer Archstone-Smith OC/SD JV Holdings, L.L.C., a Delaware limited liability company.

          “Operating Properties”: collectively, the Owned Properties and the Joint Venture Properties.

          “Other Taxes”: any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

          “Owned Properties”: each parcel of real property owned or leased by the Group Members.

          “Ownership Percentage”: with respect to any Operating Property (or any Joint Venture that owns, directly or indirectly, any Capital Stock of the Property Owner that owns or leases such Operating Property) at any time, the percentage of the total outstanding Capital Stock of the Property Owner with respect to such Operating Property held directly and indirectly by the applicable Person.

          “Payment Amount”: as defined in Section 3.5.

          “Payment Office”: the office specified from time to time by the ASOT Administrative Agent as its payment office by notice to the Lender, and upon receipt of such notice by the Lender, the Lender shall promptly notify the Borrower.

          “PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

          “Permitted Investors”: as defined in the ASOT Credit Agreement.

          “Permitted Leases”: leases or subleases (including ground leases and licenses and other occupancy agreements) entered into the ordinary course of business by any Group Member, in each case, at an arm’s-length basis (i.e., on market terms) which do not materially impair the interests of such Group Member in the Property subject thereto or the value of such Property.

          “Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

          “personal property”: “personal property”, as defined in the Uniform Commercial Code as from time to time in effect in the State of New York, which is owned by any Group Member.

          “Plan”: at a particular time, any employee benefit plan that is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

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          “Pledged Stock”: as defined in the Guarantee and Collateral Agreement.

          “Property”: any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.

          “Property Owners”: collectively, Persons identified in Schedule 1.1D attached hereto, each of which owns the Operating Property identified on such Schedule as being owned by such Person.

          “Real Estate Under Construction”: Real Property (other than a Completed Property) on which construction of material improvements has commenced or shall concurrently commence with the incurrence of Indebtedness financing such construction and is or shall be continuing to be performed.

          “Real Property”: any present and future right, title and interest (including, without limitation, any leasehold estate) in (i) any plots, pieces or parcels of Eligible Land, (ii) any Improvements of every nature whatsoever (the rights and interests described in clauses (i) and (ii) above being the “Premises”), (iii) all easements, rights of way, gores of land or any lands occupied by streets, ways, alleys, passages, sewer rights, water courses, water rights and powers, and public places adjoining such land, and any other interests in property constituting appurtenances to the Premises, or which hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all hereditaments, gas, oil, minerals (with the right to extract, sever and remove such gas, oil and minerals), and easements, of every nature whatsoever, located in, on or benefiting the Premises and (v) all other rights and privileges thereunto belonging or appertaining and all extensions, additions, improvements, betterments, renewals, substitutions and replacements to or of any of the rights and interests described in clauses (iii) and (iv) above.

          “Recourse Indebtedness”: any Indebtedness, to the extent that recourse of the applicable lender for non-payment is not limited to such lender’s Liens on a particular asset or group of assets that secure such Indebtedness (except to the extent the Property on which such lender has a Lien and to which its recourse for non-payment is limited constitutes cash or Cash Equivalents, to which extent such Indebtedness shall be deemed to be Recourse Indebtedness); provided that, personal recourse of any Person for any such Indebtedness for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of single purpose entity covenants, and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guaranty or indemnification agreements in non-recourse financing of real estate shall not, by itself, cause such Indebtedness to be characterized as Recourse Indebtedness.

          “Register”: as defined in Section 2.8(c).

          “Regulation H”: Regulation H of the Board as in effect from time to time.

          “Regulation U”: Regulation U of the Board as in effect from time to time.

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          “Regulation X”: Regulation X of the Board as in effect from time to time.

          “Reimbursement Obligation”: the obligation of the Borrower to reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing Lender.

          “Renovation Capital Expenditures”: for any period, with respect to any Person, the Capital Expenditures of such Person for such period comprised of: (a) Capital Expenditures incurred in connection with a major renovation or reparation of a community and (b) value-enhancing Capital Expenditures representing costs for which an incremental value is expected to be achieved from increasing the net operating income potential for a community or recharacterizing the quality of the income stream with an anticipated reduction in potential sales capitalization rate for items such as replacement of wood siding with a masonry-based Hardi-Board product, amenity upgrades and additions (including designer kitchens, new clubhouses or fitness centers), installation of security gates and additions of covered parking. For the avoidance of doubt, “Renovation Capital Expenditures” shall not include development expenses for any Operating Property.

          “Reorganization”: with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

          “Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the 30 day notice period is waived under subsections .27, .28, .29, ..30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

          “Required Ratios”: as defined in the ASOT Credit Agreement.

          “Requirements of Law”: as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

          “Responsible Officer”: with respect to any Person, the chief executive officer, president, chief financial officer, chief accounting officer, chief operating officer, general counsel, treasurer or controller of such Person, but in any event, with respect to financial matters, the chief financial officer, the chief accounting officer, treasurer or controller of such Person.

          “Restricted Payments”: as defined in Section 7.6.

          “Revolving Credit Commitment”: the obligation of the Lender to make Loans and to cause the Issuing Lender to issue Letters of Credit, in an aggregate principal and/or face amount not to exceed $750,000,000, as the same may be changed from time to time in accordance with the ASOT Revolving Credit Commitment.

          “Revolving Credit Commitment Period”: the period from and including the Closing Date to the Revolving Credit Termination Date.

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          “Revolving Credit Termination Date”: the fourth anniversary of the Closing Date.

          “Revolving Extensions of Credit”: an amount equal to the sum of (a) the aggregate principal amount of all Loans then outstanding, and (b) the L/C Obligations then outstanding.

          “S&P”: Standard & Poor’s Ratings Services.

          “SEC”: the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

          “Secured Guarantor Notes”: a collective reference to each unsecured promissory note, to be made by Guarantor 1, Guarantor 2 or any ASOT Additional Parent Guarantor, as borrower, in favor of the Borrower, as lender, in form and substance reasonably satisfactory to the ASOT Administrative Agent, for the purpose of making a loan to Guarantor 1, Guarantor 2 or such ASOT Additional Parent Guarantor, as applicable, to finance certain expenses of Guarantor 1, Guarantor 2 and such ASOT Additional Parent Guarantor in accordance with Section 7.6(g), as amended, supplemented or otherwise modified from time to time.

          “Secured Note LLC”: Tishman Speyer Archstone-Smith Multifamily Series IV, L.L.C., a Delaware limited liability company.

          “Security Documents”: the collective reference to the Guarantee and Collateral Agreement, the Mortgages and all other security documents hereafter delivered to the Lender granting a Lien on any Property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document.

          “Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

          “Solvent”: with respect to any Person, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

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          “Subordination of Limited Guaranty”: the Subordination of Limited Guaranty (Affiliate Borrower I-A), dated as of the date hereof, among the Lender and the ASOT Administrative Agent and accepted and agreed to by Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors.

          “Subsidiary”: as to any Person, a corporation, partnership, limited liability company or other entity either (x) of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned or (y) the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person, provided that, a Joint Venture shall not constitute a Subsidiary of such Person unless this clause (y) is applicable. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

          “Subsidiary Guarantor”: each Subsidiary of the Borrower that is or becomes a party to the Guarantee and Collateral Agreement. “Subsidiary Guarantors” shall not include (i) any Excluded Foreign Subsidiary or any Subsidiary of a Foreign Subsidiary or (ii) any Subsidiary of the Borrower prohibited from providing a guarantee of the Obligations pursuant to Indebtedness permitted by Section 7.2.

          “Successor Borrower”: as defined in Section 7.4(a).

          “Targets”: collectively, the Company and the ASOT Borrower.

          “Test Date”: as defined in the ASOT Credit Agreement.

          “TSREV”: Tishman Speyer Real Estate Venture VII, L.P.

          “Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

          “Unsecured Affiliate Borrower”: as defined in Section 7.2(u).

          “Unsecured Affiliate Lender”: as defined in Section 7.2(u).

          “Unsecured Employee Cost Loans”: as defined in Section 7.2(u).

          “Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries. For the avoidance of doubt, the definition of “Wholly Owned Subsidiary” shall include any Person all of the outstanding Capital Stock (other than directors’ qualifying shares) of which is owned, directly or indirectly, by the Borrower.

          “Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower.

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          1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

          (b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to the Group Members not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.

          (c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

          (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

          SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENT

          2.1 [Intentionally Omitted].

          2.2 [Intentionally Omitted].

          2.3 [Intentionally Omitted].

          2.4 Revolving Credit Commitment. (a) Subject to the terms and conditions hereof, the Lender agrees to make revolving credit loans (the “Loans”) to the Borrower from time to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding which, when added to the L/C Obligations then outstanding, does not exceed the amount of the Revolving Credit Commitment; provided that, the Lender shall not make any Loan to the Borrower if, after giving effect to the making of such Loan, (i) the aggregate amount of the Available Revolving Credit Commitment would be less than zero or (ii) the aggregate amount of the ASOT Available Revolving Credit Commitments would be less than zero. During the Revolving Credit Commitment Period the Borrower may use the Revolving Credit Commitment by borrowing, prepaying the Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Lender in accordance with Sections 2.5 and 2.13, provided that, no Loan shall be made as a Eurodollar Loan after the day that is one month prior to the Revolving Credit Termination Date.

          (b) The Borrower shall repay all outstanding Loans on the Revolving Credit Termination Date.

          2.5 Procedure for Revolving Credit Borrowing. The Borrower may borrow under the Revolving Credit Commitment on any Business Day during the Revolving Credit Commitment Period, provided that, the Borrower shall deliver to the Lender a Borrowing Notice or such other form of notice reasonably satisfactory and acceptable to the Lender prior to the

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requested Borrowing Date. Any Loans made on the Closing Date shall initially be Base Rate Loans, and no Loan may be made as, converted into or continued as a Eurodollar Loan having an Interest Period in excess of one month prior to the date that is the earlier of (x) the date which is 60 days after the Closing Date and (y) the date on which the Lender has been notified in writing by the ASOT Administrative Agent that the primary syndication of the ASOT Credit Agreement has been completed. Such borrowing will then be made available to the Borrower by the Lender in like funds as received by the Lender from the date on which the Lender has been notified in writing by the ASOT Administrative Agent that the primary syndication of the ASOT Credit Agreement has been completed. The Lender shall make available to the Borrower the proceeds of the Loans made available to the Lender by the ASOT Administrative Agent pursuant to the ASOT Credit Agreement, in like funds as received by the Lender.

          2.6 [Intentionally Omitted].

          2.7 [Intentionally Omitted].

          2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally promises to pay to the Lender the then unpaid principal amount of each Loan on the Revolving Credit Termination Date (or on such earlier date on which the Loans become due and payable pursuant to Section 8). The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.15.

          (b) [Intentionally Omitted].

          (c) The Lender shall maintain on behalf of the Borrower, a register (the “Register”) in which shall be recorded (i) the amount of each Loan made hereunder, the Type of such Loan and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to the Lender hereunder and (iii) the amount of any sum received by the Lender hereunder from the Borrower.

          (d) The entries made in the Register shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of the Lender to maintain the Register, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by the Lender in accordance with the terms of this Agreement.

          2.9 Commitment Fees, etc. The Borrower agrees to pay to the Lender a commitment fee for the period from and including the Closing Date to the last day of the Revolving Credit Commitment Period, in an amount and at such times as agreed between the Borrower and the Lender.

          2.10 Termination or Reduction of Revolving Credit Commitment. The Borrower may not terminate the Revolving Credit Commitment or, from time to time, reduce the Revolving Credit Commitment without the prior written consent of the ASOT Required Lenders and the Lender (other than in connection with the refinancing, repayment or termination in full of the ASOT Credit Agreement and the commitments and loans thereunder); provided that no such

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termination or reduction of Revolving Credit Commitment shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the Revolving Extensions of Credit would exceed the Revolving Credit Commitment. Any such reduction shall reduce permanently the Revolving Credit Commitment then in effect.

          2.11 Optional Prepayments. The Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Lender which notice shall specify the date and amount of such prepayment, and whether such prepayment is of Eurodollar Loans or Base Rate Loans; provided that, if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Loans that are Base Rate Loans) accrued interest to such date on the amount prepaid.

          2.12 [Intentionally Omitted].

          2.13 Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving the Lender at least two Business Days’ prior irrevocable notice of such election, provided that any such conversion of Eurodollar Loans may be made only on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Lender at least three Business Days’ prior irrevocable notice of such election (which notice shall specify the length of the initial Interest Period therefor), provided that no Base Rate Loan may be converted into a Eurodollar Loan (i) when any Event of Default has occurred and is continuing and the Lender has determined in its sole discretion not to permit such conversions or (ii) after the date that is one month prior to the Revolving Credit Termination Date.

          (b) The Borrower may elect to continue any Eurodollar Loan as such upon the expiration of the then current Interest Period with respect thereto by giving irrevocable notice to the Lender, in accordance with the applicable provisions of the term “Interest Period” set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loan, provided that, no Eurodollar Loan may be continued as such (i) when any Event of Default has occurred and is continuing and the Lender has determined in its sole discretion not to permit such continuations or (ii) after the date that is one month prior to the Revolving Credit Termination Date, and provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso, such Loans shall continue as Eurodollar Loans, with a one month Interest Period.

          2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional prepayments of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one time.

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          2.15 Interest Rates and Interest Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin in effect for such day.

          (b) Each Base Rate Loan shall bear interest for each day on which it is outstanding at a rate per annum equal to the Base Rate in effect for such day plus the Applicable Margin in effect for such day.

          (c) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement Obligations (whether or not overdue) (to the extent legally permitted) shall bear interest at a rate per annum that is equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to Base Rate Loans plus 2%, and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any commitment fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to Base Rate Loans plus 2%, in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (after as well as before judgment).

          (d) Interest shall be payable in arrears on each Interest Payment Date, provided that, interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand.

          (e) Notwithstanding anything in the foregoing to the contrary, in no event shall the interest rate payable by the Borrower hereunder for any Type of Loan on any date of determination exceed the effective rate of interest paid by the Lender pursuant to the ASOT Credit Agreement for such Type of Loan.

          2.16 Computation of Interest and Fees. (a) Interest, fees and commissions payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to Base Rate Loans on which interest is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Lender shall as soon as practicable notify the Borrower of each determination of a Eurodollar Rate made pursuant to the ASOT Credit Agreement. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Lender shall as soon as practicable notify the Borrower of the effective date and the amount of each such change in interest rate made pursuant to the ASOT Credit Agreement.

          (b) Each determination of an interest rate by the ASOT Administrative Agent pursuant to any provision of the ASOT Credit Agreement shall be conclusive and binding on the Borrower and the Lender in the absence of manifest error. The Lender shall, at the request of the

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Borrower, deliver to the Borrower a statement showing the quotations used by the ASOT Administrative Agent in determining any interest rate pursuant to Section 2.15(a).

          2.17 Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

     (a) the ASOT Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower and the Lender) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

     (b) the ASOT Administrative Agent shall have received notice from the ASOT Majority Facility Lenders in respect of the Revolving Credit Facility (as defined in the ASOT Credit Agreement) that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such ASOT Majority Facility Lenders (as conclusively certified by such ASOT Majority Facility Lenders) of making or maintaining their affected loans under the ASOT Credit Agreement during such Interest Period,

the ASOT Administrative Agent shall give telecopy, email or telephonic notice thereof to the Borrower and the Lender as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last day of the then current Interest Period with respect thereto, to Base Rate Loans. Until such notice has been withdrawn by the ASOT Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Loans to Eurodollar Loans.

          2.18 Payments.

          (a) [Intentionally Omitted].

          (b) [Intentionally Omitted].

          (c) [Intentionally Omitted].

          (d) The application of any payment of Loans (including prepayments) shall be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each payment of the Loans (except in the case of Loans that are Base Rate Loans) shall be accompanied by accrued interest to the date of such payment on the amount paid.

          (e) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 2:00 p.m. (New York City time) on the due date thereof to the Lender, at the Payment Office, in Dollars and in immediately available funds. Any payment made by the Borrower after 2:00 p.m. (New York City time) on any Business Day shall be deemed to have been on the next following Business Day. If any payment hereunder (other

27

than payments on the Eurodollar Loans)becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

          2.19 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by the Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

     (i) shall subject the Lender to any tax of any kind whatsoever with respect to this Agreement, any Application or any Eurodollar Loan made by it, or change the basis of taxation of payments to the Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.20 and changes in the rate of tax on the net income of the Lender);

     (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of the Lender that is not otherwise included in the determination of the Eurodollar Rate hereunder; or

     (iii) shall impose on the Lender any other condition;

and the result of any of the foregoing is to increase the cost to the Lender, by an amount which the Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay the Lender, upon its demand, any additional amounts necessary to compensate the Lender for such increased cost or reduced amount receivable. If the Lender becomes entitled to claim any additional amounts pursuant to this Section 2.19, it shall promptly notify the Borrower of the event by reason of which it has become so entitled.

          (b) If the Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by the Lender or any corporation controlling the Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on the Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under to a level below that which the Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration the Lender’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by the Lender to be material, then from time to time, after submission by the Lender to the Borrower of a written request therefor, the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender or such corporation for such reduction.

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          (c) A certificate setting forth in reasonable detail any additional amounts payable pursuant to this Section 2.19 submitted by the Lender to the Borrower shall be prima facie evidence in the absence of manifest error. The obligations of the Borrower pursuant to this Section 2.19 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

          2.20 Taxes. (a) All payments made by the Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, 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 Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Lender (i) as a result of a present or former connection between the Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Lender’s having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document), (ii) by the jurisdiction (or any political subdivision thereof) under which the Lender is organized or in which its principal office is located or in which its lending office is located, and (iii) as a branch profits tax imposed by the jurisdiction in which the Borrower is located. If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or any Other Taxes are required to be withheld from any amounts payable to the Lender hereunder, the amounts so payable to the Lender shall be increased to the extent necessary to yield to the Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement; provided, however, that the Borrower shall not be required to increase any such amounts payable to the Lender with respect to any Non-Excluded Taxes (i) that are attributable to the Lender’s failure to comply with the requirements of paragraph (d) or (e) of this Section 2.20, (ii) that are United States withholding taxes imposed on amounts payable to the Lender on the Closing Date or (iii) that are United States withholding taxes imposed on amounts payable to the Lender at the time the Lender changes its lending office other than at the request of the Borrower, except to the extent that the Lender was entitled, at the time of the change in its lending office, to receive additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph (a).

          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

          (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as possible thereafter the Borrower shall send to the Lender a certified copy of an original official receipt received by the Borrower (or, if an official receipt is not available, such other evidence of payment as shall be satisfactory to the Lender) showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or Other Taxes required to be paid by the Borrower pursuant to this Agreement when due to the appropriate taxing authority or fails to remit to the Lender the required receipts or other required documentary

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evidence, the Borrower shall indemnify the Lender for any incremental taxes, interest or penalties that may become payable by the Lender as a result of any such failure. The agreements in this Section 2.20 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

          (d) The Lender shall, with respect to any payments that the Lender directs to be paid to a non-U.S. address or non-U.S. bank account, deliver to the Borrower a duly completed original signed copy of U.S. Internal Revenue Service Form W-9, or any subsequent versions thereof or successors thereto that the Lender is entitled to provide at such time in order to comply with United States backup withholding requirements. Such forms shall be delivered by the Lender on or before the date it becomes a party to this Agreement and on or before the date, if any, the Lender designates a new lending office. In addition, the Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by the Lender. The Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, the Lender shall not be required to deliver any form pursuant to this paragraph that the Lender is not legally able to deliver.

          (e) If the Lender is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement, the Lender shall deliver to the Borrower, at the time or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate, provided that the Lender is legally entitled to complete, execute and deliver such documentation and in the Lender’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of the Lender.

          2.21 Indemnity. The Borrower agrees to indemnify the Lender for, and to hold the Lender harmless from, any loss or expense that the Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by the Lender in consultation with the ASOT Administrative Agent) that would have accrued to the Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this

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Section 2.21 submitted to the Borrower by the Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans, and all other amounts payable hereunder.

          2.22 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for the Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of the Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b) the Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to the Lender such amounts, if any, as may be required pursuant to Section 2.21.

          2.23 [Intentionally Omitted].

          2.24 [Intentionally Omitted].

          2.25 [Intentionally Omitted].

          2.26 [Intentionally Omitted].

          2.27 Exculpation. Subject to the qualifications below, the Lender shall not enforce the liability and obligation of the Borrower to perform and observe the obligations contained in this Agreement or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against the Borrower, except that the Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable the Lender to enforce and realize upon its interest under this Agreement and the other Loan Documents, or in the Collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower only to the extent of the Borrower’s interest in the Collateral given to the Lender, and the Lender, by accepting this Agreement and the other Loan Documents, shall not sue for, seek or demand any deficiency judgment against the Borrower in any such action or proceeding under or by reason of or under or in connection with this Agreement or the other Loan Documents. The provisions of this Section 2.27 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of the Lender to name the Borrower as a party defendant in any action or suit for foreclosure and sale under the Guarantee and Collateral Agreement; (c) affect the validity or enforceability of any guaranty made in connection with the Loans or any of the rights and remedies of the Lender thereunder; (d) impair the right of the Lender to obtain the appointment of a receiver; (e) constitute a prohibition against the Lender to seek a deficiency judgment against the Borrower in order to fully realize on any security given by the Borrower in connection with the Loans or to commence any other appropriate action or proceeding in order for the Lender to exercise its remedies against such security; or (f) constitute a waiver of the right of the Lender to enforce the liability

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and obligation of the Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by the Lender (including attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:

     (i) fraud or intentional misrepresentation by the Borrower in connection with the Loans;

     (ii) the gross negligence or willful misconduct by the Borrower;

     (iii) the breach of any representation, warranty, covenant or indemnification provision in the Loan Documents concerning Environmental Laws, hazardous substances and asbestos and any indemnification of the Lender with respect thereto in either document;

     (iv) the removal or disposal of any portion of the Collateral after an Event of Default;

     (v) the misapplication or conversion by the Borrower of (a) any insurance proceeds paid by reason of any loss, damage or destruction to any portion of the Collateral, (b) any awards or other amounts received in connection with the condemnation of all or a portion of the Collateral and (c) any rents, rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including, without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of the Borrower or its agents or employees from any and all sources arising from or attributable to the Collateral, and proceeds, if any, from business interruption or other loss of income insurance;

     (vi) failure to pay charges for labor or materials or other charges that can create Liens on any portion of the Collateral;

     (vii) any security deposits, advance deposits or other deposits collected with respect to the Collateral which are not delivered to the Lender upon a foreclosure of any portion of the Collateral or action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any lease, sublease or subsublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in the Property, and every modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof; or

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     (viii) the breach by the Borrower of the Borrower’s indemnification obligations set forth in Section 10.5.

Notwithstanding anything to the contrary in this Agreement or any of the Loan Documents, (A) the Lender shall not be deemed to have waived any right which the Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code (the “Bankruptcy Code”) to file a claim for the full amount of the Obligations or to require that the Collateral shall continue to secure all of the Obligations owing to the Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to the Borrower in the event that: (i) the Borrower fails to obtain the Lender’s prior consent to any subordinate financing or other voluntary Lien encumbering the Collateral; (ii) the Borrower fails to obtain the Lender’s prior consent to any assignment, transfer, or conveyance, direct or indirect, of the Collateral or any interest therein or the Borrower or any interest in the Borrower, as required by the Guarantee and Collateral Agreement or this Agreement; (iii) the Borrower files a voluntary petition under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (iv) an Affiliate, officer, director, or representative which controls, directly or indirectly, the Borrower files, or joins in the filing of, an involuntary petition against the Borrower under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against the Borrower from any Person; (v) the Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (vi) any Affiliate, officer, director, or representative which controls the Borrower consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for the Borrower or any portion of the Collateral; or (vii) the Borrower makes an assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its Obligations as they become due.

SECTION 3. LETTERS OF CREDIT

          3.1 L/C Commitment. (a) Subject to the terms and conditions of the ASOT Credit Agreement, the Lender, in reliance on the agreements of the other ASOT Revolving Credit Lenders set forth in Section 3.4(a) of the ASOT Credit Agreement, agrees to cause the Issuing Lender to issue letters of credit (“Letters of Credit”) for the account of the Borrower on any Business Day during the ASOT Revolving Credit Commitment Period in such form as may be approved from time to time by the Lender and the Issuing Lender; provided that, the Lender shall not have any obligation to cause any Letter of Credit to be issued if, after giving effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment (ii) the aggregate amount of the Available Revolving Credit Commitment would be less than zero, (iii) the ASOT L/C Obligations would exceed the ASOT L/C Commitment or (iv) the aggregate amount of the ASOT Available Revolving Credit Commitments would be less than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date which is five Business Days prior to the

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Revolving Credit Termination Date; provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).

          (b) The Lender shall not at any time be obligated to cause any Letter of Credit to be issued hereunder if such issuance would conflict with, or cause the Lender, the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.

          3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to time request that the Lender cause an Issuing Lender to issue a Letter of Credit by delivering to the Lender and such Issuing Lender at its address for notices specified in the ASOT Credit Agreement an Application therefor, completed to the satisfaction of the Lender and the Issuing Lender, and such other certificates, documents and other papers and information as the Lender and such Issuing Lender may request. Upon receipt of any Application, the Lender will notify the ASOT Administrative Agent of the amount, the beneficiary and the requested expiration of the requested Letter of Credit, and upon receipt of confirmation from the ASOT Administrative Agent that after giving effect to the requested issuance, the ASOT Available Revolving Commitments would not be less than zero, the Lender will cause such Application and the certificates, documents and other papers and information delivered to it in connection therewith to be processed by the Issuing Bank in accordance with its customary procedures and shall promptly cause the Letter of Credit requested thereby to be issued by causing the original of such Letter of Credit to be issued to the beneficiary thereof or as otherwise may be agreed to by the Lender, Issuing Bank and the Borrower. The Lender shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof. The Lender shall promptly give notice to the ASOT Administrative Agent as set forth in the ASOT Credit Agreement of the issuance of each Letter of Credit (including the face amount thereof), and shall provide a copy of such Letter of Credit to the ASOT Administrative Agent as soon as possible after the date of issuance.

          3.3 Fees and Other Charges. (a) The Borrower will pay to the Lender a fee on the aggregate drawable amount of all outstanding Letters of Credit issued for its account (other than any such Letters of Credit that have been fully cash collateralized pursuant to terms satisfactory to the Issuing Lender) at a per annum rate equal to the Applicable Margin then in effect with respect to the Eurodollar Loans and payable quarterly in arrears on each L/C Fee Payment Date after the issuance date. In addition, the Borrower shall pay to the Lender, for the benefit of the Issuing Lender, a fronting fee on the aggregate drawable amount of all outstanding Letters of Credit issued by, the Issuing Lender for the Borrower’s account at a rate per annum agreed upon between the Lender and the Issuing Lender, payable quarterly in arrears on each L/C Fee Payment Date after the issuance date.

          (b) In addition to the foregoing fees, the Borrower shall pay or reimburse the Lender and the Issuing Lender, as the case may be, for normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit issued for the Borrower’s account.

          3.4 [Intentionally Omitted].

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          3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to reimburse the Lender, on each date on which the Lender notifies the Borrower of the date and amount of a draft presented under any Letter of Credit and paid by the Issuing Lender, for the amount of (a) such draft so paid and (b) any taxes, fees, charges or other reasonable costs or expenses incurred by the Lender or the Issuing Lender in connection with such payment (the amounts described in the foregoing clauses (a) and (b) in respect of any drawing, collectively, the “Payment Amount”). Each such payment shall be made to the Lender at its address for notices specified herein in lawful money of the United States of America and in immediately available funds. Interest shall be payable on each Payment Amount from the date of the applicable drawing until payment in full at the rate set forth in (i) until the second Business Day following the date of the applicable drawing, Section 2.15(b) and (ii) thereafter, Section 2.15(c). Each drawing under any Letter of Credit shall constitute a request by the Borrower to the Lender for a borrowing pursuant to Section 2.5 of Base Rate Loans in the amount of such drawing. The Borrowing Date with respect to such borrowing shall be the first date on which a borrowing of Loans could be made, pursuant to Section 2.5, if the Lender had received a notice of such borrowing at the time of such drawing under such Letter of Credit.

          3.6 [Intentionally Omitted].

          3.7 Obligations Absolute. The Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Lender, any Issuing Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the Lender that the Lender shall not be responsible for, and the Borrower’s Reimbursement Obligations under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, provided that, such document or endorsement appears on its face to comply with the terms of such Letter of Credit, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. The Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of the Lender. The Borrower agrees that any action taken or omitted by the Lender or an Issuing Lender under or in connection with any Letter of Credit issued by it or the related drafts or documents, if done in the absence of gross negligence, bad faith or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code of the State of New York, shall be binding on the Borrower and shall not result in any liability of the Lender or such Issuing Lender to the Borrower.

          3.8 Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the Lender shall promptly notify the Borrower and the ASOT Administrative Agent of the date and amount thereof. The responsibility of the Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit, in addition to any payment obligation expressly provided for in such Letter of Credit issued by the

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Issuing Lender, shall be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment appear on their face to be in conformity with such Letter of Credit.

          3.9 Applications. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.

SECTION 4. REPRESENTATIONS AND WARRANTIES

          To induce the Lender to enter into this Agreement and to make the Loans and to cause the Issuing Lender to issue the Letters of Credit, the Borrower hereby represents and warrants to the Lender that:

          4.1 [Intentionally Omitted].

          4.2 No Change. Since December 31, 2006, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

          4.3 Corporate Existence; Compliance with Law. Each of the Group Members (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate power and authority, and the legal right, to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law, except, in the case of clauses (c) and (d), to the extent that the failure to be so qualified or comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

          4.4 Corporate Power; Authorization; Enforceable Obligations. Each Group Member has the corporate power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to borrow hereunder. Each Group Member has taken all necessary corporate or other action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the borrowings on the terms and conditions of this Agreement. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or the execution, delivery, performance, validity or enforceability of this Agreement or any of the other Loan Documents, except (i) such as have been obtained or made and are in full force and effect, (ii) the filings referred to in Section 4.19, and (iii) consents or authorizations, to the extent that the failure to obtain such consents, authorizations, filings and notices (or the failure to keep the same in full force and effect) could not reasonably be expected to have a Material Adverse Effect. Each Loan Document has been duly executed and delivered on behalf of each Loan Party that is a party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with

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its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

          4.5 No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Group Member except, solely with respect to a violation of a Contractual Obligation of any Group Member, to the extent such violation could not reasonably be expected to have a Material Adverse Effect, and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Security Documents and such Liens permitted pursuant to Section 7.3 hereof). No Requirement of Law or Contractual Obligation applicable to any Group Member could reasonably be expected to have a Material Adverse Effect.

          4.6 No Material Litigation. Except as otherwise disclosed to the Lender, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the actual knowledge of any Responsible Officer of the Borrower, threatened by or against any Group Member or against any of their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect.

          4.7 No Default. None of the Group Members is in default under or with respect to any of its Contractual Obligations in any respect that could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.

          4.8 Ownership of Property; Liens. Each of the Group Members has title in fee simple to, or a valid leasehold interest in, all of its real property, and good title to, or a valid leasehold interest in, all its other Property, and none of such Property is subject to any Lien except as permitted by Section 7.3.

          4.9 Intellectual Property. Each of the Group Members owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted. To the knowledge of any Group Member, no material claim has been asserted and is pending by any Person challenging or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does any Group Member know of any valid basis for any such claim. To the knowledge of any Group Member, the use of Intellectual Property by the Group Members does not infringe on the rights of any Person in any material respect.

          4.10 Taxes. Each of the Group Members has filed or caused to be filed all federal, state and other material tax returns that are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its Property and all other taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority that are due and payable, and, except as otherwise disclosed to the Lender in writing, no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is

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being asserted, with respect to any such tax, fee or other charge (other than any, in each case, the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the applicable Group Member, as the case may be).

          4.11 Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the regulations of the Board. If requested by the Lender, the Borrower will furnish to the Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.

          4.12 Labor Matters. There are no strikes or other labor disputes against any Group Member pending or, to the knowledge of the Borrower, threatened that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of the Group Members have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. All payments due from any Group Member on account of employee health and welfare insurance that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect if not paid have been paid or accrued as a liability on the books of the applicable Group Member.

          4.13 ERISA. Neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by a material amount. Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in a material liability under ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to any material liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.

          4.14 Investment Company Act; Other Regulations. No Loan Party is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. No Loan Party is subject to regulation under any Requirement of Law (other than Regulation X) that limits its ability to incur Indebtedness.

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          4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15 constitute all the Subsidiaries of the Borrower at the date hereof. Schedule 4.15 sets forth as of the Closing Date the name and jurisdiction of incorporation of each Subsidiary and, as to each Subsidiary, the percentage of each class of Capital Stock owned by each Group Member and whether such Subsidiary is a Subsidiary Guarantor.

          (b) There are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors’ qualifying shares) of any nature relating to any Capital Stock of any Group Member.

          4.16 Use of Proceeds. The proceeds of the Loans and the Letters of Credit, shall be used (i) to finance the working capital needs of the Borrower and its Subsidiaries in the ordinary course of business, including without limitation, the ongoing development and construction costs related to the real property purchased by the Development Subsidiary-A pursuant to the Development Asset Acquisition and any additional real property acquired by the Borrower and its subsidiaries hereafter and (ii) for general corporate purposes. The Revolving Credit Loans may not be used to pay any Administration Fees during any Cure Period.

          4.17 Environmental Matters. Other than exceptions to any of the following that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:

     (a) Each of the Group Members: (i) is, and within the period of all applicable statutes of limitation has been, in compliance with all applicable Environmental Laws; (ii) holds all Environmental Permits (each of which is in full force and effect) required for any of its current or intended operations or for any property owned, leased, or otherwise operated by it; (iii) is, and within the period of all applicable statutes of limitation has been, in compliance with all of its Environmental Permits; and (iv) to the extent within the control of such Group Member: each of its Environmental Permits will be timely renewed and complied with; any additional Environmental Permits that may be required of it will be timely obtained and complied with, without material expense; and compliance with any Environmental Law that is or is expected to become applicable to it will be timely attained and maintained, without material expense.

     (b) Materials of Environmental Concern are not present at, on, under, in, or about any real property now or formerly owned, leased or operated by any Group Member, or at any other location (including, without limitation, any location to which Materials of Environmental Concern have been sent for re-use or recycling or for treatment, storage, or disposal) which could reasonably be expected to (i) give rise to liability of the Group Members under any applicable Environmental Law or otherwise result in costs to the Group Members, (ii) interfere with the continued operations of the Group Members or (iii) impair the fair saleable value of any Real Property owned or leased by any Group Member.

     (c) There is no judicial, administrative, or arbitral proceeding (including any notice of violation or alleged violation) under or relating to any Environmental Law to

39

which any Group Member is, or to the knowledge of any Group Member will be, named as a party that is pending or, to the knowledge of any Group Member, threatened.

     (d) None of the Group Members has received any written request for information, or been notified that it is a potentially responsible party under or relating to the federal Comprehensive Environmental Response, Compensation, and Liability Act or any similar Environmental Law, or with respect to any Materials of Environmental Concern.

     (e) None of the Group Members has entered into or agreed to any consent decree, order, or settlement or other agreement, or is subject to any judgment, decree, or order or other agreement, in any judicial, administrative, arbitral, or other forum for dispute resolution, relating to compliance with or liability under any Environmental Law.

     (f) None of the Group Members has assumed or retained, by contract, conduct or operation of law, any liabilities of any kind, fixed or contingent, known or unknown, under any Environmental Law or with respect to any Materials of Environmental Concern.

          4.18 Accuracy of Information, etc. No statement or information contained in this Agreement, any other Loan Document, or any other document, certificate or statement furnished to the Lender, by or on behalf of any Loan Party for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, contained as of the date such statement, information, document or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary to make the statements contained herein or therein not materially misleading. The projections and pro forma financial information contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Lender that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount. There is no fact known to any Loan Party that could reasonably be expected to have a Material Adverse Effect that has not been expressly disclosed herein, in the other Loan Documents or in any other documents, certificates and statements furnished to the Lender for use in connection with the transactions contemplated hereby and by the other Loan Documents.

          4.19 Security Documents. (a) The Guarantee and Collateral Agreement is effective to create in favor of the Lender, a legal, valid and enforceable security interest in the Collateral described therein and proceeds thereof. In the case of the Pledged Stock described in the Guarantee and Collateral Agreement, when any stock certificates representing such Pledged Stock are delivered to the Lender, and in the case of the other Collateral described in the Guarantee and Collateral Agreement, when Uniform Commercial Code financing statements in appropriate form are filed in the offices specified on Schedule 4.19 (which Uniform Commercial Code financing statements have been duly completed and delivered to the Lender) and such other filings as are specified on Schedule 3 to the Guarantee and Collateral Agreement have been completed (all of which filings have been duly completed), the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and

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interest of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each case prior and superior in right to any other Person (except Liens permitted by Section 7.3).

          (b) Schedule 1.1B lists, as of the Closing Date, each parcel of owned real property and each leasehold interest in real property located in the United States and held by the Borrower or any of its Subsidiaries.

          4.20 Solvency. The Borrower is, and the Group Members, taken as a whole, are, and after giving effect to the Development Asset Acquisition and the incurrence of all Indebtedness and obligations being incurred in connection herewith and therewith will be and will continue to be, Solvent.

          4.21 Regulation H. No Mortgage encumbers improved real property which is located in an area that has been identified by the Secretary of Housing and Urban Development as an area having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968 (except any Mortgaged Properties as to which such flood insurance as required by Regulation H has been obtained and is in full force and effect as required by this Agreement).

SECTION 5. CONDITIONS PRECEDENT

          5.1 Conditions to Initial Extension of Credit. Subject to Section 6.12, the agreement of the Lender to make the initial extension of credit requested to be made by it hereunder is subject to the satisfaction, prior to or substantially contemporaneously with the making of such extension of credit on the Closing Date, of the following conditions precedent:

     (a) Loan Documents. The Lender shall have received (i) this Agreement, executed and delivered by a duly authorized officer of the Borrower, (ii) the Guarantee and Collateral Agreement, executed and delivered by a duly authorized officer of each Subsidiary Guarantor and the Borrower, and (iii) the Development Loan Intercreditor Agreement, executed and delivered by a duly authorized officer of each party thereto.

     (b) ASOT Credit Agreement. Each condition precedent to the effectiveness of the ASOT Credit Agreement shall have either been substantially contemporaneously satisfied or waived in accordance therewith and the Lender shall have received proceeds of at least $4,719,000,000 from the proceeds of the ASOT Term Loans in accordance with the terms of the ASOT Credit Agreement.

     (c) Development Asset Acquisition. The following transactions shall have been consummated substantially contemporaneously:

     (i) the Development Subsidiary-A shall have received proceeds in an amount equal to at least $500,000,000 in cash from the Development Loan Credit Agreement;

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     (ii) the Development Asset Acquisition shall have been consummated pursuant to the Development Purchase Agreement, which agreement shall be in form and substance reasonably satisfactory to the ASOT Lenders, and no provision thereof shall have been waived, amended, supplemented or otherwise modified in a manner that would reasonably be expected to have a material adverse effect to the ASOT Lenders without the prior written consent of the ASOT Administrative Agent.

     (d) Approvals. (i) All governmental and third party approvals (including material landlords’ and other consents) necessary in connection with the Development Asset Acquisition and the continuing operations of the Group Members shall have been obtained and be in full force and effect.

     (ii) All governmental and third party approvals (including material landlords’ and other consents) necessary in connection with the Revolving Credit Commitment shall have been obtained and be in full force and effect.

     (e) [Intentionally Omitted].

     (f) [Intentionally Omitted].

     (g) [Intentionally Omitted].

     (h) [Intentionally Omitted].

     (i) [Intentionally Omitted].

     (j) [Intentionally Omitted].

     (k) Solvency Analysis. The Lender shall have received a customary solvency analysis certified by the chief financial officer or treasurer of the Borrower which shall document the solvency of the Borrower and its Subsidiaries considered as a whole after giving effect to the transactions contemplated hereby.

     (l) Lien Searches. The Lender shall have received the results of a recent lien search in each of the jurisdictions in which Uniform Commercial Code financing statements or other filings or recordations should be made to evidence or perfect security interests in all assets of the Loan Parties, and such search shall reveal no liens on any of the assets of the Loan Parties, except for Liens permitted by Section 7.3 or Liens to be discharged on or prior to the Closing Date.

     (m) Environmental Matters. The Lender shall have received an American Society for Testing & Materials (“ASTM”) compliant Environmental Site Assessment (“ESA”) dated no earlier than the date that is six months prior to the Closing Date for each of the Operating Properties, together with a letter from the environmental consultant permitting the ASOT Administrative Agent and the Lender to rely on the environmental assessment as if addressed to and prepared for each of them, and the ASOT Lenders shall be satisfied with the environmental affairs of the Group Members.

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     (n) Closing Certificate. The Lender shall have received a certificate of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions and attachments.

     (o) [Intentionally Omitted].

     (p) Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged Notes. The Lender shall have received (i) the certificates (if any) representing the shares of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, (ii) an Acknowledgment and Consent, substantially in the form of Annex II to the Guarantee and Collateral Agreement, duly executed by any issuer of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement that is not itself a party to the Guarantee and Collateral Agreement and (iii) each promissory note pledged pursuant to the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank satisfactory to the Lender) by the pledgor thereof.

     (q) Filings, Registrations and Recordings. Each document (including, without limitation, any Uniform Commercial Code financing statement) required by the Security Documents or under law or reasonably requested by the Lender or the ASOT Administrative Agent to be filed, registered or recorded in order to create in favor of the Lender, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 7.3), shall have been filed, registered or recorded or shall have been delivered to the Lender in proper form for filing, registration or recordation.

     (r) [Intentionally Omitted].

     (s) [Intentionally Omitted].

     (t) Insurance. The Lender shall have received insurance certificates satisfying the requirements of Section 6.5.

          5.2 Conditions to Each Extension of Credit. The agreement of the Lender to make any extension of credit requested to be made by it hereunder on any date (including, without limitation, its initial extension of credit) is subject to the satisfaction of the following conditions precedent:

     (a) Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents (except, in the case of the initial extensions of credit on the Closing Date, the representations contained in Sections 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.15, 4.17, 4.18, 4.20 and 4.21) shall be true and correct in all material respects on and as of such date as if made on and as of such date, provided that, (i) such representations made on the Closing Date with respect to the Targets shall be limited to the representations made in the Merger Agreement material to the interests of the Lenders, but only to the extent that TSREV has the right to terminate its obligations as a result of a breach of such representations in the Merger

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Agreement and (ii) any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct on such respective dates.

     (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date.

          Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this Section 5.2 have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

          The Borrower hereby agrees that, so long as the Revolving Credit Commitment remains in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to the Lender, the Borrower shall and shall cause each of its Subsidiaries to:

          6.1 [Intentionally Omitted].

          6.2 Certificates; Other Information. Furnish to the Lender:

          (a) [intentionally omitted];

     (b) as soon as available, but in any event (i) within 120 days after the end of each fiscal year of the Borrower and (ii) not later than 60 days after the end of the first three fiscal quarterly periods of each fiscal year of the Borrower, (A) a Compliance Certificate containing all information and calculations necessary for determining compliance by the Group Members with the provisions of this Agreement referred to therein as of the last day of the fiscal quarter or fiscal year of the Borrower, as the case may be and (B) any Uniform Commercial Code financing statements or other filings specified in such Compliance Certificate as being required to be delivered therewith;

     (c) [intentionally omitted];

     (d) [intentionally omitted];

     (e) [intentionally omitted];

     (f) within five days after the same are sent, copies of all financial statements and reports that any Group Member sends to the holders of any class of its debt securities or equity securities, and, within five days after the same are filed, copies of all financial statements and reports that any Group Member may make to, or file with, the SEC (provided that the names of any limited partners identified in such financial statements or reports may be redacted prior to delivery);

     (g) [intentionally omitted]; and

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     (h) promptly, such additional financial and other information as the Lender may from time to time reasonably request.

          6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of any Group Member, as the case may be.

          6.4 Conduct of Business and Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in full force and effect its organizational existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 7.4 and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law, except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

          6.5 Maintenance of Property; Insurance. (a) Keep all Property and systems useful and necessary in its business in good working order and condition, ordinary wear and tear excepted and (b) maintain with financially sound and reputable insurance companies insurance on all its Property in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business.

          6.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) permit representatives of any ASOT Lender to visit and inspect any of its properties during normal business hours and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired (but no more than one visit per any 12-month period shall be permitted (except upon the occurrence and during the continuance of an Event of Default)) and to discuss the business, operations, properties and financial and other condition of the Group Members with officers and employees of the Group Members and with its independent certified public accountants; provided, however, that (a) unless an Event of Default has occurred and is continuing, the Group Members shall only be required to pay the expenses of one such inspection of all of the Group Members’ books and records during any fiscal year, (b) unless an Event of Default has occurred and is continuing, the Lender shall cooperate so that such visit does not materially disrupt the normal operations of such Group Member, and (c) the Lender shall conduct each such inspection in compliance with all reasonable safety and security requirements of such Group Member.

          6.7 Notices. Promptly give notice to the Lender of:

          (a) the occurrence of any Default or Event of Default;

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     (b) any (i) default or event of default under any Contractual Obligation of any Group Member or (ii) litigation, investigation or proceeding which may exist at any time between any Group Member and any Governmental Authority, that in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect;

     (c) any litigation or proceeding affecting any Group Member (i) in which the amount involved is $50,000,000 or more and not covered by insurance, (ii) in which material injunctive or similar relief is sought or (iii) which relates to any Loan Document;

     (d) the following events, as soon as possible and in any event within 30 days after the Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;

     (e) as soon as possible and in any event within 30 days of obtaining knowledge thereof: (i) any development, event, or condition that, individually or in the aggregate with other developments, events or conditions, could reasonably be expected to result in the payment by the Group Members, in the aggregate, of a Material Environmental Amount; and (ii) any notice that any governmental authority may deny any application for an Environmental Permit sought by, or revoke or refuse to renew any Environmental Permit held by, any Group Member;

     (f) [intentionally omitted]; and

     (g) any development or event that has had or could reasonably be expected to have a Material Adverse Effect.

          Each notice pursuant to this Section 6.7 shall be accompanied by a statement of the Borrower, signed on behalf of the Borrower by a Responsible Officer, setting forth details of the occurrence referred to therein and stating what action the relevant Group Member proposes to take with respect thereto.

          6.8 Environmental Laws. (a) Comply in all material respects with, and ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws, and obtain and comply in all material respects with and maintain, and ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws.

          (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws.

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          (c) If any ESA or update delivered pursuant to Section 5.1(m) identifies a Recognized Environmental Condition (“REC”), as defined under ASTM guidelines, the Borrower shall, within six months of the delivery of such ESA or update to the Lender and the ASOT Administrative Agent, conduct such follow up testing, provide such reports, and take such other actions as required or approved by the applicable Governmental Authority to the Lender and the ASOT Administrative Agent to mitigate such REC.

          6.9 [Intentionally Omitted].

          6.10 Additional Collateral, etc. (a) With respect to any Property acquired after the Closing Date by any Group Member (other than (x) any real property or any Property described in paragraph (c) of this Section 6.10, (y) any Property subject to a Lien expressly permitted by Section 7.3 and (z) Property acquired by an Excluded Foreign Subsidiary) as to which the Lender does not have a perfected Lien, promptly (i) execute and deliver to the Lender such amendments to the Guarantee and Collateral Agreement or such other documents as the Lender or the ASOT Administrative Agent deems necessary to grant to the Lender a security interest in such Property and (ii) take all actions necessary to grant to the Lender a perfected first priority security interest in such Property, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Lender or the ASOT Administrative Agent.

          (b) With respect to (i) any fee interest in any real property having an appraised value (together with improvements thereof) of at least $5,000,000 acquired after the Closing Date by any Group Member (other than any such real property owned by an Excluded Foreign Subsidiary or subject to a Lien expressly permitted by Section 7.3), or (ii) subject to the related Loan Party obtaining the required landlord consent (provided that each Loan Party shall use commercially reasonable efforts to obtain such consent), any leasehold interest in real property having an aggregate appraised value of $5,000,000 acquired or leased (including any leasehold property interest owned by any new Subsidiary acquired after the Closing Date) in one or a series of transactions after the Closing Date by any Group Member, promptly (and in any event no later than 60 days after the acquisition thereof) (A) execute and deliver a first priority Mortgage in favor of the Lender, covering such real property, (B) if requested by the Lender or the ASOT Administrative Agent, provide the ASOT Administrative Agent with (x) title and extended coverage insurance covering such real property in an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Lender or the ASOT Administrative Agent) as well as a current ALTA survey thereof, together with a surveyor’s certificate and (y) any consents or estoppels reasonably deemed necessary by the Lender or the ASOT Administrative Agent in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the ASOT Administrative Agent and (C) if reasonably requested by the Lender or the ASOT Administrative Agent, deliver to the ASOT Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the ASOT Administrative Agent.

          (c) With respect to any new Subsidiary (other than an Excluded Foreign Subsidiary) created or acquired after the Closing Date (which, for the purposes of this paragraph,

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shall include any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), by any Group Member, promptly (i) execute and deliver to the Lender such amendments to the Guarantee and Collateral Agreement as the ASOT Administrative Agent deems necessary to grant to the Lender a perfected first priority security interest in the Capital Stock of such new Subsidiary that is owned by any Group Member, (ii) deliver to the Lender the certificates representing such Capital Stock (if any), together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such Group Member, as the case may be, (iii) cause such new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and (B) to take such actions necessary to grant to the Lender a perfected first priority security interest in the Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Lender or the ASOT Administrative Agent, and (iv) if reasonably requested by the ASOT Administrative Agent, deliver to the ASOT Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the ASOT Administrative Agent.

          (d) With respect to any new Excluded Foreign Subsidiary created or acquired after the Closing Date by any Group Member (other than any Excluded Foreign Subsidiaries), promptly (i) execute and deliver to the Lender such amendments to the Guarantee and Collateral Agreement or such other documents as the Lender or the ASOT Administrative Agent deems necessary in order to grant to the Lender a perfected first priority security interest in the Capital Stock of such new Subsidiary that is owned by any Group Member (other than any Excluded Foreign Subsidiaries), (provided that in no event shall more than 65% of the total outstanding Capital Stock of any such new Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver to the Lender the certificates (if any) representing such Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such Group Member, as the case may be, and take such other action as may be necessary or, in the opinion of the Lender or the ASOT Administrative Agent, desirable to perfect the Lien of the Lender thereon, and (iii) if reasonably requested by the Lender or the ASOT Administrative Agent, deliver to the ASOT Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the ASOT Administrative Agent.

          6.11 Further Assurances. From time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take such actions, as the Lender or the ASOT Administrative Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of more fully perfecting or renewing the rights of the Lender with respect to the Collateral (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or assets hereafter acquired by any Group Member which may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the Lender of any power, right, privilege or remedy pursuant to this Agreement or the other Loan Documents which requires any consent, approval, recording, qualification or authorization of any Governmental Authority, the Borrower will execute and deliver, or will cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the

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ASOT Administrative Agent or the Lender may be required to obtain from any Group Member for such governmental consent, approval, recording, qualification or authorization.

          6.12 Post-Closing Covenants. On or prior to the date that is 60 Business Days after the Closing Date, the Borrower shall deliver to the Lender:

     (a) (i) certificates representing the Capital Stock of any Person constituting Collateral, to the extent that the organizational documents of such Person provides that the equity interests therein shall be certificated, and (ii) such other documents required in connection therewith pursuant to Section 5.1(p); and

     (b) an agreement relating to the payment of the Administration Fees by the Combined Group Members, including turnover provisions, duly executed and delivered by an authorized officer of each of the Funds, in form and substance reasonably satisfactory to the ASOT Administrative Agent.

          6.13 [Intentionally Omitted].

          6.14 [Intentionally Omitted].

          6.15 [Intentionally Omitted].

          6.16 [Intentionally Omitted].

          6.17 Additional Development Properties. In the event that any Real Property that is not a Completed Property (each, an “Additional Development Property”) is acquired by the Group Members after the Closing Date, the Borrower shall cause (i) such Additional Development Property to be acquired by a Subsidiary other than the Development Subsidiary-A and its Subsidiaries, (ii) any Group Member to comply with the terms of Section 6.10, to the extent required and (iii) Schedule 1.1B to be updated to reflect such acquisition.

SECTION 7. NEGATIVE COVENANTS

          The Borrower hereby agrees that, so long as the Revolving Credit Commitment remains in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to the Lender, the Borrower shall not and shall not permit any of its Subsidiaries to, directly or indirectly:

          7.1 [Intentionally Omitted].

          7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

          (a) Indebtedness of any Loan Party pursuant to any Loan Document;

          (b) Indebtedness of the Borrower to any of its Subsidiaries and of any Wholly Owned Subsidiary of the Borrower to the Borrower or any other Subsidiary of the Borrower;

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          (c) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate principal amount not to exceed $15,000,000 at any one time outstanding minus the aggregate outstanding principal amount of Indebtedness of the Affiliate Borrowers and their Subsidiaries permitted by Section 7.2(c) of the applicable Affiliate Borrower Credit Agreements;

          (d) Indebtedness of the Subsidiaries of the Borrower outstanding on the date hereof and listed on Schedule 7.2(d) and any refinancings, refundings, renewals or extensions thereof (without any increase in the principal amount thereof or any shortening of the maturity of any principal amount thereof);

          (e) Guarantee Obligations made in the ordinary course of business by any Subsidiaries of the Borrower of obligations of the Borrower or any of its Wholly Owned Subsidiaries;

          (f) [intentionally omitted];

          (g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, or in respect of netting services, overdraft protections or otherwise in connection with deposit accounts;

          (h) Indebtedness arising under any Capital Stock purchase, repurchase or redemption obligations which may arise pursuant to joint venture agreements in effect on the Closing Date;

          (i) Indebtedness (other than Recourse Indebtedness) assumed by the Subsidiaries of the Borrower (other than Development Subsidiary-A) in connection with any acquisition permitted by Section 7.8(h); provided that, such Indebtedness existed at the time of such acquisition and was not created in connection therewith or in contemplation thereof, and provided, further that, (i) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, after giving effect to such additional Indebtedness, no Event of Default shall exist and (ii) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such additional Indebtedness, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement (other than Sections 7.1(a) and 7.1(c) of the ASOT Credit Agreement if such Indebtedness is assumed during a Cure Period and the related acquisition was contractually committed to prior to the related Test Date) and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Indebtedness;

          (j) guarantees (including bonds), performance bonds and indemnification obligations incurred in the ordinary course of business of obligations of the Borrower and its Subsidiaries in favor of suppliers, customers, contractors, lessees, tenants, and

50

mechanics of the Borrower or any Subsidiary and any other such obligations, in each case entered into in the ordinary course of business, which are in an outstanding amount not exceeding $50,000,000 individually or $150,000,000 in the aggregate outstanding at any time minus, in each case, the aggregate outstanding principal amount of such Indebtedness of the Affiliate Borrowers and their Subsidiaries permitted by Section 7.2(j) of the applicable Affiliate Borrower Credit Agreements;

          (k) Indebtedness of any Joint Venture, directly or indirectly owned by the Borrower to the Borrower or any Subsidiary to the extent permitted by Section 7.8(g);

          (l) Indebtedness in respect of the Non-Recourse Subsidiary Borrowers that is secured by either (i) Real Property acquired by the Borrower or any of its Subsidiaries after the Closing Date and any related Property permitted by Section 7.3(r) or (ii) the Capital Stock of any Subsidiary of such Non-Recourse Subsidiary Borrower, that is also a Non-Recourse Subsidiary Borrower; provided that, with respect to any of the foregoing Indebtedness:

     (A) neither the Borrower nor any of its Subsidiaries provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or is directly or indirectly liable (as guarantor or otherwise), other than as guarantor to the extent permitted by Section 7.2(e) for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of special purpose entity covenants and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guarantee or indemnification agreements in non-recourse financing of real estate;

     (B) as to which the lenders thereunder will not have any recourse to the Capital Stock or assets of the Borrower nor any of its Subsidiaries other than the assets securing such Indebtedness, additions, accessions and improvements thereto and proceeds thereof and the Capital Stock of the Non-Recourse Subsidiary Borrower that is the borrower under such Indebtedness and, in the case of the Borrower or any of its Subsidiaries, recourse against the Borrower and its Subsidiaries for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of special purpose entity covenants and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guarantee or indemnification agreements in non-recourse financing or tax-exempt financing of real estate; and

     (C) to the extent that the lenders thereunder will have recourse to the Capital Stock of the borrower of such Indebtedness, such borrower shall be a Non-Recourse Subsidiary Borrower;

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provided, further, that, (x) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, after giving effect to such additional Indebtedness, no Event of Default shall exist and (y) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (i) containing all information and calculations necessary, and taking into consideration such additional Indebtedness, for determining pro forma compliance with the provisions of Section 7.1(b) of the ASOT Credit Agreement and (ii) certifying that no ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Indebtedness. For the avoidance of doubt, if at any time following the Closing Date the Borrower or any of its Subsidiaries acquires the remaining Capital Stock of any Joint Venture not owned by the Borrower or such Subsidiary on the Closing Date, any Real Property owned by such Joint Venture shall be included in clause (i) of this Section 7.2(l);

     (m) Construction Related Indebtedness that is not Recourse Indebtedness of any Group Member;

     (n) [intentionally omitted];

     (o) additional unsecured Indebtedness of the Borrower or any of its Subsidiaries in an aggregate principal amount (for the Borrower and all its Subsidiaries) not to exceed $50,000,000 at any one time outstanding minus the aggregate outstanding principal amount of such Indebtedness of the Affiliate Borrowers and their Subsidiaries permitted by Section 7.2(o) of the applicable Affiliate Borrower Credit Agreements;

     (p) secured Indebtedness of the Borrower under the Affiliate Revolving Notes, the proceeds of which are used by the Borrower for the purposes permitted by Section 4.16;

     (q) [intentionally omitted];

     (r) Indebtedness of the Development Subsidiary-A comprised of the Development Term Loans and the Guarantee Obligations of its Subsidiaries with respect thereto;

     (s) [intentionally omitted];

     (t) fully cash collateralized letters of credit issued for the account of the Borrower or any of its Subsidiaries, provided that, at any time the ASOT Tranche A Term Loans are outstanding or the ASOT Borrower is not in compliance with the Required Ratios, the aggregate face amount of such letters of credit at any one time outstanding shall not exceed an amount equal to $25,000,000 minus the aggregate face amount of letters of credit issued for the account of the Affiliate Borrowers or any of their Subsidiaries in accordance with Section 7.2(t) of the Affiliate Borrower Credit Agreements; and

     (u) unsecured Indebtedness (the “Unsecured Employee Cost Loans”) incurred among any of the Borrower, the Affiliate Borrower I-B Parent, the Affiliate Borrower II,

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the ASOT Borrower, Secured Note LLC and OC/SD JV Holdings LLC (each, an “Unsecured Affiliate Borrower”), as borrower, and any of the Borrower, the Affiliate Borrower I-B Parent, the Affiliate Borrower II, the ASOT Borrower, Secured Note LLC and OC/SD JV Holdings LLC (each, an “Unsecured Affiliate Lender”), as lender, solely for the purposes of funding the Unsecured Affiliate Borrowers’ obligations with respect to employee expenses to be shared by the Unsecured Affiliate Borrowers.

          7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for:

     (a) Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;

     (b) (i) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, workmen’s or other like Liens, (ii) Liens of banks related to Indebtedness permitted by Section 7.2(g) and (iii) Liens of landlords on furniture, fixtures and equipment pursuant to customary Contractual Obligations, in each case, arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings;

     (c) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

     (d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

     (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and that do not in any case materially detract from the value of the Property subject thereto or materially interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

     (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing Indebtedness permitted by Section 7.2(d) or any Liens securing any refinancings, refundings, renewals or extensions of the foregoing, provided that, no such Lien is spread to cover any additional Property after the Closing Date and that the amount of Indebtedness secured thereby is not increased;

     (g) Liens securing Indebtedness of the Borrower or any of its Subsidiaries incurred pursuant to Section 7.2(c) to finance the acquisition of fixed or capital assets, provided that, (i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber any Property other than the Property financed by such Indebtedness, (iii) the principal amount of Indebtedness secured thereby is not increased and (iv) the amount of

53

Indebtedness initially secured thereby is not more than 100% of the purchase price of such fixed or capital asset;

     (h) Liens created pursuant to the Security Documents;

     (i) any interest or title of a lessor under any lease entered into by the Borrower or any of its Subsidiaries in the ordinary course of its business and covering only the assets so leased;

     (j) Permitted Leases (including memoranda thereof), and any recordation thereof;

     (k) Liens resulting from any judgment, writ or warrant of attachment or similar process and not constituting an Event of Default;

     (l) licenses of Intellectual Property in the ordinary course of business;

     (m) Liens on property of a Person existing at the time such Person is acquired or merged with or into or consolidated with the Borrower or any of its Subsidiaries (other than the Development Subsidiary-A) to the extent permitted hereunder (and not created in anticipation or contemplation thereof) securing Indebtedness permitted by Section 7.2(i); provided that, such Liens do not extend to property not subject to such Liens at the time of acquisition (other than improvements and accessions thereon and proceeds thereof), and are no more favorable to the lienholders than such existing Liens (taken as a whole);

     (n) Liens created by sale contracts documenting unconsummated asset dispositions permitted by this Agreement; provided that, such Liens attach only to assets and proceeds thereof subject to such sales contracts;

     (o) Liens attaching to cash earnest money deposits made by the Borrower and its Subsidiaries in connection with any letter of intent or purchase agreement entered into by the Borrower or the applicable Subsidiary, provided that, such acquisition is permitted by Section 7.8;

     (p) Liens arising by operation of law or contract on insurance policies and the proceeds thereof to secure premiums thereunder;

     (q) purported Liens evidenced by the filing of precautionary Uniform Commercial Code financing statements by a lessor relating solely to operating leases of personal property entered into in the ordinary course of business;

     (r) Liens on (x) fee-owned property or real property leases of the Borrower and its Subsidiaries and any related Property (other than the Capital Stock of the Borrower and any of its Subsidiaries that is not a Non-Recourse Subsidiary Borrower) customarily granted or pledged by a borrower to its lender in connection with non-recourse financing including, without limitation, any personal property located on or related to such Property, any contracts, receivables and general intangibles related to such real property and any Hedge Agreements relating to the Indebtedness, or (y) the Capital

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Stock of any Non-Recourse Subsidiary Borrower (and, in each case, any proceeds from any of the foregoing) which Liens secure Indebtedness permitted by Sections 7.2(l) and 7.2(m); provided that, in each case, (i) such Liens shall be created substantially simultaneously with the incurrence of such Indebtedness and (ii) such Liens do not at any time encumber any Property other than the Property financed by such Indebtedness, other than, in each case, in connection with any consolidations of such Indebtedness;

     (s) [intentionally omitted];

     (t) [intentionally omitted];

     (u) Liens on cash collateral to secure letters of credit issued for the account of the Borrower and its Subsidiaries to the extent such letters of credit are permitted by Section 7.2(t);

     (v) Liens in favor of the Development Loan Administrative Agent for the benefit of the “Secured Parties” (as defined in the Development Loan Credit Agreement) securing the obligations of the Development Subsidiary-A under the Development Loan Credit Agreement; and

     (w) Liens in favor of the ASOT Borrower securing the obligations of the Borrower under the Affiliate Revolving Notes permitted by Section 7.2(p), provided that, to the extent any such Affiliate Revolving Note is secured by any of the assets of the Borrower and its Subsidiaries which assets directly or indirectly constitute Collateral (as defined in the ASOT Credit Agreement), such Lien shall be a second-priority Lien and the ASOT Borrower shall have executed and delivered an intercreditor agreement, in form and substance reasonably satisfactory to the ASOT Administrative Agent.

          7.4 Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business, except that:

     (a) any Subsidiary of the Borrower or any other Person may be merged or consolidated with or into, or, so long as such Subsidiary has nominal or no assets or liabilities, be liquidated, wound up or dissolved, or all or any part of its business, Property or assets may be conveyed, sold, leased transferred or otherwise disposed of, in one transaction or a series of transactions to, (x) any Wholly Owned Subsidiary Guarantor (provided that (i) a Wholly Owned Subsidiary Guarantor shall be the continuing or surviving corporation or (ii) simultaneously with such transaction, the continuing or surviving corporation shall become a Wholly Owned Subsidiary Guarantor and the Borrower shall comply with Section 6.10 in connection therewith) or (y) the Borrower (1) in a transaction in which the Borrower shall be the continuing or surviving corporation or (2) in a transaction in which the Borrower shall not be the continuing or surviving corporation (such surviving person, the “Successor Borrower”); provided that, (A) such transaction shall not cause the ASOT Borrower to fail to be in pro forma compliance with the covenants contained in Section 7.1 of the ASOT Credit Agreement (other than Sections 7.1(a) and 7.1(c) of the ASOT Credit Agreement if such transaction

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is consummated during a Cure Period and was contractually committed to prior to the related Test Date), (B) the Successor Borrower shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, (C) the Successor Borrower shall expressly assume all the obligations of the Borrower under this Agreement and the other Loan Documents to which the Borrower is a party pursuant to a supplement hereto or thereto in a form reasonably satisfactory to the ASOT Administrative Agent, (D) each Subsidiary Guarantor, unless it is the other party in such transaction, shall confirm that its guarantee shall apply to the Successor Borrower’s obligations under this Agreement, (E) each Subsidiary Guarantor, unless it is the other party to such transaction, shall have by a supplement to the Guarantee and Collateral Agreement confirmed that its obligations thereunder shall apply to the Successor Borrower’s obligations under this Agreement, (F) each mortgagor of the Mortgaged Property, unless it is the other party to such transaction, shall have by an amendment to or restatement of the applicable Mortgage confirmed that its obligations thereunder shall apply to the Successor Borrower’s obligations under this Agreement and/or its guarantee thereof, as applicable, (G) such transaction shall not cause a Change of Control to occur and (H) the Borrower shall have delivered to the Lender and the ASOT Administrative Agent an officer’s certificate stating that such transaction and such supplement to this Agreement or any Security Document comply with this Agreement; provided further that, if the foregoing are satisfied, the Successor Borrower will succeed to, and be substituted for, the Borrower under this Agreement; and

     (b) the Borrower or any Subsidiary of the Borrower may Dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any Subsidiary Guarantor.

          7.5 Limitation on Disposition of Property. Dispose of any of its Property (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person, except:

     (a) the Disposition of obsolete or worn out property or surplus property in the ordinary course of business;

     (b) the sale of inventory in the ordinary course of business;

     (c) Dispositions permitted by Section 7.4(b);

     (d) the sale or issuance of the Capital Stock of any Subsidiary of the Borrower to the Borrower or any Subsidiary Guarantor;

     (e) the Disposition of other assets, provided that, (x) with respect to any Disposition by Development Subsidiary-A, such Disposition is in accordance with Section 7.5(e) of the Development Loan Credit Agreement, and (y)(i) such Disposition is at fair market value, as reasonably determined by the Group Member making such Disposition, (ii) such Disposition shall not result in a Material Adverse Effect and (iii) at the time of such Disposition, (A) a certificate of a Responsible Officer of the ASOT

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Borrower shall have been delivered to the ASOT Administrative Agent, which shall (1) include a computation demonstrating pro forma compliance with the covenants contained in Section 7.1(b) of the ASOT Credit Agreement after giving effect to such Disposition and (2) certify that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such Disposition and (B) a certificate of a Responsible Officer of the Borrower shall have been delivered to the Lender, which shall include a certification that no Default or Event of Default shall have occurred and be continuing at such time or after giving effect to such Disposition;

     (f) [intentionally omitted];

     (g) Permitted Leases;

     (h) Investments permitted by Section 7.8;

     (i) asset sales pursuant to “forced-sale,” “buy-sell,” “put-call” or similar arrangements in joint venture agreements of the Joint Ventures in effect on the date hereof;

     (j) licenses of Intellectual Property in the ordinary course of business; and

     (k) Dispositions, by means of trade-in, of equipment used in the ordinary course of business, so long as such equipment is replaced or substituted, substantially concurrently, by like-equipment.

          7.6 Limitation on Restricted Payments. Declare or pay any dividend on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Group Member, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of any Group Member, or enter into any derivatives or other transaction with any financial institution, commodities or stock exchange or clearinghouse (a “Derivatives Counterparty”) obligating any Group Member to make payments to such Derivatives Counterparty as a result of any change in market value of any such Capital Stock (collectively, “Restricted Payments”), except that:

     (a) any Subsidiary may make Restricted Payments to the Borrower or any Subsidiary Guarantor;

     (b) [intentionally omitted];

     (c) the Group Members may make Restricted Payments directly or indirectly to any ASOT Parent/Affiliate Guarantor, if on the date of such Restricted Payment, the ASOT Tranche A Term Loans have been paid in full and the ASOT Borrower is in compliance with the Required Ratios; provided that, on the date of any such Restricted Payment, (i) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, immediately prior to and after giving effect to such Restricted Payment, no Default or Event of Default shall have occurred and be continuing, (ii) the ASOT

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Borrower shall deliver to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Restricted Payment and (iii) Restricted Payments may not be made pursuant to this Section 7.6(c) during any Cure Period;

     (d) any Group Member may make Restricted Payments to its direct or indirect owners to allow such direct or indirect owners to pay any taxes which are due and payable by Guarantor 1, Guarantor 2, the ASOT Additional Parent Guarantors, Holdings I Corp and the Borrower (or the first taxpayers that are a direct or indirect owner of Guarantor 1, Guarantor 2 or any ASOT Additional Parent Guarantor, in each case, solely to the extent of net income attributable to the Group Members), including, without limitation, in connection with any Disposition of Property permitted by Section 7.5 (assuming that each such owner is taxable at the highest marginal tax rate applicable to corporations resident in New York City (taking into account the deductibility of state and local taxes)); provided that, on the date of any such Restricted Payment, (x) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, immediately prior to and after giving effect to such Restricted Payment, no Default or Event of Default shall have occurred and be continuing and (y) the ASOT Borrower shall deliver to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment, for determining pro forma compliance with the provisions of Section 7.1(b) of the ASOT Credit Agreement and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Restricted Payment;

     (e) [intentionally omitted];

     (f) [intentionally omitted];

     (g) at any time other than during a Cure Period, (x) any Group Member and its Subsidiaries may make Restricted Payments to pay the Administration Fees or (y) the Borrower may make loans to the Financial Reporting Parties under the Secured Guarantor Notes; provided that, (A) on any date, the aggregate amount of Restricted Payments and the outstanding principal amount of loans made pursuant to this Section 7.6(g) shall not at any time exceed the aggregate amount of Administration Fees allocable to the Group Members during the period beginning on the Closing Date and ending on the date of determination and (B) the Secured Guarantor Notes are pledged to the Lender as Collateral, and, provided further, that, on the date of any such Restricted Payment or loan, (i) the Borrower shall deliver to the ASOT Administrative Agent a pro forma Compliance Certificate certifying that, immediately prior to and after giving effect to such Restricted Payment or loan, as applicable, no Default or Event of Default shall have occurred and be continuing and (ii) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all

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information and calculations necessary, and taking into consideration such Restricted Payment or loan, as applicable, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Restricted Payment or loan, as applicable; and

     (h) a Group Member may make Restricted Payments with Distributable Affiliate Proceeds to the extent required under the ASOT Credit Agreement.

          7.7 Limitation on Maintenance Capital Expenditures and Renovation Capital Expenditures. Make or commit to make any Maintenance Capital Expenditures or Renovation Capital Expenditures, except:

     (a) Maintenance Capital Expenditures of the Group Members made in the ordinary course of business in any fiscal year in an aggregate amount equal to the sum of all outstanding units owned or leased by the Group Members available at the beginning of such fiscal year multiplied by $950 (adjusted, in the case of units owned or leased by any Joint Venture, to reflect the Ownership Percentage of the Group Members in such Joint Venture); provided that, (i) up to 50% of any such amount referred to in this clause (a), if not so expended in the fiscal year for which it is permitted, may be carried over for expenditure in the next succeeding fiscal year and (ii) Maintenance Capital Expenditures made pursuant to this clause (a) during any fiscal year shall be deemed made, first, in respect of amounts carried over from the prior fiscal year pursuant to subclause (i) above and second, in respect of amounts permitted for such fiscal year as provided above;

     (b) Renovation Capital Expenditures of the Group Members made in the ordinary course of business in an amount not to exceed an aggregate amount equal to $180,000,000 minus the aggregate amount of Renovation Capital Expenditures of the Affiliate Borrowers made pursuant to Section 7.7(b) of the applicable Affiliate Borrower Credit Agreement; provided that, until the ASOT Tranche A Term Loans have been repaid in full and the ASOT Borrower is in compliance with the Required Ratios, the aggregate amount of Renovation Capital Expenditures made by the Group Members with respect to Joint Ventures that are not CapEx Controlled pursuant to this Section 7.7(b) shall not exceed an amount equal to $30,000,000 during the term of this Agreement minus the aggregate amount of Renovation Capital Expenditures of the Affiliate Borrowers and their Subsidiaries made with respect to Joint Ventures that are not CapEx Controlled pursuant to Section 7.7(b) of the applicable Affiliate Borrower Credit Agreement. For the avoidance of doubt, the amount of Renovation Capital Expenditures of any Group Member made with respect to any Joint Venture shall be deemed to be the amount actually paid by such Group Member, including, without limitation, amounts attributed to such Group Member from any distributions of such Joint Venture; and

     (c) Renovation Capital Expenditures of the Group Members for Real Property acquired after the Closing Date in accordance with Section 7.8(h), provided that, the Borrower has delivered to the Lender a written notice generally identifying such

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Renovation Capital Expenditures and the anticipated amount thereof promptly after such acquisition.

          7.8 Limitation on Investments. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or any assets constituting an ongoing business from, or make any other investment in, any other Person (all of the foregoing, “Investments”), except:

     (a) extensions of trade credit in the ordinary course of business;

     (b) Investments in Cash Equivalents;

     (c) Investments arising in connection with the incurrence of Indebtedness permitted by Sections 7.2(b), 7.2(e), 7.2(j) and 7.2(u);

     (d) [intentionally omitted];

     (e) [intentionally omitted];

     (f) [intentionally omitted];

     (g) (i) Investments (other than those relating to the incurrence of Indebtedness permitted by Section 7.8(c)) by any Group Member in the Borrower or any Person that is a Wholly Owned Subsidiary and (ii) Investments consisting of loans to a Joint Venture owned by the Borrower and its Subsidiaries as of the Closing Date, to the extent that (x) such loans are required by the related joint venture agreement in effect on the Closing Date and (y) the aggregate amount of such loans to such Joint Venture do not exceed an amount equal to the aggregate amount of Indebtedness of such Joint Venture to its shareholders or members multiplied by the Ownership Percentage of the Group Members in such Joint Venture;

     (h) Investments (whether made directly or indirectly through the acquisition of a Person owning such assets) made by the Borrower and its Subsidiaries (other than Development Subsidiary-A) to acquire Real Property, provided that, (x) such Investment shall not result in a Material Adverse Effect, (y) at the time of such Investment, (i) a certificate of a Responsible Officer of the Borrower shall have been delivered to the Lender, certifying that no Default or Event of Default shall have occurred and be continuing at such time or after giving effect to such Investment and (ii) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement (other than Sections 7.1(a) and 7.1(c) of the ASOT Credit Agreement if such Investment is consummated during a Cure Period and is an acquisition that was contractually committed to prior to the related Test Date) and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such Investment, and (z) the terms and conditions set forth in Section 6.10 are satisfied;

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     (i) Investments by the Borrower and its Subsidiaries in any securities received by the Borrower or such Subsidiary in the ordinary course of business in satisfaction or partial satisfaction of indebtedness from financially troubled account debtors;

     (j) Investments received by the Borrower and its Subsidiaries in connection with the bankruptcy or reorganization of suppliers and lessees and in settlement of delinquent obligations of, and other disputes with, lessees and suppliers arising in the ordinary course of business;

     (k) Investments by any Group Member in any Joint Venture owned by the Borrower and its Subsidiaries as of the Closing Date, including any Investment required in connection with (i) the exercise by any partner or member in such Joint Venture of any “forced-sale,” “buy-sell,” “put-call” or similar arrangements in the joint venture agreements for such Joint Venture, or (ii) the purchase of the partnership or membership interest of any other partner or member in such Joint Venture, provided that, (x) such Investments are required by the related joint venture agreement in effect on the Closing Date and (y) the aggregate amount of such Investments made by the Group Members in such Joint Venture do not exceed an amount equal to the aggregate amount of investments in such Joint Venture made by its shareholders or members multiplied by the Ownership Percentage of the Group Members in such Joint Venture, provided, further, that, any such Investment in the form of a loan or advance shall be evidenced by a note and pledged as Collateral pursuant to the Security Documents;

     (l) Investments by the Borrower and its Subsidiaries in Joint Ventures made after the Closing Date not otherwise permitted by Section 7.8 in an aggregate amount not exceeding on any date an amount equal to Applicable JV Investment Percentage in effect on such date of Gross Asset Value as at the last day of the fiscal quarter most recently ended for which financial statements are available less the aggregate amount of Investments in Joint Ventures made by the Affiliate Borrower Group Members after the Closing Date as of such date, provided that, (i) the amount of such Investment in the Capital Stock of any such Joint Venture shall be net of the amount of any Indebtedness incurred by such Joint Venture that is allocable to the Borrower and its Subsidiaries on such date and (ii) such Investment shall be represented by a certificate representing the Capital Stock of such Joint Venture owned by the Borrower and its Subsidiaries, as applicable, pledged by the Loan Parties to the Lender as Collateral;

     (m) [intentionally omitted];

     (n) Investments by the Borrower and its Subsidiaries in (i) Joint Ventures existing on the Closing Date and (ii) Joint Ventures created in connection with any Disposition by any Group Member that owns an Owned Property to the extent such Disposition is permitted by Section 7.5; and

     (o) loans made by the Borrower to the Financial Reporting Parties under the Secured Guarantor Notes in accordance with Section 7.6(g).

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          7.9 [Intentionally Omitted].

          7.10 Limitation on Transactions with Affiliates. Enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than any Combined Group Member) unless such transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course of business of the Group Member entering into such transaction and (c) upon fair and reasonable terms no less favorable to the Group Member entering into such transaction than it would obtain in a comparable arm’s-length transaction with a Person that is not an Affiliate, other than (i) the Development Asset Acquisition and the Loan Documents, (ii) the payment of the Administration Fees pursuant to the Fund Agreements, as in effect on the Closing Date or the date of formation, as applicable, to the extent any Restricted Payment was permitted by Section 7.6(g), (iii) the loans made by the Borrower to the Financial Reporting Parties pursuant to the Secured Guarantor Notes, (iv) [intentionally omitted], (v) the Unsecured Employee Cost Loans made by the Unsecured Affiliate Lenders to the Unsecured Affiliate Borrowers, (vi) [intentionally omitted], (vii) [intentionally omitted] and (viii) the Administration Fee Agreement.

          7.11 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by any Group Member of real or personal property which has been or is to be sold or transferred by such Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Group Member.

          7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day other than December 31 or change the Borrower’s method of determining fiscal quarters.

          7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Group Member to create, incur, assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure the Obligations or, in the case of any guarantor, its obligations under the Guarantee and Collateral Agreement, other than (a) this Agreement and the other Loan Documents, (b) [intentionally omitted], (c) any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby or Indebtedness permitted by Sections 7.2(l), 7.2(m) and 7.2(r) (in each case, any prohibition or limitation shall only be effective against the assets financed thereby) and (d) any prohibition or limitation that (i) consists of customary restrictions and conditions contained in any agreement relating to the sale of any Property permitted under Section 7.5 pending the consummation of such sale, provided that, such restriction or condition shall only be effective against such Property, (ii) exists in any agreement in effect at the time such Subsidiary becomes a Subsidiary of the Borrower, provided that (A) such agreement was not entered into in contemplation of such Person becoming a Subsidiary and (B) such prohibition or limitation shall only be effective against such Subsidiary or (iii) is imposed by any amendments or refinancings that are otherwise permitted by the Loan Documents of the contracts, instruments or obligations referred to in clause (d)(ii), provided that (A) such amendments and refinancings are no more materially restrictive (taken as a whole) with respect to such prohibitions and limitations than those in effect prior to such amendment or

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refinancing and (B) the negative pledge clause(s) in such amendments or refinancings do not extend to Property other than such Property covered in the agreements permitted in clause (d)(ii).

          7.14 Limitation on Restrictions on Subsidiary Distributions. Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (b) make Investments in the Borrower or any other Subsidiary or (c) transfer any of its assets to the Borrower or any other Subsidiary, except for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Loan Documents and (ii) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Subsidiary.

          7.15 Limitation on Lines of Business. Enter into any material line of business, either directly or through any Subsidiary, fundamentally or substantively different from those businesses in which the Borrower and its Subsidiaries are engaged on the date of this Agreement (after giving effect to the Holdings Merger) or that are reasonably related or ancillary thereto or that represents a reasonable extension or enhancement thereof.

          7.16 [Intentionally Omitted].

          7.17 Limitation on Amendments to Other Documents. (a) Amend, supplement or otherwise modify the organizational document of any Group Member in any manner that would adversely affect the interests of the Lender, (b) amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of the Administration Fee Agreement in any manner that would adversely affect the application thereto of the subordination provisions set forth therein or in any subordination agreement related thereto, or (c) otherwise amend, supplement or otherwise modify the terms and conditions of the Administration Fee Agreement or any note related thereto, except to the extent that any such amendment, supplement or modification could not reasonably be expected to have a Material Adverse Effect.

          7.18 [Intentionally Omitted].

          7.19 [Intentionally Omitted].

          7.20 Limitation on Hedge Agreements. Enter into any Hedge Agreement other than Hedge Agreements entered into in the ordinary course of business and not for speculative purposes, to protect against changes in interest rates or foreign exchange rates.

SECTION 8. EVENTS OF DEFAULT

          If any of the following events shall occur and be continuing:

     (a) the Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof; or the Borrower shall fail to

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pay any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan Document within five days after any such interest or other amount becomes due in accordance with the terms hereof or thereof; or

     (b) any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made or furnished; or

     (c) (i) any Loan Party shall default in the observance or performance of any agreement contained in clause (i) or (ii) of Section 6.4(a) (with respect to the Borrower only), Section 6.7(a), Section 7, or in Section 5 of the Guarantee and Collateral Agreement, (ii) either the Affiliate Borrower I-B or the Affiliate Borrower II defaults on any of their respective obligations under Section 2.12 of the applicable Affiliate Borrower Credit Agreement or (iii) an “Event of Default” under and as defined in any Mortgage shall have occurred and be continuing; or

     (d) any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after a Responsible Officer of any Loan Party has knowledge or should have had knowledge of such default; or

     (e) any Combined Group Member shall (i) default in making any payment of any principal of any Indebtedness (including, without limitation, any Indebtedness under the ASOT Credit Agreement or any Guarantee Obligation, but excluding the Loans, Reimbursement Obligations and, so long as no Event of Default has occurred and is continuing under Section 8(a) of the ASOT Credit Agreement, the Indebtedness under any Affiliate Borrower Loan Document or any Affiliate Revolving Note) on the scheduled or original due date with respect thereto, (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created (excluding, so long as no Event of Default has occurred and is continuing under Section 8(a) of the ASOT Credit Agreement, the Indebtedness under any Affiliate Borrower Loan Document or any Affiliate Revolving Note), or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; provided that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (e)

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shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $50,000,000; or

     (f) (i) any Combined Group Member shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation), dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Combined Group Member shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Combined Group Member any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Combined Group Member any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Combined Group Member shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Combined Group Member shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

     (g) (i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the ASOT Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the ASOT Required Lenders shall be likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could, in the sole judgment of the ASOT Required Lenders, reasonably be expected to have a Material Adverse Effect; or

     (h) one or more judgments or decrees shall be entered against any Combined Group Member involving for the Combined Group Members taken as a whole a liability

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(not paid or fully covered by insurance as to which the relevant insurance company has acknowledged coverage) of $50,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or

     (i) any of the Security Documents shall cease, for any reason (other than by reason of the express release thereof pursuant to Section 10.15), to be in full force and effect, or any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby other than as a result of any termination or release in accordance with the terms of this Agreement; or

     (j) the guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason (other than by reason of the express release thereof pursuant to Section 10.15), to be in full force and effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or

     (k) any Change of Control shall occur;

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Borrower, automatically the Revolving Credit Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) the Lender may, by notice to the Borrower declare the Revolving Credit Commitment to be terminated forthwith, whereupon the Revolving Credit Commitment shall immediately terminate; and (ii) the Lender may, by notice to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable. In the case of all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the ASOT Administrative Agent an amount equal to the aggregate then undrawn and unexpired face amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the ASOT Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the ASOT Borrower under the ASOT Credit Agreement and under the other ASOT Loan Documents. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the ASOT Borrower under the ASOT Credit Agreement and under the other ASOT Loan Documents shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto).

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SECTION 9. [INTENTIONALLY OMITTED]

SECTION 10. MISCELLANEOUS

          10.1 Amendments and Waivers. Neither this Agreement or any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 10.1. Subject to Section 7.18 of the ASOT Credit Agreement, the Lender and each Loan Party party to the relevant Loan Document may from time to time (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents (including amendments and restatements hereof or thereof) for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lender or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as may be specified in the instrument of waiver, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences.

          Any such waiver and any such amendment, supplement or modification shall be binding upon the Loan Parties, the Lender and all future holders of the Loans. In the case of any waiver, the Loan Parties and the Lender shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Any such waiver, amendment, supplement or modification shall be effected by a written instrument signed by the parties required to sign pursuant to the foregoing provisions of this Section; provided that, delivery of an executed signature page of any such instrument by facsimile transmission shall be effective as delivery of a manually executed counterpart thereof.

          10.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed in the case of the Borrower and the Lender, as follows:

The Borrower:	c/o Tishman Speyer 45 Rockefeller Plaza New York, New York 10111 Attention: Chief Financial Officer Telecopy: (212) 319-1745 Telephone: (212) 715-0300
with copies to:	Tishman Speyer 45 Rockefeller Plaza New York, New York 10111 Attention: General Counsel Telecopy: (212) 319-1745 Telephone: (212) 715-0300

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and	Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: Philip Mindlin Telecopy: (212) 403-2217 Telephone: (212) 403-1217
The Lender:	c/o Tishman Speyer 45 Rockefeller Plaza New York, New York 10111 Attention: Chief Financial Officer Telecopy: (212) 319-1745 Telephone: (212) 715-0300
with copies to:	Tishman Speyer 45 Rockefeller Plaza New York, New York 10111 Attention: General Counsel Telecopy: (212) 319-1745 Telephone: (212) 715-0300
and	Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: Philip Mindlin Telecopy: (212) 403-2217 Telephone: (212) 403-1217

provided that any notice, request or demand to or upon the Lender shall not be effective until received.

          Notices and other communications to the Lender hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Lender; provided that, the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Lender. The Lender or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

          10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

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          10.4 Survival of Representations and Warranties. All representations and warranties made herein, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.

          10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the Lender for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements and other charges of counsel to the Lender, (b) to pay or reimburse the Lender for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any other documents prepared in connection herewith or therewith, including, without limitation, the fees and disbursements of counsel to the Lender), (c) to pay, indemnify, or reimburse the Lender for, and hold the Lender harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify or reimburse the Lender, its affiliates, and its officers, directors, trustees, employees, advisors, agents and controlling persons (each, an “Indemnitee”) for, and hold each Indemnitee harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by an Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto or thereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds thereof (including any refusal by any Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Materials of Environmental Concern on or from any property owned, occupied or operated by the Borrower or any of its Subsidiaries, or any environmental liability related in any way to the Borrower or any of its Subsidiaries or any or their respective properties, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by any third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto (all the foregoing in this clause (d), collectively, the “Indemnified Liabilities”); provided that, the Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee. No Indemnitee shall be liable for any damages arising from the use by unauthorized persons of information or other materials sent through electronic, telecommunications or other information transmission

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systems that are intercepted by such persons or for any special, indirect, consequential or punitive damages in connection with the Loans. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries so to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section shall be payable not later than 30 days after written demand therefor. Statements payable by the Borrower pursuant to this Section shall be submitted to the Borrower, at the address of the Borrower set forth in Section 10.2, or to such other Person or address as may be hereafter designated by the Borrower in a notice to the ASOT Administrative Agent as set forth in the ASOT Credit Agreement. The agreements in this Section shall survive repayment of the Loans and all other amounts payable hereunder.

          10.6 Successors and Assigns; Participations and Assignments. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender, all future holders of the Loans and their respective successors and assigns permitted hereby, except that neither the Borrower nor the Lender may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the requisite ASOT Lenders pursuant to Section 7.18 of the ASOT Credit Agreement, provided, however, that it is understood and agreed that a security interest in this Agreement and the other Loan Documents shall be granted to the ASOT Administrative Agent for the benefit of the ASOT Secured Parties.

          10.7 [Intentionally Omitted].

          10.8 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower, the Lender and the ASOT Administrative Agent.

          10.9 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

          10.10 Integration. This Agreement and the other Loan Documents represent the entire agreement of the Borrower and the Lender with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

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          10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          10.12 Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:

     (a) submits for itself and its Property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

     (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

     (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the relevant Person at its address set forth in Section 10.2 or at such other address of which each party hereto shall have been notified pursuant thereto;

     (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

     (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

          10.13 Acknowledgments. The Borrower hereby acknowledges that:

     (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

     (b) the Lender does not have any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Lender, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

     (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Borrower and the Lender.

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          10.14 Confidentiality. The Lender agrees to keep confidential all non-public information provided to it by any Loan Party pursuant to this Agreement that is designated by such Loan Party as confidential; provided that nothing herein shall prevent the Lender from disclosing any such information (a) to the parties to the ASOT Credit Agreement or any affiliate of any thereof, (b) to any prospective purchaser of Revolving Credit Commitment and/or Loans that agrees to comply with the provisions of this Section or substantially equivalent provisions, (c) to any of its employees, directors, agents, attorneys, accountants and other professional advisors, (d) [intentionally omitted], (e) upon the demand of any Governmental Authority having jurisdiction over it, (f) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (g) in connection with any litigation or similar proceeding, (h) that has been publicly disclosed other than in breach of this Section, (i) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about the Lender’s investment portfolio in connection with ratings issued with respect to the Lender or (j) in connection with the exercise of any remedy hereunder or under any other Loan Document.

          10.15 Release of Collateral and Guarantee Obligations. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, upon request of the Borrower in connection with any Disposition of Property permitted by the Loan Documents or the incurrence of Indebtedness permitted by Section 7.2(l) and 7.2(m), the Lender shall take such actions as shall be required to release its security interest in any Collateral being Disposed of in such Disposition or to be subject to a Lien permitted by Section 7.3(r), and to release any guarantee obligations under any Loan Document of any Person being Disposed of in such Disposition or incurrence of such Indebtedness, to the extent necessary to permit consummation of such Disposition or incurrence of such Indebtedness in accordance with the Loan Documents. The Lender shall in lieu of taking actions to release its security interest in accordance with the foregoing sentence, take such actions as shall be reasonably requested by the Borrower to assign such security interest to the related purchaser or lender in connection with any permitted Disposition or incurrence of Indebtedness.

          (b) Notwithstanding anything to the contrary contained herein or any other Loan Document, when all Obligations have been paid in full, the Revolving Credit Commitment has been terminated or expired and no Letter of Credit shall be outstanding (unless fully cash collateralized), upon request of the Borrower, the Lender shall take such actions as shall be required to release its security interest in all Collateral, and to release all guarantee obligations under any Loan Document. Any such release of guarantee obligations shall be deemed subject to the provision that such guarantee obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made.

          10.16 [Intentionally Omitted].

          10.17 [Intentionally Omitted].

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          10.18 WAIVERS OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

          10.19 Exculpation. Notwithstanding anything appearing to the contrary in this Agreement, or in the Guarantee and Collateral Agreement or any of the other Loan Documents, the Lender shall not be entitled to enforce the liability and obligation of the Borrower or any Subsidiary Guarantor to pay, perform and observe the obligations contained in this Agreement by any action or proceeding against any member, shareholder, partner, manager, director, officer, agent, affiliate, beneficiary, trustee or employee of the Borrower or any Subsidiary Guarantor (or any direct or indirect member, shareholder, partner or other owner of any such member, shareholder, partner, manager, director, officer, agent, affiliate or employee of the Borrower or any Subsidiary Guarantor, or any director, officer, employee, agent, manager or trustee of any of the foregoing); provided that, nothing in this Section 10.19 shall have the effect of exculpating from liability any entity that is itself the Borrower or a Subsidiary Guarantor under this Agreement.

[NO FURTHER TEXT ON THIS PAGE]

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS I (BORROWER-A), L.P.
By:	Tishman Speyer Archstone-Smith Multifamily
	Holdings I (Borrower-A) GP, L.L.C., its general partner
By:	/s/ George Hatzmann
	Name:	George Hatzmann
	Title:	Authorized Signatory
ARCHSTONE-SMITH OPERATING TRUST,      as Lender
By:	/s/ George Hatzmann
	Name:	George Hatzmann
	Title:	Authorized Signatory

[Signature Page to Credit Agreement (Affiliate Borrower I-A)]

EX-10.16

Exhibit 10.16

EXECUTION VERSION

$750,000,000
CREDIT AGREEMENT
(PARENT BORROWER I-B)

among

TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDING I
(PARENT BORROWER-B), L.P.,
as Borrower,

and

ARCHSTONE-SMITH OPERATING TRUST,
as Lender

Dated as of October 5, 2007

TABLE OF CONTENTS

		Page
SECTION 1 DEFINITIONS			1
1.1	Defined Terms		1
1.2	Other Definitional Provisions		21
SECTION 2 AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENT			21
2.1	[Intentionally Omitted]		21
2.2	[Intentionally Omitted]		21
2.3	[Intentionally Omitted]		21
2.4	Revolving Credit Commitment		21
2.5	Procedure for Revolving Credit Borrowing		22
2.6	[Intentionally Omitted]		22
2.7	[Intentionally Omitted]		22
2.8	Repayment of Loans; Evidence of Debt		22
2.9	Commitment Fees, etc		23
2.10	Termination or Reduction of Revolving Credit Commitment		23
2.11	Optional Prepayments		23
2.12	[Intentionally Omitted]		23
2.13	Conversion and Continuation Options		23
2.14	Minimum Amounts and Maximum Number of Eurodollar Tranches		24
2.15	Interest Rates and Interest Payment Dates		24
2.16	Computation of Interest and Fees		25
2.17	Inability to Determine Interest Rate		25
2.18	Payments		25
2.19	Requirements of Law		26
2.20	Taxes		27
2.21	Indemnity		28
2.22	Illegality		29
2.23	[Intentionally Omitted]		29
2.24	[Intentionally Omitted]		29
2.25	[Intentionally Omitted]		29
2.26	[Intentionally Omitted]		29
2.27	Exculpation		29
SECTION 3 LETTERS OF CREDIT			32
3.1	L/C Commitment		32
3.2	Procedure for Issuance of Letter of Credit		32
3.3	Fees and Other Charges		32
3.4	[Intentionally Omitted]		33
3.5	Reimbursement Obligation of the Borrower		33
3.6	[Intentionally Omitted]		33
3.7	Obligations Absolute		33

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		Page
3.8	Letter of Credit Payments		34
3.9	Applications		34
SECTION 4 REPRESENTATIONS AND WARRANTIES			34
4.1	[Intentionally Omitted]		34
4.2	No Change		34
4.3	Corporate Existence; Compliance with Law		34
4.4	Corporate Power; Authorization; Enforceable Obligations		35
4.5	No Legal Bar		35
4.6	No Material Litigation		35
4.7	No Default		35
4.8	Ownership of Property; Liens		35
4.9	Intellectual Property		36
4.10	Taxes		36
4.11	Federal Regulations		36
4.12	Labor Matters		36
4.13	ERISA		36
4.14	Investment Company Act; Other Regulations		37
4.15	Subsidiaries		37
4.16	Use of Proceeds		37
4.17	Environmental Matters		37
4.18	Accuracy of Information, etc		38
4.19	Security Documents		39
4.20	Solvency		39
4.21	Regulation H		39
SECTION 5 CONDITIONS PRECEDENT			39
5.1	Conditions to Initial Extension of Credit		39
5.2	Conditions to Each Extension of Credit		41
SECTION 6 AFFIRMATIVE COVENANTS			42
6.1	[Intentionally Omitted]		42
6.2	Certificates; Other Information		42
6.3	Payment of Obligations		43
6.4	Conduct of Business and Maintenance of Existence; Compliance		43
6.5	Maintenance of Property; Insurance		43
6.6	Inspection of Property; Books and Records; Discussions		43
6.7	Notices		43
6.8	Environmental Laws		44
6.9	[Intentionally Omitted]		45
6.10	Additional Collateral, etc		45
6.11	Further Assurances		46
6.12	Post-Closing Covenants		47

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		Page
SECTION 7 NEGATIVE COVENANTS			47
7.1	[Intentionally Omitted]		47
7.2	Limitation on Indebtedness		47
7.3	Limitation on Liens		50
7.4	Limitation on Fundamental Changes		53
7.5	Limitation on Disposition of Property		54
7.6	Limitation on Restricted Payments		55
7.7	Limitation on Maintenance Capital Expenditures and Renovation Capital Expenditures		56
7.8	Limitation on Investments		57
7.9	[Intentionally Omitted]		59
7.10	Limitation on Transactions with Affiliates		59
7.11	Limitation on Sales and Leasebacks		59
7.12	Limitation on Changes in Fiscal Periods		60
7.13	Limitation on Negative Pledge Clauses		60
7.14	Limitation on Restrictions on Subsidiary Distributions		60
7.15	Limitation on Lines of Business		60
7.16	[Intentionally Omitted]		61
7.17	Limitation on Amendments to Other Documents		61
7.18	[Intentionally Omitted]		61
7.19	[Intentionally Omitted]		61
7.20	Limitation on Hedge Agreements		61
SECTION 8 EVENTS OF DEFAULT			61
SECTION 9 [INTENTIONALLY OMITTED]			64
SECTION 10 MISCELLANEOUS			64
10.1	Amendments and Waivers		64
10.2	Notices		65
10.3	No Waiver; Cumulative Remedies		66
10.4	Survival of Representations and Warranties		66
10.5	Payment of Expenses		66
10.6	Successors and Assigns; Participations and Assignments		68
10.7	[Intentionally Omitted]		68
10.8	Counterparts		68
10.9	Severability		68
10.10	Integration		68
10.11	Governing Law		68
10.12	Submission to Jurisdiction; Waivers		68
10.13	Acknowledgments		69
10.14	Confidentiality		69
10.15	Release of Collateral and Guarantee Obligations		70
10.16	[Intentionally Omitted]		70
10.17	[Intentionally Omitted]		70
10.18	Waivers of Jury Trial		70
10.19	Exculpation		70

-iii-

SCHEDULES:
1.1A	[Intentionally Omitted]
1.1B	Real Property
1.1C	[Intentionally Omitted]
1.1D	Property Owners
4.15	Subsidiaries
4.19	Uniform Commercial Code Filing Jurisdictions
7.2(d)	Existing Indebtedness
7.3(f)	Existing Liens
EXHIBITS:
A	Form of Guarantee and Collateral Agreement
B	Form of Compliance Certificate
C	Form of Closing Certificate
D	[Intentionally Omitted]
E	[Intentionally Omitted]
F	[Intentionally Omitted]
G	[Intentionally Omitted]
H	[Intentionally Omitted]
I	[Intentionally Omitted]
J	Form of Borrowing Notice

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          CREDIT AGREEMENT (PARENT BORROWER I-B), dated as of October 5, 2007, among TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDING I (PARENT BORROWER-B), L.P., a Delaware limited partnership (the “Borrower”), and ARCHSTONE-SMITH OPERATING TRUST, a Maryland real estate investment trust (the “Lender”).

WITNESSETH:

          WHEREAS, the Borrower has requested the Lender make available a revolving credit loan facility to provide for the general corporate needs of the Borrower and its Subsidiaries; and

          WHEREAS, the Lender is willing to make such credit facility available upon and subject to the terms and conditions hereinafter set forth;

          NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

           1.1 Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

          “Additional Fund”: each “Fund” that is the direct or indirect parent of an ASOT Additional Parent Guarantor.

          “Administration Fee”: on any date of determination, an amount equal to the “Administration Fee” due and payable by the Combined Group Members to the Funds pursuant to Section 6.14 of their respective Fund Agreements on such date, as applicable.

          “Administration Fee Agreement”: the Administration Fee Agreement, by and among the Funds, to the extent applicable, in favor of the ASOT Administrative Agent, to be entered into pursuant to Section 6.12(b), as amended, supplemented or otherwise modified from time to time in accordance with this Agreement.

          “Affiliate”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

          “Affiliate Borrower I-A”: Tishman Speyer Archstone-Smith Multifamily Holdings I (Borrower-A), L.P., a Delaware limited partnership.

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          “Affiliate Borrower I-A Credit Agreement”: the Credit Agreement (Affiliate Borrower I-A), dated as of October 5, 2007, among the Affiliate Borrower I-A, as borrower, and the Lender, as lender, as amended, supplemented or otherwise modified from time to time.

          “Affiliate Borrower I-A GP”: Tishman Speyer Archstone-Smith Multifamily Holdings I (Borrower-A) GP, L.L.C., a Delaware limited liability company.

          “Affiliate Borrower I-A Loan Documents”: the “Loan Documents” as defined in the Affiliate Borrower I-A Credit Agreement.

          “Affiliate Borrower I-B”: Tishman Speyer Archstone-Smith Multifamily Holdings I (Borrower-B), L.P., a Delaware limited partnership.

          “Affiliate Borrower I-B Credit Agreement”: the Credit Agreement (Affiliate Borrower I-B), dated as of the date hereof, among the Affiliate Borrower I-B, as borrower, and Secured Note LLC, as lender, as amended, supplemented or otherwise modified from time to time in accordance with this Agreement.

          “Affiliate Borrower I-B Intercreditor Agreement”: the Intercreditor Agreement, dated as of the date hereof, among Lehman Brothers Holdings Inc., Bank of America, N.A. and Barclays Capital Real Estate Finance Inc., collectively, as senior lender, Lehman Brothers Holdings Inc., Bank of America, N.A. and Barclays Capital Real Estate Inc., collectively, as Mezzanine A lender, Lehman Brothers Holdings Inc., Bank of America, N.A. and Barclays Capital Real Estate Finance Inc., collectively, as Mezzanine B lender, and the ASOT Administrative Agent, as amended, supplemented or otherwise modified from time to time.

          “Affiliate Borrower I-B Loan”: the “Loan” as defined in the Affiliate Borrower I-B Credit Agreement.

          “Affiliate Borrower II”: Tishman Speyer Archstone-Smith Multifamily Holdings II (Borrower), L.P., a Delaware limited partnership.

          “Affiliate Borrower II Credit Agreement”: collectively, (i) the Credit Agreement (Affiliate Borrower II-Term Loan), dated as of October 5, 2007, among the Affiliate Borrower II, as borrower, and Secured Note LLC, as lender, and (ii) the Credit Agreement (Affiliate Borrower II-Revolving Credit Loan), dated as of October 5, 2007, among the Affiliate Borrower II, as borrower, and the Lender, as lender, in each case, as amended, supplemented or otherwise modified from time to time.

          “Affiliate Borrower II Loan Documents”: the “Loan Documents” as defined in the Affiliate Borrower II Credit Agreement.

          “Affiliate Borrower Credit Agreements”: the collective reference to the Affiliate Borrower I-A Credit Agreement, the Affiliate Borrower II Credit Agreement and the ASOT Credit Agreement.

          “Affiliate Borrower Group Members”: the collective reference to the ASOT Parent/Affiliate Guarantors and their respective Subsidiaries (other than the Group Members).

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          “Affiliate Borrower Loan Documents”: collectively, the Affiliate Borrower I-A Loan Documents, the Affiliate Borrower II Loan Documents and the ASOT Loan Documents.

          “Affiliate Borrowers”: collectively, the Affiliate Borrower I-A, the Affiliate Borrower II and the ASOT Borrower.

          “Affiliate Revolving Notes”: as defined in the ASOT Credit Agreement.

          “Agreement”: this Credit Agreement (Parent Borrower I-B), as amended, supplemented or otherwise modified from time to time.

          “Applicable JV Investment Percentage”: as defined in the ASOT Credit Agreement.

          “Applicable Margin”: as defined in the ASOT Credit Agreement.

          “Application”: an application, in such form as the relevant Issuing Lender may specify from time to time, requesting such Issuing Lender to issue a Letter of Credit.

          “ASOT Additional Parent Guarantors”: the “Additional Parent Guarantors” as defined in the ASOT Credit Agreement.

          “ASOT Administrative Agent”: the “Administrative Agent” as defined in the ASOT Credit Agreement.

          “ASOT Available Revolving Credit Commitment”: the “Available Revolving Credit Commitment” as defined in the ASOT Credit Agreement.

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

          “ASOT Credit Agreement”: the Credit Agreement dated as of the date hereof, among the ASOT Borrower, as borrower, the several banks and other financial institutions or entities from time to time parties thereto, as lenders, Lehman Brothers Inc. and Banc of America Securities LLC, as joint lead arrangers and joint bookrunners, Bank of America, N.A., as syndication agent, Barclays Capital Real Estate Inc., as documentation agent, the ASOT Administrative Agent, as administrative agent, and others, as amended, supplemented or otherwise modified from time to time.

          “ASOT Guarantee and Collateral Agreement”: the “Guarantee and Collateral Agreement” as defined in the ASOT Credit Agreement.

          “ASOT L/C Commitment”: the “L/C Commitment” as defined in the ASOT Credit Agreement.

          “ASOT L/C Obligations”: the “L/C Obligations” as defined in the ASOT Credit Agreement.

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          “ASOT Lender”: any lender party to the ASOT Credit Agreement.

          “ASOT Loan Default”: a “Default” as defined in the ASOT Credit Agreement.

          “ASOT Loan Event of Default”: an “Event of Default” as defined in the ASOT Credit Agreement.

          “ASOT Loan Documents”: the “Loan Documents” as defined in the ASOT Credit Agreement.

          “ASOT Majority Facility Lenders”: the “Majority Facility Lenders” as defined in the ASOT Credit Agreement.

          “ASOT Parent/Affiliate Guarantors”: the “Parent/Affiliate Guarantors” as defined in the ASOT Credit Agreement.

          “ASOT Required Lenders”: the “Required Lenders” as defined in the ASOT Credit Agreement.

          “ASOT Revolving Credit Commitment”: the “Revolving Credit Commitment” as defined in the ASOT Credit Agreement.

          “ASOT Revolving Credit Commitment Period”: the “Revolving Credit Commitment Period” as defined in the ASOT Credit Agreement.

          “ASOT Revolving Credit Lenders”: the “Revolving Credit Lenders” as defined in the ASOT Credit Agreement.

          “ASOT Secured Parties”: the “Secured Parties” as defined in the ASOT Guarantee and Collateral Agreement.

          “ASOT Term Loans”: the “Term Loans” as defined in the ASOT Credit Agreement.

          “ASOT Tranche A Term Loans”: the “Tranche A Term Loans” as defined in the ASOT Credit Agreement.

          “ASTM”: as defined in Section 5.1(m).

          “Available Revolving Credit Commitment”: an amount equal to the excess, if any, of (a) the Revolving Credit Commitment then in effect over (b) the Revolving Extensions of Credit then outstanding.

          “Base Rate”: for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus ¹/2 of 1%. For purposes hereof: “Prime Rate” shall mean the prime lending rate as set forth on the Reuters Screen RTRTSY1 Page (or such other comparable publicly available page as may, in the reasonable opinion of the Lender in consultation with the ASOT Administrative Agent after

5

notice to the Borrower, replace such page for the purpose of displaying such rate if such rate no longer appears on the Reuters Screen RTRTSY1 Page), as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually available. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

          “Base Rate Loans”: Loans for which the applicable rate of interest is based upon the Base Rate.

          “Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

          “Borrower”: as defined in the preamble hereto.

          “Borrowing Date”: any Business Day specified by the Borrower as a date on which the Borrower requests the Lender to make the Loans hereunder.

          “Borrowing Notice”: with respect to any request for borrowing of the Loans hereunder, a notice from the Borrower, substantially in the form of, and containing the information prescribed by, Exhibit J, delivered to the Lender.

          “Business Day”: (a) for all purposes other than as covered by clause (b) below, a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (a) and which is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.

          “CapEx Controlled”: with respect to any Joint Venture directly and indirectly owned by the Combined Group Members, the ability of the Combined Group Members, directly or indirectly, to control all decisions relating to Renovation Capital Expenditures without the consent of any other Person.

          “Capital Expenditures”: for any period, with respect to any Person, the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets (other than Real Property) or additions to equipment (including replacements, capitalized repairs and improvements during such period) which are required to be capitalized under GAAP on a balance sheet of such Person. For purposes of this definition, the purchase price of equipment or other fixed assets that are purchased simultaneously with the trade-in of existing assets or with insurance proceeds or proceeds from a casualty event or condemnation proceeding shall be included in Capital Expenditures only to the extent of the gross amount by which such purchase price exceeds the credit granted by the seller of such assets for the assets being traded in at such time or the amount of such insurance proceeds or such casualty event or condemnation proceeds, as the case may be (but shall at no time be greater than the amount required by GAAP to be included or reflected by such capital assets on the balance sheet of the applicable Person).

6

          “Capital Lease Obligations”: with respect to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP; and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

          “Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

          “Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of one year or less from the date of acquisition issued by any ASOT Lender or by any commercial bank organized under the laws of the United States of America or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-2 by S&P or P-2 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within one year from the date of acquisition; (d) repurchase obligations of any ASOT Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any ASOT Lender or any commercial bank satisfying the requirements of clause (b) of this definition; and (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.

          “Change of Control”: the occurrence of any of the following events: (a) the Permitted Investors shall cease to have the power, directly or indirectly, to vote or direct the voting of securities having a majority of the ordinary voting power for the election of directors of Guarantor 1 GP, Guarantor 2 GP and the ASOT Additional Parent Guarantors (in each case, determined on a fully diluted basis); (b) TSREV and its respective Affiliates shall cease to own of record and beneficially partnership interests of each of Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors equal to at least 4.9% of the partnership interests of Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors, taken as a whole; (c) the board of directors of Guarantor 1 GP, Guarantor 2 GP or any ASOT Additional Parent Guarantor shall cease to consist of a majority of Continuing Directors; (d) Guarantor 1 GP shall (i) fail to control, directly or indirectly, the general partner of Guarantor 1 or (ii) fail to control the

7

management and policies of Guarantor 1; (e) Guarantor 2 GP shall (i) fail to control, directly or indirectly, the managing member of Guarantor 2 or (ii) fail to control the management and policies of Guarantor 2; (f) Guarantor 2 and the ASOT Additional Parent Guarantors shall (i) fail to own of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of Holdings I Corp or (ii) fail to control the management and policies of Holdings I Corp; or (g) Holdings I Corp, Guarantor 1 and the ASOT Additional Parent Guarantors shall (i) fail to control the management and policies of the Borrower or (ii) cease to own and control, of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of the Borrower.

          “Closing Date”: the date on which the conditions precedent set forth in Section 5.1 shall have been satisfied.

          “Code”: the Internal Revenue Code of 1986, as amended from time to time.

          “Collateral”: all Property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document.

          “Combined Group Members”: as defined in the ASOT Credit Agreement.

          “Commonly Controlled Entity”: an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under Section 414 of the Code.

          “Company”: Archstone-Smith Trust, a Maryland real estate investment trust.

          “Completed Property”: any Operating Property (or phase of an Operating Property) that is Construction-in-Process until the completion of such Operating Property (or phase thereof) as evidenced by the issuance of a temporary or permanent certificate of occupancy (whichever occurs first) for such Operating Property or any phase thereof.

          “Compliance Certificate”: a certificate duly executed by a Responsible Officer, on behalf of the Borrower substantially in the form of Exhibit B.

          “Construction-in-Process”: on any date of determination, all Real Properties that are under construction or with respect to which construction is reasonably anticipated to commence during the period of six full fiscal quarters immediately following such date that are not Completed Properties.

          “Construction Related Indebtedness”: Indebtedness incurred to finance construction of specific Real Estate Under Construction and which is secured by such Real Estate Under Construction.

          “Continuing Directors”: the directors of Guarantor 1 GP or Guarantor 2 GP, as applicable, on the Closing Date, after giving effect to the Holdings Merger and the other transactions contemplated hereby, and each other director of Guarantor 1 GP or Guarantor 2 GP, as applicable, if, in each case, such other director’s nomination for election to the board of

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directors of Guarantor 1 GP or Guarantor 2 GP, as applicable, is recommended by at least a majority of the then Continuing Directors or such other director receives the vote of the Permitted Investors in his or her election by the shareholders of Guarantor 1 GP or Guarantor 2 GP, as applicable.

          “Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

          “Cure Period”: as defined in the ASOT Credit Agreement.

          “Default”: any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

          “Derivatives Counterparty”: as defined in Section 7.6.

          “Disposition”: with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof; and the terms “Dispose” and “Disposed of” shall have correlative meanings.

          “Distributable Affiliate Proceeds”: as defined in the ASOT Credit Agreement.

          “Dollars” and “$”: dollars in lawful currency of the United States of America.

          “Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States of America, any state thereof or the District of Columbia.

          “Eligible Land”: land (and any Improvements thereon) which is zoned or, intended by the Group Members to be zoned, for use as a residential rental apartment community or a mixed use community (which includes land zoned for use as a residential rental apartment community).

          “Environmental Laws”: any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, agreements or other legally enforceable requirements (including, without limitation, common law) of any international authority, foreign government, the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health, or employee health and safety, as has been, is now, or may at any time hereafter be, in effect.

          “Environmental Permits”: any and all permits, licenses, approvals, registrations, notifications, exemptions and other authorizations required under any Environmental Law.

          “ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.

          “ESA”: as defined in Section 5.1(m).

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          “Eurocurrency Reserve Requirements”: as defined in the ASOT Credit Agreement.

          “Eurodollar Base Rate”: with respect to each day during each Interest Period, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time) two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on the Reuters Screen LIBOR01 Page (or otherwise on such screen), the “Eurodollar Base Rate” for purposes of this definition shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Lender in consultation with the ASOT Administrative Agent.

          “Eurodollar Loans”: Loans for which the applicable rate of interest is based upon the Eurodollar Rate.

          “Eurodollar Rate”: with respect to each day during each Interest Period, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100^th of 1%):

Eurodollar Base Rate

1.00 — Eurocurrency Reserve

Requirements

          “Eurodollar Tranche”: the collective reference to Eurodollar Loans the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

          “Event of Default”: any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

          “Excluded Foreign Subsidiary”: any Foreign Subsidiary in respect of which either (a) the pledge of all of the Capital Stock of such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower, result in adverse tax consequences to the Borrower.

          “Federal Funds Effective Rate”: for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the ASOT Administrative Agent from three federal funds brokers of recognized standing selected by it.

          “Financial Reporting Parties”: as defined in the ASOT Credit Agreement.

          “Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic Subsidiary.

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          “Fund Agreements”: the agreement of limited partnership of each Fund, as in effect on the date hereof or, in the case of Funds formed after the Closing Date, on the date of such formation.

          “Funds”: collectively, (i) Tishman Speyer Archstone-Smith Multifamily JV, L.P., a Delaware limited partnership, (ii) Tishman Speyer Archstone-Smith Multifamily Parallel JV, L.P., a Delaware limited partnership, (iii) Tishman Speyer Archstone-Smith Multifamily Parallel Fund I JV, L.P., a Delaware limited partnership, (iv) Tishman Speyer Archstone-Smith Multifamily Parallel Fund II JV, L.P., a Delaware limited partnership, and (v) each Additional Fund.

          “GAAP”: generally accepted accounting principles in the United States of America as in effect from time to time.

          “Governmental Authority”: any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).

          “Gross Asset Value”: as defined in the ASOT Credit Agreement.

          “Group Members”: the Borrower and its Subsidiaries.

          “Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement (Parent Borrower I-B) to be executed and delivered by the Borrower and each Subsidiary Guarantor, if any, substantially in the form of Exhibit A, as the same may be amended, supplemented or otherwise modified from time to time.

          “Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing person that guarantees or in effect guarantees, or which is given to induce the creation of a separate obligation by another Person (including any bank under any letter of credit) that guarantees or in effect guarantees any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term “Guarantee Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable

11

amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

          “Guarantor 1”: Tishman Speyer Archstone-Smith Multifamily Guarantor, L.P., a Delaware limited partnership.

          “Guarantor 1 GP”: Tishman Speyer Archstone-Smith Multifamily (GP), L.P., a Delaware limited partnership.

          “Guarantor 2”: Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor, L.L.C., a Delaware limited liability company.

          “Guarantor 2 GP”: Tishman Speyer Archstone-Smith Multifamily Parallel (GP), L.P., a Delaware limited partnership.

          “Hedge Agreements”: all interest rate or currency swaps, caps or collar agreements, foreign exchange agreements, commodity or currency futures contracts, options to purchase or sell a commodity or currency, or option, warrant or other right with respect to a commodity or currency futures contract or similar arrangements entered into by the Borrower or its Subsidiaries providing for protection against fluctuations in interest rates, currency exchange rates, commodity prices or the exchange of nominal interest obligations, either generally or under specific contingencies.

          “Holdings I”: Tishman Speyer Archstone-Smith Multifamily Holdings I, L.P., a Delaware limited partnership.

          “Holdings I Corp”: Tishman Speyer Archstone-Smith Multifamily Holdings I Corp., a Delaware corporation.

          “Holdings I LP Asset Acquisition”: the “Holdings I LP Asset Disposition” as defined in the ASOT Credit Agreement.

          “Holdings I LP Purchase Agreement”: as defined in the ASOT Credit Agreement

          “Holdings Merger”: as defined in the ASOT Credit Agreement.

          “Improvements”: all buildings, fixtures, structures, parking areas, landscaping and other improvements whether existing now or hereafter constructed, together with all machinery and mechanical, electrical, HVAC and plumbing systems presently located thereon and used to the operation thereof, excluding (a) any such items owned by utility service providers, (b) any such items owned by tenants or other third parties unaffiliated with the Combined Group Members or their Subsidiaries and (c) any items of personal property.

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          “Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of Property or third-party services (other than trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under acceptance, letter of credit, surety bond or similar facilities, (g) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Capital Stock of such Person, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of others of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on Property (including, without limitation, accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, but limited to the lesser of the fair market value of such property and the aggregate amount of the obligations so secured, and (j) for the purposes of Section 8(e) only, all obligations of such Person in respect of Hedge Agreements. The “Indebtedness” of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor. For purposes of clause (j) above, the principal amount of Indebtedness in respect of Hedge Agreements shall equal the amount that would be payable (giving effect to netting) at such time if such Hedge Agreement were terminated. For the avoidance of doubt, “Indebtedness” as defined hereunder shall not include (i) prepaid rents or security deposits made under tenant leases or (ii) obligations arising from agreements of the Borrower or any Subsidiary providing for (1) customary indemnification, guarantees or adjustments of purchase or acquisition price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets permitted under this Agreement (except as specified in clause (b) above) or (2) with respect to any syndication of federal low-income housing tax credits and benefits generated under section 42 of the Code by apartment projects owned by the Borrower or any Subsidiary, indemnification or guarantees of obligations to maintain such tax credits and benefits.

          “Indemnified Liabilities”: as defined in Section 10.5.

          “Indemnitee”: as defined in Section 10.5.

          “Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

          “Insolvent”: pertaining to a condition of Insolvency.

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          “Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

          “Interest Payment Date”: (a) as to any Base Rate Loan, the last day of each March, June, September and December to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or shorter, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Loan (other than any Loan that is a Base Rate Loan), the date of any repayment or prepayment made in respect thereof.

          “Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as determined by the Lender in its sole discretion prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

     (1) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

     (2) any Interest Period that would otherwise extend beyond the Revolving Credit Termination Date shall end on the Revolving Credit Termination Date; and

     (3) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period.

          “Investments”: as defined in Section 7.8.

          “Issuing Lender”: any financial institution designated by the Lender as the “Issuing Lender” hereunder.

          “Joint Venture”: any Person in which the Borrower owns, directly or indirectly, Capital Stock (other than publicly traded Capital Stock) and which is not a Wholly Owned Subsidiary of the Borrower.

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          “Joint Venture Property”: each parcel of real property owned or leased by any Joint Venture.

          “L/C Commitment”: as defined in the ASOT Credit Agreement.

          “L/C Fee Payment Date”: the last day of each March, June, September and December and the last day of the Revolving Credit Commitment Period.

          “L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.5.

          “L/C Participants”: as defined in the ASOT Credit Agreement.

          “Lender”: as defined in the preamble hereto.

          “Letters of Credit”: as defined in Section 3.1(a).

          “Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

          “Limited Guaranty”: the Limited Guaranty (Parent Borrower I-B), dated as of the date hereof, made by Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors in favor of the Lender.

          “Loan Documents”: this Agreement, the Security Documents, the Applications, the Administration Fee Agreement, the Limited Guaranty, the Subordination of Limited Guaranty and the Affiliate Borrower I-B Intercreditor Agreement.

          “Loan Parties”: the Borrower and each Subsidiary of the Borrower that is a party to a Loan Document.

          “Loans”: as defined in Section 2.4.

          “Maintenance Capital Expenditures”: for any period, with respect to any Person, the Capital Expenditures of such Person for such period that constitute expenditures for recurring value-retention Capital Expenditures representing costs that are typically incurred on a regular basis during the life of a community, such as expenditures for carpet, vinyl flooring, appliances, mechanical equipment, fixtures, roof replacement, parking lot resurfacing, exterior painting and siding replacement. It is understood and agreed that “Maintenance Capital Expenditures” shall not include (a) Renovation Capital Expenditures, (b) Capital Expenditures incurred in connection with requirements under the Fair Housing Act or the Americans with Disabilities Act, (c) Capital Expenditures representing tenant improvements awarded to any tenant in connection with any

15

commercial or office lease and (d) repair or restoration of major damage to a community that resulted from an event such as a fire, flood, hurricane, earthquake or terrorist event.

          “Material Adverse Effect”: a material adverse effect on (a) the business, assets, property, results of operations or financial condition of the Combined Group Members, taken as a whole, or (b) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights or remedies of the Lender hereunder or thereunder; provided that, solely on the Closing Date and with respect to the representations and warranties to be made by the Loan Parties on the Closing Date and the closing certificates to be delivered pursuant to Section 5.1(n) on the Closing Date, “Material Adverse Effect” shall mean a “Material Adverse Effect” as defined in the Holdings I LP Purchase Agreement.

          “Material Environmental Amount”: an amount or amounts payable by the Group Members, in the aggregate in excess of $50,000,000 for: costs to comply with any Environmental Law; costs of any investigation, and any remediation, of any Material of Environmental Concern; and compensatory damages (including, without limitation, damages to natural resources), punitive damages, fines, and penalties pursuant to any Environmental Law.

          “Materials of Environmental Concern”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products (virgin or unused), polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity, and any other materials, substances or forces of any kind, whether or not any such material, substance or force is defined as hazardous or toxic under any Environmental Law, that is regulated pursuant to or could reasonably be expected to give rise to liability under any Environmental Law.

          “Merger Agreement”: as defined in the ASOT Credit Agreement.

          “Moody’s”: Moody’s Investors Service, Inc.

          “Mortgaged Properties”: the real properties as to which the Lender shall be granted a Lien pursuant to one or more Mortgages at any time and from time to time after the Closing Date pursuant to Section 6.10(b).

          “Mortgages”: each of the mortgages, deeds of trust and deeds to secure debt made by any Loan Party in favor of, or for the benefit of, the Lender, in form and substance reasonably satisfactory to the ASOT Administrative Agent as the same may be amended, supplemented or otherwise modified from time to time.

          “Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

          “Non-Excluded Taxes”: as defined in Section 2.20(a).

          “Non-Recourse Subsidiary Borrower”: a Subsidiary of the Borrower that is a special purpose entity whose only assets are the assets securing Indebtedness incurred in accordance with Section 7.2(l).

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          “Obligations”: the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans, the Reimbursement Obligations and all other obligations and liabilities of the Borrower to the Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees, charges and disbursements of counsel to the Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.

          “OC/SD JV Holdings LLC”: Tishman Speyer Archstone-Smith OC/SD JV Holdings, L.L.C., a Delaware limited liability company.

          “Operating Properties”: collectively, the Owned Properties and the Joint Venture Properties.

          “Other Taxes”: any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

          “Owned Properties”: each parcel of real property owned or leased by the Group Members.

          “Ownership Percentage”: with respect to any Operating Property (or any Joint Venture that owns, directly or indirectly, any Capital Stock of the Property Owner that owns or leases such Operating Property) at any time, the percentage of the total outstanding Capital Stock of the Property Owner with respect to such Operating Property held directly and indirectly by the applicable Person.

          “Payment Amount”: as defined in Section 3.5.

          “Payment Office”: the office specified from time to time by the ASOT Administrative Agent as its payment office by notice to the Lender, and upon receipt of such notice by the Lender, the Lender shall promptly notify the Borrower.

          “PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

          “Permitted Investors”: as defined in the ASOT Credit Agreement.

          “Permitted Leases”: leases or subleases (including ground leases and licenses and other occupancy agreements) entered into the ordinary course of business by any Group Member, in each case, at an arm’s-length basis (i.e., on market terms) which do not materially impair the interests of such Group Member in the Property subject thereto or the value of such Property.

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          “Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

          “personal property”: “personal property”, as defined in the Uniform Commercial Code as from time to time in effect in the State of New York, which is owned by any Group Member.

          “Plan”: at a particular time, any employee benefit plan that is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

          “Pledged Stock”: as defined in the Guarantee and Collateral Agreement.

          “Property”: any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.

          “Property Owners”: collectively, Persons identified in Schedule 1.1D attached hereto, each of which owns the Operating Property identified on such Schedule as being owned by such Person.

          “Real Estate Under Construction”: Real Property (other than a Completed Property) on which construction of material improvements has commenced or shall concurrently commence with the incurrence of Indebtedness financing such construction and is or shall be continuing to be performed.

          “Real Property”: any present and future right, title and interest (including, without limitation, any leasehold estate) in (i) any plots, pieces or parcels of Eligible Land, (ii) any Improvements of every nature whatsoever (the rights and interests described in clauses (i) and (ii) above being the “Premises”), (iii) all easements, rights of way, gores of land or any lands occupied by streets, ways, alleys, passages, sewer rights, water courses, water rights and powers, and public places adjoining such land, and any other interests in property constituting appurtenances to the Premises, or which hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all hereditaments, gas, oil, minerals (with the right to extract, sever and remove such gas, oil and minerals), and easements, of every nature whatsoever, located in, on or benefiting the Premises and (v) all other rights and privileges thereunto belonging or appertaining and all extensions, additions, improvements, betterments, renewals, substitutions and replacements to or of any of the rights and interests described in clauses (iii) and (iv) above.

          “Recourse Indebtedness”: any Indebtedness, to the extent that recourse of the applicable lender for non-payment is not limited to such lender’s Liens on a particular asset or group of assets that secure such Indebtedness (except to the extent the Property on which such lender has a Lien and to which its recourse for non-payment is limited constitutes cash or Cash

18

Equivalents, to which extent such Indebtedness shall be deemed to be Recourse Indebtedness); provided that, personal recourse of any Person for any such Indebtedness for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of single purpose entity covenants, and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guaranty or indemnification agreements in non-recourse financing of real estate shall not, by itself, cause such Indebtedness to be characterized as Recourse Indebtedness.

          “Register”: as defined in Section 2.8(c).

          “Regulation H”: Regulation H of the Board as in effect from time to time.

          “Regulation U”: Regulation U of the Board as in effect from time to time.

          “Regulation X”: Regulation X of the Board as in effect from time to time.

          “Reimbursement Obligation”: the obligation of the Borrower to reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing Lender.

          “Renovation Capital Expenditures”: for any period, with respect to any Person, the Capital Expenditures of such Person for such period comprised of: (a) Capital Expenditures incurred in connection with a major renovation or reparation of a community and (b) value-enhancing Capital Expenditures representing costs for which an incremental value is expected to be achieved from increasing the net operating income potential for a community or recharacterizing the quality of the income stream with an anticipated reduction in potential sales capitalization rate for items such as replacement of wood siding with a masonry-based Hardi-Board product, amenity upgrades and additions (including designer kitchens, new clubhouses or fitness centers), installation of security gates and additions of covered parking. For the avoidance of doubt, “Renovation Capital Expenditures” shall not include development expenses for any Operating Property.

          “Reorganization”: with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

          “Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the 30 day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

          “Required Ratios”: as defined in the ASOT Credit Agreement.

          “Requirements of Law”: as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

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          “Responsible Officer”: with respect to any Person, the chief executive officer, president, chief financial officer, chief accounting officer, chief operating officer, general counsel, treasurer or controller of such Person, but in any event, with respect to financial matters, the chief financial officer, the chief accounting officer, treasurer or controller of such Person.

          “Restricted Payments”: as defined in Section 7.6.

          “Revolving Credit Commitment”: the obligation of the Lender to make Loans and to cause the Issuing Lender to issue Letters of Credit, in an aggregate principal and/or face amount not to exceed $750,000,000, as the same may be changed from time to time in accordance with the ASOT Revolving Credit Commitment.

          “Revolving Credit Commitment Period”: the period from and including the Closing Date to the Revolving Credit Termination Date.

          “Revolving Credit Termination Date”: the fourth anniversary of the Closing Date.

          “Revolving Extensions of Credit”: an amount equal to the sum of (a) the aggregate principal amount of all Loans then outstanding, and (b) the L/C Obligations then outstanding.

          “S&P”: Standard & Poor’s Ratings Services.

          “SEC”: the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

          “Secured Guarantor Notes”: a collective reference to each unsecured promissory note, to be made by Guarantor 1, Guarantor 2 or any ASOT Additional Parent Guarantor, as borrower, in favor of the Borrower, as lender, in form and substance reasonably satisfactory to the ASOT Administrative Agent, for the purpose of making a loan to Guarantor 1, Guarantor 2 or such ASOT Additional Parent Guarantor, as applicable, to finance certain expenses of Guarantor 1, Guarantor 2 and such ASOT Additional Parent Guarantor in accordance with Section 7.6(g), as amended, supplemented or otherwise modified from time to time.

          “Secured Note LLC”: Tishman Speyer Archstone-Smith Multifamily Series IV, L.L.C., a Delaware limited liability company.

          “Security Documents”: the collective reference to the Guarantee and Collateral Agreement, the Mortgages and all other security documents hereafter delivered to the Lender granting a Lien on any Property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document.

          “Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

          “Solvent”: with respect to any Person, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date,

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exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

          “Subordination of Limited Guaranty”: the Subordination of Limited Guaranty (Parent Borrower I-B), dated as of the date hereof, among the Lender and the ASOT Administrative Agent and accepted and agreed to by Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors.

          “Subsidiary”: as to any Person, a corporation, partnership, limited liability company or other entity either (x) of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned or (y) the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person, provided that, a Joint Venture shall not constitute a Subsidiary of such Person unless this clause (y) is applicable. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

          “Subsidiary Guarantor”: each Subsidiary of the Borrower that is or becomes a party to the Guarantee and Collateral Agreement. “Subsidiary Guarantors” shall not include (i) any Excluded Foreign Subsidiary or any Subsidiary of a Foreign Subsidiary or (ii) any Subsidiary of the Borrower prohibited from providing a guarantee of the Obligations pursuant to Indebtedness permitted by Section 7.2.

          “Successor Borrower”: as defined in Section 7.4(a).

          “Targets”: collectively, the Company and the ASOT Borrower.

          “Test Date”: as defined in the ASOT Credit Agreement.

          “TSREV”: Tishman Speyer Real Estate Venture VII, L.P.

          “Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

          “Unsecured Affiliate Borrower”: as defined in Section 7.2(u).

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          “Unsecured Affiliate Lender”: as defined in Section 7.2(u).

          “Unsecured Employee Cost Loans”: as defined in Section 7.2(u).

          “Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries. For the avoidance of doubt, the definition of “Wholly Owned Subsidiary” shall include any Person all of the outstanding Capital Stock (other than directors’ qualifying shares) of which is owned, directly or indirectly, by the Borrower.

          “Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower.

          1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

          (b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to the Group Members not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.

          (c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

          (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENT

          2.1 [Intentionally Omitted].

          2.2 [Intentionally Omitted].

          2.3 [Intentionally Omitted].

          2.4 Revolving Credit Commitment. (a) Subject to the terms and conditions hereof, the Lender agrees to make revolving credit loans (the “Loans”) to the Borrower from time to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding which, when added to the L/C Obligations then outstanding, does not exceed the amount of the Revolving Credit Commitment; provided that, the Lender shall not make any Loan to the Borrower if, after giving effect to the making of such Loan, (i) the aggregate amount of the Available Revolving Credit Commitment would be less than zero or (ii) the aggregate amount of the ASOT Available Revolving Credit Commitments would be less than zero. During the Revolving Credit Commitment Period the Borrower may use the

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Revolving Credit Commitment by borrowing, prepaying the Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Lender in accordance with Sections 2.5 and 2.13, provided that, no Loan shall be made as a Eurodollar Loan after the day that is one month prior to the Revolving Credit Termination Date.

          (b) The Borrower shall repay all outstanding Loans on the Revolving Credit Termination Date.

          2.5 Procedure for Revolving Credit Borrowing. The Borrower may borrow under the Revolving Credit Commitment on any Business Day during the Revolving Credit Commitment Period, provided that, the Borrower shall deliver to the Lender a Borrowing Notice or such other form of notice reasonably satisfactory and acceptable to the Lender prior to the requested Borrowing Date. Any Loans made on the Closing Date shall initially be Base Rate Loans, and no Loan may be made as, converted into or continued as a Eurodollar Loan having an Interest Period in excess of one month prior to the date that is the earlier of (x) the date which is 60 days after the Closing Date and (y) the date on which the Lender has been notified in writing by the ASOT Administrative Agent that the primary syndication of the ASOT Credit Agreement has been completed. Such borrowing will then be made available to the Borrower by the Lender in like funds as received by the Lender from the date on which the Lender has been notified in writing by the ASOT Administrative Agent that the primary syndication of the ASOT Credit Agreement has been completed. The Lender shall make available to the Borrower the proceeds of the Loans made available to the Lender by the ASOT Administrative Agent pursuant to the ASOT Credit Agreement, in like funds as received by the Lender.

          2.6 [Intentionally Omitted].

          2.7 [Intentionally Omitted].

          2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally promises to pay to the Lender the then unpaid principal amount of each Loan on the Revolving Credit Termination Date (or on such earlier date on which the Loans become due and payable pursuant to Section 8). The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.15.

          (b) [Intentionally Omitted].

          (c) The Lender shall maintain on behalf of the Borrower, a register (the “Register”) in which shall be recorded (i) the amount of each Loan made hereunder, the Type of such Loan and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to the Lender hereunder and (iii) the amount of any sum received by the Lender hereunder from the Borrower.

          (d) The entries made in the Register shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of the Lender to maintain the Register, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by the Lender in accordance with the terms of this Agreement.

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          2.9 Commitment Fees, etc. The Borrower agrees to pay to the Lender a commitment fee for the period from and including the Closing Date to the last day of the Revolving Credit Commitment Period, in an amount and at such times as agreed between the Borrower and the Lender.

          2.10 Termination or Reduction of Revolving Credit Commitment. The Borrower may not terminate the Revolving Credit Commitment or, from time to time, reduce the Revolving Credit Commitment without the prior written consent of the ASOT Required Lenders and the Lender (other than in connection with the refinancing, repayment or termination in full of the ASOT Credit Agreement and the commitments and loans thereunder); provided that no such termination or reduction of Revolving Credit Commitment shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the Revolving Extensions of Credit would exceed the Revolving Credit Commitment. Any such reduction shall reduce permanently the Revolving Credit Commitment then in effect.

          2.11 Optional Prepayments. The Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Lender which notice shall specify the date and amount of such prepayment, and whether such prepayment is of Eurodollar Loans or Base Rate Loans; provided that, if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Loans that are Base Rate Loans) accrued interest to such date on the amount prepaid.

          2.12 [Intentionally Omitted].

          2.13 Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving the Lender at least two Business Days’ prior irrevocable notice of such election, provided that any such conversion of Eurodollar Loans may be made only on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Lender at least three Business Days’ prior irrevocable notice of such election (which notice shall specify the length of the initial Interest Period therefor), provided that no Base Rate Loan may be converted into a Eurodollar Loan (i) when any Event of Default has occurred and is continuing and the Lender has determined in its sole discretion not to permit such conversions or (ii) after the date that is one month prior to the Revolving Credit Termination Date.

          (b) The Borrower may elect to continue any Eurodollar Loan as such upon the expiration of the then current Interest Period with respect thereto by giving irrevocable notice to the Lender, in accordance with the applicable provisions of the term “Interest Period” set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loan, provided that, no Eurodollar Loan may be continued as such (i) when any Event of Default has occurred and is continuing and the Lender has determined in its sole discretion not to permit such continuations

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or (ii) after the date that is one month prior to the Revolving Credit Termination Date, and provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso, such Loans shall continue as Eurodollar Loans, with a one month Interest Period.

          2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional prepayments of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one time.

          2.15 Interest Rates and Interest Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin in effect for such day.

          (b) Each Base Rate Loan shall bear interest for each day on which it is outstanding at a rate per annum equal to the Base Rate in effect for such day plus the Applicable Margin in effect for such day.

          (c) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement Obligations (whether or not overdue) (to the extent legally permitted) shall bear interest at a rate per annum that is equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to Base Rate Loans plus 2%, and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any commitment fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to Base Rate Loans plus 2%, in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (after as well as before judgment).

          (d) Interest shall be payable in arrears on each Interest Payment Date, provided that, interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand.

          (e) Notwithstanding anything in the foregoing to the contrary, in no event shall the interest rate payable by the Borrower hereunder for any Type of Loan on any date of determination exceed the effective rate of interest paid by the Lender pursuant to the ASOT Credit Agreement for such Type of Loan.

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          2.16 Computation of Interest and Fees. (a) Interest, fees and commissions payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to Base Rate Loans on which interest is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Lender shall as soon as practicable notify the Borrower of each determination of a Eurodollar Rate made pursuant to the ASOT Credit Agreement. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Lender shall as soon as practicable notify the Borrower of the effective date and the amount of each such change in interest rate made pursuant to the ASOT Credit Agreement.

          (b) Each determination of an interest rate by the ASOT Administrative Agent pursuant to any provision of the ASOT Credit Agreement shall be conclusive and binding on the Borrower and the Lender in the absence of manifest error. The Lender shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the ASOT Administrative Agent in determining any interest rate pursuant to Section 2.15(a).

          2.17 Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

     (a) the ASOT Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower and the Lender) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

     (b) the ASOT Administrative Agent shall have received notice from the ASOT Majority Facility Lenders in respect of the Revolving Credit Facility (as defined in the ASOT Credit Agreement) that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such ASOT Majority Facility Lenders (as conclusively certified by such ASOT Majority Facility Lenders) of making or maintaining their affected loans under the ASOT Credit Agreement during such Interest Period,

the ASOT Administrative Agent shall give telecopy, email or telephonic notice thereof to the Borrower and the Lender as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last day of the then current Interest Period with respect thereto, to Base Rate Loans. Until such notice has been withdrawn by the ASOT Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Loans to Eurodollar Loans.

          2.18 Payments.

          (a) [Intentionally Omitted].

          (b) [Intentionally Omitted].

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          (c) [Intentionally Omitted].

          (d) The application of any payment of Loans (including prepayments) shall be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each payment of the Loans (except in the case of Loans that are Base Rate Loans) shall be accompanied by accrued interest to the date of such payment on the amount paid.

          (e) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 2:00 p.m. (New York City time) on the due date thereof to the Lender, at the Payment Office, in Dollars and in immediately available funds. Any payment made by the Borrower after 2:00 p.m. (New York City time) on any Business Day shall be deemed to have been on the next following Business Day. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

          2.19 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by the Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

     (i) shall subject the Lender to any tax of any kind whatsoever with respect to this Agreement, any Application or any Eurodollar Loan made by it, or change the basis of taxation of payments to the Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.20 and changes in the rate of tax on the net income of the Lender);

     (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of the Lender that is not otherwise included in the determination of the Eurodollar Rate hereunder; or

     (iii) shall impose on the Lender any other condition;

and the result of any of the foregoing is to increase the cost to the Lender, by an amount which the Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay the Lender, upon its demand, any additional amounts necessary to compensate the Lender for such increased cost or reduced amount receivable. If the Lender becomes entitled to claim any additional amounts pursuant to this Section 2.19, it shall promptly notify the Borrower of the event by reason of which it has become so entitled.

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          (b) If the Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by the Lender or any corporation controlling the Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on the Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under to a level below that which the Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration the Lender’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by the Lender to be material, then from time to time, after submission by the Lender to the Borrower of a written request therefor, the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender or such corporation for such reduction.

          (c) A certificate setting forth in reasonable detail any additional amounts payable pursuant to this Section 2.19 submitted by the Lender to the Borrower shall be prima facie evidence in the absence of manifest error. The obligations of the Borrower pursuant to this Section 2.19 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

          2.20 Taxes. (a) All payments made by the Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, 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 Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Lender (i) as a result of a present or former connection between the Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Lender’s having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document), (ii) by the jurisdiction (or any political subdivision thereof) under which the Lender is organized or in which its principal office is located or in which its lending office is located, and (iii) as a branch profits tax imposed by the jurisdiction in which the Borrower is located. If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or any Other Taxes are required to be withheld from any amounts payable to the Lender hereunder, the amounts so payable to the Lender shall be increased to the extent necessary to yield to the Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement; provided, however, that the Borrower shall not be required to increase any such amounts payable to the Lender with respect to any Non-Excluded Taxes (i) that are attributable to the Lender’s failure to comply with the requirements of paragraph (d) or (e) of this Section 2.20, (ii) that are United States withholding taxes imposed on amounts payable to the Lender on the Closing Date or (iii) that are United States withholding taxes imposed on amounts payable to the Lender at the time the Lender changes its lending office other than at the request of the Borrower, except to the extent that the Lender was entitled, at the time of the change in its lending office, to receive additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph (a).

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          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

          (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as possible thereafter the Borrower shall send to the Lender a certified copy of an original official receipt received by the Borrower (or, if an official receipt is not available, such other evidence of payment as shall be satisfactory to the Lender) showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or Other Taxes required to be paid by the Borrower pursuant to this Agreement when due to the appropriate taxing authority or fails to remit to the Lender the required receipts or other required documentary evidence, the Borrower shall indemnify the Lender for any incremental taxes, interest or penalties that may become payable by the Lender as a result of any such failure. The agreements in this Section 2.20 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

          (d) The Lender shall, with respect to any payments that the Lender directs to be paid to a non-U.S. address or non-U.S. bank account, deliver to the Borrower a duly completed original signed copy of U.S. Internal Revenue Service Form W-9, or any subsequent versions thereof or successors thereto that the Lender is entitled to provide at such time in order to comply with United States backup withholding requirements. Such forms shall be delivered by the Lender on or before the date it becomes a party to this Agreement and on or before the date, if any, the Lender designates a new lending office. In addition, the Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by the Lender. The Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, the Lender shall not be required to deliver any form pursuant to this paragraph that the Lender is not legally able to deliver.

          (e) If the Lender is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement, the Lender shall deliver to the Borrower, at the time or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate, provided that the Lender is legally entitled to complete, execute and deliver such documentation and in the Lender’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of the Lender.

          2.21 Indemnity. The Borrower agrees to indemnify the Lender for, and to hold the Lender harmless from, any loss or expense that the Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any

29

prepayment after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by the Lender in consultation with the ASOT Administrative Agent) that would have accrued to the Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section 2.21 submitted to the Borrower by the Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans, and all other amounts payable hereunder.

          2.22 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for the Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of the Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b) the Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to the Lender such amounts, if any, as may be required pursuant to Section 2.21.

          2.23 [Intentionally Omitted].

          2.24 [Intentionally Omitted].

          2.25 [Intentionally Omitted].

          2.26 [Intentionally Omitted].

          2.27 Exculpation. Subject to the qualifications below, the Lender shall not enforce the liability and obligation of the Borrower to perform and observe the obligations contained in this Agreement or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against the Borrower, except that the Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable the Lender to enforce and realize upon its interest under this Agreement and the other Loan Documents, or in the Collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower only to the extent of the Borrower’s interest in the Collateral given to the Lender, and the Lender, by accepting this

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Agreement and the other Loan Documents, shall not sue for, seek or demand any deficiency judgment against the Borrower in any such action or proceeding under or by reason of or under or in connection with this Agreement or the other Loan Documents. The provisions of this Section 2.27 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of the Lender to name the Borrower as a party defendant in any action or suit for foreclosure and sale under the Guarantee and Collateral Agreement; (c) affect the validity or enforceability of any guaranty made in connection with the Loans or any of the rights and remedies of the Lender thereunder; (d) impair the right of the Lender to obtain the appointment of a receiver; (e) constitute a prohibition against the Lender to seek a deficiency judgment against the Borrower in order to fully realize on any security given by the Borrower in connection with the Loans or to commence any other appropriate action or proceeding in order for the Lender to exercise its remedies against such security; or (f) constitute a waiver of the right of the Lender to enforce the liability and obligation of the Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by the Lender (including attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:

     (i) fraud or intentional misrepresentation by the Borrower in connection with the Loans;

     (ii) the gross negligence or willful misconduct by the Borrower;

     (iii) the breach of any representation, warranty, covenant or indemnification provision in the Loan Documents concerning Environmental Laws, hazardous substances and asbestos and any indemnification of the Lender with respect thereto in either document;

     (iv) the removal or disposal of any portion of the Collateral after an Event of Default;

     (v) the misapplication or conversion by the Borrower of (a) any insurance proceeds paid by reason of any loss, damage or destruction to any portion of the Collateral, (b) any awards or other amounts received in connection with the condemnation of all or a portion of the Collateral and (c) any rents, rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including, without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of the Borrower or its agents or employees from any and all sources arising from or attributable to the Collateral, and proceeds, if any, from business interruption or other loss of income insurance;

     (vi) failure to pay charges for labor or materials or other charges that can create Liens on any portion of the Collateral;

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     (vii) any security deposits, advance deposits or other deposits collected with respect to the Collateral which are not delivered to the Lender upon a foreclosure of any portion of the Collateral or action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any lease, sublease or subsublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in the Property, and every modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof; or

     (viii) the breach by the Borrower of the Borrower’s indemnification obligations set forth in Section 10.5.

Notwithstanding anything to the contrary in this Agreement or any of the Loan Documents, (A) the Lender shall not be deemed to have waived any right which the Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code (the “Bankruptcy Code”) to file a claim for the full amount of the Obligations or to require that the Collateral shall continue to secure all of the Obligations owing to the Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to the Borrower in the event that: (i) the Borrower fails to obtain the Lender’s prior consent to any subordinate financing or other voluntary Lien encumbering the Collateral; (ii) the Borrower fails to obtain the Lender’s prior consent to any assignment, transfer, or conveyance, direct or indirect, of the Collateral or any interest therein or the Borrower or any interest in the Borrower, as required by the Guarantee and Collateral Agreement or this Agreement; (iii) the Borrower files a voluntary petition under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (iv) an Affiliate, officer, director, or representative which controls, directly or indirectly, the Borrower files, or joins in the filing of, an involuntary petition against the Borrower under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against the Borrower from any Person; (v) the Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (vi) any Affiliate, officer, director, or representative which controls the Borrower consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for the Borrower or any portion of the Collateral; or (vii) the Borrower makes an assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its Obligations as they become due.

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SECTION 3. LETTERS OF CREDIT

          3.1 L/C Commitment. (a) Subject to the terms and conditions of the ASOT Credit Agreement, the Lender, in reliance on the agreements of the other ASOT Revolving Credit Lenders set forth in Section 3.4(a) of the ASOT Credit Agreement, agrees to cause the Issuing Lender to issue letters of credit (“Letters of Credit”) for the account of the Borrower on any Business Day during the ASOT Revolving Credit Commitment Period in such form as may be approved from time to time by the Lender and the Issuing Lender; provided that, the Lender shall not have any obligation to cause any Letter of Credit to be issued if, after giving effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment (ii) the aggregate amount of the Available Revolving Credit Commitment would be less than zero, (iii) the ASOT L/C Obligations would exceed the ASOT L/C Commitment or (iv) the aggregate amount of the ASOT Available Revolving Credit Commitments would be less than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date which is five Business Days prior to the Revolving Credit Termination Date; provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).

          (b) The Lender shall not at any time be obligated to cause any Letter of Credit to be issued hereunder if such issuance would conflict with, or cause the Lender, the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.

          3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to time request that the Lender cause an Issuing Lender to issue a Letter of Credit by delivering to the Lender and such Issuing Lender at its address for notices specified in the ASOT Credit Agreement an Application therefor, completed to the satisfaction of the Lender and the Issuing Lender, and such other certificates, documents and other papers and information as the Lender and such Issuing Lender may request. Upon receipt of any Application, the Lender will notify the ASOT Administrative Agent of the amount, the beneficiary and the requested expiration of the requested Letter of Credit, and upon receipt of confirmation from the ASOT Administrative Agent that after giving effect to the requested issuance, the ASOT Available Revolving Commitments would not be less than zero, the Lender will cause such Application and the certificates, documents and other papers and information delivered to it in connection therewith to be processed by the Issuing Bank in accordance with its customary procedures and shall promptly cause the Letter of Credit requested thereby to be issued by causing the original of such Letter of Credit to be issued to the beneficiary thereof or as otherwise may be agreed to by the Lender, Issuing Bank and the Borrower. The Lender shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof. The Lender shall promptly give notice to the ASOT Administrative Agent as set forth in the ASOT Credit Agreement of the issuance of each Letter of Credit (including the face amount thereof), and shall provide a copy of such Letter of Credit to the ASOT Administrative Agent as soon as possible after the date of issuance.

          3.3 Fees and Other Charges. (a) The Borrower will pay to the Lender a fee on the aggregate drawable amount of all outstanding Letters of Credit issued for its account (other than any such Letters of Credit that have been fully cash collateralized pursuant to terms

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satisfactory to the Issuing Lender) at a per annum rate equal to the Applicable Margin then in effect with respect to the Eurodollar Loans and payable quarterly in arrears on each L/C Fee Payment Date after the issuance date. In addition, the Borrower shall pay to the Lender, for the benefit of the Issuing Lender, a fronting fee on the aggregate drawable amount of all outstanding Letters of Credit issued by, the Issuing Lender for the Borrower’s account at a rate per annum agreed upon between the Lender and the Issuing Lender, payable quarterly in arrears on each L/C Fee Payment Date after the issuance date.

          (b) In addition to the foregoing fees, the Borrower shall pay or reimburse the Lender and the Issuing Lender, as the case may be, for normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit issued for the Borrower’s account.

          3.4 [Intentionally Omitted].

          3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to reimburse the Lender, on each date on which the Lender notifies the Borrower of the date and amount of a draft presented under any Letter of Credit and paid by the Issuing Lender, for the amount of (a) such draft so paid and (b) any taxes, fees, charges or other reasonable costs or expenses incurred by the Lender or the Issuing Lender in connection with such payment (the amounts described in the foregoing clauses (a) and (b) in respect of any drawing, collectively, the “Payment Amount”). Each such payment shall be made to the Lender at its address for notices specified herein in lawful money of the United States of America and in immediately available funds. Interest shall be payable on each Payment Amount from the date of the applicable drawing until payment in full at the rate set forth in (i) until the second Business Day following the date of the applicable drawing, Section 2.15(b) and (ii) thereafter, Section 2.15(c). Each drawing under any Letter of Credit shall constitute a request by the Borrower to the Lender for a borrowing pursuant to Section 2.5 of Base Rate Loans in the amount of such drawing. The Borrowing Date with respect to such borrowing shall be the first date on which a borrowing of Loans could be made, pursuant to Section 2.5, if the Lender had received a notice of such borrowing at the time of such drawing under such Letter of Credit.

          3.6 [Intentionally Omitted].

          3.7 Obligations Absolute. The Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Lender, any Issuing Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the Lender that the Lender shall not be responsible for, and the Borrower’s Reimbursement Obligations under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, provided that, such document or endorsement appears on its face to comply with the terms of such Letter of Credit, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. The Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or

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delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of the Lender. The Borrower agrees that any action taken or omitted by the Lender or an Issuing Lender under or in connection with any Letter of Credit issued by it or the related drafts or documents, if done in the absence of gross negligence, bad faith or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code of the State of New York, shall be binding on the Borrower and shall not result in any liability of the Lender or such Issuing Lender to the Borrower.

          3.8 Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the Lender shall promptly notify the Borrower and the ASOT Administrative Agent of the date and amount thereof. The responsibility of the Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit, in addition to any payment obligation expressly provided for in such Letter of Credit issued by the Issuing Lender, shall be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment appear on their face to be in conformity with such Letter of Credit.

          3.9 Applications. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.

SECTION 4. REPRESENTATIONS AND WARRANTIES

          To induce the Lender to enter into this Agreement and to make the Loans and to cause the Issuing Lender to issue the Letters of Credit, the Borrower hereby represents and warrants to the Lender that:

          4.1 [Intentionally Omitted].

          4.2 No Change. Since December 31, 2006, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

          4.3 Corporate Existence; Compliance with Law. Each of the Group Members (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate power and authority, and the legal right, to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law, except, in the case of clauses (c) and (d), to the extent that the failure to be so qualified or comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

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          4.4 Corporate Power; Authorization; Enforceable Obligations. Each Group Member has the corporate power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to borrow hereunder. Each Group Member has taken all necessary corporate or other action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the borrowings on the terms and conditions of this Agreement. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or the execution, delivery, performance, validity or enforceability of this Agreement or any of the other Loan Documents, except (i) such as have been obtained or made and are in full force and effect, (ii) the filings referred to in Section 4.19, and (iii) consents or authorizations, to the extent that the failure to obtain such consents, authorizations, filings and notices (or the failure to keep the same in full force and effect) could not reasonably be expected to have a Material Adverse Effect. Each Loan Document has been duly executed and delivered on behalf of each Loan Party that is a party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

          4.5 No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Group Member except, solely with respect to a violation of a Contractual Obligation of any Group Member, to the extent such violation could not reasonably be expected to have a Material Adverse Effect, and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Security Documents and such Liens permitted pursuant to Section 7.3 hereof). No Requirement of Law or Contractual Obligation applicable to any Group Member could reasonably be expected to have a Material Adverse Effect.

          4.6 No Material Litigation. Except as otherwise disclosed to the Lender, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the actual knowledge of any Responsible Officer of the Borrower, threatened by or against any Group Member or against any of their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect.

          4.7 No Default. None of the Group Members is in default under or with respect to any of its Contractual Obligations in any respect that could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.

          4.8 Ownership of Property; Liens. Each of the Group Members has title in fee simple to, or a valid leasehold interest in, all of its real property, and good title to, or a valid leasehold interest in, all its other Property, and none of such Property is subject to any Lien except as permitted by Section 7.3.

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          4.9 Intellectual Property. Each of the Group Members owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted. To the knowledge of any Group Member, no material claim has been asserted and is pending by any Person challenging or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does any Group Member know of any valid basis for any such claim. To the knowledge of any Group Member, the use of Intellectual Property by the Group Members does not infringe on the rights of any Person in any material respect.

          4.10 Taxes. Each of the Group Members has filed or caused to be filed all federal, state and other material tax returns that are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its Property and all other taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority that are due and payable, and, except as otherwise disclosed to the Lender in writing, no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge (other than any, in each case, the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the applicable Group Member, as the case may be).

          4.11 Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the regulations of the Board. If requested by the Lender, the Borrower will furnish to the Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.

          4.12 Labor Matters. There are no strikes or other labor disputes against any Group Member pending or, to the knowledge of the Borrower, threatened that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of the Group Members have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. All payments due from any Group Member on account of employee health and welfare insurance that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect if not paid have been paid or accrued as a liability on the books of the applicable Group Member.

          4.13 ERISA. Neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan

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allocable to such accrued benefits by a material amount. Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in a material liability under ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to any material liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.

          4.14 Investment Company Act; Other Regulations. No Loan Party is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. No Loan Party is subject to regulation under any Requirement of Law (other than Regulation X) that limits its ability to incur Indebtedness.

          4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15 constitute all the Subsidiaries of the Borrower at the date hereof. Schedule 4.15 sets forth as of the Closing Date the name and jurisdiction of incorporation of each Subsidiary and, as to each Subsidiary, the percentage of each class of Capital Stock owned by each Group Member and whether such Subsidiary is a Subsidiary Guarantor.

     (a) There are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors’ qualifying shares) of any nature relating to any Capital Stock of any Group Member.

          4.16 Use of Proceeds. The proceeds of the Loans and the Letters of Credit, shall be used (i) to finance the working capital needs of the Borrower and its Subsidiaries in the ordinary course of business and (ii) for general corporate purposes. The Revolving Credit Loans may not be used to pay any Administration Fees during any Cure Period.

          4.17 Environmental Matters. Other than exceptions to any of the following that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:

          (a) Each of the Group Members: (i) is, and within the period of all applicable statutes of limitation has been, in compliance with all applicable Environmental Laws; (ii) holds all Environmental Permits (each of which is in full force and effect) required for any of its current or intended operations or for any property owned, leased, or otherwise operated by it; (iii) is, and within the period of all applicable statutes of limitation has been, in compliance with all of its Environmental Permits; and (iv) to the extent within the control of such Group Member: each of its Environmental Permits will be timely renewed and complied with; any additional Environmental Permits that may be required of it will be timely obtained and complied with, without material expense; and compliance with any Environmental Law that is or is expected to become applicable to it will be timely attained and maintained, without material expense.

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     (b) Materials of Environmental Concern are not present at, on, under, in, or about any real property now or formerly owned, leased or operated by any Group Member, or at any other location (including, without limitation, any location to which Materials of Environmental Concern have been sent for re-use or recycling or for treatment, storage, or disposal) which could reasonably be expected to (i) give rise to liability of the Group Members under any applicable Environmental Law or otherwise result in costs to the Group Members, (ii) interfere with the continued operations of the Group Members or (iii) impair the fair saleable value of any Real Property owned or leased by any Group Member.

     (c) There is no judicial, administrative, or arbitral proceeding (including any notice of violation or alleged violation) under or relating to any Environmental Law to which any Group Member is, or to the knowledge of any Group Member will be, named as a party that is pending or, to the knowledge of any Group Member, threatened.

     (d) None of the Group Members has received any written request for information, or been notified that it is a potentially responsible party under or relating to the federal Comprehensive Environmental Response, Compensation, and Liability Act or any similar Environmental Law, or with respect to any Materials of Environmental Concern.

     (e) None of the Group Members has entered into or agreed to any consent decree, order, or settlement or other agreement, or is subject to any judgment, decree, or order or other agreement, in any judicial, administrative, arbitral, or other forum for dispute resolution, relating to compliance with or liability under any Environmental Law.

     (f) None of the Group Members has assumed or retained, by contract, conduct or operation of law, any liabilities of any kind, fixed or contingent, known or unknown, under any Environmental Law or with respect to any Materials of Environmental Concern.

          4.18 Accuracy of Information, etc. No statement or information contained in this Agreement, any other Loan Document, or any other document, certificate or statement furnished to the Lender, by or on behalf of any Loan Party for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, contained as of the date such statement, information, document or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary to make the statements contained herein or therein not materially misleading. The projections and pro forma financial information contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Lender that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount. There is no fact known to any Loan Party that could reasonably be expected to have a Material Adverse Effect that has not been expressly disclosed herein, in the other Loan Documents or in any other documents, certificates and statements furnished to the Lender for use in connection with the transactions contemplated hereby and by the other Loan Documents.

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          4.19 Security Documents. (a) The Guarantee and Collateral Agreement is effective to create in favor of the Lender, a legal, valid and enforceable security interest in the Collateral described therein and proceeds thereof. In the case of the Pledged Stock described in the Guarantee and Collateral Agreement, when any stock certificates representing such Pledged Stock are delivered to the Lender, and in the case of the other Collateral described in the Guarantee and Collateral Agreement, when Uniform Commercial Code financing statements in appropriate form are filed in the offices specified on Schedule 4.19 (which Uniform Commercial Code financing statements have been duly completed and delivered to the Lender) and such other filings as are specified on Schedule 3 to the Guarantee and Collateral Agreement have been completed (all of which filings have been duly completed), the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each case prior and superior in right to any other Person (except Liens permitted by Section 7.3).

          (a) Schedule 1.1B lists, as of the Closing Date, each parcel of owned real property and each leasehold interest in real property located in the United States and held by the Borrower or any of its Subsidiaries.

          4.20 Solvency. The Borrower is, and the Group Members, taken as a whole, are, and after giving effect to the incurrence of all Indebtedness and obligations being incurred in connection herewith and therewith will be and will continue to be, Solvent.

          4.21 Regulation H. No Mortgage encumbers improved real property which is located in an area that has been identified by the Secretary of Housing and Urban Development as an area having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968 (except any Mortgaged Properties as to which such flood insurance as required by Regulation H has been obtained and is in full force and effect as required by this Agreement).

SECTION 5. CONDITIONS PRECEDENT

          5.1 Conditions to Initial Extension of Credit. Subject to Section 6.12, the agreement of the Lender to make the initial extension of credit requested to be made by it hereunder is subject to the satisfaction, prior to or substantially contemporaneously with the making of such extension of credit on the Closing Date, of the following conditions precedent:

     (a) Loan Documents. The Lender shall have received (i) this Agreement, executed and delivered by a duly authorized officer of the Borrower, (ii) the Guarantee and Collateral Agreement, executed and delivered by a duly authorized officer of each Subsidiary Guarantor and the Borrower, and (iii) the Affiliate Borrower I-B Intercreditor Agreement, executed and delivered by a duly authorized officer of each party thereto.

     (b) ASOT Credit Agreement. Each condition precedent to the effectiveness of the ASOT Credit Agreement shall have either been substantially contemporaneously satisfied or waived in accordance therewith and the Lender shall have received proceeds

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of at least $4,719,000,000 from the proceeds of the ASOT Term Loans in accordance with the terms of the ASOT Credit Agreement.

     (c) [Intentionally Omitted].

     (d) Approvals. (i) All governmental and third party approvals (including material landlords’ and other consents) necessary in connection with the continuing operations of the Group Members shall have been obtained and be in full force and effect.

          (ii) All governmental and third party approvals (including material landlords’ and other consents) necessary in connection with the Revolving Credit Commitment shall have been obtained and be in full force and effect.

     (e) [Intentionally Omitted].

     (f) [Intentionally Omitted].

     (g) [Intentionally Omitted].

     (h) [Intentionally Omitted].

     (i) [Intentionally Omitted].

     (j) [Intentionally Omitted].

     (k) Solvency Analysis. The Lender shall have received a customary solvency analysis certified by the chief financial officer or treasurer of the Borrower which shall document the solvency of the Borrower and its Subsidiaries considered as a whole after giving effect to the transactions contemplated hereby.

     (l) Lien Searches. The Lender shall have received the results of a recent lien search in each of the jurisdictions in which Uniform Commercial Code financing statements or other filings or recordations should be made to evidence or perfect security interests in all assets of the Loan Parties, and such search shall reveal no liens on any of the assets of the Loan Parties, except for Liens permitted by Section 7.3 or Liens to be discharged on or prior to the Closing Date.

     (m) Environmental Matters. The Lender shall have received an American Society for Testing & Materials (“ASTM”) compliant Environmental Site Assessment (“ESA”) dated no earlier than the date that is six months prior to the Closing Date for each of the Operating Properties, together with a letter from the environmental consultant permitting the ASOT Administrative Agent and the Lender to rely on the environmental assessment as if addressed to and prepared for each of them, and the ASOT Lenders shall be satisfied with the environmental affairs of the Group Members.

     (n) Closing Certificate. The Lender shall have received a certificate of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions and attachments.

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     (o) [Intentionally Omitted].

     (p) Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged Notes. The Lender shall have received (i) the certificates (if any) representing the shares of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, (ii) an Acknowledgment and Consent, substantially in the form of Annex II to the Guarantee and Collateral Agreement, duly executed by any issuer of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement that is not itself a party to the Guarantee and Collateral Agreement and (iii) each promissory note pledged pursuant to the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank satisfactory to the Lender) by the pledgor thereof.

     (q) Filings, Registrations and Recordings. Each document (including, without limitation, any Uniform Commercial Code financing statement) required by the Security Documents or under law or reasonably requested by the Lender or the ASOT Administrative Agent to be filed, registered or recorded in order to create in favor of the Lender, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 7.3), shall have been filed, registered or recorded or shall have been delivered to the Lender in proper form for filing, registration or recordation.

     (r) [Intentionally Omitted].

     (s) [Intentionally Omitted].

     (t) Insurance. The Lender shall have received insurance certificates satisfying the requirements of Section 6.5.

          5.2 Conditions to Each Extension of Credit. The agreement of the Lender to make any extension of credit requested to be made by it hereunder on any date (including, without limitation, its initial extension of credit) is subject to the satisfaction of the following conditions precedent:

     (a) Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents (except, in the case of the initial extensions of credit on the Closing Date, the representations contained in Sections 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.15, 4.17, 4.18, 4.20 and 4.21) shall be true and correct in all material respects on and as of such date as if made on and as of such date, provided that, (i) such representations made on the Closing Date with respect to the Targets shall be limited to the representations made in the Merger Agreement material to the interests of the Lenders, but only to the extent that TSREV has the right to terminate its obligations as a result of a breach of such representations in the Merger Agreement and (ii) any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct on such respective dates.

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          (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date.

          Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this Section 5.2 have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

          The Borrower hereby agrees that, so long as the Revolving Credit Commitment remains in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to the Lender, the Borrower shall and shall cause each of its Subsidiaries to:

          6.1 [Intentionally Omitted].

          6.2 Certificates; Other Information. Furnish to the Lender:

     (a) [intentionally omitted];

     (b) as soon as available, but in any event (i) within 120 days after the end of each fiscal year of the Borrower and (ii) not later than 60 days after the end of the first three fiscal quarterly periods of each fiscal year of the Borrower, (A) a Compliance Certificate containing all information and calculations necessary for determining compliance by the Group Members with the provisions of this Agreement referred to therein as of the last day of the fiscal quarter or fiscal year of the Borrower, as the case may be and (B) any Uniform Commercial Code financing statements or other filings specified in such Compliance Certificate as being required to be delivered therewith;

     (c) [intentionally omitted];

     (d) [intentionally omitted];

     (e) [intentionally omitted];

     (f) within five days after the same are sent, copies of all financial statements and reports that any Group Member sends to the holders of any class of its debt securities or equity securities, and, within five days after the same are filed, copies of all financial statements and reports that any Group Member may make to, or file with, the SEC (provided that the names of any limited partners identified in such financial statements or reports may be redacted prior to delivery);

     (g) [intentionally omitted]; and

     (h) promptly, such additional financial and other information as the Lender may from time to time reasonably request.

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          6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of any Group Member, as the case may be.

          6.4 Conduct of Business and Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep in full force and effect its organizational existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 7.4 and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law, except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

          6.5 Maintenance of Property; Insurance. (a) Keep all Property and systems useful and necessary in its business in good working order and condition, ordinary wear and tear excepted and (b) maintain with financially sound and reputable insurance companies insurance on all its Property in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business.

          6.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) permit representatives of any ASOT Lender to visit and inspect any of its properties during normal business hours and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired (but no more than one visit per any 12-month period shall be permitted (except upon the occurrence and during the continuance of an Event of Default)) and to discuss the business, operations, properties and financial and other condition of the Group Members with officers and employees of the Group Members and with its independent certified public accountants; provided, however, that (a) unless an Event of Default has occurred and is continuing, the Group Members shall only be required to pay the expenses of one such inspection of all of the Group Members’ books and records during any fiscal year, (b) unless an Event of Default has occurred and is continuing, the Lender shall cooperate so that such visit does not materially disrupt the normal operations of such Group Member, and (c) the Lender shall conduct each such inspection in compliance with all reasonable safety and security requirements of such Group Member.

          6.7 Notices. Promptly give notice to the Lender of:

     (a) the occurrence of any Default or Event of Default;

     (b) any (i) default or event of default under any Contractual Obligation of any Group Member or (ii) litigation, investigation or proceeding which may exist at any time between any Group Member and any Governmental Authority, that in either case, if not

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cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect;

          (c) any litigation or proceeding affecting any Group Member (i) in which the amount involved is $50,000,000 or more and not covered by insurance, (ii) in which material injunctive or similar relief is sought or (iii) which relates to any Loan Document;

          (d) the following events, as soon as possible and in any event within 30 days after the Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;

          (e) as soon as possible and in any event within 30 days of obtaining knowledge thereof: (i) any development, event, or condition that, individually or in the aggregate with other developments, events or conditions, could reasonably be expected to result in the payment by the Group Members, in the aggregate, of a Material Environmental Amount; and (ii) any notice that any governmental authority may deny any application for an Environmental Permit sought by, or revoke or refuse to renew any Environmental Permit held by, any Group Member;

          (f) [intentionally omitted]; and

          (g) any development or event that has had or could reasonably be expected to have a Material Adverse Effect.

          Each notice pursuant to this Section 6.7 shall be accompanied by a statement of the Borrower, signed on behalf of the Borrower by a Responsible Officer, setting forth details of the occurrence referred to therein and stating what action the relevant Group Member proposes to take with respect thereto.

          6.8 Environmental Laws. (a) Comply in all material respects with, and ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws, and obtain and comply in all material respects with and maintain, and ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws.

          (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws.

          (c) If any ESA or update delivered pursuant to Section 5.1(m) identifies a Recognized Environmental Condition (“REC”), as defined under ASTM guidelines, the

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Borrower shall, within six months of the delivery of such ESA or update to the Lender and the ASOT Administrative Agent, conduct such follow up testing, provide such reports, and take such other actions as required or approved by the applicable Governmental Authority to the Lender and the ASOT Administrative Agent to mitigate such REC.

          6.9 [Intentionally Omitted].

          6.10 Additional Collateral, etc. (a) With respect to any Property acquired after the Closing Date by any Group Member (other than (x) any real property or any Property described in paragraph (c) of this Section 6.10, (y) any Property subject to a Lien expressly permitted by Section 7.3 and (z) Property acquired by an Excluded Foreign Subsidiary) as to which the Lender does not have a perfected Lien, promptly (i) execute and deliver to the Lender such amendments to the Guarantee and Collateral Agreement or such other documents as the Lender or the ASOT Administrative Agent deems necessary to grant to the Lender a security interest in such Property and (ii) take all actions necessary to grant to the Lender a perfected first priority security interest in such Property, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Lender or the ASOT Administrative Agent.

          (b) With respect to (i) any fee interest in any real property having an appraised value (together with improvements thereof) of at least $5,000,000 acquired after the Closing Date by any Group Member (other than any such real property owned by an Excluded Foreign Subsidiary or subject to a Lien expressly permitted by Section 7.3), or (ii) subject to the related Loan Party obtaining the required landlord consent (provided that each Loan Party shall use commercially reasonable efforts to obtain such consent), any leasehold interest in real property having an aggregate appraised value of $5,000,000 acquired or leased (including any leasehold property interest owned by any new Subsidiary acquired after the Closing Date) in one or a series of transactions after the Closing Date by any Group Member, promptly (and in any event no later than 60 days after the acquisition thereof) (A) execute and deliver a first priority Mortgage in favor of the Lender, covering such real property, (B) if requested by the Lender or the ASOT Administrative Agent, provide the ASOT Administrative Agent with (x) title and extended coverage insurance covering such real property in an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Lender or the ASOT Administrative Agent) as well as a current ALTA survey thereof, together with a surveyor’s certificate and (y) any consents or estoppels reasonably deemed necessary by the Lender or the ASOT Administrative Agent in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the ASOT Administrative Agent and (C) if reasonably requested by the Lender or the ASOT Administrative Agent, deliver to the ASOT Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the ASOT Administrative Agent.

          (c) With respect to any new Subsidiary (other than an Excluded Foreign Subsidiary) created or acquired after the Closing Date (which, for the purposes of this paragraph, shall include any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), by any Group Member, promptly (i) execute and deliver to the Lender such amendments to the

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Guarantee and Collateral Agreement as the ASOT Administrative Agent deems necessary to grant to the Lender a perfected first priority security interest in the Capital Stock of such new Subsidiary that is owned by any Group Member, (ii) deliver to the Lender the certificates representing such Capital Stock (if any), together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such Group Member, as the case may be, (iii) cause such new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and (B) to take such actions necessary to grant to the Lender a perfected first priority security interest in the Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Lender or the ASOT Administrative Agent, and (iv) if reasonably requested by the ASOT Administrative Agent, deliver to the ASOT Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the ASOT Administrative Agent.

          (d) With respect to any new Excluded Foreign Subsidiary created or acquired after the Closing Date by any Group Member (other than any Excluded Foreign Subsidiaries), promptly (i) execute and deliver to the Lender such amendments to the Guarantee and Collateral Agreement or such other documents as the Lender or the ASOT Administrative Agent deems necessary in order to grant to the Lender a perfected first priority security interest in the Capital Stock of such new Subsidiary that is owned by any Group Member (other than any Excluded Foreign Subsidiaries), (provided that in no event shall more than 65% of the total outstanding Capital Stock of any such new Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver to the Lender the certificates (if any) representing such Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such Group Member, as the case may be, and take such other action as may be necessary or, in the opinion of the Lender or the ASOT Administrative Agent, desirable to perfect the Lien of the Lender thereon, and (iii) if reasonably requested by the Lender or the ASOT Administrative Agent, deliver to the ASOT Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the ASOT Administrative Agent.

          6.11 Further Assurances. From time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take such actions, as the Lender or the ASOT Administrative Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of more fully perfecting or renewing the rights of the Lender with respect to the Collateral (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or assets hereafter acquired by any Group Member which may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the Lender of any power, right, privilege or remedy pursuant to this Agreement or the other Loan Documents which requires any consent, approval, recording, qualification or authorization of any Governmental Authority, the Borrower will execute and deliver, or will cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the ASOT Administrative Agent or the Lender may be required to obtain from any Group Member for such governmental consent, approval, recording, qualification or authorization.

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          6.12 Post-Closing Covenants. On or prior to the date that is 60 Business Days after the Closing Date, the Borrower shall deliver to the Lender:

     (a) (i) certificates representing the Capital Stock of any Person constituting Collateral, to the extent that the organizational documents of such Person provides that the equity interests therein shall be certificated, and (ii) such other documents required in connection therewith pursuant to Section 5.1(p); and

     (b) an agreement relating to the payment of the Administration Fees by the Combined Group Members, including turnover provisions, duly executed and delivered by an authorized officer of each of the Funds, in form and substance reasonably satisfactory to the ASOT Administrative Agent.

SECTION 7. NEGATIVE COVENANTS

          The Borrower hereby agrees that, so long as the Revolving Credit Commitment remains in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to the Lender, the Borrower shall not and shall not permit any of its Subsidiaries to, directly or indirectly:

          7.1 [Intentionally Omitted].

          7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

     (a) Indebtedness of any Loan Party pursuant to any Loan Document;

     (b) Indebtedness of the Borrower to any of its Subsidiaries and of any Wholly Owned Subsidiary of the Borrower to the Borrower or any other Subsidiary of the Borrower;

     (c) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate principal amount not to exceed $15,000,000 at any one time outstanding minus the aggregate outstanding principal amount of Indebtedness of the Affiliate Borrowers and their Subsidiaries permitted by Section 7.2(c) of the applicable Affiliate Borrower Credit Agreements;

     (d) Indebtedness of the Subsidiaries of the Borrower outstanding on the date hereof and listed on Schedule 7.2(d) and any refinancings, refundings, renewals or extensions thereof (without any increase in the principal amount thereof or any shortening of the maturity of any principal amount thereof);

     (e) Guarantee Obligations made in the ordinary course of business by any Subsidiaries of the Borrower of obligations of the Borrower or any of its Wholly Owned Subsidiaries;

     (f) [intentionally omitted];

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     (g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, or in respect of netting services, overdraft protections or otherwise in connection with deposit accounts;

     (h) Indebtedness arising under any Capital Stock purchase, repurchase or redemption obligations which may arise pursuant to joint venture agreements in effect on the Closing Date;

     (i) Indebtedness (other than Recourse Indebtedness) assumed by the Subsidiaries of the Borrower in connection with any acquisition permitted by Section 7.8(h); provided that, such Indebtedness existed at the time of such acquisition and was not created in connection therewith or in contemplation thereof, and provided, further that, (i) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, after giving effect to such additional Indebtedness, no Event of Default shall exist and(ii) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such additional Indebtedness, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement (other than Sections 7.1(a) and 7.1(c) of the ASOT Credit Agreement if such Indebtedness is assumed during a Cure Period and the related acquisition was contractually committed to prior to the related Test Date) and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Indebtedness;

     (j) guarantees (including bonds), performance bonds and indemnification obligations incurred in the ordinary course of business of obligations of the Borrower and its Subsidiaries in favor of suppliers, customers, contractors, lessees, tenants, and mechanics of the Borrower or any Subsidiary and any other such obligations, in each case entered into in the ordinary course of business, which are in an outstanding amount not exceeding $50,000,000 individually or $150,000,000 in the aggregate outstanding at any time minus, in each case, the aggregate outstanding principal amount of such Indebtedness of the Affiliate Borrowers and their Subsidiaries permitted by Section 7.2(j) of the applicable Affiliate Borrower Credit Agreements;

     (k) Indebtedness of any Joint Venture, directly or indirectly owned by the Borrower to the Borrower or any Subsidiary to the extent permitted by Section 7.8(g);

     (l) Indebtedness in respect of the Non-Recourse Subsidiary Borrowers that is secured by either (i) Real Property acquired by the Borrower or any of its Subsidiaries after the Closing Date and any related Property permitted by Section 7.3(r) or (ii) the Capital Stock of any Subsidiary of such Non-Recourse Subsidiary Borrower, that is also a Non-Recourse Subsidiary Borrower; provided that, with respect to any of the foregoing Indebtedness:

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     (A) neither the Borrower nor any of its Subsidiaries provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or is directly or indirectly liable (as guarantor or otherwise), other than as guarantor to the extent permitted by Section 7.2(e) for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of special purpose entity covenants and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guarantee or indemnification agreements in non-recourse financing of real estate;

     (B) as to which the lenders thereunder will not have any recourse to the Capital Stock or assets of the Borrower nor any of its Subsidiaries other than the assets securing such Indebtedness, additions, accessions and improvements thereto and proceeds thereof and the Capital Stock of the Non-Recourse Subsidiary Borrower that is the borrower under such Indebtedness and, in the case of the Borrower or any of its Subsidiaries, recourse against the Borrower and its Subsidiaries for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of special purpose entity covenants and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guarantee or indemnification agreements in non-recourse financing or tax-exempt financing of real estate; and

     (C) to the extent that the lenders thereunder will have recourse to the Capital Stock of the borrower of such Indebtedness, such borrower shall be a Non-Recourse Subsidiary Borrower;

provided, further, that, (x) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, after giving effect to such additional Indebtedness, no Event of Default shall exist and (y) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (i) containing all information and calculations necessary, and taking into consideration such additional Indebtedness, for determining pro forma compliance with the provisions of Section 7.1(b) of the ASOT Credit Agreement and (ii) certifying that no ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Indebtedness. For the avoidance of doubt, if at any time following the Closing Date the Borrower or any of its Subsidiaries acquires the remaining Capital Stock of any Joint Venture not owned by the Borrower or such Subsidiary on the Closing Date, any Real Property owned by such Joint Venture shall be included in clause (i) of this Section 7.2(l);

     (m) Construction Related Indebtedness that is not Recourse Indebtedness of any Group Member;

     (n) [intentionally omitted];

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     (o) additional unsecured Indebtedness of the Borrower or any of its Subsidiaries in an aggregate principal amount (for the Borrower and all its Subsidiaries) not to exceed $50,000,000 at any one time outstanding minus the aggregate outstanding principal amount of such Indebtedness of the Affiliate Borrowers and their Subsidiaries permitted by Section 7.2(o) of the applicable Affiliate Borrower Credit Agreements;

     (p) secured Indebtedness of the Borrower under the Affiliate Revolving Notes, the proceeds of which are used by the Borrower for the purposes permitted by Section 4.16;

     (q) [intentionally omitted];

     (r) Indebtedness of the Affiliate Borrower I-B, comprised of the Affiliate Borrower I-B Loan and the Guarantee Obligations of its Subsidiaries with respect thereto;

     (s) [intentionally omitted];

     (t) fully cash collateralized letters of credit issued for the account of the Borrower or any of its Subsidiaries, provided that, at any time the ASOT Tranche A Term Loans are outstanding or the ASOT Borrower is not in compliance with the Required Ratios, the aggregate face amount of such letters of credit at any one time outstanding shall not exceed an amount equal to $25,000,000 minus the aggregate face amount of letters of credit issued for the account of the Affiliate Borrowers or any of their Subsidiaries in accordance with Section 7.2(t) of the Affiliate Borrower Credit Agreements; and

     (u) unsecured Indebtedness (the “Unsecured Employee Cost Loans”) incurred among any of the Borrower, the Affiliate Borrower I-A, the Affiliate Borrower II, the ASOT Borrower, Secured Note LLC and OC/SD JV Holdings LLC (each, an “Unsecured Affiliate Borrower”), as borrower, and any of the Borrower, the Affiliate Borrower I-A, the Affiliate Borrower II, the ASOT Borrower, Secured Note LLC and OC/SD JV Holdings LLC (each, an “Unsecured Affiliate Lender”), as lender, solely for the purposes of funding the Unsecured Affiliate Borrowers’ obligations with respect to employee expenses to be shared by the Unsecured Affiliate Borrowers.

          7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for:

     (a) Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;

     (b) (i) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, workmen’s or other like Liens, (ii) Liens of banks related to Indebtedness permitted by Section 7.2(g) and (iii) Liens of landlords on furniture, fixtures and equipment pursuant to customary Contractual Obligations, in each case, arising in the ordinary course of

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business that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings;

     (c) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

     (d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

     (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and that do not in any case materially detract from the value of the Property subject thereto or materially interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

     (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing Indebtedness permitted by Section 7.2(d) or any Liens securing any refinancings, refundings, renewals or extensions of the foregoing, provided that, no such Lien is spread to cover any additional Property after the Closing Date and that the amount of Indebtedness secured thereby is not increased;

     (g) Liens securing Indebtedness of the Borrower or any of its Subsidiaries incurred pursuant to Section 7.2(c) to finance the acquisition of fixed or capital assets, provided that, (i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber any Property other than the Property financed by such Indebtedness, (iii) the principal amount of Indebtedness secured thereby is not increased and (iv) the amount of Indebtedness initially secured thereby is not more than 100% of the purchase price of such fixed or capital asset;

     (h) Liens created pursuant to the Security Documents;

     (i) any interest or title of a lessor under any lease entered into by the Borrower or any of its Subsidiaries in the ordinary course of its business and covering only the assets so leased;

     (j) Permitted Leases (including memoranda thereof), and any recordation thereof;

     (k) Liens resulting from any judgment, writ or warrant of attachment or similar process and not constituting an Event of Default;

     (l) licenses of Intellectual Property in the ordinary course of business;

     (m) Liens on property of a Person existing at the time such Person is acquired or merged with or into or consolidated with the Borrower or any of its Subsidiaries to the extent permitted hereunder (and not created in anticipation or contemplation thereof)

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securing Indebtedness permitted by Section 7.2(i); provided that, such Liens do not extend to property not subject to such Liens at the time of acquisition (other than improvements and accessions thereon and proceeds thereof), and are no more favorable to the lienholders than such existing Liens (taken as a whole);

     (n) Liens created by sale contracts documenting unconsummated asset dispositions permitted by this Agreement; provided that, such Liens attach only to assets and proceeds thereof subject to such sales contracts;

     (o) Liens attaching to cash earnest money deposits made by the Borrower and its Subsidiaries in connection with any letter of intent or purchase agreement entered into by the Borrower or the applicable Subsidiary, provided that, such acquisition is permitted by Section 7.8;

     (p) Liens arising by operation of law or contract on insurance policies and the proceeds thereof to secure premiums thereunder;

     (q) purported Liens evidenced by the filing of precautionary financing statements by a lessor relating solely to operating leases of personal property entered into in the ordinary course of business;

     (r) Liens on (x) fee-owned property or real property leases of the Borrower and its Subsidiaries and any related Property (other than the Capital Stock of the Borrower and any of its Subsidiaries that is not a Non-Recourse Subsidiary Borrower) customarily granted or pledged by a borrower to its lender in connection with non-recourse financing including, without limitation, any personal property located on or related to such Property, any contracts, receivables and general intangibles related to such real property and any Hedge Agreements relating to the Indebtedness, or (y) the Capital Stock of any Non-Recourse Subsidiary Borrower (and, in each case, any proceeds from any of the foregoing) which Liens secure Indebtedness permitted by Sections 7.2(l) and 7.2(m); provided that, in each case, (i) such Liens shall be created substantially simultaneously with the incurrence of such Indebtedness and (ii) such Liens do not at any time encumber any Property other than the Property financed by such Indebtedness, other than, in each case, in connection with any consolidations of such Indebtedness;

     (s) [intentionally omitted];

     (t) [intentionally omitted];

     (u) Liens on cash collateral to secure letters of credit issued for the account of the Borrower and its Subsidiaries to the extent such letters of credit are permitted by Section 7.2(t);

     (v) Liens in favor of the Secured Note LLC for the benefit of the “Secured Parties” (as defined in the Affiliate Borrower I-B Credit Agreement) securing the obligations of the Affiliate Borrower I-B under the Affiliate Borrower I-B Credit Agreement; and

53

     (w) Liens in favor of the ASOT Borrower securing the obligations of the Borrower under the Affiliate Revolving Notes permitted by Section 7.2(p), provided that, to the extent any such Affiliate Revolving Note is secured by any of the assets of the Borrower and its Subsidiaries which assets directly or indirectly constitute Collateral (as defined in the ASOT Credit Agreement), such Lien shall be a second-priority Lien and the ASOT Borrower shall have executed and delivered an intercreditor agreement, in form and substance reasonably satisfactory to the ASOT Administrative Agent.

          7.4 Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business, except that:

     (a) any Subsidiary of the Borrower or any other Person may be merged or consolidated with or into, or, so long as such Subsidiary has nominal or no assets or liabilities, be liquidated, wound up or dissolved, or all or any part of its business, Property or assets may be conveyed, sold, leased transferred or otherwise disposed of, in one transaction or a series of transactions to, (x) any Wholly Owned Subsidiary Guarantor (provided that (i) a Wholly Owned Subsidiary Guarantor shall be the continuing or surviving corporation or (ii) simultaneously with such transaction, the continuing or surviving corporation shall become a Wholly Owned Subsidiary Guarantor and the Borrower shall comply with Section 6.10 in connection therewith) or (y) the Borrower (1) in a transaction in which the Borrower shall be the continuing or surviving corporation or (2) in a transaction in which the Borrower shall not be the continuing or surviving corporation (such surviving person, the “Successor Borrower”); provided that, (A) such transaction shall not cause the ASOT Borrower to fail to be in pro forma compliance with the covenants contained in Section 7.1 of the ASOT Credit Agreement (other than Sections 7.1(a) and 7.1(c) of the ASOT Credit Agreement if such transaction is consummated during a Cure Period and was contractually committed to prior to the related Test Date), (B) the Successor Borrower shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, (C) the Successor Borrower shall expressly assume all the obligations of the Borrower under this Agreement and the other Loan Documents to which the Borrower is a party pursuant to a supplement hereto or thereto in a form reasonably satisfactory to the ASOT Administrative Agent, (D) each Subsidiary Guarantor, unless it is the other party in such transaction, shall confirm that its guarantee shall apply to the Successor Borrower’s obligations under this Agreement, (E) each Subsidiary Guarantor, unless it is the other party to such transaction, shall have by a supplement to the Guarantee and Collateral Agreement confirmed that its obligations thereunder shall apply to the Successor Borrower’s obligations under this Agreement, (F) each mortgagor of the Mortgaged Property, unless it is the other party to such transaction, shall have by an amendment to or restatement of the applicable Mortgage confirmed that its obligations thereunder shall apply to the Successor Borrower’s obligations under this Agreement and/or its guarantee thereof, as applicable, (G) such transaction shall not cause a Change of Control to occur and (H) the Borrower shall have delivered to the Lender and the ASOT Administrative Agent an officer’s certificate stating that such transaction and such supplement to this Agreement or any Security Document comply with this Agreement;

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provided further that, if the foregoing are satisfied, the Successor Borrower will succeed to, and be substituted for, the Borrower under this Agreement; and

     (b) the Borrower or any Subsidiary of the Borrower may Dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any Subsidiary Guarantor.

          7.5 Limitation on Disposition of Property. Dispose of any of its Property (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person, except:

     (a) the Disposition of obsolete or worn out property or surplus property in the ordinary course of business;

     (b) the sale of inventory in the ordinary course of business;

     (c) Dispositions permitted by Section 7.4(b);

     (d) the sale or issuance of the Capital Stock of any Subsidiary of the Borrower to the Borrower or any Subsidiary Guarantor;

     (e) the Disposition of other assets, provided that, (i) such Disposition is at fair market value, as reasonably determined by the Group Member making such Disposition, (ii) such Disposition shall not result in a Material Adverse Effect and (iii) at the time of such Disposition, (A) a certificate of a Responsible Officer of the ASOT Borrower shall have been delivered to the ASOT Administrative Agent, which shall (1) include a computation demonstrating pro forma compliance with the covenants contained in Section 7.1(b) of the ASOT Credit Agreement after giving effect to such Disposition and (2) certify that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such Disposition and (B) a certificate of a Responsible Officer of the Borrower shall have been delivered to the Lender, which shall include a certification that no Default or Event of Default shall have occurred and be continuing at such time or after giving effect to such Disposition;

     (f) [intentionally omitted];

     (g) Permitted Leases;

     (h) Investments permitted by Section 7.8;

     (i) asset sales pursuant to “forced-sale,” “buy-sell,” “put-call” or similar arrangements in joint venture agreements of the Joint Ventures in effect on the date hereof;

     (j) licenses of Intellectual Property in the ordinary course of business; and

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     (k) Dispositions, by means of trade-in, of equipment used in the ordinary course of business, so long as such equipment is replaced or substituted, substantially concurrently, by like-equipment.

          7.6 Limitation on Restricted Payments. Declare or pay any dividend on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Group Member, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of any Group Member, or enter into any derivatives or other transaction with any financial institution, commodities or stock exchange or clearinghouse (a “Derivatives Counterparty”) obligating any Group Member to make payments to such Derivatives Counterparty as a result of any change in market value of any such Capital Stock (collectively, “Restricted Payments”), except that:

     (a) any Subsidiary may make Restricted Payments to the Borrower or any Subsidiary Guarantor;

     (b) [intentionally omitted];

     (c) the Group Members may make Restricted Payments directly or indirectly to any ASOT Parent/Affiliate Guarantor, if on the date of such Restricted Payment, the ASOT Tranche A Term Loans have been paid in full and the ASOT Borrower is in compliance with the Required Ratios; provided that, on the date of any such Restricted Payment, (i) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, immediately prior to and after giving effect to such Restricted Payment, no Default or Event of Default shall have occurred and be continuing, (ii) the ASOT Borrower shall deliver to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Restricted Payment and (iii) Restricted Payments may not be made pursuant to this Section 7.6(c) during any Cure Period;

     (d) any Group Member may make Restricted Payments to its direct or indirect owners to allow such direct or indirect owners to pay any taxes which are due and payable by Guarantor 1, Guarantor 2, the ASOT Additional Parent Guarantors, Holdings I Corp and the Borrower (or the first taxpayers that are a direct or indirect owner of Guarantor 1, Guarantor 2 or any ASOT Additional Parent Guarantor, in each case, solely to the extent of net income attributable to the Group Members), including, without limitation, in connection with any Disposition of Property permitted by Section 7.5 (assuming that each such owner is taxable at the highest marginal tax rate applicable to corporations resident in New York City (taking into account the deductibility of state and local taxes)); provided that, on the date of any such Restricted Payment, (x) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, immediately prior to and after giving effect to such Restricted Payment,

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no Default or Event of Default shall have occurred and be continuing and (y) the ASOT Borrower shall deliver to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment, for determining pro forma compliance with the provisions of Section 7.1(b) of the ASOT Credit Agreement and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Restricted Payment;

     (e) [intentionally omitted];

     (f) [intentionally omitted];

     (g) at any time other than during a Cure Period, (x) any Group Member and its Subsidiaries may make Restricted Payments to pay the Administration Fees or (y) the Borrower may make loans to the Financial Reporting Parties under the Secured Guarantor Notes; provided that, (A) on any date, the aggregate amount of Restricted Payments and the outstanding principal amount of loans made pursuant to this Section 7.6(g) shall not at any time exceed the aggregate amount of Administration Fees allocable to the Group Members during the period beginning on the Closing Date and ending on the date of determination and (B) the Secured Guarantor Notes are pledged to the Lender as Collateral, and, provided further, that, on the date of any such Restricted Payment or loan, (i) the Borrower shall deliver to the ASOT Administrative Agent a pro forma Compliance Certificate certifying that, immediately prior to and after giving effect to such Restricted Payment or loan, as applicable, no Default or Event of Default shall have occurred and be continuing and (ii) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment or loan, as applicable, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Restricted Payment or loan, as applicable; and

     (h) a Group Member may make Restricted Payments with Distributable Affiliate Proceeds to the extent required under the ASOT Credit Agreement.

          7.7 Limitation on Maintenance Capital Expenditures and Renovation Capital Expenditures. Make or commit to make any Maintenance Capital Expenditures or Renovation Capital Expenditures, except:

     (a) Maintenance Capital Expenditures of the Group Members made in the ordinary course of business in any fiscal year in an aggregate amount equal to the sum of all outstanding units owned or leased by the Group Members available at the beginning of such fiscal year multiplied by $950 (adjusted, in the case of units owned or leased by any Joint Venture, to reflect the Ownership Percentage of the Group Members in such Joint Venture); provided that, (i) up to 50% of any such amount referred to in this clause (a), if not so expended in the fiscal year for which it is permitted, may be carried

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over for expenditure in the next succeeding fiscal year and (ii) Maintenance Capital Expenditures made pursuant to this clause (a) during any fiscal year shall be deemed made, first, in respect of amounts carried over from the prior fiscal year pursuant to subclause (i) above and second, in respect of amounts permitted for such fiscal year as provided above;

     (b) Renovation Capital Expenditures of the Group Members made in the ordinary course of business in an amount not to exceed an aggregate amount equal to $180,000,000 minus the aggregate amount of Renovation Capital Expenditures of the Affiliate Borrowers made pursuant to Section 7.7(b) of the applicable Affiliate Borrower Credit Agreement; provided that, until the ASOT Tranche A Term Loans have been repaid in full and the ASOT Borrower is in compliance with the Required Ratios, the aggregate amount of Renovation Capital Expenditures made by the Group Members with respect to Joint Ventures that are not CapEx Controlled pursuant to this Section 7.7(b) shall not exceed an amount equal to $30,000,000 during the term of this Agreement minus the aggregate amount of Renovation Capital Expenditures of the Affiliate Borrowers and their Subsidiaries made with respect to Joint Ventures that are not CapEx Controlled pursuant to Section 7.7(b) of the applicable Affiliate Borrower Credit Agreement. For the avoidance of doubt, the amount of Renovation Capital Expenditures of any Group Member made with respect to any Joint Venture shall be deemed to be the amount actually paid by such Group Member, including, without limitation, amounts attributed to such Group Member from any distributions of such Joint Venture; and

     (c) Renovation Capital Expenditures of the Group Members for Real Property acquired after the Closing Date in accordance with Section 7.8(h), provided that, the Borrower has delivered to the Lender a written notice generally identifying such Renovation Capital Expenditures and the anticipated amount thereof promptly after such acquisition.

          7.8 Limitation on Investments. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or any assets constituting an ongoing business from, or make any other investment in, any other Person (all of the foregoing, “Investments”), except:

     (a) extensions of trade credit in the ordinary course of business;

     (b) Investments in Cash Equivalents;

     (c) Investments arising in connection with the incurrence of Indebtedness permitted by Sections 7.2(b), 7.2(e), 7.2(j) and 7.2(u);

     (d) [intentionally omitted];

     (e) [intentionally omitted];

     (f) [intentionally omitted];

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     (g) (i) Investments (other than those relating to the incurrence of Indebtedness permitted by Section 7.8(c)) by any Group Member in the Borrower or any Person that is a Wholly Owned Subsidiary and (ii) Investments consisting of loans to a Joint Venture owned by the Borrower and its Subsidiaries as of the Closing Date, to the extent that (x) such loans are required by the related joint venture agreement in effect on the Closing Date and (y) the aggregate amount of such loans to such Joint Venture do not exceed an amount equal to the aggregate amount of Indebtedness of such Joint Venture to its shareholders or members multiplied by the Ownership Percentage of the Group Members in such Joint Venture;

     (h) Investments (whether made directly or indirectly through the acquisition of a Person owning such assets) made by the Borrower and its Subsidiaries to acquire Real Property, provided that, (x) such Investment shall not result in a Material Adverse Effect, (y) at the time of such Investment, (i) a certificate of a Responsible Officer of the Borrower shall have been delivered to the Lender, certifying that no Default or Event of Default shall have occurred and be continuing at such time or after giving effect to such Investment and (ii) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement (other than Sections 7.1(a) and 7.1(c) of the ASOT Credit Agreement if such Investment is consummated during a Cure Period and is an acquisition that was contractually committed to prior to the related Test Date) and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such Investment, and (z) the terms and conditions set forth in Section 6.10 are satisfied;

     (i) Investments by the Borrower and its Subsidiaries in any securities received by the Borrower or such Subsidiary in the ordinary course of business in satisfaction or partial satisfaction of indebtedness from financially troubled account debtors;

     (j) Investments received by the Borrower and its Subsidiaries in connection with the bankruptcy or reorganization of suppliers and lessees and in settlement of delinquent obligations of, and other disputes with, lessees and suppliers arising in the ordinary course of business;

     (k) Investments by any Group Member in any Joint Venture owned by the Borrower and its Subsidiaries as of the Closing Date, including any Investment required in connection with (i) the exercise by any partner or member in such Joint Venture of any “forced-sale,” “buy-sell,” “put-call” or similar arrangements in the joint venture agreements for such Joint Venture, or (ii) the purchase of the partnership or membership interest of any other partner or member in such Joint Venture, provided that, (x) such Investments are required by the related joint venture agreement in effect on the Closing Date and (y) the aggregate amount of such Investments made by the Group Members in such Joint Venture do not exceed an amount equal to the aggregate amount of investments in such Joint Venture made by its shareholders or members multiplied by the

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Ownership Percentage of the Group Members in such Joint Venture, provided, further, that, any such Investment in the form of a loan or advance shall be evidenced by a note and pledged as Collateral pursuant to the Security Documents;

     (l) Investments by the Borrower and its Subsidiaries in Joint Ventures made after the Closing Date not otherwise permitted by Section 7.8 in an aggregate amount not exceeding on any date an amount equal to Applicable JV Investment Percentage in effect on such date of Gross Asset Value as at the last day of the fiscal quarter most recently ended for which financial statements are available less the aggregate amount of Investments in Joint Ventures made by the Affiliate Borrower Group Members after the Closing Date as of such date, provided that, (i) the amount of such Investment in the Capital Stock of any such Joint Venture shall be net of the amount of any Indebtedness incurred by such Joint Venture that is allocable to the Borrower and its Subsidiaries on such date and (ii) such Investment shall be represented by a certificate representing the Capital Stock of such Joint Venture owned by the Borrower and its Subsidiaries, as applicable, pledged by the Loan Parties to the Lender as Collateral;

     (m) [intentionally omitted];

     (n) Investments by the Borrower and its Subsidiaries in (i) Joint Ventures existing on the Closing Date and (ii) Joint Ventures created in connection with any Disposition by any Group Member that owns an Owned Property to the extent such Disposition is permitted by Section 7.5; and

     (o) loans made by the Borrower to the Financial Reporting Parties under the Secured Guarantor Notes in accordance with Section 7.6(g).

          7.9 [Intentionally Omitted].

          7.10 Limitation on Transactions with Affiliates. Enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than any Combined Group Member) unless such transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course of business of the Group Member entering into such transaction and (c) upon fair and reasonable terms no less favorable to the Group Member entering into such transaction than it would obtain in a comparable arm’s-length transaction with a Person that is not an Affiliate, other than (i) the Holdings I LP Asset Acquisition and the Loan Documents, (ii) the payment of the Administration Fees pursuant to the Fund Agreements, as in effect on the Closing Date or the date of formation, as applicable, to the extent any Restricted Payment was permitted by Section 7.6(g), (iii) the loans made by the Borrower to the Financial Reporting Parties pursuant to the Secured Guarantor Notes, (iv) [intentionally omitted], (v) the Unsecured Employee Cost Loans made by the Unsecured Affiliate Lenders to the Unsecured Affiliate Borrowers, (vi) [intentionally omitted], (vii) [intentionally omitted] and (viii) the Administration Fee Agreement.

          7.11 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by any Group Member of real or personal property which has

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been or is to be sold or transferred by such Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Group Member.

          7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day other than December 31 or change the Borrower’s method of determining fiscal quarters.

          7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Group Member to create, incur, assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure the Obligations or, in the case of any guarantor, its obligations under the Guarantee and Collateral Agreement, other than (a) this Agreement and the other Loan Documents, (b) [intentionally omitted], (c) any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby or Indebtedness permitted by Sections 7.2(l), 7.2(m) and 7.2(r) (in each case, any prohibition or limitation shall only be effective against the assets financed thereby) and (d) any prohibition or limitation that (i) consists of customary restrictions and conditions contained in any agreement relating to the sale of any Property permitted under Section 7.5 pending the consummation of such sale, provided that, such restriction or condition shall only be effective against such Property, (ii) exists in any agreement in effect at the time such Subsidiary becomes a Subsidiary of the Borrower, provided that (A) such agreement was not entered into in contemplation of such Person becoming a Subsidiary and (B) such prohibition or limitation shall only be effective against such Subsidiary or (iii) is imposed by any amendments or refinancings that are otherwise permitted by the Loan Documents of the contracts, instruments or obligations referred to in clause (d)(ii), provided that (A) such amendments and refinancings are no more materially restrictive (taken as a whole) with respect to such prohibitions and limitations than those in effect prior to such amendment or refinancing and (B) the negative pledge clause(s) in such amendments or refinancings do not extend to Property other than such Property covered in the agreements permitted in clause (d)(ii).

          7.14 Limitation on Restrictions on Subsidiary Distributions. Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (b) make Investments in the Borrower or any other Subsidiary or (c) transfer any of its assets to the Borrower or any other Subsidiary, except for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Loan Documents and (ii) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Subsidiary.

          7.15 Limitation on Lines of Business. Enter into any material line of business, either directly or through any Subsidiary, fundamentally or substantively different from those businesses in which the Borrower and its Subsidiaries are engaged on the date of this Agreement (after giving effect to the Holdings Merger) or that are reasonably related or ancillary thereto or that represents a reasonable extension or enhancement thereof.

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          7.16 [Intentionally Omitted].

          7.17 Limitation on Amendments to Other Documents. (a) Amend, supplement or otherwise modify the organizational document of any Group Member in any manner that would adversely affect the interests of the Lender, (b) amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of the Administration Fee Agreement in any manner that would adversely affect the application thereto of the subordination provisions set forth therein or in any subordination agreement related thereto, or (c) otherwise amend, supplement or otherwise modify the terms and conditions of the Administration Fee Agreement or any note related thereto, except to the extent that any such amendment, supplement or modification could not reasonably be expected to have a Material Adverse Effect.

          7.18 [Intentionally Omitted].

          7.19 [Intentionally Omitted].

          7.20 Limitation on Hedge Agreements. Enter into any Hedge Agreement other than Hedge Agreements entered into in the ordinary course of business and not for speculative purposes, to protect against changes in interest rates or foreign exchange rates.

SECTION 8. EVENTS OF DEFAULT

          If any of the following events shall occur and be continuing:

     (a) the Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan Document within five days after any such interest or other amount becomes due in accordance with the terms hereof or thereof; or

     (b) any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made or furnished; or

     (c) (i) any Loan Party shall default in the observance or performance of any agreement contained in clause (i) or (ii) of Section 6.4(a) (with respect to the Borrower only), Section 6.7(a), Section 7, or in Section 5 of the Guarantee and Collateral Agreement, (ii) either the Affiliate Borrower I-B or the Affiliate Borrower II defaults on any of their respective obligations under Section 2.12 of the applicable Affiliate Borrower Credit Agreement or (iii) an “Event of Default” under and as defined in any Mortgage shall have occurred and be continuing; or

     (d) any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as

62

provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after a Responsible Officer of any Loan Party has knowledge or should have had knowledge of such default; or

     (e) any Combined Group Member shall (i) default in making any payment of any principal of any Indebtedness (including, without limitation, any Indebtedness under the ASOT Credit Agreement or any Guarantee Obligation, but excluding the Loans, Reimbursement Obligations and, so long as no Event of Default has occurred and is continuing under Section 8(a) of the ASOT Credit Agreement, the Indebtedness under any Affiliate Borrower Loan Document or any Affiliate Revolving Note) on the scheduled or original due date with respect thereto, (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created (excluding, so long as no Event of Default has occurred and is continuing under Section 8(a) of the ASOT Credit Agreement, the Indebtedness under any Affiliate Borrower Loan Document or any Affiliate Revolving Note), or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; provided that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $50,000,000; or

     (f) (i) any Combined Group Member shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Combined Group Member shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Combined Group Member any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Combined Group Member any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry

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thereof; or (iv) any Combined Group Member shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Combined Group Member shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

     (g) (i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the ASOT Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the ASOT Required Lenders shall be likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could, in the sole judgment of the ASOT Required Lenders, reasonably be expected to have a Material Adverse Effect; or

     (h) one or more judgments or decrees shall be entered against any Combined Group Member involving for the Combined Group Members taken as a whole a liability (not paid or fully covered by insurance as to which the relevant insurance company has acknowledged coverage) of $50,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or

     (i) any of the Security Documents shall cease, for any reason (other than by reason of the express release thereof pursuant to Section 10.15), to be in full force and effect, or any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby other than as a result of any termination or release in accordance with the terms of this Agreement; or

     (j) the guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason (other than by reason of the express release thereof pursuant to Section 10.15), to be in full force and effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or

     (k) any Change of Control shall occur;

64

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Borrower, automatically the Revolving Credit Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) the Lender may, by notice to the Borrower declare the Revolving Credit Commitment to be terminated forthwith, whereupon the Revolving Credit Commitment shall immediately terminate; and (ii) the Lender may, by notice to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable. In the case of all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the ASOT Administrative Agent an amount equal to the aggregate then undrawn and unexpired face amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the ASOT Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the ASOT Borrower under the ASOT Credit Agreement and under the other ASOT Loan Documents. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the ASOT Borrower under the ASOT Credit Agreement and under the other ASOT Loan Documents shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto).

SECTION 9. [INTENTIONALLY OMITTED]

SECTION 10. MISCELLANEOUS

          10.1 Amendments and Waivers. Neither this Agreement or any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 10.1. Subject to Section 7.18 of the ASOT Credit Agreement, the Lender and each Loan Party party to the relevant Loan Document may from time to time (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents (including amendments and restatements hereof or thereof) for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lender or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as may be specified in the instrument of waiver, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences.

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          Any such waiver and any such amendment, supplement or modification shall be binding upon the Loan Parties, the Lender and all future holders of the Loans. In the case of any waiver, the Loan Parties and the Lender shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Any such waiver, amendment, supplement or modification shall be effected by a written instrument signed by the parties required to sign pursuant to the foregoing provisions of this Section; provided that, delivery of an executed signature page of any such instrument by facsimile transmission shall be effective as delivery of a manually executed counterpart thereof.

          10.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed in the case of the Borrower and the Lender, as follows:

The Borrower:	c/o Tishman Speyer
	45 Rockefeller Plaza
	New York, New York 10111
	Attention: Chief Financial Officer
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300
with copies to:	Tishman Speyer
	45 Rockefeller Plaza
	New York, New York 10111
	Attention: General Counsel
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300
and	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention: Philip Mindlin
	Telecopy: (212) 403-2217
	Telephone: (212) 403-1217
The Lender:	c/o Tishman Speyer
	45 Rockefeller Plaza
	New York, New York 10111
	Attention: Chief Financial Officer
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300
with copies to:	Tishman Speyer
	45 Rockefeller Plaza

66

	New York, New York 10111
	Attention: General Counsel
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300
and	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention: Philip Mindlin
	Telecopy: (212) 403-2217
	Telephone: (212) 403-1217

provided that any notice, request or demand to or upon the Lender shall not be effective until received.

          Notices and other communications to the Lender hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Lender; provided that, the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Lender. The Lender or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

          10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

          10.4 Survival of Representations and Warranties. All representations and warranties made herein, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.

          10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the Lender for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements and other charges of counsel to the Lender, (b) to pay or reimburse the Lender for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any other documents prepared in connection herewith or therewith, including, without limitation, the fees and disbursements of counsel to the Lender), (c) to pay, indemnify, or reimburse the Lender for, and hold the Lender

67

harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify or reimburse the Lender, its affiliates, and its officers, directors, trustees, employees, advisors, agents and controlling persons (each, an “Indemnitee”) for, and hold each Indemnitee harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by an Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto or thereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds thereof (including any refusal by any Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Materials of Environmental Concern on or from any property owned, occupied or operated by the Borrower or any of its Subsidiaries, or any environmental liability related in any way to the Borrower or any of its Subsidiaries or any or their respective properties, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by any third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto (all the foregoing in this clause (d), collectively, the “Indemnified Liabilities”); provided that, the Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee. No Indemnitee shall be liable for any damages arising from the use by unauthorized persons of information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such persons or for any special, indirect, consequential or punitive damages in connection with the Loans. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries so to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section shall be payable not later than 30 days after written demand therefor. Statements payable by the Borrower pursuant to this Section shall be submitted to the Borrower, at the address of the Borrower set forth in Section 10.2, or to such other Person or address as may be hereafter designated by the Borrower in a notice to the ASOT Administrative Agent as set forth in the ASOT Credit Agreement. The agreements in this Section shall survive repayment of the Loans and all other amounts payable hereunder.

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          10.6 Successors and Assigns; Participations and Assignments. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender, all future holders of the Loans and their respective successors and assigns permitted hereby, except that neither the Borrower nor the Lender may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the requisite ASOT Lenders pursuant to Section 7.18 of the ASOT Credit Agreement, provided, however, that it is understood and agreed that a security interest in this Agreement and the other Loan Documents shall be granted to the ASOT Administrative Agent for the benefit of the ASOT Secured Parties.

          10.7 [Intentionally Omitted].

          10.8 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower, the Lender and the ASOT Administrative Agent.

          10.9 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

          10.10 Integration. This Agreement and the other Loan Documents represent the entire agreement of the Borrower and the Lender with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

          10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          10.12 Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:

     (a) submits for itself and its Property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

     (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

69

     (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the relevant Person at its address set forth in Section 10.2 or at such other address of which each party hereto shall have been notified pursuant thereto;

     (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

     (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

          10.13 Acknowledgments. The Borrower hereby acknowledges that:

     (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

     (b) the Lender does not have any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Lender, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

     (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Borrower and the Lender.

          10.14 Confidentiality. The Lender agrees to keep confidential all non-public information provided to it by any Loan Party pursuant to this Agreement that is designated by such Loan Party as confidential; provided that nothing herein shall prevent the Lender from disclosing any such information (a) to the parties to the ASOT Credit Agreement or any affiliate of any thereof, (b) to any prospective purchaser of Revolving Credit Commitment and/or Loans that agrees to comply with the provisions of this Section or substantially equivalent provisions, (c) to any of its employees, directors, agents, attorneys, accountants and other professional advisors, (d) [intentionally omitted], (e) upon the demand of any Governmental Authority having jurisdiction over it, (f) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (g) in connection with any litigation or similar proceeding, (h) that has been publicly disclosed other than in breach of this Section, (i) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about the Lender’s investment portfolio in connection with ratings issued with respect to the Lender or (j) in connection with the exercise of any remedy hereunder or under any other Loan Document.

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          10.15 Release of Collateral and Guarantee Obligations. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, upon request of the Borrower in connection with any Disposition of Property permitted by the Loan Documents or the incurrence of Indebtedness permitted by Section 7.2(l) and 7.2(m), the Lender shall take such actions as shall be required to release its security interest in any Collateral being Disposed of in such Disposition or to be subject to a Lien permitted by Section 7.3(r), and to release any guarantee obligations under any Loan Document of any Person being Disposed of in such Disposition or incurrence of such Indebtedness, to the extent necessary to permit consummation of such Disposition or incurrence of such Indebtedness in accordance with the Loan Documents. The Lender shall, in lieu of taking actions to release its security interest in accordance with the foregoing sentence, take such actions as shall be reasonably requested by the Borrower to assign such security interest to the related purchaser or lender in connection with any permitted Disposition or incurrence of Indebtedness.

           (b) Notwithstanding anything to the contrary contained herein or any other Loan Document, when all Obligations have been paid in full, the Revolving Credit Commitment has been terminated or expired and no Letter of Credit shall be outstanding (unless fully cash collateralized), upon request of the Borrower, the Lender shall take such actions as shall be required to release its security interest in all Collateral, and to release all guarantee obligations under any Loan Document. Any such release of guarantee obligations shall be deemed subject to the provision that such guarantee obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made.

          10.16 [Intentionally Omitted].

          10.17 [Intentionally Omitted].

          10.18 WAIVERS OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

          10.19 Exculpation. Notwithstanding anything appearing to the contrary in this Agreement, or in the Guarantee and Collateral Agreement or any of the other Loan Documents, the Lender shall not be entitled to enforce the liability and obligation of the Borrower or any Subsidiary Guarantor to pay, perform and observe the obligations contained in this Agreement by any action or proceeding against any member, shareholder, partner, manager, director, officer, agent, affiliate, beneficiary, trustee or employee of the Borrower or any Subsidiary Guarantor (or any direct or indirect member, shareholder, partner or other owner of any such member, shareholder, partner, manager, director, officer, agent, affiliate or employee of the Borrower or any Subsidiary Guarantor, or any director, officer, employee, agent, manager or trustee of any of the foregoing); provided that, nothing in this Section 10.19 shall have the effect of exculpating from liability any entity that is itself the Borrower or a Subsidiary Guarantor under this Agreement.

[NO FURTHER TEXT ON THIS PAGE]

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDING I (PARENT BORROWER-B), L.P.
By:	Tishman Speyer Archstone-Smith Multifamily Holding I (Parent Borrower-B) GP, L.L.C., its general partner
By:	/s/ Bradley Turk
	Name:	Bradley Turk
	Title:	Authorized Signatory
ARCHSTONE-SMITH OPERATING TRUST, as Lender
By:	/s/ George Hatzmann
	Name:	George Hatzmann
	Title:	Authorized Signatory

[Signature Page to Credit Agreement (Parent Borrower I-B)]

EX-10.17

Exhibit 10.17

EXECUTION VERSION

$750,000,000
CREDIT AGREEMENT
(AFFILIATE BORROWER II-REVOLVING CREDIT LOAN)

among

TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS II (BORROWER) GP, L.L.C.
and
TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS II, L.P.,
as Parent Guarantors,

TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS II (BORROWER), L.P.,
as Borrower,

and

ARCHSTONE-SMITH OPERATING TRUST,
as Lender

Dated as of October 5, 2007

TABLE OF CONTENTS

		Page
SECTION 1 DEFINITIONS
1.1	Defined Terms
1.2	Other Definitional Provisions		21
SECTION 2 AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENT			22
2.1	[Intentionally Omitted]		22
2.2	[Intentionally Omitted]		22
2.3	[Intentionally Omitted]		22
2.4	Revolving Credit Commitment		22
2.5	Procedure for Revolving Credit Borrowing		22
2.6	[Intentionally Omitted]		23
2.7	[Intentionally Omitted]		23
2.8	Repayment of Loans; Evidence of Debt		23
2.9	Commitment Fees, etc		23
2.10	Termination or Reduction of Revolving Credit Commitment		23
2.11	Optional Prepayments		23
2.12	[Intentionally Omitted]		24
2.13	Conversion and Continuation Options		24
2.14	Minimum Amounts and Maximum Number of Eurodollar Tranches		24
2.15	Interest Rates and Interest Payment Dates		24
2.16	Computation of Interest and Fees		25
2.17	Inability to Determine Interest Rate		25
2.18	Payments		26
2.19	Requirements of Law		27
2.20	Taxes		28
2.21	Indemnity		29
2.22	Illegality		29
2.23	[Intentionally Omitted]		30
2.24	[Intentionally Omitted]		30
2.25	[Intentionally Omitted]		30
2.26	[Intentionally Omitted]		30
2.27	Exculpation		30
SECTION 3 LETTERS OF CREDIT			32
3.1	L/C Commitment		32
3.2	Procedure for Issuance of Letter of Credit		33
3.3	Fees and Other Charges		33
3.4	[Intentionally Omitted]		33
3.5	Reimbursement Obligation of the Borrower		33
3.6	[Intentionally Omitted]		34
3.7	Obligations Absolute		34

-i-

		Page
3.8	Letter of Credit Payments		34
3.9	Applications		34
SECTION 4 REPRESENTATIONS AND WARRANTIES			35
4.1	[Intentionally Omitted]		35
4.2	No Change		35
4.3	Corporate Existence; Compliance with Law		35
4.4	Corporate Power; Authorization; Enforceable Obligations		35
4.5	No Legal Bar		35
4.6	No Material Litigation		36
4.7	No Default		36
4.8	Ownership of Property; Liens		36
4.9	Intellectual Property		36
4.10	Taxes		36
4.11	Federal Regulations		36
4.12	Labor Matters		37
4.13	ERISA		37
4.14	Investment Company Act; Other Regulations		37
4.15	Subsidiaries		38
4.16	Use of Proceeds		38
4.17	Environmental Matters		38
4.18	Accuracy of Information, etc		39
4.19	Security Documents		39
4.20	Solvency		40
4.21	Regulation H		40
SECTION 5 CONDITIONS PRECEDENT			40
5.1	Conditions to Initial Extension of Credit		40
5.2	Conditions to Each Extension of Credit		42
SECTION 6 AFFIRMATIVE COVENANTS			43
6.1	[Intentionally Omitted]		43
6.2	Certificates; Other Information		43
6.3	Payment of Obligations		44
6.4	Conduct of Business and Maintenance of Existence; Compliance		44
6.5	Maintenance of Property; Insurance		44
6.6	Inspection of Property; Books and Records; Discussions		44
6.7	Notices		45
6.8	Environmental Laws		45
6.9	[Intentionally Omitted]		46
6.10	Additional Collateral, etc		46
6.11	Further Assurances		47
6.12	Post-Closing Covenants		48

-ii-

		Page
SECTION 7 NEGATIVE COVENANTS			48
7.1	[Intentionally Omitted]		48
7.2	Limitation on Indebtedness		48
7.3	Limitation on Liens		52
7.4	Limitation on Fundamental Changes		54
7.5	Limitation on Disposition of Property		55
7.6	Limitation on Restricted Payments		56
7.7	Limitation on Maintenance Capital Expenditures and Renovation Capital Expenditures		57
7.8	Limitation on Investments		58
7.9	[Intentionally Omitted]		60
7.10	Limitation on Transactions with Affiliates		60
7.11	Limitation on Sales and Leasebacks		61
7.12	Limitation on Changes in Fiscal Periods		61
7.13	Limitation on Negative Pledge Clauses		61
7.14	Limitation on Restrictions on Subsidiary Distributions		61
7.15	Limitation on Lines of Business		62
7.16	[Intentionally Omitted]		62
7.17	Limitation on Amendments to Other Documents		62
7.18	[Intentionally Omitted]		62
7.19	[Intentionally Omitted]		62
7.20	Limitation on Hedge Agreements		62
SECTION 8 EVENTS OF DEFAULT			62
SECTION 9 [INTENTIONALLY OMITTED]			65
SECTION 10 MISCELLANEOUS			65
10.1	Amendments and Waivers		65
10.2	Notices		66
10.3	No Waiver; Cumulative Remedies		68
10.4	Survival of Representations and Warranties		68
10.5	Payment of Expenses		68
10.6	Successors and Assigns; Participations and Assignments		69
10.7	[Intentionally Omitted]		70
10.8	Counterparts		70
10.9	Severability		70
10.10	Integration		70
10.11	Governing Law		70
10.12	Submission to Jurisdiction; Waivers		70
10.13	Acknowledgments		71
10.14	Confidentiality		71
10.15	Release of Collateral and Guarantee Obligations		71
10.16	[Intentionally Omitted]		72
10.17	[Intentionally Omitted]		72
10.18	Waivers of Jury Trial		72
10.19	Exculpation		72

-iii-

SCHEDULES:
1.1A	[Intentionally Omitted]
1.1B	Real Property
1.1C	[Intentionally Omitted]
1.1D	Property Owners
4.15	Subsidiaries
4.19	Uniform Commercial Code Filing Jurisdictions
7.2(d)	Existing Indebtedness
7.3(f)	Existing Liens
EXHIBITS:
A	Form of Guarantee and Collateral Agreement
B	Form of Compliance Certificate
C	Form of Closing Certificate
D	[Intentionally Omitted]
E	[Intentionally Omitted]
F	[Intentionally Omitted]
G	[Intentionally Omitted]
H	[Intentionally Omitted]
I	[Intentionally Omitted]
J	Form of Borrowing Notice

-iv-

          CREDIT AGREEMENT (AFFILIATE BORROWER II-REVOLVING CREDIT LOAN), dated as of October 5, 2007, among TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS II (BORROWER) GP, L.L.C., a Delaware limited liability company (“Affiliate Borrower II GP”), TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS II, L.P., a Delaware limited partnership (“Affiliate Borrower II LP”), TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS II (BORROWER), L.P., a Delaware limited partnership (the “Borrower”), and ARCHSTONE-SMITH OPERATING TRUST, a Maryland real estate investment trust (the “Lender”).

WITNESSETH:

          WHEREAS, the Borrower has requested the Lender make available a revolving credit loan facility to provide for the general corporate needs of the Borrower and its Subsidiaries; and

          WHEREAS, the Lender is willing to make such credit facility available upon and subject to the terms and conditions hereinafter set forth;

          NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

          1.1 Defined Terms. As used in this Agreement, the terms listed in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

          “Additional Fund”: each “Fund” that is the direct or indirect parent of an ASOT Additional Parent Guarantor.

          “Administration Fee”: on any date of determination, an amount equal to the “Administration Fee” due and payable by the Combined Group Members to the Funds pursuant to Section 6.14 of their respective Fund Agreements on such date, as applicable.

          “Administration Fee Agreement”: the Administration Fee Agreement, by and among the Funds, to the extent applicable, in favor of the ASOT Administrative Agent, to be entered into pursuant to Section 6.12(b), as amended, supplemented or otherwise modified from time to time in accordance with this Agreement.

          “Affiliate”: as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

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          “Affiliate Borrower I-A”: Tishman Speyer Archstone-Smith Multifamily Holdings I (Borrower-A), L.P., a Delaware limited partnership.

          “Affiliate Borrower I-A Credit Agreement”: the Credit Agreement (Affiliate Borrower I-A), dated as of the date hereof, among the Affiliate Borrower I-A, as borrower, and the Lender, as lender, as amended, supplemented or otherwise modified from time to time.

          “Affiliate Borrower I-A Loan Documents”: the “Loan Documents” as defined in the Affiliate Borrower I-B Credit Agreement.

          “Affiliate Borrower I-B Credit Agreement”: the Credit Agreement (Affiliate Borrower I-B), dated as of the date hereof, among the Affiliate Borrower I-B, as borrower, and the First Lien Lender, as lender, as amended, supplemented or otherwise modified from time to time in accordance with this Agreement.

          “Affiliate Borrower I-B Parent”: Tishman Speyer Archstone-Smith Multifamily Holding I (Parent Borrower-B), L.P., a Delaware limited partnership.

          “Affiliate Borrower I-B Parent Credit Agreement”: the Credit Agreement (Parent Borrower I-B), dated as of the date hereof, among the Affiliate Borrower I-B Parent, as borrower, and the Lender, as lender, as amended, supplemented or otherwise modified from time to time.

          “Affiliate Borrower I-B Parent Loan Documents”: the “Loan Documents” as defined in the Affiliate Borrower I-B Parent Credit Agreement.

          “Affiliate Borrower II GP”: as defined in the preamble hereto.

          “Affiliate Borrower II LP”: as defined in the preamble hereto.

          “Affiliate Borrower Credit Agreements”: the collective reference to the Affiliate Borrower I-B Parent Credit Agreement, the Affiliate Borrower I-A Credit Agreement and the ASOT Credit Agreement.

          “Affiliate Borrower Group Members”: the collective reference to the ASOT Parent/Affiliate Guarantors and their respective Subsidiaries (other than the Group Members).

          “Affiliate Borrower Loan Documents”: collectively, the Affiliate Borrower I-B Parent Loan Documents, the Affiliate Borrower I-A Loan Documents and the ASOT Loan Documents.

          “Affiliate Borrowers”: collectively, the Affiliate Borrower I-B Parent, the Affiliate Borrower I-A and the ASOT Borrower.

          “Affiliate Revolving Notes”: as defined in the ASOT Credit Agreement.

          “Agreement”: this Credit Agreement (Affiliate Borrower II-Revolving Credit Loan), as amended, supplemented or otherwise modified from time to time.

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          “Applicable JV Investment Percentage”: as defined in the ASOT Credit Agreement.

          “Applicable Margin”: as defined in the ASOT Credit Agreement.

          “Applicable Party”: each of the Parent Guarantors and the Borrower.

          “Application”: an application, in such form as the relevant Issuing Lender may specify from time to time, requesting such Issuing Lender to issue a Letter of Credit.

          “ASOT Additional Parent Guarantors”: the “Additional Parent Guarantors” as defined in the ASOT Credit Agreement.

          “ASOT Administrative Agent”: the “Administrative Agent” as defined in the ASOT Credit Agreement.

          “ASOT Available Revolving Credit Commitment”: the “Available Revolving Credit Commitment” as defined in the ASOT Credit Agreement.

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

          “ASOT Credit Agreement”: the Credit Agreement dated as of the date hereof, among the ASOT Borrower, as borrower, the several banks and other financial institutions or entities from time to time parties thereto, as lenders, Lehman Brothers Inc. and Banc of America Securities LLC, as joint lead arrangers and joint bookrunners, Bank of America, N.A., as syndication agent, Barclays Capital Real Estate Inc., as documentation agent, the ASOT Administrative Agent, as administrative agent, and others, as amended, supplemented or otherwise modified from time to time.

          “ASOT Guarantee and Collateral Agreement”: the “Guarantee and Collateral Agreement” as defined in the ASOT Credit Agreement.

          “ASOT L/C Commitment”: the “L/C Commitment” as defined in the ASOT Credit Agreement.

          “ASOT L/C Obligations”: the “L/C Obligations” as defined in the ASOT Credit Agreement.

          “ASOT Lender”: any lender party to the ASOT Credit Agreement.

          “ASOT Loan Default”: a “Default” as defined in the ASOT Credit Agreement.

          “ASOT Loan Event of Default”: an “Event of Default” as defined in the ASOT Credit Agreement.

          “ASOT Loan Documents”: the “Loan Documents” as defined in the ASOT Credit Agreement.

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          “ASOT Majority Facility Lenders”: the “Majority Facility Lenders” as defined in the ASOT Credit Agreement.

          “ASOT Parent/Affiliate Guarantors”: the “Parent/Affiliate Guarantors” as defined in the ASOT Credit Agreement.

          “ASOT Required Lenders”: the “Required Lenders” as defined in the ASOT Credit Agreement.

          “ASOT Revolving Credit Commitment”: the “Revolving Credit Commitment” as defined in the ASOT Credit Agreement.

          “ASOT Revolving Credit Commitment Period”: the “Revolving Credit Commitment Period” as defined in the ASOT Credit Agreement.

          “ASOT Revolving Credit Lenders”: the “Revolving Credit Lenders” as defined in the ASOT Credit Agreement.

          “ASOT Secured Parties”: the “Secured Parties” as defined in the ASOT Guarantee and Collateral Agreement.

          “ASOT Term Loans”: the “Term Loans” as defined in the ASOT Credit Agreement.

          “ASOT Tranche A Term Loans”: the “Tranche A Term Loans” as defined in the ASOT Credit Agreement.

          “ASTM”: as defined in Section 5.1(m).

          “Available Revolving Credit Commitment”: an amount equal to the excess, if any, of (a) the Revolving Credit Commitment then in effect over (b) the Revolving Extensions of Credit then outstanding.

          “Base Rate”: for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus ¹/2 of 1%. For purposes hereof: “Prime Rate” shall mean the prime lending rate as set forth on the Reuters Screen RTRTSY1 Page (or such other comparable publicly available page as may, in the reasonable opinion of the Lender in consultation with the ASOT Administrative Agent after notice to the Borrower, replace such page for the purpose of displaying such rate if such rate no longer appears on the Reuters Screen RTRTSY1 Page), as in effect from time to time. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually available. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

          “Base Rate Loans”: Loans for which the applicable rate of interest is based upon the Base Rate.

5

          “Board”: the Board of Governors of the Federal Reserve System of the United States (or any successor).

          “Borrower”: as defined in the preamble hereto.

          “Borrowing Date”: any Business Day specified by the Borrower as a date on which the Borrower requests the Lender to make the Loans hereunder.

          “Borrowing Notice”: with respect to any request for borrowing of the Loans hereunder, a notice from the Borrower, substantially in the form of, and containing the information prescribed by, Exhibit J, delivered to the Lender.

          “Business Day”: (a) for all purposes other than as covered by clause (b) below, a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (a) and which is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.

          “CapEx Controlled”: with respect to any Joint Venture directly and indirectly owned by the Combined Group Members, the ability of the Combined Group Members, directly or indirectly, to control all decisions relating to Renovation Capital Expenditures without the consent of any other Person.

          “Capital Expenditures”: for any period, with respect to any Person, the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets (other than Real Property) or additions to equipment (including replacements, capitalized repairs and improvements during such period) which are required to be capitalized under GAAP on a balance sheet of such Person. For purposes of this definition, the purchase price of equipment or other fixed assets that are purchased simultaneously with the trade-in of existing assets or with insurance proceeds or proceeds from a casualty event or condemnation proceeding shall be included in Capital Expenditures only to the extent of the gross amount by which such purchase price exceeds the credit granted by the seller of such assets for the assets being traded in at such time or the amount of such insurance proceeds or such casualty event or condemnation proceeds, as the case may be (but shall at no time be greater than the amount required by GAAP to be included or reflected by such capital assets on the balance sheet of the applicable Person).

          “Capital Lease Obligations”: with respect to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP; and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

          “Capital Stock”: any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

6

          “Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of one year or less from the date of acquisition issued by any ASOT Lender or by any commercial bank organized under the laws of the United States of America or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-2 by S&P or P-2 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within one year from the date of acquisition; (d) repurchase obligations of any ASOT Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any ASOT Lender or any commercial bank satisfying the requirements of clause (b) of this definition; and (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.

          “Change of Control”: the occurrence of any of the following events: (a) the Permitted Investors shall cease to have the power, directly or indirectly, to vote or direct the voting of securities having a majority of the ordinary voting power for the election of directors of Guarantor 1 GP, Guarantor 2 GP and the ASOT Additional Parent Guarantors (in each case, determined on a fully diluted basis); (b) TSREV and its respective Affiliates shall cease to own of record and beneficially partnership interests of each of Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors equal to at least 4.9% of the partnership interests of Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors, taken as a whole; (c) the board of directors of Guarantor 1 GP, Guarantor 2 GP or any ASOT Additional Parent Guarantor shall cease to consist of a majority of Continuing Directors; (d) Guarantor 1 GP shall (i) fail to control, directly or indirectly, the general partner of Guarantor 1 or (ii) fail to control the management and policies of Guarantor 1; (e) Guarantor 2 GP shall (i) fail to control, directly or indirectly, the managing member of Guarantor 2 or (ii) fail to control the management and policies of Guarantor 2; (f) Guarantor 2 and the ASOT Additional Parent Guarantors shall (i) fail to own of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of Holdings I Corp or (ii) fail to control the management and policies of Holdings I Corp; or (g) Holdings I Corp, Guarantor 1 and the ASOT Additional Parent Guarantors shall (i) fail to control the management and policies of the Borrower or (ii) cease to own and control, of record and beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of the Borrower.

7

          “Closing Date”: the date on which the conditions precedent set forth in Section 5.1 shall have been satisfied.

          “Code”: the Internal Revenue Code of 1986, as amended from time to time.

          “Collateral”: all Property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document.

          “Combined Group Members”: as defined in the ASOT Credit Agreement.

          “Commonly Controlled Entity”: an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under Section 414 of the Code.

          “Company”: Archstone-Smith Trust, a Maryland real estate investment trust.

          “Completed Property”: any Operating Property (or phase of an Operating Property) that is Construction-in-Process until the completion of such Operating Property (or phase thereof) as evidenced by the issuance of a temporary or permanent certificate of occupancy (whichever occurs first) for such Operating Property or any phase thereof.

          “Compliance Certificate”: a certificate duly executed by a Responsible Officer, on behalf of the Borrower substantially in the form of Exhibit B.

          “Construction-in-Process”: on any date of determination, all Real Properties that are under construction or with respect to which construction is reasonably anticipated to commence during the period of six full fiscal quarters immediately following such date that are not Completed Properties.

          “Construction Related Indebtedness”: Indebtedness incurred to finance construction of specific Real Estate Under Construction and which is secured by such Real Estate Under Construction.

          “Continuing Directors”: the directors of Guarantor 1 GP or Guarantor 2 GP, as applicable, on the Closing Date, after giving effect to the Holdings Merger and the other transactions contemplated hereby, and each other director of Guarantor 1 GP or Guarantor 2 GP, as applicable, if, in each case, such other director’s nomination for election to the board of directors of Guarantor 1 GP or Guarantor 2 GP, as applicable, is recommended by at least a majority of the then Continuing Directors or such other director receives the vote of the Permitted Investors in his or her election by the shareholders of Guarantor 1 GP or Guarantor 2 GP, as applicable.

          “Contractual Obligation”: as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

          “Cure Period”: as defined in the ASOT Credit Agreement.

8

          “Default”: any of the events specified in Section 8, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

          “Derivatives Counterparty”: as defined in Section 7.6.

          “Disposition”: with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof; and the terms “Dispose” and “Disposed of” shall have correlative meanings.

          “Distributable Affiliate Proceeds”: as defined in the ASOT Credit Agreement.

          “Dollars” and “$”: dollars in lawful currency of the United States of America.

          “Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States of America, any state thereof or the District of Columbia.

          “Eligible Land”: land (and any Improvements thereon) which is zoned or, intended by the Group Members to be zoned, for use as a residential rental apartment community or a mixed use community (which includes land zoned for use as a residential rental apartment community).

          “Environmental Laws”: any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, agreements or other legally enforceable requirements (including, without limitation, common law) of any international authority, foreign government, the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health, or employee health and safety, as has been, is now, or may at any time hereafter be, in effect.

          “Environmental Permits”: any and all permits, licenses, approvals, registrations, notifications, exemptions and other authorizations required under any Environmental Law.

          “ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to time.

          “ESA”: as defined in Section 5.1(m).

          “Eurocurrency Reserve Requirements”: as defined in the ASOT Credit Agreement.

          “Eurodollar Base Rate”: with respect to each day during each Interest Period, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time) two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on the Reuters Screen LIBOR01 Page (or otherwise on such screen), the “Eurodollar Base Rate” for purposes of this definition shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Lender in consultation with the ASOT Administrative Agent.

9

          “Eurodollar Loans”: Loans for which the applicable rate of interest is based upon the Eurodollar Rate.

          “Eurodollar Rate”: with respect to each day during each Interest Period, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100^th of 1%):

Eurodollar Base Rate

1.00 — Eurocurrency Reserve

Requirements

          “Eurodollar Tranche”: the collective reference to Eurodollar Loans the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

          “Event of Default”: any of the events specified in Section 8, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

          “Excluded Foreign Subsidiary”: any Foreign Subsidiary in respect of which either (a) the pledge of all of the Capital Stock of such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower, result in adverse tax consequences to the Borrower.

          “Federal Funds Effective Rate”: for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the ASOT Administrative Agent from three federal funds brokers of recognized standing selected by it.

          “Financial Reporting Parties”: as defined in the ASOT Credit Agreement.

          “First Lien Borrower”: Tishman Speyer Archstone-Smith Multifamily Holdings II (Borrower), L.P., a Delaware limited partnership, in its capacity as the borrower under the First Lien Credit Agreement.

          “First Lien Credit Agreement”: the Credit Agreement (Affiliate Borrower II-Term Loan), dated as of the date hereof, among the First Lien Borrower and the First Lien Lender.

          “First Lien Loans”: the “Loans” as defined in the First Lien Credit Agreement.

          “First Lien Lender”: Tishman Speyer Archstone-Smith Multifamily Series IV, L.L.C., a Delaware limited liability company.

10

          “First Lien Loan Documents”: the “Loan Documents” as defined in the First Lien Credit Agreement.

          “First Lien Obligations”: the “Obligations” as defined in the First Lien Credit Agreement or in any refinancing thereof.

          “Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic Subsidiary.

          “Fund Agreements”: the agreement of limited partnership of each Fund, as in effect on the date hereof or, in the case of Funds formed after the Closing Date, on the date of such formation.

          “Funds”: collectively, (i) Tishman Speyer Archstone-Smith Multifamily JV, L.P., a Delaware limited partnership, (ii) Tishman Speyer Archstone-Smith Multifamily Parallel JV, L.P., a Delaware limited partnership, (iii) Tishman Speyer Archstone-Smith Multifamily Parallel Fund I JV, L.P., a Delaware limited partnership, (iv) Tishman Speyer Archstone-Smith Multifamily Parallel Fund II JV, L.P., a Delaware limited partnership, and (v) each Additional Fund.

          “GAAP”: generally accepted accounting principles in the United States of America as in effect from time to time.

          “Governmental Authority”: any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).

          “Gross Asset Value”: as defined in the ASOT Credit Agreement.

          “Group Members”: the Parent Guarantors, the Borrower and each of their respective Subsidiaries.

          “Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement (Affiliate Borrower II-Revolving Credit Loan) to be executed and delivered by Parent Guarantors, the Borrower and each Subsidiary Guarantor, if any, substantially in the form of Exhibit A, as the same may be amended, supplemented or otherwise modified from time to time.

          “Guarantee Obligation”: as to any Person (the “guaranteeing person”), any obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing person that guarantees or in effect guarantees, or which is given to induce the creation of a separate obligation by another Person (including any bank under any letter of credit) that guarantees or in effect guarantees any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (ii) to advance or supply funds

11

(1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term “Guarantee Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

          “Guarantor 1”: Tishman Speyer Archstone-Smith Multifamily Guarantor, L.P., a Delaware limited partnership.

          “Guarantor 1 GP”: Tishman Speyer Archstone-Smith Multifamily (GP), L.P., a Delaware limited partnership.

          “Guarantor 2”: Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor, L.L.C., a Delaware limited liability company.

          “Guarantor 2 GP”: Tishman Speyer Archstone-Smith Multifamily Parallel (GP), L.P., a Delaware limited partnership.

          “Guarantors”: the collective reference to each of the Parent Guarantors and the Subsidiary Guarantors.

          “Hedge Agreements”: all interest rate or currency swaps, caps or collar agreements, foreign exchange agreements, commodity or currency futures contracts, options to purchase or sell a commodity or currency, or option, warrant or other right with respect to a commodity or currency futures contract or similar arrangements entered into by the Borrower or its Subsidiaries providing for protection against fluctuations in interest rates, currency exchange rates, commodity prices or the exchange of nominal interest obligations, either generally or under specific contingencies.

          “Holdings I Corp”: Tishman Speyer Archstone-Smith Multifamily Holdings I Corp., a Delaware corporation.

          “Holdings II LP Asset Acquisition”: the purchase of certain joint venture equity interests by the Borrower from the Company pursuant to the Holdings II LP Purchase Agreement for cash on the Closing Date.

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          “Holdings II LP Purchase Agreement”: that certain Purchase and Sale Agreement made as of October 5, 2007, by and between the Company, as seller, and the Borrower, as buyer.

          “Holdings Merger”: as defined in the ASOT Credit Agreement.

          “Improvements”: all buildings, fixtures, structures, parking areas, landscaping and other improvements whether existing now or hereafter constructed, together with all machinery and mechanical, electrical, HVAC and plumbing systems presently located thereon and used to the operation thereof, excluding (a) any such items owned by utility service providers, (b) any such items owned by tenants or other third parties unaffiliated with the Combined Group Members or their Subsidiaries and (c) any items of personal property.

          “Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of Property or third-party services (other than trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such Property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under acceptance, letter of credit, surety bond or similar facilities, (g) all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Capital Stock of such Person, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of others of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on Property (including, without limitation, accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, but limited to the lesser of the fair market value of such property and the aggregate amount of the obligations so secured, and (j) for the purposes of Section 8(e) only, all obligations of such Person in respect of Hedge Agreements. The “Indebtedness” of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor. For purposes of clause (j) above, the principal amount of Indebtedness in respect of Hedge Agreements shall equal the amount that would be payable (giving effect to netting) at such time if such Hedge Agreement were terminated. For the avoidance of doubt, “Indebtedness” as defined hereunder shall not include (i) prepaid rents or security deposits made under tenant leases or (ii) obligations arising from agreements of the Borrower or any Subsidiary providing for (1) customary indemnification, guarantees or adjustments of purchase or acquisition price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets permitted under this Agreement (except as specified in clause (b) above) or (2) with respect to any syndication of federal low-income housing tax credits and benefits generated under section 42 of the Code by apartment projects owned by the

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Borrower or any Subsidiary, indemnification or guarantees of obligations to maintain such tax credits and benefits.

          “Indemnified Liabilities”: as defined in Section 10.5.

          “Indemnitee”: as defined in Section 10.5.

          “Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

          “Insolvent”: pertaining to a condition of Insolvency.

          “Intellectual Property”: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

          “Intercreditor Agreement”: the Intercreditor Agreement (Affiliate Borrower II) to be executed by the First Lien Lender and the Lender, as the same may be amended, supplemented or otherwise modified from time to time.

          “Interest Payment Date”: (a) as to any Base Rate Loan, the last day of each March, June, September and December to occur while such Loan is outstanding and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or shorter, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Loan (other than any Loan that is a Base Rate Loan), the date of any repayment or prepayment made in respect thereof.

          “Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as determined by the Lender in its sole discretion prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

     (1) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

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     (2) any Interest Period that would otherwise extend beyond the Revolving Credit Termination Date shall end on the Revolving Credit Termination Date; and

     (3) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period.

          “Investments”: as defined in Section 7.8.

          “Issuing Lender”: any financial institution designated by the Lender as the “Issuing Lender” hereunder.

          “Joint Venture”: any Person in which the Borrower owns, directly or indirectly, Capital Stock (other than publicly traded Capital Stock) and which is not a Wholly Owned Subsidiary of the Borrower.

          “Joint Venture Property”: each parcel of real property owned or leased by any Joint Venture.

          “L/C Commitment”: as defined in the ASOT Credit Agreement.

          “L/C Fee Payment Date”: the last day of each March, June, September and December and the last day of the Revolving Credit Commitment Period.

          “L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.5.

          “L/C Participants”: as defined in the ASOT Credit Agreement.

          “Lender”: as defined in the preamble hereto.

          “Letters of Credit”: as defined in Section 3.1(a).

          “Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

          “Limited Guaranty”: the Limited Guaranty (Affiliate Borrower II-Revolving Credit Loan), dated as of the date hereof, made by Guarantor 1, Guarantor 2 and the ASOT Additional Parent Guarantors in favor of the Lender.

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          “Loan Documents”: this Agreement, the Security Documents, the Applications, the Administration Fee Agreement, the Limited Guaranty, the Subordination of Limited Guaranty and the Intercreditor Agreement.

          “Loan Parties”: each of the Parent Guarantors, the Borrower and each Subsidiary of the Borrower that is a party to a Loan Document.

          “Loans”: as defined in Section 2.4.

          “Maintenance Capital Expenditures”: for any period, with respect to any Person, the Capital Expenditures of such Person for such period that constitute expenditures for recurring value-retention Capital Expenditures representing costs that are typically incurred on a regular basis during the life of a community, such as expenditures for carpet, vinyl flooring, appliances, mechanical equipment, fixtures, roof replacement, parking lot resurfacing, exterior painting and siding replacement. It is understood and agreed that “Maintenance Capital Expenditures” shall not include (a) Renovation Capital Expenditures, (b) Capital Expenditures incurred in connection with requirements under the Fair Housing Act or the Americans with Disabilities Act, (c) Capital Expenditures representing tenant improvements awarded to any tenant in connection with any commercial or office lease and (d) repair or restoration of major damage to a community that resulted from an event such as a fire, flood, hurricane, earthquake or terrorist event.

          “Material Adverse Effect”: a material adverse effect on (a) the business, assets, property, results of operations or financial condition of the Combined Group Members, taken as a whole, or (b) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights or remedies of the Lender hereunder or thereunder; provided that, solely on the Closing Date and with respect to the representations and warranties to be made by the Loan Parties on the Closing Date and the closing certificates to be delivered pursuant to Section 5.1(n) on the Closing Date, “Material Adverse Effect” shall mean a “Material Adverse Effect” as defined in the Holdings II Purchase Agreement.

          “Material Environmental Amount”: an amount or amounts payable by the Group Members, in the aggregate in excess of $50,000,000 for: costs to comply with any Environmental Law; costs of any investigation, and any remediation, of any Material of Environmental Concern; and compensatory damages (including, without limitation, damages to natural resources), punitive damages, fines, and penalties pursuant to any Environmental Law.

          “Materials of Environmental Concern”: any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products (virgin or unused), polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity, and any other materials, substances or forces of any kind, whether or not any such material, substance or force is defined as hazardous or toxic under any Environmental Law, that is regulated pursuant to or could reasonably be expected to give rise to liability under any Environmental Law.

          “Merger Agreement”: as defined in the ASOT Credit Agreement.

          “Moody’s”: Moody’s Investors Service, Inc.

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          “Mortgaged Properties”: the real properties as to which the Lender shall be granted a Lien pursuant to one or more Mortgages at any time and from time to time after the Closing Date pursuant to Section 6.10(b).

          “Mortgages”: each of the mortgages, deeds of trust and deeds to secure debt made by any Loan Party in favor of, or for the benefit of, the Lender, in form and substance reasonably satisfactory to the ASOT Administrative Agent as the same may be amended, supplemented or otherwise modified from time to time.

          “Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

          “Non-Excluded Taxes”: as defined in Section 2.20(a).

          “Non-Recourse Subsidiary Borrower”: a Subsidiary of the Borrower that is a special purpose entity whose only assets are the assets securing Indebtedness incurred in accordance with Section 7.2(l).

          “Obligations”: the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans, the Reimbursement Obligations and all other obligations and liabilities of the Borrower to the Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees, charges and disbursements of counsel to the Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.

          “OC/SD JV Holdings LLC”: Tishman Speyer Archstone-Smith OC/SD JV Holdings, L.L.C., a Delaware limited liability company.

          “Operating Properties”: collectively, the Owned Properties and the Joint Venture Properties.

          “Other Taxes”: any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

          “Owned Properties”: each parcel of real property owned or leased by the Group Members.

          “Ownership Percentage”: with respect to any Operating Property (or any Joint Venture that owns, directly or indirectly, any Capital Stock of the Property Owner that owns or

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leases such Operating Property) at any time, the percentage of the total outstanding Capital Stock of the Property Owner with respect to such Operating Property held directly and indirectly by the applicable Person.

          “Parent Guarantors”: collectively, the Affiliate Borrower II GP and the Affiliate Borrower II LP.

          “Payment Amount”: as defined in Section 3.5.

          “Payment Office”: the office specified from time to time by the ASOT Administrative Agent as its payment office by notice to the Lender, and upon receipt of such notice by the Lender, the Lender shall promptly notify the Borrower.

          “PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

          “Permitted Investors”: as defined in the ASOT Credit Agreement.

          “Permitted Leases”: leases or subleases (including ground leases and licenses and other occupancy agreements) entered into the ordinary course of business by any Group Member, in each case, at an arm’s-length basis (i.e., on market terms) which do not materially impair the interests of such Group Member in the Property subject thereto or the value of such Property.

          “Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

          “personal property”: “personal property”, as defined in the Uniform Commercial Code as from time to time in effect in the State of New York, which is owned by any Group Member.

          “Plan”: at a particular time, any employee benefit plan that is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

          “Pledged Stock”: as defined in the Guarantee and Collateral Agreement.

          “Property”: any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.

          “Property Owners”: collectively, Persons identified in Schedule 1.1D attached hereto, each of which owns the Operating Property identified on such Schedule as being owned by such Person.

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          “Real Estate Under Construction”: Real Property (other than a Completed Property) on which construction of material improvements has commenced or shall concurrently commence with the incurrence of Indebtedness financing such construction and is or shall be continuing to be performed.

          “Real Property”: any present and future right, title and interest (including, without limitation, any leasehold estate) in (i) any plots, pieces or parcels of Eligible Land, (ii) any Improvements of every nature whatsoever (the rights and interests described in clauses (i) and (ii) above being the “Premises”), (iii) all easements, rights of way, gores of land or any lands occupied by streets, ways, alleys, passages, sewer rights, water courses, water rights and powers, and public places adjoining such land, and any other interests in property constituting appurtenances to the Premises, or which hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all hereditaments, gas, oil, minerals (with the right to extract, sever and remove such gas, oil and minerals), and easements, of every nature whatsoever, located in, on or benefiting the Premises and (v) all other rights and privileges thereunto belonging or appertaining and all extensions, additions, improvements, betterments, renewals, substitutions and replacements to or of any of the rights and interests described in clauses (iii) and (iv) above.

          “Recourse Indebtedness”: any Indebtedness, to the extent that recourse of the applicable lender for non-payment is not limited to such lender’s Liens on a particular asset or group of assets that secure such Indebtedness (except to the extent the Property on which such lender has a Lien and to which its recourse for non-payment is limited constitutes cash or Cash Equivalents, to which extent such Indebtedness shall be deemed to be Recourse Indebtedness); provided that, personal recourse of any Person for any such Indebtedness for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of single purpose entity covenants, and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guaranty or indemnification agreements in non-recourse financing of real estate shall not, by itself, cause such Indebtedness to be characterized as Recourse Indebtedness.

          “Register”: as defined in Section 2.8(c).

          “Regulation H”: Regulation H of the Board as in effect from time to time.

          “Regulation U”: Regulation U of the Board as in effect from time to time.

          “Regulation X”: Regulation X of the Board as in effect from time to time.

          “Reimbursement Obligation”: the obligation of the Borrower to reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing Lender.

          “Renovation Capital Expenditures”: for any period, with respect to any Person, the Capital Expenditures of such Person for such period comprised of: (a) Capital Expenditures incurred in connection with a major renovation or reparation of a community and (b) value-enhancing Capital Expenditures representing costs for which an incremental value is expected to be achieved from increasing the net operating income potential for a community or recharacterizing the quality of the income stream with an anticipated reduction in potential sales

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capitalization rate for items such as replacement of wood siding with a masonry-based Hardi-Board product, amenity upgrades and additions (including designer kitchens, new clubhouses or fitness centers), installation of security gates and additions of covered parking. For the avoidance of doubt, “Renovation Capital Expenditures” shall not include development expenses for any Operating Property.

          “Reorganization”: with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

          “Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the 30 day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

          “Required Ratios”: as defined in the ASOT Credit Agreement.

          “Requirements of Law”: as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

          “Responsible Officer”: with respect to any Person, the chief executive officer, president, chief financial officer, chief accounting officer, chief operating officer, general counsel, treasurer or controller of such Person, but in any event, with respect to financial matters, the chief financial officer, the chief accounting officer, treasurer or controller of such Person.

          “Restricted Payments”: as defined in Section 7.6.

          “Revolving Credit Commitment”: the obligation of the Lender to make Loans and to cause the Issuing Lender to issue Letters of Credit, in an aggregate principal and/or face amount not to exceed $750,000,000, as the same may be changed from time to time in accordance with the ASOT Revolving Credit Commitment.

          “Revolving Credit Commitment Period”: the period from and including the Closing Date to the Revolving Credit Termination Date.

          “Revolving Credit Termination Date”: the fourth anniversary of the Closing Date.

          “Revolving Extensions of Credit”: an amount equal to the sum of (a) the aggregate principal amount of all Loans then outstanding, and (b) the L/C Obligations then outstanding.

          “S&P”: Standard & Poor’s Ratings Services.

          “SEC”: the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

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          “Secured Guarantor Notes”: a collective reference to each unsecured promissory note, to be made by Guarantor 1, Guarantor 2 or any ASOT Additional Parent Guarantor, as borrower, in favor of the Borrower, as lender, in form and substance reasonably satisfactory to the ASOT Administrative Agent, for the purpose of making a loan to Guarantor 1, Guarantor 2 or such ASOT Additional Parent Guarantor, as applicable, to finance certain expenses of Guarantor 1, Guarantor 2 and such ASOT Additional Parent Guarantor in accordance with Section 7.6(g), as amended, supplemented or otherwise modified from time to time.

          “Security Documents”: the collective reference to the Guarantee and Collateral Agreement, the Mortgages and all other security documents hereafter delivered to the Lender granting a Lien on any Property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document.

          “Second Priority”: with respect to any Lien purported to be created in any Collateral pursuant to any of the Security Documents, that such Lien is the most senior Lien (other than (i) Liens created to secure the obligations under the First Lien Loan Documents and (ii) Liens created pursuant to Sections 7.3(a), (b), (e) and (g)).

          “Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

          “Solvent”: with respect to any Person, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

          “Subordination of Limited Guaranty”: the Subordination of Limited Guaranty (Affiliate Borrower II-Revolving Credit Loan), dated as of the date hereof, among the Lender and the ASOT Administrative Agent and accepted and agreed to by Guarantor 1, Guarantor 2, and the ASOT Additional Parent Guarantors.

          “Subsidiary”: as to any Person, a corporation, partnership, limited liability company or other entity either (x) of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned or (y) the

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management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person, provided that, a Joint Venture shall not constitute a Subsidiary of such Person unless this clause (y) is applicable. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

          “Subsidiary Guarantor”: each Subsidiary of the Borrower that is or becomes a party to the Guarantee and Collateral Agreement. “Subsidiary Guarantors” shall not include (i) any Excluded Foreign Subsidiary or any Subsidiary of a Foreign Subsidiary or (ii) any Subsidiary of the Borrower prohibited from providing a guarantee of the Obligations pursuant to Indebtedness permitted by Section 7.2.

          “Successor Borrower”: as defined in Section 7.4(a).

          “Targets”: collectively, the Company and the ASOT Borrower.

          “Test Date”: as defined in the ASOT Credit Agreement.

          “TSREV”: Tishman Speyer Real Estate Venture VII, L.P.

          “Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

          “Unsecured Affiliate Borrower”: as defined in Section 7.2(u).

          “Unsecured Affiliate Lender”: as defined in Section 7.2(u).

          “Unsecured Employee Cost Loans”: as defined in Section 7.2(u).

          “Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital Stock of which (other than directors’ qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries. For the avoidance of doubt, the definition of “Wholly Owned Subsidiary” shall include any Person all of the outstanding Capital Stock (other than directors’ qualifying shares) of which is owned, directly or indirectly, by the Borrower.

          “Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower.

          1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

          (b) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to the Group Members not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.

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          (c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

          (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENT

          2.1 [Intentionally Omitted].

          2.2 [Intentionally Omitted].

          2.3 [Intentionally Omitted].

          2.4 Revolving Credit Commitment. (a) Subject to the terms and conditions hereof, the Lender agrees to make revolving credit loans (the “Loans”) to the Borrower from time to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding which, when added to the L/C Obligations then outstanding, does not exceed the amount of the Revolving Credit Commitment; provided that, the Lender shall not make any Loan to the Borrower if, after giving effect to the making of such Loan, (i) the aggregate amount of the Available Revolving Credit Commitment would be less than zero or (ii) the aggregate amount of the ASOT Available Revolving Credit Commitments would be less than zero. During the Revolving Credit Commitment Period the Borrower may use the Revolving Credit Commitment by borrowing, prepaying the Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Lender in accordance with Sections 2.5 and 2.13, provided that, no Loan shall be made as a Eurodollar Loan after the day that is one month prior to the Revolving Credit Termination Date.

          (b) The Borrower shall repay all outstanding Loans on the Revolving Credit Termination Date.

          2.5 Procedure for Revolving Credit Borrowing. The Borrower may borrow under the Revolving Credit Commitment on any Business Day during the Revolving Credit Commitment Period, provided that, the Borrower shall deliver to the Lender a Borrowing Notice or such other form of notice reasonably satisfactory and acceptable to the Lender prior to the requested Borrowing Date. Any Loans made on the Closing Date shall initially be Base Rate Loans, and no Loan may be made as, converted into or continued as a Eurodollar Loan having an Interest Period in excess of one month prior to the date that is the earlier of (x) the date which is 60 days after the Closing Date and (y) the date on which the Lender has been notified in writing by the ASOT Administrative Agent that the primary syndication of the ASOT Credit Agreement has been completed. Such borrowing will then be made available to the Borrower by the Lender in like funds as received by the Lender from the date on which the Lender has been notified in writing by the ASOT Administrative Agent that the primary syndication of the ASOT Credit Agreement has been completed. The Lender shall make available to the Borrower the proceeds

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of the Loans made available to the Lender by the ASOT Administrative Agent pursuant to the ASOT Credit Agreement, in like funds as received by the Lender.

          2.6 [Intentionally Omitted].

          2.7 [Intentionally Omitted].

          2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally promises to pay to the Lender the then unpaid principal amount of each Loan on the Revolving Credit Termination Date (or on such earlier date on which the Loans become due and payable pursuant to Section 8). The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.15.

          (b) [Intentionally Omitted].

          (c) The Lender shall maintain on behalf of the Borrower, a register (the “Register”) in which shall be recorded (i) the amount of each Loan made hereunder, the Type of such Loan and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to the Lender hereunder and (iii) the amount of any sum received by the Lender hereunder from the Borrower.

          (d) The entries made in the Register shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of the Lender to maintain the Register, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by the Lender in accordance with the terms of this Agreement.

          2.9 Commitment Fees, etc. The Borrower agrees to pay to the Lender a commitment fee for the period from and including the Closing Date to the last day of the Revolving Credit Commitment Period, in an amount and at such times as agreed between the Borrower and the Lender.

          2.10 Termination or Reduction of Revolving Credit Commitment. The Borrower may not terminate the Revolving Credit Commitment or, from time to time, reduce the Revolving Credit Commitment without the prior written consent of the ASOT Required Lenders and the Lender (other than in connection with the refinancing, repayment or termination in full of the ASOT Credit Agreement and the commitments and loans thereunder); provided that no such termination or reduction of Revolving Credit Commitment shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the Revolving Extensions of Credit would exceed the Revolving Credit Commitment. Any such reduction shall reduce permanently the Revolving Credit Commitment then in effect.

          2.11 Optional Prepayments. The Borrower may at any time and from time to time after all First Lien Obligations have been paid in full, prepay the Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Lender which notice shall specify the date and amount of such prepayment, and whether such prepayment is of Eurodollar

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Loans or Base Rate Loans; provided that, if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Loans that are Base Rate Loans) accrued interest to such date on the amount prepaid.

          2.12 [Intentionally Omitted].

          2.13 Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving the Lender at least two Business Days’ prior irrevocable notice of such election, provided that any such conversion of Eurodollar Loans may be made only on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Lender at least three Business Days’ prior irrevocable notice of such election (which notice shall specify the length of the initial Interest Period therefor), provided that no Base Rate Loan may be converted into a Eurodollar Loan (i) when any Event of Default has occurred and is continuing and the Lender has determined in its sole discretion not to permit such conversions or (ii) after the date that is one month prior to the Revolving Credit Termination Date.

          (b) The Borrower may elect to continue any Eurodollar Loan as such upon the expiration of the then current Interest Period with respect thereto by giving irrevocable notice to the Lender, in accordance with the applicable provisions of the term “Interest Period” set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loan, provided that, no Eurodollar Loan may be continued as such (i) when any Event of Default has occurred and is continuing and the Lender has determined in its sole discretion not to permit such continuations or (ii) after the date that is one month prior to the Revolving Credit Termination Date, and provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso, such Loans shall continue as Eurodollar Loans, with a one month Interest Period.

          2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional prepayments of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one time.

          2.15 Interest Rates and Interest Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin in effect for such day.

          (b) Each Base Rate Loan shall bear interest for each day on which it is outstanding at a rate per annum equal to the Base Rate in effect for such day plus the Applicable Margin in effect for such day.

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          (c) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement Obligations (whether or not overdue) (to the extent legally permitted) shall bear interest at a rate per annum that is equal to (x) in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to Base Rate Loans plus 2%, and (ii) if all or a portion of any interest payable on any Loan or Reimbursement Obligation or any commitment fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to Base Rate Loans plus 2%, in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (after as well as before judgment).

          (d) Interest shall be payable in arrears on each Interest Payment Date, provided that, interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on demand.

          (e) Notwithstanding anything in the foregoing to the contrary, in no event shall the interest rate payable by the Borrower hereunder for any Type of Loan on any date of determination exceed the effective rate of interest paid by the Lender pursuant to the ASOT Credit Agreement for such Type of Loan.

          2.16 Computation of Interest and Fees. (a) Interest, fees and commissions payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to Base Rate Loans on which interest is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Lender shall as soon as practicable notify the Borrower of each determination of a Eurodollar Rate made pursuant to the ASOT Credit Agreement. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Lender shall as soon as practicable notify the Borrower of the effective date and the amount of each such change in interest rate made pursuant to the ASOT Credit Agreement.

          (b) Each determination of an interest rate by the ASOT Administrative Agent pursuant to any provision of the ASOT Credit Agreement shall be conclusive and binding on the Borrower and the Lender in the absence of manifest error. The Lender shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the ASOT Administrative Agent in determining any interest rate pursuant to Section 2.15(a).

          2.17 Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

     (a) the ASOT Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower and the Lender) that,

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by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

     (b) the ASOT Administrative Agent shall have received notice from the ASOT Majority Facility Lenders in respect of the Revolving Credit Facility (as defined in the ASOT Credit Agreement) that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such ASOT Majority Facility Lenders (as conclusively certified by such ASOT Majority Facility Lenders) of making or maintaining their affected loans under the ASOT Credit Agreement during such Interest Period,

the ASOT Administrative Agent shall give telecopy, email or telephonic notice thereof to the Borrower and the Lender as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last day of the then current Interest Period with respect thereto, to Base Rate Loans. Until such notice has been withdrawn by the ASOT Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Loans to Eurodollar Loans.

          2.18 Payments.

          (a) [Intentionally Omitted].

          (b) [Intentionally Omitted].

          (c) [Intentionally Omitted].

          (d) The application of any payment of Loans (including prepayments) shall be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each payment of the Loans (except in the case of Loans that are Base Rate Loans) shall be accompanied by accrued interest to the date of such payment on the amount paid.

          (e) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 2:00 p.m. (New York City time) on the due date thereof to the Lender, at the Payment Office, in Dollars and in immediately available funds. Any payment made by the Borrower after 2:00 p.m. (New York City time) on any Business Day shall be deemed to have been on the next following Business Day. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

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          2.19 Requirements of Law. (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by the Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

     (i) shall subject the Lender to any tax of any kind whatsoever with respect to this Agreement, any Application or any Eurodollar Loan made by it, or change the basis of taxation of payments to the Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.20 and changes in the rate of tax on the net income of the Lender);

     (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of the Lender that is not otherwise included in the determination of the Eurodollar Rate hereunder; or

     (iii) shall impose on the Lender any other condition;

and the result of any of the foregoing is to increase the cost to the Lender, by an amount which the Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay the Lender, upon its demand, any additional amounts necessary to compensate the Lender for such increased cost or reduced amount receivable. If the Lender becomes entitled to claim any additional amounts pursuant to this Section 2.19, it shall promptly notify the Borrower of the event by reason of which it has become so entitled.

          (b) If the Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by the Lender or any corporation controlling the Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on the Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under to a level below that which the Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration the Lender’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by the Lender to be material, then from time to time, after submission by the Lender to the Borrower of a written request therefor, the Borrower shall pay to the Lender such additional amount or amounts as will compensate the Lender or such corporation for such reduction.

          (c) A certificate setting forth in reasonable detail any additional amounts payable pursuant to this Section 2.19 submitted by the Lender to the Borrower shall be prima facie evidence in the absence of manifest error. The obligations of the Borrower pursuant to this Section 2.19 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

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          2.20 Taxes. (a) All payments made by the Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, 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 Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Lender (i) as a result of a present or former connection between the Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Lender’s having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document), (ii) by the jurisdiction (or any political subdivision thereof) under which the Lender is organized or in which its principal office is located or in which its lending office is located, and (iii) as a branch profits tax imposed by the jurisdiction in which the Borrower is located. If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or any Other Taxes are required to be withheld from any amounts payable to the Lender hereunder, the amounts so payable to the Lender shall be increased to the extent necessary to yield to the Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement; provided, however, that the Borrower shall not be required to increase any such amounts payable to the Lender with respect to any Non-Excluded Taxes (i) that are attributable to the Lender’s failure to comply with the requirements of paragraph (d) or (e) of this Section 2.20, (ii) that are United States withholding taxes imposed on amounts payable to the Lender on the Closing Date or (iii) that are United States withholding taxes imposed on amounts payable to the Lender at the time the Lender changes its lending office other than at the request of the Borrower, except to the extent that the Lender was entitled, at the time of the change in its lending office, to receive additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph (a).

          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

          (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as possible thereafter the Borrower shall send to the Lender a certified copy of an original official receipt received by the Borrower (or, if an official receipt is not available, such other evidence of payment as shall be satisfactory to the Lender) showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or Other Taxes required to be paid by the Borrower pursuant to this Agreement when due to the appropriate taxing authority or fails to remit to the Lender the required receipts or other required documentary evidence, the Borrower shall indemnify the Lender for any incremental taxes, interest or penalties that may become payable by the Lender as a result of any such failure. The agreements in this Section 2.20 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

          (d) The Lender shall, with respect to any payments that the Lender directs to be paid to a non-U.S. address or non-U.S. bank account, deliver to the Borrower a duly completed original signed copy of U.S. Internal Revenue Service Form W-9, or any subsequent versions thereof or successors thereto that the Lender is entitled to provide at such time in order

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to comply with United States backup withholding requirements. Such forms shall be delivered by the Lender on or before the date it becomes a party to this Agreement and on or before the date, if any, the Lender designates a new lending office. In addition, the Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by the Lender. The Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, the Lender shall not be required to deliver any form pursuant to this paragraph that the Lender is not legally able to deliver.

          (e) If the Lender is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement, the Lender shall deliver to the Borrower, at the time or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate, provided that the Lender is legally entitled to complete, execute and deliver such documentation and in the Lender’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of the Lender.

          2.21 Indemnity. The Borrower agrees to indemnify the Lender for, and to hold the Lender harmless from, any loss or expense that the Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by the Lender in consultation with the ASOT Administrative Agent) that would have accrued to the Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section 2.21 submitted to the Borrower by the Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans, and all other amounts payable hereunder.

          2.22 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for the Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of the Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be

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canceled and (b) the Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to the Lender such amounts, if any, as may be required pursuant to Section 2.21.

          2.23 [Intentionally Omitted].

          2.24 [Intentionally Omitted].

          2.25 [Intentionally Omitted].

          2.26 [Intentionally Omitted].

          2.27 Exculpation. Subject to the qualifications below, the Lender shall not enforce the liability and obligation of the Borrower to perform and observe the obligations contained in this Agreement or the other Loan Documents by any action or proceeding wherein a money judgment shall be sought against the Borrower, except that the Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable the Lender to enforce and realize upon its interest under this Agreement and the other Loan Documents, or in the Collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against the Borrower only to the extent of the Borrower’s interest in the Collateral given to the Lender, and the Lender, by accepting this Agreement and the other Loan Documents, shall not sue for, seek or demand any deficiency judgment against the Borrower in any such action or proceeding under or by reason of or under or in connection with this Agreement or the other Loan Documents. The provisions of this Section 2.27 shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of the Lender to name the Borrower as a party defendant in any action or suit for foreclosure and sale under the Guarantee and Collateral Agreement; (c) affect the validity or enforceability of any guaranty made in connection with the Loans or any of the rights and remedies of the Lender thereunder; (d) impair the right of the Lender to obtain the appointment of a receiver; (e) constitute a prohibition against the Lender to seek a deficiency judgment against the Borrower in order to fully realize on any security given by the Borrower in connection with the Loans or to commence any other appropriate action or proceeding in order for the Lender to exercise its remedies against such security; or (f) constitute a waiver of the right of the Lender to enforce the liability and obligation of the Borrower, by money judgment or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation incurred by the Lender (including attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:

     (i) fraud or intentional misrepresentation by the Borrower in connection with the Loans;

     (ii) the gross negligence or willful misconduct by the Borrower;

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     (iii) the breach of any representation, warranty, covenant or indemnification provision in the Loan Documents concerning Environmental Laws, hazardous substances and asbestos and any indemnification of the Lender with respect thereto in either document;

     (iv) the removal or disposal of any portion of the Collateral after an Event of Default;

     (v) the misapplication or conversion by the Borrower of (a) any insurance proceeds paid by reason of any loss, damage or destruction to any portion of the Collateral, (b) any awards or other amounts received in connection with the condemnation of all or a portion of the Collateral and (c) any rents, rent equivalents, moneys payable as damages or in lieu of rent or rent equivalents, royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, deposits (including, without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of the Borrower or its agents or employees from any and all sources arising from or attributable to the Collateral, and proceeds, if any, from business interruption or other loss of income insurance;

     (vi) failure to pay charges for labor or materials or other charges that can create Liens on any portion of the Collateral;

     (vii) any security deposits, advance deposits or other deposits collected with respect to the Collateral which are not delivered to the Lender upon a foreclosure of any portion of the Collateral or action in lieu thereof, except to the extent any such security deposits were applied in accordance with the terms and conditions of any lease, sublease or subsublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in the Property, and every modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto prior to the occurrence of the Event of Default that gave rise to such foreclosure or action in lieu thereof; or

     (viii) the breach by the Borrower of the Borrower’s indemnification obligations set forth in Section 10.5.

Notwithstanding anything to the contrary in this Agreement or any of the Loan Documents, (A) the Lender shall not be deemed to have waived any right which the Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code (the “Bankruptcy Code”) to file a claim for the full amount of the Obligations or to require that the

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Collateral shall continue to secure all of the Obligations owing to the Lender in accordance with the Loan Documents, and (B) the Obligations shall be fully recourse to the Borrower in the event that: (i) the Borrower fails to obtain the Lender’s prior consent to any subordinate financing or other voluntary Lien encumbering the Collateral; (ii) the Borrower fails to obtain the Lender’s prior consent to any assignment, transfer, or conveyance, direct or indirect, of the Collateral or any interest therein or the Borrower or any interest in the Borrower, as required by the Guarantee and Collateral Agreement or this Agreement; (iii) the Borrower files a voluntary petition under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law; (iv) an Affiliate, officer, director, or representative which controls, directly or indirectly, the Borrower files, or joins in the filing of, an involuntary petition against the Borrower under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition against the Borrower from any Person; (v) the Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other federal or state bankruptcy or insolvency law, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (vi) any Affiliate, officer, director, or representative which controls the Borrower consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for the Borrower or any portion of the Collateral; or (vii) the Borrower makes an assignment for the benefit of creditors, or admits, in writing or in any legal proceeding, its insolvency or inability to pay its Obligations as they become due.

SECTION 3. LETTERS OF CREDIT

          3.1 L/C Commitment. (a) Subject to the terms and conditions of the ASOT Credit Agreement, the Lender, in reliance on the agreements of the other ASOT Revolving Credit Lenders set forth in Section 3.4(a) of the ASOT Credit Agreement, agrees to cause the Issuing Lender to issue letters of credit (“Letters of Credit”) for the account of the Borrower on any Business Day during the ASOT Revolving Credit Commitment Period in such form as may be approved from time to time by the Lender and the Issuing Lender; provided that, the Lender shall not have any obligation to cause any Letter of Credit to be issued if, after giving effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment (ii) the aggregate amount of the Available Revolving Credit Commitment would be less than zero, (iii) the ASOT L/C Obligations would exceed the ASOT L/C Commitment or (iv) the aggregate amount of the ASOT Available Revolving Credit Commitments would be less than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date which is five Business Days prior to the Revolving Credit Termination Date; provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).

          (b) The Lender shall not at any time be obligated to cause any Letter of Credit to be issued hereunder if such issuance would conflict with, or cause the Lender, the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.

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          3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to time request that the Lender cause an Issuing Lender to issue a Letter of Credit by delivering to the Lender and such Issuing Lender at its address for notices specified in the ASOT Credit Agreement an Application therefor, completed to the satisfaction of the Lender and the Issuing Lender, and such other certificates, documents and other papers and information as the Lender and such Issuing Lender may request. Upon receipt of any Application, the Lender will notify the ASOT Administrative Agent of the amount, the beneficiary and the requested expiration of the requested Letter of Credit, and upon receipt of confirmation from the ASOT Administrative Agent that after giving effect to the requested issuance, the ASOT Available Revolving Commitments would not be less than zero, the Lender will cause such Application and the certificates, documents and other papers and information delivered to it in connection therewith to be processed by the Issuing Bank in accordance with its customary procedures and shall promptly cause the Letter of Credit requested thereby to be issued by causing the original of such Letter of Credit to be issued to the beneficiary thereof or as otherwise may be agreed to by the Lender, Issuing Bank and the Borrower. The Lender shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof. The Lender shall promptly give notice to the ASOT Administrative Agent as set forth in the ASOT Credit Agreement of the issuance of each Letter of Credit (including the face amount thereof), and shall provide a copy of such Letter of Credit to the ASOT Administrative Agent as soon as possible after the date of issuance.

          3.3 Fees and Other Charges. (a) The Borrower will pay to the Lender a fee on the aggregate drawable amount of all outstanding Letters of Credit issued for its account (other than any such Letters of Credit that have been fully cash collateralized pursuant to terms satisfactory to the Issuing Lender) at a per annum rate equal to the Applicable Margin then in effect with respect to the Eurodollar Loans and payable quarterly in arrears on each L/C Fee Payment Date after the issuance date. In addition, the Borrower shall pay to the Lender, for the benefit of the Issuing Lender, a fronting fee on the aggregate drawable amount of all outstanding Letters of Credit issued by, the Issuing Lender for the Borrower’s account at a rate per annum agreed upon between the Lender and the Issuing Lender, payable quarterly in arrears on each L/C Fee Payment Date after the issuance date.

          (b) In addition to the foregoing fees, the Borrower shall pay or reimburse the Lender and the Issuing Lender, as the case may be, for normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit issued for the Borrower’s account.

          3.4 [Intentionally Omitted].

          3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to reimburse the Lender, on each date on which the Lender notifies the Borrower of the date and amount of a draft presented under any Letter of Credit and paid by the Issuing Lender, for the amount of (a) such draft so paid and (b) any taxes, fees, charges or other reasonable costs or expenses incurred by the Lender or the Issuing Lender in connection with such payment (the amounts described in the foregoing clauses (a) and (b) in respect of any drawing, collectively, the “Payment Amount”). Each such payment shall be made to the Lender at its address for notices specified herein in lawful money of the United States of America and in immediately available funds. Interest shall be payable on each Payment Amount from the date of the

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applicable drawing until payment in full at the rate set forth in (i) until the second Business Day following the date of the applicable drawing, Section 2.15(b) and (ii) thereafter, Section 2.15(c). Each drawing under any Letter of Credit shall constitute a request by the Borrower to the Lender for a borrowing pursuant to Section 2.5 of Base Rate Loans in the amount of such drawing. The Borrowing Date with respect to such borrowing shall be the first date on which a borrowing of Loans could be made, pursuant to Section 2.5, if the Lender had received a notice of such borrowing at the time of such drawing under such Letter of Credit.

          3.6 [Intentionally Omitted].

          3.7 Obligations Absolute. The Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Lender, any Issuing Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with the Lender that the Lender shall not be responsible for, and the Borrower’s Reimbursement Obligations under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, provided that, such document or endorsement appears on its face to comply with the terms of such Letter of Credit, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. The Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of the Lender. The Borrower agrees that any action taken or omitted by the Lender or an Issuing Lender under or in connection with any Letter of Credit issued by it or the related drafts or documents, if done in the absence of gross negligence, bad faith or willful misconduct and in accordance with the standards of care specified in the Uniform Commercial Code of the State of New York, shall be binding on the Borrower and shall not result in any liability of the Lender or such Issuing Lender to the Borrower.

          3.8 Letter of Credit Payments. If any draft shall be presented for payment under any Letter of Credit, the Lender shall promptly notify the Borrower and the ASOT Administrative Agent of the date and amount thereof. The responsibility of the Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit, in addition to any payment obligation expressly provided for in such Letter of Credit issued by the Issuing Lender, shall be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment appear on their face to be in conformity with such Letter of Credit.

          3.9 Applications. To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.

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SECTION 4. REPRESENTATIONS AND WARRANTIES

          To induce the Lender to enter into this Agreement and to make the Loans and to cause the Issuing Lender to issue the Letters of Credit, each of the Parent Guarantors and the Borrower hereby jointly and severally represents and warrants to the Lender that:

          4.1 [Intentionally Omitted].

          4.2 No Change. Since December 31, 2006, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

          4.3 Corporate Existence; Compliance with Law. Each of the Group Members (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate power and authority, and the legal right, to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law, except, in the case of clauses (c) and (d), to the extent that the failure to be so qualified or comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

          4.4 Corporate Power; Authorization; Enforceable Obligations. Each Group Member has the corporate power and authority, and the legal right, to make, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to borrow hereunder. Each Group Member has taken all necessary corporate or other action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the borrowings on the terms and conditions of this Agreement. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or the execution, delivery, performance, validity or enforceability of this Agreement or any of the other Loan Documents, except (i) such as have been obtained or made and are in full force and effect, (ii) the filings referred to in Section 4.19, and (iii) consents or authorizations, to the extent that the failure to obtain such consents, authorizations, filings and notices (or the failure to keep the same in full force and effect) could not reasonably be expected to have a Material Adverse Effect. Each Loan Document has been duly executed and delivered on behalf of each Loan Party that is a party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

          4.5 No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any

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Contractual Obligation of any Group Member except, solely with respect to a violation of a Contractual Obligation of any Group Member, to the extent such violation could not reasonably be expected to have a Material Adverse Effect, and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Security Documents and such Liens permitted pursuant to Section 7.3 hereof). No Requirement of Law or Contractual Obligation applicable to any Group Member could reasonably be expected to have a Material Adverse Effect.

          4.6 No Material Litigation. Except as otherwise disclosed to the Lender, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the actual knowledge of any Responsible Officer of any Parent Guarantor or the Borrower, threatened by or against any Group Member or against any of their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect.

          4.7 No Default. None of the Group Members is in default under or with respect to any of its Contractual Obligations in any respect that could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.

          4.8 Ownership of Property; Liens. Each of the Group Members has title in fee simple to, or a valid leasehold interest in, all of its real property, and good title to, or a valid leasehold interest in, all its other Property, and none of such Property is subject to any Lien except as permitted by Section 7.3.

          4.9 Intellectual Property. Each of the Group Members owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted. To the knowledge of any Group Member, no material claim has been asserted and is pending by any Person challenging or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does any Group Member know of any valid basis for any such claim. To the knowledge of any Group Member, the use of Intellectual Property by the Group Members does not infringe on the rights of any Person in any material respect.

          4.10 Taxes. Each of the Group Members has filed or caused to be filed all federal, state and other material tax returns that are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its Property and all other taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority that are due and payable, and, except as otherwise disclosed to the Lender in writing, no tax Lien has been filed, and, to the knowledge of the Parent Guarantors or the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge (other than any, in each case, the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the applicable Group Member, as the case may be).

          4.11 Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for “purchasing” or “carrying” any “margin stock”

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within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the regulations of the Board. If requested by the Lender, the Borrower will furnish to the Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.

          4.12 Labor Matters. There are no strikes or other labor disputes against any Group Member pending or, to the knowledge of any Parent Guarantor or the Borrower, threatened that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of the Group Members have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. All payments due from any Group Member on account of employee health and welfare insurance that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect if not paid have been paid or accrued as a liability on the books of the applicable Group Member.

          4.13 ERISA. Neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by a material amount. Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in a material liability under ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to any material liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.

          4.14 Investment Company Act; Other Regulations. No Loan Party is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended. No Loan Party is subject to regulation under any Requirement of Law (other than Regulation X) that limits its ability to incur Indebtedness.

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          4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15 constitute all the Subsidiaries of the each of the Parent Guarantors at the date hereof. Schedule 4.15 sets forth as of the Closing Date the name and jurisdiction of incorporation of each Subsidiary and, as to each Subsidiary, the percentage of each class of Capital Stock owned by each Group Member and whether such Subsidiary is a Subsidiary Guarantor.

          (b) There are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors’ qualifying shares) of any nature relating to any Capital Stock of any Group Member.

          4.16 Use of Proceeds. The proceeds of the Loans and the Letters of Credit, shall be used (i) to finance the working capital needs of the Borrower and its Subsidiaries in the ordinary course of business and (ii) for general corporate purposes. The Revolving Credit Loans may not be used to pay any Administration Fees during any Cure Period.

          4.17 Environmental Matters. Other than exceptions to any of the following that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:

     (a) Each of the Group Members: (i) is, and within the period of all applicable statutes of limitation has been, in compliance with all applicable Environmental Laws; (ii) holds all Environmental Permits (each of which is in full force and effect) required for any of its current or intended operations or for any property owned, leased, or otherwise operated by it; (iii) is, and within the period of all applicable statutes of limitation has been, in compliance with all of its Environmental Permits; and (iv) to the extent within the control of such Group Member: each of its Environmental Permits will be timely renewed and complied with; any additional Environmental Permits that may be required of it will be timely obtained and complied with, without material expense; and compliance with any Environmental Law that is or is expected to become applicable to it will be timely attained and maintained, without material expense.

     (b) Materials of Environmental Concern are not present at, on, under, in, or about any real property now or formerly owned, leased or operated by any Group Member, or at any other location (including, without limitation, any location to which Materials of Environmental Concern have been sent for re-use or recycling or for treatment, storage, or disposal) which could reasonably be expected to (i) give rise to liability of the Group Members under any applicable Environmental Law or otherwise result in costs to the Group Members, (ii) interfere with the continued operations of the Group Members or (iii) impair the fair saleable value of any Real Property owned or leased by any Group Member.

     (c) There is no judicial, administrative, or arbitral proceeding (including any notice of violation or alleged violation) under or relating to any Environmental Law to which any Group Member is, or to the knowledge of any Group Member will be, named as a party that is pending or, to the knowledge of any Group Member, threatened.

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      (d) None of the Group Members has received any written request for information, or been notified that it is a potentially responsible party under or relating to the federal Comprehensive Environmental Response, Compensation, and Liability Act or any similar Environmental Law, or with respect to any Materials of Environmental Concern.

     (e) None of the Group Members has entered into or agreed to any consent decree, order, or settlement or other agreement, or is subject to any judgment, decree, or order or other agreement, in any judicial, administrative, arbitral, or other forum for dispute resolution, relating to compliance with or liability under any Environmental Law.

     (f) None of the Group Members has assumed or retained, by contract, conduct or operation of law, any liabilities of any kind, fixed or contingent, known or unknown, under any Environmental Law or with respect to any Materials of Environmental Concern.

          4.18 Accuracy of Information, etc. No statement or information contained in this Agreement, any other Loan Document, or any other document, certificate or statement furnished to the Lender, by or on behalf of any Loan Party for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, contained as of the date such statement, information, document or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary to make the statements contained herein or therein not materially misleading. The projections and pro forma financial information contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Lender that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount. There is no fact known to any Loan Party that could reasonably be expected to have a Material Adverse Effect that has not been expressly disclosed herein, in the other Loan Documents or in any other documents, certificates and statements furnished to the Lender for use in connection with the transactions contemplated hereby and by the other Loan Documents.

          4.19 Security Documents. (a) The Guarantee and Collateral Agreement is effective to create in favor of the Lender a legal, valid and enforceable security interest in the Collateral described therein and proceeds thereof. In the case of the Pledged Stock described in the Guarantee and Collateral Agreement, when any stock certificates representing such Pledged Stock are delivered to the Lender, and in the case of the other Collateral described in the Guarantee and Collateral Agreement, when Uniform Commercial Code financing statements in appropriate form are filed in the offices specified on Schedule 4.19 (which Uniform Commercial Code financing statements have been duly completed and delivered to the Lender) and such other filings as are specified on Schedule 3 to the Guarantee and Collateral Agreement have been completed (all of which filings have been duly completed), the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each case prior and superior in right to any other Person (except Liens permitted by Section 7.3).

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          (b) Schedule 1.1B lists, as of the Closing Date, each parcel of owned real property and each leasehold interest in real property located in the United States and held by the Parent Guarantors or any of their Subsidiaries.

          4.20 Solvency. The Borrower is, and the Group Members, taken as a whole, are, and after giving effect to the Holdings II LP Asset Acquisition and the incurrence of all Indebtedness and obligations being incurred in connection herewith and therewith will be and will continue to be, Solvent.

          4.21 Regulation H. No Mortgage encumbers improved real property which is located in an area that has been identified by the Secretary of Housing and Urban Development as an area having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968 (except any Mortgaged Properties as to which such flood insurance as required by Regulation H has been obtained and is in full force and effect as required by this Agreement).

SECTION 5. CONDITIONS PRECEDENT

          5.1 Conditions to Initial Extension of Credit. Subject to Section 6.12, the agreement of the Lender to make the initial extension of credit requested to be made by it hereunder is subject to the satisfaction, prior to or substantially contemporaneously with the making of such extension of credit on the Closing Date, of the following conditions precedent:

     (a) Loan Documents. The Lender shall have received (i) this Agreement, executed and delivered by a duly authorized officer of each Parent Guarantor and the Borrower, (ii) the Guarantee and Collateral Agreement, executed and delivered by a duly authorized officer of the Borrower, each Parent Guarantor and any Subsidiary Guarantor and the Borrower and (iii) the Intercreditor Agreement, executed and delivered by a duly authorized officer of each party thereto.

     (b) ASOT Credit Agreement. Each condition precedent to the effectiveness of the ASOT Credit Agreement shall have either been substantially contemporaneously satisfied or waived in accordance therewith and the Lender shall have received proceeds of at least $4,719,000,000 from the proceeds of the ASOT Term Loans in accordance with the terms of the ASOT Credit Agreement.

     (c) Holdings II LP Asset Acquisition. The following transactions shall have been consummated substantially contemporaneously:

     (i) the First Lien Borrower shall have received proceeds in an amount equal to at least $40,000,000 in cash from the First Lien Credit Agreement;

     (ii) the Holdings II LP Asset Acquisition shall have been consummated pursuant to the Holdings II Purchase Agreement, which agreement shall be in form and substance reasonably satisfactory to the ASOT Lenders, and no provision thereof shall have been waived, amended, supplemented or otherwise modified in a manner that would reasonably be expected to have a

41

material adverse effect to the ASOT Lenders without the prior written consent of the ASOT Administrative Agent; and

     (iii) each of the First Lien Loan Documents shall be in form and substance reasonably satisfactory to the ASOT Lenders and all other conditions set forth in the First Lien Loan Documents shall have been satisfied or the fulfillment of any such conditions shall have been waived with the written consent of the ASOT Administrative Agent.

     (d) Approvals. (i) All governmental and third party approvals (including material landlords’ and other consents) necessary in connection with the Holdings II LP Asset Acquisition and the continuing operations of the Group Members shall have been obtained and be in full force and effect.

     (ii) All governmental and third party approvals (including material landlords’ and other consents) necessary in connection with the Revolving Credit Commitment shall have been obtained and be in full force and effect.

     (e) [Intentionally Omitted].

     (f) [Intentionally Omitted].

     (g) [Intentionally Omitted].

     (h) [Intentionally Omitted].

     (i) [Intentionally Omitted].

     (j) [Intentionally Omitted].

     (k) Solvency Analysis. The Lender shall have received a customary solvency analysis certified by the chief financial officer or treasurer of the Borrower which shall document the solvency of the Borrower and its Subsidiaries considered as a whole after giving effect to the transactions contemplated hereby.

     (l) Lien Searches. The Lender shall have received the results of a recent lien search in each of the jurisdictions in which Uniform Commercial Code financing statements or other filings or recordations should be made to evidence or perfect security interests in all assets of the Loan Parties, and such search shall reveal no liens on any of the assets of the Loan Parties, except for Liens permitted by Section 7.3 or Liens to be discharged on or prior to the Closing Date.

     (m) Environmental Matters. The Lender shall have received an American Society for Testing & Materials (“ASTM”) compliant Environmental Site Assessment (“ESA”) dated no earlier than the date that is six months prior to the Closing Date for each of the Operating Properties, together with a letter from the environmental consultant permitting the ASOT Administrative Agent and the ASOT Lenders to rely on the

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environmental assessment as if addressed to and prepared for each of them, and the ASOT Lenders shall be satisfied with the environmental affairs of the Group Members.

     (n) Closing Certificate. The Lender shall have received a certificate of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions and attachments.

     (o) [Intentionally Omitted].

     (p) Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged Notes. The Lender shall have received (i) the certificates (if any) representing the shares of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, unless such certificates and stock powers have been delivered to the First Lien Lender, (ii) an Acknowledgment and Consent, substantially in the form of Annex II to the Guarantee and Collateral Agreement, duly executed by any issuer of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement that is not itself a party to the Guarantee and Collateral Agreement and (iii) each promissory note pledged pursuant to the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank satisfactory to the Lender) by the pledgor thereof.

     (q) Filings, Registrations and Recordings. Each document (including, without limitation, any Uniform Commercial Code financing statement) required by the Security Documents or under law or reasonably requested by the Lender or the ASOT Administrative Agent to be filed, registered or recorded in order to create in favor of the Lender, a perfected Second Priority Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 7.3), shall have been filed, registered or recorded or shall have been delivered to the Lender in proper form for filing, registration or recordation.

     (r) [Intentionally Omitted].

     (s) [Intentionally Omitted].

     (t) Insurance. The Lender shall have received insurance certificates satisfying the requirements of Section 6.5.

          5.2 Conditions to Each Extension of Credit. The agreement of the Lender to make any extension of credit requested to be made by it hereunder on any date (including, without limitation, its initial extension of credit) is subject to the satisfaction of the following conditions precedent:

     (a) Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents (except, in the case of the initial extensions of credit on the Closing Date, the representations contained in Sections 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.15, 4.17, 4.18, 4.20 and 4.21) shall be true and correct in all material respects on and as of such date as if made on and as of

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such date, provided that, (i) such representations made on the Closing Date with respect to the Targets shall be limited to the representations made in the Merger Agreement material to the interests of the Lenders, but only to the extent that TSREV has the right to terminate its obligations as a result of a breach of such representations in the Merger Agreement and (ii) any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct on such respective dates.

     (b) No Default. No Default or Event of Default shall have occurred and be continuing on such date or after giving effect to the extensions of credit requested to be made on such date.

          Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this Section 5.2 have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

          Each of the Parent Guarantors and the Borrower hereby jointly and severally agrees that, so long as the Revolving Credit Commitment remains in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to the Lender, each of the Parent Guarantors and the Borrower shall and shall cause each of its respective Subsidiaries to:

          6.1 [Intentionally Omitted].

          6.2 Certificates; Other Information. Furnish to the Lender:

     (a) [intentionally omitted];

     (b) as soon as available, but in any event (i) within 120 days after the end of each fiscal year of the Borrower and (ii) not later than 60 days after the end of the first three fiscal quarterly periods of each fiscal year of the Borrower, (A) a Compliance Certificate containing all information and calculations necessary for determining compliance by the Group Members with the provisions of this Agreement referred to therein as of the last day of the fiscal quarter or fiscal year of the Borrower, as the case may be and (B) any Uniform Commercial Code financing statements or other filings specified in such Compliance Certificate as being required to be delivered therewith;

     (c) [intentionally omitted];

     (d) [intentionally omitted];

     (e) [intentionally omitted];

     (f) within five days after the same are sent, copies of all financial statements and reports that any Group Member sends to the holders of any class of its debt securities or equity securities, and, within five days after the same are filed, copies of all financial statements and reports that any Group Member may make to, or file with, the SEC

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(provided that the names of any limited partners identified in such financial statements or reports may be redacted prior to delivery);

     (g) [intentionally omitted]; and

     (h) promptly, such additional financial and other information as the Lender may from time to time reasonably request.

          6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of any Group Member, as the case may be.

          6.4 Conduct of Business and Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in full force and effect its organizational existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 7.4 and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law, except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

          6.5 Maintenance of Property; Insurance. (a) Keep all Property and systems useful and necessary in its business in good working order and condition, ordinary wear and tear excepted and (b) maintain with financially sound and reputable insurance companies insurance on all its Property in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business.

          6.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) permit representatives of any ASOT Lender to visit and inspect any of its properties during normal business hours and examine and make abstracts from any of its books and records at any reasonable time and as often as may reasonably be desired (but no more than one visit per any 12-month period shall be permitted (except upon the occurrence and during the continuance of an Event of Default)) and to discuss the business, operations, properties and financial and other condition of the Group Members with officers and employees of the Group Members and with its independent certified public accountants; provided, however, that (a) unless an Event of Default has occurred and is continuing, the Group Members shall only be required to pay the expenses of one such inspection of all of the Group Members’ books and records during any fiscal year, (b) unless an Event of Default has occurred and is continuing, the Lender shall cooperate so that such visit does not materially disrupt the normal operations of such Group Member, and (c) the Lender shall conduct each such inspection in compliance with all reasonable safety and security requirements of such Group Member.

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          6.7 Notices. Promptly give notice to the Lender of:

     (a) the occurrence of any Default or Event of Default;

     (b) any (i) default or event of default under any Contractual Obligation of any Group Member or (ii) litigation, investigation or proceeding which may exist at any time between any Group Member and any Governmental Authority, that in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect;

     (c) any litigation or proceeding affecting any Group Member (i) in which the amount involved is $50,000,000 or more and not covered by insurance, (ii) in which material injunctive or similar relief is sought or (iii) which relates to any Loan Document;

     (d) the following events, as soon as possible and in any event within 30 days after the Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;

     (e) as soon as possible and in any event within 30 days of obtaining knowledge thereof: (i) any development, event, or condition that, individually or in the aggregate with other developments, events or conditions, could reasonably be expected to result in the payment by the Group Members, in the aggregate, of a Material Environmental Amount; and (ii) any notice that any governmental authority may deny any application for an Environmental Permit sought by, or revoke or refuse to renew any Environmental Permit held by, any Group Member;

     (f) [intentionally omitted]; and

     (g) any development or event that has had or could reasonably be expected to have a Material Adverse Effect.

          Each notice pursuant to this Section 6.7 shall be accompanied by a statement of the Borrower, signed on behalf of the Borrower by a Responsible Officer, setting forth details of the occurrence referred to therein and stating what action the relevant Group Member proposes to take with respect thereto.

          6.8 Environmental Laws. (a) Comply in all material respects with, and ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws, and obtain and comply in all material respects with and maintain, and ensure that all tenants and subtenants obtain and comply in all material respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws.

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          (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws.

          (c) If any ESA or update delivered pursuant to Section 5.1(m) identifies a Recognized Environmental Condition (“REC”), as defined under ASTM guidelines, the Borrower shall, within six months of the delivery of such ESA or update to the Lender and the ASOT Administrative Agent, conduct such follow up testing, provide such reports, and take such other actions as required or approved by the applicable Governmental Authority to the Lender and the ASOT Administrative Agent to mitigate such REC.

          6.9 [Intentionally Omitted].

          6.10 Additional Collateral, etc. (a) With respect to any Property acquired after the Closing Date by any Group Member (other than (x) any real property or any Property described in paragraph (c) of this Section 6.10, (y) any Property subject to a Lien expressly permitted by Section 7.3 and (z) Property acquired by an Excluded Foreign Subsidiary) as to which the Lender does not have a perfected Second Priority Lien, promptly (i) execute and deliver to the Lender such amendments to the Guarantee and Collateral Agreement or such other documents as the Lender or the ASOT Administrative Agent deems necessary to grant to the Lender a Second Priority security interest in such Property and (ii) take all actions necessary to grant to the Lender a perfected Second Priority security interest in such Property, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Lender or the ASOT Administrative Agent.

          (b) With respect to (i) any fee interest in any real property having an appraised value (together with improvements thereof) of at least $5,000,000 acquired after the Closing Date by any Group Member (other than any such real property owned by an Excluded Foreign Subsidiary or subject to a Lien expressly permitted by Section 7.3), or (ii) subject to the related Loan Party obtaining the required landlord consent (provided that each Loan Party shall use commercially reasonable efforts to obtain such consent), any leasehold interest in real property having an aggregate appraised value of $5,000,000 acquired or leased (including any leasehold property interest owned by any new Subsidiary acquired after the Closing Date) in one or a series of transactions after the Closing Date by any Group Member, promptly (and in any event no later than 60 days after the acquisition thereof) (A) execute and deliver a Second Priority Mortgage in favor of the Lender, covering such real property, (B) if requested by the Lender or the ASOT Administrative Agent, provide the ASOT Administrative Agent with (x) title and extended coverage insurance covering such real property in an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Lender or the ASOT Administrative Agent) as well as a current ALTA survey thereof, together with a surveyor’s certificate and (y) any consents or estoppels reasonably deemed necessary by the Lender or the ASOT Administrative Agent in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the ASOT Administrative Agent and (C) if reasonably requested by the Lender or the ASOT Administrative Agent, deliver to the ASOT Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the ASOT Administrative Agent.

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          (c) With respect to any new Subsidiary (other than an Excluded Foreign Subsidiary) created or acquired after the Closing Date (which, for the purposes of this paragraph, shall include any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary) by any Group Member, promptly (i) execute and deliver to the Lender such amendments to the Guarantee and Collateral Agreement as the ASOT Administrative Agent deems necessary to grant to the Lender a perfected Second Priority security interest in the Capital Stock of such new Subsidiary that is owned by any Group Member, (ii) deliver to the Lender (or the First Lien Lender in accordance with the Intercreditor Agreement) the certificates representing such Capital Stock (if any), together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such Group Member, as the case may be, (iii) cause such new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and (B) to take such actions necessary to grant to the Lender a perfected Second Priority security interest in the Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Lender or the ASOT Administrative Agent, and (iv) if reasonably requested by the ASOT Administrative Agent, deliver to the ASOT Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the ASOT Administrative Agent.

          (d) With respect to any new Excluded Foreign Subsidiary created or acquired after the Closing Date by any Group Member (other than any Excluded Foreign Subsidiaries), promptly (i) execute and deliver to the Lender such amendments to the Guarantee and Collateral Agreement or such other documents as the Lender or the ASOT Administrative Agent deems necessary in order to grant to the Lender a perfected Second Priority security interest in the Capital Stock of such new Subsidiary that is owned by any Group Member (other than any Excluded Foreign Subsidiaries), (provided that in no event shall more than 65% of the total outstanding Capital Stock of any such new Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver to the Lender (or the First Lien Lender in accordance with the Intercreditor Agreement) the certificates (if any) representing such Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such Group Member, as the case may be, and take such other action as may be necessary or, in the opinion of the Lender or the ASOT Administrative Agent, desirable to perfect the Second Priority Lien of the Lender thereon, and (iii) if reasonably requested by the Lender or the ASOT Administrative Agent, deliver to the ASOT Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the ASOT Administrative Agent.

          6.11 Further Assurances. From time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take such actions, as the Lender or the ASOT Administrative Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of more fully respect to the Collateral (or with perfecting or renewing the rights of the Lender with respect to any additions thereto or replacements or proceeds thereof or with

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respect to any other property or assets hereafter acquired by any Group Member which may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the Lender of any power, right, privilege or remedy pursuant to this Agreement or the other Loan Documents which requires any consent, approval, recording, qualification or authorization of any Governmental Authority, the Borrower will execute and deliver, or will cause the execution and delivery of, all applications, certifications, instruments and other documents and papers that the ASOT Administrative Agent or the Lender may be required to obtain from any Group Member for such governmental consent, approval, recording, qualification or authorization.

          6.12 Post-Closing Covenants. On or prior to the date that is 60 Business Days after the Closing Date, the Borrower shall deliver to the Lender:

     (a) (i) subject to the Intercreditor Agreement, certificates representing the Capital Stock of any Person constituting Collateral, to the extent that the organizational documents of such Person provides that the equity interests therein shall be certificated, and (ii) such other documents required in connection therewith pursuant to Section 5.1(p); and

     (b) an agreement relating to the payment of the Administration Fees by the Combined Group Members, including turnover provisions, duly executed and delivered by an authorized officer of each of the Funds, in form and substance reasonably satisfactory to the ASOT Administrative Agent.

SECTION 7. NEGATIVE COVENANTS

          Each of the Parent Guarantors and the Borrower hereby jointly and severally agrees that, so long as the Revolving Credit Commitment remains in effect, any Letter of Credit remains outstanding or any Loan or other amount is owing to the Lender, each of the Parent Guarantors and the Borrower shall not and shall not permit any of its respective Subsidiaries to, directly or indirectly:

          7.1 [Intentionally Omitted].

          7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

          (a) Indebtedness of any Loan Party pursuant to any Loan Document;

          (b) Indebtedness of the Borrower to any of its Subsidiaries and of any Wholly Owned Subsidiary of the Borrower to the Borrower or any other Subsidiary of the Borrower;

          (c) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate principal amount not to exceed $15,000,000 at any one time outstanding minus the aggregate outstanding principal amount of Indebtedness of the Affiliate Borrowers and their Subsidiaries permitted by Section 7.2(c) of the applicable Affiliate Borrower Credit Agreements;

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     (d) Indebtedness of the Subsidiaries of the Borrower outstanding on the date hereof and listed on Schedule 7.2(d) and any refinancings, refundings, renewals or extensions thereof (without any increase in the principal amount thereof or any shortening of the maturity of any principal amount thereof);

     (e) Guarantee Obligations made in the ordinary course of business by any Subsidiaries of the Borrower of obligations of the Borrower or any of its Wholly Owned Subsidiaries;

     (f) [intentionally omitted];

     (g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, or in respect of netting services, overdraft protections or otherwise in connection with deposit accounts;

     (h) Indebtedness arising under any Capital Stock purchase, repurchase or redemption obligations which may arise pursuant to joint venture agreements in effect on the Closing Date;

     (i) Indebtedness (other than Recourse Indebtedness) assumed by the Subsidiaries of the Borrower in connection with any acquisition permitted by Section 7.8(h); provided that, such Indebtedness existed at the time of such acquisition and was not created in connection therewith or in contemplation thereof, and provided, further that, (i) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, after giving effect to such additional Indebtedness, no Event of Default shall exist and (ii) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such additional Indebtedness, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement (other than Sections 7.1(a) and 7.1(c) of the ASOT Credit Agreement if such Indebtedness is assumed during a Cure Period and the related acquisition was contractually committed to prior to the related Test Date) and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Indebtedness;

     (j) guarantees (including bonds), performance bonds and indemnification obligations incurred in the ordinary course of business of obligations of the Borrower and its Subsidiaries in favor of suppliers, customers, contractors, lessees, tenants, and mechanics of the Borrower or any Subsidiary and any other such obligations, in each case entered into in the ordinary course of business, which are in an outstanding amount not exceeding $50,000,000 individually or $150,000,000 in the aggregate outstanding at any time minus, in each case, the aggregate outstanding principal amount of such Indebtedness of the Affiliate Borrowers and their Subsidiaries permitted by Section 7.2(j) of the applicable Affiliate Borrower Credit Agreements;

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     (k) Indebtedness of any Joint Venture, directly or indirectly owned by the Borrower to the Borrower or any Subsidiary to the extent permitted by Section 7.8(g);

     (l) Indebtedness in respect of the Non-Recourse Subsidiary Borrowers that is secured by either (i) Real Property acquired by the Borrower or any of its Subsidiaries after the Closing Date and any related Property permitted by Section 7.3(r) or (ii) the Capital Stock of any Subsidiary of such Non-Recourse Subsidiary Borrower, that is also a Non-Recourse Subsidiary Borrower; provided that, with respect to any of the foregoing Indebtedness:

     (A) neither the Borrower nor any of its Subsidiaries provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or is directly or indirectly liable (as guarantor or otherwise), other than as guarantor to the extent permitted by Section 7.2(e) for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of special purpose entity covenants and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guarantee or indemnification agreements in non-recourse financing of real estate;

     (B) as to which the lenders thereunder will not have any recourse to the Capital Stock or assets of the Borrower nor any of its Subsidiaries other than the assets securing such Indebtedness, additions, accessions and improvements thereto and proceeds thereof and the Capital Stock of the Non-Recourse Subsidiary Borrower that is the borrower under such Indebtedness and, in the case of the Borrower or any of its Subsidiaries, recourse against the Borrower and its Subsidiaries for fraud, misrepresentation, misapplication of cash, waste, environmental claims and liabilities, prohibited transfers, violations of special purpose entity covenants and other circumstances customarily excluded by institutional lenders from exculpation provisions and/or included in separate guarantee or indemnification agreements in non-recourse financing or tax-exempt financing of real estate; and

     (C) to the extent that the lenders thereunder will have recourse to the Capital Stock of the borrower of such Indebtedness, such borrower shall be a Non-Recourse Subsidiary Borrower;

provided, further, that, (x) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, after giving effect to such additional Indebtedness, no Event of Default shall exist and (y) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (i) containing all information and calculations necessary, and taking into consideration such additional Indebtedness, for determining pro forma compliance with the provisions of Section 7.1(b) of the ASOT Credit Agreement and (ii) certifying that no ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such

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additional Indebtedness. For the avoidance of doubt, if at any time following the Closing Date the Borrower or any of its Subsidiaries acquires the remaining Capital Stock of any Joint Venture not owned by the Borrower or such Subsidiary on the Closing Date, any Real Property owned by such Joint Venture shall be included in clause (i) of this Section 7.2(l);

     (m) Construction Related Indebtedness that is not Recourse Indebtedness of any Group Member;

     (n) [intentionally omitted];

     (o) additional unsecured Indebtedness of the Borrower or any of its Subsidiaries in an aggregate principal amount (for the Borrower and all its Subsidiaries) not to exceed $50,000,000 at any one time outstanding minus the aggregate outstanding principal amount of such Indebtedness of the Affiliate Borrowers and their Subsidiaries permitted by Section 7.2(o) of the applicable Affiliate Borrower Credit Agreements;

     (p) secured Indebtedness of the Borrower under the Affiliate Revolving Notes, the proceeds of which are used by the Borrower for the purposes permitted by Section 4.16;

     (q) [intentionally omitted];

     (r) Indebtedness of the First Lien Borrower comprised of the First Lien Loans and the Guarantee Obligations of its Subsidiaries and the Parent Guarantors with respect thereto;

     (s) [intentionally omitted];

     (t) fully cash collateralized letters of credit issued for the account of the Borrower or any of its Subsidiaries, provided that, at any time the ASOT Tranche A Term Loans are outstanding or the ASOT Borrower is not in compliance with the Required Ratios, the aggregate face amount of such letters of credit at any one time outstanding shall not exceed an amount equal to $25,000,000 minus the aggregate face amount of letters of credit issued for the account of the Affiliate Borrowers or any of their Subsidiaries in accordance with Section 7.2(t) of the Affiliate Borrower Credit Agreements; and

     (u) unsecured Indebtedness (the “Unsecured Employee Cost Loans”) incurred among any of the Borrower, the Affiliate Borrower I-A, the Affiliate Borrower I-B Parent, the ASOT Borrower, the First Lien Lender, and OC/SD JV Holdings LLC (each, an “Unsecured Affiliate Borrower”), as borrower, and any of the Borrower, the Affiliate Borrower I-A, the Affiliate Borrower I-B Parent, the ASOT Borrower, the First Lien Lender and OC/SD JV Holdings LLC (each, an “Unsecured Affiliate Lender”), as lender, solely for the purposes of funding the Unsecured Affiliate Borrowers’ obligations with respect to employee expenses to be shared by the Unsecured Affiliate Borrowers.

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          7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for:

     (a) Liens for taxes not yet due or that are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;

     (b) (i) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, workmen’s or other like Liens, (ii) Liens of banks related to Indebtedness permitted by Section 7.2(g) and (iii) Liens of landlords on furniture, fixtures and equipment pursuant to customary Contractual Obligations, in each case, arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings;

     (c) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

     (d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

     (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, are not substantial in amount and that do not in any case materially detract from the value of the Property subject thereto or materially interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

     (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing Indebtedness permitted by Section 7.2(d) or any Liens securing any refinancings, refundings, renewals or extensions of the foregoing, provided that, no such Lien is spread to cover any additional Property after the Closing Date and that the amount of Indebtedness secured thereby is not increased;

     (g) Liens securing Indebtedness of the Borrower or any of its Subsidiaries incurred pursuant to Section 7.2(c) to finance the acquisition of fixed or capital assets, provided that, (i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber any Property other than the Property financed by such Indebtedness, (iii) the principal amount of Indebtedness secured thereby is not increased and (iv) the amount of Indebtedness initially secured thereby is not more than 100% of the purchase price of such fixed or capital asset;

     (h) Liens created pursuant to the Security Documents;

     (i) any interest or title of a lessor under any lease entered into by the Borrower or any of its Subsidiaries in the ordinary course of its business and covering only the assets so leased;

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     (j) Permitted Leases (including memoranda thereof), and any recordation thereof;

     (k) Liens resulting from any judgment, writ or warrant of attachment or similar process and not constituting an Event of Default;

     (l) licenses of Intellectual Property in the ordinary course of business;

     (m) Liens on property of a Person existing at the time such Person is acquired or merged with or into or consolidated with the Borrower or any of its Subsidiaries to the extent permitted hereunder (and not created in anticipation or contemplation thereof) securing Indebtedness permitted by Section 7.2(i); provided that, such Liens do not extend to property not subject to such Liens at the time of acquisition (other than improvements and accessions thereon and proceeds thereof), and are no more favorable to the lienholders than such existing Liens (taken as a whole);

     (n) Liens created by sale contracts documenting unconsummated asset dispositions permitted by this Agreement; provided that, such Liens attach only to assets and proceeds thereof subject to such sales contracts;

     (o) Liens attaching to cash earnest money deposits made by the Borrower and its Subsidiaries in connection with any letter of intent or purchase agreement entered into by the Borrower or the applicable Subsidiary, provided that, such acquisition is permitted by Section 7.8;

     (p) Liens arising by operation of law or contract on insurance policies and the proceeds thereof to secure premiums thereunder;

     (q) purported Liens evidenced by the filing of precautionary financing statements by a lessor relating solely to operating leases of personal property entered into in the ordinary course of business;

     (r) Liens on (x) fee-owned property or real property leases of the Borrower and its Subsidiaries and any related Property (other than the Capital Stock of the Borrower and any of its Subsidiaries that is not a Non-Recourse Subsidiary Borrower) customarily granted or pledged by a borrower to its lender in connection with non-recourse financing including, without limitation, any personal property located on or related to such Property, any contracts, receivables and general intangibles related to such real property and any Hedge Agreements relating to the Indebtedness, or (y) the Capital Stock of any Non-Recourse Subsidiary Borrower (and, in each case, any proceeds from any of the foregoing) which Liens secure Indebtedness permitted by Sections 7.2(l) and 7.2(m); provided that, in each case, (i) such Liens shall be created substantially simultaneously with the incurrence of such Indebtedness and (ii) such Liens do not at any time encumber any Property other than the Property financed by such Indebtedness, other than, in each case, in connection with any consolidations of such Indebtedness;

     (s) Liens securing Indebtedness in respect of the First Lien Loan in favor of the First Lien Lender;

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     (t) [intentionally omitted];

     (u) Liens on cash collateral to secure letters of credit issued for the account of the Borrower and its Subsidiaries to the extent such letters of credit are permitted by Section 7.2(t);

     (v) [intentionally omitted]; and

     (w) Liens in favor of the ASOT Borrower securing the obligations of the Borrower under the Affiliate Revolving Notes permitted by Section 7.2(p), provided that, to the extent any such Affiliate Revolving Note is secured by any of the assets of the Borrower and its Subsidiaries which assets directly or indirectly constitute Collateral (as defined in the ASOT Credit Agreement), such Lien shall be a third-priority Lien and the ASOT Borrower shall have executed and delivered an intercreditor agreement, in form and substance reasonably satisfactory to the ASOT Administrative Agent.

          7.4 Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business, except that:

     (a) any Subsidiary of any Applicable Party or any other Person may be merged or consolidated with or into, or, so long as such Subsidiary has nominal or no assets or liabilities, be liquidated, wound up or dissolved, or all or any part of its business, Property or assets may be conveyed, sold, leased transferred or otherwise disposed of, in one transaction or a series of transactions to, (x) such Applicable Party (other than the Borrower) (provided that such Applicable Party shall be the continuing or surviving corporation) or any Wholly Owned Subsidiary Guarantor (provided that (i) a Wholly Owned Subsidiary Guarantor shall be the continuing or surviving corporation or (ii) simultaneously with such transaction, the continuing or surviving corporation shall become a Wholly Owned Subsidiary Guarantor and such Applicable Party shall comply with Section 6.10 in connection therewith) or (y) the Borrower (1) in a transaction in which the Borrower shall be the continuing or surviving corporation or (2) in a transaction in which the Borrower shall not be the continuing or surviving corporation (such surviving person, the “Successor Borrower”); provided that, (A) such transaction shall not cause the ASOT Borrower to fail to be in pro forma compliance with the covenants contained in Section 7.1 of the ASOT Credit Agreement (other than Sections 7.1(a) and 7.1(c) of the ASOT Credit Agreement if such transaction is consummated during a Cure Period and was contractually committed to prior to the related Test Date), (B) the Successor Borrower shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof, (C) the Successor Borrower shall expressly assume all the obligations of the Borrower under this Agreement and the other Loan Documents to which the Borrower is a party pursuant to a supplement hereto or thereto in a form reasonably satisfactory to the ASOT Administrative Agent, (D) each Guarantor, unless it is the other party in such transaction, shall confirm that its guarantee shall apply to the Successor Borrower’s obligations under this Agreement, (E) each Guarantor, unless it is the other party to such transaction, shall have by a supplement to the Guarantee and Collateral

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Agreement confirmed that its obligations thereunder shall apply to the Successor Borrower’s obligations under this Agreement, (F) each mortgagor of the Mortgaged Property, unless it is the other party to such transaction, shall have by an amendment to or restatement of the applicable Mortgage confirmed that its obligations thereunder shall apply to the Successor Borrower’s obligations under this Agreement and/or its guarantee thereof, as applicable, (G) such transaction shall not cause a Change of Control to occur and (H) the Borrower shall have delivered to the Lender and the ASOT Administrative Agent an officer’s certificate stating that such transaction and such supplement to this Agreement or any Security Document comply with this Agreement; provided further that, if the foregoing are satisfied, the Successor Borrower will succeed to, and be substituted for, the Borrower under this Agreement; and

     (b) any Subsidiary of any Applicable Party may Dispose of any or all of its assets (upon voluntary liquidation or otherwise) to such Applicable Party or any Subsidiary Guarantor.

          7.5 Limitation on Disposition of Property. Dispose of any of its Property (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person, except:

     (a) the Disposition of obsolete or worn out property or surplus property in the ordinary course of business;

     (b) the sale of inventory in the ordinary course of business;

     (c) Dispositions permitted by Section 7.4(b);

     (d) the sale or issuance of the Capital Stock of any Subsidiary of any Applicable Party to such Applicable Party or any Subsidiary Guarantor;

     (e) the Disposition of other assets (other than the Secured Guarantor Notes), provided that, (i) such Disposition is at fair market value, as reasonably determined by the Group Member making such Disposition, (ii) such Disposition shall not result in a Material Adverse Effect, and (iii) at the time of such Disposition, (A) a certificate of a Responsible Officer of the ASOT Borrower shall have been delivered to the ASOT Administrative Agent, which shall (1) include a computation demonstrating pro forma compliance with the covenants contained in Section 7.1(b) of the ASOT Credit Agreement after giving effect to such Disposition and (2) certify that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such Disposition and (B) a certificate of a Responsible Officer of the Borrower shall have been delivered to the Lender, which shall include a certification that no Default or Event of Default shall have occurred and be continuing at such time or after giving effect to such Disposition;

     (f) [intentionally omitted];

     (g) Permitted Leases;

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     (h) Investments permitted by Section 7.8;

     (i) asset sales pursuant to “forced-sale,” “buy-sell,” “put-call” or similar arrangements in joint venture agreements of the Joint Ventures in effect on the date hereof;

     (j) licenses of Intellectual Property in the ordinary course of business; and

     (k) Dispositions, by means of trade-in, of equipment used in the ordinary course of business, so long as such equipment is replaced or substituted, substantially concurrently, by like-equipment.

          7.6 Limitation on Restricted Payments. Declare or pay any dividend on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of any Group Member, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of any Group Member, or enter into any derivatives or other transaction with any financial institution, commodities or stock exchange or clearinghouse (a “Derivatives Counterparty”) obligating any Group Member to make payments to such Derivatives Counterparty as a result of any change in market value of any such Capital Stock (collectively, “Restricted Payments”), except that:

     (a) any Subsidiary may make Restricted Payments to any Applicable Party or any Subsidiary Guarantor;

     (b) [intentionally omitted];

     (c) the Group Members may make Restricted Payments directly or indirectly to any ASOT Parent/Affiliate Guarantor, if on the date of such Restricted Payment, the ASOT Tranche A Term Loans have been paid in full and the ASOT Borrower is in compliance with the Required Ratios; provided that, on the date of any such Restricted Payment, (i) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, immediately prior to and after giving effect to such Restricted Payment, no Default or Event of Default shall have occurred and be continuing, (ii) the ASOT Borrower shall deliver to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Restricted Payment and (iii) Restricted Payments may not be made pursuant to this Section 7.6(c) during any Cure Period;

     (d) any Group Member may make Restricted Payments to its direct or indirect owners to allow such direct or indirect owners to pay any taxes which are due and payable by Guarantor 1, Guarantor 2, the ASOT Additional Parent Guarantors, Holdings I Corp and the Borrower (or the first taxpayers that are a direct or indirect owner of Guarantor 1, Guarantor 2 or any ASOT Additional Parent Guarantor, in each

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case, solely to the extent of net income attributable to the Group Members), including, without limitation, in connection with any Disposition of Property permitted by Section 7.5 (assuming that each such owner is taxable at the highest marginal tax rate applicable to corporations resident in New York City (taking into account the deductibility of state and local taxes)); provided that, on the date of any such Restricted Payment, (x) the Borrower shall deliver to the Lender a pro forma Compliance Certificate certifying that, immediately prior to and after giving effect to such Restricted Payment, no Default or Event of Default shall have occurred and be continuing and (y) the ASOT Borrower shall deliver to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment, for determining pro forma compliance with the provisions of Section 7.1(b) of the ASOT Credit Agreement and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Restricted Payment;

     (e) [intentionally omitted];

     (f) [intentionally omitted];

     (g) at any time other than during a Cure Period, (x) any Group Member and its Subsidiaries may make Restricted Payments to pay the Administration Fees or (y) the Borrower may make loans to the Financial Reporting Parties under the Secured Guarantor Notes; provided that, (A) on any date, the aggregate amount of Restricted Payments and the outstanding principal amount of loans made pursuant to this Section 7.6(g) shall not at any time exceed the aggregate amount of Administration Fees allocable to the Group Members during the period beginning on the Closing Date and ending on the date of determination and (B) the Secured Guarantor Notes are pledged to the Lender as Collateral, and, provided further, that, on the date of any such Restricted Payment or loan, (i) the Borrower shall deliver to the ASOT Administrative Agent a pro forma Compliance Certificate certifying that, immediately prior to and after giving effect to such Restricted Payment or loan, as applicable, no Default or Event of Default shall have occurred and be continuing and (ii) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment or loan, as applicable, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such additional Restricted Payment or loan, as applicable; and

     (h) a Group Member may make Restricted Payments with Distributable Affiliate Proceeds to the extent required under the ASOT Credit Agreement.

          7.7 Limitation on Maintenance Capital Expenditures and Renovation Capital Expenditures. Make or commit to make any Maintenance Capital Expenditures or Renovation Capital Expenditures, except:

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     (a) Maintenance Capital Expenditures of the Group Members made in the ordinary course of business in any fiscal year in an aggregate amount equal to the sum of all outstanding units owned or leased by the Group Members available at the beginning of such fiscal year multiplied by $950 (adjusted, in the case of units owned or leased by any Joint Venture, to reflect the Ownership Percentage of the Group Members in such Joint Venture); provided that, (i) up to 50% of any such amount referred to in this clause (a), if not so expended in the fiscal year for which it is permitted, may be carried over for expenditure in the next succeeding fiscal year and (ii) Maintenance Capital Expenditures made pursuant to this clause (a) during any fiscal year shall be deemed made, first, in respect of amounts carried over from the prior fiscal year pursuant to subclause (i) above and second, in respect of amounts permitted for such fiscal year as provided above;

     (b) Renovation Capital Expenditures of the Group Members made in the ordinary course of business in an amount not to exceed an aggregate amount equal to $180,000,000 minus the aggregate amount of Renovation Capital Expenditures of the Affiliate Borrowers made pursuant to Section 7.7(b) of the applicable Affiliate Borrower Credit Agreement; provided that, until the ASOT Tranche A Term Loans have been repaid in full and the ASOT Borrower is in compliance with the Required Ratios, the aggregate amount of Renovation Capital Expenditures made by the Group Members with respect to Joint Ventures that are not CapEx Controlled pursuant to this Section 7.7(b) shall not exceed an amount equal to $30,000,000 during the term of this Agreement minus the aggregate amount of Renovation Capital Expenditures of the Affiliate Borrowers and their Subsidiaries made with respect to Joint Ventures that are not CapEx Controlled pursuant to Section 7.7(b) of the applicable Affiliate Borrower Credit Agreement. For the avoidance of doubt, the amount of Renovation Capital Expenditures of any Group Member made with respect to any Joint Venture shall be deemed to be the amount actually paid by such Group Member, including, without limitation, amounts attributed to such Group Member from any distributions of such Joint Venture; and

     (c) Renovation Capital Expenditures of the Group Members for Real Property acquired after the Closing Date in accordance with Section 7.8(h), provided that, the Borrower has delivered to the Lender a written notice generally identifying such Renovation Capital Expenditures and the anticipated amount thereof promptly after such acquisition.

          7.8 Limitation on Investments. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or any assets constituting an ongoing business from, or make any other investment in, any other Person (all of the foregoing, “Investments”), except:

     (a) extensions of trade credit in the ordinary course of business;

     (b) Investments in Cash Equivalents;

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     (c) Investments arising in connection with the incurrence of Indebtedness permitted by Sections 7.2(b), 7.2(e), 7.2(j) and 7.2(u);

     (d) [intentionally omitted];

     (e) [intentionally omitted];

     (f) [intentionally omitted];

     (g) (i) Investments (other than those relating to the incurrence of Indebtedness permitted by Section 7.8(c)) by any Group Member in the Borrower or any Person that is a Wholly Owned Subsidiary and (ii) Investments consisting of loans to a Joint Venture owned by the Borrower and its Subsidiaries as of the Closing Date, to the extent that (x) such loans are required by the related joint venture agreement in effect on the Closing Date and (y) the aggregate amount of such loans to such Joint Venture do not exceed an amount equal to the aggregate amount of Indebtedness of such Joint Venture to its shareholders or members multiplied by the Ownership Percentage of the Group Members in such Joint Venture;

     (h) Investments (whether made directly or indirectly through the acquisition of a Person owning such assets) made by the Borrower and its Subsidiaries to acquire Real Property, provided that, (w) such Investment shall not result in a Material Adverse Effect, (x) at the time of such Investment, (i) a certificate of a Responsible Officer of the Borrower shall have been delivered to the Lender, certifying that no Default or Event of Default shall have occurred and be continuing at such time or after giving effect to such Investment and (ii) the ASOT Borrower shall have delivered to the ASOT Administrative Agent a certificate of a Responsible Officer (A) containing all information and calculations necessary, and taking into consideration such Restricted Payment, for determining pro forma compliance with the provisions of Section 7.1 of the ASOT Credit Agreement (other than Sections 7.1(a) and 7.1(c) of the ASOT Credit Agreement if such Investment is consummated during a Cure Period and is an acquisition that was contractually committed to prior to the related Test Date) and (B) certifying that no ASOT Loan Default or ASOT Loan Event of Default shall have occurred and be continuing at such time or after giving effect to such Investment, (y) the terms and conditions set forth in Section 6.10 are satisfied and (z) Investments may not be made pursuant to this Section 7.8(h) during a Cure Period other than acquisitions that were contractually committed to prior to the related Test Date;

     (i) Investments by the Borrower and its Subsidiaries in any securities received by the Borrower or such Subsidiary in the ordinary course of business in satisfaction or partial satisfaction of indebtedness from financially troubled account debtors;

     (j) Investments received by the Borrower and its Subsidiaries in connection with the bankruptcy or reorganization of suppliers and lessees and in settlement of delinquent obligations of, and other disputes with, lessees and suppliers arising in the ordinary course of business;

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     (k) Investments by any Group Member in any Joint Venture owned by the Borrower and its Subsidiaries as of the Closing Date, including any Investment required in connection with (i) the exercise by any partner or member in such Joint Venture of any “forced-sale,” “buy-sell,” “put-call” or similar arrangements in the joint venture agreements for such Joint Venture, or (ii) the purchase of the partnership or membership interest of any other partner or member in such Joint Venture, provided that, (x) such Investments are required by the related joint venture agreement in effect on the Closing Date and (y) the aggregate amount of such Investments made by the Group Members in such Joint Venture do not exceed an amount equal to the aggregate amount of investments in such Joint Venture made by its shareholders or members multiplied by the Ownership Percentage of the Group Members in such Joint Venture, provided, further, that, any such Investment in the form of a loan or advance shall be evidenced by a note and pledged as Collateral pursuant to the Security Documents;

     (l) Investments by the Borrower and its Subsidiaries in Joint Ventures made after the Closing Date not otherwise permitted by Section 7.8 in an aggregate amount not exceeding on any date an amount equal to Applicable JV Investment Percentage in effect on such date of Gross Asset Value as at the last day of the fiscal quarter most recently ended for which financial statements are available less the aggregate amount of Investments in Joint Ventures made by the Affiliate Borrower Group Members after the Closing Date as of such date, provided that, (i) the amount of such Investment in the Capital Stock of any such Joint Venture shall be net of the amount of any Indebtedness incurred by such Joint Venture that is allocable to the Borrower and its Subsidiaries on such date and (ii) such Investment shall be represented by a certificate representing the Capital Stock of such Joint Venture owned by the Borrower and its Subsidiaries, as applicable, pledged by the Loan Parties to the Lender as Collateral;

     (m) [intentionally omitted];

     (n) Investments by the Borrower and its Subsidiaries in (i) Joint Ventures existing on the Closing Date and (ii) Joint Ventures created in connection with any Disposition by any Group Member that owns an Owned Property to the extent such Disposition is permitted by Section 7.5; and

          (o) loans made by the Borrower to the Financial Reporting Parties under the Secured Guarantor Notes in accordance with Section 7.6(g).

          7.9 [Intentionally Omitted].

          7.10 Limitation on Transactions with Affiliates. Enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than any Combined Group Member) unless such transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course of business of the Group Member entering into such transaction and (c) upon fair and reasonable terms no less favorable to the Group Member entering into such transaction than it would obtain in a comparable arm’s-length transaction with a Person that is not an Affiliate, other than (i) the Holdings II LP Asset Acquisition and the Loan

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Documents, (ii) the payment of the Administration Fees pursuant to the Fund Agreements, as in effect on the Closing Date or the date of formation, as applicable, to the extent any Restricted Payment was permitted by Section 7.6(g), (iii) the loans made by the Borrower to the Financial Reporting Parties pursuant to the Secured Guarantor Notes, (iv) [intentionally omitted], (v) the Unsecured Employee Cost Loans made by the Unsecured Affiliate Lenders to the Unsecured Affiliate Borrowers, (vi) [intentionally omitted], (vii) [intentionally omitted] and (viii) the Administration Fee Agreement.

          7.11 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by any Group Member of real or personal property which has been or is to be sold or transferred by such Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Group Member.

          7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day other than December 31 or change the Borrower’s method of determining fiscal quarters.

          7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Group Member to create, incur, assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure the Obligations or, in the case of any guarantor, its obligations under the Guarantee and Collateral Agreement, other than (a) this Agreement and the other Loan Documents, (b) the First Lien Loan Documents, (c) any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby or Indebtedness permitted by Sections 7.2(l), 7.2(m) and 7.2(r) (in each case, any prohibition or limitation shall only be effective against the assets financed thereby) and (d) any prohibition or limitation that (i) consists of customary restrictions and conditions contained in any agreement relating to the sale of any Property permitted under Section 7.5 pending the consummation of such sale, provided that, such restriction or condition shall only be effective against such Property, (ii) exists in any agreement in effect at the time such Subsidiary becomes a Subsidiary of the Borrower, provided that (A) such agreement was not entered into in contemplation of such Person becoming a Subsidiary and (B) such prohibition or limitation shall only be effective against such Subsidiary or (iii) is imposed by any amendments or refinancings that are otherwise permitted by the Loan Documents of the contracts, instruments or obligations referred to in clause (d)(ii), provided that (A) such amendments and refinancings are no more materially restrictive (taken as a whole) with respect to such prohibitions and limitations than those in effect prior to such amendment or refinancing and (B) the negative pledge clause(s) in such amendments or refinancings do not extend to Property other than such Property covered in the agreements permitted in clause (d)(ii).

          7.14 Limitation on Restrictions on Subsidiary Distributions. Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (b) make Investments in the Borrower or any other Subsidiary or (c) transfer any of its assets to the Borrower or any other Subsidiary, except for such encumbrances or restrictions existing

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under or by reason of (i) any restrictions existing under the Loan Documents and (ii) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Subsidiary.

          7.15 Limitation on Lines of Business. Enter into any material line of business, either directly or through any Subsidiary, fundamentally or substantively different from those businesses in which the Borrower and its Subsidiaries are engaged on the date of this Agreement (after giving effect to the Holdings Merger) or that are reasonably related or ancillary thereto or that represents a reasonable extension or enhancement thereof.

          7.16 [Intentionally Omitted].

          7.17 Limitation on Amendments to Other Documents. (a) Amend, supplement or otherwise modify the organizational document of any Group Member in any manner that would adversely affect the interests of the Lender, (b) amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of the Administration Fee Agreement in any manner that would adversely affect the application thereto of the subordination provisions set forth therein or in any subordination agreement related thereto, or (c) otherwise amend, supplement or otherwise modify the terms and conditions of the Administration Fee Agreement or any note related thereto, except to the extent that any such amendment, supplement or modification could not reasonably be expected to have a Material Adverse Effect.

          7.18 [Intentionally Omitted].

          7.19 [Intentionally Omitted].

          7.20 Limitation on Hedge Agreements. Enter into any Hedge Agreement other than Hedge Agreements entered into in the ordinary course of business and not for speculative purposes, to protect against changes in interest rates or foreign exchange rates.

SECTION 8. EVENTS OF DEFAULT

     If any of the following events shall occur and be continuing:

     (a) the Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan Document within five days after any such interest or other amount becomes due in accordance with the terms hereof or thereof; or

     (b) any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made or furnished; or

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     (c) (i) any Loan Party shall default in the observance or performance of any agreement contained in clause (i) or (ii) of Section 6.4(a) (with respect to the Parent Guarantors and the Borrower only), Section 6.7(a), Section 7, or in Section 5 of the Guarantee and Collateral Agreement, (ii) either Affiliate Borrower I-B defaults on any of its obligations under Section 2.12 of the Affiliate Borrower I-B Credit Agreement or the First Lien Borrower defaults on any of its obligations under Section 2.12 of the First Lien Credit Agreement or (iii) an “Event of Default” under and as defined in any Mortgage shall have occurred and be continuing; or

     (d) any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after a Responsible Officer of any Loan Party has knowledge or should have had knowledge of such default; or

     (e) any Combined Group Member shall (i) default in making any payment of any principal of any Indebtedness (including, without limitation, any Indebtedness under the ASOT Credit Agreement or any Guarantee Obligation, but excluding the Loans, Reimbursement Obligations and, so long as no Event of Default has occurred and is continuing under Section 8(a) of the ASOT Credit Agreement, the Indebtedness under any Affiliate Borrower Loan Document, the First Lien Loan Documents or any Affiliate Revolving Note) on the scheduled or original due date with respect thereto, (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created (excluding, so long as no Event of Default has occurred and is continuing under Section 8(a) of the ASOT Credit Agreement, the Indebtedness under any Affiliate Borrower Loan Document, the First Lien Loan Documents or any Affiliate Revolving Note), or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; provided that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $50,000,000; or

     (f) (i) any Combined Group Member shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation,

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dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any Combined Group Member shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any Combined Group Member any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any Combined Group Member any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any Combined Group Member shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any Combined Group Member shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

     (g) (i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the ASOT Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the ASOT Required Lenders shall be likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could, in the sole judgment of the ASOT Required Lenders, reasonably be expected to have a Material Adverse Effect; or

     (h) one or more judgments or decrees shall be entered against any Combined Group Member involving for the Combined Group Members taken as a whole a liability (not paid or fully covered by insurance as to which the relevant insurance company has acknowledged coverage) of $50,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof; or

     (i) any of the Security Documents shall cease, for any reason (other than by reason of the express release thereof pursuant to Section 10.15), to be in full force and effect, or any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien

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created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby other than as a result of any termination or release in accordance with the terms of this Agreement; or

     (j) the guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason (other than by reason of the express release thereof pursuant to Section 10.15), to be in full force and effect or any Loan Party or any Affiliate of any Loan Party shall so assert; or

     (k) any Change of Control shall occur;

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to the Borrower, automatically the Revolving Credit Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) shall immediately become due and payable, and (B) if such event is any other Event of Default, either or both of the following actions may be taken: (i) the Lender may, by notice to the Borrower declare the Revolving Credit Commitment to be terminated forthwith, whereupon the Revolving Credit Commitment shall immediately terminate; and (ii) the Lender may, by notice to the Borrower, declare the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents (including, without limitation, all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and payable. In the case of all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the ASOT Administrative Agent an amount equal to the aggregate then undrawn and unexpired face amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the ASOT Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the ASOT Borrower under the ASOT Credit Agreement and under the other ASOT Loan Documents. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the ASOT Borrower under the ASOT Credit Agreement and under the other ASOT Loan Documents shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto).

SECTION 9. [INTENTIONALLY OMITTED]

SECTION 10. MISCELLANEOUS

          10.1 Amendments and Waivers. Neither this Agreement or any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except

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in accordance with the provisions of this Section 10.1. Subject to Section 7.18 of the ASOT Credit Agreement, the Lender and each Loan Party party to the relevant Loan Document may from time to time (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents (including amendments and restatements hereof or thereof) for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lender or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as may be specified in the instrument of waiver, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences.

          Any such waiver and any such amendment, supplement or modification shall be binding upon the Loan Parties, the Lender and all future holders of the Loans. In the case of any waiver, the Loan Parties and the Lender shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Any such waiver, amendment, supplement or modification shall be effected by a written instrument signed by the parties required to sign pursuant to the foregoing provisions of this Section; provided that, delivery of an executed signature page of any such instrument by facsimile transmission shall be effective as delivery of a manually executed counterpart thereof.

          10.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed in the case of the Parent Guarantors, the Borrower and the Lender, as follows:

The Parent Guarantors:	c/o Tishman Speyer
	45 Rockefeller Plaza
	New York, New York 10111
	Attention: Chief Financial Officer
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300
with copies to:	Tishman Speyer
	45 Rockefeller Plaza
	New York, New York 10111
	Attention: General Counsel
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300

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and	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention: Philip Mindlin
	Telecopy: (212) 403-2217
	Telephone: (212) 403-1217
The Borrower:	c/o Tishman Speyer
	45 Rockefeller Plaza
	New York, New York 10111
	Attention: Chief Financial Officer
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300
with copies to:	Tishman Speyer
	45 Rockefeller Plaza
	New York, New York 10111
	Attention: General Counsel
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300
and	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention: Philip Mindlin
	Telecopy: (212) 403-2217
	Telephone: (212) 403-1217
The Lender:	c/o Tishman Speyer
	45 Rockefeller Plaza New York, New York 10111
	Attention: Chief Financial Officer
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300
with copies to:	Tishman Speyer
	45 Rockefeller Plaza
	New York, New York 10111
	Attention: General Counsel
	Telecopy: (212) 319-1745
	Telephone: (212) 715-0300

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and	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention: Philip Mindlin
	Telecopy: (212) 403-2217
	Telephone: (212) 403-1217

provided that any notice, request or demand to or upon the Lender shall not be effective until received.

          Notices and other communications to the Lender hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Lender; provided that, the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Lender. The Lender or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

          10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

          10.4 Survival of Representations and Warranties. All representations and warranties made herein, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.

          10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the Lender for all its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements and other charges of counsel to the Lender, (b) to pay or reimburse the Lender for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement, the other Loan Documents and any other documents prepared in connection herewith or therewith, including, without limitation, the fees and disbursements of counsel to the Lender), (c) to pay, indemnify, or reimburse the Lender for, and hold the Lender harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan

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Documents and any such other documents, and (d) to pay, indemnify or reimburse the Lender, its affiliates, and its officers, directors, trustees, employees, advisors, agents and controlling persons (each, an “Indemnitee”) for, and hold each Indemnitee harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by an Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto or thereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds thereof (including any refusal by any Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Materials of Environmental Concern on or from any property owned, occupied or operated by the Borrower or any of its Subsidiaries, or any environmental liability related in any way to the Borrower or any of its Subsidiaries or any or their respective properties, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by any third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto (all the foregoing in this clause (d), collectively, the “Indemnified Liabilities”); provided that, the Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee. No Indemnitee shall be liable for any damages arising from the use by unauthorized persons of information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such persons or for any special, indirect, consequential or punitive damages in connection with the Loans. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries so to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section shall be payable not later than 30 days after written demand therefor. Statements payable by the Borrower pursuant to this Section shall be submitted to the Borrower, at the address of the Borrower set forth in Section 10.2, or to such other Person or address as may be hereafter designated by the Borrower in a notice to the ASOT Administrative Agent as set forth in the ASOT Credit Agreement. The agreements in this Section shall survive repayment of the Loans and all other amounts payable hereunder.

          10.6 Successors and Assigns; Participations and Assignments. This Agreement shall be binding upon and inure to the benefit of the Parent Guarantors, the Borrower, the Lender, all future holders of the Loans and their respective successors and assigns permitted hereby, except that neither the Borrower nor the Lender may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the requisite ASOT Lenders pursuant to Section 7.18 of the ASOT Credit Agreement, provided, however, that it is

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understood and agreed that a security interest in this Agreement and the other Loan Documents shall be granted to the ASOT Administrative Agent for the benefit of the ASOT Secured Parties.

          10.7 [Intentionally Omitted].

          10.8 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower, the Lender and the ASOT Administrative Agent.

          10.9 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

          10.10 Integration. This Agreement and the other Loan Documents represent the entire agreement of the Parent Guarantors, the Borrower and the Lender with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

          10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          10.12 Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:

     (a) submits for itself and its Property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

     (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

     (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the relevant Person at its address set forth in

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Section 10.2 or at such other address of which each party hereto shall have been notified pursuant thereto;

     (d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

     (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

          10.13 Acknowledgments. Each of the Parent Guarantors and the Borrower hereby acknowledges that:

     (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

     (b) the Lender does not have any fiduciary relationship with or duty to any Parent Guarantor or the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Lender, on one hand, and the Parent Guarantors and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

     (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Parent Guarantors, the Borrower and the Lender.

          10.14 Confidentiality. The Lender agrees to keep confidential all non-public information provided to it by any Loan Party pursuant to this Agreement that is designated by such Loan Party as confidential; provided that nothing herein shall prevent the Lender from disclosing any such information (a) to the parties to the ASOT Credit Agreement or any affiliate of any thereof, (b) to any prospective purchaser of Revolving Credit Commitment and/or Loans that agrees to comply with the provisions of this Section or substantially equivalent provisions, (c) to any of its employees, directors, agents, attorneys, accountants and other professional advisors, (d) [intentionally omitted], (e) upon the demand of any Governmental Authority having jurisdiction over it, (f) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (g) in connection with any litigation or similar proceeding, (h) that has been publicly disclosed other than in breach of this Section, (i) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about the Lender’s investment portfolio in connection with ratings issued with respect to the Lender or (j) in connection with the exercise of any remedy hereunder or under any other Loan Document.

          10.15 Release of Collateral and Guarantee Obligations. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, upon request of the Borrower in connection with any Disposition of Property permitted by the Loan Documents or the incurrence of Indebtedness permitted by Section 7.2(l) and 7.2(m), the Lender shall take such actions as shall be required to release its security interest in any Collateral being Disposed of in

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such Disposition or to be subject to a Lien permitted by Section 7.3(r), and to release any guarantee obligations under any Loan Document of any Person being Disposed of in such Disposition or incurrence of such Indebtedness, to the extent necessary to permit consummation of such Disposition or incurrence of such Indebtedness in accordance with the Loan Documents.

          (b) Notwithstanding anything to the contrary contained herein or any other Loan Document, when all Obligations have been paid in full, the Revolving Credit Commitment has terminated or expired and no Letter of Credit shall be outstanding (unless fully cash collateralized), upon request of the Borrower, the Lender shall take such actions as shall be required to release its security interest in all Collateral, and to release all guarantee obligations under any Loan Document. Any such release of guarantee obligations shall be deemed subject to the provision that such guarantee obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made. The Lender shall in lieu of taking actions to release its security interest in accordance with the foregoing sentence, take such actions as shall be reasonably requested by the Borrower to assign such security interest to the related purchaser or lender in connection with any permitted Disposition or incurrence of Indebtedness.

          10.16 [Intentionally Omitted].

          10.17 [Intentionally Omitted].

          10.18 WAIVERS OF JURY TRIAL. THE PARENT GUARANTORS, THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

          10.19 Exculpation. Notwithstanding anything appearing to the contrary in this Agreement, or in the Guarantee and Collateral Agreement or any of the other Loan Documents, the Lender shall not be entitled to enforce the liability and obligation of the Borrower or any Guarantor to pay, perform and observe the obligations contained in this Agreement by any action or proceeding against any member, shareholder, partner, manager, director, officer, agent, affiliate, beneficiary, trustee or employee of the Borrower or any Guarantor (or any direct or indirect member, shareholder, partner or other owner of any such member, shareholder, partner, manager, director, officer, agent, affiliate or employee of the Borrower or any Guarantor, or any director, officer, employee, agent, manager or trustee of any of the foregoing); provided that, nothing in this Section 10.19 shall have the effect of exculpating from liability any entity that is itself the Borrower or a Guarantor under this Agreement.

[NO FURTHER TEXT ON THIS PAGE]

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS II (BORROWER), L.P.
By:	Tishman Speyer Archstone-Smith Multifamily Holdings II (Borrower) GP, L.L.C., its general partner
By:	/s/ George Hatzmann
	Name:	George Hatzmann
	Title:	Authorized Signatory
TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS II (BORROWER) GP, L.L.C.
By:	/s/ George Hatzmann
	Name:	George Hatzmann
	Title:	Authorized Signatory
TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY HOLDINGS II, L.P.
By:	Tishman Speyer Archstone-Smith Multifamily
	Parallel Guarantor, L.L.C., its general partner
By:	/s/ Bradley Turk
	Name:	Bradley Turk
	Title:	Authorized Signatory

[Signature Page to Credit Agreement (Affiliate Borrower II-Revolving Credit Loan)]

 

ARCHSTONE-SMITH OPERATING TRUST, as Lender
By:	/s/ George Hatzmann
	Name:	George Hatzmann
	Title:	Authorized Signatory

[Signature Page to Credit Agreement (Affiliate Borrower II-Revolving Credit Loan)]

EX-10.18

Exhibit 10.18

EXECUTION COPY

     EMPLOYMENT AGREEMENT (this “Agreement”) dated as of October 5, 2007, among ARCHSTONE-SMITH COMMUNITIES L.L.C., a limited liability company formed under the laws of the State of Delaware (the “Employer”), R. SCOTT SELLERS (“Executive”), and Archstone-Smith Operating Trust, a real estate investment trust formed under the laws of the State of Maryland (the “Company” or “ASOT”), as Guarantor.

     WHEREAS, pursuant to the Agreement and Plan of Merger, made and entered into as of the 28th day of May, 2007, as amended by that certain Amendment No. 1 entered into as of the 5^th day of August, 2007, by and among Archstone-Smith Trust, a real estate investment trust formed under the laws of the State of Maryland (“AST”), ASOT (together with AST, the “Seller Parties”), River Holding, LP, a Delaware limited partnership (“River Holding”), River Acquisition (MD), LP, a real estate investment trust formed under the laws of the State of Maryland (the “Merger REIT”) and River Trust Acquisition (MD), LLC, a Maryland limited liability company (the “Operating Trust Merger Sub”) (the “Merger Agreement”), (i) at the Operating Trust Merger Effective Time (as defined in the Merger Agreement), the Operating Trust Merger Sub shall be merged with and into ASOT and ASOT will be the surviving entity in the Operating Trust Merger (as defined in the Merger Agreement) and (ii) at the Company Merger Effective Time (as defined in the Merger Agreement), being the date hereof and hereafter referred to herein as the “Effective Date”, AST will be merged with and into an assignee of Merger REIT and such assignee of Merger REIT will be the surviving entity in the Company Merger (as defined in the Merger Agreement) (the Operating Trust Merger and the Company Merger collectively, the “Transaction”);

     WHEREAS, concurrently with the execution of the Merger Agreement, as a condition and inducement to the River Holding’s willingness to enter into the Merger Agreement, River Holding and Executive entered into a definitive term sheet with respect to Executive’s employment by the Employer upon the closing of the Transaction (the “Term Sheet”); and

     WHEREAS, the Seller Parties and Executive are parties to that change in control agreement dated as of August 12, 2002, as such change in control agreement has been amended or supplemented through the Effective Date (the “Prior Agreement”); and

     WHEREAS, this Agreement, when executed, replaces the Term Sheet and the Prior Agreement effective as of the Effective Date; and

     WHEREAS, in connection with the Transaction, the Employer desires to employ Executive and Executive desires to be employed by the Employer; and

     WHEREAS, the Company has agreed to provide certain benefits directly under this Agreement and to guarantee payment of the compensation obligations hereunder of the Employer;

     NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     Section 1. Employment Period.

     The initial term of this Agreement shall commence on the Effective Date and end on December 31, 2010 (the “Initial Period”), unless terminated earlier pursuant to Section 3; provided, however, that as of the expiration date of each of (i) the Initial Period and (ii) if applicable, any Renewal Period (as defined below), the term of this Agreement will automatically be extended for a one-year period (each, a “Renewal Period”), unless either party gives at least ninety (90) days written notice prior to such expiration date of its intention not to extend the term of this Agreement (the Initial Period and each subsequent Renewal Period shall constitute the “Employment Period”). Executive’s termination of employment at the end of the Employment Period following a notice of nonrenewal by the Company or the Employer shall be treated as termination by the Employer without “Cause” (as defined below) as of the end of the Employment Period. Upon Executive’s termination of employment for any reason with the Employer and all other affiliates of the Employer, he shall immediately resign all positions with the Employer, the Company and any of their respective subsidiaries or affiliates.

     Section 2. Terms of Employment.

          (a) Position. During the Employment Period, Executive shall serve as Chief Executive Officer of the Company and the Employer, and as a member of the board of directors or other applicable governing body of Tishman Speyer Real Estate Venture VII (Governance), L.P., and at all times as the senior executive officer of the Company and the Employer and each of their respective controlled subsidiaries. During the Employment Period, Executive shall have such duties and responsibilities as are commensurate with the normal responsibilities of a chief executive officer of an enterprise similar to the Company, of like size and controlled by private-equity investors, including responsibility for the day-to-day management of the Company, subject to the direction of the Board of Directors of Tishman Speyer Archstone-Smith Multifamily Series I Trust which Board of Directors are to be appointed, directly or indirectly, by Tishman Speyer Real Estate Venture VII (Governance), L.P. and Tishman Speyer Real Estate Venture VII Parallel (Governance), L.P. (collectively, the “Governance GP”) or an authorized representative of the Governance GP (the “Designee”); provided, that the Designee shall be a senior executive of the Governance GP or one of its affiliates. In performing his duties hereunder, Executive shall report directly to the Governance GP or the Designee. At the request of the Governance GP, Executive shall also serve as Chief Executive Officer, without additional compensation, of any of the Company’s (i) subsidiaries or (ii) affiliates, a substantial portion of the activities of which involve the acquisition, disposition, operation, development, management or financing of multifamily residential apartment buildings or communities.

          (b) Duties. During the Employment Period, Executive agrees to devote all of his business time to the business and affairs of the Company and the Employer and to use Executive’s reasonable best efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Executive from (i) serving on civic or charitable boards or committees, (ii) with the

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consent of the Governance GP, which consent will not be unreasonably withheld, serving on the board of directors of no more than one public company which does not engage in the acquisition, disposition, operation, development, management or financing of multifamily residential apartment buildings or communities or office buildings and (iii) managing personal investments, so long as, individually or in the aggregate, such activities do not materially interfere with the performance of Executive’s responsibilities hereunder.

          (c) Compensation.

               (i) Base Salary. During the Initial Period, Executive shall receive from the Employer an annual base salary of $750,000.00, which shall be paid in accordance with the customary payroll practices of the Employer (the “Annual Base Salary”). During the Employment Period following the Initial Period, Annual Base Salary shall be adjusted by not less than the increase in the US Department of Labor Consumer Price Index CPI-U, US City Average, All Items, from the Effective Date until the first day of the Renewal Period, and annually thereafter on the same basis.

               (ii) Bonuses.

               (1) Guaranteed Annual Bonus. Subject to the following sentence, Executive shall earn from the Employer a guaranteed annual bonus of $4.0 million in respect of the fiscal year of the Employer (the “Fiscal Year”) ending on December 31, 2008 (the “2008 Guaranteed Annual Bonus”) and shall earn a guaranteed annual bonus of $2.0 million in respect of each of the Fiscal Years during the Employment Period ending on a subsequent December 31 (together with the 2008 Guaranteed Annual Bonus, the “Guaranteed Annual Bonus”). Other than as set forth in Section 4 below or with respect to any portion of a Guaranteed Annual Bonus deferred in accordance with Section 2(c)(vii) below, the Guaranteed Annual Bonus in respect of any Fiscal Year shall be paid not later than the March 15 following the end of such Fiscal Year, and only if Executive is employed by the Employer or the Company on the last day of the Fiscal Year to which such Guaranteed Annual Bonus relates.

               (2) Incremental Annual Bonus. Subject to Section 2(c)(ii)(2)D. below, in addition to the Guaranteed Annual Bonus, Executive shall be eligible to earn from the Employer an annual incremental bonus (the “Incremental Annual Bonus”), which shall be based on the dollar amount of direct and indirect equity interests in Tishman Speyer Archstone-Smith Multifamily JV, L.P. (“Fund”), Tishman Speyer Archstone-Smith Multifamily Parallel JV, L.P. (“Parallel Fund”), Tishman Speyer Archstone-Smith Multifamily Parallel Fund I JV, L.P. (“Parallel Fund I”), Tishman Speyer Archstone-Smith Multifamily Parallel Fund II JV, L.P. (“Parallel Fund II”) and any entity similar to Parallel Fund I created after the Effective Date (each a “Post-Effective Date Parallel Fund”), and any of their direct or indirect controlled subsidiaries owned on or following the Effective Date by parties other than Lehman Brothers Holdings Inc. (“Lehman”), Tishman Speyer Real Estate Venture VII, L.P. (“Tishman Speyer”), Banc of America Strategic Ventures, Inc., a Delaware corporation, Archstone LB Syndication Partner LLC, a Delaware limited liability company, BIH ASN, LLC, a Delaware limited liability company, Executive or any of their respective affiliates (including but not limited to any investment funds sponsored and managed by any of them or any of their respective affiliates) (collectively, the “Equity Parties”) in connection with the bridge equity syndication presently

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contemplated by the Equity Parties (the “New Equity”); provided, however, that (i) equity which is owned on or following the Effective Date by any of the Bridge Equity Providers (as defined in the Syndication Agreement and Modification Agreement, dated as of the date hereof, among affiliates of Tishman Speyer, affiliates of Lehman and the Bridge Equity Providers (the “Syndication Agreement”)) shall be treated as New Equity only if and to the extent that such equity is retained as a result of a Bridge Equity Provider having made a voluntary election in writing prior to a Failed Syndication (as such term is defined in the Syndication Agreement) to retain such equity pursuant to the terms of the Syndication Agreement and not syndicate it to third parties; and (ii) Syndication Equity (as defined in the Syndication Agreement) which has been sold to any of the Equity Parties (other than the Bridge Equity Providers) subsequent to the Effective Date shall be treated as New Equity if and only if Administration Fees and GP Promote (as such terms are defined in the Syndication Agreement) are paid on such equity, whether or not paid at the highest rate.

                    A. 2008 Incremental Annual Bonus. With respect to the Fiscal Year ending on December 31, 2008, (1) if the amount of New Equity on December 31, 2008 is at least $4.6 billion, the Incremental Annual Bonus will be $3,125,000 and (2) if the amount of such New Equity is greater than $2.3 billion, but less than $4.6 billion, the Incremental Annual Bonus will be equal to the sum of (a) $1,562,500 plus (b) the product of (i) $1,562,500 multiplied by (ii) a fraction, the numerator of which is the amount of such New Equity in excess of $2.3 billion and the denominator of which is $2.3 billion (the “Partial Incremental Annual Bonus”).

                    B. 2009 and 2010 Incremental Annual Bonuses. With respect to the Fiscal Years ending December 31, 2009 and 2010, if the amount of New Equity on the last day of each such Fiscal Year is greater than $2.3 billion, the Incremental Annual Bonus in respect of such Fiscal Year will be (1) $3,125,000, if the amount of such New Equity is at least $4.6 billion, and (2) the Partial Incremental Annual Bonus (as determined pursuant to Section 2(c)(ii)A above, but using the amount of New Equity on the last day of the applicable Fiscal Year), if the amount of such New Equity is greater than $2.3 billion but less than $4.6 billion.

                    C. Incremental Bonuses for 2011 and Thereafter. With respect to Fiscal Years ending December 31, 2011 and later, if the amount of New Equity on the first anniversary of the Effective Date (the “Syndication End Date”) is greater than $2.3 billion, the Incremental Annual Bonus in respect of such Fiscal Year will be (1) $3,125,000, if the amount of such New Equity is at least $4.6 billion, and (2) if the amount of such New Equity is greater than $2.3 billion but less than $4.6 billion, the Incremental Annual Bonus shall be equal to $3,125,000 multiplied by a fraction (not greater than one) (the “Fraction”), (i) the numerator of which is the aggregate annual Administration Fees (as such term is defined in the Syndication Agreement), which GP and Parallel GP, or either of them, is entitled to receive in respect of such Fiscal Year pursuant to the Syndication Agreement, or are otherwise permitted to and in fact receive pursuant to such Syndication Agreement and any side letter referenced therein (collectively, “Fees”) and (ii) the denominator of which is the aggregate annual Fees which GP and Parallel GP would have been entitled to receive in respect of such Fiscal Year pursuant to the Syndication Agreement and any side letter referenced therein, had the amount of such New Equity been $4.6 billion assuming that Administration Fees would have been paid at a rate of .45% (the denominator being referred to herein as “Full Syndication Fees”). Executive shall be entitled to all relevant information pertinent to the calculation of Fees.

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                    D. General. Subject to Section 4, the Incremental Annual Bonus, if any, in respect of any Fiscal Year shall be paid not later than the March 15 following the end of such Fiscal Year, but only if Executive is employed on the last day of the Fiscal Year to which such Incremental Annual Bonus relates. No Incremental Annual Bonus will be paid pursuant to Section 2(c)(ii)(2)A. or B. above in respect of any Fiscal Year for which, on the last day of such Fiscal Year, the amount of New Equity is not greater than $2.3 billion; and no Incremental Annual Bonus will be paid pursuant to Section 2(c)(ii)(2)C. above in respect of any Fiscal Year unless there is at least $2.3 billion of New Equity on and as of the Syndication End Date.

               (iii) Benefits. During the Employment Period, Executive shall be entitled to participate in all savings and retirement plans, practices, policies and programs applicable generally to other senior executives of the Company and the Employer and shall be eligible for participation in, and shall receive all benefits under, welfare benefit plans, practices, policies and programs provided by the Company and the Employer to the extent applicable generally to other senior executives of the Company or the Employer (the plans, practices, policies and programs referred to in the paragraph, collectively, “Benefit Plans”).

               (iv) Vacation. During the Employment Period, Executive shall be entitled to six (6) weeks per annum of paid vacation.

               (v) Expenses. During the Employment Period, Executive shall be entitled to receive reimbursement from the Employer for all reasonable business expenses incurred by Executive in performance of his duties hereunder, provided that Executive provides all necessary documentation in accordance with applicable Company or Employer policy.

               (vi) Profits Interests. As of the Effective Date, Executive has been granted by Tishman Speyer Archstone-Smith Multifamily Participants, L.L.C. 4,800 Class C Units (out of 8,000 total available Class C Units) (the “Profits Interests”) pursuant to the terms of the Award Agreement attached hereto as Appendix A.

               (vii) Phantom LP Interests. Notwithstanding Section 2(c)(ii)(1) above, subject to the next following sentence, Executive may elect in lieu of receiving up to 50% of each Guaranteed Annual Bonus to receive fully vested ”Class A Units” of Tishman Speyer Archstone-Smith Multifamily Junior Mezz Borrower, L.P. (“Junior Mezz Borrower”), Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor, L.L.C. (“Parallel Guarantor”), Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor I, L.L.C. (“Parallel Guarantor I”), Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor II, L.L.C. (“Parallel Guarantor II”) and any entity similar to Parallel Guarantor created after the Effective Date (each a “Post-Effective Date Parallel Guarantor”) (collectively, “Phantom Units”), provided, however, that (A) the amount covered by such election shall be allocated to Junior Mezz Borrower, Parallel Guarantor, Parallel Guarantor I, Parallel Guarantor II and each Post-Effective Date Parallel Guarantor (if any) in the same proportion as the aggregate equity invested in such entities (measured at cost) is allocated between them, and (B) the number of Phantom Units of each such

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entity received in respect of any such election shall be equal to the quotient of (x) the dollar amount of Guaranteed Annual Bonus as to which such election is made and which is allocated to the applicable entity, divided by (y) the Fiscal Year-end value of one ”Class A Unit” of the applicable entity, as determined by Governance GP, reported to investors in respect of the Fiscal Year in which such Guaranteed Annual Bonus was earned. Any such election as to the Guaranteed Annual Bonus to be earned in respect of a particular Fiscal Year must be made no later than the day prior to the first day of such Fiscal Year, or by such other date which the Company or Employer and Executive agree will not result in tax penalties to Executive under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and shall specify one or more permissible date or dates for settlement and distribution as are consistent with such Section 409A, as provided in paragraph (2) below (the “Settlement Date”). The Phantom Units, if any, will otherwise be subject to the terms and conditions of a Phantom Unit Agreement prepared by the Company or the Employer and reasonably acceptable to the Company or the Employer and Executive; provided that Phantom Units will have the following features, and any Phantom Unit Agreement will be consistent therewith:

               (1) Phantom Units are intended to provide Executive with cash payments on the Settlement Date equal to the cumulative cash distributions (and, if applicable, the fair market value of non-cash distributions) to which he would have been entitled had he owned a number of ”Class A Units” in the issuing entity equal to the number of Phantom Units. Executive acknowledges that all payments in respect of Phantom Units will be taxable as ordinary income, irrespective of the tax character of distributions in respect of “Class A Units”.

               (2) The Company or the Employer shall cause all Phantom Units to be redeemed by the issuing entity as soon as practicable following the occurrence of, but in any event during the calendar year in which occurs, the earliest of (i) Executive’s death, (ii) the date the Executive becomes “disabled” (within the meaning of Section 409A(a)(2)(C) of the Code), (iii) a specified time (which for the avoidance of doubt may include his separation from service) elected by Executive in accordance with Section 409A of the Code and (iv) a change in the ownership or effective control of the entity which issued such Phantom Units, or in the ownership of a substantial portion of such issuing entity’s assets, in a manner which constitutes an allowable payment event under Section 409A of the Code. Such redemption will be for cash, except that in the case of a redemption event described in clause (iv) of the preceding sentence in which the holders of ”Class A Units” of the applicable entity receive distributions wholly or partially in a form other than cash, such redemption will be, at the election of the issuing entity, either in cash (with any non-cash assets distributed to holders of “Class A Units” valued at their fair market value, as reasonably determined by the general partner or managing member of such entity, as the case may be), or in the same form (including the same proportion) as the distributions made to holders of the applicable ”Class A Units”. The amount for which each Phantom Unit will be redeemed pursuant to this paragraph shall be the per-unit value of the ”Class A Units” of the applicable entity at the time of the applicable redemption event, which shall be deemed to be (A) in the case of a redemption event described in clause (iv) of the preceding sentence, the value established with reference to the applicable transaction, and (B) in the case of any other redemption event, the Fiscal Year-end value of one ”Class A Unit”, as applicable, as determined by Governance GP, in the applicable entity in respect of the Fiscal Year ending immediately prior to the applicable redemption event.

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               (3) Any payments to Executive in respect of Phantom Units caused by the sale or other disposition of the related “Class A Units” shall proportionately reduce the number of Phantom Units held by Executive.

               (viii) Effective Date Equity Grant. As of the Effective Date, Executive has been granted (x) 100 restricted Class B Units in Junior Mezz Borrower, with an aggregate value of $10,530,988 as of the Effective Date, (y) 100 restricted Class B Units in Parallel Guarantor I with an aggregate value of $711,470 as of the Effective Date and (z) 100 restricted Class B Units in Parallel Guarantor II with an aggregate value of $7,542 as of the Effective Date, for a total aggregate value equal to $11.25 million as of the Effective Date (the “Effective Date Equity Grant”); provided, however, that, to the extent requested by Executive, as soon as practicable after the Effective Date, the Company (or one of its affiliates) shall provide Executive with supporting calculations necessary to establish that the “Class B Units” granted to him pursuant to the Effective Date Equity Grant, and the direct or indirect economic interests in the assets acquired in the Transaction, were purchased at a price per “unit” that was not less favorable to Executive than the price per “unit” paid by Lehman or Tishman Speyer for their “units”, and the Company (or its applicable affiliate) shall promptly make all such adjustments (whether by amendment or otherwise) as are necessary to ensure the foregoing. The Effective Date Equity Grant will be subject to the terms and conditions of the Unit Award Agreements attached hereto as Appendices B, C and D, which shall in any event provide for withholding of units by the issuer in an amount having a fair market value equal to the taxes due in connection with the vesting of such units, regardless of whether withholding of taxes by such issuer is otherwise required by law; provided, however, that such withholding in excess of the minimum withholding required by law shall be required only to the extent not resulting in accounting charges to the issuer or any affiliate thereof in excess of those charges which would apply in the absence of such withholding.

               (ix) Effective Date Equity Purchase. As of the Effective Date, Executive has purchased 21.75 Non-voting Class A Units of Junior Mezz Borrower for an aggregate purchase price of $2,290,444 (the “Effective Date Equity Purchase”) subject to the terms and conditions of the Unit Purchase Agreement attached hereto as Appendix E; provided, however, that, to the extent requested by Executive, as soon as practicable after the Effective Date, the Company (or one of its affiliates) shall provide Executive with supporting calculations necessary to establish that the “Non-voting Class A Units” purchased by him pursuant to the Effective Date Equity Purchase, and the direct or indirect economic interests in the assets acquired in the Transaction, were purchased at a price per “unit” that was not less favorable to Executive than the price per “unit” paid by Lehman or Tishman Speyer for their “units”, and the Company (or its applicable affiliate) shall promptly make all such adjustments (whether by amendment or otherwise) as are necessary to ensure the foregoing.

               (x) Equity Documents. The agreements reflecting the Effective Date Equity Grant, the Effective Date Equity Purchase, the Profits Interests, any Phantom Units and any other equity interest or equity interest-based award agreement entered into by and between the Company or any of its affiliates and Executive on or after the date hereof, are collectively referred to herein as the “Equity Documents”.

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               (xi) GP Interests. As of the Effective Date, Executive has invested $4.1 million pursuant to which he has purchased certain interests in Tishman Speyer Archstone-Smith Multifamily (GP) (“Fund GP”), L.P., Tishman Speyer Archstone-Smith Multifamily Parallel (GP), L.P. (“Parallel Fund GP”) (collectively, the “GP Interests”) and Fund pursuant to the limited partnership agreements of each of such entities. At any time following the cessation of the Executive’s employment for any reason or no reason, the issuer of a GP Interest, or any affiliate thereof shall have the right, but not the obligation, to repurchase such GP Interest at its fair market value. For purposes of the preceding sentence, fair market value shall be determined by an independent third party appraiser selected by the issuer of the applicable GP Interest from among a list of five independent nationally known appraisal firms supplied by the issuer to Executive (the “Approved Appraiser List”). The Company shall pay for the first appraisal. If Executive disagrees with such appraisal, he may select one of the remaining four appraisers on the Approved Appraiser List to perform a second appraisal. If such second appraisal is no greater than 105% of the first appraisal, the first appraisal shall be deemed fair market value and Executive shall pay for the second appraisal. If the second appraisal is greater than 105% of the first appraisal, fair market value shall be deemed to be the average of the first appraisal and the second appraisal, and the Company shall pay for the second appraisal.

          (d) Guarantee of Payment. The Company agrees and hereby guarantees to Executive that all compensation and benefits required to be paid or provided to Executive under this Agreement by any entity other than the Company, other than compensation required to be provided pursuant to Sections 2(c)(viii), (ix) and (xi) hereof will, to the extent not timely paid by the Employer or one of it affiliates, instead be timely paid by the Company. This is a guaranty of payment and performance and not merely of collection. If Employer fails to make any payment when due with respect to Executive or to perform any duties, obligations or covenants with respect to Employer’s obligations with respect to Executive, the Company will as soon as practicable and unconditionally pay to Executive such amounts and perform such duties, obligations and covenants.

     Section 3. Termination of Employment.

          (a) Death or Disability. The Employment Period, and Executive’s employment hereunder, shall terminate upon Executive’s death. If Executive becomes subject to a “Disability” (as defined below) during the Employment Period, the Company or the Employer may give Executive written notice in accordance with Sections 3(e) and 11(j) of the termination of Executive’s employment. For purposes of this Agreement, “Disability” means (i) Executive’s inability to substantially perform his duties hereunder by reason of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months, as determined by a physician chosen by the Governance GP and reasonably acceptable to Executive or his representative, or (ii) Executive is, by reason of any medically determinable physical or mental impairment, receiving income replacement benefits under the applicable long-term disability plan covering employees of the Employer.

          (b) Cause. The Employment Period, and Executive’s employment hereunder, may be terminated at any time by the Company or the Employer for Cause. For purposes of this Agreement, “Cause” shall mean, in the reasonable judgment of the Governance GP (subject to any contrary determination by an arbitrator in accordance with Section 11(g) hereof) (i) the

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willful and continued failure by Executive to substantially perform his duties with the Company, after written notification by the Company or the Governance GP (or the Designee) of such failure, (ii) the willful engaging by Executive in conduct which is demonstrably injurious to the Company or the Governance GP or any of their affiliates, monetarily or otherwise, (iii) the engaging by Executive in egregious misconduct involving serious moral turpitude or (iv) Executive’s failure to follow the reasonable, lawful directions of the Governance GP or the Designee (provided that directions from the Governance GP or the Designee, as the case may be, shall be considered unlawful if Executive obtains a written opinion from his counsel to that effect); provided, however, that an event described in this clause (iv) shall not constitute Cause unless the Governance GP has notified Executive in writing describing the failure which constitutes Cause and then only if Executive fails to either cure such failure or to provide a written opinion of counsel that such direction would involve a violation of the Company’s or the Employer’s Code of Business Conduct and Ethics in effect at the time of the opinion (provided that if such Code of Business Conduct and Ethics is less stringent than that in effect at the Effective Date in respect of the matter to which the opinion relates, than as to that matter the Company’s Code of Business Conduct and Ethics in effect at the Effective Date shall be deemed to apply), within fourteen (14) days after Executive’s receipt of such written notice.

For purposes of this provision, (i) no act or failure to act on Executive’s part shall be deemed “willful” unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that such action was in the best interest of the Company and (ii) no failure of Executive or the Company or any of its affiliates to achieve performance goals shall be treated as a basis for termination of Executive’s employment for Cause. The cessation of employment of Executive shall not be deemed to be for Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the Governance GP (after Executive is given an opportunity, together with counsel, to be heard before representatives of Tishman Speyer and Lehman specifying the particulars thereof in detail).

          (c) Termination Without Cause. The Employment Period, and Executive’s employment hereunder, may be terminated by the Company or the Employer without Cause at any time.

          (d) Termination by Executive. The Employment Period, and Executive’s employment hereunder, may be terminated at any time by Executive for Good Reason or without Good Reason upon 90 days’ prior written notice, provided, in the case of a termination for Good Reason, that Executive provides such notice within 60 days after the occurrence of the event giving rise to the termination for Good Reason. For purposes of this Agreement, “Good Reason” means Executive’s voluntary resignation after the occurrence of one or more of the following events without Executive’s consent: (i) a material adverse change in Executive’s titles or positions or the assignment to Executive of duties inconsistent with his position as Chief Executive Officer or with other responsibilities set forth in Section 2(a) of this Agreement; (ii) a reduction in or failure to pay when due Executive’s Annual Base Salary, Guaranteed Annual Bonus or Incremental Annual Bonus, or a failure by the Company to make any grant (or to cause an affiliate of the Company to make any such grant) or make any payment in respect of (or cause any affiliate of the Company to make any payment in respect of) any Phantom Unit or Profits Interests; or (iii) the relocation of Executive’s primary office or the Company’s principal executive offices to a location more than five (5) miles from their respective locations as of the

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Effective Date; provided that a termination shall not be for “Good Reason” pursuant to clause (i), (ii) or (iii), unless Executive shall have given written notice to the Company and the Employer of his intention to resign for Good Reason and the events which constitute such Good Reason and the Company or the Employer shall have failed to cure such events within fourteen (14) days after the Company’s and the Employer’s receipt of such written notice and Executive thereafter elects to terminate his employment for Good Reason.

          (e) Notice of Termination. Any termination by the Company or the Employer for Cause or without Cause (including on account of Executive’s Disability), or by Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party or parties hereto given in accordance with Section 11(j). For purposes of this Agreement, a “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) if the “Date of Termination” (as defined below) is other than the date of receipt of such notice, specifies the Date of Termination. The failure by Executive or the Company or the Employer to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company or the Employer hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

          (f) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by the Company or the Employer for Cause, by the Company or the Employer without Cause or by reason of Disability, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided such notice is in accordance with Section 3(d)) or any later date specified therein pursuant to Section 3(e), as the case may be and (ii) if Executive’s employment is terminated by reason of death, the date of death.

     Section 4. Obligations of the Employer upon Termination.

          (a) With Good Reason; Without Cause. If during the Employment Period, the Company or the Employer shall terminate Executive’s employment without Cause or Executive shall terminate his employment for Good Reason, then the Employer will provide Executive with the following severance payments and/or benefits:

               (i) The Employer shall pay to Executive in a lump sum cash amount, to the extent not previously paid, (A) the Annual Base Salary through the Date of Termination, (B) any unpaid Guaranteed Annual Bonus and any unpaid Incremental Annual Bonus earned for any Fiscal Year ended prior to the Fiscal Year in which the Date of Termination occurs, provided that Executive was employed on the last day of such Fiscal Year, (C) a pro-rated Guaranteed Annual Bonus for the year in which the Date of Termination occurs (the “Pro-Rata Bonus”), (D) all unpaid or unreimbursed expenses incurred in accordance with Company or Employer policy and (E) all other compensation and benefits due to Executive under the terms and rules of any compensation or benefit plan maintained by the Company or its subsidiaries (including the Employer) (the “Accrued Obligations”);

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               (ii) If such termination occurs on or after December 31, 2010, a lump sum cash amount within 30 business days following the Date of Termination equal to the sum of (A) one times the Annual Base Salary, (B) $2 million and (C) the Incremental Annual Bonus, based on the application of Section 2(c)(ii)(2)C. to the New Equity raised through the Syndication End Date;

               (iii) If such termination occurs prior to December 31, 2010, a lump sum cash amount within 30 business days following the Date of Termination equal to the lesser of (A) the sum of (1) two times the Annual Base Salary, (2) $4 million and (3) two times the Incremental Annual Bonus, based on the application of Section 2(c)(ii)A. or B. (as applicable to the Date of Termination) to the New Equity raised through the Date of Termination (the “Applicable Incremental Annual Bonus”) and (B) the sum of (1) one times the Annual Base Salary, (2) $2 million, (3) the Applicable Incremental Annual Bonus and (4) the remaining Annual Base Salary, Guaranteed Annual Bonuses and Applicable Incremental Annual Bonuses (based on the amount of New Equity purchased through the Date of Termination) to which Executive would have been entitled through December 31, 2010, had he remained employed by the Employer through such date; and

               (iv) Notwithstanding Sections 4(a)(ii) and 4(a)(iii) above, if such termination occurs after a “Change in Control” (as defined below), the Employer will pay Executive in a lump sum cash amount within 30 business days following the Date of Termination, the sum of (A) two times the Annual Base Salary, (B) $4 million and (C) two times the Incremental Annual Bonus as determined pursuant to clause (C) of Section 4(a)(ii) above or the Applicable Incremental Annual Bonus as determined pursuant to clause (A)(3) of Section 4(a)(iii) above, as applicable, based on the Date of Termination. For purposes of this Agreement, a “Change in Control” means (1) one or more sales or other dispositions by Tishman Speyer and/or Lehman of interests in Fund GP and Parallel Fund GP (collectively, the GP Entities”), at the conclusion of which neither Tishman Speyer nor Lehman, nor Tishman Speyer and Lehman together, continue to have a controlling interest in the GP Entities, or (2) the collective sale by Tishman Speyer and Lehman of all or substantially all of their limited partnership interests in Fund, Parallel Fund, Parallel Fund I, Parallel Fund II and any Post-Effective Date Parallel Fund (collectively, the “LP Funds”); provided that the following shall not constitute a Change in Control: (A) a sale of Lehman’s interests in Fund GP and/or Parallel Fund GP to Tishman Speyer, (B) a sale of Lehman’s interests in the LP Funds to Tishman Speyer, (C) a sale of Tishman Speyer’s interests in Fund GP and/or Parallel Fund GP to Lehman, (D) a sale of Tishman Speyer’s interests in the LP Funds to Lehman, (E) a transfer of interests in any of the foregoing from Tishman Speyer or Lehman to one or more of their controlled affiliates, (F) a recapitalization of Fund GP, Parallel Fund GP, any of the LP Funds or any other affiliate of the Company through which Lehman and/or Tishman Speyer own general partnership or limited partnership interests or (G) any syndication of limited partnership interests in any of the LP Funds or the sale of all or any portion of the equity held by the Bridge Equity Providers in any of the LP Funds.

After satisfaction of the obligations set forth in clauses (i), (ii), (iii) or (iv), as applicable, the Employer shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under

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this Agreement, any rights he may have under the Equity Documents, and any rights Executive may have under Sections 11(g) and 11(o) hereof.

Notwithstanding any provision in this Agreement to the contrary, in the event that (i) Executive is a “specified employee” within the meaning of Section 409A of the Code (with such classification to be determined by the applicable employer in accordance with any method specified in applicable Treasury Regulations (a “Specified Employee”), and (ii) it is necessary to avoid tax penalties under Section 409A of the Code, any payment otherwise required to be made hereunder to Executive at any date as a result of the termination of Executive’s employment (other than any payment made in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or Treas. Reg. Section 1.409A-1(b)(4) (Short-Term Deferrals)) shall be delayed for six months and one day following the date on which Executive’s employment is terminated (the “409A Payment Date”), on which date there shall be paid to the Executive, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to this paragraph.

          (b) Death or Disability. If Executive’s employment shall be terminated by reason of Executive’s death or Disability, then the Employer will provide Executive (or his estate or legal representative) with the Accrued Obligations. Thereafter, the Company and the Employer shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement, any rights he may have under the Equity Documents, and any rights Executive may have under Sections 11(g) and 11(o) hereof. Notwithstanding the foregoing provisions of this Section 4(b), in the event that (i) Executive is a Specified Employee and (ii) the termination of employment is on account of Disability which does not result in Executive being “disabled” (within the meaning of Section 409A(a)(2)(C) of the Code) and (iii) it is necessary to avoid tax penalties under Section 409A of the Code, cash severance amounts that would otherwise be payable under this Section 4(b) during the six-month period immediately following the Date of Termination shall instead be paid on the 409A Payment Date.

          (c) Cause; Other than for Good Reason. If Executive’s employment shall be terminated by the Company or the Employer for Cause or by Executive without Good Reason, then the Employer shall provide Executive with the Accrued Obligations other than the Pro-Rata Bonus. Thereafter, the Company and the Employer shall have no further obligation to Executive or his legal representatives, other than any rights to vested benefits under any Benefit Plans, indemnification rights he may have under this Agreement, any rights he may have under the Equity Documents, and any rights Executive may have under Sections 11(g) and 11(o) hereof.

          (d) General Release. Notwithstanding the foregoing, the Company’s and the Employer’s obligations to make payments (other than Accrued Obligations) under Section 4(a) and in the case of Disability under Section 4(b) are conditioned on Executive’s or his legal representative’s (as applicable), executing and not revoking within the applicable time period provided for therein (“Applicable Release Period”), in both cases, absent a bona fide dispute or claim relating to the amount to be paid, not later than the latest business day that is not more than two months after the end of the calendar year in which the Date of Termination occurs, a release substantially in the form attached as Appendix F (the “Release”); provided, however, that in any case where the first and last days of the Applicable Release Period are in two separate taxable

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years, any payments required to be made to Executive pursuant to Section 4(a) or Section 4(b) that are treated as deferred compensation for purposes of Section 409A of the Code shall be made in the later taxable year, within the time provided following the conclusion of the Applicable Release Period.

          (e) Guarantee of Payment. The Company agrees and hereby guarantees to Executive that all payments and benefits required to be paid or provided to Executive under Section 4 of this Agreement by any entity other than the Company will (subject to Executive’s compliance with Section 4(d) of this Agreement where applicable), to the extent not timely paid by the Employer or one of it affiliates, instead be timely paid by the Company. This is a guaranty of payment and performance and not merely of collection. If Employer fails to make any payment when due with respect to Executive or to perform any duties, obligations or covenants with respect to Employer’s obligations with respect to Executive, the Company will as soon as practicable and unconditionally pay to Executive such amounts and perform such duties, obligations and covenants.

     Section 5. Confidentiality, Non-Solicitation and Non-Competition. Executive agrees that:

          (a) Except as may be required by the lawful order of a court or agency of competent jurisdiction, or except to the extent that Executive has the express written authorization from the Company, Executive agrees to keep secret and confidential both prior to and following any termination of Executive’s employment all non-public information concerning the Company, Tishman Speyer, Lehman or their respective affiliates or subsidiaries (or their respective predecessors) which was acquired by or disclosed to Executive during the course of Executive’s employment with the Company or any of the foregoing, and not to disclose the same, either directly or indirectly, to any other person, firm or business entity or to use it in any way. For purposes of the foregoing, information which has become publicly available through Executive’s violation of this Section 5(a) shall be considered to be non-public information.

          (b) During the period commencing on the Effective Date and ending on (i) the first anniversary of the Date of Termination if such date is prior to December 31, 2010 and (ii) the second anniversary of the Date of Termination if such date is on or after December 31, 2010, Executive covenants and agrees that Executive will not, whether for Executive or for any other person, business, partnership, association, firm, company or corporation, initiate contact with, solicit, divert or take away or hire (as applicable) (x) any of the customers of the Company or its subsidiaries, or any customers of Tishman Speyer, Lehman and their respective more than 50% owned affiliates that are engaged in the same business as the Company (all such entities, the “Covered Entities”), to provide services similar to those provided by the Company or its affiliates, (y) any of the Equity Parties and other direct and indirect investors and their controlled affiliates in the Company and its affiliates for the purpose of raising capital (provided, however, that no contact with a substantial investor in an entity owned or managed by a party by whom Executive becomes employed after the Date of Termination, which contact is solely for the purpose of soliciting such investor to invest in such subsequent employer, shall be treated as a solicitation in violation of this covenant if the original investment by such investor in such subsequent employer pre-dated the Date of Termination), and (z) employees of the Company or

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its subsidiaries, or of any of the Covered Entities, in each case in existence from time to time during the Employment Period and at the time of such proscribed action.

          (c) During the period commencing on the Effective Date and ending on the first anniversary of the Date of Termination, Executive covenants and agrees that Executive will not, directly or indirectly, engage in, assist, perform services for, plan for, establish or open, or have any financial interest (other than (i) ownership of 1% or less of the outstanding stock of any corporation listed on a national securities exchange, or (ii) ownership of securities in any entity affiliated with the Company) in any person, firm, corporation, or business entity (whether as an employee, officer, director, consultant or otherwise) that engages in the acquisition, disposition, operation, development, management or financing of multifamily residential apartment buildings or communities.

          (d) Executive acknowledges that the Company would be irreparably injured by a violation of this Section 5 and Executive agrees that the Company, in addition to any other remedies available to it for such breach or threatened breach, shall be entitled to a preliminary injunction, temporary restraining order, or other equivalent relief, restraining Executive from any actual or threatened breach of this Section 5. The Company may seek this remedy in any court of competent jurisdiction, without regard to Section 11(g) below (Arbitration of All Disputes). If a bond is required to be posted in order for the Company to secure an injunction or other equitable remedy, the parties agree that such bond need not be more than a nominal sum.

     Section 6. Additional Provisions Relating to Termination.

          (a) During the period beginning on the date of delivery of a Notice of Termination and ending on the Date of Termination, Executive shall continue to perform his duties hereunder, and shall also perform such services for the Company and the Employer as are necessary and appropriate for a smooth transition to Executive’s successor, if any; provided, however, that the Company or the Employer may suspend Executive from performing such duties and services following the delivery of a Notice of Termination and during the period of any such suspension (which shall end on the Date of Termination), Executive shall continue to be treated as employed by the Employer for other purposes, and Executive’s rights to compensation or benefits hereunder shall not be affected by such suspension.

          (b) Executive agrees that, for a reasonable period after Executive’s termination of employment, Executive will assist the Company, its subsidiaries, the Covered Entities and all other direct or indirect investors in the Company in defense of any claims that may be made against any of them, to the extent that such claims may relate to services performed by Executive for any of them in connection with the Company. Executive agrees to promptly inform the Company if Executive becomes aware of any lawsuits involving such claims that may be filed against the Company, any of its subsidiaries, any of the Covered Entities or any other direct or indirect investor in the Company. The Company agrees to provide legal counsel to Executive in connection with such assistance (to the extent legally permitted), to provide separate counsel for Executive in any situation where the Company’s counsel cannot effectively represent Executive without violation of the applicable canons of ethics relating to conflicts of interest, and to reimburse Executive for all of Executive’s reasonable out-of-pocket expenses associated with such assistance, including travel expenses. The Employer agrees to provide (or

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to cause the Company to provide) reasonable compensation to Executive for such assistance at a per diem rate equal to $10,000 per day provided that the Executive provides at least eight hours of assistance on any such day and a pro-rated portion of such amount where the Executive provides less than eight hours of assistance on any such day based on the actual number of hours and partial hours of assistance provided by the Executive on such day. Executive also agrees to the extent not otherwise prohibited by law, to promptly inform the Company if asked to assist in any investigation of the Company, any of its subsidiaries, any of the Covered Entities or any other direct or indirect investors in the Company (or their actions) that may relate to services performed by Executive for any of them, regardless of whether a lawsuit has then been filed against any of them with respect to such investigation.

     Section 7. Non-Disparagement. While employed by the Employer, and after the Date of Termination, Executive agrees to not make any false, defamatory or disparaging statements about the Company, its subsidiaries, any of the Covered Entities or any other direct or indirect investor in the Company, or the officers or directors of any of the foregoing, that are reasonably likely to cause damage to any of such persons or parties. While Executive is employed by the Employer, and after the Date of Termination, the Employer and the Company agree that none of their officers or directors, or of their respective subsidiaries or any of the Covered Entities , shall make any false, defamatory or disparaging statements about Executive that are reasonably likely to cause damage to Executive.

     Section 8. Excess Parachute Payments. The provisions of Paragraph 9 of the Prior Agreement are hereby incorporated by reference and made a part of this Agreement; provided, however, that (i) the references to Paragraph 6 of the Prior Agreement contained therein shall be deemed references to Section 4 of this Agreement and the references to Paragraph 10 of the Prior Agreement contained therein shall be stricken, and (ii) Paragraph 9 of the Prior Agreement (as modified by this Section 8) shall only apply with respect to payments and/or benefits determined, in accordance with Section 280G of the Code, to be contingent on either (i) the Transaction or (ii) any transaction occurring after the Effective Date if and only if, immediately prior to the consummation of such transaction, the Company (or any applicable parent of the Company) has any stock which is readily tradeable on an established securities market or otherwise within the meaning of Section 280G of the Code.

     Section 9. Executive’s Representations, Warranties and Covenants.

          (a) Executive hereby represents and warrants to the Company and its subsidiaries that:

             (1) Executive has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive;

             (2) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject;

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               (3) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, fee for services agreement, confidentiality agreement or similar agreement with any other person other than the Company or any of its affiliates, or one of the Covered Entities;

               (4) upon the execution and delivery of this Agreement by the Company, Employer and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable in accordance with its terms;

               (5) Executive understands that the Company and its affiliates will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance; and

               (6) as of the Effective Date, Executive is not in breach of any of the terms of this Agreement, including having committed any acts that would form the basis for a Cause termination if such act had occurred after the Effective Date and does not have any claims or causes of action against the Company.

          (b) The Company, the Employer and each of their respective subsidiaries hereby represent and warrant to Executive that:

               (1) the Company and the Employer have all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the Company and the Employer;

               (2) the execution, delivery and performance of this Agreement by the Company and the Employer does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Company is a party or any judgment, order or decree to which the Company or the Employer is subject;

               (3) upon the execution and delivery of this Agreement by the Company, the Employer and Executive, this Agreement will be a legal, valid and binding obligation of the Company and the Employer, enforceable against each of them in accordance with its terms;

               (4) the Company and the Employer understand that Executive will rely upon the accuracy and truth of the representations and warranties of the Company and the Employer set forth herein and the Company and the Employer consent to such reliance; and

               (5) the Company and the Employer have determined or, in connection with the adjustment provisions of Sections 2(c)(viii) and 2(c)(ix) of this Agreement will determine, the valuations of the equity interests granted or purchased, as applicable, under Sections 2(c)(viii) and 2(c)(ix) hereof on a basis that is consistent with the valuations underlying all other “units” purchased in the Transaction.

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     Section 10. Indemnification.

       Executive shall at all times during the Employment Period, and thereafter in respect of actions taken, or not taken, by Executive during the Employment Period, be entitled to indemnification, fee advancement and coverage under policies of directors and officers liability insurance that are not less favorable than those set forth in Section 7.06 of the Merger Agreement.

     Section 11. General Provisions.

          (a) Severability. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any party under this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

          (b) Entire Agreement. This Agreement (including the Appendices hereto) and the other Equity Documents collectively embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way (including, without limitation, any other employment, severance or change-in-control agreement or understanding). For the avoidance of doubt, Executive, the Company and the Employer acknowledge that, upon the Effective Date, upon the due execution of this Agreement and each of its related Appendices, other than Appendix F, and subject to Executive’s rights that are expressly preserved under Section 11(g) hereof, (i) the Term Sheet and (ii) any agreement between Executive and the Company or the Seller Parties or any subsidiary or affiliate of any of the foregoing entered into prior to the Effective Date, including without limitation, the Prior Agreement, shall be void ab initio as of immediately before the Effective Date.

          (c) Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

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          (d) Successors and Assigns.

               (i) This Agreement is personal to Executive and without the prior written consent of the Company or the Employer shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

               (ii) This Agreement shall inure to the benefit of and be binding upon the Company and the Employer and each of their respective successors and assigns. The Company and the Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company or the Employer, as applicable, to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company or the Employer would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, or otherwise, and “Employer” shall mean the Employer as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, or otherwise.

          (e) Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF DELAWARE WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. ANY ACTION TO ENFORCE THIS AGREEMENT AND/OR THE APPENDICES HERETO (OTHER THAN AN ACTION WHICH MUST BE BROUGHT BY ARBITRATION PURSUANT TO SECTION 11(g)) MUST BE BROUGHT IN, AND THE PARTIES HEREBY CONSENT TO THE JURISDICTION OF, A COURT SITUATED IN DELAWARE. EACH PARTY HEREBY WAIVES THE RIGHTS TO CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.

          (f) JURY TRIAL WAIVER. THE PARTIES EXPRESSLY AND KNOWINGLY WAIVE ANY RIGHT TO A JURY TRIAL IN THE EVENT ANY ACTION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR EXECUTIVE’S EMPLOYMENT WITH THE COMPANY OR THE EMPLOYER IS LITIGATED OR HEARD IN ANY COURT.

          (g) Arbitration of All Disputes. Except as provided in Sections 5 and 11(e) above, any controversy or claim arising out of or relating to this Agreement or the Prior Agreement or the breach thereof shall be settled by arbitration in Delaware, in accordance with the laws of the State of Delaware, by three arbitrators appointed by the parties. If the parties

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cannot agree within 30 days on the appointment of the arbitrators, one shall be appointed by the Company and one by Executive, and the third shall be appointed by the first two arbitrators. If the first two arbitrators cannot agree on the appointment of a third arbitrator within 10 days, then the third arbitrator shall be appointed by the Chief Judge of the United States Court of Appeals for the Third Circuit. The arbitration shall be conducted in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators, which shall be as provided in this Section 11(g). Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. In the event that Executive determines that it is either necessary or desirable for Executive to retain legal counsel or incur other costs and expenses in connection with enforcement of his rights under this Agreement or the Prior Agreement, (i) with respect to any controversies or claims relating to the Prior Agreement due to actions or omissions occurring or not occurring prior to the Effective Date, the Employer shall (or shall cause the Company to) pay Executive’s reasonable attorneys’ fees and costs and expenses in connection with enforcement of his rights (including the enforcement of any arbitration award in court) at the time such fees, costs and expenses are incurred, provided, however, if the arbitrators shall determine that, under the circumstances, payment by the Employer or the Company of all or any part of any such fees, costs and expenses would be unjust, Executive shall repay such amount to the Employer or the Company in accordance with the order of the arbitrators and (ii) with respect to any other controversies or claims, the Employer or the Company shall bear all costs and expenses (including, but not limited to, Executive’s reasonable attorneys’ fees and costs and expenses) in connection with enforcement of his rights and any costs associated with the enforcement of any arbitration award in court; unless Executive fails to prevail on any material issue in such dispute. Any award of the arbitrators shall include interest at a rate or rates considered just under the circumstances by the arbitrators.

          (h) Mitigation and Set-Off. Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. Neither the Company, nor the Employer nor any of their respective subsidiaries or affiliates shall be entitled to set-off against the amounts payable to Executive under this Agreement any amounts earned by Executive in other employment after termination of his employment, or any amounts which might have been earned by Executive in other employment had he sought such other employment.

          (i) Amendment and Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Company, the Employer and Executive and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

          (j) Notices. Any notice provided for in this Agreement must be in writing and must be either personally delivered, transmitted via telecopier, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, when received if transmitted via telecopier, five days after deposit in the

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U.S. mail and one day after deposit for overnight delivery with a reputable overnight courier service.

     If to the Employer, to:

Archstone-Smith Communities L.L.C.
c/o Archstone-Smith Operating Trust
9200 E. Panorama Circle, Suite 400
Englewood, Colorado 80112
Attention: General Counsel

     If to the Company, to:

Archstone-Smith Operating Trust
9200 E. Panorama Circle, Suite 400
Englewood, Colorado 80112
Attention: General Counsel

in each case, with copies (which shall not constitute notice) to:

Tishman Speyer
45 Rockefeller Plaza
New York, New York 10111
Attention: General Counsel

and

Wachtell, Lipton, Rosen & Katz
51 West 52^nd Street
New York, NY 10019
Attention: Michael J. Segal, Esq.
Facsimile: (212) 403-2000

     If to Executive, to:

Executive’s home address most recently on file with the Company.

          (k) Withholding. The Company and the Employer may withhold from any amounts payable or benefits to be provided to Executive under this Agreement or otherwise, all Federal, state, city or other taxes and other amounts that are required to be withheld pursuant to any applicable law or regulation.

          (l) Survival of Representations, Warranties and Agreements. All representations, warranties and agreements contained herein shall survive this Agreement and the Employment Period indefinitely.

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          (m) Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references to a “Section” in this Agreement are to a section of the Agreement unless otherwise noted.

          (n) Construction. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party.

          (o) Legal Fees. The Company acknowledges and understands that the Seller Parties have agreed to pay, as incurred, Executive’s reasonable legal fees and expenses (at standard hourly rates) in connection with the drafting and negotiation of the Term Sheet, this Agreement and the related documents and the Company will pay (or will cause the Employer to pay) any such fees and expenses that have not been paid by the Effective Date.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

ARCHSTONE-SMITH COMMUNITIES L.L.C.
By:	/s/ Michael B. Benner
	Name: Michael B. Benner
	Title: Authorized Signatory
ARCHSTONE-SMITH OPERATING TRUST
By:	/s/ Michael B. Benner
	Name: Michael B. Benner
	Title: Authorized Signatory
	/s/ R. Scott Sellers
	R. SCOTT SELLERS

Appendix F

Form of Release

     THIS RELEASE (the “Release”) is entered into between R. Scott Sellers (“Executive”) and Archstone-Smith Communities L.L.C. a limited liability company formed under the laws of the State of Delaware (the “Employer”) and Archstone-Smith Operating Trust, a real estate investment trust formed under the laws of the State of Maryland (the “Company”) [other entities in structure to be inserted] (the “Other Named Releasees”), for the benefit of the Company and the Other Named Releasees. The entering into and non-revocation of this Release is a condition to Executive’s, or legal representative’s, right to receive the payments under Section 4(a) or (b), as applicable, of the employment agreement entered into by and between Executive, the Employer and the Company, dated as of October 5, 2007 (the “Employment Agreement”). Capitalized terms used and not defined herein shall have the meaning provided in the Employment Agreement.

     Accordingly, Executive, the Employer and the Company agree as follows.

          1. In consideration for the payments and other benefits provided to Executive solely by Sections 4(a) or (b) as applicable, of the Employment Agreement, to which Executive is not otherwise entitled, and the sufficiency of which Executive acknowledges, Executive represents and agrees, as follows:

          (a) Executive, for himself, his heirs, administrators, representatives, executors, successors and assigns (collectively “Releasers”), hereby irrevocably and unconditionally releases, acquits and forever discharges and agrees not to sue the Employer, the Company or any of the Other Named Releasees or any of their respective parents, subsidiaries, divisions, affiliates and related entities and their respective current and former directors, officers, shareholders, trustees, employees, consultants, independent contractors, representatives, agents, servants, successors and assigns and all persons acting by, through or under or in concert with any of them (collectively “Releasees”), from all claims, rights and liabilities up to and including the date of this Release arising from or relating to Executive’s employment with, or termination of employment from, the Employer or the Company and/or their respective predecessors arising from or relating to all periods of employment with the Employer or the Company and/or their respective predecessors and from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of actions, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected and any claims of wrongful discharge, breach of contract, implied contract, promissory estoppel, defamation, slander, libel, tortious conduct, employment discrimination or claims under any federal, state or local employment statute, law, order or ordinance, including any rights or claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq. (“ADEA”), or any other federal, state or municipal ordinance relating to discrimination in employment. Nothing contained herein shall restrict the parties’ rights to enforce the terms of this Release.

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          (b) To the maximum extent permitted by law, Executive agrees that he has not filed, nor will he ever file, a lawsuit asserting any claims which are released by this Release, or to accept any benefit from any lawsuit which might be filed by another person or government entity based in whole or in part on any event, act, or omission which is the subject of this Release.

          (c) This Release specifically excludes Executive’s rights and the Employer’s and/or the Company’s obligations (and all of such rights and obligations shall be preserved, notwithstanding the execution of this Release) (i) under Section 10 of the Employment Agreement, (ii) for vested benefits to which the Executive may be entitled under any benefit plan of the Employer, the Company or any Company Entity in which the Executive participates (collectively, the “Company Plans”) or (iii) under the Equity Documents. Executive’s entitlement to such benefits under the Company Plans shall be determined in accordance with the provisions of the Company Plans and his rights under the Equity Documents shall be determined with the provisions of the applicable Equity Documents. For the avoidance of doubt, the Company Plans and the Equity Documents shall include contractual rights under any partnership, LLC or operating agreement, under any stockholders agreement, and under any other applicable agreement under which any compensation is provided to the Executive that is not provided under Section 4(a) or 4(b) of the Employment Agreement, as applicable. Nothing contained in this Release shall release Executive from his obligations, including any obligations to abide by restrictive covenants, under the Employment Agreement or the Company Plans that continue or are to be performed following termination of employment. Nothing contained in this Release shall prevent Executive from asserting defenses to any claims that may be asserted against him by any Releasee.

          (d) The parties agree that this Release shall not affect the rights and responsibilities of the US Equal Employment Opportunity Commission (hereinafter “EEOC”) to enforce ADEA and other laws. In addition, the parties agree that this Release shall not be used to justify interfering with Executive’s protected right to file a charge or participate in an investigation or proceeding conducted by the EEOC. The parties further agree that Executive knowingly and voluntarily waives all rights or claims (that arose prior to Executive’s execution of this Release) the Releasers may have against the Releasees, or any of them, to receive any benefit or remedial relief (including, but not limited to, reinstatement, back pay, front pay, damages, attorneys’ fees, experts’ fees) as a consequence of any investigation or proceeding conducted by the EEOC.

          2. Executive acknowledges that the Employer and the Company have specifically advised Executive of his right to seek the advice of an attorney concerning the terms and conditions of this Release. Executive further acknowledges that he has been furnished with a copy of this Release, and he has been afforded twenty-one (21) days in which to consider the terms and conditions set forth above prior to this Release. By executing this Release, Executive affirmatively states that he has had sufficient and reasonable time to review this Release and to consult with an attorney concerning his legal rights prior to the final execution of this Release. Executive further agrees that he has carefully read this Release and fully understands its terms. Executive understands that he may revoke this Release within seven (7) days after signing this Release. Revocation of this Release must be made in writing and must be received by the Employer and the Company in accordance with Section 11(j) of the Employment Agreement within the time period set forth above.

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          3. This Release will be governed by and construed in accordance with the laws of the state of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the state of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the state of Delaware to be applied. In furtherance of the foregoing, the internal law of the state of Delaware will control the interpretation and construction of this agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. The provisions of this Release are severable, and if any part or portion of it is found to be unenforceable, the other paragraphs shall remain fully valid and enforceable. This Release shall become effective and enforceable on the eighth day following its execution by Executive, provided he does not exercise his right of revocation as described above. If Executive fails to sign and deliver this Release or revokes his signature, this Release will be without force or effect, and Executive shall not be entitled to the payment under Section 4(a) or (b) of the Employment Agreement, as applicable.

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EX-10.19

Exhibit 10.19

EXECUTION COPY

TISHMAN SPEYER ARCHSTONE SMITH
MULTIFAMILY PARTICIPANTS, L.L.C.

Award Agreement

R. SCOTT SELLERS

AT THE ADDRESS LAST ON THE RECORDS OF THE COMPANY

Dear SCOTT,

     We are pleased to advise that you have been granted the following Class C Units in Tishman Speyer Archstone Smith Multifamily Participants, L.L.C. (the “Company”). Your Units are subject to the terms and conditions described in this Award Agreement, as well as those contained in the Company’s LLC Agreement (the “LLC Agreement”):

Name of Recipient:	R. Scott Sellers
Date of Grant:	October 5, 2007
Number of Units:	4,800
Vesting:	Subject to the Participant’s continued employment with ARCHSTONE-SMITH COMMUNITIES L.L.C., a limited liability company formed under the laws of the State of Delaware or any of its affiliates (the “Employer”) through the applicable vesting date, one-seventh (1/7th) of the Units shall vest on each of the first seven anniversaries of the Date of Grant. In the event of a termination of your employment by the Employer without “Cause” or by you for “Good Reason” (each as defined, and in accordance with the procedures described, in the employment agremeent by and among you, the Employer and Archstone-Smith Operating Trust, dated as of October 5, 2007 (the “Employment Agreement”), the Units that would have vested in the one-year period following the “Date of Termination” (as defined in the Employment Agreement) shall vest immediately upon such termination. Except as described in the preceding sentence, you shall forfeit any unvested Units upon a termination of your employment with the Employer.
	Notwithstanding the foregoing, in the event of (i) the consummation of a “Change in Control” (as defined in the Employment Agreement) or (ii) a dissolution or liquidation of the Company in accordance with Section 17 of the LLC Agreement, all of your Units that are outstanding (i.e., have not been forfeited) and unvested as of the consummation of the Change in Control, dissolution or liquidation as applicable shall immediately vest in full.

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     Sincerely,

TISHMAN SPEYER ARCHSTONE-SMITH
MULTIFAMILY PARTICIPANTS, L.L.C.

By: Name:	/s/ Michael B. Benner Michael B. Benner
Title:	Authorized Signatory

     Please sign below to indicate your acceptance of the Units, and your agreement to the terms and conditions of the LLC Agreement and this Award Agreement.

Date Accepted: October 5, 2007

By:	/s/ R. Scott Sellers
Name:	R. Scott Sellers
Social Security Number:

EX-10.20

Exhibit 10.20

EXECUTION COPY

UNIT AWARD AGREEMENT

     This Unit Award Agreement (this “Agreement”), is made effective as of October 5, 2007, (hereinafter referred to as the “Date of Grant”), between Tishman Speyer Archstone-Smith Multifamily Junior Mezz Borrower, L.P., a limited partnership organized under the laws of the State of Delaware (the “Company”), and R. Scott Sellers (“Sellers”). Capitalized terms not defined in this Agreement shall have the meaning given to them in the Limited Partnership Agreement of the Company, dated as of October 5, 2007 (the “LP Agreement”).

RECITALS:

     WHEREAS, Sellers is employed by Archstone-Smith Communities L.L.C. or any of its affiliates (the “Employer”) and, through such employment, provides services to the Company and its affiliates;

     WHEREAS, the Board of Directors of Tishman Speyer U.S. Value Added Associates VII, L.L.C. (the “Board”), which is the general partner of Tishman Speyer Real Estate Venture VII (Governance), L.P., which in turn is the general partner of Tishman Speyer Archstone-Smith Multifamily (GP), L.P., which in turn is the general partner of Tishman Speyer Archstone-Smith Multifamily JV, L.P., which in turn owns 100% of the membership interests of Tishman Speyer Archstone-Smith Multifamily Junior Mezz Borrower (GP), L.L.C., the general partner of the Company has determined that it would be in the best interests of the Company and its affiliates to make the award of Class B Units provided for herein to Sellers pursuant to the terms set forth herein.

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

       1. Award of Class B Units.

          (a) Class B Units. Subject to the terms and conditions of this Agreement, the Company hereby grants to Sellers an award of 100 Class B Units of the Company (such 100 units, hereinafter called the “Class B Units”). The Class B Units shall vest in accordance with Section 2 of this Agreement.

          (b) Adjustment.

               (i) In the event that there shall be any sale or other extraordinary distribution (whether in the form of cash, membership units of the Company or other property), recapitalization, split or reverse split of equity, reorganization, merger, consolidation, spin-off, combination, repurchase, or unit exchange, or other similar transaction or event affecting the Class B Units, the Board shall cause to be made such equitable adjustments as it, in good faith, deems necessary or appropriate to the number and kind of units issued pursuant to this Agreement to prevent inappropriate dilution or enlargement of the economic interest represented by such units.

               (ii) In the event that securities of the Company are redeemed in connection with the establishment of a new Affiliate or Affiliates, the Company may cancel all or a portion of such Class B Units and issue or cause to be issued to Sellers economically equivalent equity interests in such new Affiliate(s) (a “Reapportionment”), containing terms and conditions that are no less favorable than the terms and conditions set forth herein (including, but not limited to, vesting conditions), to appropriately apportion the incentive compensation element of the Class B Units amongst such Affiliate(s). In the event that a Reapportionment results in any negative impact on Sellers (including, without limitation, any adverse tax impact such as the loss of long-term capital gains treatment, the inclusion of income on the date of such Reapportionment or the loss of basis), the Company shall indemnify and hold Sellers harmless with respect to all economic loss associated with the transfer of the interests and shall gross-up all such payments so that the indemnification is tax neutral to Sellers; provided, however, that Sellers shall cooperate with the Company to minimize the extent of any adverse tax impact to the extent permissible under applicable law.

       2. Vesting. Subject to Sellers’s continued employment with the Employer, the Class B Units will vest and become non-forfeitable (such non-forfeitable Class B Units, the “Vested Units,” and Class B Units prior to becoming Vested Units, “Unvested Units”) on the three-year anniversary of the Date of Grant; provided, however, that all Class B Units shall become Vested Units upon the earlier to occur of (i) a termination of Sellers’s employment with the Employer by the Employer without “Cause” or by Sellers for “Good Reason” (each as defined in, and in accordance with the terms and conditions of, the employment agreement by and between Sellers and Archstone-Smith Communities L.L.C., dated as of October 5, 2007 (the “Employment Agreement”)) and (ii) the date on which there is a liquidation or dissolution of the Company if and only if the Unvested Units effectively lose any portion of their value in connection with such liquidation or dissolution and such lost value is not replaced upon or promptly following such liquidation or dissolution through the grant to Sellers of economically equivalent units or interests in an Affiliate (without any negative impact to Sellers associated with such replacement). Any Class B Units which remain Unvested Units after the application of the preceding sentence shall be forfeited upon a termination of Sellers’s employment with the Employer.

       3. Distributions.

          (a) Vested Units. Distributions in respect of Vested Units shall be made to Sellers in accordance with the provisions of Section 14 of the LP Agreement.

          (b) Unvested Units. Sellers shall not be entitled to any distributions in respect of Unvested Units until and unless such Unvested Units have become Vested Units. Any amounts which would have been distributed to Sellers pursuant to the terms of the LP Agreement in respect of Unvested Units but for the application of the preceding sentence (the “Unvested Allocations”) shall be distributed to Sellers as soon as practicable after such Class B Units become Vested Units, without interest. The Company shall set aside all Unvested Allocations until such time as the Unvested Allocations are either forfeited pursuant to Section 2 above or distributed pursuant to this Section 3(b) as provided for in Section 14 of the LP Agreement.

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       4. Rights as Holder of Class B Units. Sellers shall be the record owner of the Class B Units unless and until such Class B Units are forfeited pursuant to Section 2 hereof or transferred in accordance with Section 6 hereof and, except as provided in this Agreement, as record owner shall be entitled to all rights of a holder of Class B Units of the Company; provided, that the Class B Units shall be subject to the limitations on transfer and encumbrance set forth in this Agreement and the LP Agreement.

       5. Representations in the LP Agreement; Purchase for Investment; Other Representations of Sellers.

          (a) Representations in LP Agreement. Sellers hereby represents and warrants that all representations and warranties made by Sellers in the LP Agreement are true and correct.

          (b) Investment Intent. Sellers hereby represents and warrants that the Class B Units are being acquired for investment and not with a view to distribution thereof, and to make such other reasonable and customary representations regarding matters relevant to compliance with applicable securities laws as are deemed necessary by counsel to the Company.

          (c) Other Representations. Sellers hereby represents and warrants to the Company as follows:

               (i) Access to Information. Because of Sellers’s business relationship with the Company and with the management of the Company, Sellers has had access to all material and relevant information concerning the Company, thereby enabling Sellers to make an informed investment decision with respect to his investment in the Company, and all pertinent data and information requested by Sellers from the Company or its representatives concerning the business and financial condition of the Company and the terms and conditions of this Agreement have been furnished to Sellers. Sellers acknowledges that he has had the opportunity to ask questions of and receive answers and obtain additional information from the Company and its representatives concerning the present and proposed business and financial conditions of the Company.

               (ii) Financial Sophistication. Sellers has such knowledge and experience in financial and business matters that Sellers is capable of evaluating the merits and risks of investing in the Class B Units.

               (iii) Understanding the Investment Risks. Sellers understands that:

               (A) An investment in the Class B Units represents a highly speculative investment, and there can be no assurance as to the success of the Company in its business;

               (B) There is at present no market for the Class B Units and there can be no assurance that a market will develop in the future;

               (C) The Class B Units may be worthless; and

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               (D) Ownership of the Class B Units may result in taxable income to Sellers without a corresponding cash or in-kind distribution.

               (iv) Understanding the Nature of the Class B Units. Sellers understands and agrees that:

               (A) There can be no assurance that the Class B Units will be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any applicable state securities laws and, if they are not so registered, they will only be issued and sold in reliance upon certain exemptions contained in the Securities Act and applicable state securities laws, and the representations and warranties of Sellers contained herein are essential to any claim of exemption by the Company under the Securities Act and such state laws;

               (B) If the Class B Units are not so registered, the Class B Units will be “restricted securities” as that term is defined in Rule 144 promulgated under the Securities Act;

               (C) Sellers may not sell, transfer, assign, pledge or otherwise dispose of or encumber the Class B Units without registration under the Securities Act and applicable state securities laws unless the Company receives an option of counsel acceptable to it (as to both counsel and the opinion) that such registration is not required;

               (D) Only the Company can register the Class B Units under the Securities Act and applicable state securities laws;

               (E) The Company has not made any representations to Sellers that the Company will register the Class B Units under the Securities Act or any applicable state securities laws, or with respect to compliance with any exemption therefrom;

               (F) Sellers is aware of the conditions for his obtaining an exemption from the sale or transfer of the Class B Units under the Securities Act and any applicable state securities laws; and

               (G) The Company may, from time to time, make stop transfer notations in its transfer record to ensure compliance with the Securities Act and any applicable state securities laws, and any additional restrictions imposed by state securities administrators.

               (v) Investment Intent. Sellers acknowledges that:

               (A) Neither Sellers nor anyone acting on his behalf has paid or will pay a commission or other remuneration to any person in connection with the acquisition of the Class B Units; and

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               (B) At the time and as a condition of delivery of documents evidencing the Class B Units, Sellers will be deemed to have made all the representations and warranties contained in this Section 5 with respect to such Class B Units and may be required to make other representations concerning investment intent as condition of the delivery of such Class B Units by the Company.

     6. Restriction on Transfer/LP Agreement. Unvested Units may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by Sellers. Vested Units may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by Sellers, except (a) if and as permitted by the LP Agreement, (b) by will or the laws of descent and distribution, (c) to or for the benefit of any spouse, child or grandchild of Sellers, or to a trust or partnership for the benefit of any of the foregoing individuals, or (d) if and as permitted by the Board. The Class B Units shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Class B Units contrary to the provisions of this Agreement or the LP Agreement shall be null and void and without effect.

     7. Designation of Beneficiary. Sellers may appoint any individual or legal entity in writing as his beneficiary to receive any Class B Unit (to the extent not previously terminated or forfeited) under this Agreement upon Sellers’s death or Disability (as defined in the Employment Agreement). Sellers may revoke his designation of a beneficiary at any time and appoint a new beneficiary in writing. To be effective, Sellers must complete the designation of a beneficiary or revocation of a beneficiary by written notice to the Company under Section 8 of this Agreement before the date of Sellers’s death. In the absence of a beneficiary designation, the legal representative of Sellers’s estate shall be deemed the beneficiary. Notwithstanding the foregoing, in the event that any beneficiary appointed by Sellers (or deemed to be as such pursuant to the preceding sentence) does not expressly become party to the LP Agreement and expressly assume all restrictions on the Class B Units to which Sellers was subject at the time of his death or Disability, such appointment (and any purported transfer of Class B Units thereunder) shall be null and void and without effect.

     8. Notices. Any notice necessary under this Agreement shall be addressed to the Company at the principal executive office of the Employer and to Sellers at the address appearing in the personnel records of the Employer for Sellers or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

     9. Tax Withholding. The Company and Sellers acknowledge and agree that Sellers is an employee of the Company for all purposes hereunder, including, without limitation, for purposes of calculating the Company’s withholding tax obligations in connection with any Class B Units becoming Vested Units. The Company shall reasonably determine the amount of any Federal, state, local or other income, employment, or other taxes which the Company or any of its subsidiaries or affiliates may reasonably be obligated to withhold (giving effect to the immediately preceding sentence) with respect to the grant, vesting or other event with respect to the Class B Units. In connection with any Class B Units becoming Vested Units, the Company shall withhold from delivery to Sellers a number of Class B Units that are otherwise becoming

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Vested Units having a fair market value equal to the taxes payable by Sellers in connection with such vesting; provided, however, that the foregoing shall only apply as to any amounts in excess of the minimum withholding required by applicable law (after giving effect to the first sentence of this Section 9) only to the extent such withholding would not result in accounting charges to the Company or any of its affiliates in excess of the accounting charges which would have applied in the absence of such withholding.

     10. Choice of Law; Forum. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of Delaware to be applied. In furtherance of the foregoing, the internal law of the State of Delaware will control the interpretation and construction of this Agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. Any proceeding arising out of or relating to this Agreement shall be adjudicated in accordance with the procedures described in Section 11(g) of the Employment Agreement.

     11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     12. Class B Units Subject to LP Agreement. By entering into this Agreement Sellers agrees and acknowledges that (i) Sellers has received and read a copy of the LP Agreement and (ii) the Class B Units are subject to the LP Agreement, the terms and provisions of which are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the LP Agreement, the applicable terms and provisions of this Agreement will govern and prevail. The grant of Class B Units pursuant to this Agreement shall not restrict in any way the adoption of any amendment to the LP Agreement in accordance with the terms of such agreement. Notwithstanding anything herein to the contrary, the grant of Class B Units pursuant to this Agreement is subject to Sellers taking actions required by the Company to become a party to the LP Agreement.

     13. No Right to Continued Service. This Agreement shall not be construed as giving Sellers the right to be retained in the employ of, or in any other continuing relationship with, the Employer or any of its affiliates.

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     14. Cooperation. The parties shall cooperate to resolve any disputes as to the interpretation of this Agreement and the dispute resolution mechanisms set forth in Section 11(g) of the Employment Agreement shall remain applicable.

     15. No Limit on Other Compensation Arrangements. Nothing contained in this Agreement shall prevent the Company, the Employer or any of their affiliates from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the award of Class B Units, securities and other types of awards, and such arrangements may be either generally applicable or applicable only in specific cases.

     16. Amendments. The provisions of this Agreement may not be amended, modified or supplemented unless consented to in writing by the Company and Sellers.

     17. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

/s/ R. Scott Sellers

R. Scott Sellers

TISHMAN SPEYER ARCHSTONE-SMITH
MULTIFAMILY JUNIOR MEZZ BORROWER, L.P., a Delaware limited partnership

By: TISHMAN SPEYER ARCHSTONE-SMITH
MULTIFAMILY JUNIOR MEZZ BORROWER (GP), L.L.C., a Delaware limited liability company, its sole general partner

	/s/ Michael B. Benner
By:	Michael B. Benner
Title:	Authorized Signatory

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EX-10.21

Exhibit 10.21

EXECUTION COPY

UNIT AWARD AGREEMENT

     This Unit Award Agreement (this “Agreement”), is made effective as of October 5, 2007, (hereinafter referred to as the “Date of Grant”), between Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor I, L.L.C., a limited liability company organized under the laws of the State of Delaware (the “Company”), and R. Scott Sellers (“Sellers”). Capitalized terms not defined in this Agreement shall have the meaning given to them in the Limited Liability Company Agreement of the Company, dated as of October 5, 2007 (the “LP Agreement”).

R E C I T A L S:

     WHEREAS, Sellers is employed by Archstone-Smith Communities L.L.C. or any of its affiliates (the “Employer”) and, through such employment, provides services to the Company and its affiliates;

     WHEREAS, the Board of Directors of Tishman Speyer U.S. Value Added Associates VII, L.L.C. (the “Board”), which is the general partner of Tishman Speyer Real Estate Venture VII Parallel (Governance), L.P., which in turn is the general partner of Tishman Speyer Archstone-Smith Multifamily Parallel (GP), L.P., which in turn is the general partner of Tishman Speyer Archstone-Smith Multifamily Parallel Fund I JV, L.P., the managing member of the Company has determined that it would be in the best interests of the Company and its affiliates to make the award of Class B Units provided for herein to Sellers pursuant to the terms set forth herein.

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

     1. Award of Class B Units.

          (a) Class B Units. Subject to the terms and conditions of this Agreement, the Company hereby grants to Sellers an award of 100 Class B Units of the Company (such 100 units, hereinafter called the “Class B Units”). The Class B Units shall vest in accordance with Section 2 of this Agreement.

          (b) Adjustment.

               (i) In the event that there shall be any sale or other extraordinary distribution (whether in the form of cash, membership units of the Company or other property), recapitalization, split or reverse split of equity, reorganization, merger, consolidation, spin-off, combination, repurchase, or unit exchange, or other similar transaction or event affecting the Class B Units, the Board shall cause to be made such equitable adjustments as it, in good faith, deems necessary or appropriate to the number and kind of units issued pursuant to this Agreement to prevent inappropriate dilution or enlargement of the economic interest represented by such units.

               (ii) In the event that securities of the Company are redeemed in connection with the establishment of a new Affiliate or Affiliates, the Company may cancel all or a portion of such Class B Units and issue or cause to be issued to Sellers economically equivalent equity interests in such new Affiliate(s) (a “Reapportionment”), containing terms and conditions that are no less favorable than the terms and conditions set forth herein (including, but not limited to, vesting conditions), to appropriately apportion the incentive compensation element of the Class B Units amongst such Affiliate(s). In the event that a Reapportionment results in any negative impact on Sellers (including, without limitation, any adverse tax impact such as the loss of long-term capital gains treatment, the inclusion of income on the date of such Reapportionment or the loss of basis), the Company shall indemnify and hold Sellers harmless with respect to all economic loss associated with the transfer of the interests and shall gross-up all such payments so that the indemnification is tax neutral to Sellers; provided, however, that Sellers shall cooperate with the Company to minimize the extent of any adverse tax impact to the extent permissible under applicable law.

     2. Vesting. Subject to Sellers’s continued employment with the Employer, the Class B Units will vest and become non-forfeitable (such non-forfeitable Class B Units, the “Vested Units,” and Class B Units prior to becoming Vested Units, “Unvested Units”) on the three-year anniversary of the Date of Grant; provided, however, that all Class B Units shall become Vested Units upon the earlier to occur of (i) a termination of Sellers’s employment with the Employer by the Employer without “Cause” or by Sellers for “Good Reason” (each as defined in, and in accordance with the terms and conditions of, the employment agreement by and between Sellers and Archstone-Smith Communities L.L.C., dated as of October 5, 2007 (the “Employment Agreement”)) and (ii) the date on which there is a liquidation or dissolution of the Company if and only if the Unvested Units effectively lose any portion of their value in connection with such liquidation or dissolution and such lost value is not replaced upon or promptly following such liquidation or dissolution through the grant to Sellers of economically equivalent units or interests in an Affiliate (without any negative impact to Sellers associated with such replacement). Any Class B Units which remain Unvested Units after the application of the preceding sentence shall be forfeited upon a termination of Sellers’s employment with the Employer.

     3. Distributions.

          (a) Vested Units. Distributions in respect of Vested Units shall be made to Sellers in accordance with the provisions of Section 14 of the LP Agreement.

          (b) Unvested Units. Sellers shall not be entitled to any distributions in respect of Unvested Units until and unless such Unvested Units have become Vested Units. Any amounts which would have been distributed to Sellers pursuant to the terms of the LP Agreement in respect of Unvested Units but for the application of the preceding sentence (the “Unvested Allocations”) shall be distributed to Sellers as soon as practicable after such Class B Units become Vested Units, without interest. The Company shall set aside all Unvested Allocations until such time as the Unvested Allocations are either forfeited pursuant to Section 2 above or distributed pursuant to this Section 3(b) as provided for in Section 14 of the LP Agreement.

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     4. Rights as Holder of Class B Units. Sellers shall be the record owner of the Class B Units unless and until such Class B Units are forfeited pursuant to Section 2 hereof or transferred in accordance with Section 6 hereof and, except as provided in this Agreement, as record owner shall be entitled to all rights of a holder of Class B Units of the Company; provided, that the Class B Units shall be subject to the limitations on transfer and encumbrance set forth in this Agreement and the LP Agreement.

     5. Representations in the LP Agreement; Purchase for Investment; Other Representations of Sellers.

          (a) Representations in LP Agreement. Sellers hereby represents and warrants that all representations and warranties made by Sellers in the LP Agreement are true and correct.

          (b) Investment Intent. Sellers hereby represents and warrants that the Class B Units are being acquired for investment and not with a view to distribution thereof, and to make such other reasonable and customary representations regarding matters relevant to compliance with applicable securities laws as are deemed necessary by counsel to the Company.

          (c) Other Representations. Sellers hereby represents and warrants to the Company as follows:

               (i) Access to Information. Because of Sellers’s business relationship with the Company and with the management of the Company, Sellers has had access to all material and relevant information concerning the Company, thereby enabling Sellers to make an informed investment decision with respect to his investment in the Company, and all pertinent data and information requested by Sellers from the Company or its representatives concerning the business and financial condition of the Company and the terms and conditions of this Agreement have been furnished to Sellers. Sellers acknowledges that he has had the opportunity to ask questions of and receive answers and obtain additional information from the Company and its representatives concerning the present and proposed business and financial conditions of the Company.

               (ii) Financial Sophistication. Sellers has such knowledge and experience in financial and business matters that Sellers is capable of evaluating the merits and risks of investing in the Class B Units.

               (iii) Understanding the Investment Risks. Sellers understands that:

          (A) An investment in the Class B Units represents a highly speculative investment, and there can be no assurance as to the success of the Company in its business;

                    (B) There is at present no market for the Class B Units and there can be no assurance that a market will develop in the future;

                    (C) The Class B Units may be worthless; and

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                    (D) Ownership of the Class B Units may result in taxable income to Sellers without a corresponding cash or in-kind distribution.

          (iv) Understanding the Nature of the Class B Units. Sellers understands and agrees that:

               (A) There can be no assurance that the Class B Units will be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any applicable state securities laws and, if they are not so registered, they will only be issued and sold in reliance upon certain exemptions contained in the Securities Act and applicable state securities laws, and the representations and warranties of Sellers contained herein are essential to any claim of exemption by the Company under the Securities Act and such state laws;

               (B) If the Class B Units are not so registered, the Class B Units will be “restricted securities” as that term is defined in Rule 144 promulgated under the Securities Act;

               (C) Sellers may not sell, transfer, assign, pledge or otherwise dispose of or encumber the Class B Units without registration under the Securities Act and applicable state securities laws unless the Company receives an option of counsel acceptable to it (as to both counsel and the opinion) that such registration is not required;

               (D) Only the Company can register the Class B Units under the Securities Act and applicable state securities laws;

               (E) The Company has not made any representations to Sellers that the Company will register the Class B Units under the Securities Act or any applicable state securities laws, or with respect to compliance with any exemption therefrom;

               (F) Sellers is aware of the conditions for his obtaining an exemption from the sale or transfer of the Class B Units under the Securities Act and any applicable state securities laws; and

               (G) The Company may, from time to time, make stop transfer notations in its transfer record to ensure compliance with the Securities Act and any applicable state securities laws, and any additional restrictions imposed by state securities administrators.

          (v) Investment Intent. Sellers acknowledges that:

               (A) Neither Sellers nor anyone acting on his behalf has paid or will pay a commission or other remuneration to any person in connection with the acquisition of the Class B Units; and

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               (B) At the time and as a condition of delivery of documents evidencing the Class B Units, Sellers will be deemed to have made all the representations and warranties contained in this Section 5 with respect to such Class B Units and may be required to make other representations concerning investment intent as condition of the delivery of such Class B Units by the Company.

     6. Restriction on Transfer/LP Agreement. Unvested Units may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by Sellers. Vested Units may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by Sellers, except (a) if and as permitted by the LP Agreement, (b) by will or the laws of descent and distribution, (c) to or for the benefit of any spouse, child or grandchild of Sellers, or to a trust or partnership for the benefit of any of the foregoing individuals, or (d) if and as permitted by the Board. The Class B Units shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Class B Units contrary to the provisions of this Agreement or the LP Agreement shall be null and void and without effect.

     7. Designation of Beneficiary. Sellers may appoint any individual or legal entity in writing as his beneficiary to receive any Class B Unit (to the extent not previously terminated or forfeited) under this Agreement upon Sellers’s death or Disability (as defined in the Employment Agreement). Sellers may revoke his designation of a beneficiary at any time and appoint a new beneficiary in writing. To be effective, Sellers must complete the designation of a beneficiary or revocation of a beneficiary by written notice to the Company under Section 8 of this Agreement before the date of Sellers’s death. In the absence of a beneficiary designation, the legal representative of Sellers’s estate shall be deemed the beneficiary. Notwithstanding the foregoing, in the event that any beneficiary appointed by Sellers (or deemed to be as such pursuant to the preceding sentence) does not expressly become party to the LP Agreement and expressly assume all restrictions on the Class B Units to which Sellers was subject at the time of his death or Disability, such appointment (and any purported transfer of Class B Units thereunder) shall be null and void and without effect.

     8. Notices. Any notice necessary under this Agreement shall be addressed to the Company at the principal executive office of the Employer and to Sellers at the address appearing in the personnel records of the Employer for Sellers or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

     9. Tax Withholding. The Company and Sellers acknowledge and agree that Sellers is an employee of the Company for all purposes hereunder, including, without limitation, for purposes of calculating the Company’s withholding tax obligations in connection with any Class B Units becoming Vested Units. The Company shall reasonably determine the amount of any Federal, state, local or other income, employment, or other taxes which the Company or any of its subsidiaries or affiliates may reasonably be obligated to withhold (giving effect to the immediately preceding sentence) with respect to the grant, vesting or other event with respect to the Class B Units. In connection with any Class B Units becoming Vested Units, the Company shall withhold from delivery to Sellers a number of Class B Units that are otherwise becoming

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Vested Units having a fair market value equal to the taxes payable by Sellers in connection with such vesting; provided, however, that the foregoing shall only apply as to any amounts in excess of the minimum withholding required by applicable law (after giving effect to the first sentence of this Section 9) only to the extent such withholding would not result in accounting charges to the Company or any of its affiliates in excess of the accounting charges which would have applied in the absence of such withholding.

     10. Choice of Law; Forum. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of Delaware to be applied. In furtherance of the foregoing, the internal law of the State of Delaware will control the interpretation and construction of this Agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. Any proceeding arising out of or relating to this Agreement shall be adjudicated in accordance with the procedures described in Section 11(g) of the Employment Agreement.

     11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     12. Class B Units Subject to LP Agreement. By entering into this Agreement Sellers agrees and acknowledges that (i) Sellers has received and read a copy of the LP Agreement and (ii) the Class B Units are subject to the LP Agreement, the terms and provisions of which are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the LP Agreement, the applicable terms and provisions of this Agreement will govern and prevail. The grant of Class B Units pursuant to this Agreement shall not restrict in any way the adoption of any amendment to the LP Agreement in accordance with the terms of such agreement. Notwithstanding anything herein to the contrary, the grant of Class B Units pursuant to this Agreement is subject to Sellers taking actions required by the Company to become a party to the LP Agreement.

     13. No Right to Continued Service. This Agreement shall not be construed as giving Sellers the right to be retained in the employ of, or in any other continuing relationship with, the Employer or any of its affiliates.

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     14. Cooperation. The parties shall cooperate to resolve any disputes as to the interpretation of this Agreement and the dispute resolution mechanisms set forth in Section 11(g) of the Employment Agreement shall remain applicable.

     15. No Limit on Other Compensation Arrangements. Nothing contained in this Agreement shall prevent the Company, the Employer or any of their affiliates from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the award of Class B Units, securities and other types of awards, and such arrangements may be either generally applicable or applicable only in specific cases.

     16. Amendments. The provisions of this Agreement may not be amended, modified or supplemented unless consented to in writing by the Company and Sellers.

     17. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

/s/ R. Scott Sellers R. Scott Sellers

TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY PARALLEL GUARANTOR I, L.L.C.
	/s/ Michael B. Benner
By:	Michael B. Benner
Title:	Authorized Signatory

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EX-10.22

Exhibit 10.22

EXECUTION COPY

UNIT AWARD AGREEMENT

     This Unit Award Agreement (this “Agreement”), is made effective as of October 5, 2007, (hereinafter referred to as the “Date of Grant”), between Tishman Speyer Archstone-Smith Multifamily Parallel Guarantor II, L.L.C., a limited liability company organized under the laws of the State of Delaware (the “Company”), and R. Scott Sellers (“Sellers”). Capitalized terms not defined in this Agreement shall have the meaning given to them in the Limited Liability Company Agreement of the Company, dated as of October 5, 2007 (the “LP Agreement”).

R E C I T A L S:

     WHEREAS, Sellers is employed by Archstone-Smith Communities L.L.C. or any of its affiliates (the “Employer”) and, through such employment, provides services to the Company and its affiliates;

     WHEREAS, the Board of Directors of Tishman Speyer U.S. Value Added Associates VII, L.L.C. (the “Board”), which is the general partner of Tishman Speyer Real Estate Venture VII Parallel (Governance), L.P., which in turn is the general partner of Tishman Speyer Archstone-Smith Multifamily Parallel (GP), L.P., which in turn is the general partner of Tishman Speyer Archstone-Smith Multifamily Parallel Fund II JV, L.P., the managing member of the Company has determined that it would be in the best interests of the Company and its affiliates to make the award of Class B Units provided for herein to Sellers pursuant to the terms set forth herein.

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

     1. Award of Class B Units.

          (a) Class B Units. Subject to the terms and conditions of this Agreement, the Company hereby grants to Sellers an award of 100 Class B Units of the Company (such 100 units, hereinafter called the “Class B Units”). The Class B Units shall vest in accordance with Section 2 of this Agreement.

          (b) Adjustment.

               (i) In the event that there shall be any sale or other extraordinary distribution (whether in the form of cash, membership units of the Company or other property), recapitalization, split or reverse split of equity, reorganization, merger, consolidation, spin-off, combination, repurchase, or unit exchange, or other similar transaction or event affecting the Class B Units, the Board shall cause to be made such equitable adjustments as it, in good faith, deems necessary or appropriate to the number and kind of units issued pursuant to this Agreement to prevent inappropriate dilution or enlargement of the economic interest represented by such units.

               (ii) In the event that securities of the Company are redeemed in connection with the establishment of a new Affiliate or Affiliates, the Company may cancel all or a portion of such Class B Units and issue or cause to be issued to Sellers economically equivalent equity interests in such new Affiliate(s) (a “Reapportionment”), containing terms and conditions that are no less favorable than the terms and conditions set forth herein (including, but not limited to, vesting conditions), to appropriately apportion the incentive compensation element of the Class B Units amongst such Affiliate(s). In the event that a Reapportionment results in any negative impact on Sellers (including, without limitation, any adverse tax impact such as the loss of long-term capital gains treatment, the inclusion of income on the date of such Reapportionment or the loss of basis), the Company shall indemnify and hold Sellers harmless with respect to all economic loss associated with the transfer of the interests and shall gross-up all such payments so that the indemnification is tax neutral to Sellers; provided, however, that Sellers shall cooperate with the Company to minimize the extent of any adverse tax impact to the extent permissible under applicable law.

     2. Vesting. Subject to Sellers’s continued employment with the Employer, the Class B Units will vest and become non-forfeitable (such non-forfeitable Class B Units, the “Vested Units,” and Class B Units prior to becoming Vested Units, “Unvested Units”) on the three-year anniversary of the Date of Grant; provided, however, that all Class B Units shall become Vested Units upon the earlier to occur of (i) a termination of Sellers’s employment with the Employer by the Employer without “Cause” or by Sellers for “Good Reason” (each as defined in, and in accordance with the terms and conditions of, the employment agreement by and between Sellers and Archstone-Smith Communities L.L.C., dated as of October 5, 2007 (the “Employment Agreement”)) and (ii) the date on which there is a liquidation or dissolution of the Company if and only if the Unvested Units effectively lose any portion of their value in connection with such liquidation or dissolution and such lost value is not replaced upon or promptly following such liquidation or dissolution through the grant to Sellers of economically equivalent units or interests in an Affiliate (without any negative impact to Sellers associated with such replacement). Any Class B Units which remain Unvested Units after the application of the preceding sentence shall be forfeited upon a termination of Sellers’s employment with the Employer.

     3. Distributions.

          (a) Vested Units. Distributions in respect of Vested Units shall be made to Sellers in accordance with the provisions of Section 14 of the LP Agreement.

          (b) Unvested Units. Sellers shall not be entitled to any distributions in respect of Unvested Units until and unless such Unvested Units have become Vested Units. Any amounts which would have been distributed to Sellers pursuant to the terms of the LP Agreement in respect of Unvested Units but for the application of the preceding sentence (the “Unvested Allocations”) shall be distributed to Sellers as soon as practicable after such Class B Units become Vested Units, without interest. The Company shall set aside all Unvested Allocations until such time as the Unvested Allocations are either forfeited pursuant to Section 2 above or distributed pursuant to this Section 3(b) as provided for in Section 14 of the LP Agreement.

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     4. Rights as Holder of Class B Units. Sellers shall be the record owner of the Class B Units unless and until such Class B Units are forfeited pursuant to Section 2 hereof or transferred in accordance with Section 6 hereof and, except as provided in this Agreement, as record owner shall be entitled to all rights of a holder of Class B Units of the Company; provided, that the Class B Units shall be subject to the limitations on transfer and encumbrance set forth in this Agreement and the LP Agreement.

     5. Representations in the LP Agreement; Purchase for Investment; Other Representations of Sellers.

          (a) Representations in LP Agreement. Sellers hereby represents and warrants that all representations and warranties made by Sellers in the LP Agreement are true and correct.

          (b) Investment Intent. Sellers hereby represents and warrants that the Class B Units are being acquired for investment and not with a view to distribution thereof, and to make such other reasonable and customary representations regarding matters relevant to compliance with applicable securities laws as are deemed necessary by counsel to the Company.

          (c) Other Representations. Sellers hereby represents and warrants to the Company as follows:

               (i) Access to Information. Because of Sellers’s business relationship with the Company and with the management of the Company, Sellers has had access to all material and relevant information concerning the Company, thereby enabling Sellers to make an informed investment decision with respect to his investment in the Company, and all pertinent data and information requested by Sellers from the Company or its representatives concerning the business and financial condition of the Company and the terms and conditions of this Agreement have been furnished to Sellers. Sellers acknowledges that he has had the opportunity to ask questions of and receive answers and obtain additional information from the Company and its representatives concerning the present and proposed business and financial conditions of the Company.

               (ii) Financial Sophistication. Sellers has such knowledge and experience in financial and business matters that Sellers is capable of evaluating the merits and risks of investing in the Class B Units.

               (iii) Understanding the Investment Risks. Sellers understands that:

          (A) An investment in the Class B Units represents a highly speculative investment, and there can be no assurance as to the success of the Company in its business;

                    (B) There is at present no market for the Class B Units and there can be no assurance that a market will develop in the future;

                    (C) The Class B Units may be worthless; and

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                    (D) Ownership of the Class B Units may result in taxable income to Sellers without a corresponding cash or in-kind distribution.

               (iv) Understanding the Nature of the Class B Units. Sellers understands and agrees that:

                    (A) There can be no assurance that the Class B Units will be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any applicable state securities laws and, if they are not so registered, they will only be issued and sold in reliance upon certain exemptions contained in the Securities Act and applicable state securities laws, and the representations and warranties of Sellers contained herein are essential to any claim of exemption by the Company under the Securities Act and such state laws;

                    (B) If the Class B Units are not so registered, the Class B Units will be “restricted securities” as that term is defined in Rule 144 promulgated under the Securities Act;

                    (C) Sellers may not sell, transfer, assign, pledge or otherwise dispose of or encumber the Class B Units without registration under the Securities Act and applicable state securities laws unless the Company receives an option of counsel acceptable to it (as to both counsel and the opinion) that such registration is not required;

                    (D) Only the Company can register the Class B Units under the Securities Act and applicable state securities laws;

                    (E) The Company has not made any representations to Sellers that the Company will register the Class B Units under the Securities Act or any applicable state securities laws, or with respect to compliance with any exemption therefrom;

                    (F) Sellers is aware of the conditions for his obtaining an exemption from the sale or transfer of the Class B Units under the Securities Act and any applicable state securities laws; and

                    (G) The Company may, from time to time, make stop transfer notations in its transfer record to ensure compliance with the Securities Act and any applicable state securities laws, and any additional restrictions imposed by state securities administrators.

               (v) Investment Intent. Sellers acknowledges that:

                    (A) Neither Sellers nor anyone acting on his behalf has paid or will pay a commission or other remuneration to any person in connection with the acquisition of the Class B Units; and

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          (B) At the time and as a condition of delivery of documents evidencing the Class B Units, Sellers will be deemed to have made all the representations and warranties contained in this Section 5 with respect to such Class B Units and may be required to make other representations concerning investment intent as condition of the delivery of such Class B Units by the Company.

     6. Restriction on Transfer/LP Agreement. Unvested Units may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by Sellers. Vested Units may not be transferred, pledged, assigned, hypothecated or otherwise disposed of in any way by Sellers, except (a) if and as permitted by the LP Agreement, (b) by will or the laws of descent and distribution, (c) to or for the benefit of any spouse, child or grandchild of Sellers, or to a trust or partnership for the benefit of any of the foregoing individuals, or (d) if and as permitted by the Board. The Class B Units shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Class B Units contrary to the provisions of this Agreement or the LP Agreement shall be null and void and without effect.

     7. Designation of Beneficiary. Sellers may appoint any individual or legal entity in writing as his beneficiary to receive any Class B Unit (to the extent not previously terminated or forfeited) under this Agreement upon Sellers’s death or Disability (as defined in the Employment Agreement). Sellers may revoke his designation of a beneficiary at any time and appoint a new beneficiary in writing. To be effective, Sellers must complete the designation of a beneficiary or revocation of a beneficiary by written notice to the Company under Section 8 of this Agreement before the date of Sellers’s death. In the absence of a beneficiary designation, the legal representative of Sellers’s estate shall be deemed the beneficiary. Notwithstanding the foregoing, in the event that any beneficiary appointed by Sellers (or deemed to be as such pursuant to the preceding sentence) does not expressly become party to the LP Agreement and expressly assume all restrictions on the Class B Units to which Sellers was subject at the time of his death or Disability, such appointment (and any purported transfer of Class B Units thereunder) shall be null and void and without effect.

     8. Notices. Any notice necessary under this Agreement shall be addressed to the Company at the principal executive office of the Employer and to Sellers at the address appearing in the personnel records of the Employer for Sellers or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

     9. Tax Withholding. The Company and Sellers acknowledge and agree that Sellers is an employee of the Company for all purposes hereunder, including, without limitation, for purposes of calculating the Company’s withholding tax obligations in connection with any Class B Units becoming Vested Units. The Company shall reasonably determine the amount of any Federal, state, local or other income, employment, or other taxes which the Company or any of its subsidiaries or affiliates may reasonably be obligated to withhold (giving effect to the immediately preceding sentence) with respect to the grant, vesting or other event with respect to the Class B Units. In connection with any Class B Units becoming Vested Units, the Company shall withhold from delivery to Sellers a number of Class B Units that are otherwise becoming

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Vested Units having a fair market value equal to the taxes payable by Sellers in connection with such vesting; provided, however, that the foregoing shall only apply as to any amounts in excess of the minimum withholding required by applicable law (after giving effect to the first sentence of this Section 9) only to the extent such withholding would not result in accounting charges to the Company or any of its affiliates in excess of the accounting charges which would have applied in the absence of such withholding.

     10. Choice of Law; Forum. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of Delaware to be applied. In furtherance of the foregoing, the internal law of the State of Delaware will control the interpretation and construction of this Agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply. Any proceeding arising out of or relating to this Agreement shall be adjudicated in accordance with the procedures described in Section 11(g) of the Employment Agreement.

     11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     12. Class B Units Subject to LP Agreement. By entering into this Agreement Sellers agrees and acknowledges that (i) Sellers has received and read a copy of the LP Agreement and (ii) the Class B Units are subject to the LP Agreement, the terms and provisions of which are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the LP Agreement, the applicable terms and provisions of this Agreement will govern and prevail. The grant of Class B Units pursuant to this Agreement shall not restrict in any way the adoption of any amendment to the LP Agreement in accordance with the terms of such agreement. Notwithstanding anything herein to the contrary, the grant of Class B Units pursuant to this Agreement is subject to Sellers taking actions required by the Company to become a party to the LP Agreement.

     13. No Right to Continued Service. This Agreement shall not be construed as giving Sellers the right to be retained in the employ of, or in any other continuing relationship with, the Employer or any of its affiliates.

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     14. Cooperation. The parties shall cooperate to resolve any disputes as to the interpretation of this Agreement and the dispute resolution mechanisms set forth in Section 11(g) of the Employment Agreement shall remain applicable.

     15. No Limit on Other Compensation Arrangements. Nothing contained in this Agreement shall prevent the Company, the Employer or any of their affiliates from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the award of Class B Units, securities and other types of awards, and such arrangements may be either generally applicable or applicable only in specific cases.

     16. Amendments. The provisions of this Agreement may not be amended, modified or supplemented unless consented to in writing by the Company and Sellers.

     17. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

/s/ R. Scott Sellers R. Scott Sellers

TISHMAN SPEYER ARCHSTONE-SMITH MULTIFAMILY PARALLEL GUARANTOR II, L.L.C.
	/s/ Michael B. Benner
By:	Michael B. Benner
Title:	Authorized Signatory

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EX-10.23

Exhibit 10.23

SEPARATION AND GENERAL RELEASE AGREEMENT

     This Separation and General Release Agreement (the “Agreement”), is made as of April 2, 2007and will be effective as of December 31, 2007, by and between J. Lindsay Freeman (“Freeman”), an individual, Archstone-Smith Operating Trust, a Maryland real estate investment trust (the “Operating Trust”) and Archstone-Smith Trust, a Maryland real estate investment trust (the “ASN”) (Operating Trust and ASN are collectively referred to as the “Company”).

     WHEREAS, Freeman is currently the Chief Operating Officer (the “COO”) of the Company, and

     WHEREAS, the Company and the Executive desire to establish the terms and conditions of Freeman’s resignation as COO, continued employment with the Company during 2008 and subsequent retirement from the Company Agreement on the terms and conditions contained herein,

     NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained and for good and valuable consideration, the sufficiency of which is hereby acknowledged, Freeman and the Company (the “Parties”) hereby agree as follows:

     1. Officer Resignation. Freeman shall take all necessary and appropriate actions to resign his position as COO of the Company and as an officer and/or director of all subsidiaries of the Company effective December 31, 2007 (the “Resignation Date”). Following the resignation as Chief Operating Officer, Freeman shall remain employed through December 31, 2008.

     2. Termination Date/Salary. Freeman’s employment with the Company shall be continued through December 31, 2008 (the “Termination Date”). During the term of Freeman’s employment, the Company shall continue to pay to Freeman his base salary at the rate of $450,000, less applicable withholdings and deductions for the period beginning with the Resignation Date and ending on the Termination Date. The salary payments shall be made in bi-weekly payments in accordance with the Company’s usual payroll practices.

     3. Restricted Stock Units. Provided that Freeman complies with the terms of this Agreement, executes a release containing terms substantially similar to those contained in Section 17 within 30 days following his Termination Date (the “Termination Release”), and does not rescind or seek to have overturned or declared invalid the Termination Release, and subject to the other terms, conditions and limitations of the Archstone-Smith Trust 2001 Long-Term Incentive Plan (the “LTIP”) and the applicable Restricted Share Unit Agreement, all unvested restricted share units awarded prior to Freeman’s Resignation Date shall continue to vest following the Resignation Date in accordance with their terms without requiring Freeman’s continued employment by the Company. The provisions of this Section shall constitute an amendment of any Restricted Share Unit Agreement pursuant to which restricted share units would vest after December 31, 2008.

     4. Long-Term Incentive Plan. As an additional severance payment, upon Freeman’s Termination Date, and provided Freeman complies with the terms of this Agreement and execute and does not seek to invalidate the Termination Release, Freeman shall be entitled to an amount of cash equal to 2/3 of the value of the performance units to which he would be entitled had he remained employed through the entire performance period described in the Performance Unit Agreement between Freeman and ASN dated as of May 2, 2007 (the “Unit Agreement”). Freeman acknowledges that the determination of the amount shall not be made until 2009 in accordance with the procedures established for making LTIP awards to other executives of the Company, shall not be made until at least 6 months following the Termination Date, and shall only be made in the event no award is made under the Unit Agreement.

     5. Benefits. Following Freeman’s resignation as COO, Freeman shall remain eligible for all benefits generally available to employees of the Company; provided, however, that Freeman shall not be entitled to any bonus, LTIP award or restricted stock unit or other stock based award with respect to services performed during 2008.

     (a) Upon the Termination Date, Freeman shall be entitled to those benefits provided under the terms, conditions and limitations of the Company’s retirement and welfare benefit plans or programs (excluding any severance program) subject to the provisions of the applicable plan or program.

     (b) Except as expressly provided in this Agreement, the Company will not provide to Freeman any other compensation, whether or not accrued, directly or indirectly, in connection with Freeman’s termination of employment with the Company.

     (c) The Company shall continue to indemnify and hold harmless Freeman for all actions taken by Freeman during his employment in accordance with Freeman’s existing terms of employment.

     6. Change in Control Agreement. The parties agree that the Change in Control Agreement between Freeman and the Company dated August 12, 2002 shall expire as of the Resignation Date.

     7. Representations.

     (a) Freeman represents and warrants that he has brought no charges, complaints, claims, actions or proceedings against the Company as of the date of this Agreement. Freeman further agrees that he will not commence any lawsuit or, to the fullest extent permitted by law, other proceedings against the Company with respect to any cause, matter, claim, act or omission occurring thereafter, provided, however, that this shall not limit Freeman from enforcing his rights under this Agreement.

     (b) Freeman represents and warrants that as of the Termination Date he will return to the Company all property of the Company in whatever form retained, including any copies thereof, in the possession of or under the control of Freeman, including, but without limitation, all budget information and all notes, memoranda and meeting details regarding operations of the Company, all of which shall be delivered to the Chief Operating Officer of the Company on or immediately after the Termination Date.

     (c) Freeman will not disparage the Company or any of its shareholders, trustees, officers, employees or agents. The Company will not disparage Freeman.

     8. Non-Disclosure.

     (a) Confidential Information Defined. Freeman has created, has had contact with, use of, and received confidential information and/or trade secrets of Company, including, but not limited to, data concerning existing or proposed advertising proposals or campaigns, marketing and sales research, techniques, manuals, programs, systems, designs, computer programs, formulas, pricing, bidding methods, innovations, inventions, discoveries, improvements, research and development, specifications, data, know-how, formats, marketing plans, business plans and strategies, investment and disposition strategies, information regarding the skills and compensation of other employees of Company, forecasts, financial information, budgets, projections, and customer and/or supplier identities, characteristics, preferences and agreements (collectively “Confidential Information”). Confidential Information may be contained

in materials including, but not limited to, customer lists, supplier lists and price lists, reports or computer programs, as well as be constituted by unwritten information, techniques, processes, practices or knowledge. Confidential Information includes all information disclosed by Company to Freeman and information developed or learned by Freeman while a shareholder, officer and/or employee of Company. Confidential Information includes all information that has or could have commercial value or other utility in the business in which Company has been engaged or in which it is contemplated engaging. Confidential Information also includes all information of which the unauthorized disclosure could be detrimental to the interests of Company, whether or not such information is identified as Confidential Information by Company.

     (b) Scope. For the “Restricted Period” (as hereinafter defined) Freeman will not, either directly or indirectly, for Freeman’s own benefit or for the benefit of any third party, use, divulge, disclose, or communicate to any third party, any of the Confidential Information in any manner whatsoever, unless the Company otherwise consents to the disclosure or use of any of the Confidential Information in writing prior to such disclosure or use. With respect to each particular item of Confidential Information, the “Restricted Period” shall mean: (a) the period ending on March 31, 2011, if the item of Confidential Information at issue does not constitute a trade secret, or (b) indefinitely, if the item of Confidential Information at issue constitutes a trade secret, until such item of Confidential Information at issue ceases to be a trade secret, but in no event earlier than March 31, 2011 if the item continues to be Confidential Information. Notwithstanding the foregoing, Confidential Information does not include information (i) in the public domain, (ii) received by Freeman outside of Freeman’s relationship with Company as a shareholder, director, officer and/or employee, from a party not under an obligation of confidentiality to Company, directly or indirectly, or (iii) that later becomes public, unless such information is made public by Freeman in breach of this Agreement or any other agreement by which Freeman is bound or by any other party directly or indirectly under an obligation of confidentiality to Company.

     9. Covenant Not-To-Compete. To protect the Company’s proprietary interest in the Confidential Information and to protect the goodwill and value of the Business of Company (hereafter defined), Freeman shall not, except with the prior written consent of the Company, for the Non-Compete Term (as hereafter defined) anywhere in the United States of America, its respective territories, possessions and protectorates, engage, directly or indirectly, individually or in association or in combination with any other person or entity, as proprietor or owner, officer, director or shareholder (other than as a passive investor in and holder of less than five percent (5%) of the common stock of any publicly traded corporation), member or manager of any limited liability company, or as an employee, agent, independent contractor, consultant, advisor, joint venturer, trustee, licensee, principal, partner or otherwise, whether or not for monetary benefit, in (a) any business that competes with the Company or any entity in which the Operating Trust or ASN has a 25% or greater direct or indirect ownership interest (the “Company Related Entity”) or (b) otherwise includes the business of the acquisition, disposition, operation, development, management or financing of multifamily apartment communities (the “Business of Company”). Freeman agrees that the Company has, is and intends to conduct the Business of Company throughout the United States of America. Consequently, Freeman and Company agree that it is not possible to limit the geographic scope of this non-competition covenant contained in this Section to particular cities, provinces or other geographic subdivisions of these specified jurisdictions. For purposes of this Agreement, the “Non-Compete Term” shall mean the period ending on March 31, 2011.

     10. Nonsolicitation of Employees. To protect Company’s proprietary interest in the Confidential Information and in Company’s relationships with its employees and contractors, and to protect the goodwill and value of the Business of Company, during the Employee Non-Solicitation Term (as hereinafter defined), Freeman will not, except with the prior written consent of Company, individually or in association or combination with or through any other person or entity, directly or indirectly, encourage, induce or entice any employee or independent contractor of Company to terminate or modify

such person’s or entity’s employment, engagement or business relationship with Company. For purposes of this Agreement, the “Employee Non-Solicitation Term” shall mean the period ending on March 31, 2011.

     11. Covenant Not to Hire Employees. To protect Company’s proprietary interest in the Confidential Information and in Company’s relationships with its employees and contractors, and to protect the goodwill and value of the Business of Company, during the Non-Hire Term (as hereinafter defined), Freeman will not, except with the prior written consent of Company, individually or in association or combination with or through any other person or entity, directly or indirectly, hire or attempt to hire, whether as an employee, consultant or otherwise, any person who at such time is an employee or contractor of Company to perform the same or substantially similar services as such employee or contractor performed or supplied for or on behalf of Company. For purposes of this Agreement, the “Non-Hire Term” shall mean the period ending on March 31, 2011. During the Non-Hire Term, Freeman also agrees that he will not, except on behalf of Company, directly or indirectly hire or attempt to hire, whether as an employee, consultant or otherwise, any person who at any time in the six (6) month period prior to such time had been employed by Company.

     12. Nondisruption; Other Matters. For twenty-four (24) consecutive months from the Termination Date, Freeman agrees that he will not directly or indirectly interfere with, disrupt or attempt to disrupt any past, present or prospective relationship, contractual or otherwise, between Company, on the one hand, and any of its customers, suppliers or employees, on the other hand.

     13. Equitable Relief. Freeman acknowledges and agrees that Company’s remedies at law for breach of any of the provisions of this Agreement would be inadequate and, in recognition of this fact, Freeman agrees that, in the event of such breach, in addition to any remedies at law it may have, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may be available. Freeman further acknowledges that should Freeman violate any of the provisions of this Agreement, it will be difficult to determine the amount of damages resulting to Company and that in addition to any other remedies they may have, Company shall be entitled to temporary and permanent injunctive relief without the necessity of proving damages.

     14. Acknowledgement. Each of Freeman and Company acknowledges and agrees that the covenants and agreements contained in this Agreement have been negotiated in good faith by the parties, are reasonable and are not more restrictive or broader than necessary to protect the interests of the parties thereto, and would not achieve their intended purpose if they were on different terms or for periods of time shorter than the periods of time provided herein or applied in more restrictive geographical areas than are provided herein.

     15. Separate Covenants. The covenants contained in this Agreement shall be construed as a series of separate covenants, one for each of the counties in each of the states of the United States of America, one for each geographic subdivision of each country in Europe in which the Company has operations, and their respective territories, possessions and protectorates.

     16. Severability. The parties agree that construction of this Agreement shall be in favor of its reasonable nature, legality and enforceability, and that any construction causing unenforceability shall yield to a construction permitting enforceability. It is agreed that the noncompetition, nonsolicitation, and nonhiring covenants and provisions of this Agreement are severable, and that if any single covenant or provision or multiple covenants or provisions should be found unenforceable, the entire Agreement and remaining covenants and provisions shall not fail but shall be construed as enforceable without any severed covenant or provision in accordance with the tenor of this Agreement. The parties specifically agree that no covenant or provision of this Agreement shall be invalidated because of overbreadth insofar as the parties acknowledge the scope of the covenants and provisions contained herein to be reasonable

and necessary for the protection of Company and not unduly restrictive upon Freeman. However, should a court or any other trier of fact or law determine not to enforce any covenant or provision of this Agreement as written due to overbreadth, then the parties agree that said covenant or provision shall be enforced to the extent reasonable, with the court or such trier to make any necessary revisions to said covenant or provision to permit its enforceability and that any such limitation on the enforceability of any such covenant or provision shall not affect the enforceability of any other covenant or provision of this Agreement.

     17. Releases.

     (a) In consideration of this Agreement and the monies and other good and valuable consideration provided by the Company pursuant to this Agreement, except for claims arising out of the obligations of the parties under this Agreement, any claim for indemnification that Freeman has against the Company pursuant to any Company document or insurance policy (which shall remain in effect with respect to all actions arising in connection with his employment to the same extent as such claims existed prior to the termination of employment) or any claims as a shareholder of the Company, Freeman hereby irrevocably and unconditionally releases, waives and forever discharges the Company, its successors and assigns, and its past and present officers, trustees, and employees, including all employees, directors and officers of any of the Company’s affiliates (collectively, “Company Releasees”), from any and all actions, causes of action, claims, counterclaims, demands, damages, rights, remedies and liabilities of whatever kind or character, in law or equity, suspected or unsuspected, past or present, that he has ever had, may now have, or may later assert against the Company Releasees, including without limitation for statutory interest or attorneys’ fees, and arising at anytime from the beginning of time to the Effective Date of this Agreement (hereinafter collectively referred to as “Freeman’s Claims”), and including, without limitation, any claims arising out of, in connection with, or relating to Freeman’s recruitment, employment and termination of employment, and any claims arising out of or related to any federal, state and/or local labor or civil rights laws including, without limitation, the federal Civil Right Acts of 1866, 1871, 1964 and 1991, the Age Discrimination in Employment Act of 1967, as amended by, inter alia, the Older Workers’ Benefit Protection Act of 1990, the Consolidated Omnibus Reconciliation Act of 1985, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, as well as any other applicable local and/or state employment, civil rights, human rights and discrimination laws, as each may have been amended from time to time. Except as limited above or by this Agreement, execution of this Agreement by Freeman operates as a complete bar and defense against any and all of Freeman’s Claims against the Company Releasees.

     (b) In consideration of this Agreement, except for claims arising out of the obligations of the parties under this Agreement, the Company hereby irrevocably and unconditionally releases, waives and forever discharges Freeman, his successors and assigns from any and all actions, causes of action, claims, counterclaims, demands, damages, rights, remedies and liabilities of whatever kind or character, in law or equity, suspected or unsuspected, past or present, that it has ever had, may now have, or may later assert against Freeman, including without limitation for statutory interest or attorneys’ fees, and arising at anytime from the beginning of time to the Effective Date of this Agreement (hereinafter collectively referred to as “Company’s Claims”), and including, without limitation, any claims arising out of, in connection with, or relating to the Employment Agreement, and/or Freeman’s recruitment, employment and termination of employment, as each may have been amended from time to time. Execution of this Agreement by the Company operates as a complete bar and defense against any and all of Company’s Claims against Freeman.

     18. Miscellaneous Provisions.

     (a) This Agreement contains the entire agreement between and among the Parties and supersedes any and all prior agreements, arrangements, negotiations, discussions or understandings between and among the parties relating to the subject matter hereof. No oral understanding, statements, promises or inducements contrary to the terms of this Agreement exist. This Agreement cannot be changed or terminated orally. Should any provisions of this Agreement be held invalid, illegal or unenforceable, it shall be deemed to be modified so that its purpose can lawfully be effectuated and the balance of this Agreement shall remain in full force and effect.

     (b) Freeman and the Company agree that, except as contemplated by this Agreement, any prior agreements and understandings between them, if any, whether oral or written and of whatever nature, are hereby cancelled, terminated and superseded by this Agreement and shall be of no further force or effect.

     (c) This Agreement shall extend to, be binding upon, and inure to the benefit of the Parties and their respective successors, executors, heirs and assigns.

     (d) This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, the site of the Company’s principal place of business.

     (e) This Agreement may be executed in any number of counterparts each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

     (f) In the event of any ambiguity, this Agreement or any of its provisions shall not be construed for or against either party on the basis of which party drafted the particular language at issue.

     19. Effective Date/Revocation. Freeman may revoke this Agreement in writing at any time during a period of seven (7) calendar days after the execution of this Agreement by both of the Parties (the “Revocation Period”). This Agreement shall be effective and enforceable automatically on the date Freeman executes the Certificate of Non-Revocation of Separation Agreement and General Release, in the form attached as Exhibit A. The certificate should be executed and dated by Freeman at least one (1) day after expiration of the Revocation Period (the “Effective Date”).

     20. Notices. Any notices or requests under this Agreement shall be in writing and addressed as follows:

     If to Freeman:

At his address as reflected on the records of the Company;

     If to the Company:

Archstone-Smith Trust
Attn: General Counsel
9200 East Panorama Circle
Suite 400
Englewood CO 80112

     IN SIGNING THIS SEPARATION AND GENERAL RELEASE AGREEMENT, FREEMAN ACKNOWLEDGES THAT HE HAS BEEN INFORMED OF THE FOLLOWING RIGHTS AVAILABLE TO HIM UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT (ADEA):

     (A) HE HAS READ AND UNDERSTANDS THIS AGREEMENT AND IS HEREBY ADVISED IN WRITING HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT;

     (B) HE HAS SIGNED THIS AGREEMENT VOLUNTARILY AND UNDERSTANDS THAT THIS AGREEMENT CONTAINS A FULL AND FINAL RELEASE OF ALL OF FREEMAN’S CLAIMS;

     (C) HE HAS BEEN OFFERED AT LEAST TWENTY-ONE (21) CALENDAR DAYS TO CONSIDER THIS AGREEMENT;

     (D) THIS AGREEMENT IS NOT MADE IN CONNECTION WITH AN EXIT INCENTIVE OR OTHER EMPLOYEE TERMINATION PROGRAM OFFERED TO A GROUP OR CLASS OF EMPLOYEES; AND

     (E) HE DOES NOT WAIVE RIGHTS OR CLAIMS UNDER THE ADEA THAT MIGHT ARISE AFTER THE DATE THIS WAIVER IS EXECUTED.

AGREED AND ACCEPTED:
/s/ J. Lindsay Freeman
J. Lindsay Freeman
Archstone-Smith Trust
By:	/s/ R. Scott Sellers
	Name: R. Scott Sellers Title: CEO

ACKNOWLEDGMENT

STATE OF COLORADO

COUNTY OF JEFFERSON

     On Aug 22, 2007 before me the undersigned, personally appeared J. Lindsay Freeman, personally known to me or proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the person, or the person upon behalf of which the individual acted, executed the instrument.

/s/ Barbara W. Rolfes

Notary Public

ACKNOWLEDGMENT

STATE OF COLORADO

COUNTY OF JEFFERSON

     On Aug 22, 2007 before me the undersigned, personally appeared R. Scott Sellers, personally known to me or proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity as an officer of Archstone-Smith Trust, and that by his signature on the instrument, Archstone-Smith Trust, upon behalf of which the individual acted, executed the instrument.

/s/ Barbara W. Rolfes

Notary Public

EXHIBIT A

CERTIFICATION OF NON-REVOCATION OF
SEPARATION AND GENERAL RELEASE AGREEMENT

     I hereby certify and represent that seven (7) calendar days have passed since the Parties signed the Settlement Agreement and General Release (the “Agreement”) and that I have NOT exercised my right to revoke that Agreement pursuant to the Older Workers Benefit Protection Act of 1990. I understand that Archstone-Smith Trust, and the other Releasees, in providing me with benefits under the Agreement, are relying on this Certificate, and that I can no longer revoke the Agreement.

		,	2007
J. Lindsay Freeman	Date of Execution

IMPORTANT:

     This Certificate should be signed, dated and returned to the Company no earlier than on the eighth (8^th) calendar day after the Agreement is executed by both parties.

EX-10.24

Exhibit 10.24

AMENDMENT TO
SEPARATION AND GENERAL RELEASE AGREEMENT

     This AMENDMENT TO SEPARATION AND GENERAL RELEASE AGREEMENT (the “Amendment”) is dated as of June 1, 2007, between Archstone-Smith Operating Trust (the “Operating Trust”), Archstone-Smith Trust (“ASN”) (Operating Trust and ASN are referred to hereinafter as the “Company”), and J. Lindsay Freeman (the “Executive”) and shall be effective upon the consummation of the Merger (as defined below).

     WHEREAS, the Management Development and Executive Compensation Committee (the “Committee”) of the Board of Trustees of the Company approved the general terms of a Separation and General Release Agreement (the “Agreement”) as of March, 7, 2007 and the Executive and the Company entered into the Agreement as of May 9, 2007, effective as of December 31, 2007; and

     WHEREAS, the parties desire to enter into this Amendment to revise the terms of the Agreement to provide for specified payments to Mr. Freeman in connection with his remaining an employee of the Company following the consummation of the merger contemplated by the Agreement and Plan of Merger among Operating Trust, ASN, River Holding, LP, River Acquisition (MD), LP and River Trust Acquisition (MD), LLC (the “Merger”);

     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements of the parties contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

     1. This Amendment shall be effective as of the consummation of the Merger.

     2. Section 2 of the Agreement shall be amended by adding the following new sentence to the end:

          “If Freeman remains employed with the Company following the consummation of the Merger and through the Resignation Date or if Freeman is terminated without cause following the consummation of the Merger and on or prior to the Resignation Date, Freeman will be entitled to an additional cash payment of $1,000,000 to be paid by January 15, 2008.”

     3. Section 3 of the Agreement shall be amended by deleting the existing Section 3 in its entirety and adding the following new Section 3:

          “3. Cash Equivalent RSU Award. In lieu of receiving an award of restricted share units under the Archstone-Smith Trust 2001 Long-Term Incentive Plan (the “LTIP”), Freeman will receive a cash payment that is equal to the award of restricted share units that Freeman would have received under the LTIP for the 2007 performance year consistent with the criteria previously established by the Committee for the year and based on the performance of the Company up to the consummation of the Merger where appropriate and based on the Company’s entire 2007 performance where appropriate. Such payment , which, based on the Agreement would have been paid over a three year period

without requiring Freeman’s continued employment by the Company after December 31, 2007, will now be determined by the Company or its successors in December 2007 and will be paid by January 15, 2008.”

     4. Section 4 of the Agreement shall be amended by deleting the existing Section 4 in its entirety and replacing it with the following new Section 4:

         “4. Intentionally Omitted.”

     5. Section 5 of the Agreement shall be amended by adding the following sentence before subsection (a):

         “Freeman shall be entitled to receive a bonus award in respect of the Company’s 2007 performance in accordance with the terms previously established by the Committee in 2005 and communicated to Freeman.”

     6. Section 6 of the Agreement shall be amended by deleting the existing Section 6 in its entirety and adding the following new Section 6:

         “The parties agree that the Change in Control Agreement between Freeman and the Company dated August 12, 2002 shall terminate and be of no force and effect upon the earlier of the consummation of the Merger and the Resignation Date, with the exception of Section 9 thereof which shall continue in effect.”

     7. Except as otherwise provided herein, the Agreement shall remain in full force and effect in accordance with its original terms.

     IN WITNESS WHEREOF, the parties have executed and delivered this Amendment on                           , 2007.

		ARCHSTONE-SMITH TRUST
Date:	8/22/07		By:	/s/ R. Scott Sellers
				Name: R. Scott Sellers
				Title: CEO
		ARCHSTONE-SMITH OPERATING TRUST
Date:	8/22/07		By:	/s/ R. Scott Sellers
				Name: R. Scott Sellers
				Title: CEO
		J. LINDSAY FREEMAN
Date:	8/22/07			/s/ J. Lindsay Freeman

EX-21

Exhibit 21

Name	Jurisdiction
AICP LLC	Delaware
Alban Towers LLC	D.C.
Archstone Builders	Delaware
Archstone Communities LLC	Delaware
Archstone Financial Services Inc.	Delaware
Archstone Management Services Inc	Delaware
Archstone Property Management (California) Incorporated	Delaware
Archstone Property Management LLC	Delaware
Archstone South San Francisco LLC	Delaware
Archstone Wheaton Station Borrower LLC	Delaware
Archstone Wheaton Station LLC	Maryland
Archstone-Smith Unitholder Services LLC	Delaware
ASN 50th Street LLC	Delaware
ASN Bear Hill LLC	Delaware
ASN Bellevue LLC	Delaware
ASN Belltown LLC	Delaware
ASN Calabasas I LLC	Delaware
ASN Calabasas II LLC	Delaware
ASN CambridgePark LLC	Delaware
ASN Chicago LLC	Delaware
ASN City Place LLC	Delaware
ASN Clinton Green Member LLC	Delaware
ASN Dulles LLC	Delaware
ASN Dupont Circle LLC	Delaware
ASN Emeryville LLC	Delaware
ASN Encinitas LLC	Delaware
ASN Fairchase LLC	Delaware
ASN Foundry LLC	Delaware
ASN Fox Plaza LLC	Delaware
ASN Fremont LLC	Delaware
ASN Gaithersburg LLC	Delaware
ASN Glencoe LLC	Delaware
ASN Hoboken I LLC	Delaware
ASN Hoboken II LLC	Delaware
ASN Kendall Square LLC	Delaware
ASN Key West LLC	Delaware
ASN La Mesa II LLC	Delaware
ASN La Mesa LLC	Delaware
ASN LaJolla Colony LLC	Delaware
ASN Long Beach Harbor LLC	Delaware
ASN Long Beach LLC	Delaware
ASN Los Feliz LLC	Delaware
ASN Maple Leaf (Office) LLC	Delaware
ASN Marina LLC	Delaware
ASN Meadows at Russett I LLC	Delaware
ASN Meadows at Russett II LLC	Delaware
ASN Monument Park LLC	Delaware

1

Name	Jurisdiction
ASN Mountain View LLC	Delaware
ASN Multifamily Limited Partnership	Delaware
ASN Murray Hill LLC	Delaware
ASN Park Essex LLC	Delaware
ASN Pasadena LLC	Delaware
ASN Presidio View LLC	Delaware
ASN Quarry Hills LLC	Delaware
ASN Quincy LLC	Delaware
ASN Reading LLC	Delaware
ASN Redmond Lakeview LLC	Delaware
ASN Redmond Park LLC	Delaware
ASN San Jose LLC	Delaware
ASN San Mateo LLC	Delaware
ASN Santa Clara LLC	Delaware
ASN Santa Monica LLC	Delaware
ASN Seattle LLC	Delaware
ASN Studio City LLC	Delaware
ASN Summit LLC	Delaware
ASN Sunset LLC	Delaware
ASN Tanforan Crossing I LLC	Delaware
ASN Tanforan Crossing II LLC	Delaware
ASN Technologies, Inc	Delaware
ASN Thousand Oaks Crest LLC	Delaware
ASN Thousand Oaks Plaza LLC	Delaware
ASN Vanoni Ranch, LLC	Delaware
ASN Ventura Colony LLC	Delaware
ASN Ventura Four LLC	Delaware
ASN Ventura LLC	Delaware
ASN Ventura Two LLC	Delaware
ASN Walnut Creek Station LLC	Delaware
ASN Walnut Ridge LLC	Delaware
ASN Warner Center LLC	Delaware
ASN Watertown LLC	Delaware
ASN Westmont LLC	Delaware
ASN Woodland Hills East LLC	Delaware
Bradbury Park Apartments LLC	Delaware
Capital Mezz LLC	Delaware
CG-N Affordable LLC	Delaware
CG-N Affordable Manager LLC	Delaware
CG-S Affordable LLC	Delaware
CG-S Affordable Manager LLC	Delaware
Courthouse Hill LLC	Delaware
First Herndon Associates LP	Delaware
Golden State Mezz LLC	Delaware
Metropolitan Acquisition Finance L.P.	Delaware
OEC Holdings, LLC	Delaware
Panorama Insurance Ltd. [Captive Insurance Company]	Bermuda
PTR-Colorado (1), LLC	Colorado
R&B Realty Group II, LLC	Delaware
SCA-North Carolina (1) LLC	Delaware

2

Name	Jurisdiction
SCA-North Carolina (2) LLC	Delaware
Smith Five, Inc	Delaware
Smith Four, Inc	Delaware
Smith One, Inc	Delaware
Smith Property Holdings 2000 Commonwealth L.L.C.	Delaware
Smith Property Holdings 4411 Connecticut L.L.C.	Delaware
Smith Property Holdings Alban Towers L.L.C.	Delaware
Smith Property Holdings Alban Towers Two L.L.C.	Delaware
Smith Property Holdings Ballston Place L.L.C.	Delaware
Smith Property Holdings Buchanan House L.L.C.	Delaware
Smith Property Holdings Columbia Road L.P.	Delaware
Smith Property Holdings Consulate L.L.C.	Delaware
Smith Property Holdings Cronin’s Landing L.P.	Delaware
Smith Property Holdings Crystal Houses L.L.C.	Delaware
Smith Property Holdings Crystal Plaza LLC	Delaware
Smith Property Holdings Crystal Towers L.P.	Delaware
Smith Property Holdings Five (D.C.) L.P.	Delaware
Smith Property Holdings Five L.P.	Delaware
Smith Property Holdings Four L.P.	Delaware
Smith Property Holdings Kenmore L.P.	Delaware
Smith Property Holdings Lincoln Towers L.L.C.	Delaware
Smith Property Holdings One (D.C.) L.P.	Delaware
Smith Property Holdings One L.P.	Delaware
Smith Property Holdings Parc Vista L.L.C.	Delaware
Smith Property Holdings Reston Landing L.L.C.	Delaware
Smith Property Holdings Seven L.P.	Delaware
Smith Property Holdings Six (D.C.) L.P.	Delaware
Smith Property Holdings Six L.P.	Delaware
Smith Property Holdings Three (D.C.) L.P.	Delaware
Smith Property Holdings Three L.P.	Delaware
Smith Property Holdings Two (D.C.) L.P.	Delaware
Smith Property Holdings Two L.P.	Delaware
Smith Property Holdings Van Ness L.P.	Delaware
Smith Property Holdings Water Park Towers L.L.C.	Delaware
Smith Property Holdings Wilson L.L.C.	Delaware
Smith Realty Company	Maryland
Smith Seven, Inc	Delaware
Smith Six, Inc	Delaware
Smith Three, Inc	Delaware
Smith Two, Inc	Delaware
The Lakes Holdings, LLC	Delaware
Tishman Speyer Archstone-Smith 2000 Commonwealth Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith 2000 Commonwealth Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith 2201 Wilson Boulevard Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith 2201 Wilson Boulevard Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Arlington Courthouse Place Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Arlington Courthouse Place Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Arlington Courthouse Plaza Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Arlington Courthouse Plaza Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Arlington Courthouse Plaza, L.L.C.	Delaware

3

Name	Jurisdiction
Tishman Speyer Archstone-Smith Ballston Place Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Ballston Place Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Bear Hill Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Bear Hill Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Boston Common Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Boston Common Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Buchanan Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Buchanan Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Calvert Woodley Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Calvert Woodley Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Calvert Woodley, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cambridgepark Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cambridgepark Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Carmargue I Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Carmargue I Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Carmargue I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Carmargue II Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Carmargue II Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Carmargue II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Carmargue III Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Carmargue III Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Carmargue III, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cedar River Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cedar River Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cedar River, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Charter Oak Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Charter Oak Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Charter Oak, L.L.C.	Delaware
Tishman Speyer Archstone-Smith City Place Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith City Place Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Colony Apartments Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Colony Apartments Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Columbia Crossing Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Columbia Crossing Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Columbia Crossing, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cronin’s Landing Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cronin’s Landing Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cronin’s Landing, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal House Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal House Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal Houses III, L.P.	Delaware
Tishman Speyer Archstone-Smith Crystal Place Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal Place Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal Place, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal Plaza Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal Plaza Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal Towers & Lofts 590 Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal Towers & Lofts 590 Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Crystal Towers & Lofts 590, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cupertino Mezzanine I, L.L.C.	Delaware

4

Name	Jurisdiction
Tishman Speyer Archstone-Smith Cupertino Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Cupertino, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Del Mar Station Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Del Mar Station Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Del Mar Station, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Dulles Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Dulles Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Emerald Park Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Emerald Park Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Emerald Park, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Emeryville Bay Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Emeryville Bay Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fairchase II Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fairchase II Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fairchase II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fairchase Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fairchase Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fairfax Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fairfax Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fairfax, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fox Plaza Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fox Plaza Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fremont Center Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Fremont Center Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Rosslyn Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Rosslyn Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Rosslyn, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Virginia Square I Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Virginia Square I Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Virginia Square I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Virginia Square II Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Virginia Square II Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Virginia Square II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Virginia Square III Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Virginia Square III Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gallery At Virginia Square III, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gateway Place Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gateway Place Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Gateway Place, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Glendale Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Glendale Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Glendale, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Hacienda Mezzanine I, LLC	Delaware
Tishman Speyer Archstone-Smith Hacienda Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Hacienda, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Harborside Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Harborside Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Harborside, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Harbour Pointe Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Harbour Pointe Mezzanine II, L.L.C.	Delaware

5

Name	Jurisdiction
Tishman Speyer Archstone-Smith Harbour Pointe, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Hoboken I Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Hoboken I Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Hoboken II Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Hoboken II Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Kendall Square Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Kendall Square Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Key West Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Key West Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith La Jolla Colony Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith La Jolla Colony Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Lincoln Towers Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Lincoln Towers Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Long Beach Harbor Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Long Beach Harbor Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Los Feliz Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Los Feliz Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Marina Del Rey-I Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Marina Del Rey-I Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Marina Del Rey-I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Marina Del Rey-II Mezzanine I, LLC	Delaware
Tishman Speyer Archstone-Smith Marina Del Rey-II Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Marina Del Rey-II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Marina Terrace Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Marina Terrace Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Marina Terrace, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Meadows At Russett I (Borrower), L.L.C.	Delaware
Tishman Speyer Archstone-Smith Meadows At Russett II (Borrower), L.L.C.	Delaware
Tishman Speyer Archstone-Smith Monument Park Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Monument Park Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Mountain View Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Mountain View Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Mountain View, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Murray Hill Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Murray Hill Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Newport Village I & II Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Newport Village I & II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Newport Village I&II Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Newport Village III Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Newport Village III Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Newport Village III, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Northcreek Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Northcreek Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Northcreek, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oak Creek I Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oak Creek I Mezzanine II, L.L C.	Delaware
Tishman Speyer Archstone-Smith Oak Creek I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oak Creek II Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oak Creek II Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oak Creek II, L.L.C.	Delaware

6

Name	Jurisdiction
Tishman Speyer Archstone-Smith Oakwood Arlington Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Arlington Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Arlington, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Bellevue Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Bellevue Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Boston Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Boston Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Boston, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Chicago Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Chicago Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Long Beach Marina Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Long Beach Marina Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Marina Del Rey Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Marina Del Rey Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Mountain View Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Mountain View Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Philadelphia Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Philadelphia Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Philadelphia, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood San Francisco Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood San Francisco Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood San Francisco, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood San Jose South Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood San Jose South Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Seattle Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Seattle Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Toluca Hills Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Toluca Hills Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Toluca Hills, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Woodland Hills Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Oakwood Woodland Hills Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Old Town Pasadena Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Old Town Pasadena Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Old Town Pasadena, L.L.C.	Delaware
Tishman Speyer Archstone-Smith One Superior Place Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith One Superior Place Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith One Superior Place, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Parc Vista Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Parc Vista Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Pasadena Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Pasadena Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Playa Del Rey Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Playa Del Rey Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Playa Del Rey, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Poinsettia Ridge Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Poinsettia Ridge Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Quarry Hills Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Quarry Hills Mezzanine II, L.L.C.	Delaware

7

Name	Jurisdiction
Tishman Speyer Archstone-Smith Quincy Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Quincy Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Campus Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Campus Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Campus, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Court Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Court Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Court, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Lakeview Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Lakeview Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Park Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redmond Park Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redwood Shores Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redwood Shores Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Redwood Shores, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Reston Landing Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Reston Landing Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Russett I Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Russett I Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Russett II Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Russett II Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith San Mateo Holdings, L.L.C.	Delaware
Tishman Speyer Archstone-Smith San Mateo Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith San Mateo Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Santa Clara Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Santa Clara Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Santa Monica Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Santa Monica Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Santa Monica On Main Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Santa Monica On Main Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Santa Monica On Main, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Sierra Del Oro Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Sierra Del Oro Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Sierra Del Oro, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Simi Valley Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Simi Valley Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Simi Valley, L.L.C.	Delaware
Tishman Speyer Archstone-Smith South Market Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith South Market Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith South Market, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City III-A Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City III-A Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City III-A, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City III-B Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City III-B Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City III-B, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City III-C Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City III-C Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City III-C, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Studio City Mezzanine I, L.L.C.	Delaware

8

Name	Jurisdiction
Tishman Speyer Archstone-Smith Studio City Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Sunset (Borrower), L.L.C.	Delaware
Tishman Speyer Archstone-Smith Sunset Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Sunset Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Thousand Oaks Crest Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Thousand Oaks Crest Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Thousand Oaks Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Thousand Oaks Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Thousand Oaks Plaza Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Thousand Oaks Plaza Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Thousand Oaks, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Tysons Corner Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Tysons Corner Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Tysons Corner, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Vanoni Ranch Lessee, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Vanoni Ranch Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Vanoni Ranch Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Vanoni Ranch Mezzanine Lessee I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Vanoni Ranch Mezzanine Lessee II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Ventura Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Ventura Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Ventura Three Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Ventura Three Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Ventura Two Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Ventura Two Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Wall Street Towers Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Wall Street Towers Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Walnut Creek Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Walnut Creek Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Walnut Creek Station Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Walnut Creek Station Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Walnut Creek, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Walnut Ridge Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Walnut Ridge Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Warner Center Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Warner Center Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Water Park Towers Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Water Park Towers Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Watertown Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Watertown Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Westmont Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Westmont Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Westside Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Westside Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Westside, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Willow Glen Mezzanine I, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Willow Glen Mezzanine II, L.L.C.	Delaware
Tishman Speyer Archstone-Smith Willow Glen, L.L.C.	Delaware

9

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, R. Scot Sellers, certify that:

1.	I have reviewed this annual report on Form 10-K of Archstone (the “registrant”).
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the years covered by annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the years presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-f(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of trustees (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.

By:	/s/ R. Scot Sellers
	R. Scot Sellers
	Chief Executive Officer

March 31, 2008

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Charles E. Mueller, Jr., certify that:

1.	I have reviewed this annual report on Form 10-K of Archstone (the “registrant”).
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the years covered by annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the years presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-f(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of trustees (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.

By:	/s/ Charles E. Mueller, Jr. Charles E. Mueller, Jr.
	Chief Financial Officer
	(Principal Financial Officer)
	Chief Operating Officer effective January 1, 2008

March 31, 2008

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     The undersigned, being the Chief Executive Officer of Archstone, a Maryland real estate investment trust (the “Issuer”), hereby certifies that the Annual Report on Form 10-K (the “Annual Report”) of the Issuer for the year ended December 31, 2007, which accompanies this certification, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. §78m(a)) and that the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

By:	/s/ R. Scot Sellers R. Scot Sellers
	Chief Executive Officer

March 31, 2008

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     The undersigned, being the Chief Financial Officer of Archstone, a Maryland real estate investment trust (the “Issuer”), hereby certifies, that the Annual Report on Form 10-K (the “Annual Report”) of the Issuer for the year ended December 31, 2007, which accompanies this certification, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. §78m(a)) and that the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

By:	/s/ Charles E. Mueller, Jr.
	Charles E. Mueller, Jr.
	Chief Financial Officer
	(Principal Financial Officer)
	Chief Operating Officer effective January 1, 2008

March 31, 2008