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EXHIBIT 10.1 Freddie Mac Loan Number: 499673646 Property Name: Tapestry Park at
Montclair MULTIFAMILY LOAN AND SECURITY AGREEMENT (Revised 4-10-2019) SUMMARY
The following information is incorporated into and deemed part of this
Multifamily Loan and Security Agreement. A. Parties to Agreement; Date; Loan
Amount. Borrower: SIR TAPESTRY PARK, LLC, a Delaware limited liability company
BERKELEY POINT CAPITAL LLC, d/b/a NEWMARK KNIGHT Lender: FRANK, a Delaware
limited liability company Date: as of September 26, 2019 Loan Amount:
$48,750,000.00 B. Summary of Loan Terms. 1. Property Manager: [ X ] STEADFAST
MANAGEMENT COMPANY, INC., a California corporation, or another residential
rental property manager which is approved by Lender in writing. [ ] Not
applicable. 2. SPE Equity Owner: [ ] _______, a single member Delaware limited
liability company [ ] __________ corporation [ X ] Not applicable. Borrower will
not be required to maintain an SPE Equity Owner in its organizational structure
during the term of the Loan and all references to SPE Equity Owner in this Loan
Agreement and in the Note will be of no force or effect. 3. Repair and Reserve
Fund Information: [subject to the provisions of Article IV] Item Collect
Deferred N/A a. Imposition Reserves: (use an “X” to mark each item as

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Item Collect Deferred N/A “Collect”, “Deferred”, or “N/A” as appropriate)
Property Insurance premiums or premiums for other X Insurance required by Lender
under Section 6.10 Taxes and payments in lieu of taxes X Water/sewer charges
that could become a Lien on the X Mortgaged Property Ground Rents X
Assessments/other charges that could become a Lien on X the Mortgaged Property,
including home owner association dues Item Yes No b. Repairs and Repair Reserve:
Are Repairs required? X If Yes, is a Reserve required? Is radon testing
required? X Are Green Improvements required? X If Yes, is a Reserve required? If
Yes to Repairs and/or Green Improvements, is a Letter of Credit required? Item
Yes No c. Replacement Reserve: Is a Replacement Reserve required? X If Yes, are
reserves Funded? X If Yes, are reserves Deferred? X d. Rental Achievement
Reserve: Is a Rental Achievement Reserve required? X If Yes, are reserves in the
form of cash? If Yes, are reserves in the form of a Letter of Credit? e. Rate
Cap Agreement Reserve: Is a Cap Agreement required? X If Yes, is a Rate Cap
Agreement Reserve required? If Yes, are reserves in the form of cash?

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f. Other Reserve(s) required? X g. Lease Up Transaction Is this a Lease Up
Transaction? X If Yes, are reserves in the form of cash? If Yes, are reserves in
the form of a Letter of Credit? 4. Purpose of Loan: [see Section 5.24] [ X ]
Refinance Loan: The Loan is a Refinance Loan. [ ] Acquisition Loan – Mortgaged
Property: The Mortgaged Property was or will be purchased from
_________________________________ (“Property Seller”). [ ] Acquisition Loan –
Membership Interests: The Membership Interests were or will be purchased from
_________________________________ (“Membership Interests Seller”). [ ]
Supplemental Loan: The Loan is a Supplemental Loan. [ ]
Cross-Collateralized/Cross-Defaulted Loan Pool: The Loan is part of a cross-
collateralized/cross-defaulted pool of loans described as follows: (check all
that are applicable) [ ] being simultaneously made to Borrower and/or Borrower’s
Affiliates [ ] made previously to Borrower and/or Borrower’s Affiliates 5.
Moisture Management Plan: [see Section 6.06] [ ] MMP is required for the
Mortgaged Property. [ X ] MMP is not required for the Mortgaged Property. 6.
Minimum Occupancy: [See Section 6.09(e)] 85% 7. Insurance – Borrower Proof of
Loss: [see Section 6.10(k)]  “Borrower Proof of Loss Threshold” means
$200,000.00.  “Borrower Proof of Loss Maximum” means $800,000.00. 8. O&M
Program: [see Section 6.12] [ X ] None 9. Transfer Information: [see Article
VII] “X” if Type of Transfer applicable

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Transfer to Previously Underwritten Person [see Section 7.03(a)(iii)] Prior
Borrower Principal: Previously Underwritten Person: Co-Owner Transfer [see
Section 7.03(a)(iv)] Required Co-Owner: Required Co-Owner Interest in the
Mortgaged Property: TIC Roll-up Transfer [see Section 7.03(a)(v)] Consolidation
Borrower Manager: Preferred Equity Control Take-Over Transfer [see Section
7.03(b)(ii)] Preferred Equity Investor: Buy-Sell Transfer [see Section
7.03(b)(iii)] Buy-Sell Equity Investor: 10. Required Equity Owner Requirements:
[see Section 7.03(c)(ii)] “X” if Required Equity Owner applicable Name of
Required Equity Owner: Required Equity Ownership Interest: 11. Notice
Requirements: [see Section 11.03] If to Lender: Berkeley Point Capital LLC,
d/b/a Newmark Knight Frank 225 Franklin Street, Suite #1800 Boston,
Massachusetts 02110 Attention: Director Loan Servicing If to Borrower: SIR
Tapestry Park, LLC c/o Steadfast Companies 18100 Von Karman Avenue, Suite 500
Irvine, California 92612 Attention: Ana Marie del Rio, General Counsel Courtesy
Copy to: Attention: 12. Supplemental Financing: [see Section 11.11(b)(v)]
“Maximum Combined LTV” is 75.0%.

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13. Senior Instrument: [ X ] Not applicable. This Agreement relates to a first
lien on the Mortgaged Property. The defined term “Senior Instrument” is not
applicable. [ ] This Agreement relates to a Supplemental Loan. “Senior
Instrument” means each of the following: 14. State Specific Provision. [ X ] Not
applicable. [ ] The applicable State specific provision is set forth in the
State Specific Provisions Rider attached to this Agreement. 15. Reserved. 16.
Reserved. C. Exhibits

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X Exhibit A Description of the Land (required) X Exhibit B Modifications to
Multifamily Loan and Security Agreement X Exhibit C Repair Schedule of Work X
Exhibit D Repair Disbursement Request (required) X Exhibit E Work Commenced at
Mortgaged Property X Exhibit F Capital Replacements (required) X Exhibit G
Description of Ground Lease X Exhibit H Organizational Chart of Borrower as of
the Date of this Loan Agreement (required) N X Exhibit I Designated Entities for
Transfers and Guarantor(s) (required) Exhibit J Description of Release Parcel
Exhibit K Reserved Exhibit L Reserved Exhibit M Reserved Exhibit N Reserved X
Exhibit O Borrower’s Certificate of Property Improvement Alterations Completion
(required)

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D. Attached Riders Name of Rider Date Revised Rider to Multifamily Loan and
Security Agreement – Trade Names 3-1-2014 Rider to Multifamily Loan and Security
Agreement - Month to Month Leases 5-1-2015 Rider to Multifamily Loan and
Security Agreement - Corporate Leases 4-19-2018 Rider to Multifamily Loan and
Security Agreement - Termite or Wood 3-1-2014 Damaging Insect Control Rider to
Multifamily Loan and Security Agreement - Recycled Borrower 4-19-2018 Rider to
Multifamily Loan and Security Agreement – Cooperation with Rating 1-27-2015
Agencies and Investors Rider to Multifamily Loan and Security Agreement –
Replacement Reserve – 7-1-2014 Immediate Deposits

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TABLE OF CONTENTS ARTICLE I DEFINED TERMS; CONSTRUCTION 1.01 Defined Terms 1.02
Construction ARTICLE II LOAN 2.01 Loan Terms 2.02 Prepayment Premium 2.03
Exculpation 2.04 Application of Payments 2.05 Usury Savings 2.06 Floating Rate
Mortgage – Third-Party Cap Agreement ARTICLE III LOAN SECURITY AND GUARANTY 3.01
Security Instrument 3.02 Reserve Funds 3.03 Uniform Commercial Code Security
Agreement 3.04 Cap Agreement and Cap Collateral Assignment 3.05 Guaranty 3.06
Reserved 3.07 Reserved 3.08 Reserved 3.09 Reserved ARTICLE IV RESERVE FUNDS AND
REQUIREMENTS 4.01 Reserves Generally 4.02 Reserves for Taxes, Insurance and
Other Charges 4.03 Repairs; Repair Reserve Fund 4.04 Replacement Reserve Fund
4.05 Rental Achievement Provisions 4.06 Debt Service Reserve 4.07 Rate Cap
Agreement Reserve Fund 4.08 through 4.20 are Reserved ARTICLE V REPRESENTATIONS
AND WARRANTIES 5.01 Review of Documents 5.02 Condition of Mortgaged Property
5.03 No Condemnation 5.04 Actions; Suits; Proceedings 5.05 Environmental 5.06
Commencement of Work; No Labor or Materialmen’s Claims 5.07 Compliance with
Applicable Laws and Regulations 5.08 Access; Utilities; Tax Parcels 5.09
Licenses and Permits Multifamily Loan and Security Agreement Page viii

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5.10 No Other Interests 5.11 Term of Leases 5.12 No Prior Assignment; Prepayment
of Rents 5.13 Illegal Activity 5.14 Taxes Paid 5.15 Title Exceptions 5.16 No
Change in Facts or Circumstances 5.17 Financial Statements 5.18 ERISA – Borrower
Status 5.19 No Fraudulent Transfer or Preference 5.20 No Insolvency or Judgment
5.21 Working Capital 5.22 Cap Collateral 5.23 Ground Lease 5.24 Purpose of Loan
5.25 Through 5.39 are Reserved 5.40 Recycled SPE Borrower 5.41 Recycled SPE
Equity Owner 5.42 through 5.50 are Reserved 5.51 Survival 5.52 through 5.57 are
Reserved 5.58 Prohibited Parties Lists 5.59 AML Laws 5.60 Internal Controls 5.61
Crowdfunding 5.62 through 5.70 are Reserved ARTICLE VI BORROWER COVENANTS 6.01
Compliance with Laws 6.02 Compliance with Organizational Documents 6.03 Use of
Mortgaged Property 6.04 Non-Residential Leases 6.05 Prepayment of Rents 6.06
Inspection 6.07 Books and Records; Financial Reporting 6.08 Taxes; Operating
Expenses; Ground Rents 6.09 Preservation, Management and Maintenance of
Mortgaged Property 6.10 Insurance 6.11 Condemnation 6.12 Environmental Hazards
6.13 Single Purpose Entity Requirements 6.14 Repairs and Capital Replacements
6.15 Residential Leases Affecting the Mortgaged Property 6.16 Litigation;
Government Proceedings 6.17 Further Assurances and Estoppel Certificates;
Lender’s Expenses 6.18 Cap Collateral Multifamily Loan and Security Agreement
Page ix

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6.19 Ground Lease 6.20 ERISA Requirements 6.21 through 6.52 are Reserved 6.53
Economic Sanctions Laws; AML Laws 6.54 Crowdfunding 6.55 through 6.62 are
Reserved ARTICLE VII TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN
BORROWER 7.01 Prohibited Transfers 7.02 Permitted Transfers 7.03 Conditionally
Permitted Transfers 7.04 Preapproved Intrafamily Transfers 7.05 Lender’s Consent
to Prohibited Transfers 7.06 SPE Equity Owner Requirement Following Transfer
7.07 Additional Transfer Requirements - External Cap Agreement 7.08 Reserved
7.09 Reserved 7.10 Easement, Restrictive Covenant or Other Encumbrance ARTICLE
VIII ACTIONS OR EVENTS RELATING TO GUARANTOR 8.01 Guarantor Bankruptcy 8.02
Guarantor Status Event 8.03 Death of a Guarantor Not in Borrower’s Ownership
Structure ARTICLE IX EVENTS OF DEFAULT AND REMEDIES 9.01 Events of Default 9.02
Protection of Lender’s Security; Security Instrument Secures Future Advances
9.03 Remedies 9.04 Forbearance 9.05 Waiver of Marshalling ARTICLE X RELEASE;
INDEMNITY 10.01 Release 10.02 Indemnity 10.03 Reserved ARTICLE XI MISCELLANEOUS
PROVISIONS 11.01 Waiver of Statute of Limitations, Offsets and Counterclaims
11.02 Governing Law; Consent to Jurisdiction and Venue 11.03 Notice 11.04
Successors and Assigns Bound 11.05 Joint and Several (and Solidary) Liability
11.06 Relationship of Parties; No Third-Party Beneficiary 11.07 Severability;
Amendments 11.08 Disclosure of Information Multifamily Loan and Security
Agreement Page x

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11.09 Determinations by Lender 11.10 Sale of Note; Change in Servicer; Loan
Servicing 11.11 Supplemental Financing 11.12 Defeasance 11.13 Lender’s Rights to
Sell or Securitize 11.14 Cooperation with Rating Agencies and Investors 11.15
Letter of Credit Requirements 11.16 through 11.18 are Reserved 11.19 Reserved
11.20 Time is of the Essence 11.21 Electronic Signatures 11.22 Reserved 11.23
Subrogation 11.24 Reserved ARTICLE XII DEFINITIONS ARTICLE XIII INCORPORATION OF
ATTACHED RIDERS ARTICLE XIV INCORPORATION OF ATTACHED EXHIBITS ARTICLE XV
RESERVED Multifamily Loan and Security Agreement Page xi

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MULTIFAMILY LOAN AND SECURITY AGREEMENT THIS MULTIFAMILY LOAN AND SECURITY
AGREEMENT (“Loan Agreement”) is dated as of the 26th day of September, 2019 and
is made by and between SIR TAPESTRY PARK, LLC, a Delaware limited liability
company (“Borrower”), and BERKELEY POINT CAPITAL LLC, d/b/a NEWMARK KNIGHT
FRANK, a Delaware limited liability company (together with its successors and
assigns, “Lender”). RECITAL Lender has agreed to make and Borrower has agreed to
accept a loan in the original principal amount of $48,750,000.00 (“Loan”).
Lender is willing to make the Loan to Borrower upon the terms and subject to the
conditions set forth in this Loan Agreement. AGREEMENT NOW, THEREFORE, in
consideration of these promises, the mutual covenants contained in this Loan
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties agree as follows: ARTICLE I DEFINED
TERMS; CONSTRUCTION. 1.01 Defined Terms. Each defined term in this Loan
Agreement will have the meaning ascribed to that term in Article XII unless
otherwise defined in this Loan Agreement. 1.02 Construction. (a) The captions
and headings of the Articles and Sections of this Loan Agreement are for
convenience only and will be disregarded in construing this Loan Agreement. (b)
Any reference in this Loan Agreement to an “Exhibit,” an “Article” or a
“Section” will, unless otherwise explicitly provided, be construed as referring,
respectively, to an Exhibit attached to this Loan Agreement or to an Article or
Section of this Loan Agreement. (c) All Exhibits and Riders attached to or
referred to in this Loan Agreement are incorporated by reference in this Loan
Agreement. (d) Any reference in this Loan Agreement to a statute or regulation
will be construed as referring to that statute or regulation as amended from
time to time. (e) Use of the singular in this Loan Agreement includes the plural
and use of the plural includes the singular. Multifamily Loan and Security
Agreement Page 1

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(f) As used in this Loan Agreement, the term “including” means “including, but
not limited to” and the term “includes” means “includes without limitation.” (g)
The use of one gender includes the other gender, as the context may require. (h)
Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document in this Loan Agreement will be construed
as referring to such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth in this Loan Agreement),
and (ii) any reference in this Loan Agreement to any Person will be construed to
include such Person’s successors and assigns. (i) Any reference in this Loan
Agreement to “Lender’s requirements,” “as required by Lender,” or similar
references will be construed, after Securitization, to mean Lender’s
requirements or standards as determined in accordance with Lender’s and Loan
Servicer’s obligations under the terms of the Securitization documents. (j) Any
reference in this Loan Agreement to “Lender’s consent,” will be construed to
mean Lender’s written consent. ARTICLE II LOAN. 2.01 Loan Terms. The Loan will
be evidenced by the Note and will bear interest and be paid in accordance with
the payment terms set forth in the Note. 2.02 Prepayment Premium. Borrower will
be required to pay a prepayment premium in connection with certain prepayments
of the Indebtedness, including a payment made after Lender’s exercise of any
right of acceleration of the Indebtedness, as provided in the Note. 2.03
Exculpation. Borrower’s personal liability for payment of the Indebtedness and
for performance of the other obligations to be performed by it under this Loan
Agreement is limited in the manner, and to the extent, provided in the Note.
2.04 Application of Payments. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness which is less than all
amounts due and payable at such time, then Lender may apply that payment to
amounts then due and payable in any manner and in any order determined by Lender
(unless otherwise required by applicable law), in Lender’s sole and absolute
discretion. Neither Lender’s acceptance of an amount that is less than all
amounts then due and payable, nor Lender’s application of such payment in the
manner authorized, will constitute or be deemed to constitute either a waiver of
the unpaid amounts or an accord and satisfaction. Notwithstanding the
application of any such amount to the Indebtedness, Borrower’s obligations under
this Loan Agreement, the Note and all other Loan Documents will remain
unchanged. Multifamily Loan and Security Agreement Page 2

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2.05 Usury Savings. If any applicable law limiting the amount of interest or
other charges permitted to be collected from Borrower is interpreted so that any
charge provided for in any Loan Document, whether considered separately or
together with other charges levied in connection with any other Loan Document,
violates that law, and Borrower is entitled to the benefit of that law, that
charge is reduced to the extent necessary to eliminate that violation. The
amounts, if any, previously paid to Lender in excess of the permitted amounts
will be applied by Lender to reduce the principal amount of the Indebtedness.
For the purpose of determining whether any applicable law limiting the amount of
interest or other charges permitted to be collected from Borrower has been
violated, all Indebtedness which constitutes interest, as well as all other
charges levied in connection with the Indebtedness which constitute interest,
will be deemed to be allocated and spread ratably over the stated term of the
Note. Unless otherwise required by applicable law, such allocation and spreading
will be effected in such a manner that the rate of interest so computed is
uniform throughout the stated term of the Note. 2.06 Floating Rate Mortgage –
Third-Party Cap Agreement. If (a) the Note does not provide for interest to
accrue at a floating or variable interest rate (other than during any Extension
Period, if applicable), and (b) a third-party Cap Agreement is not required,
then this Section 2.06 and Section 3.04 will be of no force or effect. (a) So
long as there is no Event of Default, Lender or Loan Servicer will remit to
Borrower each Cap Payment received by Lender or Loan Servicer with respect to
any month for which Borrower has paid in full the monthly installment of
principal and interest or interest only, as applicable, due under the Note.
Alternatively, at Lender’s option, so long as there is no Event of Default,
Lender may apply a Cap Payment received by Lender or Loan Servicer with respect
to any month to the applicable monthly payment of accrued interest due under the
Note if Borrower has paid in full the remaining portion of such monthly payment
of principal and interest or interest only, as applicable. (b) Neither the
existence of a Cap Agreement nor anything in this Loan Agreement will relieve
Borrower of its primary obligation to timely pay in full all amounts due under
the Note and otherwise due on account of the Indebtedness. ARTICLE III LOAN
SECURITY AND GUARANTY. 3.01 Security Instrument. Borrower will execute the
Security Instrument dated of even date with this Loan Agreement. The Security
Instrument will be recorded in the applicable land records in the Property
Jurisdiction. 3.02 Reserve Funds. (a) Security Interest. To secure Borrower’s
obligations under this Loan Agreement and to further secure Borrower’s
obligations under the Note and the other Loan Documents, Borrower conveys,
pledges, transfers and grants to Lender a security interest pursuant to the
Uniform Commercial Code of the Property Jurisdiction or Multifamily Loan and
Security Agreement Page 3

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any other applicable law in and to all money in the Reserve Funds, as the same
may increase or decrease from time to time, all interest and dividends thereon
and all proceeds thereof. (b) Supplemental Loan. If this Loan Agreement is
entered into in connection with a Supplemental Loan and if the same Person is or
becomes both Senior Lender and Supplemental Lender, then: (i) Borrower assigns
and grants to Supplemental Lender a security interest in the Reserve Funds
established in connection with the Senior Indebtedness as additional security
for all of Borrower’s obligations under the Supplemental Note. (ii) In addition,
Borrower assigns and grants to Senior Lender a security interest in the Reserve
Funds established in connection with the Supplemental Indebtedness as additional
security for all of Borrower’s obligations under the Senior Note. (iii) It is
the intention of Borrower that all amounts deposited by Borrower in connection
with either the Senior Loan Documents, the Supplemental Loan Documents, or both,
constitute collateral for the Supplemental Indebtedness secured by the
Supplemental Instrument and the Senior Indebtedness secured by the Senior
Instrument, with the application of such amounts to such Senior Indebtedness or
Supplemental Indebtedness to be at the discretion of Senior Lender and
Supplemental Lender. 3.03 Uniform Commercial Code Security Agreement. This Loan
Agreement is also a security agreement under the Uniform Commercial Code for any
of the Mortgaged Property which, under applicable law, may be subjected to a
security interest under the Uniform Commercial Code, for the purpose of securing
Borrower’s obligations under this Loan Agreement and to further secure
Borrower’s obligations under the Note, Security Instrument and other Loan
Documents, whether such Mortgaged Property is owned now or acquired in the
future, and all products and cash and non-cash proceeds thereof (collectively,
“UCC Collateral”), and by this Loan Agreement, Borrower grants to Lender a
security interest in the UCC Collateral. 3.04 Cap Agreement and Cap Collateral
Assignment. Reserved. 3.05 Guaranty. Borrower will cause each Guarantor (if any)
to execute a Guaranty of all or a portion of Borrower’s obligations under the
Loan Documents effective as of the date of this Loan Agreement. 3.06 Reserved.
3.07 Reserved. Multifamily Loan and Security Agreement Page 4

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3.08 Reserved. 3.09 Reserved. ARTICLE IV RESERVE FUNDS AND REQUIREMENTS. 4.01
Reserves Generally. (a) Establishment of Reserve Funds; Investment of Deposits.
Unless otherwise provided in Section 4.03 and/or Section 4.04, each Reserve Fund
will be established on the date of this Loan Agreement and each of the following
will apply: (i) All Reserve Funds will be deposited in an Eligible Account at an
Eligible Institution or invested in “permitted investments” as then defined and
required by the Rating Agencies. (ii) Lender will not be obligated to open
additional accounts or deposit Reserve Funds in additional institutions when the
amount of any Reserve Fund exceeds the maximum amount of the federal deposit
insurance or guaranty. Borrower acknowledges and agrees that it will not have
the right to direct Lender as to any specific investment of monies in any
Reserve Fund. Lender will not be responsible for any losses resulting from
investment of monies in any Reserve Fund or for obtaining any specific level or
percentage of earnings on such investment. (b) Interest on Reserve Funds; Trust
Funds. Unless applicable law requires, Lender will not be required to pay
Borrower any interest, earnings or profits on the Reserve Funds. Any amounts
deposited with Lender under this Article IV will not be trust funds, nor will
they operate to reduce the Indebtedness, unless applied by Lender for that
purpose pursuant to the terms of this Loan Agreement. (c) Use of Reserve Funds.
Each Reserve Fund will, except as otherwise provided in this Loan Agreement, be
used for the sole purpose of paying, or reimbursing Borrower for payment of, the
item(s) for which the applicable Reserve Fund was established. Borrower
acknowledges and agrees that, except as specified in this Loan Agreement, monies
in one Reserve Fund will not be used to pay, or reimburse Borrower for, matters
for which another Reserve Fund has been established. (d) Termination of Reserve
Funds. Upon the payment in full of the Indebtedness, Lender will pay to Borrower
all funds remaining in any Reserve Funds. (e) Reserved. Multifamily Loan and
Security Agreement Page 5

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4.02 Reserves for Taxes, Insurance and Other Charges. (a) Deposits to Imposition
Reserve Deposits. Borrower will deposit with Lender on the day monthly
installments of principal or interest, or both, are due under the Note (or on
another day designated in writing by Lender), until the Indebtedness is paid in
full, an additional amount sufficient to accumulate with Lender the entire sum
required to pay, when due, the items marked “Collect” in Part 3, Summary of Loan
Terms. Except as provided in Section 4.02(e), Lender will not require Borrower
to make Imposition Reserve Deposits with respect to the items marked “Deferred”
in Part 3, Summary of Loan Terms. The amounts deposited pursuant to this Section
4.02(a) are collectively referred to in this Loan Agreement as the “Imposition
Reserve Deposits.” The obligations of Borrower for which the Imposition Reserve
Deposits are required are collectively referred to in this Loan Agreement as
“Impositions.” The amount of the Imposition Reserve Deposits must be sufficient
to enable Lender to pay each Imposition before the last date upon which such
payment may be made without any penalty or interest charge being added. Lender
will maintain records indicating how much of the monthly Imposition Reserve
Deposits and how much of the aggregate Imposition Reserve Deposits held by
Lender are held for the purpose of paying Taxes, Insurance premiums, Ground Rent
(if applicable) and each other Imposition. (b) Disbursement of Imposition
Reserve Deposits. Lender will apply the Imposition Reserve Deposits to pay
Impositions so long as no Event of Default has occurred and is continuing.
Lender will pay all Impositions from the Imposition Reserve Deposits held by
Lender upon Lender’s receipt of a bill or invoice for an Imposition. If Borrower
holds a ground lessee interest in the Mortgaged Property and Imposition Reserve
Deposits are collected for Ground Rent, then Lender will pay the monthly or
other periodic installments of Ground Rent from the Imposition Reserve Deposits,
whether or not Lender receives a bill or invoice for such installments. Lender
will have no obligation to pay any Imposition to the extent it exceeds the
amount of the Imposition Reserve Deposits then held by Lender. Lender may pay an
Imposition according to any bill, statement or estimate from the appropriate
public office, Ground Lessor (if applicable) or insurance company without
inquiring into the accuracy of the bill, statement or estimate or into the
validity of the Imposition. (c) Excess or Deficiency of Imposition Reserve
Deposits. If at any time the amount of the Imposition Reserve Deposits held by
Lender for payment of a specific Imposition exceeds the amount reasonably deemed
necessary by Lender, the excess will be credited against future installments of
Imposition Reserve Deposits. If at any time the amount of the Imposition Reserve
Deposits held by Lender for payment of a specific Imposition is less than the
amount reasonably estimated by Lender to be necessary, Borrower will pay to
Lender the amount of the deficiency within 15 days after Notice from Lender.
Multifamily Loan and Security Agreement Page 6

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(d) Delivery of Invoices. Borrower will promptly deliver to Lender a copy of all
notices of, and invoices for, Impositions. (e) Deferral of Collection of Any
Imposition Reserve Deposits; Delivery of Receipts. If Lender does not collect an
Imposition Reserve Deposit with respect to an Imposition either marked
“Deferred” in Part 3, Summary of Loan Terms or pursuant to a separate written
deferral by Lender, then on or before the earlier of the date each such
Imposition is due, or the date this Loan Agreement requires each such Imposition
to be paid, Borrower will provide Lender with proof of payment of each such
Imposition. Upon Notice to Borrower, Lender may revoke its deferral and require
Borrower to deposit with Lender any or all of the Imposition Reserve Deposits
listed in Part 3, Summary of Loan Terms, regardless of whether any such item is
marked “Deferred” (i) if Borrower does not timely pay any of the Impositions,
(ii) if Borrower fails to provide timely proof to Lender of such payment, (iii)
at any time during the existence of an Event of Default or (iv) upon placement
of a Supplemental Loan in accordance with Section 11.11. (f) through (i) are
Reserved. 4.03 Repairs; Repair Reserve Fund. Reserved. 4.04 Replacement Reserve
Fund. Reserved. 4.05 Rental Achievement Provisions. Reserved. 4.06 Debt Service
Reserve. Reserved. 4.07 Rate Cap Agreement Reserve Fund. Reserved. 4.08 through
4.20 are Reserved. ARTICLE V REPRESENTATIONS AND WARRANTIES. Borrower represents
and warrants to Lender as follows as of the date of this Loan Agreement: 5.01
Review of Documents. Borrower has reviewed: (a) the Note, (b) the Security
Instrument, (c) the Commitment Letter, and (d) all other Loan Documents. 5.02
Condition of Mortgaged Property. Except as Borrower may have disclosed to Lender
in writing in connection with the issuance of the Commitment Letter, the
Mortgaged Property has not been damaged by fire, water, wind or other cause of
loss, or any previous damage to the Mortgaged Property has been fully restored.
Multifamily Loan and Security Agreement Page 7

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5.03 No Condemnation. No part of the Mortgaged Property has been taken in
Condemnation or other like proceeding, and, to the best of Borrower’s knowledge
after due inquiry and investigation, no such proceeding is pending or threatened
for the partial or total Condemnation or other taking of the Mortgaged Property.
5.04 Actions; Suits; Proceedings. (a) There are no judicial, administrative,
mediation or arbitration actions, suits or proceedings pending or, to the best
of Borrower’s knowledge, threatened in writing against or affecting Borrower
(and, if Borrower is a limited partnership, any of its general partners or if
Borrower is a limited liability company, any member of Borrower) or the
Mortgaged Property which, if adversely determined, would have a Material Adverse
Effect. (b) Reserved. 5.05 Environmental. Except as previously disclosed by
Borrower to Lender in writing (which written disclosure may be in certain
environmental assessments and other written reports accepted by Lender in
connection with the funding of the Indebtedness and dated prior to the date of
this Loan Agreement), each of the following is true: (a) Borrower has not at any
time engaged in, caused or permitted any Prohibited Activities or Conditions on
the Mortgaged Property. (b) To the best of Borrower’s knowledge after due
inquiry and investigation, no Prohibited Activities or Conditions exist or have
existed on the Mortgaged Property. (c) The Mortgaged Property does not now
contain any underground storage tanks, and, to the best of Borrower’s knowledge
after due inquiry and investigation, the Mortgaged Property has not contained
any underground storage tanks in the past. If there is an underground storage
tank located on the Mortgaged Property that has been previously disclosed by
Borrower to Lender in writing, that tank complies with all requirements of
Hazardous Materials Laws. (d) To the best of Borrower’s knowledge after due
inquiry and investigation, Borrower has complied with all Hazardous Materials
Laws, including all requirements for notification regarding releases of
Hazardous Materials. Without limiting the generality of the foregoing, all
Environmental Permits required for the operation of the Mortgaged Property in
accordance with Hazardous Materials Laws now in effect have been obtained and
all such Environmental Permits are in full force and effect. (e) To the best of
Borrower’s knowledge after due inquiry and investigation, no event has occurred
with respect to the Mortgaged Property that constitutes, or with the Multifamily
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passage of time or the giving of notice, or both, would constitute noncompliance
with the terms of any Environmental Permit. (f) There are no actions, suits,
claims or proceedings pending or, to the best of Borrower’s knowledge after due
inquiry and investigation, threatened in writing that involve the Mortgaged
Property and allege, arise out of, or relate to any Prohibited Activity or
Condition. (g) Borrower has received no actual or constructive notice of any
written complaint, order, notice of violation or other communication from any
Governmental Authority with regard to air emissions, water discharges, noise
emissions or Hazardous Materials, or any other environmental, health or safety
matters affecting the Mortgaged Property or any property that is adjacent to the
Mortgaged Property. 5.06 Commencement of Work; No Labor or Materialmen’s Claims.
Except as set forth on Exhibit E, prior to the recordation of the Security
Instrument, no work of any kind has been or will be commenced or performed upon
the Mortgaged Property, and no materials or equipment have been or will be
delivered to or upon the Mortgaged Property, for which the contractor,
subcontractor or vendor continues to have any rights including the existence of
or right to assert or file a mechanic’s or materialmen’s Lien. If any such work
of any kind has been commenced or performed upon the Mortgaged Property, or if
any such materials or equipment have been ordered or delivered to or upon the
Mortgaged Property, then prior to the execution of the Security Instrument,
Borrower has satisfied each of the following conditions: (a) Borrower has fully
disclosed in writing to both the Lender and the title company issuing the Title
Policy that work has been commenced or performed on the Mortgaged Property, or
materials or equipment have been ordered or delivered to or upon the Mortgaged
Property. (b) Borrower has obtained and delivered to Lender and the title
company issuing the Title Policy Lien waivers from all contractors,
subcontractors, suppliers or any other applicable party, pertaining to all work
commenced or performed on the Mortgaged Property, or materials or equipment
ordered or delivered to or upon the Mortgaged Property. Borrower represents and
warrants that all parties furnishing labor and materials for which a Lien or
claim of Lien may be filed against the Mortgaged Property have been paid in full
and, except for such Liens or claims insured against by the Title Policy (which
Borrower has disclosed pursuant to Section 5.06(a) and which are identified on
Exhibit E), there are no mechanics’, laborers’ or materialmen’s Liens or claims
outstanding for work, labor or materials affecting the Mortgaged Property,
whether prior to, equal with or subordinate to the Lien of the Security
Instrument. 5.07 Compliance with Applicable Laws and Regulations. Multifamily
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(a) To the best of Borrower’s knowledge after due inquiry and investigation,
each of the following is true: (i) All Improvements and the use of the Mortgaged
Property comply with all applicable statutes, rules and regulations, including
all applicable statutes, rules and regulations pertaining to requirements for
equal opportunity, anti-discrimination, fair housing, environmental protection,
zoning and land use (“legal, non-conforming” status with respect to uses or
structures will be considered to comply with zoning and land use requirements
for the purposes of this representation). (ii) The Improvements comply with
applicable health, fire, and building codes. (iii) There is no evidence of any
illegal activities relating to controlled substances on the Mortgaged Property.
(b) Reserved. (c) Reserved. 5.08 Access; Utilities; Tax Parcels. The Mortgaged
Property (a) has ingress and egress via a publicly dedicated right of way or via
an irrevocable easement permitting ingress and egress, (b) is served by public
utilities and services generally available in the surrounding community or
otherwise appropriate for the use in which the Mortgaged Property is currently
being utilized, and (c) constitutes one or more separate tax parcels. 5.09
Licenses and Permits. (a) Borrower and any operator of the Mortgaged Property,
if applicable, and to the best of Borrower’s knowledge, any commercial tenant of
the Mortgaged Property is in possession of all material licenses, permits and
authorizations required for use of the Mortgaged Property, which are valid and
in full force and effect as of the date of this Loan Agreement. (b) through (i)
are Reserved. 5.10 No Other Interests. To the best of Borrower’s knowledge after
due inquiry and investigation, no Person has (a) any possessory interest in the
Mortgaged Property or right to occupy the Mortgaged Property except under and
pursuant to the provisions of existing Leases by and between tenants and
Borrower (a form of residential lease having been previously provided to Lender
together with the material terms of any and all Non- Residential Leases at the
Mortgaged Property), or (b) an option to purchase the Mortgaged Property or an
interest in the Mortgaged Property, except as has been disclosed to and approved
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5.11 Term of Leases. All Leases for residential units with respect to the
Mortgaged Property satisfy each of the following conditions: (a) They are on
forms that are customary for similar multifamily properties in the Property
Jurisdiction. (b) They are for initial terms of at least 6 months and not more
than 2 years (unless otherwise approved in writing by Lender). (c) They do not
include any Corporate Leases (unless otherwise approved in writing by Lender).
(d) They do not include options to purchase. 5.12 No Prior Assignment;
Prepayment of Rents. Borrower has (a) not executed any prior assignment of Rents
(other than an assignment of Rents securing any prior indebtedness that is being
assigned to Lender, or that is being paid off and discharged with the proceeds
of the Loan evidenced by the Note or, if this Loan Agreement is entered into in
connection with a Supplemental Loan, other than an assignment of Rents securing
any Senior Indebtedness), and (b) not performed any acts and has not executed,
and will not execute, any instrument which would prevent Lender from exercising
its rights under any Loan Document. At the time of execution of this Loan
Agreement, unless otherwise approved by Lender in writing, there has been no
prepayment of any Rents for more than 2 months prior to the due dates of such
Rents other than the last month’s rent, if collected at the time a tenant enters
into a Lease. 5.13 Illegal Activity. No portion of the Mortgaged Property has
been or will be purchased with the proceeds of any illegal activity. 5.14 Taxes
Paid. Borrower has filed all federal, state, county and municipal tax returns
required to have been filed by Borrower, and has paid all Taxes which have
become due pursuant to such returns or to any notice of assessment received by
Borrower, and Borrower has no knowledge of any basis for additional assessment
with respect to such Taxes. To the best of Borrower’s knowledge after due
inquiry and investigation, there are not presently pending any special
assessments against the Mortgaged Property or any part of the Mortgaged
Property. 5.15 Title Exceptions. To the best of Borrower’s knowledge after due
inquiry and investigation, none of the items shown in the schedule of exceptions
to coverage in the Title Policy will have a Material Adverse Effect on the (a)
ability of Borrower to pay the Loan in full, (b) ability of Borrower to use all
or any part of the Mortgaged Property in the manner in which the Mortgaged
Property is being used on the Closing Date, except as set forth in Section 6.03,
(c) operation of the Mortgaged Property, or (d) value of the Mortgaged Property.
5.16 No Change in Facts or Circumstances. Multifamily Loan and Security
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(a) All information in the application for the Loan submitted to Lender,
including all financial statements for the Mortgaged Property, Borrower, and any
Borrower Principal, and all Rent Schedules, reports, certificates, and any other
documents submitted in connection with the application (collectively, “Loan
Application”) is complete and accurate in all material respects as of the date
such information was submitted to Lender. (b) There has been no change in any
fact or circumstance since the Loan Application was submitted to Lender that
would make any information submitted as part of the Loan Application materially
incomplete or inaccurate. (c) The organizational structure of Borrower is as set
forth in Exhibit H. 5.17 Financial Statements. The financial statements of
Borrower and each Borrower Principal furnished to Lender as part of the Loan
Application reflect in each case a positive net worth as of the date of the
applicable financial statement. 5.18 ERISA – Borrower Status. Borrower
represents as follows: (a) Borrower is not an “investment company,” or a company
under the Control of an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended. (b) Borrower is not an “employee
benefit plan,” as defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA or a “plan” to which Section 4975 of the Tax Code applies, and the
assets of Borrower do not constitute “plan assets” of one or more such plans
within the meaning of 29 C.F.R. Section 2510.3-101, as modified by Section 3(42)
of ERISA. (c) Borrower is not a “governmental plan” within the meaning of
Section 3(32) of ERISA, and is not subject to state statutes regulating
investments or fiduciary obligations with respect to governmental plans. 5.19 No
Fraudulent Transfer or Preference. No Borrower or Borrower Principal (a) has
made, or is making in connection with and as security for the Loan, a transfer
of an interest in the property of Borrower or Borrower Principal to or for the
benefit of Lender or otherwise as security for any of the obligations under the
Loan Documents which is or could constitute a voidable preference under federal
bankruptcy, state insolvency or similar applicable creditors’ rights laws, or
(b) has made, or is making in connection with the Loan, a transfer (including
any transfer to or for the benefit of an insider under an employment contract)
of an interest of Borrower or any Borrower Principal in property which is or
could constitute a voidable preference under federal bankruptcy, state
insolvency or similar applicable creditors’ rights laws, or (c) has incurred, or
is incurring in connection with the Loan, any obligation (including any
obligation to or for the benefit of an insider under an employment contract)
which is or could constitute a fraudulent Multifamily Loan and Security
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transfer under federal bankruptcy, state insolvency, or similar applicable
creditors’ rights laws. 5.20 No Insolvency or Judgment. (a) No Pending
Proceedings or Judgments. No Borrower or Borrower Principal is (i) the subject
of or a party to (other than as a creditor) any completed or pending Bankruptcy,
or (ii) the subject of any judgment unsatisfied of record or docketed in any
court located in the United States. (b) Insolvency. Borrower is not presently
insolvent, and the Loan will not render Borrower insolvent. As used in this
Section, the term “insolvent” means that the total of all of a Person’s
liabilities (whether secured or unsecured, contingent or fixed, or liquidated or
unliquidated) is in excess of the value of all of the assets of the Person that
are available to satisfy claims of creditors. 5.21 Working Capital. After the
Loan is made, Borrower intends to have sufficient working capital, including
cash flow from the Mortgaged Property or other sources, not only to adequately
maintain the Mortgaged Property, but also to pay all of Borrower’s outstanding
debts as they come due (other than any balloon payment due upon the maturity of
the Loan). Lender acknowledges that no members or partners of Borrower or any
Borrower Principal will be obligated to contribute equity to Borrower for
purposes of providing working capital to maintain the Mortgaged Property or to
pay Borrower’s outstanding debts except as may otherwise be required under their
organizational documents. 5.22 Cap Collateral. Reserved. 5.23 Ground Lease.
Reserved. 5.24 Purpose of Loan. The purpose of the Loan is as indicated by the
checked boxes in Part B.4, Summary of Loan Terms. (a) Refinance Loan: If
“Refinance Loan” is checked in Part B.4, Summary of Loan Terms, then Borrower
has fully disclosed to Lender the intended use of any cash received by Borrower
from Lender in connection with the refinancing, if applicable. (b) Acquisition
Loan – Mortgaged Property: If “Acquisition Loan – Mortgaged Property” is checked
in Part B.4, Summary of Loan Terms, then Borrower has fully disclosed to Lender
all the consideration given or received or to be given or received in connection
with the acquisition of the Mortgaged Property. The Mortgaged Property was or
will be purchased from the Property Seller set forth in Part B.4, Summary of
Loan Terms. No Borrower or Borrower Principal has or had, directly or indirectly
(through a family member or otherwise), any interest in the Property Seller and
the acquisition of the Mortgaged Property is an arm’s- Multifamily Loan and
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length transaction. To the best of Borrower’s knowledge after due inquiry and
investigation, the purchase price of the Mortgaged Property represents the fair
market value of the Mortgaged Property and Property Seller is not or will not be
insolvent subsequent to the sale of the Mortgaged Property. (c) Acquisition Loan
– Membership Interests: If “Acquisition Loan – Membership Interests” is checked
in Part B.4, Summary of Loan Terms, then Borrower has fully disclosed to Lender
all the consideration given or received or to be given or received in connection
with the acquisition of 100% of the Membership Interests. The Membership
Interests were or will be purchased from Membership Interests Seller set forth
in Part B.4, Summary of Loan Terms. No Borrower Principal has or had, directly
or indirectly (through a family member or otherwise), any interest in the
Membership Interests Seller and the acquisition of the Membership Interests is
an arm’s-length transaction. To the best of Borrower’s knowledge after due
inquiry and investigation, the purchase price of the Membership Interests
represents the fair market value of the Membership Interests and Membership
Interests Seller is not or will not be insolvent subsequent to the sale of the
Membership Interests. (d) Supplemental Loan: If “Supplemental Loan” is checked
in Part B.4, Summary of Loan Terms, then and, except to the extent specifically
required or approved by Lender, there has been no change in the ownership of
either the Mortgaged Property or Borrower Principals since the date of the
Senior Note. Borrower has fully disclosed to Lender the intended use of any cash
received by Borrower from Lender in connection with the Supplemental Loan, if
applicable. (e) Cross-Collateralized/Cross-Defaulted Loan Pool: If
“Cross-Collateralized/Cross- Defaulted Loan Pool” is checked in Part B.4,
Summary of Loan Terms, then the Loan is part of a
cross-collateralized/cross-defaulted pool of loans and Borrower has fully
disclosed to Lender the intended use of any cash received by Borrower from
Lender in connection with the Loan and the other loans comprising the
cross-collateralized/cross-defaulted loan pool, if applicable. 5.25 through 5.39
are Reserved. 5.40 Recycled SPE Borrower. Reserved. 5.41 Recycled SPE Equity
Owner. Reserved. 5.42 through 5.50 are Reserved. 5.51 Survival. The
representations and warranties set forth in this Loan Agreement will survive
until the Indebtedness is paid in full; however, the representations and
warranties set forth in Section 5.05 will survive beyond repayment of the entire
Indebtedness, to the extent provided in Section 10.02(i). Multifamily Loan and
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5.52 through 5.57 are Reserved. 5.58 Prohibited Parties Lists. (a) Borrower is
not identified and to the best of Borrower’s knowledge after due inquiry and
investigation, no Borrower Principal nor any Non-U.S. Equity Holder is
identified on the OFAC Lists. (b) Borrower is not listed and to the best of
Borrower’s knowledge after due inquiry and investigation, no Borrower Principal
is listed on the FHFA SCP List. 5.59 AML Laws. (a) Borrower has not been
convicted of a violation of the AML Laws or been the subject of a final
enforcement action relating to the AML Laws. (b) To the best of Borrower’s
knowledge after due inquiry and investigation, no Borrower Principal nor
Non-U.S. Equity Holder has been convicted of a violation of the AML Laws or been
the subject of a final enforcement action relating to the AML Laws. (c) Borrower
has not received any notice that it is the subject of any pending proceedings
for any violation of the AML Laws and to the best of Borrower’s knowledge it is
not the subject of any pending proceedings for any violation of the AML Laws.
(d) To the best of Borrower’s knowledge after due inquiry and investigation no
Borrower Principal nor Non-U.S. Equity Holder is the subject of any pending
proceedings for any violation of the AML Laws. 5.60 Internal Controls. Borrower
has in place and to the best of Borrower’s knowledge after due inquiry and
investigation, Borrower has determined that each Borrower Principal has in
place, practices and procedures for the admission of investors which prevent the
admission of: (a) Any investor that is in violation of any criminal or civil law
or regulation intended to prevent money laundering or the funding of terrorist
or illegal drug trafficking activities. Notwithstanding the foregoing, Lender
acknowledges and agrees that if Borrower or any Borrower Principal is a Public
Company, unless such Borrower or Borrower Principal exercises control over the
purchase and sale of its publicly traded equity securities to a particular
investor (other than as a placement agent), Borrower or such Borrower Principal
will not be deemed to make this representation with respect to direct or
indirect ownership in such Public Company. Multifamily Loan and Security
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(b) Any Person that will have a 25% or more ownership interest in the aggregate
in Borrower (whether directly or indirectly) that is on the Prohibited Parties
Lists. (c) Any Non-U.S. Equity Holder that is on the OFAC Lists. 5.61
Crowdfunding. Except as has been disclosed in writing to and approved in writing
by Lender, no direct or indirect ownership (or other economic) interest of 25%
or more in the aggregate in Borrower or any Borrower Principal has been marketed
or sold to investors through any form of Crowdfunding. 5.62 through 5.70 are
Reserved. ARTICLE VI BORROWER COVENANTS. 6.01 Compliance with Laws. Borrower
will comply with all laws, ordinances, rules, regulations and requirements of
any Governmental Authority having jurisdiction over the Mortgaged Property and
all licenses and permits and all recorded covenants and agreements relating to
or affecting the Mortgaged Property, including all laws, ordinances,
regulations, requirements and covenants pertaining to health and safety,
construction of improvements on the Mortgaged Property, Repairs, Capital
Replacements, fair housing, disability accommodation, zoning and land use,
applicable building codes, special use permits and environmental regulations,
Leases and the maintenance and disposition of tenant security deposits. Borrower
will take appropriate measures to prevent, and will not engage in or knowingly
permit, any illegal activities at the Mortgaged Property, including those that
could endanger tenants or visitors, result in damage to the Mortgaged Property,
result in forfeiture of the Mortgaged Property, or otherwise materially impair
the Lien created by the Security Instrument or Lender’s interest in the
Mortgaged Property. Borrower will at all times maintain records sufficient to
demonstrate compliance with the provisions of this Section 6.01. 6.02 Compliance
with Organizational Documents. Borrower will at all times comply with all laws,
regulations and requirements of any Governmental Authority relating to
Borrower’s formation, continued existence and good standing in its state of
formation and, if different, in the Property Jurisdiction. Borrower will at all
times comply with its organizational documents, including its partnership
agreement (if Borrower is a partnership), its by-laws (if Borrower is a
corporation or housing cooperative corporation or association) or its operating
agreement (if Borrower is a limited liability company or tenancy-in-common). If
Borrower is a housing cooperative corporation or association, Borrower will at
all times maintain its status as a “cooperative housing corporation” as such
term is defined in Section 216(b) of the Internal Revenue Code of 1986, as
amended, or any successor statute thereto. 6.03 Use of Mortgaged Property. (a)
Unless required by applicable law, without the prior consent of Lender, Borrower
will not take any of the following actions: Multifamily Loan and Security
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(i) Allow changes in the use for which all or any part of the Mortgaged Property
is being used at the time this Loan Agreement is executed. (ii) Convert any
individual dwelling units or common areas to commercial use. (iii) Initiate a
change in the zoning classification of the Mortgaged Property or acquiesce to a
change in the zoning classification of the Mortgaged Property. (iv) Establish
any condominium or cooperative regime with respect to the Mortgaged Property
beyond any which may be in existence on the date of this Loan Agreement. (v)
Combine all or any part of the Mortgaged Property with all or any part of a tax
parcel which is not part of the Mortgaged Property. (vi) Subdivide or otherwise
split any tax parcel constituting all or any part of the Mortgaged Property.
(vii) Add to or change any location at which any of the Mortgaged Property is
stored, held or located unless Borrower (A) gives Notice to Lender within 30
days after the occurrence of such addition or change, (B) executes and delivers
to Lender any modifications of or supplements to this Loan Agreement that Lender
may require, and (C) authorizes the filing of any financing statement which may
be filed in connection with this Loan Agreement, as Lender may require. (viii)
Convert, in whole or in part, any non-residential income producing units to
non-income producing units. (b) Reserved. (c) Notwithstanding anything contained
in this Section 6.03 to the contrary, if Borrower is a housing cooperative
corporation or association, Lender acknowledges and consents to Borrower’s use
of the Mortgaged Property as a housing cooperative. 6.04 Non-Residential Leases.
(a) Prohibited New Non-Residential Leases or Modified Non-Residential Leases.
Except as set forth in Section 6.04(b), Borrower will not enter into any New
Non- Residential Lease, enter into any Modified Non-Residential Lease or
terminate any Non-Residential Lease (including any Non-Residential Lease in
existence on the date of this Loan Agreement) without the prior consent of
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(b) New Non-Residential Leases or Modified Non-Residential Leases for which
Lender’s Consent is Not Required. Lender’s consent will not be required for
Borrower to enter into a Modified Non-Residential Lease or a New Non-
Residential Lease if the Modified Non-Residential Lease or New Non-Residential
Lease satisfies each of the following requirements: (i) The tenant under the New
Non-Residential Lease or Modified Non- Residential Lease is not an Affiliate of
Borrower or any Guarantor. (ii) The terms of the New Non-Residential Lease or
Modified Non-Residential Lease are at least as favorable to Borrower as those
customary in the applicable market at the time Borrower enters into the New Non-
Residential Lease or Modified Non-Residential Lease. (iii) The Rents paid to
Borrower pursuant to the New Non-Residential Lease or Modified Non-Residential
Lease are not less than 90% of the rents paid to Borrower pursuant to the
Non-Residential Lease, if any, for that portion of the Mortgaged Property that
was in effect prior to the New Non- Residential Lease or Modified
Non-Residential Lease. (iv) The term of the New Non-Residential Lease or
Modified Non-Residential Lease, including any option to extend, is 10 years or
less. (v) Any New Non-Residential Lease must provide that the space may not be
used or operated, in whole or in part, for any of the following: (A) The
operation of a so-called “head shop” or other business devoted to the sale of
articles or merchandise normally used or associated with illegal or unlawful
activities such as, but not limited to, the sale of paraphernalia used in
connection with marijuana or controlled drugs or substances. (B) A gun shop,
shooting gallery or firearms range. (C) A so-called massage parlor or any
business which sells, rents or permits the viewing of so-called “adult” or
pornographic materials such as, but not limited to, adult magazines, books,
movies, photographs, sexual aids, sexual articles and sex paraphernalia. (D) Any
use involving the sale or distribution of any flammable liquids, gases or other
Hazardous Materials. (E) An off-track betting parlor or arcade. Multifamily Loan
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(F) A liquor store or other establishment whose primary business is the sale of
alcoholic beverages for off-site consumption. (G) A burlesque or strip club. (H)
Any illegal activity. (vi) The aggregate of the income derived from the space
leased pursuant to the New Non-Residential Lease accounts for less than 20% of
the gross income of the Mortgaged Property on the date that Borrower enters into
the New Non-Residential Lease. (vii) Such New Non-Residential Lease is not an
oil or gas lease, pipeline agreement or other instrument related to the
production or sale of oil or natural gas. (viii) Any New Non-Residential Lease
must satisfy the condition of Section 6.04(d). (c) Executed Copies of
Non-Residential Leases. Borrower will, without request by Lender, deliver a
fully executed copy of each Non-Residential Lease to Lender promptly after such
Non-Residential Lease is signed. (d) Subordination and Attornment Requirements.
All Non-Residential Leases entered into after the date of this Loan Agreement,
regardless of whether Lender’s consent or approval is required, will
specifically include the following provisions: (i) The tenant will attorn to
Lender and any purchaser at a foreclosure sale, such attornment to be
self-executing and effective upon acquisition of title to the Mortgaged Property
by any purchaser at a foreclosure sale or by Lender in any manner. (ii) The
tenant agrees to execute such further evidences of attornment as Lender or any
purchaser at a foreclosure sale may from time to time request. (iii) The tenant
will, upon receipt of a written request from Lender following the occurrence of
and during the continuance of an Event of Default, pay all Rents payable under
the Lease to Lender. (iv) Reserved. (v) Reserved. Multifamily Loan and Security
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6.05 Prepayment of Rents. Borrower will not receive or accept Rent under any
Lease (whether a residential Lease or a Non-Residential Lease) for more than 2
months in advance. 6.06 Inspection. (a) Right of Entry. Subject to the rights of
tenants under Leases, Borrower will permit Lender, its agents, representatives
and designees and any interested Governmental Authority to make or cause to be
made entries upon and inspections of the Mortgaged Property to inspect, among
other things: (i) Repairs, (ii) Capital Replacements, (iii) Restorations, (iv)
Property Improvement Alterations, and (v) any other Improvements, both in
process and upon completion (including environmental inspections and tests
performed by professional inspection engineers) during normal business hours, or
at any other reasonable time, upon reasonable Notice to Borrower if the
inspection is to include occupied residential units (which Notice need not be in
writing). During normal business hours, or at any other reasonable time,
Borrower will also permit Lender to examine all books and records and contracts
and bills pertaining to the foregoing. Notice to Borrower will not be required
in the case of an emergency, as determined in Lender’s Discretion, or when an
Event of Default has occurred and is continuing. (b) Inspection of Mold. If
Lender determines that Mold has or may have developed as a result of a water
intrusion event or leak, Lender, at Lender’s Discretion, may require that a
professional inspector inspect the Mortgaged Property to confirm whether Mold
has developed and, if so, thereafter as frequently as Lender determines is
necessary until any issue with Mold and its cause(s) are resolved to Lender’s
satisfaction. Such inspection will be limited to a visual and olfactory
inspection of the area that has experienced the Mold, water intrusion event or
leak. Borrower will be responsible for the cost of each such professional
inspection and any remediation deemed to be necessary as a result of the
professional inspection. After any issue with Mold is remedied to Lender’s
satisfaction, Lender will not require a professional inspection any more
frequently than once every 3 years unless Lender otherwise becomes aware of Mold
as a result of a subsequent water intrusion event or leak. (c) Certification in
Lieu of Inspection. If Lender or Loan Servicer determines not to conduct an
annual inspection of the Mortgaged Property, and in lieu thereof Lender requests
a certification, Borrower will provide to Lender a factually correct
certification, each year that the annual inspection is waived, to the following
effect: Borrower has not received any written complaint, notice, letter or other
written communication from any tenant, Property Manager or governmental
authority regarding mold, fungus, microbial contamination or pathogenic
organisms (“Mold”) or any activity, condition, event or omission that causes or
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Mold on or in any part of the Mortgaged Property or, if Borrower has received
any such written complaint, notice, letter or other written communication, that
Borrower has investigated and determined that no Mold activity, condition or
event exists or alternatively has fully and properly remediated such activity,
condition, event or omission in compliance with the Moisture Management Plan for
the Mortgaged Property. If Borrower is unwilling or unable to provide such
certification, Lender may require a professional inspection of the Mortgaged
Property at Borrower’s expense. 6.07 Books and Records; Financial Reporting. (a)
Delivery of Books and Records. (i) Borrower will keep and maintain at all times
at the Mortgaged Property, Borrower’s main business office, or the Property
Manager’s office, and upon Lender’s request will make available at the Mortgaged
Property (or, at Borrower’s option, at the Property Manager’s office), complete
and accurate books of account and records (including copies of supporting bills
and invoices) adequate to reflect correctly the operation of the Mortgaged
Property and copies of all written contracts, Leases, and other instruments
which affect the Mortgaged Property. The books, records, contracts, Leases and
other instruments will be subject to examination and inspection by Lender at any
reasonable time (“Books and Records”). (ii) Borrower will keep the Books and
Records in accordance with one of the following accounting methods, consistently
applied, and Borrower will promptly provide Lender Notice of any change in
Borrower’s accounting methods: (A) Generally accepted accounting principles
(GAAP). (B) Tax method of accounting, if under the tax method of accounting, the
accrual basis is used for interest expense, real estate taxes and insurance
expense, and the cash basis is used for all other items, including income,
prepaid rent, utilities and payroll expense. Financial statements may exclude
depreciation and amortization. (C) Such other method that is acceptable to
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(b) Delivery of Statement of Income and Expenses; Rent Schedule and Other
Statements. Borrower will furnish to Lender each of the following: (i) Within 25
days after the end of each calendar quarter prior to Securitization and within
35 days after each calendar quarter after Securitization, each of the following:
(A) A Rent Schedule dated no earlier than the date that is 5 days prior to the
end of such quarter. (B) A statement of income and expenses for Borrower that is
either of the following: (1) For the 12-month period ending on the last day of
such quarter. (2) If at the end of such quarter Borrower or any Affiliate of
Borrower has owned the Mortgaged Property for less than 12 months, for the
period commencing with the acquisition of the Mortgaged Property by Borrower or
its Affiliate, and ending on the last day of such quarter. (C) When requested by
Lender, a balance sheet showing all assets and liabilities of Borrower as of the
end of that fiscal quarter. (ii) Within 90 days after the end of each fiscal
year of Borrower, all of the following: (A) An annual statement of income and
expenses for Borrower for that fiscal year. (B) A balance sheet showing all
assets and liabilities of Borrower as of the end of that fiscal year. (C) An
accounting of all security deposits held pursuant to all Leases, including the
name of the institution (if any) and the names and identification numbers of the
accounts (if any) in which such security deposits are held and the name of the
person to contact at such financial institution, along with any authority or
release necessary for Lender to access information regarding such accounts.
(iii) Within 30 days after the date of filing, copies of all tax returns filed
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(c) Additional Reporting Requirements Upon Request. Borrower will furnish to
Lender each of the following: (i) Upon Lender’s request, in Lender’s sole and
absolute discretion prior to a Securitization, and thereafter upon Lender’s
request in Lender’s Discretion, a monthly Rent Schedule and a monthly statement
of income and expenses for Borrower, in each case within 25 days after the end
of each month. (ii) Upon Lender’s request in Lender’s sole and absolute
discretion prior to a Securitization, and thereafter upon Lender’s request in
Lender’s Discretion, within 10 days after such a request from Lender, an
organizational chart that identifies all of the following: (A) Persons that
directly or indirectly Control Borrower and any Designated Entity for Transfers
and the interest held by each. (B) Persons with a collective equity interest
(whether direct or indirect) of 25% or more in Borrower if not already
identified pursuant to Section 6.07(c)(ii)(A). (C) All Non-U.S. Equity Holders.
If any Designated Entity for Transfers is a Public Company, the organizational
chart will not be required to show the ownership of such Public Company. (iii)
Upon Lender’s request in Lender’s Discretion, such other financial information
or property management information (including information on tenants under
Leases to the extent such information is available to Borrower, copies of bank
account statements from financial institutions where funds owned or controlled
by Borrower are maintained, and an accounting of security deposits) as may be
required by Lender from time to time, in each case within 30 days after such
request. (iv) Upon Lender’s request in Lender’s Discretion, a monthly property
management report for the Mortgaged Property, showing the number of inquiries
made and rental applications received from tenants or prospective tenants and
deposits received from tenants and any other information requested by Lender
within 30 days after such request. However, Lender will not require the
foregoing more frequently than quarterly except when there has been an Event of
Default and such Event of Default is continuing, in which case Lender may
require Borrower to furnish the foregoing more frequently. Multifamily Loan and
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(d) Form of Statements; Audited Financials. A natural person having authority to
bind Borrower (or the SPE Equity Owner or Guarantor, as applicable), acting in
his or her capacity as a manager, general partner or an officer of Borrower, SPE
Equity Owner, or Guarantor and not in his or her individual capacity, will
certify each of the statements, schedules and reports required by Sections
6.07(b), 6.07(c) and 6.07(f) to be complete and accurate. Each of the
statements, schedules and reports required by Sections 6.07(b), 6.07(c) and
6.07(f) will be in such form and contain such detail as Lender may reasonably
require. Lender also may require that any of the statements, schedules or
reports listed in Sections 6.07(b), 6.07(c) and 6.07(f) be audited at Borrower’s
expense by independent certified public accountants acceptable to Lender, at any
time when an Event of Default has occurred and is continuing or at any time that
Lender, in its reasonable judgment, determines that audited financial statements
are required for an accurate assessment of the financial condition of Borrower
or of the Mortgaged Property. (e) Failure to Timely Provide Financial Statements
or Additional Reporting. If Borrower fails to provide in a timely manner the
statements, schedules and reports required by Sections 6.07(b), 6.07(c) and
6.07(f), Lender will give Notice to Borrower specifying the statements,
schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) that
Borrower has failed to provide. If Borrower has not provided the required
statements, schedules and reports within 10 Business Days following such Notice,
then (i) Borrower will pay a late fee of $500 for each late statement, schedule
or report, plus an additional $500 per month that any such statement, schedule
or report continues to be late, and (ii) Lender will have the right to have
Borrower’s books and records audited, at Borrower’s expense, by independent
certified public accountants selected by Lender in order to obtain such
statements, schedules and reports, and all related costs and expenses of Lender
will become immediately due and payable and will become an additional part of
the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s
exercise of its rights to require an audit will not be required in the case of
an emergency, as determined in Lender’s Discretion, or when an Event of Default
has occurred and is continuing. (f) Delivery of Guarantor and SPE Equity Owner
Financial Statements. Borrower will cause Guarantor and/or SPE Equity Owner to
deliver each of the following to Lender within 10 Business Days following
Lender’s request: (i) Guarantor’s or SPE Equity Owner’s (as applicable) balance
sheet and profit and loss statement (or if such party is a natural person, such
party’s personal financial statements) as of the end of (A) the quarter that
ended at least 30 days prior to the due date of the requested items, and/or (B)
the fiscal year that ended at least 90 days prior to the due date of the
requested items. (ii) Other Guarantor or SPE Equity Owner (as applicable)
financial statements as Lender may reasonably require. Multifamily Loan and
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(iii) Written updates on the status of all litigation proceedings that Guarantor
or SPE Equity Owner (as applicable) disclosed or should have disclosed to Lender
as of the Closing Date. (iv) If an Event of Default has occurred and is
continuing, copies of Guarantor’s or SPE Equity Owner’s (as applicable) most
recent filed state and federal tax returns, including any current tax return
extensions. (g) Reporting Upon Event of Default. If an Event of Default has
occurred and is continuing, Borrower will deliver to Lender upon written demand
all books and records relating to the Mortgaged Property or its operation. (h)
Credit Reports. Borrower authorizes Lender to obtain a credit report on Borrower
at any time. (i) through (m) are Reserved. 6.08 Taxes; Operating Expenses;
Ground Rents. (a) Payment of Taxes and Ground Rent. Subject to the provisions of
Sections 6.08(c) and (d), Borrower will pay or cause to be paid (i) all Taxes
when due and before the addition of any interest, fine, penalty or cost for
nonpayment, and (ii) if Borrower’s interest in the Mortgaged Property is as a
Ground Lessee, then the monthly or other periodic installments of Ground Rent
before the last date upon which each such installment may be made without
penalty or interest charges being added. (b) Payment of Operating Expenses.
Subject to the provisions of Section 6.08(c), Borrower will (i) pay the expenses
of operating, managing, maintaining and repairing the Mortgaged Property
(including utilities, Repairs and Capital Replacements) before the last date
upon which each such payment may be made without any penalty or interest charge
being added, and (ii) pay Insurance premiums prior to the expiration date of
each policy of Insurance, unless applicable law specifies some lesser period.
(c) Payment of Impositions and Reserve Funds. If Lender is collecting Imposition
Reserve Deposits pursuant to Article IV, then so long as no Event of Default
exists, Borrower will not be obligated to pay any Imposition for which
Imposition Reserve Deposits are being collected, whether Taxes, Insurance
premiums, Ground Rent (if applicable) or any other individual Impositions, but
only to the extent that sufficient Imposition Reserve Deposits are held by
Lender for the purpose of paying that specific Imposition and Borrower has
timely delivered to Lender any bills or premium notices that it has received
with respect to that specific Imposition (other than Ground Rent). Lender will
have no liability to Borrower for failing to pay any Impositions to the extent
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Default has occurred and is continuing, (ii) insufficient Imposition Reserve
Deposits are held by Lender at the time an Imposition becomes due and payable,
or (iii) Borrower has failed to provide Lender with bills and premium notices as
provided in this Section 6.08(c). (d) Right to Contest. Borrower, at its own
expense, may contest by appropriate legal proceedings, conducted diligently and
in good faith, the amount or validity of any Imposition other than Insurance
premiums and Ground Rent (if applicable), if: (i) Borrower notifies Lender of
the commencement or expected commencement of such proceedings, (ii) the
Mortgaged Property is not in danger of being sold or forfeited, (iii) if
Borrower has not already paid the Imposition, Borrower deposits with Lender
reserves sufficient to pay the contested Imposition, if requested by Lender, and
(iv) Borrower furnishes whatever additional security is required in the
proceedings or is reasonably requested by Lender, which may include the delivery
to Lender of reserves established by Borrower to pay the contested Imposition.
6.09 Preservation, Management and Maintenance of Mortgaged Property. (a)
Maintenance of Mortgaged Property; No Waste. Borrower will keep the Mortgaged
Property in good repair, including the replacement of Personalty and Fixtures
with items of equal or better function and quality. Borrower will not commit
waste or permit impairment or deterioration of the Mortgaged Property. (b)
Abandonment of Mortgaged Property. Borrower will not abandon the Mortgaged
Property. (c) Preservation of Mortgaged Property. (i) Borrower will restore or
repair promptly, in a good and workmanlike manner, any damaged part of the
Mortgaged Property to the equivalent of its original condition, or such other
condition as Lender may approve in writing, whether or not Insurance proceeds or
Condemnation awards are available to cover any costs of such Restoration or
repair; provided, however, that Borrower will not be obligated to perform such
Restoration or repair if (A) no Event of Default has occurred and is continuing,
and (B) Lender has elected to apply any available Insurance proceeds and/or
Condemnation awards to the payment of Indebtedness pursuant to Section 6.10(l)
or Section 6.11(d). (ii) Borrower will give Notice to Lender of and, unless
otherwise directed in writing by Lender, will appear in and defend any action or
proceeding purporting to affect the Mortgaged Property, Lender’s security or
Lender’s rights under this Loan Agreement. Multifamily Loan and Security
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(d) Property Management. Borrower will provide for professional management of
the Mortgaged Property by the Property Manager at all times under a property
management agreement approved by Lender in writing. Borrower will not surrender,
terminate, cancel, modify, renew or extend its property management agreement, or
enter into any other agreement relating to the management or operation of the
Mortgaged Property with Property Manager or any other Person, or consent to (i)
the assignment by the Property Manager of its interest under such property
management agreement or (ii) the transfer of a controlling interest in the
Property Manager if the Property Manager is an Affiliate of Borrower, in each
case without the consent of Lender, which consent will not be unreasonably
withheld. (i) If at any time Lender consents to the appointment of a new
Property Manager, such new Property Manager and Borrower will, as a condition of
Lender’s consent, execute an Assignment of Management Agreement in a form
acceptable to Lender. (ii) If any such replacement Property Manager is an
Affiliate of Borrower, and if a nonconsolidation opinion was delivered on the
Closing Date, Borrower will deliver to Lender an updated nonconsolidation
opinion in form and substance satisfactory to Lender with regard to
nonconsolidation. (iii) Reserved. (e) Alteration of Mortgaged Property. Borrower
will not (and will not permit any tenant or other Person to) remove, demolish or
alter the Mortgaged Property or any part of the Mortgaged Property, including
any removal, demolition or alteration occurring in connection with a
rehabilitation of all or part of the Mortgaged Property, except that each of the
following is permitted: (i) Repairs or Capital Replacements in accordance with
the terms and conditions of this Loan Agreement. (ii) Any repairs or
replacements made in connection with the replacement of tangible Personalty.
(iii) If Borrower is a cooperative housing corporation or association, repairs
or replacements to the extent permitted with respect to individual dwelling
units under the form of a proprietary lease or occupancy agreement. (iv) Any
repairs or replacements in connection with making an individual unit ready for a
new occupant or pursuant to Sections 6.09(a) and (c). (v) Property Improvement
Alterations, provided that each of the following conditions is satisfied:
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(A) At least 30 days prior to the commencement of any Property Improvement
Alterations, Borrower must submit to Lender a Property Improvement Notice. The
Property Improvement Notice must include all of the following information: (1)
The expected start date and completion date of the Property Improvement
Alterations. (2) A description of the anticipated Property Improvement
Alterations to be made. (3) The projected budget of the Property Improvement
Alterations and the source of funding. If any changes to Property Improvement
Alterations as described in the Property Improvement Notice are made that extend
beyond the overall scope and intent of the Property Improvement Alterations set
forth in the Property Improvement Notice (e.g., renovations changed to renovate
common areas but Property Improvement Notice only described renovations to the
residential unit bathrooms), then Borrower must submit a new Property
Improvement Notice to Lender in accordance with this Section 6.09(e)(v)(A). (B)
The Property Improvement Alterations may not be commenced within 12 months prior
to the Maturity Date without prior consent of the Lender and must be completed
at least 6 months prior to the Maturity Date. (C) Neither the performance nor
completion of the Property Improvement Alterations may result in any of the
following: (1) An adverse effect on any Major Building System. (2) A change in
residential unit configurations on a permanent basis. (3) An increase or
decrease in the total number of residential units. (4) The demolition of any
existing Improvements. (5) A permanent obstruction of tenants’ access to units
or a temporary obstruction of tenants’ access to units without a reasonable
alternative access provided during the period of renovation which causes the
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(D) Reserved. (E) The Leases used to calculate Minimum Occupancy for use in
Section 6.09(e)(v)(I) must meet all of the following conditions: (1) The Leases
are with tenants that are not Affiliates of Borrower or Guarantor (except as
otherwise expressly agreed by Lender in writing). (2) The Leases are on arms’
length terms and conditions. (3) The Leases otherwise satisfy the requirements
of the Loan Documents. (F) The Property Improvement Alterations must be
completed in accordance with Section 6.14 and any reference to Repairs in
Sections 6.06 and 6.14 will be deemed to include Property Improvement
Alterations. (G) Upon completion of the applicable Property Improvement
Alterations, Borrower must provide all of the following to the Lender: (1)
Borrower’s Certificate of Property Improvement Alterations Completion, in the
form attached as Exhibit O (“Certificate of Completion”). (2) Any other
certificates or approval, acceptance or compliance required by Lender, including
certificates of occupancy, from any Governmental Authority having jurisdiction
over the Mortgaged Property and the Property Improvement Alterations and
professional engineers certifications. (H) Borrower must deliver to Lender
within 10 days of Lender’s request a written status update on the Property
Improvement Alterations. (I) While Property Improvement Alterations that result
in individual residential units not being available for leasing are ongoing, if
a Rent Schedule shows that the occupancy of the Mortgaged Property has decreased
to less than the Minimum Occupancy, Borrower must take each of the following
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(1) Complete all pending Property Improvement Alterations to such individual
residential units in a timely manner until the Mortgaged Property satisfies the
Minimum Occupancy requirement. (2) Suspend any additional Property Improvement
Alterations which would cause residential units to be unavailable for leasing
until the Mortgaged Property satisfies the Minimum Occupancy requirement. (J) If
Borrower has commenced Property Improvement Alterations on the Mortgaged
Property, then Borrower will deliver to Lender, upon Lender’s request, and in a
timely manner, the Certificate of Completion together with such additional
information as Lender may request. (K) If on the date of this Loan Agreement the
Loan amount is $25,000,000 or more, or if the Mortgage is part of a crossed pool
of Loans with an aggregate balance of $25,000,000 or more, then at no time
during the term of the Loan may any outstanding amounts expended by Borrower for
services and/or materials in connection with Property Improvement Alterations
that are then due and payable exceed 10% of the original principal loan amount.
(vi) Reserved. (vii) Reserved. (viii) Reserved. (f) Establishment of MMP. If
indicated in Part B.5, Summary of Loan Terms, Borrower will have or will
establish and will adhere to the MMP. If Borrower is required to have an MMP,
Borrower will keep all MMP documentation at the Mortgaged Property or at the
Property Manager’s office and available for review by Lender or the Loan
Servicer during any annual assessment or other inspection of the Mortgaged
Property that is required by Lender. At a minimum, the MMP must contain a
provision for: (i) staff training, (ii) information to be provided to tenants,
(iii) documentation of the plan, (iv) the appropriate protocol for incident
response and remediation, and (v) routine, scheduled inspections of common space
and unit interiors. (g) No Reduction of Housing Cooperative Charges. If Borrower
is a housing cooperative corporation or association, until the Indebtedness is
paid in full, Borrower will not reduce the maintenance fees, charges or
assessments payable by shareholders or residents under proprietary leases or
occupancy agreements below a level which is sufficient to pay all expenses of
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operating and other expenses for the Mortgaged Property and all payments due
pursuant to the terms of the Note and any Loan Documents. (h) through (l) are
reserved. (m) Mechanic’s, Materialmen’s and Judgment Liens. If a mechanic’s,
materialmen’s or judgment Lien is filed against the Mortgaged Property, Borrower
must cause the Lien to be released of record, bonded off, or otherwise remedied
to Lender’s satisfaction within 60 days after the date of creation of the Lien.
However, if Borrower is diligently prosecuting such release or other remedy and
advises Lender that such release or remedy cannot be consummated within such
60-day period, Borrower will have an additional period (not exceeding 120 days
from the date of creation of the Lien or such earlier time as may be required by
applicable law in which the lienor must act to enforce the Lien) within which to
obtain such release of record or consummate such other remedy. 6.10 Insurance.
At all times during the term of this Loan Agreement, Borrower will maintain at
its sole cost and expense, for the mutual benefit of Borrower and Lender, all of
the Insurance specified in this Section 6.10, as required by Lender and
applicable law, and in such amounts and with such maximum deductibles as Lender
may require, as those requirements may change: (a) Property Insurance. Borrower
will keep the Improvements insured at all times against relevant physical
hazards that may cause damage to the Mortgaged Property as Lender may require
(“Property Insurance”). Required Property Insurance coverage may include any or
all of the following: (i) All Risks of Physical Loss. Insurance against loss or
damage from fire, wind, hail, and other related perils within the scope of a
“Causes of Loss – Special Form” or “All Risk” policy, in an amount not less than
the Replacement Cost of the Mortgaged Property. (ii) Ordinance and Law. If any
part of the Mortgaged Property is legal non- conforming under current building,
zoning or land use laws or ordinances, then “Ordinance and Law Coverage” in the
amount required by Lender. (iii) Flood. If any of the Improvements are located
in an area identified by the Federal Emergency Management Agency (or any
successor to that agency) as a “Special Flood Hazard Area,” flood Insurance in
the amount required by Lender. (iv) Windstorm. If windstorm and/or windstorm
related perils and/or “named storm” (collectively, “Windstorm Coverage”), are
excluded from the “Causes of Loss – Special Form” policy required under Section
6.10(a)(i), then separate coverage for such risks, either through an endorsement
or a separate policy. Windstorm Coverage will be written in an amount not less
than the Replacement Cost of the Mortgaged Property. Multifamily Loan and
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(v) Boiler and Machinery/Equipment Breakdown. If the Mortgaged Property contains
a central heating, ventilation and cooling system (“HVAC System”) where steam
boilers and/or other pressurized systems are in operation and are regulated by
the Property Jurisdiction, Insurance providing coverage in the amount required
by Lender. (vi) Builder’s Risk. During any period of construction or
Restoration, builder’s risk Insurance (including fire and other perils within
the scope of a policy known as “Causes of Loss – Special Form” or “All Risk”
policy) in an amount not less than the sum of the related contractual
arrangements. (vii) Other. Insurance for other physical perils applicable to the
Mortgaged Property as may be required by Lender including earthquake, sinkhole,
mine subsidence, avalanche, mudslides, and volcanic eruption. If Lender
reasonably requires any updated reports or other documentation to determine
whether additional Insurance is necessary or prudent, Borrower will pay for the
updated reports or other documentation at its sole cost and expense. (viii)
Reserved. (ix) Reserved. (x) Reserved. (b) Business Income/Rental Value.
Business income/rental value Insurance for all relevant perils to be covered in
the amount required by Lender, but in no case less than the effective gross
income attributable to the Mortgaged Property for the preceding 12 months, as
determined by Lender in Lender’s Discretion. (c) Commercial General Liability
Insurance. Commercial general liability Insurance against legal liability claims
for personal and bodily injury, property damage and contractual liability in
such amounts and with such maximum deductibles as Lender may require, but not
less than $1,000,000 per occurrence and $2,000,000 in the general aggregate on a
per-location basis, plus excess and/or umbrella liability coverage in such
amounts as Lender may require. (d) Terrorism Insurance. Insurance required under
Section 6.10(a), Section 6.10(b), and Section 6.10(c) will provide coverage for
acts of terrorism. Terrorism coverage may be provided through one or more
separate policies, which will be on terms (including amounts) consistent with
those required under Section 6.10(a)(i) and (ii) and Section 6.10(b). If
Insurance against acts of terrorism is not available at commercially reasonable
rates and if the related hazards are not at the time commonly insured against
for properties similar to the Mortgaged Property and located in or around the
region in which the Mortgaged Property is located, then Lender may opt to
temporarily suspend, cap or otherwise limit the requirement to have such
terrorism insurance for a period not to exceed Multifamily Loan and Security
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one year, unless such suspension or cap is renewed by Lender for additional one
year increments. (e) Payment of Premiums. All Property Insurance premiums and
premiums for other Insurance required under this Section 6.10 will be paid in
the manner provided in Article IV, unless Lender has designated in writing
another method of payment. (f) Policy Requirements. The following requirements
apply with respect to all Insurance required by this Section 6.10: (i) All
Insurance policies will be in a form approved by Lender. (ii) All Insurance
policies will be issued by Insurance companies authorized to do business in the
Property Jurisdiction and/or acting as eligible surplus insurers in the Property
Jurisdiction, which have a general policyholder’s rating satisfactory to Lender.
(iii) All Property Insurance policies will contain a standard mortgagee or
mortgage holder’s clause and a loss payable clause, in favor of, and in a form
approved by, Lender. (iv) If any Insurance policy contains a coinsurance clause,
the coinsurance clause will be offset by an agreed amount endorsement in an
amount not less than the Replacement Cost. (v) All commercial general liability
and excess/umbrella liability policies will name Lender, its successors and/or
assigns, as additional insured. (vi) Professional liability policies will not
include Lender, its successors and/or assigns, as additional insured. (vii) All
Insurance policies (with the exception of commercial general liability Insurance
policies) will provide that the insurer will notify Lender in writing of
cancelation of policies at least 10 days before the cancelation of the policy by
the insurer for nonpayment of the premium or nonrenewal and at least 30 days
before cancelation by the insurer for any other reason. (g) Evidence of
Insurance; Insurance Policy Renewals. Borrower will deliver to Lender a legible
copy of each Insurance policy, and Borrower will promptly deliver to Lender a
copy of all renewal and other notices received by Borrower with respect to the
policies. Borrower will ensure that the Mortgaged Property is continuously
covered by the required Insurance. Prior to the expiration date of each
Insurance policy, Borrower will deliver to Lender evidence acceptable to Lender
in Lender’s Discretion that each policy has been renewed. If the evidence of a
renewal does not include a legible copy of the renewal policy, Borrower will
deliver a legible copy of such renewal no later than the earlier of the
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(i) 60 days after the expiration date of the original policy. (ii) The date of
any Notice of an insured loss given to Lender under Section 6.10(i). (h)
Compliance With Insurance Requirements. Borrower will comply with all Insurance
requirements and will not permit any condition to exist on the Mortgaged
Property that would invalidate any part of any Insurance coverage required under
this Loan Agreement. (i) Obligations Upon Casualty; Proof of Loss. (i) If an
insured loss occurs, then Borrower will give immediate written notice to the
Insurance carrier and to Lender. (ii) Borrower authorizes and appoints Lender as
attorney in fact for Borrower to make proof of loss, to adjust and compromise
any claims under policies of Property Insurance, to appear in and prosecute any
action arising from such Property Insurance policies, to collect and receive the
proceeds of Property Insurance, to hold the proceeds of Property Insurance, and
to deduct from such proceeds Lender’s expenses incurred in the collection of
such proceeds. This power of attorney is coupled with an interest and therefore
is irrevocable. However, nothing contained in this Section 6.10 will require
Lender to incur any expense or take any action. (j) Lender’s Options Following a
Casualty. Subject to Sections 6.10(k) and (l), Lender may, at Lender’s option,
take one of the following actions: (i) Require a “repair or replacement”
settlement, in which case the proceeds will be used to reimburse Borrower for
the cost of restoring and repairing the Mortgaged Property to the equivalent of
its original condition or to a condition approved by Lender (“Restoration”). If
Lender determines to require a repair or replacement settlement and to apply
Insurance proceeds to Restoration, Lender will apply the proceeds in accordance
with Lender’s then-current policies relating to the Restoration of casualty
damage on similar multifamily properties. If Lender, in Lender’s Discretion,
retains a professional inspection engineer or other qualified third-party to
inspect any Restoration items, Lender may charge Borrower an amount sufficient
to pay all reasonable costs and expenses charged by such third-party inspector.
(ii) Require an “actual cash value” settlement in which case the proceeds may be
applied to the payment of the Indebtedness, whether or not then due. (k)
Borrower’s Options Following a Casualty. Subject to Section 6.10(l), Borrower
may take the following actions: Multifamily Loan and Security Agreement Page 34

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(i) If a casualty results in damage to the Mortgaged Property for which the cost
of Repairs will be less than the Borrower Proof of Loss Threshold, Borrower will
have the sole right to make proof of loss, adjust and compromise the claim and
collect and receive any proceeds directly without the approval or prior consent
of Lender so long as the Insurance proceeds are used solely for the Restoration
of the Mortgaged Property. (ii) If a casualty results in damage to the Mortgaged
Property for which the cost of Repairs will be more than the Borrower Proof of
Loss Threshold, but less than the Borrower Proof of Loss Maximum, Borrower is
authorized to make proof of loss and adjust and compromise the claim without the
prior consent of Lender, and Lender will hold the applicable Insurance proceeds
to be used to reimburse Borrower for the cost of Restoration of the Mortgaged
Property and will not apply such proceeds to the payment of the Indebtedness.
(iii) If a casualty results in damage to the Mortgaged Property for which the
cost of Repairs will be more than the Borrower Proof of Loss Maximum, Borrower
must obtain the consent of Lender prior to making any proof of loss or adjusting
or compromising the claim, and Lender will hold the applicable Insurance
proceeds to be used to reimburse Borrower for the cost of Restoration of the
Mortgaged Property and will not apply such proceeds to the payment of the
Indebtedness. (l) Lender’s Right to Apply Insurance Proceeds to Indebtedness.
Lender will have the right to apply Insurance proceeds to the payment of the
Indebtedness if Lender determines, in Lender’s Discretion, that any of the
following conditions exist: (i) An Event of Default (or any event, which, with
the giving of Notice or the passage of time, or both, would constitute an Event
of Default) has occurred and is continuing. (ii) There will not be sufficient
funds from Insurance proceeds, anticipated contributions of Borrower of its own
funds or other sources acceptable to Lender to complete the Restoration. (iii)
The rental income from the Mortgaged Property after completion of the
Restoration will not be sufficient to meet all operating costs and other
expenses, deposits to Reserve Funds and Loan repayment obligations relating to
the Mortgaged Property. (iv) The Restoration will be completed less than (A) 6
months prior to the Maturity Date if re-leasing will be completed prior to the
Maturity Date, or (B) 12 months prior to the Maturity Date if re-leasing will
not be completed prior to the Maturity Date. Multifamily Loan and Security
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(v) The Restoration will not be completed within one year after the date of the
loss or casualty. (vi) The casualty involved an actual or constructive loss of
more than 30% of the fair market value of the Mortgaged Property, and rendered
untenantable more than 30% of the residential units of the Mortgaged Property.
(vii) After completion of the Restoration the fair market value of the Mortgaged
Property is expected to be less than the fair market value of the Mortgaged
Property immediately prior to such casualty (assuming the affected portion of
the Mortgaged Property is re-let within a reasonable period after the date of
such casualty). (viii) Leases covering less than 35% of the residential units of
the Mortgaged Property will remain in full force and effect during and after the
completion of Restoration. (m) Lender’s Succession to Insurance Policies. If the
Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the
Mortgaged Property, Lender will automatically succeed to all rights of Borrower
in and to any Insurance policies and unearned Insurance premiums and in and to
the proceeds resulting from any damage to the Mortgaged Property prior to such
sale or acquisition. (n) Payment of Installments After Application of Insurance
Proceeds. Unless Lender otherwise agrees in writing, any application of any
Insurance proceeds to the Indebtedness will not extend or postpone the due date
of any monthly installments referred to in the Note, Article IV of this Loan
Agreement or change the amount of such installments. (o) Assignment of Insurance
Proceeds. Borrower agrees to execute such further evidence of assignment of any
Insurance proceeds as Lender may require. (p) Borrower Acknowledgment of
Lender’s Right to Change Insurance Requirements. Borrower acknowledges and
agrees that Lender’s Insurance requirements may change from time to time
throughout the term of the Indebtedness to include coverage for the kind of
risks customarily insured against and in such minimum coverage amounts and
maximum deductibles as are generally required by institutional lenders for
properties comparable to the Mortgaged Property. 6.11 Condemnation. (a) Rights
Generally. Borrower will promptly notify Lender in writing of any action or
proceeding or notice relating to any proposed or actual condemnation or other
taking, or conveyance in lieu thereof, of all or any part of the Mortgaged
Property, Multifamily Loan and Security Agreement Page 36

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whether direct or indirect (“Condemnation”). Borrower will appear in and
prosecute or defend any action or proceeding relating to any Condemnation unless
otherwise directed by Lender in writing. Borrower authorizes and appoints Lender
as attorney in fact for Borrower to commence, appear in and prosecute, in
Lender’s or Borrower’s name, any action or proceeding relating to any
Condemnation and to settle or compromise any claim in connection with any
Condemnation, after consultation with Borrower and consistent with commercially
reasonable standards of a prudent lender. This power of attorney is coupled with
an interest and therefore is irrevocable. However, nothing contained in this
Section 6.11(a) will require Lender to incur any expense or take any action.
Borrower transfers and assigns to Lender all right, title and interest of
Borrower in and to any award or payment with respect to (i) any Condemnation, or
any conveyance in lieu of Condemnation, and (ii) any damage to the Mortgaged
Property caused by governmental action that does not result in a Condemnation.
(b) Application of Award. Lender may hold such awards or proceeds and apply such
awards or proceeds, after the deduction of Lender’s expenses incurred in the
collection of such amounts (including Attorneys’ Fees and Costs) at Lender’s
option, to the Restoration or repair of the Mortgaged Property or to the payment
of the Indebtedness, with the balance, if any, to Borrower. Unless Lender
otherwise agrees in writing, any application of any awards or proceeds to the
Indebtedness will not extend or postpone the due date of any monthly
installments referred to in the Note or Article IV of this Loan Agreement, or
change the amount of such installments. Borrower agrees to execute such further
evidence of assignment of any Condemnation awards or proceeds as Lender may
require. (c) Borrower’s Right to Condemnation Proceeds. Notwithstanding any
provision to the contrary in this Section 6.11, but subject to Section 6.11(e),
in the event of a partial Condemnation of the Mortgaged Property, as long as no
Event of Default, or any event which, with the giving of Notice or the passage
of time, or both, would constitute an Event of Default, has occurred and is
continuing, in the event of a partial Condemnation resulting in proceeds or
awards in the amount of less than $100,000, Borrower will have the sole right to
make proof of loss, adjust and compromise the claim and collect and receive any
proceeds directly without the approval or prior consent of Lender so long as the
proceeds or awards are used solely for the Restoration of the Mortgaged
Property. (d) Right to Apply Condemnation Proceeds to Indebtedness. In the event
of a partial Condemnation of the Mortgaged Property resulting in proceeds or
awards in the amount of $100,000 or more and subject to Section 6.11(e), Lender
will have the right to apply Condemnation proceeds to the payment of the
Indebtedness if Lender determines, in Lender’s Discretion, that any of the
following conditions exist: Multifamily Loan and Security Agreement Page 37

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(i) An Event of Default (or any event, which, with the giving of Notice or the
passage of time, or both, would constitute an Event of Default) has occurred and
is continuing. (ii) There will not be sufficient funds from Condemnation
proceeds, anticipated contributions of Borrower of its own funds or other
sources acceptable to Lender to complete the Restoration. (iii) The rental
income from the Mortgaged Property after completion of the Restoration will not
be sufficient to meet all operating costs and other expenses, deposits to
Reserve Funds and Loan repayment obligations relating to the Mortgaged Property.
(iv) The Restoration will not be completed at least one year before the Maturity
Date (or 6 months before the Maturity Date if re-leasing of the Mortgaged
Property will be completed within such 6-month period). (v) The Restoration will
not be completed within one year after the date of the Condemnation. (vi) The
Condemnation involved an actual or constructive loss of more than 15% of the
fair market value of the Mortgaged Property, and rendered untenantable more than
25% of the residential units of the Mortgaged Property. (vii) After Restoration
the fair market value of the Mortgaged Property is expected to be less than the
fair market value of the Mortgaged Property immediately prior to the
Condemnation (assuming the affected portion of the Mortgaged Property is re-let
within a reasonable period after the date of the Condemnation). (viii) Leases
covering less than 35% of residential units of the Mortgaged Property will
remain in full force and effect during and after the completion of Restoration.
(e) Right to Apply Condemnation Proceeds in Connection with a Partial Release.
Notwithstanding anything to the contrary set forth in this Loan Agreement,
including this Section 6.11, for so long as the Loan or any portion of the Loan
is included in a Securitization in which the Note is assigned to a REMIC trust,
then each of the following will apply: (i) If any portion of the Mortgaged
Property is released from the Lien of the Loan in connection with a Condemnation
and if the ratio of (A) the unpaid principal balance of the Loan to (B) the
value of the Mortgaged Property (with the value of the Mortgaged Property first
being reduced by the outstanding principal balance of any Senior Indebtedness or
any indebtedness secured by the Mortgaged Property that is at the same level
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of priority with the Indebtedness and taking into account only the related land
and buildings and not any personal property or going-concern value), as
determined by Lender in its sole and absolute discretion based on a commercially
reasonable valuation method permitted in connection with a Securitization, is
greater than 125% immediately after such Condemnation and before any Restoration
or repair of the Mortgaged Property (but taking into account any planned
Restoration or repair of the Mortgaged Property as if such planned Restoration
or repair were completed), then Lender will apply any net proceeds or awards
from such Condemnation, in full, to the payment of the principal of the
Indebtedness whether or not then due and payable, unless Lender has received an
opinion of counsel (acceptable to Lender if such opinion is provided by
Borrower) that a different application of the net proceeds or awards will not
cause such Securitization to fail to meet applicable federal income tax
qualification requirements or subject such Securitization to any tax, and the
net proceeds or awards are applied in the manner specified in such opinion. (ii)
If (A) neither Borrower nor Lender has the right to receive any or all net
proceeds or awards as a result of the provisions of any agreement affecting the
Mortgaged Property (including any Ground Lease (if applicable), condominium
document, or reciprocal easement agreement) and, therefore cannot apply the net
proceeds or awards to the payment of the principal of the Indebtedness as set
forth above, or (B) Borrower receives any or all of the proceeds or awards
described in Section 6.11(e)(ii)(A) and fails to apply the proceeds in
accordance with Section 6.11(e)(i), then Borrower will prepay the Indebtedness
in an amount which Lender, in its sole and absolute discretion, deems necessary
to ensure that the Securitization will not fail to meet applicable federal
income tax qualification requirements or be subject to any tax as a result of
the Condemnation, unless Lender has received an opinion of counsel (acceptable
to Lender if such opinion is provided by Borrower) that a different application
of the net proceeds or awards will not cause such Securitization to fail to meet
applicable federal income tax qualification requirements or subject such
Securitization to any tax, and the net proceeds or awards are applied in the
manner specified in such opinion. (f) Succession to Condemnation Proceeds. If
the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to
the Mortgaged Property, Lender will automatically succeed to all rights of
Borrower in and to any Condemnation proceeds and awards prior to such sale or
acquisition. 6.12 Environmental Hazards. (a) Prohibited Activities and
Conditions. Except for matters described in this Section 6.12, Borrower will not
cause or permit Prohibited Activities or Conditions. Borrower will comply with
all Hazardous Materials Laws applicable to the Mortgaged Property. Without
limiting the generality of the previous sentence, Multifamily Loan and Security
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Borrower will: (i) obtain and maintain all Environmental Permits required by
Hazardous Materials Laws and comply with all conditions of such Environmental
Permits, (ii) cooperate with any inquiry by any Governmental Authority, and
(iii) subject to Section 6.12(g), comply with any governmental or judicial order
that arises from any alleged Prohibited Activity or Condition. (b) Employees,
Tenants and Contractors. Borrower will take all commercially reasonable actions
(including the inclusion of appropriate provisions in any Leases executed after
the date of this Loan Agreement) to prevent its employees, agents and
contractors, and all tenants and other occupants from causing or permitting any
Prohibited Activities or Conditions. Borrower will not lease or allow the
sublease or use of all or any portion of the Mortgaged Property to any tenant or
subtenant for nonresidential use by any user that, in the ordinary course of its
business, would cause or permit any Prohibited Activity or Condition. (c) O&M
Programs. As required by Lender, Borrower will also have established a written
operations and maintenance program with respect to certain Hazardous Materials.
Each such operations and maintenance program and any additional or revised
operations and maintenance programs established for the Mortgaged Property
pursuant to this Section 6.12 must be approved by Lender and will be referred to
in this Loan Agreement as an “O&M Program.” Borrower will comply in a timely
manner with, and cause all employees, agents, and contractors of Borrower and
any other Persons present on the Mortgaged Property to comply with each O&M
Program. Borrower will pay all costs of performance of Borrower’s obligations
under any O&M Program, and Lender’s out of pocket costs incurred in connection
with the monitoring and review of each O&M Program must be paid by Borrower upon
demand by Lender. Any such out-of- pocket costs of Lender that Borrower fails to
pay promptly will become an additional part of the Indebtedness as provided in
Section 9.02. (d) Notice to Lender. Borrower will promptly give Notice to Lender
upon the occurrence of any of the following events: (i) Borrower’s discovery of
any Prohibited Activity or Condition. (ii) Borrower’s receipt of or knowledge of
any written complaint, order, notice of violation or other communication from
any tenant, Property Manager, Governmental Authority or other Person with regard
to present or future alleged Prohibited Activities or Conditions, or any other
environmental, health or safety matters affecting the Mortgaged Property. (iii)
Borrower’s breach of any of its obligations under this Section 6.12. Any such
Notice given by Borrower will not relieve Borrower of, or result in a waiver of,
any obligation under this Loan Agreement, the Note or any other Loan Document.
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(e) Environmental Inspections, Tests and Audits. Borrower will pay promptly the
costs of any environmental inspections, tests or audits, a purpose of which is
to identify the extent or cause of or potential for a Prohibited Activity or
Condition (“Environmental Inspections”), required by Lender in connection with
any foreclosure or deed in lieu of foreclosure, or as a condition of Lender’s
consent to any Transfer under Article VII, or required by Lender following a
reasonable determination by Lender that Prohibited Activities or Conditions may
exist. Any such costs incurred by Lender (including Attorneys’ Fees and Costs
and the costs of technical consultants whether incurred in connection with any
judicial or administrative process or otherwise) that Borrower fails to pay
promptly will become an additional part of the Indebtedness as provided in
Section 9.02. As long as: (i) no Event of Default has occurred and is
continuing, (ii) Borrower has actually paid for or reimbursed Lender for all
costs of any such Environmental Inspections performed or required by Lender, and
(iii) Lender is not prohibited by law, contract or otherwise from doing so,
Lender will make available to Borrower, without representation of any kind,
copies of Environmental Inspections prepared by third parties and delivered to
Lender. Lender reserves the right, and Borrower expressly authorizes Lender, to
make available to any party, including any prospective bidder at a foreclosure
sale of the Mortgaged Property, the results of any Environmental Inspections
made by or for Lender with respect to the Mortgaged Property. Borrower consents
to Lender notifying any party (either as part of a notice of sale or otherwise)
of the results of any Environmental Inspections made by or for Lender. Borrower
acknowledges that Lender cannot control or otherwise ensure the truthfulness or
accuracy of the results of any Environmental Inspections and that the release of
such results to prospective bidders at a foreclosure sale of the Mortgaged
Property may have a material and adverse effect upon the amount that a party may
bid at such sale. Borrower agrees that Lender will have no liability whatsoever
as a result of delivering the results of any Environmental Inspections made by
or for Lender to any third-party, and Borrower releases and forever discharges
Lender from any and all claims, damages or causes of action arising out of,
connected with or incidental to the results of the delivery of any Environmental
Inspections made by or for Lender. (f) Remedial Work. If any investigation, site
monitoring, containment, clean-up, Restoration or other remedial work (“Remedial
Work”) is necessary to comply with any Hazardous Materials Law or order of any
Governmental Authority that has or acquires jurisdiction over the Mortgaged
Property or the use, operation or improvement of the Mortgaged Property, or is
otherwise required by Lender as a consequence of any Prohibited Activity or
Condition or to prevent the occurrence of a Prohibited Activity or Condition,
Borrower will, by the earlier of (i) the applicable deadline required by
Hazardous Materials Law, or (ii) 30 days after Notice from Lender demanding such
action, begin performing the Remedial Work, and thereafter diligently prosecute
it to completion, and must in any event complete the work by the time required
by applicable Hazardous Materials Law. If Borrower fails to begin on a timely
basis or diligently prosecute any required Multifamily Loan and Security
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Remedial Work, Lender may, at its option, cause the Remedial Work to be
completed, in which case Borrower will reimburse Lender on demand for the cost
of doing so. Any reimbursement due from Borrower to Lender will become part of
the Indebtedness as provided in Section 9.02. (g) Borrower Contest of Order.
Notwithstanding Section 6.12(f), Borrower may contest the order of any
Governmental Authority in good faith through appropriate proceedings, provided
that (i) Borrower has demonstrated to Lender’s satisfaction that any delay in
completing Remedial Work pending the outcome of such proceedings would not
result in damage to the Mortgaged Property or to persons who use or occupy the
Improvements, or otherwise impair Lender’s interest under this Loan Agreement,
and (ii) if any delay in completing the Remedial Work results or may result in a
Lien against the Mortgaged Property, Borrower must promptly furnish to Lender a
bond or other security satisfactory to Lender in an amount not less than 150% of
the applicable claim. 6.13 Single Purpose Entity Requirements. (a) Single
Purpose Entity Requirements. Until the Indebtedness is paid in full, each
Borrower and any SPE Equity Owner will remain a “Single Purpose Entity,” which
means at all times since its formation and thereafter it will satisfy each of
the following conditions: (i) It will not engage in any business or activity,
other than the ownership, operation and maintenance of the Mortgaged Property
and activities incidental thereto. (ii) It will not acquire, own, hold, lease,
operate, manage, maintain, develop or improve any assets other than the
Mortgaged Property and such Personalty as may be necessary for the operation of
the Mortgaged Property and will conduct and operate its business as presently
conducted and operated. (iii) It will preserve its existence as an entity duly
organized, validly existing and in good standing (if applicable) under the laws
of the jurisdiction of its formation or organization and will do all things
necessary to observe organizational formalities. (iv) It will not merge or
consolidate with any other Person. (v) It will not take any action to dissolve,
wind-up, terminate or liquidate in whole or in part; to sell, transfer or
otherwise dispose of all or substantially all of its assets; to change its legal
structure; transfer or permit the direct or indirect transfer of any
partnership, membership or other equity interests, as applicable, other than
Transfers permitted under this Loan Agreement; issue additional partnership,
membership or other equity interests, as applicable, or seek to accomplish any
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(vi) It will not, without the prior unanimous written consent of all of
Borrower’s partners, members, or shareholders, as applicable, and, if
applicable, the prior unanimous written consent of 100% of the members of the
board of directors or of the board of Managers of Borrower or the SPE Equity
Owner, take any of the following actions: (A) File any insolvency, or
reorganization case or proceeding, to institute proceedings to have Borrower or
any SPE Equity Owner be adjudicated bankrupt or insolvent. (B) Institute
proceedings under any applicable insolvency law. (C) Seek any relief under any
law relating to relief from debts or the protection of debtors. (D) Consent to
the filing or institution of a Bankruptcy against Borrower or any SPE Equity
Owner. (E) File a petition seeking, or consent to, reorganization or relief with
respect to Borrower or any SPE Equity Owner under any applicable federal or
state law relating to bankruptcy or insolvency. (F) Seek or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian, or any similar official for Borrower or a substantial part of its
property or for any SPE Equity Owner or a substantial part of its property. (G)
Make any assignment for the benefit of creditors of Borrower or any SPE Equity
Owner. (H) Admit in writing Borrower’s or any SPE Equity Owner’s inability to
pay its debts generally as they become due. (I) Take action in furtherance of
any of the foregoing. (vii) It will not amend or restate its organizational
documents if such change would cause the provisions set forth in those
organizational documents not to comply with the requirements set forth in this
Section 6.13. (viii) It will not own any subsidiary or make any investment in,
any other Person. (ix) It will not commingle its assets with the assets of any
other Person and will hold all of its assets in its own name. Multifamily Loan
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(x) It will not incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the following: (A) The
Indebtedness and any further indebtedness as described in Section 11.11 with
regard to Supplemental Instruments. (B) Customary unsecured trade payables
incurred in the ordinary course of owning and operating the Mortgaged Property
provided the same are not evidenced by a promissory note, do not exceed, in the
aggregate, at any time a maximum amount of 2% of the original principal amount
of the Indebtedness and are paid within 60 days of the date incurred. (C)
through (I) are reserved. (xi) It will maintain its records, books of account,
bank accounts, financial statements, accounting records and other entity
documents separate and apart from those of any other Person and will not list
its assets as assets on the financial statement of any other Person; provided,
however, that Borrower’s assets may be included in a consolidated financial
statement of its Affiliate provided that (A) appropriate notation will be made
on such consolidated financial statements to indicate the separateness of
Borrower from such Affiliate and to indicate that Borrower’s assets and credit
are not available to satisfy the debts and other obligations of such Affiliate
or any other Person, and (B) such assets will also be listed on Borrower’s own
separate balance sheet. (xii) Except for capital contributions or capital
distributions permitted under the terms and conditions of its organizational
documents, it will only enter into any contract or agreement with any general
partner, member, shareholder, principal or Affiliate of Borrower or any
Guarantor, or any general partner, member, principal or Affiliate thereof, upon
terms and conditions that are commercially reasonable and substantially similar
to those that would be available on an arm’s-length basis with third parties.
(xiii) It will not maintain its assets in such a manner that will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person. (xiv) It will not assume or guaranty (excluding any
guaranty that has been executed and delivered in connection with the Note) the
debts or obligations of any other Person, hold itself out to be responsible for
the debts of another Person, pledge its assets to secure the obligations of any
other Person or otherwise pledge its assets for the benefit of any other Person,
or hold out its credit as being available to satisfy the obligations of any
other Person. Multifamily Loan and Security Agreement Page 44

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(xv) It will not make or permit to remain outstanding any loans or advances to
any other Person except for those investments permitted under the Loan Documents
and will not buy or hold evidence of indebtedness issued by any other Person
(other than cash or investment-grade securities). (xvi) It will file its own tax
returns separate from those of any other Person, unless Borrower (A) is treated
as a “disregarded entity” for tax purposes and is not required to file tax
returns under applicable law or (B) is required by applicable law to file
consolidated tax returns, and will pay any taxes required to be paid under
applicable law. (xvii) It will hold itself out to the public as a legal entity
separate and distinct from any other Person and conduct its business solely in
its own name, will correct any known misunderstanding regarding its separate
identity and will not identify itself or any of its Affiliates as a division or
department of any other Person. (xviii) It will maintain adequate capital for
the normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations and will pay its
debts and liabilities from its own assets as the same become due; provided,
however, that nothing in this Section 6.13(a)(xviii) will require any member or
partner of Borrower or any Borrower Principal to make any equity contribution to
Borrower. (xix) It will allocate fairly and reasonably shared expenses with
Affiliates (including shared office space) and use separate stationery, invoices
and checks bearing its own name. (xx) It will pay (or cause the Property Manager
to pay on behalf of Borrower from Borrower’s funds) its own liabilities
(including salaries of its own employees) from its own funds; provided, however,
that nothing in this Section 6.13(a)(xx) will require any member or partner of
Borrower or any Borrower Principal to make any equity contribution to Borrower.
(xxi) It will not acquire obligations or securities of its partners, members,
shareholders, or Affiliates, as applicable. (xxii) Except as contemplated or
permitted by the property management agreement with respect to the Property
Manager, it will not permit any Affiliate or constituent party independent
access to its bank accounts. (xxiii) It will maintain a sufficient number of
employees (if any) in light of its contemplated business operations and pay the
salaries of its own employees, if any, only from its own funds; provided,
however, that Multifamily Loan and Security Agreement Page 45

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nothing in this Section 6.13(a)(xxiii) will require any member or partner of
Borrower or any Borrower Principal to make any equity contribution to Borrower.
(xxiv) If such entity is a single member limited liability company, such entity
will satisfy each of the following conditions: (A) Be formed and organized under
Delaware law. (B) Have either one springing member that is a corporation or two
springing members who are natural persons. If there is more than one springing
member, only one springing member will be the sole member of Borrower or SPE
Equity Owner (as applicable) at any one time, and the second springing member
will become the sole member only upon the first springing member ceasing to be a
member. (C) Otherwise comply with all Rating Agencies’ criteria for single
member limited liability companies (including the delivery of Delaware single
member limited liability company opinions acceptable in all respects to Lender).
(D) At all times Borrower or SPE Equity Owner (as applicable) will have one and
only one member. (xxv) If such entity is a single member limited liability
company that is board- managed, such entity will have a board of Managers
separate from that of Guarantor and any other Person and will cause its board of
Managers to keep minutes of board meetings and actions and observe all other
Delaware limited liability company required formalities. (xxvi) If an SPE Equity
Owner is required pursuant to this Loan Agreement, if Borrower is (A) a limited
liability company with more than one member, then Borrower has and will have at
least one member that is an SPE Equity Owner that has satisfied and will satisfy
the requirements of Section 6.13(b) and such member is its managing member, or
(B) a limited partnership, then all of its general partners are SPE Equity
Owners that have satisfied and will satisfy the requirements set forth in
Section 6.13(b). (xxvii) Reserved. (xxviii) Reserved. (b) SPE Equity Owner
Requirements. The SPE Equity Owner, if applicable, will at all times since its
formation and thereafter comply in its own right (subject to the Multifamily
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modifications set forth below), and will cause Borrower to comply, with each of
the requirements of a Single Purpose Entity. Upon the withdrawal or the
disassociation of an SPE Equity Owner from Borrower, Borrower will immediately
appoint a new SPE Equity Owner, whose organizational documents are substantially
similar to those of the withdrawn or disassociated SPE Equity Owner, and deliver
a new nonconsolidation opinion to Lender in form and substance satisfactory to
Lender with regard to nonconsolidation by a bankruptcy court of the assets of
each of Borrower and SPE Equity Owner with those of its Affiliates. (i) With
respect to Section 6.13(a)(i), the SPE Equity Owner will not engage in any
business or activity other than being the managing member or general partner, as
the case may be, of Borrower and owning at least 0.5% equity interest in
Borrower. (ii) With respect to Section 6.13(a)(ii), the SPE Equity Owner has not
and will not acquire or own any assets other than its equity interest in
Borrower and personal property related thereto. (iii) With respect to Section
6.13(a)(viii), the SPE Equity Owner will not own any subsidiary or make any
investment in any other Person, except for Borrower. (iv) With respect to
Section 6.13(a)(x), the SPE Equity Owner has not and will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than (A) customary unsecured payables incurred in the
ordinary course of owning Borrower provided the same are not evidenced by a
promissory note, do not exceed, in the aggregate, at any time a maximum amount
of $10,000 and are paid within 60 days of the date incurred, and (B) in its
capacity as general partner of Borrower (if applicable). (v) With respect to
Section 6.13(a)(xiv), the SPE Equity Owner will not assume or guaranty the debts
or obligations of any other Person, hold itself out to be responsible for the
debts of another Person, pledge its assets to secure the obligations of any
other Person or otherwise pledge its assets for the benefit of any other Person,
or hold out its credit as being available to satisfy the obligations of any
other Person, except for in its capacity as general partner of Borrower (if
applicable). (c) Effect of Transfer on Single Purpose Entity Requirements.
Notwithstanding anything to the contrary in this Loan Agreement, no Transfer
will be permitted under Article VII unless the provisions of this Section 6.13
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6.14 Repairs and Capital Replacements. (a) Completion of Repairs. Borrower will
commence any Repairs as soon as practicable after the date of this Loan
Agreement and will diligently proceed with and complete such Repairs on or
before the Completion Date. All Repairs and Capital Replacements will be
completed in a good and workmanlike manner, with suitable materials, and in
accordance with good building practices and all applicable laws, ordinances,
rules, regulations, building setback lines and restrictions applicable to the
Mortgaged Property. Borrower agrees to cause the replacement of any material or
work that is defective, unworkmanlike or that does not comply with the
requirements of this Loan Agreement, as determined by Lender. (b) Purchases.
Without the prior consent of Lender, no materials, machinery, equipment,
fixtures or any other part of the Repairs or Capital Replacements will be
purchased or installed under conditional sale contracts or lease agreements, or
any other arrangement wherein title to such Repairs or Capital Replacements is
retained or subjected to a purchase money security interest, or the right is
reserved or accrues to anyone to remove or repossess any such Repairs or Capital
Replacements, or to consider them as personal property. (c) Lien Protection.
Borrower will promptly pay or cause to be paid, when due, all costs, charges and
expenses incurred in connection with the construction and completion of the
Repairs or Capital Replacements, and will keep the Mortgaged Property free and
clear of any and all Liens other than the Lien of the Security Instrument and
any other Lien to which Lender has consented. (d) Adverse Claims. Borrower will
promptly advise Lender in writing of any litigation, Liens or claims affecting
the Mortgaged Property and of all complaints and charges made by any
Governmental Authority that may delay or adversely affect the Repairs or Capital
Replacements. 6.15 Residential Leases Affecting the Mortgaged Property. (a)
Borrower will, promptly upon Lender’s request, deliver to Lender an executed
copy of each residential Lease then in effect. (b) All Leases for residential
units will satisfy the following conditions: (i) They will be on forms that are
customary for similar multifamily properties in the Property Jurisdiction. (ii)
They will be for initial terms of at least 6 months and not more than 2 years
(unless otherwise approved in writing by Lender). Multifamily Loan and Security
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(iii) They will not include any Corporate Leases (unless otherwise approved in
writing by Lender). (iv) They will not include options to purchase. (c) If
Borrower is a cooperative housing corporation or association, notwithstanding
anything to the contrary contained in this Loan Agreement, so long as Borrower
remains a cooperative housing corporation or association and is not in breach of
any covenant of this Loan Agreement, Lender consents to each of the following:
(i) The execution of Leases for terms in excess of 2 years to a tenant
shareholder of Borrower, so long as such Leases, including proprietary Leases,
are and will remain subordinate to the Lien of the Security Instrument. (ii) The
surrender or termination of such Leases where the surrendered or terminated
Lease is immediately replaced or where Borrower makes its best efforts to secure
such immediate replacement by a newly-executed Lease of the same apartment to a
tenant shareholder of Borrower. However, no consent is given by Lender to any
execution, surrender, termination or assignment of a Lease under terms that
would waive or reduce the obligation of the resulting tenant shareholder under
such Lease to pay cooperative assessments in full when due or the obligation of
the former tenant shareholder to pay any unpaid portion of such assessments. (d)
Reserved. 6.16 Litigation; Government Proceedings. Borrower will give prompt
Notice to Lender of any litigation or governmental proceedings pending or, to
the best of Borrower’s knowledge, threatened in writing against Borrower or any
Borrower Principal which might have a Material Adverse Effect. As and when
requested by Lender, Borrower will provide Lender with written updates on the
status of all litigation or governmental proceedings affecting Borrower or any
Borrower Principal. 6.17 Further Assurances and Estoppel Certificates; Lender’s
Expenses. Within 10 days after a request from Lender, in Lender’s Discretion,
Borrower will take each of the following actions: (a) Deliver to Lender a
written statement, signed and acknowledged by Borrower, certifying to Lender or
any Person designated by Lender, as of the date of such statement: (i) that the
Loan Documents are unmodified and in full force and effect (or, if there have
been modifications, that the Loan Documents are in full force and effect as
modified and setting forth such modifications), (ii) the unpaid principal
balance of the Note, (iii) the date to which interest under the Note has been
paid, (iv) that Borrower is not in default in paying the Indebtedness or in
performing or observing any of the covenants or agreements contained in this
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Loan Agreement or any of the other Loan Documents (or, if Borrower is in
default, describing such default in reasonable detail), (v) whether there are
any then-existing setoffs or defenses known to Borrower against the enforcement
of any right or remedy of Lender under the Loan Documents, and (vi) any
additional facts requested by Lender. (b) Execute, acknowledge and/or deliver,
at its sole cost and expense, all further acts, deeds, conveyances, assignments,
estoppel certificates, financing statements or amendments, transfers and
assurances as Lender may require from time to time in order to better assure,
grant and convey to Lender the rights intended to be granted, now or in the
future, to Lender under this Loan Agreement and the Loan Documents or in
connection with Lender’s consent rights under Article VII. Borrower acknowledges
and agrees that, in connection with each request by Borrower under this Loan
Agreement or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees
and Costs and expenses incurred by Lender and Loan Servicer, including any fees
charged by the Rating Agencies, if applicable, regardless of whether the matter
is approved, denied or withdrawn. Any amounts payable by Borrower under this
Loan Agreement will be deemed a part of the Indebtedness, will be secured by the
Security Instrument and will bear interest at the Default Rate if not fully paid
within 10 days of written demand for payment. 6.18 Cap Collateral. Reserved.
6.19 Ground Lease. Reserved. 6.20 ERISA Requirements. (a) Borrower will not
engage in any transaction which would cause an obligation, or action taken or to
be taken under this Loan Agreement (or the exercise by Lender of any of its
rights under the Note, this Loan Agreement or any of the other Loan Documents)
to be a non-exempt prohibited transaction under ERISA or Section 4975 of the Tax
Code. (b) Borrower will deliver to Lender such certifications or other evidence
from time to time throughout the term of this Loan Agreement, as requested by
Lender in Lender’s Discretion, confirming each of the following: (i) Borrower is
not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is
subject to Title I of ERISA, a “plan” to which Section 4975 of the Tax Code
applies, or an entity whose underlying assets constitute “plan assets” of one or
more of such plans. (ii) Borrower is not a “governmental plan” within the
meaning of Section 3(32) of ERISA. Multifamily Loan and Security Agreement Page
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(iii) Borrower is not subject to state statutes regulating investments or
fiduciary obligations with respect to governmental plans. (iv) One or more of
the following circumstances is true: (A) Equity interests in Borrower are
publicly offered securities within the meaning of 29 C.F.R. Section
2510.3-101(b)(2), as amended from time to time or any successor provision. (B)
Less than 25% of each outstanding class of equity interests in Borrower are held
by “benefit plan investors” within the meaning of Section 3(42) of ERISA, as
amended from time to time or any successor provision. (C) Borrower qualifies as
either an “operating company” or a “real estate operating company” within the
meaning of 29 C.F.R. Section 2510.3-101(c) or (e), as either may be amended from
time to time or any successor provisions, or is an investment company registered
under the Investment Company Act of 1940. (v) Reserved 6.21 through 6.52 are
Reserved. 6.53 Economic Sanctions Laws; AML Laws. (a) Borrower will comply with
the Economic Sanctions Laws and AML Laws, as applicable, and Borrower will take
reasonable measures to ensure that each Borrower Principal will comply with the
Economic Sanctions Laws and AML Laws, as applicable. (b) Borrower and each
Borrower Principal will have in place practices and procedures for the admission
of investors which are designed to prevent the admission of: (i) Any Non-U.S.
Equity Holder, or any investor that would have a 25% or more ownership interest
in Borrower (whether directly or indirectly), and that has been convicted of a
violation of the AML Laws, or been the subject of a final enforcement action
relating to the AML Laws. (ii) Any Person with a 25% or more ownership interest
in Borrower (whether directly or indirectly) that is on the Prohibited Parties
Lists. (iii) Any Non-U.S. Equity Holder that is on the OFAC Lists. Multifamily
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6.54 Crowdfunding. Borrower and each Borrower Principal will not permit direct
or indirect ownership (or other economic) interests of 25% or more in Borrower
or any Borrower Principal that have been marketed or sold to investors through
any form of Crowdfunding. 6.55 through 6.62 are Reserved. ARTICLE VII TRANSFERS
OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER. 7.01 Prohibited Transfers.
Subject to Section 7.02 and 7.03, as applicable, the occurrence of any of the
following Transfers will constitute a Prohibited Transfer: (a) A Transfer of all
or any part of the Mortgaged Property or any interest in the Mortgaged Property,
whether voluntary, involuntary or by operation of law, including (i) the grant,
creation or existence of any Lien on the Mortgaged Property, even if such Lien
does not have priority over the Lien of the Security Instrument, and (ii) the
partial release of income producing or non-income producing property. (b) A
Transfer or series of Transfers of any legal or equitable interest of any
Guarantor which owns a direct or indirect interest in Borrower that result(s) in
such Guarantor no longer owning any direct or indirect interest in Borrower. (c)
The Transfer of any Controlling Interest in Borrower or any Designated Entity
for Transfers. (d) A Transfer or series of Transfers of any legal or equitable
interest that result(s) in a Required Equity Owner no longer owning the Required
Equity Ownership Interest. (e) The occurrence of a Status Event with respect to
Borrower. (f) The grant, creation or existence of any Lien on Ownership
Interest, whether voluntary, involuntary or by operation of law, and whether or
not such Lien on Ownership Interest has priority over the Lien of the Security
Instrument, if the foreclosure of such Lien or the exercise of other remedies
would result in a Prohibited Transfer. (g) The termination or revocation of a
Trust if the Trust is Borrower, Guarantor or a Designated Entity for Transfers.
(h) through (k) are Reserved. (l) A Transfer that requires Lender’s prior
consent under this Loan Agreement or a Conditionally Permitted Transfer that
requires that certain conditions be satisfied, Multifamily Loan and Security
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if such prior consent was not obtained or such conditions were not satisfied, as
applicable. (m) through (q) are Reserved. 7.02 Permitted Transfers.
Notwithstanding any provision of Section 7.01 to the contrary, the following
Transfers are Permitted Transfers: (a) Permitted Transfers of the Mortgaged
Property. (i) A Prohibited Transfer of the Mortgaged Property for which Borrower
has obtained Lender’s written consent. (ii) The grant of a leasehold interest in
an individual dwelling unit for a term of 2 years or less (or longer if approved
by Lender in writing) not containing an option to purchase. (iii) The creation
of any New Non-Residential Lease, or the modification or termination of any
Non-Residential Lease, in each case, for which Borrower satisfies the
requirements of Section 6.04. (iv) A Condemnation with respect to which Borrower
satisfies the requirements of Section 6.11. (v) A Transfer of obsolete or worn
out Personalty or Fixtures that are contemporaneously replaced by items of equal
or better function and quality, which are free of Liens (other than those Liens
created by the Loan Documents or consented to by Lender in writing). (vi) The
creation of a mechanic’s, materialmen’s, or judgment Lien with respect to which
Borrower satisfies the requirements of Section 6.09(m). (vii) An easement,
restrictive covenant or other encumbrance with respect to which Borrower
satisfies the requirements of Section 7.10. (viii) A Lien of a Supplemental
Instrument with respect to which Borrower satisfies the requirements of Section
11.11. (ix) A Defeasance with respect to which Borrower satisfies the
requirements of Section 11.12. (b) Permitted Transfers of Ownership Interests
(i) A Transfer of any legal or equitable interests in an entity that is not
Borrower or a Designated Entity for Transfers so long as such Transfer does not
result in a Prohibited Transfer under Section 7.01(b) or 7.01(d). Multifamily
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(ii) A Transfer of any legal or equitable Non-Controlling Interest in Borrower
or any Designated Entity for Transfers so long as such Transfer does not result
in a Prohibited Transfer under Section 7.01(b) or 7.01(d). (iii) A Prohibited
Transfer of any legal or equitable interests in Borrower or a Designated Entity
for Transfers for which Borrower has obtained Lender’s written consent. (iv) A
Conditionally Permitted Transfer pursuant to Section 7.03, upon the satisfaction
of all applicable conditions. (v) The Transfer by a Person of all or part of the
Controlling Interest in Borrower or a Designated Entity for Transfers if such
interests are first converted to a Non-Controlling Interest and the transferor
retains Control of the Borrower or Designated Entity for Transfers, as
applicable, so long as such Transfer does not result in a Prohibited Transfer
under Section 7.01(b) or 7.01(d). (vi) If Borrower is a housing cooperative or
association, the Transfer of the shares in the housing cooperative or
association or the assignment of the occupancy agreements or Leases relating to
tenant shareholders. (c) through (r) are Reserved. 7.03 Conditionally Permitted
Transfers. Notwithstanding any provision of Section 7.01 to the contrary, the
occurrence of any of the following Transfers will not constitute a Prohibited
Transfer if Borrower has complied with all applicable conditions specified in
this Section 7.03 and in Section 7.04 (each a “Conditionally Permitted
Transfer”). (a) Conditionally Permitted Transfers - Category I (Transfer
Processing Fee transactions) (i) Affiliate Transfer. An “Affiliate Transfer” is
a Transfer of any Controlling Interest in Borrower or a Designated Entity for
Transfers to an Affiliate of the transferor. (ii) Intrafamily Transfer. An
“Intrafamily Transfer” is a Transfer of any Controlling Interest in Borrower or
a Designated Entity for Transfers to an entity or revocable Trust that is
Controlled by the transferor for the benefit of Immediate Family Members. (iii)
Transfer to Previously Underwritten Person. (A) A “Transfer to Previously
Underwritten Person” is a Transfer of a Controlling Interest in Borrower or a
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Transfers to a Previously Underwritten Person due to the retirement, death, or
legal incapacity of a Prior Borrower Principal. If the name of Previously
Underwritten Person is not completed in the Summary of Loan Terms then this
Section 7.03(a)(iii) is not applicable. (B) In place of the Notice required in
Section 7.04(a), Borrower provides Lender with Notice of such Transfer together
with copies of all documents effecting such Transfer not more than 60 days after
the retirement, death, or legal incapacity of Prior Borrower Principal. (C) If
Prior Borrower Principal or its Affiliate was a Guarantor, one of the following
must occur: (1) Lender determines that at the time of the Transfer any or all
the remaining Guarantors will meet the requirements for a Replacement Guarantor,
including the Replacement Guarantor Net Worth and Liquidity Requirements, or (2)
Previously Underwritten Person or an Affiliate becomes a Replacement Guarantor
and executes and delivers a Replacement Guaranty within 60 days after the
retirement, death, or legal incapacity of Prior Borrower Principal. (D)
Previously Underwritten Person certifies in writing to Lender that, since the
date of this Loan Agreement, except as disclosed to and approved by Lender in
writing, Previously Underwritten Person has not been: (1) Subject to a claim in
any litigation or other proceeding (even if settled) relating to fraud, breach
of fiduciary duty, breach of trust or other similar claim, or money laundering,
terrorist financing, terrorism or similar claim. (2) To the best of Previously
Underwritten Person’s knowledge, investigated by any Governmental Authority in
connection with any matter set forth in Section 7.03(a)(iii)(D)(1). (3) The
subject of a complaint or indictment charging a felony. (4) Involved in any
pending or current criminal litigation. (5) The subject of a Bankruptcy.
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(6) Suspended, barred or otherwise restricted by any department or agency of the
federal government. (E) Previously Underwritten Person certifies in writing to
Lender that its net worth and liquidity are substantially the same as or better
than the net worth and liquidity of Previously Underwritten Person as of the
date of this Loan Agreement. (F) Section 7.04(i) will not be applicable (solely
with respect to the Prior Borrower Principal). (iv) Co-Owner Transfer. (A) A
“Co-Owner Transfer” is a Transfer of interests in the Mortgaged Property by any
co-owner of the Mortgaged Property to any other co-owner of the Mortgaged
Property. (B) Lender receives and approves the documents transferring interest
in the Mortgaged Property to the transferee(s). (C) If Borrower is a
tenancy-in-common, each of the co-owners remaining after the Co-Owner Transfer
executes an amendment to the Tenancy in Common Agreement reasonably acceptable
to Lender. (D) Each co-owner remaining after the Co-Owner Transfer reaffirms in
writing, in a form reasonably acceptable to Lender, its obligations under the
Note, Loan Agreement, Security Instrument, and any other Loan Document and
acknowledges and confirms that the Note, Loan Agreement, Security Instrument,
and all other Loan Documents are in full force and effect. (E) Each Guarantor
reaffirms in writing, in a form reasonably acceptable to Lender, its obligations
under any Guaranty and acknowledges and confirms that the Guaranty remains in
full force and effect. (F) Borrower delivers to Lender either (1) an endorsement
to the Title Policy along with a title update, or (2) a new title insurance
policy, in either case with an effective date no earlier than the date of
recordation of the deed transferring the interest in the Mortgaged Property to
the transferee. An endorsement to the Title Policy that evidences the
recordation of the deed transferring the interest in the Mortgaged Property to
the transferee but which does not change the effective date of the Title Policy
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(G) Following the Co-Owner Transfer, Required Co-Owner must continue to maintain
the Required Co-Owner Interest as described in the Part B.9, Summary of Loan
Terms. (v) TIC Roll-up Transfer. (A) A “TIC Roll-up Transfer” is the termination
of the existing Tenancy in Common Agreement and the Transfer of all the
interests of each Co-Owner Borrower in the Mortgaged Property to a single entity
(“Consolidation Borrower”). (B) Immediately after the TIC Roll-up Transfer, the
proportional beneficial ownership interest in the Consolidation Borrower must be
the same as the ultimate beneficial ownership of each Co- Owner Borrower in the
Mortgaged Property immediately prior to the TIC Roll-up Transfer. By way of
example, an owner of a 10% membership interest in a Co-Owner Borrower that owns
50% of the Mortgaged Property must become a 5% member of the Consolidation
Borrower. (C) If the Consolidation Borrower was formed more than 90 days prior
to the date of the TIC Roll-up Transfer, the Consolidation Borrower must comply
with all of Lender’s then-current requirements relating to recycled entities.
(D) Following the TIC Roll-up Transfer, the Consolidation Borrower must be
directly or indirectly Controlled by the Consolidation Borrower Manager
identified in Part B.9, Summary of Loan Terms. (E) All consents, agreements and
other documents relating to the termination of the Tenancy in Common Agreement,
the transfer of interests in the Mortgaged Property to Consolidation Borrower,
and/or otherwise related to the TIC Roll-up Transfer are reasonably satisfactory
to Lender. (F) The Consolidation Borrower executes an Assumption Agreement that,
among other things, requires the Consolidation Borrower to assume and perform
all obligations of each Co-Owner Borrower set forth in the Loan Documents. Each
Co-Owner Borrower will remain liable and Consolidation Borrower will become
liable under the Loan Documents for events or circumstances occurring or
existing on or before the date of the TIC Roll-up Transfer. (G) The Assumption
Agreement is recorded in the land records and Consolidation Borrower delivers
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Title Policy along with a title update, or (2) a new title insurance policy in a
form acceptable to Lender, in either case with an effective date no earlier than
the date of recordation of the Assumption Agreement. An endorsement to the
existing Title Policy that evidences the recordation of the deed transferring
the interest in the Mortgaged Property to the Consolidation Borrower but which
does not change the effective date of the Title Policy will not be sufficient.
(H) Each Guarantor reaffirms in writing, in a form reasonably acceptable to
Lender, its obligations under any existing Guaranty and acknowledges and
confirms that the Guaranty remains in full force and effect. (I) The
Consolidation Borrower files such financing statements as reasonably required by
Lender. (J) The TIC Roll-up Transfer is completed in accordance with the terms
of this Section 7.03(a)(v) at least one year prior to the Maturity Date. (vi)
through (xv) are Reserved. (b) Conditionally Permitted Transfers - Category II
(Special Transfer Processing Fee transactions) (i) Transfer Due to Death. (A)
“Transfer Due to Death” is (1) a Transfer to a Beneficiary of a Controlling
Interest in Borrower or a Designated Entity for Transfers by devise, descent, or
operation of law, due to the death of a natural person, and if applicable, (2)
the subsequent Transfer by such Beneficiary to another Beneficiary of the
deceased natural person (“Second Beneficiary”). (B) In place of the Notice
required in Section 7.04(a), Borrower provides Lender with Notice of the death
not more than 60 days after the death (“Notice of Death”). (C) Within 30 days
after the Notice of Death, Borrower notifies Lender (1) of the proposed Transfer
date, (2) of the identity of the Beneficiary, and (3) whether the Beneficiary
will subsequently Transfer the Controlling Interest to a Second Beneficiary and
the identity of the Second Beneficiary, if applicable (“Settlement Notice”).
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(D) In place of the Transfer Processing Fee due under Section 7.04(b), Borrower
pays Lender the Special Transfer Processing Fee when Borrower delivers the
Settlement Notice. (E) Contemporaneously with providing the Settlement Notice to
Lender, Borrower provides evidence reasonably satisfactory to Lender that the
eligibility, organization, credit and experience in the management of similar
properties of Beneficiary or Second Beneficiary, as applicable, are appropriate
to the overall structure and documentation of the Loan. (F) If the Transfer Due
to Death results from the death of any Guarantor, each surviving Guarantor
executes such documents and agreements as Lender reasonably requires to ratify
its Guaranty within 30 days after the Notice of Death. (G) If the Transfer Due
to Death results from the death of any Guarantor, unless Lender determines that
any or all the surviving Guarantors meet the requirements for a Replacement
Guarantor, including the Replacement Guarantor Net Worth and Liquidity
Requirements, one of the following occurs: (1) Within 30 days after the
Settlement Notice, Borrower causes a Replacement Guarantor to execute and
deliver to Lender a Replacement Guaranty. (2) The estate of the deceased
Guarantor ratifies the Guaranty in writing within 30 days after the Settlement
Notice, and within 6 months after the death of the deceased Guarantor, Borrower
causes a Replacement Guarantor to execute and deliver to Lender a Replacement
Guaranty. (H) Section 7.04(i) and (j) will not be applicable (solely with
respect to any deceased Guarantor). (ii) Preferred Equity Control Take-Over
Transfer. (A) A “Preferred Equity Control Take-Over Transfer” is a Transfer of
the Manager’s right to Control the Borrower to Preferred Equity Investor or an
Affiliate of Preferred Equity Investor pursuant to the operating agreement,
joint venture agreement, or similar agreement governing a preferred equity
contribution. If the name of Preferred Equity Investor is not specified in the
Summary of Loan Terms then this Transfer provision is not applicable. The
Preferred Equity Control Take-Over Transfer cannot include the Transfer of the
Manager’s ownership interests to Preferred Equity Investor. Multifamily Loan and
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(B) In place of the Transfer Processing Fee required by Section 7.04(b),
Borrower pays Lender the Special Transfer Processing Fee when Borrower delivers
the Notice of the Transfer. (C) Notwithstanding Section 7.04(c), if there is an
Event of Default and the Preferred Equity Control Take-Over Transfer would cure
the Event of Default, then the Preferred Equity Control Take-Over Transfer will
be permitted if it occurs within 60 days after all applicable conditions have
been met to Lender’s satisfaction. (D) Preferred Equity Investor or an Affiliate
of Preferred Equity Investor becomes a Replacement Guarantor and executes and
delivers a Replacement Guaranty. (E) Preferred Equity Investor certifies in
writing to Lender that since the date of this Loan Agreement, except as
disclosed to and approved by Lender, Preferred Equity Investor (or the Affiliate
of Preferred Equity Investor, if applicable) has not been: (1) Subject to a
claim in any litigation or other proceeding (even if settled) relating to fraud,
breach of fiduciary duty, breach of trust or other similar claim, or money
laundering, terrorist financing, terrorism or similar claim. (2) To the best of
Preferred Equity Investor’s knowledge, investigated by any Governmental
Authority in connection with any matter set forth in Section 7.03(b)(ii)(E)(1).
(3) The subject of a complaint or indictment charging a felony. (4) Involved in
any pending or current criminal litigation. (5) The subject of a Bankruptcy. (6)
Suspended, barred or otherwise restricted by any department or agency of the
federal government. (F) Preferred Equity Investor certifies in writing to Lender
that its net worth and liquidity (or the net worth and liquidity of the
Affiliate of Preferred Equity Investor) are substantially the same as or better
than the net worth and liquidity of Preferred Equity Investor as of the date of
this Loan Agreement. (G) Section 7.04(i) will not be applicable. (iii) Buy-Sell
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(A) A “Buy-Sell Transfer” is a Transfer of the Manager’s right to directly or
indirectly Control the Borrower and/or the Manager’s direct or indirect
ownership interest in the Borrower to the Buy- Sell Equity Investor or an
Affiliate of Buy-Sell Equity Investor pursuant to a buy-sell agreement,
operating agreement, partnership agreement, joint venture agreement, or similar
agreement. If the name of the Buy-Sell Equity Investor is not specified in the
Summary of Loan Terms then this provision is not applicable. (B) In place of the
Transfer Processing Fee required by Section 7.04(b), Borrower pays Lender the
Special Transfer Processing Fee when Borrower delivers the Notice. (C)
Notwithstanding Section 7.04(c), if there is an Event of Default and the
Buy-Sell Transfer would cure the Event of Default, then the Buy-Sell Transfer
will be permitted if it occurs within 60 days after all applicable conditions
have been met to Lender’s satisfaction. (D) Buy-Sell Equity Investor or its
Affiliate becomes a Replacement Guarantor and executes and delivers a
Replacement Guaranty. (E) Buy-Sell Equity Investor certifies in writing to
Lender that since the date of this Loan Agreement, except as disclosed to and
approved by Lender, Buy-Sell Equity Investor (or the Affiliate of Buy-Sell
Equity Investor, if applicable) has not been: (1) Subject to a claim in any
litigation or other proceeding (even if settled) relating to fraud, breach of
fiduciary duty, breach of trust or other similar claim, or money laundering,
terrorist financing, terrorism or similar claim. (2) To the best of Buy-Sell
Equity Investor’s knowledge, investigated by any Governmental Authority in
connection with any matter set forth in Section 7.03(b)(iii)(E)(1). (3) The
subject of a complaint or indictment charging a felony. (4) Involved in any
pending or current criminal litigation. (5) The subject of a Bankruptcy. (6)
Suspended, barred or otherwise restricted by any department or agency of the
federal government. Multifamily Loan and Security Agreement Page 61

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(F) Buy-Sell Equity Investor certifies in writing to Lender that its net worth
and liquidity (or the net worth and liquidity of the Affiliate of Buy-Sell
Equity Investor, if applicable) are substantially the same as or better than the
net worth and liquidity of Buy-Sell Equity Investor as of the date of this Loan
Agreement. (G) Section 7.04(i) will not be applicable. (iv) through (viii) are
Reserved. (c) Conditionally Permitted Transfers - Category III (Transfer
Processing Fee plus Conditional Transfer Fee transactions) If the Loan is in a
Securitization, for purposes of this Section 7.03(c) only, the term “Lender in
Lender’s Discretion” may include the determination of the approved directing
certificateholder, if any, in such Securitization. (i) Manager Transfer. (A) A
“Manager Transfer” is a voluntary or involuntary Transfer by a Manager
(“Departing Manager”) to one or more Existing Owners. (B) Lender in Lender’s
Discretion has determined that the eligibility, organization, credit, and
experience in the management of similar properties of the Existing Owner are
appropriate to the overall structure and documentation of the Loan. (C) If the
Departing Manager or its Affiliate is a Guarantor, Existing Owner or an
Affiliate of Existing Owner becomes a Replacement Guarantor and executes and
delivers a Replacement Guaranty. (D) Section 7.04(i) will not be applicable. (E)
Notwithstanding Section 7.04(q), Borrower pays to Lender the Conditional
Transfer Fee at the time of the Manager Transfer. (ii) Required Equity Owner
Transfer. (A) A “Required Equity Owner Transfer” is a Transfer by a Required
Equity Owner (“Departing Equity Owner”) of part or all of the Required Equity
Ownership Interest. (B) Lender in Lender’s Discretion has determined that it is
not necessary for the Departing Equity Owner to maintain the Required Equity
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(C) If the Required Equity Owner Transfer takes place in connection with another
Transfer, then notwithstanding Section 7.04(b), Lender will not collect a
Transfer Processing Fee if a Transfer Processing Fee or Special Transfer
Processing Fee was collected by Lender in connection with the other Transfer.
(D) Section 7.04(r) will not be applicable. (E) Notwithstanding Section 7.04(q),
Borrower pays to Lender the Conditional Transfer Fee at the time of the Required
Equity Owner Transfer. (iii) Release of Guarantor Transfer. (A) A “Release of
Guarantor Transfer” is a Transfer that occurs when Lender in Lender’s Discretion
agrees in writing to release a Guarantor (“Released Guarantor”) of a portion of
Released Guarantor’s liability under the Guaranty. (B) After the Release of
Guarantor Transfer, there must be one or more remaining Guarantor(s), which
individually or together meet the Replacement Guarantor Net Worth and Liquidity
Requirements and are otherwise acceptable to Lender. (C) If Lender consents to a
Release of Guarantor Transfer, then one of the following will apply: (i) If
Borrower delivers to Lender a Clean Site Assessment, then Lender will release
Released Guarantor from all of Released Guarantor’s obligations except Released
Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12 or
Section 10.02(b) with respect to any loss, liability, damage, claim, cost or
expense which directly or indirectly arises from or relates to any Prohibited
Activities or Conditions existing prior to the date of the Transfer. (ii) If
Borrower does not deliver a Clean Site Assessment as described in Section
7.03(B)(iii), then Lender will release Released Guarantor from all of Released
Guarantor’s obligations except for Released Guarantor’s obligation to guaranty
Borrower’s liability under Section 6.12 or Section 10.02(b). Multifamily Loan
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(D) If the Release of Guarantor Transfer takes place in connection with another
Transfer, notwithstanding Section 7.04(b), Lender will not collect a Transfer
Processing Fee if a Transfer Processing Fee or Special Transfer Processing Fee
was collected by Lender in connection with the other Transfer. (E)
Notwithstanding Section 7.04(q), Borrower pays to Lender the Conditional
Transfer Fee at the time of the Release of Guarantor Transfer unless the Release
of Guarantor Transfer takes place in connection with another Conditionally
Permitted Transfer or a Transfer to which Lender has consented pursuant to
Section 7.05. (iv) through (viii) are Reserved. (d) Reserved. 7.04 Conditions
for Conditionally Permitted Transfers. The following conditions will apply to
all Conditionally Permitted Transfers unless otherwise noted in Section 7.03.
(a) Borrower provides Lender with Notice at least 30 days prior to the proposed
Conditionally Permitted Transfer. (b) Borrower pays a Transfer Processing Fee to
Lender at the time Borrower provides Lender with the Notice of such Transfer.
(c) At the time of the Conditionally Permitted Transfer, no Event of Default has
occurred and is continuing and no event or condition has occurred and is
continuing that, with the giving of Notice or the passage of time, or both,
would become an Event of Default. (d) Borrower delivers to Lender organizational
charts, in form and detail acceptable to Lender, reflecting the structure of
Borrower prior to and after the Conditionally Permitted Transfer. If required by
Lender, the Loan Agreement is amended to revise Exhibit H to reflect the
post-Conditionally Permitted Transfer organizational chart. (e) Borrower
delivers to Lender either (i) copies of the then-current organizational
documents of Borrower and any other entity in which interests will be
transferred, including any proposed amendments to be made in connection with the
Conditionally Permitted Transfer or (ii) a certification that the organizational
documents have not been modified since the date of this Loan Agreement. (f)
Borrower certifies in writing to Lender that as of the date of the Conditionally
Permitted Transfer no Borrower Principal: (i) Is on any Prohibited Parties
Lists. Multifamily Loan and Security Agreement Page 64

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(ii) Has been convicted of a violation of the AML Laws. (iii) Has been the
subject of a final enforcement action relating to the AML Laws. (g) Borrower
certifies in writing to Lender that as of the date of the Conditionally
Permitted Transfer either there will not be any Non-U.S. Equity Holders, or no
Non-U.S. Equity Holder: (i) Is on the OFAC Lists. (ii) Has been convicted of a
violation of the AML Laws. (iii) Has been the subject of a final enforcement
action relating to the AML Laws. (h) Following the Conditionally Permitted
Transfer, one of the following is true: (i) The Property Manager, if applicable,
continues to be responsible for the management of the Mortgaged Property, and
such Conditionally Permitted Transfer will not result in a change in the
day-to-day operations of the Mortgaged Property. (ii) The requirements of
Section 6.09(d) regarding the appointment of a new Property Manager have been or
will be satisfied. (i) Following the Conditionally Permitted Transfer, Control
and management of the operations of Borrower continue to be held by the Person
exercising such Control and management immediately prior to the Conditionally
Permitted Transfer. (j) Unless a Replacement Guarantor is applicable, Guarantor
continues to own a direct or indirect interest in Borrower if Guarantor owned a
direct or indirect interest in Borrower prior to the Conditionally Permitted
Transfer. (k) Reserved. (l) If any transferee or any Replacement Guarantor is an
entity, Borrower provides to Lender satisfactory evidence that the term of
existence of such entity (exclusive of any unexercised extension options or
rights) does not expire prior to the Maturity Date. (m) If there is a
Replacement Guaranty or a modification of any Loan Document, Borrower delivers
to Lender customary legal opinions, as Lender reasonably deems necessary, in
form and substance satisfactory to Lender. Multifamily Loan and Security
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(n) Borrower and Guarantor execute such documents and agreements as Lender
reasonably requires to evidence the Transfer and to ratify their obligations
under the Loan Documents. (o) If a nonconsolidation opinion was delivered on the
Closing Date and if, after giving effect to the Conditionally Permitted Transfer
and all prior Transfers, 50% or more in the aggregate of direct or indirect
interests in Borrower are owned by any Person and its Affiliates that owned less
than a 50% direct or indirect interest in Borrower as of the Closing Date,
Borrower delivers to Lender an opinion of counsel for Borrower, in form and
substance satisfactory to Lender, regarding nonconsolidation. (p) Borrower pays
or reimburses Lender, upon demand, for all costs and expenses, including all
Attorneys’ Fees and Costs incurred by Lender in connection with such
Conditionally Permitted Transfer. (q) Lender will not be entitled to collect a
Transfer Fee or Conditional Transfer Fee. (r) Upon completion of any
Conditionally Permitted Transfer, Required Equity Owner must own the Required
Equity Ownership Interest. (s) Upon completion of any Conditionally Permitted
Transfer, Borrower must be in compliance with Section 7.06 and 7.07 of this Loan
Agreement, if applicable. (t) through (v) are Reserved. 7.05 Lender’s Consent to
Prohibited Transfers. (a) Conditions for Lender’s Consent. With respect to a
Transfer that would otherwise constitute an Event of Default under this Article
VII, Lender will consent, without any adjustment to the rate at which the
Indebtedness bears interest or to any other economic terms of the Indebtedness
set forth in the Note, if, prior to such Transfer, each of the following
requirements is satisfied: (i) Borrower has provided Lender with Notice at least
45 days prior to the proposed Transfer and has paid the Transfer Processing Fee
at the time of such Notice. (ii) At least 30 days prior to the proposed
Transfer, Borrower has submitted to Lender all information required by Lender to
make the determinations required by this Section 7.05. (iii) As of the date of
the Transfer, no Event of Default has occurred and is continuing and no event or
condition has occurred and is continuing that, with the giving of Notice or the
passage of time, or both, would become an Event of Default unless such Transfer
would cure the Event of Default. Multifamily Loan and Security Agreement Page 66

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(iv) Lender in Lender’s Discretion has determined that the transferee’s
organization, credit and experience in the management of similar properties meet
Lender’s standards and are appropriate to the overall structure and
documentation of the Loan. (v) Lender in Lender’s Discretion has determined that
the proposed Guarantor’s credit meets Lender’s standards. (vi) Lender in
Lender’s Discretion has determined that the Mortgaged Property at the time of
the proposed Transfer will be managed by a Property Manager meeting the
requirements of Section 6.09(d). (vii) Lender in Lender’s Discretion has
determined that the Mortgaged Property, at the time of the proposed Transfer,
will meet all of Lender’s standards as to its physical condition, occupancy, net
operating income, and the accumulation of reserves (or appropriate reserves
acceptable to Lender are established). (viii) Reserved. (ix) Lender has
determined that none of the transferee, any proposed Borrower Principal of the
transferee or any Non-U.S. Equity Holder of the transferee is presently listed
on the OFAC Lists and neither the transferee or any proposed Borrower Principal
of the transferee is listed on the FHFA SCP List. (x) Lender has determined that
neither the transferee nor any proposed Borrower Principal has been convicted of
a violation of the AML Laws or has been the subject of a final enforcement
action relating to the AML Laws. (xi) If any Supplemental Instrument is
outstanding, Borrower has obtained the consent of each Supplemental Lender, if
different from Lender. (xii) Borrower and Guarantor execute such additional
documents as Lender may require to evidence the Transfer. (xiii) In the case of
a Transfer of all or any part of the Mortgaged Property (either through deed or
the Transfer of membership or partnership interests), each of the following
conditions is satisfied: (A) The transferee executes the Assumption Agreement.
(B) Lender may, in Lender’s Discretion, by Notice to Borrower and the proposed
transferee(s), (1) modify or render void any or all the negotiated modifications
to the Loan Documents and/or (2) Multifamily Loan and Security Agreement Page 67

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reinstate Imposition Reserve Deposits that were waived or deferred for the
transferor as a condition to Lender’s consent to the proposed Transfer. (C) If
required by Lender, one or more Replacement Guarantor(s) satisfying the
Replacement Guarantor Net Worth and Liquidity Requirements, executes and
delivers to Lender a Replacement Guaranty. (D) The transferee executes such
additional documentation (including financing statements, as applicable) as
Lender may require. (E) In the case of the Transfer of the Property by deed, the
transferee delivers either (1) an endorsement to the Title Policy along with a
title update or (2) a new title insurance policy, in either case with an
effective date no earlier than the date of recordation of the deed transferring
the interest in the Mortgaged Property. An endorsement to the Title Policy that
evidences the recordation of the deed transferring the interest in the Mortgaged
Property to the transferee but which does not change the effective date of the
Title Policy will not be sufficient. (xiv) In the case of a Transfer of any
Controlling Interest in Borrower or Designated Entity for Transfers, each of the
following conditions is satisfied: (A) Borrower and Guarantor execute such
documents and agreements as Lender requires to evidence the Transfer and to
ratify their obligations under the Loan Documents. (B) Lender may, in Lender’s
Discretion, by Notice to Borrower and the proposed transferee(s) (1) modify or
render void any or all the negotiated modifications to the Loan Documents and/or
(2) reinstate Imposition Reserve Deposits that were waived or deferred for the
transferor as a condition to Lender’s consent to the proposed Transfer. (C) If
required by Lender, one or more Replacement Guarantor(s) satisfying the
Replacement Guarantor Net Worth and Liquidity Requirements, executes and
delivers to Lender a Replacement Guaranty. (D) The transferee executes such
additional documentation (including financing statements, as applicable) as
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(xv) Lender has received such legal opinions as Lender deems necessary,
including a nonconsolidation opinion (if a nonconsolidation opinion was
delivered on the Closing Date and if required by Lender), an opinion that the
assignment and assumption of the Loan Documents has been duly authorized,
executed, and delivered, and that the assumption documents and the Loan
Documents are enforceable as the obligations of Borrower, transferee, and
Guarantor, as applicable. (xvi) Borrower pays to Lender all costs, including the
cost of all title searches, title insurance and recording costs, and all
Attorneys’ Fees and Costs incurred in reviewing the Transfer request and any
fees charged by the Rating Agencies, if applicable. (xvii) At the time of the
Transfer, Borrower pays the Transfer Fee to Lender. (xviii) Upon completion of
any Transfer pursuant to this Section 7.05, Borrower must be in compliance with
Section 7.06 and Section 7.07 of this Loan Agreement, if applicable. (xix)
through (xxvi) Reserved. (b) Continuing Liability of Borrower. If Borrower
requests a release of its liability under the Loan Documents in connection with
a Transfer of all of Borrower’s interest in the Mortgaged Property, and Lender
approves the Transfer pursuant to Section 7.05(a), then one of the following
will apply: (i) If Borrower delivers to Lender a Clean Site Assessment, then
Lender will release Borrower from all of Borrower’s obligations under the Loan
Documents except for any liability under Section 6.12 or Section 10.02(b) with
respect to any loss, liability, damage, claim, cost or expense which directly or
indirectly arises from or relates to any Prohibited Activities or Conditions
existing prior to the date of the Transfer. (ii) If Borrower does not deliver a
Clean Site Assessment as described in Section 7.05(b)(i), then Lender will
release Borrower from all of Borrower’s obligations under the Loan Documents
except for liability under Section 6.12 or Section 10.02(b). (c) Continuing
Liability of Guarantor. If Guarantor requests a release of its liability under
the Guaranty in connection with a Transfer which is permitted, conditionally
permitted, or approved by Lender pursuant to this Article VII, and Borrower has
provided a Replacement Guarantor in compliance with the terms of this Loan
Agreement, then one of the following will apply: (i) If Borrower delivers to
Lender a Clean Site Assessment, then Lender will release Guarantor from all of
Guarantor’s obligations except Guarantor’s Multifamily Loan and Security
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guaranty of Borrower’s liability under Section 6.12 or Section 10.02(b) with
respect to any loss, liability, damage, claim, cost or expense which directly or
indirectly arises from or relates to any Prohibited Activities or Conditions
existing prior to the date of the Transfer. (ii) If Borrower does not deliver a
Clean Site Assessment as described in Section 7.05(c)(i), then Lender will
release Guarantor from all of Guarantor’s obligations except for Guarantor’s
guaranty of Borrower’s liability under Section 6.12 or Section 10.02(b). 7.06
SPE Equity Owner Requirement Following Transfer. Following any Transfer,
Borrower must satisfy any applicable conditions regarding an SPE Equity Owner
set forth in Section 6.13(a)(xxvi) of this Loan Agreement. 7.07 Additional
Transfer Requirements - External Cap Agreement. (a) Continuation of Cap
Agreement. If a Transfer of all or part of the Mortgaged Property permitted by
this Loan Agreement occurs, Borrower will ensure that any third-party Cap
Agreement is transferred to the applicable transferee or, if the Cap Agreement
is not transferable, Borrower will replace the third-party Cap Agreement in
accordance with Lender’s then-current requirements. (b) Establishment or
Modification of Rate Cap Agreement Reserve Fund (i) If the third-party Cap
Agreement which will be in place immediately following the Transfer is scheduled
to expire prior to the Maturity Date, Lender may require Borrower to establish a
Rate Cap Agreement Reserve Fund. (ii) If Borrower has previously established a
Rate Cap Agreement Reserve Fund, then Lender will determine whether the balance
of any existing Rate Cap Agreement Reserve Fund is sufficient under then-current
market conditions to purchase a Replacement Cap Agreement, and may then take any
of the following actions: (A) Lender may require Borrower to make an additional
deposit into the Rate Cap Agreement Reserve Fund. (B) If funding of the Rate Cap
Agreement Reserve Fund has been deferred, Lender may require Borrower to begin
making monthly deposits into the Rate Cap Agreement Reserve Fund. (C) Lender may
require Borrower to increase the amount of monthly deposits to the Rate Cap
Agreement Reserve Fund. 7.08 Reserved. Multifamily Loan and Security Agreement
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7.09 Reserved. 7.10 Easement, Restrictive Covenant or Other Encumbrance. The
grant of an easement, restrictive covenant or other encumbrance (other than a
mechanic’s, materialman’s or judgment Lien, or any Lien securing indebtedness)
will be a Permitted Transfer if each of the following conditions is satisfied:
(a) Borrower provides Lender with at least 30 days prior Notice of the proposed
Transfer. (b) Prior to the Transfer, Lender determines, in Lender’s Discretion,
that the easement, restrictive covenant or other encumbrance will not materially
affect the operation or value of the Mortgaged Property or Lender’s interest in
the Mortgaged Property. (c) Borrower pays or reimburses Lender, upon demand, for
all costs and expenses, including all Attorneys’ Fees and Costs, incurred by
Lender in connection with reviewing Borrower’s request for Lender’s review of
such grant of easement, restrictive covenant, or other encumbrance; provided,
however, that Lender will not be entitled to collect a Transfer Processing Fee,
a Special Transfer Processing Fee, a Transfer Fee, or a Conditional Transfer
Fee. (d) If the Note is held by a REMIC trust, Lender may obtain an opinion of
counsel, at Borrower’s expense, which meets each of the following requirements:
(i) The counsel providing the opinion is acceptable to Lender. (ii) The opinion
is addressed to Lender. (iii) The opinion is in form and substance satisfactory
to Lender in its sole and absolute discretion. (iv) The opinion confirms each of
the following: (A) The grant of such easement, restrictive covenant or other
encumbrance has been effected in accordance with the requirements of Treasury
Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended
or replaced from time to time). (B) The qualification and status of the REMIC
trust as a REMIC will not be adversely affected or impaired because of such
grant. (C) That there will be no imposition of a tax under applicable REMIC
provisions because of such grant. Multifamily Loan and Security Agreement Page
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ARTICLE VIII ACTIONS OR EVENTS RELATING TO GUARANTOR. 8.01 Guarantor Bankruptcy.
If there is a Bankruptcy with respect to a Guarantor, then the following
requirements must be satisfied: (a) Borrower or Guarantor must provide Notice of
such Bankruptcy to Lender at least 30 days prior to the filing of a voluntary
Bankruptcy or within 30 days after the commencement of an involuntary
Bankruptcy. (b) Within 90 days after filing a voluntary Bankruptcy or
commencement of an involuntary Bankruptcy, if such action is not dismissed, then
Borrower must cause a Replacement Guarantor to execute and deliver to Lender a
Replacement Guaranty, together with such customary legal opinions as Lender
deems necessary. (c) Borrower must pay or reimburse Lender, upon demand, for all
costs and expenses, including all Attorneys’ Fees and Costs, incurred by Lender
in connection with the replacement of Guarantor. (d) Borrower must pay the
Special Transfer Processing Fee to Lender in connection with the replacement of
Guarantor at the time of the delivery of the Replacement Guaranty. 8.02
Guarantor Status Event. If there is a Status Event with respect to a Guarantor,
the following requirements must be satisfied: (a) Borrower or Guarantor must
provide Notice of such Status Event and pay the Special Transfer Processing Fee
to Lender within 30 days after a Status Event. (b) Within 30 days after a Status
Event, Borrower must cause a Replacement Guarantor to execute and deliver to
Lender a Replacement Guaranty, together with such customary legal opinions as
Lender deems necessary. (c) Borrower must pay or reimburse Lender, upon demand,
for all costs and expenses including all Attorneys’ Fees and Costs, incurred by
Lender in connection with the Status Event. 8.03 Death of a Guarantor Not in
Borrower’s Ownership Structure. If there is a death of a Guarantor Not in
Borrower’s Ownership Structure, the following requirements must be satisfied:
(a) Borrower must provide Notice to Lender within 60 days after the death of any
Guarantor Not in Borrower’s Ownership Structure along with the Special Transfer
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(b) Each surviving Guarantor must execute such documents and agreements as
Lender requires in Lender’s Discretion to ratify its Guaranty within 30 days
after the Notice required under Section 8.03(a). (c) Unless Lender determines
that any or all the surviving Guarantors meet the requirements for a Replacement
Guarantor, including the Replacement Guarantor Net Worth and Liquidity
Requirements, one of the following must occur: (i) Within 30 days after the
Notice required under Section 8.03(a), Borrower causes a Replacement Guarantor
to execute and deliver to Lender a Replacement Guaranty. (ii) The estate of the
deceased Guarantor ratifies the Guaranty in writing within 30 days after the
Notice required under Section 8.03(a), and within 6 months after the death of
the applicable Guarantor, Borrower causes a Replacement Guarantor to execute and
deliver to Lender a Replacement Guaranty. (d) Borrower must pay or reimburse
Lender, upon demand, for all costs and expenses including all Attorneys’ Fees
and Costs, incurred by Lender in connection with the replacement of the
Guarantor. ARTICLE IX EVENTS OF DEFAULT AND REMEDIES. 9.01 Events of Default.
The occurrence of any one or more of the following will constitute an Event of
Default under this Loan Agreement: (a) Borrower fails to pay or deposit when due
any amount required by the Note, this Loan Agreement or any other Loan Document.
(b) Borrower fails to maintain the Insurance coverage required by Section 6.10.
(c) Borrower or any SPE Equity Owner fails to comply with the provisions of
Section 6.13 or if any of the assumptions contained in any nonconsolidation
opinions delivered to Lender at any time is or becomes untrue in any material
respect. (d) Borrower or any SPE Equity Owner, any of its officers, directors,
trustees, general partners or managers or any Guarantor commits fraud or a
material misrepresentation or material omission in connection with: (i) the
application for or creation of the Indebtedness, (ii) any financial statement,
Rent Schedule, or other report or information provided to Lender during the term
of the Indebtedness, or (iii) any request for Lender’s consent to any proposed
action, including a request for disbursement of funds under this Loan Agreement.
(e) Borrower fails to comply with the Condemnation provisions of Section 6.11.
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(f) A Transfer occurs that violates the provisions of Article VII, whether or
not any actual impairment of Lender’s security results from such Transfer. (g) A
forfeiture action or proceeding, whether civil or criminal, is commenced which
could result in a forfeiture of the Mortgaged Property or otherwise materially
impair the Lien created by the Security Instrument or Lender’s interest in the
Mortgaged Property. (h) Borrower fails to perform any of its obligations under
this Loan Agreement (other than those specified in Section 9.01), as and when
required, which failure continues for a period of 30 days after Notice of such
failure by Lender to Borrower. However, if Borrower’s failure to perform its
obligations as described in this Section 9.01(h) is of the nature that it cannot
be cured within the 30 day cure period after such Notice from Lender but
reasonably could be cured within 90 days, then Borrower will have additional
time as determined by Lender in Lender’s Discretion, not to exceed an additional
60 days, in which to cure such default, provided that Borrower has diligently
commenced to cure such default during the initial 30 day cure period and
diligently pursues the cure of such default. However, no such Notice or cure
periods will apply in the case of any such failure which could, in Lender’s
judgment, absent immediate exercise by Lender of a right or remedy under this
Loan Agreement, result in harm to Lender, danger to tenants or third parties, or
impairment of the Note, the Security Instrument or this Loan Agreement or any
other security given under any other Loan Document. (i) Borrower fails to
perform any of its obligations as and when required under any Loan Document
other than this Loan Agreement which failure continues beyond the applicable
cure period, if any, specified in that Loan Document. (j) The holder of any
other debt instrument secured by a mortgage, deed of trust or deed to secure
debt on the Mortgaged Property exercises any right to declare all amounts due
under that debt instrument immediately due and payable. (k) Any of the following
occurs: (i) Borrower or any SPE Equity Owner commences a Bankruptcy. (ii) Any
party other than Lender commences a Bankruptcy against Borrower or any SPE
Equity Owner which (A) results in the entry of an order for relief or any such
adjudication or appointment, or (B) has not been dismissed, discharged or bonded
for a period of 90 days. (iii) Any action or legal proceeding is commenced
against Borrower or any SPE Equity Owner seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of any order by a
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for any such relief which is not vacated, dismissed, stayed, or bonded pending
appeal within 90 days from the entry thereof. (iv) Borrower or any SPE Equity
Owner takes any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in Section 9.01(k)(i), (ii) or
(iii). (l) Borrower or any SPE Equity Owner has made any representation or
warranty in Article V or any other Section of this Loan Agreement that is false
or misleading in any material respect. (m) If the Loan is secured by an interest
under a Ground Lease, Borrower fails to comply with the provisions of Section
6.19. (n) If the Loan is a Supplemental Loan, any Event of Default occurs under
(i) the Senior Note, the Senior Instrument or any other Senior Loan Document, or
(ii) any loan document related to another loan in connection with the Mortgaged
Property, regardless of whether Borrower has obtained Supplemental Lender’s
approval of the placement of such Lien on the Mortgaged Property. In addition,
if the Loan is a Supplemental Loan, as Borrower under both the Supplemental
Instrument and the Senior Instrument, Borrower acknowledges and agrees that if
there is an Event of Default under the Supplemental Note, the Supplemental
Instrument or any other Supplemental Loan Document, such Event of Default will
be an Event of Default under the terms of the Senior Instrument and will entitle
Senior Lender to invoke any and all remedies permitted to Senior Lender by
applicable law, the Senior Note, the Senior Instrument or any of the other
Senior Loan Documents. (o) If the Mortgaged Property is subject to any
covenants, conditions and/or restrictions, land use restriction agreements or
similar agreements, Borrower fails to perform any of its obligations under any
such agreement as and when required, and such failure continues beyond any
applicable cure period. (p) Any of the following occurs: (i) A Bankruptcy or
other similar action is commenced by or against any Guarantor, unless the
conditions set forth in Section 8.01 are satisfied. (ii) A Status Event occurs
with respect to any Guarantor that is an entity, unless the conditions set forth
in Section 8.02 are satisfied. (iii) A natural person who is a Guarantor dies,
unless the conditions set forth in Section 7.03(b) or Section 8.03, as
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(iv) A Guarantor that is an entity whose term of existence expires prior to the
Maturity Date fails to comply with each of the requirements set forth in Section
22 of the Guaranty. (v) Guarantor fails to comply with the provisions of the
Section of the Guaranty entitled “Material Adverse Change” or “Minimum Net
Worth/Liquidity Requirements” as applicable. (q) If the Loan Documents require a
Cap Agreement, Borrower fails to provide Lender with a Replacement Cap Agreement
prior to the expiration of the then- existing Cap Agreement. (r) through (zzz)
are Reserved. 9.02 Protection of Lender’s Security; Security Instrument Secures
Future Advances. (a) If Borrower fails to perform any of its obligations under
this Loan Agreement or any other Loan Document, or if any action or proceeding
is commenced which purports to affect the Mortgaged Property, Lender’s security
or Lender’s rights under this Loan Agreement, including eminent domain,
insolvency, code enforcement, civil or criminal forfeiture, enforcement of
Hazardous Materials Laws, fraudulent conveyance or reorganizations or
proceedings involving a bankrupt or decedent, then Lender, in Lender’s
Discretion, may make such appearances, file such documents, disburse such sums
and take such actions as Lender reasonably deems necessary to perform such
obligations of Borrower and to protect Lender’s interest, including: (i) payment
of Attorneys’ Fees and Costs, (ii) payment of fees and out-of-pocket expenses of
accountants, inspectors and consultants, (iii) entry upon the Mortgaged Property
to make Repairs or secure the Mortgaged Property, (iv) procurement of the
Insurance required by Section 6.10, (v) payment of amounts which Borrower has
failed to pay under Section 6.08, (vi) performance of Borrower’s obligations
under Section 6.09, and (vii) advances made by Lender to pay, satisfy or
discharge any obligation of Borrower for the payment of money that is secured by
a Prior Lien. (b) Any amounts disbursed by Lender under this Section 9.02, or
under any other provision of this Loan Agreement that treats such disbursement
as being made under this Section 9.02, will be secured by the Security
Instrument, will be added to, and become part of, the principal component of the
Indebtedness, will be immediately due and payable and will bear interest from
the date of disbursement until paid at the Default Rate. (c) Nothing in this
Section 9.02 will require Lender to incur any expense or take any action. 9.03
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(a) Upon an Event of Default, Lender may exercise any or all of its rights and
remedies provided under the Loan Documents and Borrower will pay all costs
associated therewith, including Attorneys’ Fees and Costs. (b) Each right and
remedy provided in this Loan Agreement is distinct from all other rights or
remedies under this Loan Agreement or any other Loan Document or afforded by
applicable law or equity, and each will be cumulative and may be exercised
concurrently, independently or successively, in any order. Lender’s exercise of
any particular right or remedy will not in any way prevent Lender from
exercising any other right or remedy available to Lender. Lender may exercise
any such remedies from time to time and as often as Lender chooses. (c) Lender
will have all remedies available to Lender under Revised Article 9 of the
Uniform Commercial Code of the Property Jurisdiction, the Loan Documents and
under applicable law. (d) Lender may also retain (i) all money in the Reserve
Funds, including interest, and (ii) any Cap Payment, and in Lender’s sole and
absolute discretion, may apply such amounts, without restriction and without any
specific order of priority, to the payment of any and all Indebtedness. (e) If a
claim or adjudication is made that Lender has acted unreasonably or unreasonably
delayed acting in any case where, by law or under this Loan Agreement or the
other Loan Documents, Lender has an obligation to act reasonably or promptly,
then Lender will not be liable for any monetary damages, and Borrower’s sole
remedy will be limited to commencing an action seeking injunctive relief or
declaratory judgment. Any action or proceeding to determine whether Lender has
acted reasonably will be determined by an action seeking declaratory judgment.
(f) Reserved. 9.04 Forbearance. (a) Lender may (but will not be obligated to)
agree with Borrower, from time to time, and without giving Notice to, or
obtaining the consent of, or having any effect upon the obligations of, any
Guarantor or other third-party obligor, to take any of the following actions:
(i) Extend the time for payment of all or any part of the Indebtedness. (ii)
Reduce the payments due under this Loan Agreement, the Note or any other Loan
Document. (iii) Release anyone liable for the payment of any amounts under this
Loan Agreement, the Note or any other Loan Document. Multifamily Loan and
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(iv) Accept a renewal of the Note. (v) Modify the terms and time of payment of
the Indebtedness. (vi) Join in any extension or subordination agreement. (vii)
Release any portion of the Mortgaged Property. (viii) Take or release other or
additional security. (ix) Modify the rate of interest or period of amortization
of the Note or change the amount of the monthly installments payable under the
Note. (x) Otherwise modify this Loan Agreement, the Note or any other Loan
Document. (b) Any forbearance by Lender in exercising any right or remedy under
the Note, this Loan Agreement or any other Loan Document or otherwise afforded
by applicable law, will not be a waiver of or preclude the exercise of any other
right or remedy, or the subsequent exercise of any right or remedy. The
acceptance by Lender of payment of all or any part of the Indebtedness after the
due date of such payment, or in an amount which is less than the required
payment, will not be a waiver of Lender’s right to require prompt payment when
due of all other payments on account of the Indebtedness or to exercise any
remedies for any failure to make prompt payment. Enforcement by Lender of any
security for the Indebtedness will not constitute an election by Lender of
remedies that preclude the exercise of any other right available to Lender.
Lender’s receipt of any awards or proceeds under Sections 6.10 and 6.11 will not
operate to cure or waive any Event of Default. 9.05 Waiver of Marshalling.
Notwithstanding the existence of any other security interests in the Mortgaged
Property held by Lender or by any other party, Lender will have the right to
determine the order in which any or all of the Mortgaged Property will be
subjected to the remedies provided in this Loan Agreement or any other Loan
Document or applicable law. Lender will have the right to determine the order in
which any or all portions of the Indebtedness are satisfied from the proceeds
realized upon the exercise of such remedies. Borrower and any party who now or
in the future acquires a security interest in the Mortgaged Property and who has
actual or constructive notice of the Security Instrument waives any and all
right to require the marshalling of assets or to require that any of the
Mortgaged Property be sold in the inverse order of alienation or that any of the
Mortgaged Property be sold in parcels or as an entirety in connection with the
exercise of any of the remedies permitted by applicable law or provided in this
Loan Agreement. ARTICLE X RELEASE; INDEMNITY. Multifamily Loan and Security
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10.01 Release. Borrower covenants and agrees that, in performing any of its
duties under this Loan Agreement, none of Lender, Loan Servicer or any of their
respective agents or employees will be liable for any losses, claims, damages,
liabilities and expenses that may be incurred by any of them as a result of such
performance, except that no party will be released from liability for any
losses, claims, damages, liabilities or expenses arising out of the willful
misconduct or gross negligence of such party. 10.02 Indemnity. (a) General
Indemnity. Borrower agrees to indemnify, hold harmless and defend Lender,
including any custodian, trustee and other fiduciaries who hold or have held a
full or partial interest in the Loan for the benefit of third parties, any prior
owner or holder of the Note, the Loan Servicer, any prior Loan Servicer, the
officers, directors, shareholders, partners, employees and trustees of each of
the foregoing, and the heirs, legal representatives, successors and assigns of
each of the foregoing (collectively, “Indemnitees”) against any and all losses,
claims, damages, liabilities and expenses including Attorneys’ Fees and Costs,
which may be imposed or incurred by any of them directly or indirectly arising
out of, or in any way relating to, or as a result of: (i) any failure of the
Mortgaged Property to comply with the laws, regulations, ordinance, code or
decree of any Governmental Authority, including those pertaining to the
Americans with Disabilities Act, zoning, occupancy and subdivision of real
property, (ii) any obligation of Borrower under any Lease, and (iii) any
accident, injury or death to any natural person on the Mortgaged Property or any
damage to personal property located on the Mortgaged Property, except that no
such party will be indemnified from liability for any losses, claims, damages,
liabilities or expenses arising out of the willful misconduct or gross
negligence of such party. (b) Environmental Indemnity. Borrower agrees to
indemnify, hold harmless and defend Indemnitees from and against all
proceedings, claims, damages, penalties and costs (whether initiated or sought
by Governmental Authorities or private parties), including Attorneys’ Fees and
Costs and remediation costs, whether incurred in connection with any judicial or
administrative process or otherwise, arising directly or indirectly from any of
the following: (i) Any breach of any representation or warranty of Borrower in
Section 5.05. (ii) Any failure by Borrower to perform any of its obligations
under Section 6.12. (iii) The existence or alleged existence of any Prohibited
Activity or Condition. (iv) The presence or alleged presence of Hazardous
Materials on or under the Mortgaged Property or in any of the Improvements.
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(v) The actual or alleged violation of any Hazardous Materials Law. (c)
Indemnification Regarding ERISA Covenants. BORROWER WILL INDEMNIFY LENDER AND
DEFEND AND HOLD LENDER HARMLESS FROM AND AGAINST ALL CIVIL PENALTIES, EXCISE
TAXES, OR OTHER LOSS, COST, DAMAGE AND EXPENSE (INCLUDING REASONABLE ATTORNEYS’
FEES AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE AND SETTLEMENT OF CLAIMS
AND LOSSES INCURRED IN CORRECTING ANY PROHIBITED TRANSACTION OR IN THE SALE OF A
PROHIBITED LOAN, AND IN OBTAINING ANY INDIVIDUAL PROHIBITED TRANSACTION
EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN LENDER’S SOLE AND ABSOLUTE
DISCRETION) THAT LENDER MAY INCUR, DIRECTLY OR INDIRECTLY, AS A RESULT OF
DEFAULT UNDER SECTION 6.20. THIS INDEMNITY WILL SURVIVE ANY TERMINATION,
SATISFACTION OR FORECLOSURE OF THE SECURITY INSTRUMENT. (d) Securitization
Indemnification. (i) Borrower agrees to indemnify, hold harmless and defend the
Indemnified Parties from and against any and all proceedings, losses, claims,
damages, liabilities, penalties, costs and expenses (whether initiated or sought
by Governmental Authorities or private parties), including Attorneys’ Fees and
Costs, which may be incurred by any Indemnified Party (either directly or
indirectly), which arise out of, are in any way related to, or are as a result
of a claim that the Borrower Information contains an untrue statement of any
material fact or the Borrower Information omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading (collectively, the “Securitization
Indemnification”). (ii) Borrower will not be liable under the Securitization
Indemnification if the claim is based on Borrower Information that Lender has
materially misstated or materially misrepresented in the Disclosure Document.
(iii) For purposes of this Section 10.02(d) only: (A) “Borrower Information”
includes any information provided at any time to Lender or Loan Servicer by
Borrower, any SPE Equity Owner, any Guarantor, any Property Manager or any
Indemnification Affiliate of the foregoing with respect to any of the following:
(1) Any Person listed in Section 10.02(d)(iii)(A). Multifamily Loan and Security
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(2) The Loan. (3) The Mortgaged Property. Borrower Information includes: (I)
representations and warranties made in the Loan Documents, (II) financial
statements of Borrower, any SPE Equity Owner, any Designated Entity for
Transfers or any Guarantor, and (III) operating statements and rent rolls with
respect to the Mortgaged Property. Borrower Information does not include any
information provided directly to Lender or Loan Servicer by a third-party such
as an appraiser or an environmental consultant. (B) “Indemnification Affiliate”
of any Person means: (1) Any other individual or entity that is, directly or
indirectly, one of the following: (I) In Control of the applicable Person. (II)
Under the Control of the applicable Person. (III) Under common Control with the
applicable Person. (2) Any individual that is a director or officer of the
applicable Person. (3) Any individual that is a director or officer of any
entity described in clause (1) of this definition. The term “Lender” includes
its officers and directors. (C) An “Issuer Person” includes all the following:
(1) Any Person that has filed the registration statement, if any, relating to
the Securitization, and any Affiliate of such Person. (2) Any Person acting as
issuer, depositor, sponsor and/or in a similar capacity with respect to the
Securitization, and any Affiliate of such Person. (D) The “Issuer Group”
includes all the following: (1) Each director and officer of any Issuer Person.
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(2) Each entity that Controls any Issuer Person within the meaning of Section 15
of the Securities Act or Section 20 of the Securities Exchange Act. (E) The
“Underwriter Group” includes all the following: (1) Each entity which is acting
as an underwriter, manager, placement agent, initial purchaser or in a similar
capacity with respect to the Securitization. (2) Each entity that Controls any
such entity described in Section 10.02(d)(iii)(E)(1) within the meaning of
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act
and is acting as an underwriter, manager, placement agent, initial purchaser or
in a similar capacity with respect to the Securitization. (3) The directors and
officers of the entities described in Section 10.02(d)(iii)(E)(1) and Section
10.02(d)(iii)(E)(2). (F) “Indemnified Party” or “Indemnified Parties” means one
or more of Lender, Issuer Person, Issuer Group, and Underwriter Group. (e)
Economic Sanctions and AML Laws Indemnity. Borrower agrees to indemnify, hold
harmless and defend Indemnitees from and against all proceedings, claims,
damages, penalties and costs (whether initiated or sought by Governmental
Authorities or private parties), including Attorneys’ Fees and Costs and
remediation costs, whether incurred in connection with any judicial or
administrative process or otherwise, arising directly or indirectly from any
failure of Borrower or any Borrower Principal to comply with the Economic
Sanctions Laws or AML Laws (“Economic Sanctions and AML Laws Indemnity”). (f)
Selection and Direction of Counsel. Counsel selected by Borrower to defend
Indemnitees will be subject to the approval of those Indemnitees. In any
circumstances in which the indemnity under this Article X applies, Lender may
employ its own legal counsel and consultants to prosecute, defend or negotiate
any claim or legal or administrative proceeding and Lender, with the prior
written consent of Borrower (which will not be unreasonably withheld, delayed or
conditioned) may settle or compromise any action or legal or administrative
proceeding. However, unless an Event of Default has occurred and is continuing,
or the interests of Borrower and Lender are in conflict, as determined by Lender
in Lender’s Discretion, Lender will permit Borrower to undertake the actions
referenced in this Article X so long as Lender approves such action, which
approval will not be unreasonably withheld or delayed. Borrower will reimburse
Lender upon demand for all costs and expenses incurred by Lender, including all
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costs of settlements entered into in good faith, consultants’ fees and
Attorneys’ Fees and Costs. (g) Settlement or Compromise of Claims. Borrower will
not, without the prior written consent of those Indemnitees who are named as
parties to a claim or legal or administrative proceeding (“Claim”), settle or
compromise the Claim if the settlement (i) results in the entry of any judgment
that does not include as an unconditional term the delivery by the claimant or
plaintiff to Lender of a written release of those Indemnitees, satisfactory in
form and substance to Lender or (ii) may materially and adversely affect Lender,
as determined by Lender in Lender’s Discretion. (h) Effect of Changes to Loan on
Indemnification Obligations. Borrower’s obligation to indemnify the Indemnitees
will not be limited or impaired by any of the following, or by any failure of
Borrower or any Guarantor to receive notice of or consideration for any of the
following: (i) Any amendment or modification of any Loan Document. (ii) Any
extensions of time for performance required by any Loan Document. (iii) Any
provision in any of the Loan Documents limiting Lender’s recourse to property
securing the Indebtedness, or limiting the personal liability of Borrower or any
other party for payment of all or any part of the Indebtedness. (iv) The
accuracy or inaccuracy of any representations and warranties made by Borrower
under this Loan Agreement or any other Loan Document. (v) The release of
Borrower or any other Person, by Lender or by operation of law, from performance
of any obligation under any Loan Document. (vi) The release or substitution in
whole or in part of any security for the Indebtedness. (vii) Lender’s failure to
properly perfect any Lien or security interest given as security for the
Indebtedness. (i) Payments by Borrower. Borrower will, at its own cost and
expense, do all of the following: (i) Pay or satisfy any judgment or decree that
may be entered against any Indemnitee or Indemnitees in any legal or
administrative proceeding incident to any matters against which Indemnitees are
entitled to be indemnified under this Article X. Multifamily Loan and Security
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(ii) Reimburse Indemnitees for any expenses paid or incurred in connection with
any matters against which Indemnitees are entitled to be indemnified under this
Article X. (iii) Reimburse Indemnitees for any and all expenses, including
Attorneys’ Fees and Costs, paid or incurred in connection with the enforcement
by Indemnitees of their rights under this Article X, or in monitoring and
participating in any legal or administrative proceeding. (j) Other Obligations.
The provisions of this Article X will be in addition to any and all other
obligations and liabilities that Borrower may have under applicable law or under
other Loan Documents, and each Indemnitee will be entitled to indemnification
under this Article X without regard to whether Lender or that Indemnitee has
exercised any rights against the Mortgaged Property or any other security,
pursued any rights against any Guarantor, or pursued any other rights available
under the Loan Documents or applicable law. If Borrower consists of more than
one Person, the obligation of those Persons to indemnify the Indemnitees under
this Article X will be joint and several. The obligation of Borrower to
indemnify the Indemnitees under this Article X will survive any repayment or
discharge of the Indebtedness, any foreclosure proceeding, any foreclosure sale,
any delivery of any deed in lieu of foreclosure, and any release of record of
the Lien of the Security Instrument. Notwithstanding the foregoing, if Lender
has never been a mortgagee-in-possession of, or held title to, the Mortgaged
Property, Borrower will have no obligation to indemnify the Indemnitees under
this Article X after the date of the release of record of the Lien of the
Security Instrument by payment in full at the Maturity Date or by voluntary
prepayment in full. (k) Reserved. 10.03 Reserved. ARTICLE XI MISCELLANEOUS
PROVISIONS. 11.01 Waiver of Statute of Limitations, Offsets and Counterclaims.
Borrower waives the right to assert any statute of limitations as a bar to the
enforcement of this Loan Agreement or the Lien of the Security Instrument or to
any action brought to enforce any Loan Document. Borrower waives the right to
assert a counterclaim, other than a compulsory counterclaim, in any action or
proceeding brought against it by Lender or otherwise to offset any obligations
to make the payments required by the Loan Documents. No failure by Lender to
perform any of its obligations under the Loan Documents will be a valid defense
to, or result in any offset against, any payments that Borrower is obligated to
make under any of the Loan Documents. 11.02 Governing Law; Consent to
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(a) This Loan Agreement, and any Loan Document which does not itself expressly
identify the law which is to apply to it, will be governed by the laws of the
Property Jurisdiction. (b) Borrower agrees that any controversy arising under or
in relation to the Note, the Security Instrument, this Loan Agreement or any
other Loan Document may be litigated in the Property Jurisdiction. The state and
federal courts and authorities with jurisdiction in the Property Jurisdiction
will have jurisdiction over all controversies that may arise under or in
relation to the Note, any security for the Indebtedness or any other Loan
Document. Borrower irrevocably consents to service, jurisdiction and venue of
such courts for any such litigation and waives any other venue to which it might
be entitled by virtue of domicile, habitual residence or otherwise. However,
nothing in this Section 11.02 is intended to limit Lender’s right to bring any
suit, action or proceeding relating to matters under this Loan Agreement in any
court of any other jurisdiction. 11.03 Notice. (a) All Notices under or
concerning this Loan Agreement will be in writing. Each Notice will be deemed
given on the earliest to occur of: (i) the date when the Notice is received by
the addressee, (ii) the first Business Day after the Notice is delivered to a
recognized overnight courier service, with arrangements made for payment of
charges for next Business Day delivery, or (iii) the third Business Day after
the Notice is deposited in the United States mail with postage prepaid,
certified mail, return receipt requested. Addresses for Notice are set forth in
Part B.11, Summary of Loan Terms. Lender will endeavor to provide a courtesy
copy of any Notice given to Borrower by Lender to the Person at the address set
forth in Part B.11, Summary of Loan Terms. However, the failure to provide such
courtesy copy will not affect the validity or sufficiency of any Notice to
Borrower, will not affect Lender’s rights and remedies under this Loan Agreement
or any other Loan Document, and will not subject Lender to any claims by or
liability to Borrower or any other Person. No Person listed below will be a
third-party beneficiary of any of the Loan Documents. (b) Any party to this Loan
Agreement may change the address to which Notices intended for it are to be
directed by means of Notice given to the other party in accordance with this
Section 11.03. Each party agrees that it will not refuse or reject delivery of
any Notice given in accordance with this Section 11.03, that it will
acknowledge, in writing, the receipt of any Notice upon request by the other
party and that any Notice rejected or refused by it will be deemed for purposes
of this Section 11.03 to have been received by the rejecting party on the date
so refused or rejected, as conclusively established by the records of the U.S.
Postal Service or the courier service. Multifamily Loan and Security Agreement
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(c) Any Notice under the Note and any other Loan Document that does not specify
how Notices are to be given will be given in accordance with this Section 11.03.
(d) Reserved. 11.04 Successors and Assigns Bound. This Loan Agreement will bind
the respective successors and assigns of Borrower and Lender, and the rights
granted by this Loan Agreement will inure to Lender’s successors and assigns.
11.05 Joint and Several (and Solidary) Liability. If more than one Person signs
this Loan Agreement as Borrower, the obligations of such Persons will be joint
and several. For a Mortgaged Property located in Louisiana, if more than one
Person signs this Loan Agreement as Borrower, the obligations of such Persons
will be joint and several and solidary, and wherever the phrase “joint and
several” appears in this Loan Agreement, the phrase is amended to read “joint,
several, and solidary.” 11.06 Relationship of Parties; No Third-Party
Beneficiary. (a) The relationship between Lender and Borrower will be solely
that of creditor and debtor, respectively, and nothing contained in this Loan
Agreement will create any other relationship between Lender and Borrower.
Nothing contained in this Loan Agreement will constitute Lender as a joint
venturer, partner or agent of Borrower, or render Lender liable for any debts,
obligations, acts, omissions, representations or contracts of Borrower. (b) No
creditor of any party to this Loan Agreement and no other Person will be a
third-party beneficiary of this Loan Agreement or any other Loan Document.
Without limiting the generality of the preceding sentence: (i) any arrangement
(“Servicing Arrangement”) between Lender and any Loan Servicer for loss sharing
or interim advancement of funds will constitute a contractual obligation of such
Loan Servicer that is independent of the obligation of Borrower for the payment
of the Indebtedness, (ii) Borrower will not be a third-party beneficiary of any
Servicing Arrangement, and (iii) no payment by the Loan Servicer under any
Servicing Arrangement will reduce the amount of the Indebtedness. 11.07
Severability; Amendments. (a) The invalidity or unenforceability of any
provision of this Loan Agreement will not affect the validity or enforceability
of any other provision, and all other provisions will remain in full force and
effect. This Loan Agreement contains the entire agreement among the parties as
to the rights granted and the obligations assumed in this Loan Agreement. (b)
This Loan Agreement may not be amended or modified except by a writing signed by
the party against whom enforcement is sought. Multifamily Loan and Security
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11.08 Disclosure of Information. (a) Borrower acknowledges that Lender may
provide to third parties with an existing or prospective interest in the
servicing, enforcement, evaluation, performance, ownership, purchase,
participation or Securitization of the Loan, including any of the Rating
Agencies, any entity maintaining databases on the underwriting and performance
of commercial mortgage loans, as well as governmental regulatory agencies having
regulatory authority over Lender, any and all information which Lender now has
or may hereafter acquire relating to the Loan, the Mortgaged Property, Borrower,
any SPE Equity Owner or any Guarantor, as Lender determines necessary or
desirable and that such information may be included in disclosure documents in
connection with a Securitization or syndication of participation interests,
including a prospectus, prospectus supplement, offering memorandum, private
placement memorandum or similar document (each, a “Disclosure Document”) and
also may be included in any filing with the Securities and Exchange Commission
pursuant to the Securities Act or the Securities Exchange Act. To the fullest
extent permitted under applicable law, Borrower irrevocably waives all rights,
if any, to prohibit such disclosure, including any right of privacy. (b)
Borrower agrees that Lender may publicly use, at Lender’s discretion, the name
of the Mortgaged Property, photographs of the Mortgaged Property, and basic
transaction information (for example, the number of units in the Mortgaged
Property and the Loan Amount) relating to the Loan. 11.09 Determinations by
Lender. Unless otherwise provided in this Loan Agreement, in any instance where
the consent or approval of Lender may be given or is required, or where any
determination, judgment or decision is to be rendered by Lender under this Loan
Agreement, the granting, withholding or denial of such consent or approval and
the rendering of such determination, judgment or decision will be made or
exercised by Lender (or its designated representative) at its sole and exclusive
option and in its sole and absolute discretion. 11.10 Sale of Note; Change in
Servicer; Loan Servicing. The Note or a partial interest in the Note (together
with this Loan Agreement and the other Loan Documents) may be sold one or more
times without prior Notice to Borrower. A sale may result in a change of the
Loan Servicer. There also may be one or more changes of the Loan Servicer
unrelated to a sale of the Note. If there is a change of the Loan Servicer,
Borrower will be given Notice of the change. All actions regarding the servicing
of the Loan evidenced by the Note, including the collection of payments, the
giving and receipt of Notice, inspections of the Mortgaged Property, inspections
of books and records, and the granting of consents and approvals, may be taken
by the Loan Servicer unless Borrower receives Notice to the contrary. If
Borrower receives conflicting Notices regarding the identity of the Loan
Servicer or any other subject, any such Notice from Lender will govern.
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11.11 Supplemental Financing. (a) This Section will apply only if at the time of
any application referred to in Section 11.11(b), Freddie Mac has in effect a
product described in its Multifamily Seller/Servicer Guide under which it
purchases supplemental mortgages on multifamily properties that meet specified
criteria (“Supplemental Mortgage Product”). For purposes of this Section 11.11
only, the term “Freddie Mac” will include any affiliate or subsidiary of Freddie
Mac. (b) After the first anniversary of the date of this Loan Agreement, or, if
there are any Supplemental Loans affecting the Mortgaged Property, after the
first anniversary of the date of the Supplemental Note for the most
recently-incurred Supplemental Loan, Freddie Mac will consider an application
from an originating lender that is generally approved by Freddie Mac to sell
mortgages to Freddie Mac under the Supplemental Mortgage Product (“Approved
Seller/Servicer”) for the purchase by Freddie Mac of a proposed indebtedness of
Borrower to the Approved Seller/Servicer to be secured by one or more
Supplemental Instruments on the Mortgaged Property. Freddie Mac will purchase
each Supplemental Loan secured by the Mortgaged Property if each of the
following conditions is satisfied: (i) At the time of the proposed Supplemental
Loan, no Event of Default may have occurred and be continuing and no event or
condition may have occurred and be continuing that, with the giving of Notice or
the passage of time, or both, would become an Event of Default. (ii) Borrower
and the Mortgaged Property must be acceptable to Freddie Mac under its
Supplemental Mortgage Product. (iii) New loan documents must be entered into to
reflect each Supplemental Loan, such documents to be acceptable to Freddie Mac
in its discretion. (iv) No Supplemental Loan may cause the combined debt service
coverage ratio of the Mortgaged Property after the making of that Supplemental
Loan to be less than the Minimum DSCR. As used in this Section, the term
“combined debt service coverage ratio” means, with respect to the Mortgaged
Property, the ratio of: (A) the annual net operating income from the operations
of the Mortgaged Property at the time of the proposed Supplemental Loan, to (B)
the aggregate of the annual principal and interest payable on all of the
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(1) the Indebtedness under this Loan Agreement (using a 30- year amortization
schedule), (2) any “Indebtedness” as defined in any security instruments
recorded against the Mortgaged Property (using a 30-year amortization schedule
for any Supplemental Loans), and (3) the proposed “Indebtedness” for any
Supplemental Loan (using a 30-year amortization schedule). As used in this
Section 11.11, “annual principal and interest” with respect to a floating rate
loan will be calculated by Freddie Mac using an interest rate equal to one of
the following: (X) If the loan has an internal interest rate cap, the Capped
Interest Rate. (Y) If the loan has an external interest rate cap, the Original
Strike Rate plus the Margin. (Z) If the loan has no interest rate cap, the
greater of (I) 7%, or (II) the then-current Index Rate plus the Margin plus 300
basis points. The annual net operating income of the Mortgaged Property will be
as determined by Freddie Mac in its discretion considering factors such as
income in place at the time of the proposed Supplemental Loan and income during
the preceding 12 months, and actual, historical and anticipated operating
expenses. Freddie Mac will determine the combined debt service coverage ratio of
the Mortgaged Property based on its underwriting. Borrower will provide Freddie
Mac such financial statements and other information Freddie Mac may require to
make these determinations. (v) No Supplemental Loan may cause the combined loan
to value ratio of the Mortgaged Property after the making of that Supplemental
Loan to exceed the Maximum Combined LTV, as determined by Freddie Mac. As used
in this Section, “combined loan to value ratio” means, with respect to the
Mortgaged Property, the ratio, expressed as a percentage, of: (A) the aggregate
outstanding principal balances of all of the following: (1) the Indebtedness
under this Loan Agreement, (2) any “Indebtedness” as defined in any security
instruments recorded against the Mortgaged Property, and Multifamily Loan and
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(3) the proposed “Indebtedness” for any Supplemental Loan, to (B) the value of
the Mortgaged Property. Freddie Mac will determine the combined loan to value
ratio of the Mortgaged Property based on its underwriting. Borrower will provide
Freddie Mac such financial statements and other information Freddie Mac may
require to make these determinations. In addition, Freddie Mac, at Borrower’s
expense, may obtain MAI appraisals of the Mortgaged Property in order to assist
Freddie Mac in making the determinations under this Section 11.11. If Freddie
Mac requires an appraisal, then the value of the Mortgaged Property that will be
used to determine whether the Maximum Combined LTV has been met will be the
lesser of the appraised value set forth in such appraisal or the value of the
Mortgaged Property as determined by Freddie Mac. (vi) Borrower’s organizational
documents are amended to permit Borrower to incur additional debt in the form of
Supplemental Loans (Lender will consent to such amendment(s)). (vii) One or more
Persons acceptable to Freddie Mac executes and delivers to the Approved
Seller/Servicer a Guaranty in a form acceptable to Freddie Mac with respect to
the exceptions to non-recourse liability described in Freddie Mac’s form
promissory note, unless Freddie Mac has elected to waive its requirement for a
Guaranty. (viii) The loan term of each Supplemental Loan will be coterminous
with the Senior Indebtedness or longer than the Senior Indebtedness, in Freddie
Mac’s discretion. (ix) The Prepayment Premium Period of each Supplemental Loan
will be coterminous with the Prepayment Premium Period or the combined Lockout
Period and Defeasance Period, as applicable, of the Senior Indebtedness. (x) The
interest rate of each Supplemental Loan will be determined by Freddie Mac in its
discretion. (xi) Lender enters into an intercreditor agreement (“Intercreditor
Agreement”) acceptable to Freddie Mac and to Lender for each Supplemental Loan.
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(xii) Borrower’s payment of fees and other expenses charged by Lender, Freddie
Mac, the Approved Seller/Servicer, and the Rating Agencies (including reasonable
Attorneys’ Fees and Costs) in connection with reviewing and originating each
Supplemental Loan. (xiii) Commencing on the date that the first Supplemental
Loan is originated and continuing for so long as any Supplemental Loan is
outstanding, the first lien Senior Lender will begin collection of any deferred
Monthly Deposit or Revised Monthly Deposit for Capital Replacements in
accordance with Section 4.04(e) (if applicable) as well as Imposition Reserve
Deposits for any of the following Impositions marked ‘Deferred’ in Section Part
3, Summary of Loan Terms: (A) Property Insurance premiums or premiums for other
Insurance required by Lender under Section 6.10; provided, however, the first
lien Senior Lender will not begin collection of any deferred Property Insurance
premiums payable with respect to insurance coverage requirements under Section
6.10 that are otherwise satisfied by a blanket or master policy of insurance
covering the Mortgaged Property. (B) Taxes and payments in lieu of taxes (C)
Ground Rents Such deposits will be credited to the payment of any such required
Imposition Reserve Deposits under any Supplemental Loan. (xiv) If any covenants,
conditions and restrictions affecting the Mortgaged Property provide for a lien
for any assessments or other unpaid amounts, Borrower will provide satisfactory
evidence that such lien will be subordinate to the lien of the Supplemental
Instrument. (xv) All other requirements of the Supplemental Mortgage Product
must be met, unless Freddie Mac has elected to waive one or more of its
requirements. (xvi) Reserved. (xvii) Reserved. (xviii) Reserved. (c) No later
than 5 Business Days after Lender’s receipt of a written request from Borrower,
Lender will provide the following information to an Approved Seller/Servicer:
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(i) The then-current outstanding principal balance of the Senior Indebtedness.
(ii) Payment history of the Senior Indebtedness. (iii) Whether any Reserve Funds
are being collected on the Senior Indebtedness and the amount of each such
Reserve Fund deposit as of the date of the request. (iv) Whether any Repairs,
Capital Replacements or improvements or rental achievement or burn-off guaranty
requirements are existing or outstanding under the terms of the Senior
Indebtedness. (v) A copy of the most recent inspection report for the Mortgaged
Property. (vi) Whether any modifications or amendments have been made to the
Loan Documents for the Senior Indebtedness since origination of the Senior
Indebtedness and, if applicable, a copy of such modifications and amendments.
(vii) Whether to Lender’s knowledge any Event of Default exists under the Senior
Indebtedness. Lender will only be obligated to provide this information in
connection with Borrower’s request for a Supplemental Loan from an Approved
Seller/Servicer. Notwithstanding anything in this Section 11.11 to the contrary,
if Freddie Mac is the owner of the Note, this Section 11.11(c) is not
applicable. (d) Lender will have no obligation to consent to any mortgage or
Lien on the Mortgaged Property that secures any indebtedness other than the
Indebtedness, except as set forth in this Loan Agreement. (e) If a Supplemental
Loan is made to Borrower, Borrower agrees that the terms of the Intercreditor
Agreement will govern with respect to any distributions of excess proceeds by
Lender to the Supplemental Lender, and Borrower agrees that Lender may
distribute any excess proceeds received by Lender pursuant to the Loan Documents
to Supplemental Lender pursuant to the Intercreditor Agreement. 11.12
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the
Cut- off Date and if the Note provides for Defeasance). This Section 11.12 will
apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date,
and if the Note provides for Defeasance. If both of these conditions are met,
then, subject to Section 11.12(a) and (c), Borrower will have the right to
defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged
Property from the Lien of the Security Instrument upon the satisfaction of each
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(a) Borrower will not have the right to obtain Defeasance at any of the
following times: (i) If the Loan is not assigned to a REMIC trust. (ii) During
the Lockout Period. (iii) After the expiration of the Defeasance Period. (iv)
After Lender has accelerated the maturity of the unpaid principal balance of,
accrued interest on, and other amounts payable under, the Note pursuant to
Section 11 of the Note. (b) Borrower will give Lender Notice (“Defeasance
Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower
desires to close the Defeasance. The Defeasance Closing Date specified by
Borrower may not be more than 60 calendar days, nor less than 30 calendar days,
after the date on which Lender receives the Defeasance Notice. Lender will
acknowledge receipt of the Defeasance Notice and will notify Borrower of the
identity of the accommodation borrower (“Successor Borrower”). (c) The
Defeasance Notice must be accompanied by a $10,000 non-refundable fee
(“Defeasance Fee”) for Lender’s processing of the Defeasance. If Lender does not
receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant
to that Defeasance Notice will terminate. (d) (i) If Borrower timely pays the
Defeasance Fee, but Borrower fails to perform its other obligations under this
Section 11.12, Lender will have the right to retain the Defeasance Fee as
liquidated damages for Borrower’s default and, except as provided in Section
11.12(d)(ii), Borrower will be released from all further obligations under this
Section 11.12. Borrower acknowledges that Lender will incur financing costs in
arranging and preparing for the release of the Mortgaged Property from the Lien
of the Security Instrument in reliance on the executed Defeasance Notice.
Borrower agrees that the Defeasance Fee represents a fair and reasonable
estimate, taking into account all circumstances existing on the date of this
Loan Agreement, of the damages Lender will incur by reason of Borrower’s
default. (ii) If the Defeasance is not consummated on the Defeasance Closing
Date for any reason, Borrower agrees to reimburse Lender for all third-party
costs and expenses (other than financing costs covered by Section 11.12(d)(i))
incurred by Lender in reliance on the executed Defeasance Notice, within 5
Business Days after Borrower receives a written demand for payment, Multifamily
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accompanied by a statement, in reasonable detail, of Lender’s third-party costs
and expenses. (iii) All payments required to be made by Borrower to Lender
pursuant to this Section 11.12 will be made by wire transfer of immediately
available funds to the account(s) designated by Lender in its acknowledgement of
the Defeasance Notice. (e) No Event of Default has occurred and is continuing.
(f) Borrower will deliver each of the following documents to Lender, in form and
substance satisfactory to Lender, on or prior to the Defeasance Closing Date,
unless Lender has issued a written waiver of its right to receive any such
document: (i) One or more opinions of counsel for Borrower confirming each of
the following: (A) Lender has a valid and perfected first Lien and first
priority security interest in the Defeasance Collateral and the proceeds of the
Defeasance Collateral. (B) The Pledge Agreement is duly authorized, executed,
delivered and enforceable against Borrower in accordance with its terms. (C) If,
as of the Defeasance Closing Date, the Note is held by a REMIC trust, then each
of the following is correct: (1) The Defeasance has been effected in accordance
with the requirements of Treasury Regulation Section 1.860G- 2(a)(8) (as such
regulation may be modified, amended or replaced from time to time). (2) The
qualification and status of the REMIC trust as a REMIC will not be adversely
affected or impaired as a result of the Defeasance. (3) That there will be no
imposition of a tax under applicable REMIC provisions as a result of the
Defeasance. (D) The Defeasance will not result in a “sale or exchange” of the
Note within the meaning of Section 1001(c) of the Tax Code and the temporary and
final regulations promulgated thereunder. (ii) A written certificate from an
independent certified public accounting firm (reasonably acceptable to Lender),
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Collateral will generate cash sufficient to make all Scheduled Debt Payments as
they fall due under the Note, including full payment due on the Note on the
Maturity Date. (iii) Lender’s form of a pledge and security agreement (“Pledge
Agreement”) and financing statements which pledge and create a first priority
security interest in the Defeasance Collateral in favor of Lender. (iv) Lender’s
form of a transfer and assumption agreement (“Transfer and Assumption
Agreement”), pursuant to which Borrower and any Guarantor (in each case, subject
to satisfaction of all requirements under this Loan Agreement) will be relieved
from liability in connection with the Loan to the extent described in Sections
7.05(b) and 7.05(c), respectively, and Successor Borrower will assume all
remaining obligations. (v) Forms of all documents necessary to release the
Mortgaged Property from the Liens created by the Security Instrument and related
UCC financing statements (collectively, “Release Instruments”), each in
appropriate form required by the Property Jurisdiction. (vi) Any other opinions,
certificates, documents or instruments that Lender may reasonably request. (g)
Borrower will deliver to Lender, on or prior to the Defeasance Closing Date,
each of the following: (i) The Defeasance Collateral, which meets all of the
following requirements: (A) It is owned by Borrower, free and clear of all Liens
and claims of third-parties. (B) It is in an amount sufficient to provide for
(1) redemption payments to occur prior, but as close as possible, to all
successive Installment Due Dates occurring under the Note after the Defeasance
Closing Date, and (2) delivery of redemption proceeds at least equal to the
amount of principal and interest due on the Note on each Installment Due Date
including full payment due on the Note on the Maturity Date (“Scheduled Debt
Payments”). (C) All redemption payments received from the Defeasance Collateral
will be paid directly to Lender to be applied on account of the Scheduled Debt
Payments occurring after the Defeasance Closing Date. Multifamily Loan and
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(D) The pledge of the Defeasance Collateral will be effected through the
book-entry facilities of a qualified securities intermediary designated by
Lender in conformity with all applicable laws. (ii) All accrued and unpaid
interest and all other sums due under the Note, this Loan Agreement and under
the other Loan Documents, including all amounts due under Section 11.12(i), up
to the Defeasance Closing Date. (h) Reserved. (i) Borrower will pay all
reasonable costs and expenses incurred by Lender in connection with the
Defeasance in full on or prior to the Defeasance Closing Date, which payment is
required prior to Lender’s issuance of the Release Instruments and whether or
not Defeasance is completed. Such expenses include all fees, costs and expenses
incurred by Lender and its agents in connection with the Defeasance (including
Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement
and of the other materials described in this Loan Agreement and any related
documentation, Rating Agencies’ fees, or other costs related to the Defeasance).
Lender reserves the right to require that Borrower post a deposit to cover costs
which Lender reasonably anticipates that Lender will incur in connection with
the Defeasance. (j) No Transfer Fee or Conditional Transfer Fee will be payable
to Lender upon a Defeasance made in accordance with this Section 11.12. (k)
Reserved. 11.13 Lender’s Rights to Sell or Securitize. Borrower acknowledges
that Lender, and each successor to Lender’s interest, may (without prior Notice
to Borrower or Borrower’s prior consent), sell or grant participations in the
Loan (or any part of the Loan), sell or subcontract the servicing rights related
to the Loan, securitize the Loan or place the Loan in a trust. Borrower agrees
to cooperate with all reasonable requests of Lender in connection with any of
the foregoing including taking the following actions: (a) Executing any
financing statements or other documents deemed necessary by Lender or its
transferee to create, perfect or preserve the rights and interest to be acquired
by such transferee. (b) Delivering revised organizational documents, counsel
opinions, and executed amendments to the Loan Documents satisfactory to the
Rating Agencies. (c) Providing updated financial information with appropriate
verification through auditors’ letters, if required by Lender. (If Lender
requires that Borrower’s updated financial information be accompanied by
appropriate verification through Multifamily Loan and Security Agreement Page 96

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auditors’ letters, then Lender will reimburse Borrower for the costs which
Borrower reasonably incurs in connection with obtaining such auditors’ letters.)
(d) Providing updated information on all litigation proceedings affecting
Borrower or any Borrower Principal as required in Section 6.16. (e) Reviewing
information contained in any Disclosure Document and providing a mortgagor
estoppel certificate, written confirmation of Borrower’s indemnification
obligations under this Loan Agreement, and such other information about
Borrower, any SPE Equity Owner, any Guarantor, any Property Manager or the
Mortgaged Property as Lender may require for Lender’s offering materials.
Notwithstanding anything set forth above in this Section 11.13, Borrower will
not be required to execute any document that changes the interest rate, the
stated maturity date or the amortization of principal set forth in the Note, or
that modifies or amends any essential economic terms of the Loan. 11.14
Cooperation with Rating Agencies and Investors. Borrower covenants and agrees
that if Lender decides to include the Loan as an asset of a Secondary Market
Transaction, Borrower will do all of the following: (a) At Lender’s request,
meet with representatives of the Rating Agencies and/or investors to discuss the
business and operations of the Mortgaged Property. (b) Permit Lender or its
representatives to provide related information to the Rating Agencies and/or
investors. (c) Cooperate with the reasonable requests of the Rating Agencies
and/or investors in connection with all of the foregoing. 11.15 Letter of Credit
Requirements. (a) Any Letter of Credit required under this Loan Agreement must
satisfy the following conditions: (i) It must be a clean, irrevocable,
unconditional standby letter of credit. (ii) It must name Lender as the sole
beneficiary and permit Lender to assign the Letter of Credit without further
consent from Issuer. (iii) It must have an initial term of not less than 12
months. (iv) It must be in the form required by Lender. Multifamily Loan and
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(v) It must provide that it may be drawn on by Lender or Loan Servicer, in whole
or in part, by presentation to Issuer of a sight draft without any other
restrictions on the right to draw. (vi) It must be issued by an Issuer meeting
Lender’s requirements, which Issuer (i) must be an Eligible Institution, and
(ii) may not, unless Lender agrees in writing, be an affiliate of Borrower or
Lender. (vii) It must be obtained on behalf of Borrower by a Person other than
Borrower’s general partners or managing members if Borrower is a general or
limited partnership or limited liability company. Neither Borrower nor the
general partners or managing members, if applicable, may have any liability or
other obligations under any reimbursement agreement with respect to the Letter
of Credit. (viii) It may not be secured by a lien on all or any part of the
Mortgaged Property or related Personalty. (ix) When delivered to Lender, it must
be accompanied by an opinion acceptable to Lender in Lender’s Discretion issued
by counsel to the Issuer that includes opinions as to Issuer’s power and
authority to issue the Letter of Credit and the enforceability of the Letter of
Credit against Issuer and an updated nonconsolidation opinion with regard to any
such Letter of Credit in form and substance satisfactory to Lender. (b) If at
any time the Issuer of a Letter of Credit held by Lender ceases to be an
Eligible Institution, Lender will have the right to immediately draw down the
Letter of Credit in full and hold the Proceeds in an escrow account in
accordance with the terms of this Loan Agreement. (c) Each Letter of Credit held
by Lender pursuant to this Loan Agreement provides additional collateral for the
Indebtedness in addition to the lien of the Security Instrument. 11.16 Reserved.
11.17 Reserved. 11.18 Reserved. 11.19 Reserved. 11.20 Time is of the Essence.
Time is of the essence with respect to each covenant of this Loan Agreement.
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11.21 Electronic Signatures. With respect to any E-Signed Document, the
following provisions apply: (a) Borrower represents and warrants that the
intention of the natural Person signing on behalf of Borrower or Borrower
Principal on each E-Signed Document was to attribute its respective signature to
such E-Signed Document, and that the E- Signature represents the signer’s
signature to the E-Signed document. (b) Borrower understands and agrees that the
E-Signatures on all E-Signed Documents are legally binding. (c) Borrower waives
all rights to repudiate the authenticity or validity of any E- Signature on any
E-Signed Document to the extent such repudiation is based in whole or in part on
the fact that such signature is not in an original handwritten form. (d)
Borrower agrees that the law governing E-Signatures will be the federal
Electronic Signatures in Global and National Commerce Act of 2000 (15 U.S. Code,
Chapter 96) (E-SIGN) and/or the Uniform Electronic Transactions Act of 1999 as
promulgated by the U.S. Uniform Law Commission for consideration and enactment
by the states (UETA), and that under no circumstances will E- Signatures be
governed by the Uniform Computer Information Transactions Act (UCITA). 11.22
Reserved. 11.23 Subrogation. If, and to the extent that, the proceeds of the
Loan, or subsequent advances under Section 9.02, are used to pay, satisfy or
discharge a Prior Lien, such Loan proceeds or advances will be deemed to have
been advanced by Lender at Borrower’s request, and Lender will automatically,
and without further action on its part, be subrogated to the rights, including
Lien priority, of the owner or holder of the obligation secured by the Prior
Lien, whether or not the Prior Lien is released. 11.24 Reserved. ARTICLE XII
DEFINITIONS. The following terms, when used in this Loan Agreement (including
when used in the recitals), will have the following meanings: “Affiliate” of any
Person means any other individual or entity that is, directly or indirectly, one
of the following: (i) In Control of the applicable Person. (ii) Under the
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(iii) Under common Control with the applicable Person. “Affiliate Transfer” is
defined in Section 7.03(a)(i). “AML Laws” means applicable federal anti-money
laundering laws and regulations including 18 U.S.C. §§ 1956 and 1957, as
amended. “Approved Seller/Servicer” is defined in Section 11.11(b). “Assignment
of Management Agreement” means the Assignment of Management Agreement and
Subordination of Management Fees, dated the same date as this Loan Agreement,
among Borrower, Lender and Property Manager, including all schedules, riders,
allonges and addenda, as such Assignment of Management Agreement may be amended
from time to time, and any future Assignment of Management Agreement and
Subordination of Management Fees executed in accordance with Section 6.09(d).
“Assumption Agreement” means Lender’s then-standard assumption agreement that,
among other things, requires the transferee to perform all obligations of
Borrower set forth in the Note, the Security Instrument, this Loan Agreement and
any other Loan Document. “Attorneys’ Fees and Costs” means all of the following:
(i) Fees and out of pocket costs of Lender’s and Loan Servicer’s attorneys, as
applicable, including costs of Lender’s and Loan Servicer’s in-house counsel,
support staff costs, costs of preparing for litigation, computerized research,
telephone and facsimile transmission expenses, mileage, deposition costs,
postage, duplicating, process service, videotaping and similar costs and
expenses. (ii) Costs and fees of expert witnesses, including appraisers. (iii)
Investigatory fees. (iv) Costs for any opinion required by Lender pursuant to
the terms of the Loan Documents. “Bankruptcy” means any of the following whether
voluntary or involuntary, other than a case or proceeding initiated by Lender:
(i) Any case under the Bankruptcy Code or any similar federal or state law for
the relief of debtors. (ii) Any proceeding for the reorganization,
recapitalization or adjustment or marshalling of a debtor’s assets or
liabilities. (iii) Any receivership or assignment for the benefit of creditors.
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(iv) Any liquidation, dissolution, winding up, or similar proceeding, whether or
not involving bankruptcy or insolvency. (v) Any case or proceeding similar to
those set forth in (i) through (iv) of this definition. (vi) Any other
proceeding of any type or nature in which substantially all claims of creditors
are determined and any payment or distribution is or may be made on account of
such claims. “Bankruptcy Code” means the United States Bankruptcy Code, 11
U.S.C. Section 101 et seq., as amended from time to time. “Beneficiary” means an
Immediate Family Member (or an entity Controlled by an Immediate Family Member)
who acquires an interest by devise, descent or operation of law due to the death
of a natural person. “Books and Records” is defined in Section 6.07(a).
“Borrower” means all Persons identified as “Borrower” in the first paragraph of
this Loan Agreement, together with their successors and assigns. “Borrower
Information” is defined in Section 10.02(d). “Borrower Principal” means any of
the following: (i) Any general partner of Borrower (if Borrower is a
partnership). (ii) Any manager, managing member, non-member manager, or member
of the board of managers of Borrower (if Borrower is a limited liability
company). (iii) Any settlor (grantor) of a living or revocable Trust (if
Borrower is a living or revocable Trust). (iv) Any trustee of a Trust (if
Borrower is a Trust). (v) Any Person (limited partner, member or shareholder)
with a collective direct or indirect equity interest in Borrower equal to or
greater than 25%, including any equitable ownership interest or any beneficial
interest in an Illinois land trust, an irrevocable trust, or a Delaware
Statutory Trust. (vi) Any master tenant operating all or a substantial portion
of the Mortgaged Property pursuant to a master lease structure, such as a
Delaware Statutory Trust structure. (vii) Any Guarantor of all or any portion of
the Loan or of any obligations of Borrower under the Loan Documents. Multifamily
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(viii) Any person or entity that Lender determines should be a Borrower
Principal, including any person or entity that may take Control of Borrower in
accordance with the terms of this Loan Agreement, such as pursuant to a Buy-Sell
Transfer. “Borrower Proof of Loss Threshold” is the amount set forth in Part
B.7, Summary of Loan Terms. “Borrower Proof of Loss Maximum” is the amount set
forth in Part B.7, Summary of Loan Terms. “Buy-Sell Equity Investor” is the
Person specified as such in the Summary of Loan Terms. “Buy-Sell Transfer” is
defined in Section 7.03(b)(iii). “Business Day” means any day other than a
Saturday, a Sunday, or any other day on which Lender or the national banking
associations are not open for business. “Cap Agreement” means any interest rate
cap agreement, interest rate swap agreement or other interest rate-hedging
contract or agreement, in a form acceptable to Lender, obtained by Borrower from
a Cap Provider as a requirement of any Loan Document or as a condition of
Lender’s making the Loan. “Cap Collateral” means all of the following: (i) The
Cap Agreement. (ii) The Cap Payments. (iii) All rights of Borrower under any Cap
Agreement and all rights of Borrower to all Cap Payments, including contract
rights and general intangibles, whether existing now or arising after the date
of this Loan Agreement. (iv) All rights, liens and security interests or
guaranties granted by a Cap Provider or any other Person to secure or guaranty
payment of any Cap Payments whether existing now or granted after the date of
this Loan Agreement. (v) All documents, writings, books, files, records and
other documents arising from or relating to any of the foregoing, whether
existing now or created after the date of this Loan Agreement. (vi) All cash and
non-cash proceeds and products of (ii) through (v) of this definition. “Cap
Payment(s)” means any and all monies payable pursuant to any Cap Agreement by a
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“Cap Provider” means the third-party financial institution approved by Lender
that is the counterparty under any Cap Agreement or Replacement Cap Agreement.
“Capital Replacement” means the replacement of those items listed on Exhibit F.
“Capped Interest Rate” is defined in the Note, if applicable. “Claim” is defined
in Section 10.02(f). “Clean Site Assessment” means a current Site Assessment
which (i) is dated within 90 days prior to the date of the proposed Transfer,
and (ii) evidences no presence of Hazardous Materials on the Mortgaged Property
and no other Prohibited Activities or Conditions with respect to the Mortgaged
Property. “Closing Date” means the date on which Lender disburses the proceeds
of the Loan to or for the account of Borrower. “Commitment Letter” means the
fully executed commitment letter or early rate lock application between Lender
and Borrower issued in connection with the Loan, as such document may have been
modified, amended or extended. “Completion Date” means, with respect to any
Repair, the date specified for that Repair in the Repair Schedule of Work
(Exhibit C), as such date may be extended by Lender in writing. “Condemnation”
is defined in Section 6.11(a). “Co-Owner Transfer” is defined in Section
7.03(a)(iv). “Conditional Transfer Fee” means a fee of $25,000 that is paid (i)
in addition to and not in lieu of the Transfer Processing Fee or Special
Transfer Processing Fee, as applicable, and (ii) when certain Conditionally
Permitted Transfers – Category III are completed. “Conditionally Permitted
Transfer” means a Transfer that will not cause an Event of Default under this
Loan Agreement if certain conditions in this Loan Agreement are satisfied. The
Conditionally Permitted Transfers are set forth in Section 7.03. “Conditionally
Permitted Transfer - Category I” includes the Transfers set forth in 7.03(a) for
which Borrower must pay the Transfer Processing Fee. “Conditionally Permitted
Transfer - Category II” includes the Transfers set forth in 7.03(b) for which
Borrower must pay the Special Transfer Processing Fee. “Conditionally Permitted
Transfer - Category III” includes the Transfers set forth in 7.03(c) for which
Borrower must pay the Transfer Processing Fee and the Conditional Transfer Fee.
“Consolidation Borrower” is defined in Section 7.03(a)(v). Multifamily Loan and
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“Consolidation Borrower Manager” is the Person specified as such in Part B.9,
Summary of Loan Terms. “Control” means to possess, directly or indirectly, the
power to manage an entity, including the authority to legally bind the entity.
“Controlling Interest” means an interest held by a Person that gives such person
the legal right to Control an entity, including the interest held by any of the
following: (i) Any general partner in a partnership. (ii) Any manager (whether a
member manager, nonmember manager, or a manager on a board of managers) in a
limited liability company. (iii) Any director on a board of directors for a
corporation that is not a Public Company. (iv) Any trustee of a Trust. (v) The
settlor of a revocable Trust. (vi) Any Person with a position and/or decision
rights that are similar to those listed in (i) through (v). Neither of the
following alone will be deemed sufficient to constitute a Controlling Interest:
(i) the ownership of the majority of the equitable or legal interests in such
entity or (ii) the right to vote on “major decisions” for such entity.
“Corporate Lease” means a Lease for one or more residential units under which
one entity will rent all such units from Borrower and will have the right to
sublease such units to individual subtenants. “Crowdfunding” means the practice
of funding a project or venture by raising capital by either of the following
methods: (i) Via general solicitation (i.e., marketing directed to the public at
large, whether via the internet or otherwise) that (A) names Freddie Mac, or (B)
names or contains any information about the Mortgaged Property. (ii) From
unaccredited investors in a public offering (e.g., under the related exemptions
of Title III or Title IV of the Jumpstart Our Business Startups (JOBS) Act).
“Cut-off Date” is defined in the Note, if applicable. Multifamily Loan and
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“Default Rate” is defined in the Note. “Defeasance” is defined in Section 11.12.
“Defeasance Closing Date” is defined in Section 11.12(b). “Defeasance
Collateral” means: (i) a Freddie Mac Debt Security, (ii) a Fannie Mae Debt
Security, (iii) U.S. Treasury Obligations, or (iv) FHLB Obligations. “Defeasance
Fee” is defined in Section 11.12(c). “Defeasance Notice” is defined in Section
11.12(b). “Defeasance Period” is defined in the Note, if applicable. “Departing
Equity Owner” is defined in Section 7.03(c)(ii). “Departing Manager” is defined
in Section 7.03(c)(i). “Designated Entity for Transfers” means each entity so
identified in Exhibit I, and that entity’s successors and permitted assigns.
“Disclosure Document” is defined in Section 11.08. “E-Signature” means any form
of signature provided on behalf of Borrower or a Borrower Principal other than
an original handwritten signature, including any type of image created in any
manner (whether electronically or otherwise) which image could reasonably be
interpreted as an indication of the signer’s intent to sign the document.
“E-Signed Document” means any document received by Servicer or Lender in
connection with the underwriting, origination, transfer, Securitization, or
servicing of the Loan, or the correction or amendment of any such document, to
which an E-Signature is affixed, attached, or otherwise logically associated.
“Economic Sanctions Laws” means the foreign assets control regulations, 31
C.F.R. Chapter V, as amended, and any amending federal legislation or executive
order relating thereto, as administered by OFAC. “Economic Sanctions and AML
Laws Indemnity” is defined in Section 10.02(e). “Eligible Account” means an
identifiable account which is separate from all other funds held by the holding
institution that is either (i) an account or accounts maintained with the
corporate trust department of a federal or state-chartered depository
institution or trust company which complies with the definition of Eligible
Institution, or (ii) a segregated trust account or accounts maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company acting in its fiduciary capacity which, in the case
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depository institution or trust company is subject to regulations substantially
similar to 12 C.F.R. §9.10(b), having in either case a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authority. An Eligible Account will not be evidenced by a
certificate of deposit, passbook or other instrument. “Eligible Institution”
means a federal or state chartered depository institution or trust company
insured by the Federal Deposit Insurance Corporation, the short term unsecured
debt obligations or commercial paper of which are rated at least A-1 by Standard
& Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., P-1 by
Moody’s Investors Service, Inc. and F-3 by Fitch, Inc. in the case of accounts
in which funds are held for 30 days or less or, in the case of letters of credit
or accounts in which funds are held for more than 30 days, the long term
unsecured debt obligations of which are rated at least “A” by Fitch, Inc. and
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., and “A2” by Moody’s Investors Service, Inc. If at any time an Eligible
Institution does not meet the required rating, the Loan Servicer must move the
Eligible Account within 30 days of such event to an appropriately rated Eligible
Institution. “Environmental Inspections” is defined in Section 6.12(e).
“Environmental Permit” means any permit, license, or other authorization issued
under any Hazardous Materials Law with respect to any activities or businesses
conducted on or in relation to the Mortgaged Property. “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended. “Event of Default”
means the occurrence of any event listed in Section 9.01. “Existing Owner” means
any Person that owned a direct or indirect interest in Borrower or had a
Controlling Interest in Borrower on the date of this Loan Agreement and whose
name appears in the organizational chart attached as Exhibit H to this Loan
Agreement. “Extension Period” is defined in the Note, if applicable. “Fannie Mae
Debt Security” means any non-callable bond, debenture, note, or other similar
debt obligation issued by the Federal National Mortgage Association. “FHFA”
means the Federal Housing Finance Agency. “FHFA SCP List” means the Suspended
Counterparty List maintained by the FHFA which is currently published at
https://www.fhfa.gov/SupervisionRegulation/LegalDocuments/suspendedcounterpartyprogram.
“FHLB Obligations” mean direct, non-callable and non-redeemable securities
issued, or fully insured as to payment, by the Federal Home Loan Bank.
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“Fixtures” means all property owned by Borrower which is attached to the Land or
the Improvements so as to constitute a fixture under applicable law, including:
machinery, equipment, engines, boilers, incinerators and installed building
materials; systems and equipment for the purpose of supplying or distributing
heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring
and conduits used in connection with radio, television, security, fire
prevention or fire detection or otherwise used to carry electronic signals;
telephone systems and equipment; elevators and related machinery and equipment;
fire detection, prevention and extinguishing systems and apparatus; security and
access control systems and apparatus; plumbing systems; water heaters, ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers,
dryers and other appliances; light fixtures, awnings, storm windows and storm
doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors;
cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants;
swimming pools; and exercise equipment. “Freddie Mac” means the Federal Home
Loan Mortgage Corporation. “Freddie Mac Debt Security” means any non-callable
bond, debenture, note, or other similar debt obligation issued by Freddie Mac.
“Freddie Mac Web Site” means the web site of Freddie Mac, located at
www.freddiemac.com. “GAAP” means generally accepted accounting principles.
“Governmental Authority” means any board, commission, department, agency or body
of any municipal, county, state or federal governmental unit, or any subdivision
of any of them, that has or acquires jurisdiction over the Mortgaged Property,
or the use, operation or improvement of the Mortgaged Property, or over
Borrower. “Guarantor” means the Person(s) required by Lender to guaranty all or
a portion of Borrower’s obligations under the Loan Documents, as set forth in
the Guaranty. The required Guarantors as of the date of this Loan Agreement are
set forth in Exhibit I. “Guaranty” means the Guaranty executed by Guarantor
and/or any Replacement Guaranty or supplemental guaranty executed pursuant to
the terms of this Loan Agreement. “Guarantor Not in Borrower’s Ownership
Structure” means a Guarantor who does not (i) Control Borrower or a Designated
Entity for Transfers and/or (ii) have a direct or indirect ownership interest in
Borrower. “Hazardous Materials” means petroleum and petroleum products and
compounds containing them, including gasoline, diesel fuel and oil; explosives;
flammable materials; radioactive materials; polychlorinated biphenyls (PCBs) and
compounds containing them; lead and lead- based paint; asbestos or asbestos
containing materials in any form that is or could become friable; underground or
above-ground storage tanks, whether empty or containing any substance; any
substance the presence of which on the Mortgaged Property is prohibited by any
Governmental Authority; any substance that requires special handling and any
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substance now or in the future that (i) is defined as a “hazardous substance,”
“hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,”
“contaminant,” or “pollutant” by or within the meaning of any Hazardous
Materials Law, or (ii) is regulated in any way by or within the meaning of any
Hazardous Materials Law. “Hazardous Materials Law” and “Hazardous Materials
Laws” means any and all federal, state and local laws, ordinances, regulations
and standards, rules, policies and other governmental requirements,
administrative rulings and court judgments and decrees in effect now or in the
future, including all amendments, that relate to Hazardous Materials or the
protection of human health or the environment and apply to Borrower or to the
Mortgaged Property. Hazardous Materials Laws include the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601,
et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq.,
the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous
Materials Transportation Act, 49 U.S.C. Section 5101 et seq., and their state
analogs. “HVAC System” is defined in Section 6.10(a)(v). “Immediate Family
Members” means a Person’s spouse, parent, child (including stepchild),
grandchild (including step-grandchild), sibling, or domestic partner.
“Imposition Reserve Deposits” is defined in Section 4.02(a). “Impositions” is
defined in Section 4.02(a). “Improvements” means the buildings, structures and
improvements now constructed or at any time in the future constructed or placed
upon the Land, including any future alterations, replacements and additions.
“Indebtedness” means the principal of, interest at the fixed or variable rate
set forth in the Note on, and all other amounts due at any time under, the Note,
this Loan Agreement or any other Loan Document, including prepayment premiums,
late charges, default interest, and advances as provided in Section 9.02 to
protect the security of the Security Instrument. “Indemnification Affiliate” is
defined in Section 10.02(d). “Indemnified Party/ies” is defined in Section
10.02(d). “Indemnitees” is defined in Section 10.02(a). “Index Rate” is defined
in the Note, if applicable. “Installment Due Date” is defined in the Note.
“Insurance” means Property Insurance, liability insurance and all other
insurance that Lender requires Borrower to maintain pursuant to this Loan
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“Intercreditor Agreement” is defined in Section 11.11(b). “Intrafamily Transfer”
is defined in Section 7.03(a)(ii). “Issuer” means the issuer of any Letter of
Credit. “Issuer Group” is defined in Section 10.02(d). “Issuer Person” is
defined in Section 10.02(d). “Land” means the land described in Exhibit A.
“Leases” means all present and future leases, subleases, licenses, concessions
or grants or other possessory interests now or hereafter in force, whether oral
or written, covering or affecting the Mortgaged Property, or any portion of the
Mortgaged Property (including proprietary leases or occupancy agreements if
Borrower is a cooperative housing corporation), and all modifications,
extensions or renewals. “Lender” means the entity identified as “Lender” in the
first paragraph of this Loan Agreement, or any subsequent holder of the Note.
“Lender’s Discretion” means Lender’s reasonable discretion unless otherwise set
forth in this Loan Agreement. “Letter of Credit” means any letter of credit
required under the terms of this Loan Agreement or any other Loan Document.
“Lien” means any mortgage, deed of trust, deed to secure debt, security interest
or other lien or encumbrance on the Mortgaged Property. “Lien on Ownership
Interest” means any security interest or other lien or encumbrance on any direct
or indirect ownership interest in Borrower. “Loan” is defined on Page 1 of this
Loan Agreement. “Loan Agreement” means this Multifamily Loan and Security
Agreement. “Loan Application” is defined in Section 5.16(a). “Loan Documents”
means the Note, the Security Instrument, this Loan Agreement, all guaranties,
all indemnity agreements, all collateral agreements, UCC filings, O&M Programs,
the MMP and any other documents now or in the future executed by Borrower, any
Guarantor or any other Person in connection with the Loan evidenced by the Note,
as such documents may be amended from time to time. Multifamily Loan and
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“Loan Servicer” means the entity that from time to time is designated by Lender
to collect payments and deposits and receive Notices under the Note, the
Security Instrument, this Loan Agreement and any other Loan Document, and
otherwise to service the Loan evidenced by the Note for the benefit of Lender.
“Lockout Period,” if applicable, is defined in the Note. “Major Building System”
means one that is integral to the Improvements, providing basic services to the
tenants and other occupants of the Improvements including: (i) Electrical
(electrical lines or power upgrades, excluding fixture replacement). (ii) HVAC
(central and unit systems, excluding replacement of in kind unit systems). (iii)
Plumbing (supply and waste lines, excluding fixture replacement). (iv)
Structural (foundation, framing, and all building support elements). “Manager”
or “Managers” means a Person who is named or designated as (i) a non-member
manager, manager, managing member, or manager on a board of managers or
otherwise acts in the capacity of a manager or managing member pursuant to the
limited liability company agreement or similar instrument under which the
limited liability company is formed or operated, or (ii) a general partner of a
general or limited partnership pursuant to a partnership agreement or similar
agreement under which the partnership is formed or operated. “Manager Transfer”
is defined in Section 7.03(c)(i). “Margin” is defined in the Note, if
applicable. “Material Adverse Effect” means a significant detrimental effect on:
(i) the Mortgaged Property, (ii) the business, prospects, profits, operations or
condition (financial or otherwise) of Borrower, (iii) the enforceability,
validity, perfection or priority of the Lien of any Loan Document, or (iv) the
ability of Borrower to perform any obligations under any Loan Document.
“Maturity Date” means the Scheduled Maturity Date, as defined in the Note.
“Maximum Combined LTV means the percentage set forth in Part B.12, Summary of
Loan Terms. “Membership Interests” are all or substantially all the ownership
interests in the Membership Interests Seller. “Membership Interests Seller” is
defined in Part B.4, Summary of Loan Terms. Multifamily Loan and Security
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“Minimum DSCR” means, with respect to a Supplemental Loan, (i) if the Senior
Indebtedness bears interest at a fixed rate, 1.25:1, or (ii) if the Senior
Indebtedness bears interest at a floating rate, 1.10:1. “Minimum Occupancy”
means the percentage of units at the Mortgaged Property set forth in Part B.6,
Summary of Loan Terms with leases that comply with Section 5.11, Section
6.09(e)(v)(E), and Section 6.15. “MMP” means a moisture management plan to
control water intrusion and prevent the development of Mold or moisture at the
Mortgaged Property throughout the term of this Loan Agreement. The requirements
for an MMP are set forth in Part B.5, Summary of Loan Terms. “Modified
Non-Residential Lease” means an extension or modification of any Non-Residential
Lease, which Non-Residential Lease was in existence as of the date of this Loan
Agreement. “Mold” means mold, fungus, microbial contamination or pathogenic
organisms. “Mortgaged Property” means all of Borrower’s present and future
right, title and interest in and to all of the following: (i) The Land, or, if
Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground Lease
and the Leasehold Estate. (ii) The Improvements. (iii) The Fixtures. (iv) The
Personalty. (v) All current and future rights, including air rights, development
rights, zoning rights and other similar rights or interests, easements,
tenements, rights of way, strips and gores of land, streets, alleys, roads,
sewer rights, waters, watercourses and appurtenances related to or benefiting
the Land or the Improvements, or both, and all rights-of-way, streets, alleys
and roads which may have been or may in the future be vacated. (vi) All proceeds
paid or to be paid by any insurer of the Land, the Improvements, the Fixtures,
the Personalty or any other part of the Mortgaged Property, whether or not
Borrower obtained the Insurance pursuant to Lender’s requirement. (vii) All
awards, payments and other compensation made or to be made by any municipal,
state or federal authority with respect to the Land or the Leasehold Estate, as
applicable, the Improvements, the Fixtures, the Personalty or any other part of
the Mortgaged Property, including any awards or settlements resulting from
Condemnation proceedings or the total or partial taking of the Land, the
Improvements, the Fixtures, the Personalty or any other part of the Mortgaged
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Property under the power of eminent domain or otherwise and including any
conveyance in lieu thereof. (viii) All contracts, options and other agreements
for the sale of the Land, or the Leasehold Estate, as applicable, the
Improvements, the Fixtures, the Personalty or any other part of the Mortgaged
Property entered into by Borrower now or in the future, including cash or
securities deposited to secure performance by parties of their obligations. (ix)
All proceeds from the conversion, voluntary or involuntary, of any of the items
described in items (i) through (viii) of this definition, into cash or
liquidated claims, and the right to collect such proceeds. (x) All Rents and
Leases. (xi) All earnings, royalties, accounts receivable, issues and profits
from the Land, the Improvements or any other part of the Mortgaged Property, and
all undisbursed proceeds of the Loan. (xii) All Imposition Reserve Deposits.
(xiii) All refunds or rebates of Impositions by any Governmental Authority or
insurance company (other than refunds applicable to periods before the real
property tax year in which this Loan Agreement is dated). (xiv) All tenant
security deposits which have not been forfeited by any tenant under any Lease
and any bond or other security in lieu of such deposits. (xv) All names under or
by which any of the Mortgaged Property may be operated or known, and all
trademarks, trade names and goodwill relating to any of the Mortgaged Property.
(xvi) If required by the terms of Section 4.05 or elsewhere in this Loan
Agreement, all rights under any Letter of Credit and the Proceeds, as such
Proceeds may increase or decrease from time to time. (xvii) If the Note provides
for interest to accrue at a floating or variable rate and there is a Cap
Agreement, the Cap Collateral. (xviii) through (xxv) are Reserved. “New
Non-Residential Lease” is any Non-Residential Lease not in existence as of the
date of this Loan Agreement. “Non-Controlling Interest” is an ownership interest
in Borrower or in a Designated Entity for Transfers that is not a Controlling
Interest, including (i) any limited partnership interest in a Multifamily Loan
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partnership, (ii) any non-managing interest in a limited liability company, or
(iii) beneficial interests in a Trust that is not a revocable Trust.
“Non-Residential Lease” is a Lease of a portion of the Mortgaged Property to be
used for non- residential purposes. “Non-U.S. Equity Holder” means any Person
with a collective equity interest (whether direct or indirect) of 10% or more in
Borrower, and which is either (a) an individual who is not a citizen of the
United States, or (b) an entity formed outside the United States. “Note” means
the Multifamily Note or Notes (including any Amended and Restated Note(s),
Consolidated, Amended and Restated Note(s), or Extended and Restated Note(s))
executed by Borrower in favor of Lender and dated as of the date of this Loan
Agreement, including all schedules, riders, allonges and addenda, as such
Multifamily Note(s) may be amended, modified and/or restated from time to time.
“Notice” or “Notices” means all notices, demands and other communication
required under the Loan Documents, provided in accordance with the requirements
of Section 11.03. “Notice of Death” is defined in Section 7.03(b)(i). “O&M
Program” is defined in Section 6.12(c) and if applicable, consists of the O&M
Programs set forth in Part B.8, Summary of Loan Terms. “OFAC” means the U.S.
Department of the Treasury’s Office of Foreign Assets Control. “OFAC Lists”
means either one of the following: (i) The OFAC Specially Designated Nationals
and Blocked Persons List. (ii) The OFAC Consolidated Sanctions List. “Permitted
Transfer” means a Transfer that will not cause an Event of Default under this
Loan Agreement. The Permitted Transfers are set forth in Section 7.02. “Person”
means any natural person, sole proprietorship, corporation, general partnership,
limited partnership, limited liability company, limited liability partnership,
limited liability limited partnership, joint venture, association, joint stock
company, bank, trust, estate, unincorporated organization, any federal, state,
county or municipal government (or any agency or political subdivision thereof),
endowment fund or any other form of entity. “Personalty” means all of the
following: (i) Accounts (including deposit accounts) of Borrower related to the
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(ii) Equipment and inventory owned by Borrower, which are used now or in the
future in connection with the ownership, management or operation of the Land or
Improvements or are located on the Land or Improvements, including furniture,
furnishings, machinery, building materials, goods, supplies, tools, books,
records (whether in written or electronic form) and computer equipment (hardware
and software). (iii) Other tangible personal property owned by Borrower which is
used now or in the future in connection with the ownership, management or
operation of the Land or Improvements or is located on the Land or in the
Improvements, including ranges, stoves, microwave ovens, refrigerators,
dishwashers, garbage disposers, washers, dryers and other appliances (other than
Fixtures). (iv) Any operating agreements relating to the Land or the
Improvements. (v) Any surveys, plans and specifications and contracts for
architectural, engineering and construction services relating to the Land or the
Improvements. (vi) All other intangible property, general intangibles and rights
relating to the operation of, or used in connection with, the Land or the
Improvements, including all governmental permits relating to any activities on
the Land and including subsidy or similar payments received from any sources,
including a Governmental Authority. (vii) Any rights of Borrower in or under any
Letter of Credit. “Pledge Agreement” is defined in Section 11.12(f)(iii).
“Preferred Equity Control Take-over” is defined in Section 7.03(b)(ii).
“Preferred Equity Investor” is the Person specified as such in Part B.9, Summary
of Loan Terms. “Prepayment Premium Period” is defined in the Note. “Previously
Underwritten Person” is the Person specified as such in Part B.9, Summary of
Loan Terms. “Prior Borrower Principal” is the Person specified as such in Part
B.9, Summary of Loan Terms. “Prior Lien” means a pre-existing mortgage, deed of
trust or other Lien encumbering the Mortgaged Property. “Proceeds” means the
cash obtained by a draw on a Letter of Credit. Multifamily Loan and Security
Agreement Page 114

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“Prohibited Activity or Condition” means each of the following: (i) The
presence, use, generation, release, treatment, processing, storage (including
storage in above-ground and underground storage tanks), handling or disposal of
any Hazardous Materials on or under the Mortgaged Property. (ii) The
transportation of any Hazardous Materials to, from or across the Mortgaged
Property. (iii) Any occurrence or condition on the Mortgaged Property, which
occurrence or condition is or may be in violation of Hazardous Materials Laws.
(iv) Any violation of or noncompliance with the terms of any Environmental
Permit with respect to the Mortgaged Property. (v) Any violation or
noncompliance with the terms of any O&M Program. However, the term “Prohibited
Activity or Condition” expressly excludes lawful conditions permitted by an O&M
Program or the safe and lawful use and storage of quantities of: (i) pre-
packaged supplies, cleaning materials and petroleum products customarily used in
the operation and maintenance of comparable multifamily properties, (ii)
cleaning materials, personal grooming items and other items sold in pre-packaged
containers for consumer use and used by tenants and occupants of residential
units in the Mortgaged Property, and (iii) petroleum products used in the
operation and maintenance of motor vehicles from time to time located on the
Mortgaged Property’s parking areas, so long as all of the foregoing are used,
stored, handled, transported and disposed of in compliance with Hazardous
Materials Laws. “Prohibited Parties List” means any one or more of the (i) OFAC
Lists or (ii) FHFA SCP List. “Prohibited Transfer” means a Transfer that will
constitute an Event of Default under this Loan Agreement. The Prohibited
Transfers are set forth in Section 7.01. “Property Improvement Alterations”
means alterations to the Improvements existing at or upon the Mortgaged Property
as of the date of this Loan Agreement, which are being made to renovate or
upgrade the Mortgaged Property and are not otherwise permitted under Section
6.09(e). Repairs, Capital Replacements, Restoration or other work required to be
performed at the Mortgaged Property pursuant to Sections 6.10 or 6.11 will not
constitute Property Improvement Alterations. “Property Improvement Notice” means
a Notice to Lender that Borrower intends to begin the Property Improvement
Alterations identified in the Property Improvement Notice. “Property Insurance”
is defined in Section 6.10(a). “Property Jurisdiction” means the jurisdiction in
which the Land is located. Multifamily Loan and Security Agreement Page 115

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“Property Manager” means the Person identified as such in Part B.1, Summary of
Loan Terms. “Property Seller” is defined in Section 5.24. “Public Company” means
(i) a company whose shares are traded on a United States public exchange or a
United States over-the-counter exchange with no control over who purchases its
shares after the initial public offering, or (ii) a pension fund that is
controlled by a United States municipal, county, state, or federal governmental
unit or any subsidiary thereof. “Rate Cap Agreement Reserve Fund” means the
account established pursuant to Section 4.07, if applicable, to pay for the cost
of a Replacement Cap Agreement. “Rating Agencies” means Fitch, Inc., Moody’s
Investors Service, Inc., or Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc., or any successor entity of the foregoing, or
any other nationally recognized statistical rating organization. “Released
Guarantor” is defined in Section 7.03(c)(iii). “Release of Guarantor Transfer”
is defined in Section 7.03(c)(iii). “Release Instruments” is defined in Section
11.12(f). “Remedial Work” is defined in Section 6.12(f). “Rent(s)” means all
rents (whether from residential or non-residential space), revenues and other
income of the Land or the Improvements, parking fees, laundry and vending
machine income and fees and charges for food, health care and other services
provided at the Mortgaged Property, whether now due, past due or to become due,
and deposits forfeited by tenants, and, if Borrower is a cooperative housing
corporation or association, maintenance fees, charges or assessments payable by
shareholders or residents under proprietary leases or occupancy agreements,
whether now due, past due or to become due. “Rent Schedule” means a written
schedule for the Mortgaged Property showing the name of each tenant, and for
each tenant, the space occupied, the lease expiration date, the rent payable for
the current month, the date through which rent has been paid, and any related
information requested by Lender. “Repairs” means the repairs to be made to the
Mortgaged Property, as described on the Repair Schedule of Work (Exhibit C) or
as otherwise required by Lender in accordance with this Loan Agreement.
“Replacement Cap Agreement” means any Cap Agreement satisfying the provisions of
this Loan Agreement, using documentation approved by Lender, and purchased by
Borrower to replace any initial Cap Agreement or subsequent Cap Agreement.
Multifamily Loan and Security Agreement Page 116

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“Replacement Cost” means the estimated replacement cost of the Improvements,
Fixtures, and Personalty (or, when used in reference to a property that is not
the Mortgaged Property, all improvements, fixtures, and personalty located on
such property), excluding any deduction for depreciation, all as determined
annually by Borrower using customary methodology and sources of information
acceptable to Lender in Lender’s Discretion. Replacement Cost will not include
the cost to reconstruct foundations or site improvements, such as driveways,
parking lots, sidewalks, and landscaping. “Replacement Guarantor” means a Person
acceptable to Lender that executes a Guaranty in connection with (i) a Transfer,
(ii) a Guarantor Status Event, (iii) a Guarantor Bankruptcy, or (iv) the death
of a Guarantor, and that meets the Replacement Guarantor Net Worth and Liquidity
Requirements. “Replacement Guaranty” means a Guaranty executed by a Replacement
Guarantor in a form acceptable to Lender and in substantially the same form as
the Guaranty executed on the same date as this Loan Agreement. If the
Replacement Guarantor is an entity, the Replacement Guarantor’s Guaranty will be
modified to include, at Replacement Guarantor’s option, either Lender’s current
form of the Rider to Guaranty – Material Adverse Change, or Lender’s current
form of the Rider to Guaranty – Minimum Net Worth/Liquidity. “Replacement
Guarantor Net Worth and Liquidity Requirements” means that all Guarantors
(including any Replacement Guarantors) collectively satisfy the following
requirements: (a) A net worth of at least: (i) $5,000,000 for Loans with an
unpaid principal balance of the Loan at the time of the applicable Transfer of
less than $15,000,000. (ii) $10,000,000 for Loans with an unpaid principal
balance of the Loan at the time of the applicable Transfer of at least
$15,000,000 and less than $30,000,000. (iii) $15,000,000 for Loans with an
unpaid principal balance of the Loan at the time of the applicable Transfer of
at least $30,000,000 and less than $50,000,000. (iv) 30% of the unpaid principal
balance of the Loan at the time of the applicable Transfer for Loans of at least
$50,000,000. (b) Liquidity equal to the greater of 10% of the unpaid principal
balance of the Loan at the time of the applicable Transfer or one year of debt
service unless another amount is set forth in this Loan Agreement. If the Loan
has a floating interest rate, then the liquidity requirement will be 10% of the
unpaid principal balance. If the Loan is an interest-only or partial interest
only loan, then Lender will calculate one year of debt service using the
amortizing debt service. Multifamily Loan and Security Agreement Page 117

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“Required Co-Owner” means a Person that must maintain at least the Required
Co-Owner Interest after a Co-Owner Transfer, as set forth in Part B.9, Summary
of Loan Terms. “Required Co-Owner Interest” means the percentage of direct or
indirect interest in the Mortgaged Property that the Required Co-Owner must
maintain after a Co-Owner Transfer, as set forth in Part B.9, Summary of Loan
Terms. “Required Equity Owner” means a Person that must maintain at least the
Required Equity Ownership Interest, as set forth in Part B.9, Summary of Loan
Terms. “Required Equity Owner Transfer” is defined in Section 7.03(c)(ii).
“Required Equity Ownership Interest” means the minimum percentage of direct or
indirect interest in Borrower that the Required Equity Owner must maintain, as
set forth in Part B.10, Summary of Loan Terms. “Reserve Fund” means each account
established for Imposition Reserve Deposits, the Replacement Reserve Fund, the
Repair Reserve Fund (if any), the Rate Cap Agreement Reserve Fund (if any), the
Rental Achievement Reserve Fund (if any), and any other account established
pursuant to Article IV of this Loan Agreement. “Restoration” is defined in
Section 6.10(j)(i). “Scheduled Debt Payments” is defined in Section
11.12(g)(i)(B). “Second Beneficiary” is defined in Section 7.03(b)(i).
“Secondary Market Transaction” means any of the following: (i) Any sale or
assignment of this Loan Agreement, the Note and the other Loan Documents to one
or more investors as a whole loan. (ii) A participation of the Loan to one or
more investors. (iii) Any deposit of this Loan Agreement, the Note and the other
Loan Documents with a trust or other entity which may sell certificates or other
instruments to investors evidencing an ownership interest in the assets of such
trust or other entity. (iv) Any other sale, assignment or transfer of the Loan
or any interest in the Loan to one or more investors. “Securitization” means
when the Note or any portion of the Note is assigned to a REMIC or grantor
trust. “Securitization Indemnification” is defined in Section 10.02(d).
Multifamily Loan and Security Agreement Page 118

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“Security Instrument” means the mortgage, deed of trust, deed to secure debt or
other similar security instrument encumbering the Mortgaged Property and
securing Borrower’s performance of its Loan obligations, including Borrower’s
obligations under the Note and this Loan Agreement (including any Amended and
Restated Security Instrument, Consolidation, Modification and Extension
Agreement, Extension and Modification Agreement or similar agreement or
instrument amending and restating existing security instruments). “Senior
Indebtedness” means, for a Supplemental Loan, if any, the Indebtedness evidenced
by each Senior Note and secured by each Senior Instrument for the benefit of
each Senior Lender. “Senior Instrument” means, for a Supplemental Loan, each
Senior Instrument identified in Part B.13, Summary of Loan Terms. If the Loan is
a first lien on the Mortgaged Property, the term “Senior Instrument” is not
applicable. “Senior Lender” means each holder of a Senior Note. “Senior Loan
Documents” means, for a Supplemental Loan, if any, all documents relating to
each loan evidenced by a Senior Note. “Senior Note” means, for a Supplemental
Loan, if any, each Multifamily Note secured by a Senior Instrument. “Servicing
Arrangement” is defined in Section 11.06(b). “Settlement Notice” is defined in
Section 7.03(b)(i). “Single Purpose Entity” is defined in Section 6.13(a). “Site
Assessment” means an environmental assessment report for the Mortgaged Property
prepared at Borrower’s expense by a qualified environmental consultant engaged
by Borrower, or by Lender on behalf of Borrower, and approved by Lender, and in
a manner reasonably satisfactory to Lender, based upon an investigation relating
to and making appropriate inquiries to evaluate the risks associated with Mold
and any existence of Hazardous Materials on or about the Mortgaged Property, and
the past or present discharge, disposal, release or escape of any such
substances, all consistent with the most current version of the ASTM 1527
standard (or any successor standard published by ASTM) and good customary and
commercial practice. “SPE Equity Owner” if applicable, means the Person
identified as such in Part B.2, Summary of Loan Terms. If an SPE Equity Owner is
not identified in Part B.2, Summary of Loan Terms then Borrower will not be
required to maintain an SPE Equity Owner in its organizational structure during
the term of the Loan and all references to SPE Equity Owner in this Loan
Agreement and in the Note will be of no force or effect. Multifamily Loan and
Security Agreement Page 119

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“Special Transfer Processing Fee” means a nonrefundable fee of $25,000 for
Lender’s review of (i) a proposed or completed Conditionally Permitted Transfer
– Category II or (ii) certain other actions or events relating to Guarantor set
forth in Article VIII. “Status Event” means any of the following events have
occurred in connection with an entity: (i) Termination of its existence. (ii)
Merger or consolidation of the entity with another entity (whether or not the
entity is the surviving entity). (iii) Surrender of its charter. (iv)
Dissolution of the entity. (v) Liquidation of its assets. (vi) Division of the
entity. (vii) Reconstitution of the entity into another entity. (viii) The
filing of any document with the applicable governmental authority to effect any
action listed in (i) through (vii) of this definition. “Successor Borrower” is
defined in Section 11.12(b). “Supplemental Indebtedness” the Indebtedness
evidenced by the Supplemental Note(s) and secured by the Supplemental
Instrument(s) for the benefit of Supplemental Lender(s), if any. “Supplemental
Instrument” means, for each Supplemental Loan (whether one or more), if any, the
Security Instrument executed to secure the Supplemental Note for that
Supplemental Loan. “Supplemental Lender” means, for each Supplemental Loan
(whether one or more), if any, the lender named in the Supplemental Instrument
for that Supplemental Loan and its successors and/or assigns. “Supplemental
Loan” means any loan that is subordinate to the Senior Indebtedness.
“Supplemental Loan Documents” means, for each Supplemental Loan (whether one or
more), if any, all documents relating to the loan evidenced by the Supplemental
Note for that Supplemental Loan. “Supplemental Mortgage Product” is defined in
Section 11.11(a). “Supplemental Note” means, for each Supplemental Loan (whether
one or more), if any, the Multifamily Note secured by the Supplemental
Instrument for that Supplemental Loan. Multifamily Loan and Security Agreement
Page 120

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“Tax Code” means the Internal Revenue Code of the United States, 26 U.S.C.
Section 1 et seq., as amended from time to time. “Taxes” means all taxes,
assessments, vault rentals and other charges, if any, whether general, special
or otherwise, including all assessments for schools, public betterments and
general or local improvements, which are levied, assessed or imposed by any
public authority or quasi- public authority, and which, if not paid, will become
a Lien on the Land or the Improvements. “Tenancy in Common Agreement” means a
written agreement that sets out the rights and responsibilities of each Co-Owner
Borrower. “TIC Roll-up Transfer” is defined in Section 7.03(a)(v). “Title
Policy” means the title policy issued to and accepted by Lender
contemporaneously with the execution of this Loan Agreement insuring Lender’s
interest in the Mortgaged Property. “Total Insurable Value” means the sum of the
Replacement Cost, business income/rental value Insurance and the value of any
business personal property. “Transfer” means any of the following: (i) A sale,
assignment, transfer or other disposition or divestment of any legal or
equitable direct or indirect interest in Borrower, any Designated Entity for
Transfer or the Mortgaged Property (whether voluntary, involuntary or by
operation of law). (ii) The granting, creating or attachment of a Lien,
encumbrance or security interest (whether voluntary, involuntary or by operation
of law). (iii) The issuance or other creation of a legal or equitable ownership
interest in a legal entity, including a partnership interest, interest in a
limited liability company or corporate stock. (iv) The withdrawal, retirement,
removal or involuntary resignation of a partner in a partnership or a member or
Manager in a limited liability company. (v) The addition, appointment,
substitution or removal of a manager on a board of managers or a director on a
board of directors. (vi) A Status Event. (vii) The termination or revocation of
a trust, or the addition, removal, appointment or substitution of a trustee of a
trust. Multifamily Loan and Security Agreement Page 121

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For purposes of defining the term “Transfer,” the term “partnership” means a
general partnership, a limited partnership, a joint venture, a limited liability
partnership, or a limited liability limited partnership and the term “partner”
means a general partner, a limited partner, or a joint venturer. “Transfer” does
not include any of the following: (i) A conveyance of the Mortgaged Property at
a judicial or non-judicial foreclosure sale under the Security Instrument. (ii)
The Mortgaged Property becoming part of a bankruptcy estate by operation of law
under the Bankruptcy Code. (iii) The filing or recording of a Lien against the
Mortgaged Property for local taxes and/or assessments not then due and payable.
“Transfer and Assumption Agreement” is defined in Section 11.12(f)(iv).
“Transfer Due to Death” is defined in Section 7.03(b)(i). “Transfer Fee” means a
fee paid when the Transfer is completed. Unless otherwise specified, the
Transfer Fee will be equal to the lesser of the following: (i) 1% of the
outstanding principal balance of the Indebtedness as of the date of the
Transfer. (ii) $250,000. “Transfer Processing Fee” means a nonrefundable fee of
$15,000 for Lender’s review of a proposed or completed Transfer. “Transfer to
Previously Underwritten Person(s)” is defined in Section 7.03(a)(iii). “Trust”
means a legal entity in which a trustee agrees to hold and manage certain assets
or property of the trustor for the benefit of the beneficiary(ies). “Trust”
includes a revocable trust, irrevocable trust, testamentary trust, and Delaware
Statutory Trust. “U.S. Treasury Obligations” means direct, non-callable and
non-redeemable securities issued, or fully insured as to payment, by the United
States of America. “UCC Collateral” is defined in Section 3.03. “Underwriter
Group” is defined in Section 10.02(d). “Uniform Commercial Code” means the
Uniform Commercial Code as promulgated in the applicable jurisdiction.
Multifamily Loan and Security Agreement Page 122

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“Windstorm Coverage” is defined in Section 6.10(a)(iv). Multifamily Loan and
Security Agreement Page 123

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ARTICLE XIII INCORPORATION OF ATTACHED RIDERS. The Riders listed in Part D of
the Summary of Loan Terms are attached to and incorporated into this Loan
Agreement. ARTICLE XIV INCORPORATION OF ATTACHED EXHIBITS. The Exhibits listed
in Part C of the Summary of Loan Terms, if marked with an “X” in the space
provided, are attached to this Loan Agreement: ARTICLE XV RESERVED. REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK; SIGNATURES ON FOLLOWING PAGES Multifamily Loan
and Security Agreement Page 124

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BORROWER: SIR TAPESTRY PARK, LLC a Delaware limited liability company By:
Steadfast Income Advisor, LLC a Delaware limited liability company Manager By:
SIGNATURES CONTINUE ON FOLLOWING PAGE Multifamily Loan and Security Agreement
Page S-1

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LENDER: BERKELEY POINT CAPITAL LLC, d/b/a NEWMARK KNIGHT FRANK, a Delaware
limited liability company By: ~(lll!/_,~f----1.l:'/f!!j~;h---(SEAL) Deborah
Demoney Vice President Multifamily Loan and Security Agreement Page S-2

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT TRADE NAMES (Revised 3-1-2014)
The following changes are made to the Loan Agreement which precedes this Rider:
A. Section 6.30 is deleted and replaced with the following: 6.30 Lender’s Right
To Use Trade Name. Notwithstanding anything contained in this Loan Agreement,
Borrower agrees that Lender will have an irrevocable license, coupled with an
interest and for which consideration has been paid and received, to use and
disseminate existing brochures, pamphlets, and other marketing materials
relating to any of the Mortgaged Property, notwithstanding that they may include
the names “SIR”, “STAR” or “Steadfast” and/or associated trademark rights and
trade names relating to any of the Mortgaged Property for a period not to exceed
120 days after the date Lender acquires the Mortgaged Property by foreclosure or
deed-in-lieu of foreclosure. B. Section (xv) of the definition of “Mortgaged
Property” in Article XII is modified to read as follows: (xv) All names under or
by which any of the mortgaged property may be operated or known, and all
trademarks, trade names and goodwill relating to any of the mortgaged property;
provided however, that the names “SIR”, “STAR” or “Steadfast” and/or associated
trademark rights are not assigned to lender, subject to Section 6.30 of this
Loan Agreement. Rider to Multifamily Loan and Security Agreement Page 1 Trade
Names

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT MONTH TO MONTH LEASES (Revised
5-1-2015) The following changes are made to the Loan Agreement which precedes
this Rider: A. Section 5.11(b) is deleted and replaced with the following: (b)
They are for initial terms of at least 6 months and not more than 2 years
(unless otherwise approved in writing by Lender). Notwithstanding the foregoing,
Lender agrees that not more than 10% of all Leases for residential dwelling
units may be for an initial term of less than 6 months, provided that such
leases have an initial term of at least 1 month. B. Section 6.15(b)(ii) is
deleted and replaced with the following: (ii) They will be for initial terms of
at least 6 months and not more than 2 years (unless otherwise approved in
writing by Lender). Notwithstanding the foregoing, Lender agrees that not more
than 10% of all Leases for residential dwelling units may be for an initial term
of less than 6 months, provided that such leases have an initial term of at
least 1 month. Rider to Multifamily Loan and Security Agreement Page 1 Month to
Month Leases

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT CORPORATE LEASES (Revised
4-19-2018) The following changes are made to the Loan Agreement which precedes
this Rider: A. Section 5.11(c) is deleted and replaced with the following: (c)
They do not include any Corporate Leases (unless otherwise approved in writing
by Lender). Notwithstanding the foregoing, Lender agrees that no more than 10%
of all residential dwelling units may be leased pursuant to one or more
Corporate Leases; provided, however, no more than 5% of all residential units
may be leased pursuant to one or more Corporate Leases to any one corporate
tenant at any time and provided that under no circumstances may Corporate Leases
affecting 5% or more of all residential dwelling units expire in the same 6
month period as any other Corporate Leases. The form of any such Corporate Lease
must be approved by Lender. Any subleases executed in connection with a
Corporate Lease must be on forms that are customary for similar multifamily
properties in the Property Jurisdiction and must provide for a minimum term of 1
month. B. Section 6.15(b)(iii) is deleted and replaced with the following: (iii)
They will not include any Corporate Leases (unless otherwise approved in writing
by Lender). Notwithstanding the foregoing, Lender agrees that no more than 10%
of all residential dwelling units may be leased pursuant to one or more
Corporate Leases; provided, however, no more than 5% of all residential units
may be leased pursuant to one or more Corporate Leases to any one corporate
tenant at any time and provided that under no circumstances may Corporate Leases
affecting 5% or more of all residential dwelling units expire in the same 6
month period as any other Corporate Leases. The form of any such Corporate Lease
must be approved by Lender. Any subleases executed in connection with a
Corporate Lease must be on forms that are customary for similar multifamily
properties in the Property Jurisdiction and must provide for a minimum term of 1
month. Borrower may not, in connection with any Corporate Lease (or otherwise),
participate in any Home Sharing Activities or enter into any Corporate Lease for
units that it knows or should know are intended to be used for full-time or
part-time Home Sharing Activities. C. The following definition is added to
Article XII: “Home Sharing Activities” means short-term rentals of units that
are marketed through a peer-to-peer online marketplace or a home sharing
platform (such as Airbnb, VRBO, HomeAway, Booking.com, and other similar
platforms). Rider to Multifamily Loan and Security Agreement Page 1 Corporate
Leases

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT TERMITE OR WOOD DAMAGING INSECT
CONTROL (Revised 3-1-2014) The following changes are made to the Loan Agreement
which precedes this Rider: A. Section 6.09(k) is deleted and replaced with the
following: (k) Termite or Wood Damaging Insect Control. Within ninety (90) days
of the Closing Date, Borrower will enter into maintain a contract with a
qualified service provider for control of termites or other wood damaging
insects at the Mortgaged Property and maintain such contract for so long as the
Indebtedness remains outstanding. Rider to Multifamily Loan and Security
Agreement Page 1 Termite or Wood Damaging Insect Control

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RECYCLED BORROWER (Revised 4-19-2018) The following changes are made to the Loan
Agreement which precedes this Rider: A. Section 5.40 is replaced with the
following: 5.40 Recycled Borrower. (a) Underwriting Representations. Borrower
represents that as of the date of this Loan Agreement, each of the following is
true: (i) Borrower is and always has been duly formed, validly existing, and in
good standing in the state of its formation and in all other jurisdictions where
it is qualified to do business. (ii) Borrower is not now, nor has it ever been,
party to any lawsuit, arbitration, summons, or legal proceeding that is still
pending which, if adversely determined, would have a Material Adverse Effect, or
that resulted in a judgment against it that has not been paid in full, and there
are no liens of any nature against Borrower except (a) for tax liens not yet due
or (b) as shown in the schedule of exceptions to coverage in the Title Policy
issued to and accepted by Lender contemporaneously with the execution of this
Loan. (iii) Borrower is in compliance with all laws, regulations, and orders
applicable to it (“legal, non-conforming” status with respect to uses or
structures will be considered to comply with zoning and land use laws and
regulations for the purposes of this representation) and, except as otherwise
disclosed in this Loan Agreement, has received all permits necessary for it to
operate. (iv) Borrower is not involved in any dispute with any taxing authority.
(v) Borrower has paid all taxes which it owes. (vi) Borrower has never owned any
real property other than the Mortgaged Property and personal property necessary
or incidental to its ownership or operation of the Mortgaged Property and has
never engaged in any business other than the ownership and operation of the
Mortgaged Property. (vii) Borrower has provided Lender with complete financial
statements that reflect a fair and accurate view of the entity’s financial
condition in all material respects as of the date set forth thereon. (viii) If
required by Lender, Lender has received a current Phase I environmental Site
Assessment for the Mortgaged Property and that Site Assessment has not
identified any recognized environmental conditions that require further
investigation or remediation. Rider to Multifamily Loan and Security Agreement
Page 1 Recycled Borrower

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(ix) Borrower has no material contingent or actual obligations not related to
the Mortgaged Property. (x) Each amendment and restatement of Borrower’s
organizational documents has been accomplished in accordance with, and was
permitted by, the relevant provisions of said documents prior to its amendment
or restatement from time to time. (b) Separateness Representations. Borrower
represents that from the date of its formation, each of the following is true:
(i) Borrower has not entered into any contract or agreement with any Related
Party Affiliate, except upon terms and conditions that are commercially
reasonable and substantially similar to those available in an arm’s-length
transaction with an unrelated party. (ii) Borrower has paid all of its debts and
liabilities from its assets, including any fair and reasonable allocated portion
of shared expenses with Affiliates. (iii) Borrower has done or caused to be done
all things necessary to observe all organizational formalities applicable to it
and to preserve its existence. (iv) Except with respect to financial statements
which are covered by subsection (v) below, Borrower has maintained all of its
books, records, financial statements and bank accounts separate from those of
any other Person. (v) Borrower has not had its assets listed as assets on the
financial statement of any other Person; provided, however, Borrower’s assets
may have been included in a consolidated financial statement of its Affiliate if
each of the following conditions is met: (A) Appropriate notation was made on
such consolidated financial statements to indicate the separateness of Borrower
from such Affiliate and to indicate that Borrower’s assets and credit were not
available to satisfy the debts and other obligations of such Affiliate or any
other Person. (B) Such assets were also listed on Borrower’s own separate
balance sheet. (vi) Borrower has filed its own tax returns (except to the extent
that it has been a tax-disregarded entity not required to file tax returns under
applicable law) and, if it is a corporation, has not filed a consolidated
federal income tax return with any other Person. (vii) Borrower has been, and at
all times has held itself out to the public as, a legal entity separate and
distinct from any other Person (including any Affiliate or other Related Party
Affiliate). (viii) Borrower has corrected any known misunderstanding regarding
its status as a separate entity. Rider to Multifamily Loan and Security
Agreement Page 2 Recycled Borrower

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(ix) Borrower has conducted all of its business and held all of its assets in
its own name. (x) Borrower has not identified itself or any of its affiliates as
a division or part of the other. (xi) Borrower has maintained and used separate
stationery, invoices and checks bearing its own name. (xii) Borrower has not
commingled its assets with those of any other Person and has held all of its
assets in its own name. (xiii) Borrower has not guaranteed or become obligated
for the debts of any other Person. (xiv) Borrower has not held itself out as
being responsible for the debts or obligations of any other Person. (xv)
Borrower has allocated fairly and reasonably any overhead expenses that have
been shared with an Affiliate, including paying for office space and services
performed by any employee of an Affiliate or Related Party Affiliate. (xvi)
Borrower has not pledged its assets to secure the obligations of any other
Person. (xvii) Borrower has maintained adequate capital in light of its
contemplated business operations. (xviii) Borrower has maintained a sufficient
number of employees in light of its contemplated business operations and has
paid the salaries of its own employees from its own funds. (xix) Borrower has
not owned any subsidiary or any equity interest in any other entity. (xx)
Borrower has not incurred any indebtedness that is still outstanding other than
Indebtednessindebtedness that is permitted under the Loan Documents. (xxi)
Borrower has not had any of its obligations guaranteed by an Affiliate or other
Related Party Affiliate, except for guarantees that have been either released or
discharged (or that will be discharged as a result of the closing of the Loan)
or guarantees that are expressly contemplated by the Loan Documents. (xxii) None
of the tenants holding leasehold interests with respect to the Mortgaged
Property are an Affiliate of Borrower or other Related Party Affiliate. B. The
following definition is added to Article XII: Rider to Multifamily Loan and
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“Related Party Affiliate” means any of the Borrower’s Affiliates, constituents,
or owners, or any guarantors of any of the Borrower’s obligations or any
Affiliate of any of the foregoing. Rider to Multifamily Loan and Security
Agreement Page 4 Recycled Borrower

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT COOPERATION WITH RATING
AGENCIES AND INVESTORS (Revised 1-27-2015) A. Section 11.14 is deleted and
replaced with the following: 11.14 Cooperation with Rating Agencies and
Investors. At the request of Lender and, to the extent not already required to
be provided by Borrower under this Loan Agreement, Borrower must use reasonable
efforts to satisfy the market standards to which Lender customarily adheres or
which may be reasonably required in the marketplace or by the Rating Agencies in
connection with any Securities secured by or evidencing ownership interests in
the Note and this Loan Agreement, including all of the following: (a) Borrower
will provide financial and other information with respect to the Mortgaged
Property, the Borrower and the Property Manager. (b) Borrower will perform or
permit or cause to be performed or permitted such site inspections and other due
diligence investigations of the Mortgaged Property, as may be requested by
Lender in Lender’s Discretion or may reasonably be requested by the Rating
Agencies or as may be necessary or appropriate in connection with the Secondary
Market Transaction. Lender will reimburse Borrower for any third party costs
which Borrower reasonably incurs in connection with any such due diligence
investigation. (c) Borrower will make such representations and warranties as of
the closing date of the Secondary Market Transaction with respect to the
Mortgaged Property, Borrower and the Loan Documents as are customarily provided
in securitization transactions and as may be requested by Lender in Lender’s
Discretion or may reasonably be requested by the Rating Agencies and consistent
with the facts covered by such representations and warranties as they exist on
the date of this Loan Agreement, including the representations and warranties
made in the Loan Documents, together, if customary, with appropriate
verification of and/or consents to the Provided Information through letters of
auditors or opinions of counsel of independent attorneys acceptable to Lender
and to the Rating Agencies. Lender will reimburse Borrower for any third party
costs Rider to Multifamily Loan and Security Agreement Page 1 Cooperation with
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which Borrower reasonably incurs in connection with obtaining such auditors’
letters or opinions of counsel. (d) Borrower will cause its counsel to render
opinions, which may be relied upon by Lender, the Rating Agencies and their
respective counsel, agents and representatives, as to nonconsolidation or any
other opinion customary in securitization transactions with respect to the
Mortgaged Property and Borrower and its Affiliates, which counsel and opinions
must be satisfactory to Lender in Lender’s Discretion and be reasonably
satisfactory to the Rating Agencies. Lender will reimburse Borrower for any
third party costs which Borrower reasonably incurs in connection with obtaining
such opinions of Borrower’s counsel. (e) Borrower will execute such amendments
to the Loan Documents and organizational documents, establish and fund the
Replacement Reserve Fund, if any, and complete any Repairs, if any, as may be
requested by Lender or by the Rating Agencies or otherwise to effect the
Secondary Market Transaction; provided, however, that the Borrower will not be
required to modify or amend any Loan Document if such modification or amendment
would (i) change the interest rate, the stated maturity or the amortization of
principal set forth in the Note, or (ii) modify or amend any other material
economic term of the Loan. B. The following definitions are added to Article
XII: “Provided Information” means the information provided by Borrower as
required by Section 11.14 (a), (b) and (c). “Securities” means single or
multi-class securities. Rider to Multifamily Loan and Security Agreement Page 2
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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT REPLACEMENT RESERVE FUND –
IMMEDIATE DEPOSITS (Revised 7-1-2014) The following changes are made to the Loan
Agreement which precedes this Rider: A. Section 4.04 is deleted and replaced
with the following: 4.04 Replacement Reserve Fund. (a) Deposits to Replacement
Reserve Fund. On the Closing Date, the parties will establish the Replacement
Reserve Fund and Borrower will pay the Initial Deposit to Lender for deposit
into the Replacement Reserve Fund. Commencing on the date the first installment
of principal and/or interest is due under the Note and continuing on the same
day of each successive month until the Loan is paid in full, Borrower will pay
the Monthly Deposit to Lender for deposit into the Replacement Reserve Fund,
together with its regular monthly payments of principal and/or interest as
required by the Note. A transfer of funds into the Replacement Reserve Fund from
the Repair Reserve Fund, pursuant to the terms of Section 4.03(e), if
applicable, will not alter or reduce the amount of any deposits to the
Replacement Reserve Fund. (b) Costs Charged by Lender. (i) If Lender, in
Lender’s Discretion, retains a professional inspection engineer or other
qualified third party to inspect any Capital Replacements pursuant to the terms
of Section 6.06, Lender may charge Borrower an amount sufficient to pay all
reasonable costs and expenses charged by such third party inspector. (ii) If
there are sufficient funds in Replacement Reserve Fund, Lender will be entitled,
but not obligated, to deduct from the Replacement Reserve Fund the costs and
expenses set forth in Section 4.04(b)(i). Lender will be entitled to charge
Borrower for such costs and expenses and Borrower will pay the amount of such
item(s) to Lender immediately after Notice from Lender to Borrower of such
charge(s). (iii) If there are insufficient funds in the Replacement Reserve
Fund, then Lender will be entitled to charge Borrower for the costs and expenses
specified in Section 4.04(b)(i), and Borrower will pay the amount of such
item(s) to Lender immediately after Notice from Lender to Borrower of such
charge(s). Rider to Multifamily Loan and Security Agreement Page 1 Replacement
Reserve Fund – Immediate Deposits

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(c) Adjustments to Replacement Reserve Fund. If the initial term of the Loan is
greater than 120 months, then the following provisions will apply: (i) Lender
reserves the right to adjust the amount of the Monthly Deposit based on Lender’s
assessment of the physical condition of the Mortgaged Property, however, Lender
will not make such an adjustment prior to the date that is 120 months after the
first installment due date, nor more frequently than every 10 years thereafter
during the term of the Loan. (ii) Borrower will pay the cost of any assessment
required by Lender pursuant to Section 4.04(c)(i) to Lender immediately after
Notice from Lender to Borrower of such charge. (iii) Upon Notice from Lender or
Loan Servicer, Borrower will begin paying the Revised Monthly Deposit on the
first monthly payment date that is at least 30 days after the date of Lender’s
or Loan Servicer’s Notice. If Lender or Loan Servicer does not provide Borrower
with Notice of a Revised Monthly Deposit, Borrower will continue to pay the
Monthly Deposit or the Revised Monthly Deposit then in effect. (d) Insufficient
Amount in Replacement Reserve Fund. If Borrower requests disbursement from the
Replacement Reserve Fund for a Capital Replacement in accordance with this Loan
Agreement in an amount which exceeds the amount on deposit in the Replacement
Reserve Fund, Lender will disburse to Borrower only the amount on deposit in the
Replacement Reserve Fund. Borrower will pay all additional amounts required in
connection with any such Capital Replacement from Borrower’s own funds. (e)
Reserved. (f) Reserved. (g) Disbursements from Replacement Reserve Fund. (i)
Requests for Disbursement. Lender will disburse funds from the Replacement
Reserve Fund as follows: (A) Borrower’s Request. If Borrower determines, at any
time or from time to time, that a Capital Replacement is necessary or desirable,
Borrower will perform such Capital Replacement and request from Lender, in
writing, reimbursement for such Capital Replacement. Borrower’s request for
reimbursement will include (1) a detailed description of the Capital Replacement
performed, together Rider to Multifamily Loan and Security Agreement Page 2
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with evidence, satisfactory to Lender, that the cost of such Capital Replacement
has been paid, and (2) if required by Lender, lien waivers from each contractor
and material supplier supplying labor or materials for such Capital Replacement.
(B) Lender’s Request. If Lender reasonably determines at any time or from time
to time, that a Capital Replacement is necessary for the proper maintenance of
the Mortgaged Property, it will so notify Borrower, in writing, requesting that
Borrower obtain and submit to Lender bids for all labor and materials required
in connection with such Capital Replacement. Borrower will submit such bids and
a time schedule for completing each Capital Replacement to Lender within 30 days
after Borrower’s receipt of Lender’s Notice. Borrower will perform such Capital
Replacement and request from Lender, in writing, reimbursement for such Capital
Replacement. Borrower’s request for reimbursement will include (1) a detailed
description of the Capital Replacement performed, together with evidence,
satisfactory to Lender, that the cost of such Capital Replacement has been paid,
and (2) if required by Lender, lien waivers from each contractor and material
supplier supplying labor or materials for such Capital Replacement. (ii)
Conditions Precedent. Disbursement from the Replacement Reserve Fund will be
made no more frequently than once every Replacement Reserve Disbursement Period
and, except for the final disbursement, no disbursement will be made in an
amount less than the Minimum Replacement Disbursement Request Amount.
Disbursements will be made only if the following conditions precedent have been
satisfied, as determined by Lender in Lender’s Discretion: (A) Each Capital
Replacement has been performed and/or installed on the Mortgaged Property in a
good and workmanlike manner with suitable materials (or in the case of a partial
disbursement, performed and/or installed on the Mortgaged Property to an
acceptable stage), in accordance with good building practices and all applicable
laws, ordinances, rules and regulations, building setback lines and restrictions
applicable to the Mortgaged Property, and has been paid for by Borrower as
evidenced by copies of all applicable paid invoices or bills submitted to Lender
by Borrower at the time Borrower requests disbursement from the Replacement
Reserve Fund. Rider to Multifamily Loan and Security Agreement Page 3
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(B) There is no condition, event or act that would constitute a default (with or
without Notice and/or lapse of time). (C) No Lien or claim based on furnishing
labor or materials has been recorded, filed or asserted against the Mortgaged
Property, unless Borrower has properly provided a bond or other security against
loss in accordance with applicable law. (D) All licenses, permits and approvals
of any Governmental Authority required for the Capital Replacement as completed
to the applicable stage have been obtained and submitted to Lender upon Lender’s
request. (h) Right to Complete Capital Replacements. If Borrower abandons or
fails to proceed diligently with any Capital Replacement in a timely fashion or
an Event of Default occurs and continues under this Loan Agreement for 30 days
after Notice of such failure by Lender to Borrower, Lender will have the right
(but not the obligation) to enter upon the Mortgaged Property and take over and
cause the completion of such Capital Replacement. However, no such Notice or
cure period will apply in the case of such failure which could, in Lender’s sole
and absolute discretion, absent immediate exercise by Lender of a right or
remedy under this Loan Agreement, result in harm to Lender, tenants or third
parties or impairment of the security given under this Loan Agreement, the
Security Instrument or any other Loan Document. Any contracts entered into or
indebtedness incurred upon the exercise of such right may be in the name of
Borrower, and Lender is irrevocably appointed the attorney in fact for Borrower,
such appointment being coupled with an interest, to enter into such contracts,
incur such obligations, enforce any contracts or agreements made by or on behalf
of Borrower (including the prosecution and defense of all actions and
proceedings in connection with the Capital Replacement and the payment,
settlement or compromise of all bills and claims for materials and work
performed in connection with the Capital Replacement) and do any and all things
necessary or proper to complete any Capital Replacement, including signing
Borrower’s name to any contracts and documents as may be deemed necessary by
Lender. In no event will Lender be required to expend its own funds to complete
any Capital Replacement, but Lender may, in Lender’s Discretion, advance such
funds. Any funds advanced will be added to the Indebtedness, secured by the
Security Instrument and payable to Lender by Borrower in accordance with the
provisions of the Note, this Loan Agreement, the Security Instrument and any
other Loan Document pertaining to the protection of Lender’s security and
advances made by Lender. Rider to Multifamily Loan and Security Agreement Page 4
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(i) Completion of Capital Replacements. Lender’s disbursement of monies from the
Replacement Reserve Fund or other acknowledgment of completion of any Capital
Replacement in a manner satisfactory to Lender in Lender’s Discretion will not
be deemed a certification by Lender that the Capital Replacement has been
completed in accordance with applicable building, zoning or other codes,
ordinances, statutes, laws, regulations or requirements of any Governmental
Authority. Borrower will at all times have the sole responsibility for ensuring
that all Capital Replacements are completed in accordance with all such
requirements of any Governmental Authority. (j) Reserved. (k) Reserved. B. The
following definitions are added to Article XII: “Initial Deposit” means $0.
“Minimum Replacement Disbursement Request Amount” means $5,000. “Monthly
Deposit” means $7,404. “Replacement Reserve Deposit” means the Initial Deposit,
the Monthly Deposit and/or the Revised Monthly Deposit, as appropriate.
“Replacement Reserve Disbursement Period” means the interval between
disbursements from the Replacement Reserve Fund, which interval will be no
shorter than once a month. “Replacement Reserve Fund” means the account
established pursuant to this Loan Agreement to defray the costs of Capital
Replacements. “Revised Monthly Deposit” means the adjusted amount per month that
Lender determines Borrower must deposit in the Replacement Reserve Fund
following any adjustment determination by Lender pursuant to Section 4.04(c).
Rider to Multifamily Loan and Security Agreement Page 5 Replacement Reserve Fund
– Immediate Deposits

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EXHIBIT A DESCRIPTION OF THE LAND Multifamily Loan and Security Agreement Page
A-1

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EXHIBIT B MODIFICATIONS TO MULTIFAMILY LOAN AND SECURITY AGREEMENT The following
modifications are made to the text of the Loan Agreement that precedes this
Exhibit. I. BORROWER MODIFICATIONS. 1. Section 5.02 is deleted in its entirety
and replaced with the following: 5.02 Condition of Mortgaged Property. Except as
Borrower may have disclosed to Lender in writing in connection with the issuance
of the Commitment Letter or except for ordinary wear and tear, (a), the
Mortgaged Property has not been damaged by fire, water, wind or other cause of
loss, or (b) any previous damage to the Mortgaged Property has been fully
restored. 2. Section 5.09(a) is deleted in its entirety and replaced with the
following: (a) Borrower and any operatorproperty manager of the Mortgaged
Property, if applicable, and to the best of Borrower’s knowledge, any commercial
tenant of the Mortgaged Property is in possession of all material licenses,
permits and authorizations required for use of the Mortgaged Property, which are
valid and in full force and effect as of the date of this Loan Agreement. 3.
Section 6.04(a) is deleted in its entirety and replaced with the following: (a)
Prohibited New Non-Residential Leases or Modified Non-Residential Leases. Except
as set forth in Section 6.04(b), Borrower will not enter into any New
Non-Residential Lease, enter into any Modified Non-Residential Lease or
terminate any Non-Residential Lease (including any Non- Residential Lease in
existence on the date of this Loan Agreement) without the prior consent of
Lender, except Borrower may terminate any Non-Residential Lease (including any
Non-Residential Lease in existence on the date of this Loan Agreement) as a
result of a default thereunder that continues after any applicable notice or
cure period without the prior written consent of Lender, provided that Borrower
gives Lender written notice within ten (10) days of such termination. 4. The
lead-in clause of Section 6.04(d) is deleted in its entirety and replaced with
the following: (d) Subordination and Attornment Requirements. All
Non-Residential Leases entered into after the date of this Loan Agreement,
regardless of whether Lender’s consent or approval is required, will
specifically include the following provisions unless otherwise agreed to by
Lender: 5. Section 6.06(a) is deleted in its entirety and replaced with the
following: (a) Right of Entry. Subject to the rights of tenants under Leases,
Borrower will permit Lender, its agents, representatives and designees and any
interested Governmental Authority to make or cause to be made entries
Multifamily Loan and Security Agreement Page B-1

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upon and inspections of the Mortgaged Property to inspect, among other things:
(i) Repairs, (ii) Capital Replacements, (iii) Restorations, (iv) Property
Improvement Alterations, and (v) any other Improvements, both in process and
upon completion (including environmental inspections and tests performed by
professional inspection engineers) during normal business hours, or at any other
reasonable time, upon reasonable Notice to Borrower if the inspection is to
include occupied residential units (which Notice need not be in writing). During
normal business hours, or at any other reasonable time, upon reasonable Notice
to Borrower, Borrower will also permit Lender to examine all books and records
and contracts and bills pertaining to the foregoing. Notice to Borrower will not
be required in the case of an emergency, as determined in Lender’s Discretion,
or when an Event of Default has occurred and is continuing. 6. Section 6.08(b)
is deleted in its entirety and replaced with the following: (b) Payment of
Operating Expenses. Subject to the provisions of Section 6.08(c), Borrower will
(i) pay the expenses of operating, managing, maintaining and repairing the
Mortgaged Property (including utilities, Repairs and Capital Replacements) (an
“Operating Expense”) before the last date upon which each such payment may be
made without any penalty or interest charge being added; provided, however,
Borrower, at its own expense, may contest by appropriate legal proceedings,
conducted diligently and in good faith, the amount or validity of any Operating
Expense, if (A) Borrower notifies Lender of the commencement or expected
commencement of such proceedings, (B) the Mortgaged Property is not in danger of
being sold or forfeited, (C) Borrower has demonstrated to Lender’s reasonable
satisfaction that any delay in paying the Operating Expense will not result in
(1) damage to the Mortgaged Property, (2) a depreciation of the Mortgaged
Property as determined by Lender in Lender’s Discretion, or (3) otherwise impair
Lender’s interest under the Loan Documents, (D) if Borrower has not already paid
the Operating Expense, Borrower deposits with Lender reserves sufficient to pay
the contested Operating Expense, if requested by Lender, and (E) Borrower
furnishes whatever additional security is required in the proceedings or is
reasonably requested by Lender, which may include the delivery to Lender of
reserves established by Borrower to pay the contested Operating Expense, and
(ii) pay Insurance premiums prior to the expiration date of each policy of
Insurance, unless applicable law specifies some lesser period.. 7. Section
6.10(a)(iv) is deleted in its entirety and replaced with the following: (iv)
Windstorm. If coverage for windstorm and/or windstorm related perils and/or
“named storm” (collectively, “Windstorm Coverage”), areis excluded from the
“Causes of Loss – Special Form” policy required under Section 6.10(a)(i), then
separate coverage for such risks, either through an endorsement or a separate
policy. Windstorm Coverage will be written in an amount not less than the
Replacement Cost of the Mortgaged Property. 8. Section 6.10(m) is deleted in its
entirety and replaced with the following: Multifamily Loan and Security
Agreement Page B-2

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(m) Lender’s Succession to Insurance Policies. If the Mortgaged Property is sold
at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender
will automatically succeed to all rights of Borrower in and to any Insurance
policies (other than blanket Insurance policies) and unearned Insurance premiums
(other than with respect to blanket Insurance policies) and in and to the
proceeds resulting from any damage to the Mortgaged Property prior to such sale
or acquisition. 9. Section 6.14(c) is deleted in its entirety and replaced with
the following: (c) Lien Protection. Borrower will promptly pay or cause to be
paid, when due, all costs, charges and expenses incurred in connection with the
construction and completion of the Repairs or Capital Replacements, and will
keep the Mortgaged Property free and clear of any and all Liens other than the
Lien of the Security Instrument and any other Lien to which Lender has consented
subject to the cure rights set forth in Section 6.09(m) of this Loan Agreement.
10. Section 6.14(d) is deleted in its entirety and replaced with the following:
(d) Adverse Claims. Borrower will promptly advise Lender in writing of any
litigation, Liens or written claims affecting the Mortgaged Property and of all
written complaints and charges made by any Governmental Authority that may delay
or adversely affect the Repairs or Capital Replacements. 11. Section 7.03(d) is
replaced with the following: (d) Steadfast Affiliate Transfer. The merger of
Steadfast Income REIT, Inc. (“SIR”) into Steadfast Apartment REIT, Inc. (“STAR”)
or its wholly-owned and Controlled Affiliate (the “REIT Transfer”), provided,
that, the conditions set forth below and the applicable conditions set forth in
Section 7.04 of this Loan Agreement are satisfied: (i) In place of the
requirements under Section 7.04(d), Borrower delivers to Lender organizational
charts, in form and detail acceptable to Lender, reflecting the structure of
Borrower prior to and after the REIT Transfer, and the Loan Agreement must be
amended to revise (A) Exhibit H to reflect the post-REIT Transfer organizational
chart, and (B) Exhibit I to reflect the Replacement Guarantor(s) and post-REIT
Transfer Designated Entities for Transfers as determined by Lender. (ii) In
place of the requirements under Section 7.04(i), following the REIT Transfer,
Control and management of the operations of Borrower continue to be held by the
Person exercising such Control and management immediately prior to the REIT
Transfer, except that SIR will be replaced with STAR or STAR’s wholly-owned and
Controlled Affiliate. Multifamily Loan and Security Agreement Page B-3

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(iii) STAR or its wholly owned and Controlled Affiliate becomes a Replacement
Guarantor and executes and delivers a Replacement Guaranty. (iv) STAR certifies
in writing to Lender that, since the date of this Loan Agreement, except as
disclosed to and approved by Lender in writing, STAR has not been: (A) Subject
to a claim in any litigation or other proceeding (even if settled) relating to
fraud, breach of fiduciary duty, breach of trust or other similar claim, or
money laundering, terrorist financing, terrorism or similar claim. (B) To the
best of STAR’s knowledge, investigated by any Governmental Authority in
connection with any matter set forth in Section 7.03(d)(iv)(A). (C) The subject
of a complaint or indictment charging a felony. (D) Involved in any pending or
current criminal litigation. (E) The subject of a Bankruptcy. (F) Suspended,
barred or otherwise restricted by any department or agency of the federal
government. (v) STAR certifies in writing to Lender that its net worth and
liquidity are substantially the same as or better than the net worth and
liquidity of STAR as of the date of this Loan Agreement. Multifamily Loan and
Security Agreement Page B-4

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EXHIBIT C REPAIR SCHEDULE OF WORK N/A Multifamily Loan and Security Agreement
Page C-1

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EXHIBIT D REPAIR DISBURSEMENT REQUEST The undersigned requests from (“Lender”)
the disbursement of funds in the amount of $_________________ (“Disbursement
Request”) from the Repair Reserve Fund established pursuant to the Multifamily
Loan and Security Agreement dated , 20 by and between Lender and the undersigned
( “Loan Agreement”) to pay for repairs to the multifamily apartment project
known as and located in . The undersigned represents and warrants to Lender that
the following information and certifications provided in connection with this
Disbursement Request are true and correct as of the date hereof: 1. Purpose for
which disbursement is requested: 2. To whom the disbursement will be made (may
be the undersigned in the case of reimbursement for advances and payments made
or cost incurred for work done by the undersigned): 3. Estimated costs of
completing the uncompleted Repairs as of the date of this Disbursement Request:
4. The undersigned certifies that each of the following is true: (a) The
disbursement requested pursuant to this Disbursement Request will be used solely
to pay a cost or costs allowable under the Loan Agreement. (b) None of the items
for which disbursement is requested pursuant to this Disbursement Request has
formed the basis for any disbursement previously made from the Repair Reserve
Fund. (c) All labor and materials for which disbursements have been requested
have been incorporated into the Improvements or suitably stored upon the
Mortgaged Property in accordance with reasonable and standard building
practices, the Loan Agreement and all applicable laws, ordinances, rules and
regulations of any governmental authority having jurisdiction over the Mortgaged
Property. (d) The materials, supplies and equipment furnished or installed for
the Repairs are not subject to any Lien or security interest or that the funds
to be disbursed pursuant to this Disbursement Request are to be used to satisfy
any such Lien or security interest. Multifamily Loan and Security Agreement Page
D-1

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5. All capitalized terms used in this Disbursement Request without definition
will have the meanings ascribed to them in the Loan Agreement. IN WITNESS
WHEREOF, the undersigned has executed this Disbursement Request as of the day
and date first above written. BORROWER: Date: Multifamily Loan and Security
Agreement Page D-2

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EXHIBIT E WORK COMMENCED AT MORTGAGED PROPERTY Ongoing general maintenance and
upkeep of the Mortgaged Property and upgrades in connection with residential
unit turns performed in the ordinary course of business at the Mortgaged
Property, all such work subject to any and all requirements set forth in this
Loan Agreement and the other Loan Documents; all invoices for the same to be
paid by Borrower when due. Multifamily Loan and Security Agreement Page E-1

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EXHIBIT F CAPITAL REPLACEMENTS  Carpet/vinyl flooring  Window treatments 
Roofs  Furnaces/boilers  Air conditioners  Ovens/ranges  Refrigerators 
Dishwashers  Water heaters  Garbage disposals  pool plaster/liner  pavement
(seal, stripe, minor repairs)  exterior walls (paint/finish)  common area
floors  microwaves  clothes washers and dryers  Other items that Lender may
approve subject to any conditions that Lender may require, all in Lender’s sole
and absolute discretion. Multifamily Loan and Security Agreement Page F-1

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EXHIBIT G DESCRIPTION OF GROUND LEASE N/A Multifamily Loan and Security
Agreement Page G-1

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EXHIBIT H ORGANIZATIONAL CHART OF BORROWER AS OF THE DATE OF THIS LOAN AGREEMENT
Multifamily Loan and Security Agreement Page H-1

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EXHIBIT I DESIGNATED ENTITIES FOR TRANSFERS AND GUARANTOR(S) Designated Entities
for Transfers Steadfast Income REIT, Inc. Steadfast Income Advisor, LLC
Steadfast Income REIT Operating Partnership, L.P. Guarantor(s) Steadfast Income
REIT, Inc. Multifamily Loan and Security Agreement Page I-1

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EXHIBIT O BORROWER’S CERTIFICATE OF PROPERTY IMPROVEMENT ALTERATIONS COMPLETION
THIS BORROWER’S CERTIFICATE OF PROPERTY IMPROVEMENT ALTERATIONS COMPLETION
(“Certificate”) is made as of _______ ___, 20___, by ______________, a
________________ (“Borrower”) for the benefit of ________________, a
________________, and it successors and assigns (collectively, “Lender”). In
connection with Section 6.09(e)(v)(G) of the Loan Agreement, Borrower certifies
to Lender as follows: [INSERT THE APPLICABLE SECTION (a) AND DELETE THE OTHER:]
[USE THE FOLLOWING IF ALL PROPERTY IMPROVEMENT ALTERATIONS THAT WERE COMMENCED
HAVE BEEN COMPLETED] (a) All Property Improvement Alterations described in the
Property Improvement Notice that were commenced have been completed. The
completed Property Improvement Alterations and their completion dates are as
follows: Description of Property Improvement Completion Date Alteration
Commenced [OR] [USE THE FOLLOWING IF MINIMUM OCCUPANCY HAS DECREASED BELOW THE
MINIMUM OCCUPANCY REQUIREMENT AND NOT ALL THE PROPERTY IMPROVEMENT ALTERATIONS
THAT WERE COMMENCED HAD BEEN COMPLETED AT SUCH TIME] (a) All Property
Improvement Alterations described in the Property Improvement Notice that
resulted in individual residential units not being available for leasing that
were commenced have been or will be completed in a timely manner. Such Property
Improvement Alterations that were commenced and their completion dates and/or,
if applicable, anticipated completion dates, are as follows: Description of
Property Completion Anticipated Comments Improvement Alteration Date Completion
Commenced Date Multifamily Loan and Security Agreement Page O-1

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[FOR ALL LOANS:] (b) The completed Property Improvement Alterations were
completed in a good and workmanlike manner and in compliance with all laws
(including, without limitation, any and all life safety laws, environmental
laws, building codes, zoning ordinances and laws for the handicapped and/or
disabled) (c) Should Borrower intend to contest any claim or claims for labor,
materials or other costs, Borrower agrees to give Lender notice within 30 days
of the existence of such claim or claims and certifies to Lender that payment of
the full amount which might in any event be payable in order to satisfy such
claim or claims will be made. [INSERT THE FOLLOWING IF MINIMUM OCCUPANCY HAS
DECREASED BELOW THE MINIMUM OCCUPANCY REQUIREMENT] (d) Any additional Property
Improvement Alterations not yet commenced which would cause residential units to
be unavailable for leasing have been suspended. [BORROWER SIGNATURE] Multifamily
Loan and Security Agreement Page O-2

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