Exhibit 10.7

 

 

  

LOAN AGREEMENT

 

Dated as of December 1, 2016

 

By and Between

 

BR ROSWELL, LLC,

as Borrower,

 

and

 

METLIFE HCMJV 1 REIT, LLC

as Lender

 

Property:

Roswell City Walk Apartments

3000 Forrest Street

Roswell, Fulton County, Georgia, 30075

Loan Amount: $51,000,000.00 

 

 

 

 

 

 

TABLE OF CONTENTS

 

      Page         I.   DEFINITIONS; PRINCIPLES OF CONSTRUCTION 1   Section 1.1
Definitions 1   Section 1.2 Principles of Construction 11         II.   THE LOAN
12   Section 2.1 The Loan 12   Section 2.2 Interest Rate 12   Section 2.3
Application of Payments 12   Section 2.4 Security 13   Section 2.5 Late Charge
13   Section 2.6 Acceleration Upon Event of Default 13   Section 2.7 Interest
Upon Event of Default 13   Section 2.8 Limitation on Interest 13   Section 2.9
Prepayment 13         III.   TAXES, LIENS AND ENCUMBRANCES AND OTHER CHARGES 14
  Section 3.1 Payment of Impositions 14         IV.   REPRESENTATIONS AND
WARRANTIES 15   Section 4.1 Borrower Representations 15         V.   BORROWER
COVENANTS 20   Section 5.1 Borrower Affirmative Covenants 20   Section 5.2
Borrower Negative Covenants 25         VI.   INSURANCE, CASUALTY AND
CONDEMNATION 27   Section 6.1 Insurance 27   Section 6.2 Casualty and
Condemnation 31         VII.   PROPERTY MANAGEMENT 33   Section 7.1 The
Management Agreement 33   Section 7.2 Prohibition Against Termination or
Modification 34   Section 7.3 Replacement of Manager 34         VIII.   CHANGE
IN OWNERSHIP, PROHIBITION ON ADDITIONAL FINANCING AND ADDITIONAL OBLIGATIONS 34
  Section 8.1 Permitted Transfers of Interest in Borrower 34   Section 8.2
Prohibition on Additional Financing 37   Section 8.3 Restrictions on Additional
Obligations 37   Section 8.4 Statements Regarding Ownership 37         IX.  
ENVIRONMENTAL HAZARDS 37   Section 9.1 Representations and Warranties 37  
Section 9.2 Remedial Work 38   Section 9.3 Environmental Site Assessment 38  
Section 9.4 Unsecured Obligations 38

 

 i

 

  

X.   PARTICIPATION AND SALE OF LOAN 38   Section 10.1 Sale of Loan/Participation
39   Section 10.2 Splitting of the Mortgage 39   Section 10.3 Cooperation 39    
    XI.   DEFAULTS 39   Section 11.1 Event of Default 39   Section 11.2 Remedies
40   Section 11.3 Duration of Events of Default 40         XII.   MISCELLANEOUS
41   Section 12.1 Successors and Assigns; Terminology 41   Section 12.2 Lender’s
Discretion 41   Section 12.3 Governing Law 41   Section 12.4 Modification 41  
Section 12.5 Notices 41   Section 12.6 Waiver of Jury Trial 42   Section 12.7
Headings 42   Section 12.8 Severability 42   Section 12.9 Preferences 42  
Section 12.10 Waiver of Notice 43   Section 12.11 Remedies of Borrower 43  
Section 12.12 Expenses; Indemnity 43   Section 12.13 Schedules and
Exhibits  Incorporated 43   Section 12.14 No Joint Venture or Partnership; No
Third Party Beneficiaries 43   Section 12.15 Publicity 44   Section 12.16 Waiver
of Marshalling of Assets 44   Section 12.17 Waiver of
Offsets/Defenses/Counterclaims 44   Section 12.18 Conflict; Construction of
Documents; Reliance 44   Section 12.19 Brokers and Financial Advisors 45  
Section 12.20 Exculpation 45   Section 12.21 Prior Agreements 46   Section 12.22
Liability of Borrower 46   Section 12.23 Joint and Several Liability 46  
Section 12.24 Counterparts 46   Section 12.25 Time Of The Essence 46   Section
12.26 No Merger 46

 

Schedules and Exhibits

Schedule 4.1.21 – Material Agreements

Schedule 4.1.35 – REAs

Schedule 9.1 – Environmental Reports

 

Exhibit A – Legal Description

Exhibit B – Leasing Guidelines

Exhibit C – Rent Roll

Exhibit C-1 – Delinquent and Prepaid Report

Exhibit D – Organizational Chart

 

 ii

 

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (as amended, restated, replaced, supplemented or otherwise
modified from time to time, this “Agreement”), dated as of December 1, 2016 (the
“Execution Date”), by and between METLIFE HCMJV 1 REIT, LLC, a Delaware limited
liability company, having an address at One MetLife Way, Whippany, NJ 07981-1449
(together with its successors and assigns, “Lender”), and BR ROSWELL, LLC, a
Delaware limited liability company, having an address at c/o Bluerock Real
Estate, LLC, 712 Fifth Avenue, 9th Floor, New York, NY 10019 (“Borrower”).

 

All capitalized terms used herein shall have the respective meanings set forth
in Article I hereof.

 

WITNESSETH:

 

WHEREAS, Borrower desires to obtain the Loan from Lender; and

 

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in
accordance with the conditions and terms of this Agreement and the other Loan
Documents.

 

NOW, THEREFORE, in consideration of the covenants set forth in this Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree, represent and warrant
as follows:

 

I.           DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section 1.1   Definitions.

 

For all purposes of this Agreement, except as otherwise expressly provided:

 

“Accelerated Loan Amount” shall mean, the Secured Indebtedness, and all other
sums evidenced and/or secured by the Loan Documents, including without
limitation any applicable prepayment fees.

 

“Advance Date” The date funds are disbursed to Borrower.

 

“Affiliate” shall mean, any Person that either Liable Party or Ramin Kamfar,
directly or indirectly, (i) owns more than fifty percent (50%) of such Person,
or (ii) Controls such Person.

 

“Agreement” shall have the meaning set forth in the introductory paragraph
hereto.

 

“ALTA” shall mean American Land Title Association or any successor thereto.

 

“Apartment Units” shall mean, collectively, the residential apartment units at
the Property.

 

“Application” shall mean the application submitted for the Loan by Borrower.

 

“Approved Plans and Specifications” shall have the meaning set forth in Section
6.2.3(a).

 

“Architect” shall have the meaning set forth in Section 6.2.3(a).

 

 1LOAN AGREEMENT

 

 

“Assignment of Leases” shall mean that certain first priority Assignment of
Leases, dated as of the date hereof, from Borrower, as assignor, to Lender, as
assignee, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

“Assignment of Management Agreement” shall mean that certain Assignment and
Subordination of Management Agreement dated as of the date hereof executed by
Borrower and Manager to and for the benefit of Lender, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time.

 

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy”, as amended from time to time, and any successor statute or
statutes and all rules and regulations from time to time promulgated thereunder,
and any comparable foreign laws relating to bankruptcy, insolvency or creditors’
rights.

 

“BR Control Conditions” shall have the meaning set forth in Section 8.1.

 

“BR Operating Partnership” shall have the meaning set forth in Section 8.1.

 

“Borrower” shall have the meaning set forth in the introductory paragraph
hereto.

 

“Borrower’s Constituents” shall have the meaning set forth in Section 4.1.26.

 

“Broker” shall have the meaning set forth in Section 12.19.

 

“Business Day” shall mean any day on which Lender is conducting normal business
operations.

 

“Business Income” shall mean the sum of (i) the total anticipated gross income
from occupancy of the Property, (ii) the amount of all charges (such as, but not
limited to, operating expenses, insurance premiums, and taxes) that are the
obligation of Tenants or occupants to Borrower, (iii) the fair market rental
value of any Apartment Unit physically occupied and/or leased by Borrower and/or
its affiliates, and (iv) any other amounts payable to Borrower or to any
affiliate of Borrower pursuant to the Leases.

 

“Carroll Member” shall have the meaning set forth in Section 8.1.

 

“Carroll Parent” shall have the meaning set forth in Section 8.1.

 

“Carroll Transferee” shall have the meaning set forth in Section 8.1.

 

“Casualty Threshold” shall mean $100,000.00.

 

“Certification Parties” shall mean Lender, its subsidiaries and affiliates, and
their respective successors and/or assigns.

 

“Closing Date Extraordinary Rental Payments” shall have the meaning set forth in
Section 4.1.16(e).

 

“Code” shall mean the Internal Revenue Code of 1986, as amended, and as it may
be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

 

 2LOAN AGREEMENT

 

 

“Condemnation” shall mean a temporary or permanent taking by reason of any
condemnation or similar eminent domain proceeding or by grant or conveyance in
lieu of condemnation or eminent domain.

 

“Condemnation Proceeds” shall mean any and all compensation, awards, damages,
proceeds and payments or relief for the Condemnation paid in connection with a
Condemnation in respect of all or any part of the Property.

 

“Contractor” shall have the meaning set forth in Section 6.2.3(a).

 

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management, policies or activities of a
Person (subject to the rights of others to approve significant decisions),
whether through ownership of voting securities, by contract or otherwise. The
definition is to be construed to apply equally to variations of the word
“Control” including “Controlled,” “Controlling” or “Controlled by.”

 

“Default Rate” shall mean an annual rate equal to the Interest Rate plus four
percent (4%).

 

“Delinquent and Prepaid Report” shall have the meaning set forth in Section
4.1.16(b).

 

“DOWNREIT” means a real estate investment trust that holds all or substantially
all of its real estate assets through multiple “Down-REIT” partnerships in which
such trust owns a general or limited partnership interest approximately equal to
the value of equity contributed (typically cash) to the “Down-REIT” partnership,
and can involve one or more third party general or limited partners which
contribute commercial real estate properties or other real estate assets in
exchange for partnership interests in the “Down-REIT” partnership and possibly
other consideration such as put rights.

 

“Environmental Indemnity” shall mean that certain Unsecured Indemnity Agreement,
dated as of the date hereof, executed by Borrower and Liable Party, if any, in
favor of Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

“Environmental Reports” shall have the meaning set forth in Section 9.1.

 

“EPI” shall have the meaning set forth in Section 6.1.1(a)(iii).

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

“Event of Default” shall have the meaning set forth in Section 11.1.

 

“Execution Date” shall have the meaning set forth in the introductory paragraph
hereof.

 

“Existing Contamination” shall have the meaning set forth in the Environmental
Indemnity.

 

“Existing Leases” shall mean all existing Leases, including all existing
modifications and amendments, and including all existing Lease Guaranties.

 

“Extraordinary Rental Payments” means any security deposit payments under any
Lease in excess of two (2) calendar months.

 

 3LOAN AGREEMENT

 

 

“Extraordinary Rental Escrow” shall have the meaning set forth in Section
5.1.14(b).

 

“Full Replacement Cost” shall have the meaning set forth in Section 6.1.1(a)(i).

 

“GAAP” shall mean generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such entity as may be in general use by significant segments
of the U.S. accounting profession.

 

“General Transfer Requirements” shall have the meaning set forth in Section 8.1.

 

“Governmental Authority” shall mean any court, board, agency, commission, office
or authority of any nature whatsoever or any governmental unit (federal, state,
county, district, municipal, city, foreign or otherwise) whether now or
hereafter in existence.

 

“Guaranty” shall mean any Guaranty of Recourse Obligations, whether dated as of
the date hereof or subsequently, executed by Liable Party in favor of Lender, as
the same may be amended, restated, replaced, supplemented or otherwise modified
from time to time.

 

“Hazardous Materials” shall include without limitation:

 

(i)          Those substances included within the definitions of “hazardous
substances,” “hazardous materials,” “toxic substances,” or “solid waste” in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. Sections 9601 et seq.), as amended by Superfund Amendments and
Reauthorization Act of l986 (Publ. L. 99-499 100 Stat. 1613), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Sections 6901 et seq.), and the
Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et seq., and in
the regulations promulgated pursuant to said laws, all as amended;

 

(ii)         Those substances regulated under the Georgia Solid Waste Management
Act (O.C.G.A. Section 12-8-20 et seq.), the Georgia Hazardous Waste Management
Act (O.C.G.A. Section 12-8-60 et seq.), the Georgia Underground Storage Tank Act
(O.C.G.A. Section 12-13-1 et seq.), the Georgia Hazardous Site Response Act
(O.C.G.A. Section 12-8-90 et seq.) and in the regulations promulgated pursuant
to such laws, all as amended;

 

(iii)        Those chemicals known to cause cancer or reproductive toxicity, as
published pursuant to the applicable State statutes, if any, including the
statutes and laws referred to in subparagraph (ii) above;

 

(iv)        Those substances listed in the United States Department of
Transportation Table (49 CFR 172.101 and amendments thereto) or by the
Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 and amendments thereto);

 

(v)         Any material, waste or substance which is (A) petroleum, (B)
asbestos, (C) polychlorinated biphenyls, (D) designated as a “hazardous
substance” pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section
1251 et seq. (33 U.S.C. Section 1321) or listed pursuant to Section 307 of the
Clean Water Act (33 U.S.C. Section 1317); (E) a chemical substance or mixture
regulated under the Toxic Substances Control Act of 1976, 15 U.S.C. Sections
2601 et seq.; (F) flammable explosives; or (G) radioactive materials; and

 

 4LOAN AGREEMENT

 

 

(vi)        Such other substances, materials and wastes which are or become
regulated as hazardous or toxic under applicable local, state or federal law, or
the United States government, or which are classified as hazardous or toxic
under federal, state, or local laws or regulations.

 

“Impairment of the Security” shall mean any or all of the following: (i) any of
the Leases for more than thirty-two (32) Apartment Units existing immediately
prior to the damage, destruction, Condemnation or casualty shall have been
cancelled, or shall contain any exercisable right to cancel as a result of the
damage, destruction or casualty that has not been legally waived in writing by
the applicable Tenant; (ii) if the Casualty Threshold has been exceeded, the
casualty or damage occurs during the last year of the term of the Loan; or (iii)
restoration of the Property is estimated to require more than one year to
complete from the date of the occurrence.

 

“Impositions” shall mean real estate and other taxes and assessments which may
be payable, assessed, levied, imposed upon or become a lien on or against any
portion of the Property.

 

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

 

“Indemnified Parties” means Lender, MetLife HCMJV 1, LP, and their respective
affiliates, partners and participants, and the officers, directors, agents,
employees of each of them, and the successors and assigns of each of them, and
any Person who is or will have been involved in the origination of the Loan, any
Person who is or will have been involved in the servicing of the Loan secured
hereby, any Person in whose name the encumbrance created by the Security
Instrument is or will have been recorded, persons and entities who may hold or
acquire or will have held a full or partial interest in the Loan secured hereby
(including, but not limited to, investors or prospective investors in the
Securities, as well as custodians, trustees and other fiduciaries who hold or
have held a full or partial interest in the Loan secured hereby for the benefit
of third parties) as well as the respective directors, officers, shareholders,
partners, employees, agents, servants, representatives, contractors,
subcontractors, affiliates, subsidiaries, participants, successors and assigns
of any and all of the foregoing (including but not limited to any other Person
who holds or acquires or will have held a participation or other full or partial
interest in the Loan, whether during the term of the Loan or as a part of or
following a foreclosure of the Loan and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of Lender’s assets and business).

 

“Insolvent Entity” shall have the meaning set forth in Section 11.1(c).

 

“Insurance Proceeds” shall mean all insurance proceeds payable to Borrower in
connection with the Property whether or not such insurance coverage is
specifically required under the terms of this Agreement.

 

“Interest Rate” shall mean a per annum rate equal to three and sixty-three
hundredths percent (3.63%).

 

“Investor” shall have the meaning set forth in Section 10.1.

 

“IT Agreement” shall mean that certain Service Agreement dated as of December 1,
2016 entered into by and between Borrower and IT SUPPORT SOLUTIONS GROUP, LLC, a
Georgia limited liability company.

 

“Late Charge” shall mean an amount equal to four cents ($0.04) for each dollar
that is overdue.

 

 5LOAN AGREEMENT

 

 

“Lease” shall mean all leases and all other agreements for possession of all or
any portion of the Property, including all of the same now or hereafter
existing, and all extensions, modifications, amendments, expansions and renewals
of any of the same and all Lease Guaranties.

 

“Lease Guaranties” shall mean every guarantee of any obligation under any Lease,
including all modifications and amendments to such guaranties.

 

“Leasing Guidelines” shall mean the Leasing Guidelines attached to this
Agreement as Exhibit B, as the same may be amended, modified or supplemented in
accordance with the provisions of this Agreement by Lender.

 

“Lender” shall have the meaning set forth in the introductory paragraph hereof.

 

“Lender’s Address for Insurance Notification” shall mean: MetLife HCMJV 1 REIT,
LLC, and its successors, assigns, affiliates, partners and participants, One
MetLife Way, Whippany, NJ 07981-1449, Attention: Officer in Charge.

 

“Liable Party” shall mean, collectively, Bluerock Residential Growth REIT, Inc.,
a Maryland corporation, and any other Person now or hereafter executing the
Environmental Indemnity (other than Borrower) and/or any guaranty of any of
Borrower’s obligations under the Loan Documents.

 

“Liens and Encumbrances” shall mean any lien or encumbrance on the Property,
including deeds of trust, mortgages, security interests, conditional sales,
mechanic liens, tax liens or assessment liens (including any tax liens or
assessment liens to secure repayment of any loan or other financing including,
without limitation, any Property-Assessed Clean Energy loan) regardless of
whether or not they are subordinate to the security title conveyed by the
Security Instrument.

 

“Loan” shall mean, collectively, the indebtedness evidenced by the Note with
interest at the rates set forth herein, all additional advances or fundings made
by Lender, and any other amounts required to be paid by Borrower under any of
the Loan Documents.

 

“Loan Amount” shall equal Fifty One Million and No/100 Dollars ($51,000,000.00).

 

“Loan Documents” shall mean, collectively, this Agreement, the Note, the
Security Instrument, the Assignment of Leases, the Assignment of Management
Agreement and any and all other documents now or hereafter executed and/or
delivered in connection with the Loan (except the Environmental Indemnity and
the Guaranty, if any), as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time. The Environmental
Indemnity and the Guaranty, if any, are not Loan Documents and shall survive
repayment of the Loan or other termination of the Loan Documents to the extent
set forth therein.

 

“Losses” shall mean, collectively, any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, punitive damages, foreseeable and unforeseeable consequential
damages, of whatever kind or nature (including but not limited to reasonable
attorneys’ fees and other costs of defense).

 

“LTV” shall mean the ratio of the then outstanding principal balance of the Loan
to the value of the Property, as determined by Lender.

 

 6LOAN AGREEMENT

 

 

“Management Agreement” shall mean the Property Management Agreement, dated as of
December 1, 2016 entered into by and between Borrower and Manager, pursuant to
which the Manager is to provide management and other services with respect to
the Property, and all amendments thereto entered into in accordance with the
terms and conditions set forth in this Agreement.

 

“Manager” shall mean Carroll Management Group, LLC, a Georgia limited liability
company, or any other manager approved in accordance with the terms and
conditions of the Loan Documents.

 

“Material Adverse Change” shall mean a material adverse change in (i) the
condition (financial, physical or otherwise) of the Property and/or (ii) the
financial condition of Borrower that would reasonably be expected to impair its
ability to perform its obligations under the Loan Documents to which it is a
party.

 

“Material Agreements” shall mean each contract and agreement relating to the
ownership, management, development, use, operation, leasing, maintenance, repair
or improvement of the Property (other than the Management Agreement and the
Leases), (i) under which there is an obligation of Borrower to pay more than
$250,000.00 per annum, (ii) the termination of which would materially adversely
affect the Property or the operation thereof, or (iii) which is not terminable
by the owner of the Property upon thirty (30) days’ or less notice without
payment of a termination fee in excess of $25,000.00 in the aggregate for all
contracts and agreements under this clause (iii).

 

“Maturity Date” shall mean December 1, 2026.

 

“MetLife Parties” shall have the meaning set forth in Section 4.1.28.

 

“Monthly Installment” shall mean equal monthly installments of principal and
interest at the Interest Rate each in the amount of $232,729.71 based on an
amortization period of thirty (30) years.

 

“Net Condemnation Proceeds” shall mean all Condemnation Proceeds less the cost,
if any, to Lender of recovering the Condemnation Proceeds including, without
limitation, reasonable attorneys’ fees and expenses, and adjusters’ fees.

 

“Net Insurance Proceeds” shall mean Insurance Proceeds less the cost, if any, to
Lender of recovering the Insurance Proceeds including, without limitation,
reasonable attorneys’ fees and expenses, and adjusters’ fees.

 

“Note” shall mean that certain Promissory Note, dated as of the date hereof, in
the original principal amount of Fifty One Million and No/100 Dollars
($51,000,000.00), made by Borrower to the order of Lender, as the same may be
hereinafter amended, consolidated, split, severed, restated, replaced (whether
by one or more replacement notes), supplemented, renewed, extended or otherwise
modified from time to time.

 

“O&M Agreement” shall mean an Operations and Maintenance Agreement with respect
to the Property, if any, reviewed and approved by Lender in connection with
underwriting the Loan.

 

“One-Time Property Transfer” shall have the meaning set forth in Section 8.1.

 

 7LOAN AGREEMENT

 

 

“Ordinary Course Transfers” shall mean (i) any transfer by current shareholders
or limited partners of Liable Party or BR Operating Partnership or (ii) in the
case of any issuance of interests, the issuance thereof by Liable Party or BR
Operating Partnership, in each case undertaken in connection with the day to day
operations and/or capital raising of Liable Party, including any issuance,
redemption, creation and issuance of new classes or series of ownership
interests, of corporate stock, partnership interests or other ownership
interests in Liable Party or BR Operating Partnership

 

“Other Charges” shall mean all ground rents, maintenance charges, impositions
other than Impositions, and any other charges, including, without limitation,
vault charges and license fees for the use of vaults, chutes and similar areas
adjoining the Property, now or hereafter levied or assessed or imposed against
the Property or any part thereof.

 

“Permitted Exceptions” shall mean, collectively, (i) the lien and security
interests created and the security title conveyed by the Loan Documents, (ii)
those property specific exceptions to title recorded in the real estate records
of the county where the Property is located and contained in Schedule B-1 of the
title insurance policy or policies which have been approved by Lender, (iii)
Liens and Encumbrances, if any, for taxes imposed by any Governmental Authority
not yet due or delinquent, and (iv) such other title and survey exceptions as
Lender has approved or may approve in writing in Lender’s sole discretion.
Notwithstanding the foregoing, Permitted Exceptions shall not include any tax
liens or assessment liens to secure repayment of any loan or other financing
including, without limitation, any Property-Assessed Clean Energy loan.

 

“Permitted Indebtedness” shall have the meaning set forth in Section 8.3.

 

“Permitted Transfer” shall have the meaning set forth in Section 8.1.

 

“Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, estate, trust, unincorporated association, any other
entity, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.

 

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

 

“Plan” shall have the meaning set forth in Section 4.1.5.

 

“Policies” and “Policy” shall mean all insurance provided for in Section
6.1.1(a) and obtained under valid and enforceable policies.

 

“Premiums” shall mean all premiums for the Policies required under this
Agreement.

 

“Prepayment Fee” shall be the greater of (A) (x) the present value of all
remaining payments of principal and interest under the Loan including the
outstanding principal due on the Maturity Date, discounted at the rate which,
when compounded monthly, is equivalent to the Treasury Rate compounded
semi-annually, less (y) the amount of the principal then outstanding, or (B) one
percent (1%) of the amount of the principal being prepaid.

 

“Principal and Interest Installment Date” shall mean January 1, 2020.

 

“Property” shall mean the fee estate of Borrower with regard to the property
described on Exhibit A, the Improvements thereon and all personal property owned
by Borrower and encumbered by the Security Instrument, together with all rights
pertaining to such property and Improvements, all as more particularly described
in the Security Instrument.

 

 8LOAN AGREEMENT

 

 

“Purchase Agreement” shall mean that certain Purchase and Sale Agreement between
GGT LMI City Walk GA, LLC, a Delaware limited liability company, as seller, and
Bluerock Real Estate, LLC, a Delaware limited liability company, as purchaser,
with an effective date of September 15, 2016, as amended by that certain First
Amendment to Purchase and Sale Agreement dated as of September 19, 2016, that
certain Second Amendment to Purchase and Sale Agreement dated as of September
30, 2016 and that certain Third Amendment to Purchase and Sale Agreement dated
as of November 3, 2016, and as assigned by Bluerock Real Estate, LLC, a Delaware
limited liability company, to Borrower pursuant to that certain Assignment of
Purchase and Sale Agreement dated as of December 1, 2016.

 

“Rating Agencies” shall mean any nationally recognized statistical rating agency
which has assigned a rating to any Securities.

 

“REAs” shall mean, collectively, those agreements as set forth on Schedule
4.1.35 attached hereto.

 

“Regulated Entity” shall have the meaning set forth in Section 4.1.29.

 

“Remedial Work” shall mean any investigation or monitoring of site conditions or
any clean up, containment, restoration, removal or other remedial work.

 

“Rent Roll” shall have the meaning set forth in Section 4.1.16(a).

 

“Rents and Profits” shall have the meaning set forth in the Security Instrument.

 

“Request for Payment” shall have the meaning set forth in Section 6.2.3(b)(ii).

 

“Requirements” shall mean all laws, ordinances, orders, covenants, conditions
and restrictions and other requirements relating to land and building design and
construction, use and maintenance, that may now or hereafter pertain to or
affect the Property or any part of the Property or the Use, including, without
limitation, planning, zoning, subdivision, environmental, air quality, flood
hazard, fire safety, handicapped facilities, building, health, fire, traffic,
safety, wetlands, coastal and other governmental or regulatory rules, laws,
ordinances, statutes, codes and requirements applicable to the Property,
including permits, licenses and/or certificates that may be necessary from time
to time to comply with any of the these requirements.

 

“Requirements for Restoration” shall have the meaning set forth in Section
6.2.3.

 

“Requirements of Environmental Laws” means all Requirements of environmental,
ecological, health, or industrial hygiene laws or regulations or rules of common
law related to the Property, including, without limitation, all Requirements
imposed by any environmental permit, law, rule, order, or regulation of any
federal, state, or local executive, legislative, judicial, regulatory, or
administrative agency, which relate to (i) exposure to Hazardous Materials;
(ii) pollution or protection of the air, surface water, ground water, land;
(iii) solid, gaseous, or liquid waste generation, treatment, storage, disposal,
or transportation; or (iv) regulation of the manufacture, processing,
distribution and commerce, use, or storage of Hazardous Materials.

 

“Restoration” shall have the meaning set forth in Section 6.2.1(b).

 

“Restoration Funds” shall have the meaning set forth in Section 6.2.3(a).

 

 9LOAN AGREEMENT

 

 

“Secondary Financing” shall have the meaning set forth in Section 8.2.

 

“Secured Indebtedness” shall mean, collectively, the indebtedness evidenced by
the Note with interest at the rates set forth herein, all additional advances or
fundings made by Lender under the Loan Documents, and any other amounts required
to be paid by Borrower under any of the Loan Documents.

 

“Securities” shall have the meaning set forth in Section 10.1.

 

“Security Instrument” shall mean that certain first priority Deed to Secure
Debt, Security Agreement and Fixture Filing, dated as of the date hereof,
executed and delivered by Borrower as security for the Loan and encumbering the
Property, as the same may be amended, consolidated, split, spread, severed,
restated, replaced, supplemented, renewed, extended or otherwise modified from
time to time.

 

“Servicer” shall mean a servicer, if any, selected by Lender to service the
Loan.

 

“Sole Member” shall have the meaning set forth in Section 8.1.

 

“Special Purpose Entity” means a Person, other than a natural person, which
shall not:

 

(i)          engage in any business other than owning and operating the
Property;

 

(ii)         acquire or own a material asset other than the Property and
incidental personal property (other than substitutes thereof);

 

(iii)        maintain assets in a way difficult to segregate and identify, or
commingle its assets with the assets of any other person or entity;

 

(iv)        fail to hold itself out to the public as a legal entity separate
from any other;

 

(v)         fail to conduct business solely in its name;

 

(vi)        fail to maintain records, accounts or bank accounts separate from
any other person or entity;

 

(vii)       file or consent to a petition pursuant to applicable bankruptcy,
insolvency, liquidation or reorganization statutes, or make an assignment for
the benefit of creditors without the unanimous consent of its partners or
members, as applicable;

 

(viii)      incur additional indebtedness except for Permitted Indebtedness and
except for trade payables in the ordinary course of business of owning and
operating the Property, provided that such trade payables are paid within ninety
(90) days of when incurred;

 

(ix)         dissolve, liquidate, consolidate, merge or (except as permitted by
this Agreement) sell all or substantially all of its assets; or

 

(x)          without the consent of Lender, modify, amend or revise its
organizational documents in any material respect.

 

“Standard Lease Form” shall have the meaning set forth in Exhibit B.

 

 10LOAN AGREEMENT

 

 

“State” shall mean the state where the Property is located.

 

“Tenant” shall mean any Person obligated by contract or otherwise to pay monies
(including a percentage of gross income, revenue or profits) under any Lease now
or hereafter affecting all or any part of the Property.

 

“Title Insurance Policy” shall mean an ALTA mortgagee title insurance policy or
policies in the form acceptable to Lender issued with respect to the Property
and insuring the security title conveyed by the Security Instrument, together
with such endorsements and affirmative coverage as Lender may require.

 

“Transfer” shall have the meaning set forth in Section 8.1.

 

“Treasury Rate” shall mean the annualized yield on securities issued by the
United States Treasury having a maturity equal to the remaining stated term of
the Loan, as quoted in the Federal Reserve Statistical Release [H. 15 (519)]
under the heading “U.S. Government Securities - Treasury Constant Maturities”
for the date which is five (5) Business Days prior to the date on which
prepayment is being made. If this rate is not available as of the date of
prepayment, the Treasury Rate shall be determined by interpolating between the
yield on securities of the next longer and next shorter maturity. If the
Treasury Rate is no longer published, Lender shall select a comparable rate.

 

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect in the State.

 

“Unsecured Obligations” means any obligations evidenced by or arising under the
Environmental Indemnity.

 

“UPREIT” means an “Umbrella Partnership” real estate investment trust that holds
all or substantially all of its real estate assets through an operating
partnership in which such trust holds a general or limited partnership interest
approximately equal to the value of capital raised by such trust through sales
of its capital stock, and can involve one or more third party general or limited
partners which contribute property or other real estate assets in exchange for
partnership units of the operating partnership which are convertible (at the
option of the holder) into equity interests in the real estate investment trust.

 

“Use” shall have the meaning set forth in Section 5.1.13.

 

“Work” shall have the meaning set forth in Section 6.2.3(a).

 

Section 1.2  Principles of Construction. All references to sections and
schedules are to sections and schedules in or to this Agreement unless otherwise
specified. Any reference in this Agreement or in any other Loan Document, the
Guaranty, if any, or the Environmental Indemnity to any Loan Document shall be
deemed to mean such Loan Document, Guaranty, if any, or Environmental Indemnity
(as applicable) as the same may hereafter be amended, modified, supplemented,
extended, replaced and/or restated from time to time (and, in the case of any
note or other instrument, to any instrument issued in substitution therefor).
Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise specified, all meanings attributed to defined terms herein
shall be equally applicable to both the singular and plural forms of the terms
so defined.

 

 11LOAN AGREEMENT

 

 

II.          THE LOAN

 

Section 2.1   The Loan.

 

2.1.1    Agreement to Lend and Borrow. Subject to and upon the terms and
conditions set forth herein, Lender shall make the Loan to Borrower and Borrower
shall accept the Loan from Lender on the Advance Date.

 

2.1.2    Single Disbursement to Borrower. Borrower shall receive only one
disbursement hereunder in respect of the Loan and any amount borrowed and repaid
hereunder in respect of the Loan may not be reborrowed.

 

2.1.3    The Note. The Loan shall be evidenced by the Note and shall be repaid
in accordance with the terms of this Agreement and the Note.

 

Section 2.2   Interest Rate.

 

2.2.1    Payment of Principal and Interest. Principal and interest under this
Agreement and the Note shall be payable as follows:

 

(a)          Interest on the funded portion of the Loan Amount shall accrue from
the Advance Date at the Interest Rate and shall be paid on January 1, 2017 and
on the first day of each calendar month thereafter until the Principal and
Interest Installment Date;

 

(b)          Commencing on the Principal and Interest Installment Date and on
the first day of each calendar month thereafter, to and including the first day
of the calendar month immediately preceding the Maturity Date, Borrower shall
pay the Monthly Installment; and

 

(c)          On the Maturity Date, a final payment in the aggregate amount of
the unpaid principal sum evidenced by the Note, all accrued and unpaid interest,
and all other unpaid amounts of the Secured Indebtedness shall become
immediately payable in full.

 

(d)          Borrower acknowledges and agrees that a substantial portion of the
original Loan Amount shall be outstanding and due on the Maturity Date.

 

(e)          Interest shall be calculated on the basis of a thirty (30) day
month and a three hundred sixty (360) day year, except that (i) if the Advance
Date occurs on a date other than the first day of a calendar month, interest
payable for the period commencing on the Advance Date and ending on the last day
of the month in which the Advance Date occurs shall be calculated on the basis
of the actual number of days elapsed over a 365 day or 366 day year, as
applicable, and (ii) if the Maturity Date occurs on a date other than the last
day of the month, interest payable for the period commencing on the first day of
the month in which the Maturity Date occurs and ending on the Maturity Date
shall be calculated on the basis of the actual number of days elapsed over a 365
day or 366 day year, as applicable.

 

Section 2.3           Application of Payments. At the election of Lender, and to
the extent permitted by law, all payments shall be applied in the order selected
by Lender to any expenses, prepayment fees, late charges, escrow deposits and
other sums due and payable under the Loan Documents, and to unpaid interest at
the Interest Rate or at the Default Rate, as applicable. The balance of any
payments shall be applied to reduce the then unpaid Loan Amount.

 

 12LOAN AGREEMENT

 

 

Section 2.4  Security. The covenants of the Security Instrument are incorporated
by reference into this Agreement. The Note shall evidence, and the Security
Instrument and the Assignment of Leases shall secure, the Secured Indebtedness.

 

Section 2.5  Late Charge. If any payment of interest and/or principal (other
than the outstanding principal balance of the Loan on the Maturity Date), or any
payment of a required escrow deposit is not paid within seven (7) days after the
due date, Lender shall have the option to charge Borrower the Late Charge,
provided, however, such Late Charge shall not be charged with respect to the
first late payment during the term of the Loan nor with respect to the final
payment due on the Maturity Date. The Late Charge is for the purpose of
defraying the expenses incurred in connection with handling and processing
delinquent payments and is payable in addition to any other remedy Lender may
have. Unpaid Late Charges shall become part of the Secured Indebtedness and
shall be added to any subsequent payments due under the Loan Documents.

 

Section 2.6  Acceleration Upon Event of Default. At the option of Lender, if
Borrower fails to pay any sum specified in this Agreement or the Note within
seven (7) days after the due date, or if any other Event of Default occurs, the
Accelerated Loan Amount shall become immediately due and payable.

 

Section 2.7   Interest Upon Event of Default. The Accelerated Loan Amount shall
bear interest at the Default Rate, which shall never exceed the maximum rate of
interest permitted to be contracted for under the laws of the State. The Default
Rate shall commence upon the occurrence of an Event of Default and shall
continue until all defaults are cured.

 

Section 2.8   Limitation on Interest. The agreements made by Borrower with
respect to this Agreement, the Note and the other Loan Documents are expressly
limited so that in no event shall the amount of interest received, charged or
contracted for by Lender exceed the highest lawful amount of interest
permissible under the laws applicable to the Loan. If at any time performance of
any provision of this Agreement, the Note or the other Loan Documents results in
the highest lawful rate of interest permissible under applicable laws being
exceeded, then the amount of interest received, charged or contracted for by
Lender shall automatically and without further action by any party be deemed to
have been reduced to the highest lawful amount of interest then permissible
under applicable laws. If Lender shall ever receive, charge or contract for, as
interest, an amount which is unlawful, at Lender’s election, the amount of
unlawful interest shall be refunded to Borrower (if actually paid) or applied to
reduce the then unpaid Loan Amount. To the fullest extent permitted by
applicable laws, any amounts contracted for, charged or received under the Loan
Documents included for the purpose of determining whether the Interest Rate
would exceed the highest lawful rate shall be calculated by allocating and
spreading such interest to and over the full stated term of the Loan.

 

Section 2.9  Prepayment. Borrower shall not have the right to prepay all or any
portion of the Loan Amount at any time during the term of this Loan except as
expressly set forth in this Section 2.9. During the 120-day period prior to the
Maturity Date, Borrower may prepay the Loan without a Prepayment Fee on thirty
(30) days’ prior written notice to Lender. In addition, commencing on December
1, 2021, Borrower may prepay the Loan with a Prepayment Fee on forty-five (45)
days’ prior written notice to Lender. If Borrower provides notice of its
intention to prepay, the Accelerated Loan Amount shall become due and payable on
the date specified in the prepayment notice.

 

 13LOAN AGREEMENT

 

 

2.9.1    Prepayment Fee. Any tender of payment by Borrower or any other person
or entity of the Secured Indebtedness, other than as expressly provided in the
Loan Documents, shall constitute a prohibited prepayment. If a prepayment of all
or any part of the Secured Indebtedness is made following (i) an Event of
Default and an acceleration of the Maturity Date, (ii) the application of money
to the principal of the Loan after a casualty or Condemnation, or (iii) in
connection with a purchase of the Property or a repayment of the Secured
Indebtedness at any time before, during or after, a judicial or non-judicial
foreclosure or sale of the Property, then to compensate Lender for the loss of
the investment, Borrower shall pay to Lender an amount equal to the Prepayment
Fee. Notwithstanding the foregoing, so long as Borrower makes a good faith
effort to recover any Prepayment Fee which would be due as a result of a
casualty or Condemnation, from the insurer in the case of a casualty or from the
condemning authority in the case of a Condemnation, then the Prepayment Fee due
as a result of the casualty or Condemnation shall be waived except to the extent
recovered by Borrower. Lender will, upon request, provide an estimate of the
amount of the Prepayment Fee two (2) weeks before the date of the scheduled
prepayment.

 

2.9.2    Waiver of Right to Prepay Note Without Prepayment Fee . Borrower
acknowledges that Lender has relied upon the anticipated investment return under
the Note and this Agreement in entering into transactions with, and in making
commitments to, third parties and that the tender of any prohibited prepayment
or any permitted prepayment which pursuant to the terms of the Note and this
Agreement requires a Prepayment Fee, shall include the Prepayment Fee. Borrower
agrees that the determination of the Interest Rate was based on the intent,
expectation and agreement (and the Interest Rate would have been higher without
such agreement) of Borrower and Lender that the amounts advanced under the Note
and this Agreement would not be prepaid during the term of the Loan, or if any
such prepayment would occur, the Prepayment Fee would apply (except as expressly
permitted by the terms of the Note and this Agreement). Borrower also agrees
that the Prepayment Fee represents the reasonable estimate of Lender and
Borrower of a fair average compensation for the loss that may be sustained by
Lender as a result of a prepayment of the Loan and it shall be paid without
prejudice to the right of Lender to collect any other amounts provided to be
paid under the Loan Documents

 

BORROWER EXPRESSLY (A) WAIVES ANY RIGHTS IT MAY HAVE UNDER GEORGIA LAW TO PREPAY
THE LOAN, IN WHOLE OR IN PART, WITHOUT FEE OR PENALTY, UPON ACCELERATION OF THE
MATURITY DATE OF THE LOAN, AND (B) AGREES THAT IF, FOR ANY REASON, A PREPAYMENT
OF THE LOAN IS MADE, UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF
THE LOAN BY LENDER ON ACCOUNT OF ANY DEFAULT BY BORROWER UNDER ANY LOAN
DOCUMENT, INCLUDING BUT NOT LIMITED TO ANY TRANSFER, FURTHER ENCUMBRANCE OR
DISPOSITION WHICH IS PROHIBITED OR RESTRICTED BY THIS AGREEMENT, THE SECURITY
INSTRUMENT OR ANY OF THE OTHER LOAN DOCUMENTS, THEN BORROWER SHALL BE OBLIGATED
TO PAY LENDER CONCURRENTLY THE PREPAYMENT FEE. BY EXECUTING THE NOTE AND THIS
AGREEMENT, BORROWER AGREES THAT LENDER’S AGREEMENT TO MAKE THE LOAN AT THE
INTEREST RATE AND FOR THE TERM SET FORTH IN THIS AGREEMENT CONSTITUTES ADEQUATE
CONSIDERATION FOR THIS WAIVER AND AGREEMENT.

 

III.         TAXES, LIENS AND ENCUMBRANCES AND OTHER CHARGES.

 

Section 3.1  Payment of Impositions. Unless otherwise paid to Lender as provided
in Section 5.1.14(a), Borrower shall pay all Impositions. The Impositions shall
be paid not later than thirty (30) days before the date on which the particular
Imposition would become delinquent and Borrower shall produce to Lender receipts
of the imposing authority, or other evidence reasonably satisfactory to Lender,
evidencing the payment of the Imposition in full. If Borrower elects by
appropriate legal action to contest any Imposition, Borrower shall first deposit
cash with Lender as a reserve in an amount which Lender reasonably determines is
sufficient to pay the Imposition plus all fines, interest, penalties and costs
which may become due pending the determination of the contest. If Borrower
deposits this sum with Lender, Borrower shall not be required to pay the
Imposition provided that the contest operates to prevent enforcement or
collection of the Imposition, or the sale or forfeiture of, the Property, and is
prosecuted with due diligence and continuity. Upon termination of any proceeding
or contest, Borrower shall pay the amount of the Imposition as finally
determined in the proceeding or contest. Provided that there is not then an
Event of Default, the monies which have been deposited with Lender pursuant to
this Section shall be applied toward such payment and the excess, if any, shall
be returned to Borrower.

 

 14LOAN AGREEMENT

 

 

IV.          REPRESENTATIONS AND WARRANTIES

 

Section 4.1   Borrower Representations. Borrower represents and warrants as of
the date hereof that:

 

4.1.1    Organization.

 

(a)          The execution of the Loan Documents and the Environmental Indemnity
have been duly authorized and there is no provision in the organizational
documents of Borrower requiring further consent for such action by any other
entity or person.

 

(b)          It is duly organized, validly existing and is in good standing
under the laws of the state of its formation and in the State, and it has all
necessary licenses, authorizations, registrations, permits and/or approvals to
own its properties and to carry on its business as presently conducted.

 

(c)          The execution, delivery and performance of the Loan Documents and
the Environmental Indemnity will not result in Borrower’s being in default under
any provision of its organizational documents or of any deed of trust, deed to
secure debt, mortgage, lease, credit or other agreement to which it is a party
or which affects it or the Property.

 

(d)          The Loan Documents and the Environmental Indemnity have been duly
authorized, executed and delivered by Borrower and constitute valid and binding
obligations of Borrower which are enforceable in accordance with their terms,
except to the extent that such enforcement may be limited by applicable
bankruptcy or similar laws affecting the enforcement of creditors’ rights
generally and the availability of equitable remedies.

 

4.1.2    Litigation. Neither Borrower nor any of Borrower’s Constituents is
involved in any litigation, arbitration, or other proceeding or governmental
investigation pending which if determined adversely would materially adversely
affect Borrower’s ability to perform in accordance with the Loan Documents or
the Environmental Indemnity.

 

4.1.3    Agreements. Borrower is not in default with respect to any order or
decree of any court or any order, regulation or demand of any Governmental
Authority, which default would be reasonably likely to materially and adversely
affect the condition (financial or other) or operations of the Property or
Borrower or Borrower’s ability to perform its obligations hereunder or under the
Loan Documents or the Environmental Indemnity. Borrower has complied with all
requirements of all instruments and agreements affecting the Property, whether
or not of record, including without limitation all covenants and agreements by
and between Borrower and any governmental or regulatory agency pertaining to the
development, use or operation of the Property.

 

 15LOAN AGREEMENT

 

 

4.1.4    Consents. No consent, approval, authorization or order of any court or
Governmental Authority is required for the execution, delivery and performance
by Borrower of, or compliance by Borrower with, this Agreement or any of the
other Loan Documents or the Environmental Indemnity or the consummation of the
transactions contemplated hereby or thereby, other than those which have been
obtained by Borrower.

 

4.1.5    No Plan Assets. (i) it is acting on its own behalf; (ii) it is not an
employee benefit plan as defined in Section 3(3) of ERISA, that is subject to
Title I of ERISA, nor a plan as defined in Section 4975(e)(1) of the Internal
Revenue Code of 1986, as amended (the “Code”), that is subject to Section 4975
of the Code (each of the foregoing hereinafter referred to collectively as a
“Plan”); (iii) Borrower’s assets do not constitute “plan assets” of one or more
such Plans within the meaning of Department of Labor Regulation Section
2510.3-101, as modified by Section 3(42) of ERISA; (iv) it will not be
reconstituted as a Plan or as an entity whose assets constitute “plan assets”;
and (v) it is not, and will not be, a “governmental plan” within the meaning of
Section 3(32) of ERISA and the transactions contemplated by the Loan Documents
are not and will not be in violation of any state statutes applicable to
Borrower that regulate investments of, and fiduciary obligations with respect
to, governmental plans and that are similar to the provisions of Section 406 of
ERISA or Section 4975 of the Code.

 

4.1.6    Compliance. The Improvements and their Use comply with (and no notices
of violation have been received in connection with) all Requirements.

 

4.1.7    Zoning. The zoning approval for the Property is not dependent upon the
ownership or use of any property which is not encumbered by the Security
Instrument.

 

4.1.8    Financial Information. All financial statements, including, without
limitation, the statements of cash flow and income and operating expense, that
have been delivered to Lender in respect of the Property and/or in connection
with the Loan (i) are true, complete and correct in all material respects as of
the date of such reports, (ii) accurately represent the financial condition of
the Property as of the date of such reports, and (iii) have been prepared in
accordance with GAAP (or other accounting standards consistently applied and
acceptable to Lender) throughout the periods covered. Borrower does not have any
contingent liabilities, liabilities for taxes, unusual forward or long term
commitments or unrealized or anticipated losses from any unfavorable commitments
that are known to Borrower and which are, individually or in the aggregate,
reasonably likely to have a materially adverse effect on the Property or the
operation thereof, except as referred to or reflected in the most recent
financial statements of Borrower delivered to Lender. Since the date of such
financial statements, there has been no Material Adverse Change in the financial
condition, operations or business of Borrower or the Property from that set
forth in the financial statements.

 

4.1.9    Casualty and Condemnation. Except as expressly approved by Lender in
writing, no casualty or damage to any part of the Property that would cost more
than $50,000 to restore or replace has occurred which has not been fully
restored or replaced. No part of the Property has been taken in Condemnation or
other similar proceeding or transferred in lieu of Condemnation, nor has
Borrower received notice of any proposed Condemnation or other similar
proceeding affecting the Property. No Condemnation or other proceeding has been
commenced, is pending or, to Borrower’s best knowledge, is contemplated with
respect to all or any portion of the Property or for the relocation of roadways
providing access to the Property.

 

4.1.10  Enforceability. The Loan Documents and the Environmental Indemnity are
not subject to any right of rescission, set off, counterclaim or defense by
Borrower, including the defense of usury, nor would the operation of any of the
terms of the Loan Documents or the Environmental Indemnity, or the exercise of
any right thereunder, render the Loan Documents or the Environmental Indemnity
unenforceable, and Borrower has not asserted any right of rescission, set off,
counterclaim or defense with respect thereto.

 

 16LOAN AGREEMENT

 

 

4.1.11  Assignment of Leases. Pursuant to the Assignment of Leases, Borrower has
assigned the Leases and the Rents and Profits to Lender. Borrower acknowledges
that it is permitted to collect certain of the Rents and Profits pursuant to a
revocable license as set forth in the Assignment of Leases. No Person other than
Lender has any interest in or assignment of the Leases or any portion of the
Rents and Profits due and payable or to become due and payable thereunder.

 

4.1.12  Insurance. Borrower has obtained and has delivered to Lender evidence of
all of the Policies, with all premiums prepaid thereunder, reflecting the
insurance coverages, amounts and other requirements set forth in this
Agreement.  No claims have been made under any of the Policies, and no Person,
including Borrower, has done, by act or omission, anything which would impair
the coverage of any of the Policies.

 

4.1.13  Licenses. All authorizations, permits, licenses, including, without
limitation liquor licenses, if any, and operating permits, required by any
Governmental Authority for the use, occupancy and operation of the Property in
the manner in which the Property is currently being used, occupied and operated
have been obtained, paid for and are in full force and effect and, to the
knowledge of Borrower, all Tenants have such permits and approvals as are
required by any Governmental Authority for the use, occupancy and operation of
the premises demised under their respective Leases.

 

4.1.14  Flood Zone. None of the Improvements on the Property is located in an
area identified by the Federal Emergency Management Agency as a special flood
hazard area.

 

4.1.15  Physical Condition. To Borrower’s knowledge and except as identified in
any property condition report ordered by and delivered to Lender in connection
with the Loan, the Property, including, without limitation, all buildings,
improvements, parking facilities, sidewalks, storm drainage systems, roofs,
plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation
systems and all structural components, are in good condition, order and repair;
there exists no structural or other material defects or damages in the Property,
whether latent or otherwise. Borrower has not received notice from any insurance
company or bonding company of any defects or inadequacies in the Property, or
any part thereof, which would adversely affect the insurability of the same or
cause the imposition of extraordinary premiums or charges thereon or of any
termination or threatened termination of any Policy or bond. Construction of the
Improvements on the Property is complete.

 

4.1.16  Leases.

 

(a)          The rent roll attached hereto as Exhibit C (the “Rent Roll”) is
true, correct and complete and there are no Leases affecting the Property except
those Leases identified on the Rent Roll. All agreements between the landlord
and Tenant or between the landlord and any guarantor pertaining to any of such
Leases are set forth in writing.

 

(b)          There are no defaults by Borrower under the Existing Leases. To the
best knowledge of Borrower and except as reflected in the delinquent and prepaid
report attached hereto as Exhibit C-1 (the “Delinquent and Prepaid Report”),
there are no defaults by any Tenants under the Existing Leases nor by any
guarantors under the existing Lease Guaranties. The Existing Leases, including
the existing Lease Guaranties, are in full force and effect.

 

(c)          No Tenant now occupies or has a Lease with regard to, nor will any
Tenant occupy or have a Lease with regard to, ten (10) or more Apartment Units.

 

 17LOAN AGREEMENT

 

 

(d)          No Existing Lease may be amended, terminated or canceled
unilaterally by a Tenant, and no Tenant may be released from its obligations,
except in the event of material casualty or Condemnation or except with regard
to termination provisions that are specifically required by law, including,
without limitation, the Servicemembers Civil Relief Act, 50 USC App. Sec.
501-597(b), as may be amended from time to time.

 

(e)          Except as reflected in the Delinquent and Prepaid Report and except
for rent and additional rent for the current month, Borrower has not accepted
any payment of rent more than one month in advance of its due date, nor, except
with regard to Apartment Unit 4318 (the “Closing Date Extraordinary Rental
Payments”), any security deposit in an amount exceeding two (2) month’s rent.

 

4.1.17  Filing and Recording Taxes. All transfer taxes, deed stamps, intangible
taxes or other amounts in the nature of transfer taxes required to be paid by
Borrower under applicable Requirements in connection with the transfer of the
Property to Borrower have been paid or are being paid simultaneously herewith.
All mortgage, mortgage recording, stamp, intangible or other similar tax
required to be paid under applicable Requirements in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including, without limitation, the
Security Instrument, have been paid or are being paid simultaneously herewith.
All taxes and governmental assessments due and owing in respect of the Property
have been paid, or an escrow of funds in an amount sufficient to cover such
payments has been established hereunder or are insured against by the Title
Insurance Policy.

 

4.1.18  Special Purpose Entity/Separateness.

 

(a)          Borrower is a Special Purpose Entity.

 

(b)          The Property has “single asset real estate” status as defined by
Section 101(51)(B) of the Bankruptcy Code.

 

(c)          The representations and warranties set forth in this Section 4.1.18
shall survive for so long as any amount remains payable to Lender under this
Agreement or any other Loan Document.

 

4.1.19  Solvency. Borrower (a) has not entered into the transaction contemplated
by this Agreement or any Loan Document or the Environmental Indemnity with the
actual intent to hinder, delay, or defraud any creditor and (b) has received
reasonably equivalent value in exchange for its obligations under the Loan
Documents and the Environmental Indemnity. Giving effect to the Loan, the fair
saleable value of Borrower’s assets exceeds and will, immediately following the
making of the Loan, exceed Borrower’s total liabilities, including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities.
Borrower’s assets do not and, immediately following the making of the Loan will
not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted.

 

4.1.20  Organizational Chart. The organizational chart attached as Exhibit D
hereto, relating to Borrower and certain affiliates and other parties, is true,
complete and correct on and as of the date hereof and shows all Persons holding
a twenty-five percent (25%) or more direct or indirect ownership interest in
Borrower and/or holding a Controlling interest in Borrower. Borrower has
delivered to Lender true and correct copies of all Borrower’s organizational
documents and except as expressly approved by Lender in writing, there have been
no changes in Borrower’s Constituents since the date that the Application was
executed by Borrower.

 

 18LOAN AGREEMENT

 

 

4.1.21  Material Agreements. Attached hereto as Schedule 4.1.21 is a list of all
Material Agreements, true and complete copies of each of which have been
delivered to Lender.

 

4.1.22  No Other Debt. Borrower has not borrowed or received debt financing
(other than permitted pursuant to this Agreement) that has not been heretofore
repaid in full.

 

4.1.23  No Bankruptcy Filing. Neither Borrower, nor any of Borrower’s
Constituents, is involved in any bankruptcy, reorganization, insolvency,
dissolution or liquidation proceeding, and to the best knowledge of Borrower, no
such proceeding is contemplated or threatened.

 

4.1.24  Full and Accurate Disclosure. No information contained in this
Agreement, the other Loan Documents or the Environmental Indemnity, or any
written statement furnished by or on behalf of Borrower pursuant to the terms of
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading in any material respect in light of the circumstances
under which they were made. There is no fact or circumstance presently known to
Borrower which has not been disclosed to Lender and which materially adversely
affects, or is reasonably likely to materially adversely affect, the Property,
Borrower or its business, operations or condition (financial or otherwise).

 

4.1.25  Foreign Person. Neither Borrower nor any partner, member, shareholder or
stockholder of Borrower is, and no legal or beneficial interest in a partner,
member, shareholder or stockholder of Borrower is or will be held, directly or
indirectly by, a “foreign person” within the meaning of Sections 1445 and 7701
of the Code.

 

4.1.26  No Change in Facts or Circumstances; Disclosure. There has been no
Material Adverse Change from the conditions shown in the Application or in the
materials submitted in connection with the Application or in the credit rating
or financial condition of Borrower, the directors, officers, partners,
shareholders, stockholders or members of Borrower or any entity which is a
partner, shareholder, stockholder, beneficiary or member of any entity which is
a partner, shareholder, stockholder, beneficiary or member of Borrower,
respectively as the case may be (collectively, “Borrower’s Constituents”). The
foregoing notwithstanding, the definition of “Borrower’s Constituents” shall
expressly exclude the Carroll Member and any holder of any indirect publicly
held interest in Borrower owning less than a twenty-five percent (25%) interest.

 

4.1.27  Management Agreement. Borrower has provided to Lender a true, correct
and complete copy of the Management Agreement. The Management Agreement is in
full force and effect and no event of default has occurred thereunder nor has
any event under the Management Agreement occurred which, but for the giving of
notice, or passage of time, or both would be an event of default thereunder. All
fees payable to Manager have been paid in full.

 

4.1.28  Non-Relationship. Neither Borrower nor any of Borrower’s Constituents,
as the case may be, is (a) a director or officer of any of MetLife, Inc.,
Metropolitan Life Insurance Company, MetLife HCMJV 1, LP, MetLife HCMJV 1 GP,
LLC, MetLife HCMJV 1 LP, LLC or MetLife HCMJV 1 REIT, LLC (collectively, the
“MetLife Parties”), (b) a parent, son or daughter of a director or officer of
any of the MetLife Parties, or a descendent of any of them, (c) a stepparent,
adopted child, step-son or step-daughter of a director or officer of any of the
MetLife Parties, (d) a spouse of a director or officer of any of the MetLife
Parties, or (e) an affiliate of any of the MetLife Parties or is receiving asset
management services from any of the MetLife Parties or any affiliate of any of
the MetLife Parties, and none of the collateral for the Loan herein is owned
wholly or partially by any of the MetLife Parties or any affiliate of any of the
MetLife Parties nor is any of the MetLife Parties or any affiliate of any of the
MetLife Parties providing asset management services for such collateral.

 

 19LOAN AGREEMENT

 

 

4.1.29  US Patriot Act. Either (a) Borrower is regulated by the Securities and
Exchange Commission, Financial Industry Regulatory Authority, Inc. or the
Federal Reserve System (a “Regulated Entity”), or is a wholly-owned subsidiary
or wholly-owned affiliate of a Regulated Entity, or (b) neither Borrower nor any
person or entity that directly or indirectly (i) controls Borrower or (ii) has
an ownership interest in Borrower of twenty-five percent (25%) or more appears
on the list of Specially Designated Nationals and Blocked Persons published by
the Office of Foreign Assets Control of the U.S. Department of the Treasury, or
any similar list maintained by any other Governmental Authority, with respect to
which entering into transactions with such person or entity would violate the
USA Patriot Act or regulations or any Presidential Executive Order or any other
similar applicable law, ordinance, order, rule or regulation and shall provide
evidence as reasonably requested by Lender from time to time, to confirm
compliance.

 

4.1.30  Criminal Acts. Neither Borrower nor any of Borrower’s Constituents has
been convicted of, or been indicted for a felony criminal offense.

 

4.1.31  No Defaults. Neither Borrower nor any of Borrower’s Constituents is in
default under any mortgage, deed of trust, deed to secure debt, note, loan or
credit agreement.

 

4.1.32  Purchase Agreement. Borrower has delivered to Lender a true and complete
copy of the Purchase Agreement and there exist no material documents or
instruments relating to the purchase of the Property other than those documents
and instruments that have been delivered to Lender.

 

4.1.33  Personal Property. Borrower owns the Personal Property free from any
lien, security interest, encumbrance or adverse claim, except as otherwise
expressly approved by Lender in writing. The Personal Property has not been used
or bought for personal, family, or household purposes, but has been bought and
used solely for the purpose of carrying on Borrower’s business.

 

4.1.34  O&M Agreement. The O&M Agreement, if any, is in full force and effect
and there is no default thereunder by any party thereto and no event has
occurred that, with the passage of time and/or the giving of notice would
constitute a default thereunder.

 

4.1.35  REA. All of the REAs are in full force and effect and neither Borrower
nor, to Borrower’s knowledge, any other party to any of the REAs, is in default
thereunder, and to the best of Borrower’s knowledge, there are no conditions
which, with the passage of time or the giving of notice, or both, would
constitute a default thereunder. Except as set forth on Schedule 4.1.35, no REA
has been modified, amended or supplemented.

 

V.         BORROWER COVENANTS

 

Section 5.1  Borrower Affirmative Covenants. From the date hereof until payment
of the Secured Indebtedness in full, Borrower hereby covenants and agrees with
Lender that:

 

5.1.1    Existence; Compliance with Requirements. Borrower shall do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its existence, rights, licenses, permits and franchises and comply with
all present and future Requirements affecting or relating to Borrower, the
Property and/or the Use. Borrower shall not use or knowingly permit the use of
the Property, or any part thereof, for any illegal purpose. Borrower shall
furnish to Lender, on request, proof of compliance with the Requirements.

 

 20LOAN AGREEMENT

 

 

5.1.2    Litigation. Borrower shall give prompt notice to Lender of any
litigation or governmental proceedings pending or threatened in writing against
Borrower, Liable Party, if any, or the Property which could, if determined
adversely to Borrower, Liable Party, if any, or the Property, be reasonably
expected to affect the Property, or Borrower’s or Liable Party’s, if any,
ability to perform its obligations, as applicable, hereunder or under the other
Loan Documents, the Guaranty, if any, or the Environmental Indemnity.

 

5.1.3    Access to Property. Subject to the rights of Tenants under the Leases,
Lender shall have the right, at any time and from time to time during normal
business hours, to enter the Property in order to ascertain Borrower’s
compliance with the Loan Documents, to examine the condition of the Property, to
perform an appraisal, to undertake surveying or engineering work, and to inspect
premises occupied by Tenants. Borrower shall cooperate with Lender in performing
these inspections.

 

5.1.4    Books and Records; Financial Reporting. Borrower shall keep adequate
books and records of account in accordance with GAAP, or in accordance with
other methods acceptable to Lender in its sole discretion, consistently applied
and furnish to Lender:

 

(a)          a quarterly certified rent roll signed and dated by Borrower,
detailing the names of all Tenants of the Improvements, the portion of
Improvements occupied by each Tenant, the base rent and any other charges
payable under each Lease and the term of each Lease, including the expiration
date, and any other information as is reasonably required by Lender, within
thirty (30) days after the end of each fiscal quarter;

 

(b)          a quarterly operating statement of the Property and year to date
operating statements detailing the total revenues received, total expenses
incurred, total cost of all capital improvements, total debt service and total
cash flow, to be prepared and certified by Borrower in the form required by
Lender, and if available, any quarterly operating statement prepared by an
independent certified public accountant, within thirty to sixty (30-60) days
after the close of each fiscal quarter of Borrower;

 

(c)          an annual balance sheet and profit and loss statement of Borrower
in the form required by Lender, prepared and certified by Borrower, or if
required by Lender following an Event of Default, audited financial statements
for Borrower, prepared by an independent certified public accountant acceptable
to Lender within ninety (90) days after the close of each fiscal year of
Borrower;

 

(d)          an annual operating budget presented on a monthly basis consistent
with the annual operating statement described above for the Property including
cash flow projections for the upcoming one (1) year period and all proposed
capital replacements and improvements at least fifteen (15) days prior to the
start of each calendar year;

 

(e)          an annual ARGUS© valuation file in electronic form which includes,
without limitation, a then current rent roll, all income of the Property and all
Property expenses within ninety (90) days after the close of each fiscal year of
Borrower; and

 

 21LOAN AGREEMENT

 

 

(f)           any financial statements required pursuant to the Guaranty, if
any, including, without limitation, within ninety (90) days after the end of
each fiscal year of Liable Party, beginning with the fiscal year ending December
31, 2016, (i) an annual balance sheet and profit and loss statement of Liable
Party in the form required by Lender, prepared and certified by Liable Party, or
if required by Lender following an Event of Default, audited financial
statements for Liable Party, if any, prepared by an independent certified public
accountant reasonably acceptable to Lender (and for these purposes, BDO USA, LLP
is hereby deemed approved by Lender; provided, however, in the event Lender
reasonably determines that such accountant is no longer acceptable, such audited
financial statements shall be prepared by an independent certified public
account that is then reasonably acceptable to Lender), and (ii) a certificate of
Liable Party to Lender (A) stating that no default under the Guaranty and no
event which with notice or lapse of time or both would be a default under the
Guaranty has occurred and is continuing, or if in Liable Party’s opinion a
default under the Guaranty has occurred and is continuing, a statement as to the
nature thereof and (B) disclosing and certifying as to all material changes in
Liable Party’s debt or net worth or otherwise certifying that there has been no
material change in Liable Party’s debt or net worth since the previous financial
statement delivered to Lender.

 

5.1.5     Property Reports. Upon request from Lender or its representatives and
designees, Borrower shall furnish in a timely manner to Lender:

 

(a)          a property management report for the Property, showing the number
of inquiries made and/or rental applications received from Tenants or
prospective tenants and deposits received from Tenants and any other information
requested by Lender, in reasonable detail and certified by Borrower (or an
officer, general partner, member or principal of Borrower if Borrower is not an
individual) under penalty of perjury to be true and complete, but no more
frequently than quarterly; and

 

(b)          an accounting of all security deposits held in connection with any
Lease of any part of the Property, including the name and identification number
of the accounts in which such security deposits are held, the name and address
of the financial institutions 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 obtain information regarding such
accounts directly from such financial institutions.

 

5.1.6     Additional Financial or Management Information; Right to Audit.

 

(a)          Borrower shall furnish Lender with such other additional financial
or management information (including state and federal tax returns) as may, from
time to time, be reasonably required by Lender or the Rating Agencies in form
and substance satisfactory to Lender or the Rating Agencies.

 

(b)          Lender and its representatives shall have the right upon at least
five (5) days prior written notice to Borrower to examine and audit the records,
books, management and other papers of Borrower and its affiliates or of any
guarantor or indemnitor which reflect upon their financial condition and/or the
income, expenses and operations of the Property, at the Property or at any
office regularly maintained by Borrower, its affiliates or any guarantor or
indemnitor where the books and records are located. Lender shall have the right
upon notice to make copies and extracts from the foregoing records and other
papers.

 

(c)          Borrower shall furnish Lender and its agents convenient facilities
for any such examination and audit of any such books and records.

 

5.1.7     Title to the Property. Borrower will warrant and defend the validity
and priority of the security title conveyed by the Security Instrument and the
Assignment of Leases on the Property against the claims of all Persons
whomsoever, subject only to Permitted Exceptions.

 

 22LOAN AGREEMENT

 

 

5.1.8     Estoppel Statements.

 

(a)          Within ten (10) days after a request by Lender, Borrower shall
furnish an acknowledged written statement in form satisfactory to Lender (i)
setting forth the amount of the Loan and the interest rate, (ii) stating either
that no offsets or defenses exist against the Loan, or if any offsets or
defenses are alleged to exist, their nature and extent, (iii) whether any
default then exists under the Loan Documents or the Environmental Indemnity or
any event has occurred and is continuing that with the lapse of time, the giving
of notice, or both, would constitute such a default, and (iv) any other matters
as Lender may reasonably request. If Borrower does not furnish an estoppel
certificate, certified to the Certification Parties, within the 10-day period,
Borrower appoints Lender as its attorney-in-fact to execute and deliver the
certificate on its behalf, which power of attorney shall be coupled with an
interest and shall be irrevocable.

 

(b)          Borrower shall use best efforts to deliver to Lender, upon request,
estoppel certificates, certified to the Certification Parties, from each party
under the REAs; provided that such certificates may be in form required under
the REAs; provided, further, that Borrower shall not be required to deliver such
certificates more frequently than two (2) times in any calendar year.

 

5.1.9     Leases and Other Agreements Affecting the Property.

 

(a)          Borrower shall perform all obligations of landlord under any and
all Leases. Upon request of Lender, Borrower agrees to furnish Lender true,
correct and complete executed copies of all Existing Leases and all future
Leases.

 

(b)          Borrower shall not, without the prior written consent of Lender,
(i) enter into any Lease, (ii) modify, amend or extend any Lease, (iii) provide
consents regarding subleases or assignments or other minor deviations from the
terms of any Lease (unless the tenant (and any guarantor, if applicable) who is
liable immediately prior to such subletting or assignment covenants to remain
fully liable thereafter), (iv) cancel, terminate or accept surrender of any
Lease, or (v) exercise other lawful rights and remedies with regard to any
Lease, unless (x) the Lease, modification, amendment, extension or consent
complies with the Leasing Guidelines or, (y) with regard to a cancellation,
termination or acceptance of surrender, such act is in compliance with the
Leasing Guidelines or Borrower has entered into a new Lease complying with the
provisions set forth herein, including the Leasing Guidelines, and covering all
of the premises of the Lease being cancelled, terminated or surrendered.
Further, Borrower shall not, without the prior written consent of Lender, (1)
accept any payment of rent more than one month in advance of its due date, or
(2) enter into any option to purchase the Property. If any of the acts described
in this paragraph are done without the prior written consent of Lender to the
extent required pursuant to the terms hereof, at the option of Lender, they
shall be of no force or effect and shall constitute a default under this
Agreement.

 

(c)          Each Lease affecting the Property entered into from and after the
date hereof shall be on the Standard Lease Form as provided in the Leasing
Guidelines or, if any other form of lease is used (which such form shall be
subject to Lender’s prior written approval), such form shall be absolutely
subordinate to the security title conveyed by the Security Instrument and shall
also contain a provision, satisfactory to Lender, to the effect that in the
event of the judicial or non-judicial foreclosure of the Property, at the
election of the acquiring foreclosure purchaser, the particular Lease shall not
be terminated and the tenant shall attorn to the purchaser. If requested to do
so, the tenant shall agree to enter into a new Lease for the balance of the term
upon the same terms and conditions.

 

(d)          Borrower covenants and agrees that all contracts and agreements
relating to the Property requiring the payment of leasing commissions or
management fees or other similar compensation shall (i) provide that the
obligation will not be enforceable against Lender and (ii) be subordinate to the
security title conveyed by the Security Instrument. Lender will be provided
evidence of Borrower’s compliance with this Section 5.1.9(d) upon request.

 

 23LOAN AGREEMENT

 

 

5.1.10   Material Agreements. Borrower shall (a) promptly perform and/or observe
all of the material covenants and agreements required to be performed and
observed by it under each Material Agreement to which it is a party, and do all
things necessary to preserve and to keep unimpaired its rights thereunder, (b)
promptly notify Lender in writing of the giving of any notice of any default by
any party under any Material Agreement of which it is aware and (c) promptly
enforce the performance and observance of all of the material covenants and
agreements required to be performed and/or observed by the other party under
each Material Agreement to which it is a party in a commercially reasonable
manner.

 

5.1.11   Performance by Borrower. Borrower shall in a timely manner observe,
perform and fulfill each and every covenant, term and provision of each Loan
Document and the Environmental Indemnity executed and delivered by Borrower.

 

5.1.12   Maintenance of the Property. Borrower, at its sole cost and expense,
shall keep the Property in good order, condition and repair, and make all
necessary structural and non-structural, ordinary and extraordinary repairs to
the Property and the Improvements.

 

5.1.13   Use. Borrower shall use, or cause to be used, the Property continuously
as residential multifamily apartments and certain ancillary uses in connection
therewith, including the provision of recreational amenities to tenants (the
“Use”). Borrower shall not use, or permit the use of, the Property for any other
use without the prior written consent of Lender. Borrower shall not file or
record a declaration of condominium, master mortgage or deed of trust or any
other similar document evidencing the imposition of a so-called “condominium
regime” whether superior or subordinate to the Security Instrument and Borrower
shall not permit any part of the Property to be converted to, or operated as, a
“cooperative apartment house” whereby the tenants or occupants participate in
the ownership, management or control of any part of the Property.

 

5.1.14  Escrow Deposits.

 

(a)          Without limiting the effect of Section 3.1 and Section 6.1,
Borrower shall pay to Lender monthly on the same date the monthly installment is
payable under the Note and this Agreement, an amount equal to 1/12th of the
amounts Lender reasonably estimates are necessary to pay, on an annualized
basis, (1) all Impositions and (2) the Premiums until such time as Borrower has
deposited an amount equal to the annual charges for these items and on demand,
from time to time, shall pay to Lender any additional amounts necessary to pay
the Premiums and Impositions. Borrower will furnish to Lender bills for
Impositions and Premiums thirty (30) days before Impositions become delinquent
and such Premiums become due for payment and, except if an Event of Default
occurs, Lender shall use commercially reasonable efforts to remit such amounts
on behalf of Borrower prior to the due date thereof. No amounts paid as
Impositions or Premiums shall be deemed to be trust funds and these funds may be
commingled with other funds held on behalf of borrowers of Lender without any
requirement to pay interest to Borrower on account of these funds. If an Event
of Default occurs, Lender shall have the right, at its election, to apply any
amounts held under this Section 5.1.14(a) in reduction of the Secured
Indebtedness, or in payment of the Premiums or Impositions for which the amounts
were deposited.

 

 24LOAN AGREEMENT

 

 

(b)          Pursuant to the terms of the Security Instrument and the Assignment
of Leases, Borrower has absolutely and unconditionally assigned, set over and
transferred to Lender all of Borrower’s right, title, interest and estates in
and to the Leases and the Rents and Profits, including, without limitation, the
Extraordinary Rental Payments, subject to the terms and license granted to
Borrower thereunder, which documents shall govern and control the provisions of
said assignment. Notwithstanding anything to the contrary, such license shall
not be applicable to any Extraordinary Rental Payments, all of which, except
with regard to the Closing Date Extraordinary Rental Payments, shall be paid
directly to Lender, held by Lender (hereinafter referred to as the
“Extraordinary Rental Escrow”) and disbursed or applied as hereinafter provided.
Subject to the terms hereof, Lender shall be entitled to hold Extraordinary
Rental Payments it receives in an account as additional security for the Loan
and the funds shall be governed by the terms set forth in this subparagraph (b)
and applied in accordance with the terms of any applicable Lease as provided in
this subparagraph (b). Borrower shall render such accounts of collections as
Lender may reasonably require. Any Tenant is authorized and directed to pay all
Extraordinary Rental Payments to Lender. None of the Extraordinary Rental Escrow
shall be deemed to be trust funds and these funds may be commingled with other
funds held on behalf of borrowers of Lender without any requirement to pay
interest to Borrower on account of these funds. So long as no Event of Default
then exists, upon request of Borrower, Lender shall disburse funds from time to
time from the Extraordinary Rental Escrow for use by Borrower, subject to
Lender’s consent, which consent shall not be unreasonably withheld, conditioned
or delayed, except in accordance with the terms of any applicable Lease. Such
disbursements of funds from the Extraordinary Rental Escrow shall be conditioned
upon Borrower furnishing to Lender a written request for each such disbursement
together with those items as Lender deems reasonably necessary in its
discretion. If an Event of Default occurs, Lender shall have the right to use
such Extraordinary Rental Escrow in accordance with the terms of the Leases for
which the amounts were deposited, provided, however, Lender shall not have the
right to apply any amounts held under this Section 5.1.14(b) in reduction of the
Secured Indebtedness. In the event of a foreclosure or a deed foreclosure of the
Property, such Extraordinary Rental Escrow shall be transferred to the acquiring
foreclosure purchaser.

 

5.1.15  Personal Property. Borrower will notify Lender of, and will protect,
defend and indemnify Lender and MetLife HCMJV 1, LP, and their respective
affiliates, partners and participants, and the officers, directors, agents,
employees of each of them, and the successors and assigns of each of them
against, all claims and demands of all persons at any time claiming any rights
or interest in the Personal Property. The Personal Property shall not be used or
bought for personal, family, or household purposes, but shall be bought and used
solely for the purpose of carrying on Borrower’s business.

 

5.1.16  Special Purpose Entity/Separateness.

 

(a)          Borrower shall continue to be a Special Purpose Entity.

 

(b)          The Property shall continue to have “single asset real estate”
status as defined by Section 101(51)(B) of the Bankruptcy Code.

 

(c)          The covenants set forth in this Section 5.1.16 shall survive for so
long as any amount remains payable to Lender under this Agreement or any other
Loan Document.

 

Section 5.2    Borrower Negative Covenants. From the date hereof until the
Secured Indebtedness is paid in full, Borrower hereby covenants and agrees with
Lender that:

 

5.2.1     Liens and Encumbrances. Without the prior written consent of Lender,
to be exercised in Lender’s sole and absolute discretion, other than the
Permitted Exceptions, Borrower shall not create, place or allow to remain any
Liens and Encumbrances on the Property. If any Liens and Encumbrances are
recorded against the Property or any part of the Property, Borrower shall obtain
a discharge and release of any Liens and Encumbrances within fifteen (15) days
after receipt of notice of their existence. The foregoing notwithstanding,
Borrower shall be permitted to enter into typical utility easements with
applicable utility providers as long as such utility easements do not interfere
with the use and operation of the Property and such utility easements are
otherwise subject to Lender’s reasonable approval.

 

 25LOAN AGREEMENT

 

 

5.2.2     Change in Business. Borrower shall not enter into any line of business
other than the ownership and operation of the Property.

 

5.2.3     Affiliate Transactions. Other than (i) the Management Agreement in
effect as of the date hereof and (ii) the IT Agreement in effect as of the date
hereof, Borrower shall not enter into, or be a party to, any transaction with an
affiliate of Borrower or any of the partners of Borrower except in the ordinary
course of business and on terms which are fully disclosed to Lender in advance
and are no less favorable to Borrower or such affiliate than would be obtained
in a comparable arm’s length transaction with an unrelated third party.

 

5.2.4     Zoning. Without the prior written consent of Lender, Borrower shall
not (i) initiate or acquiesce in a change in the zoning classification of and/or
restrictive covenants affecting the Property or seek any variance under existing
zoning ordinances, (ii) use or permit the use of the Property in a manner which
may result in the Use becoming a non-conforming use under applicable zoning
ordinances, or (iii) subject the Property to restrictive covenants.

 

5.2.5     Assets. Borrower shall not purchase or own any property other than the
Property and any property necessary or incidental to the ownership and operation
of the Property.

 

5.2.6     No Joint Assessment. Borrower shall not suffer, permit or initiate the
joint assessment of the Property (i) with any other real property constituting a
tax lot separate from the Property, and (ii) with any portion of the Property
which may be deemed to constitute personal property, or any other procedure
whereby the lien of any taxes which may be levied against such personal property
shall be assessed or levied or charged to the Property.

 

5.2.7     Principal Place of Business; Chief Executive Office; Books and
Records. Borrower shall not (i) change its principal place of business or name
from the address and name set forth in the introductory paragraph hereof
without, in each instance, (A) giving Lender at least thirty (30) days’ prior
written notice thereof and (B) taking all action required by Lender for the
purpose of perfecting and/or protecting the Lien and security interest of Lender
created pursuant to this Agreement and the other Loan Documents or (ii) change
its organizational structure without (A) obtaining the prior written consent of
Lender and (B) taking all action reasonably required by Lender for the purpose
of perfecting or protecting the Lien and security interest of Lender created
pursuant to this Agreement and the other Loan Documents. At the request of
Lender, Borrower shall execute a certificate, certified to the Certification
Parties, in form reasonably satisfactory to Lender listing the trade names under
which Borrower intends to operate the Property, and representing and warranting
that Borrower does business under no other trade name with respect to the
Property.

 

5.2.8     ERISA. Borrower will not be reconstituted as a Plan or as an entity
whose assets constitute “plan assets”. Borrower will not become a “governmental
plan” within the meaning of Section 3(32) of ERISA and will not become subject
to any state statutes that regulate investments of, and fiduciary obligations
with respect to, governmental plans, that are similar to the provisions of
Section 406 of ERISA or Section 4975 of the Code and that would be violated by
the transactions contemplated by the Loan Documents.

 

 26LOAN AGREEMENT

 

 

5.2.9     Material Agreements. Borrower shall not, without Lender’s prior
written consent, such consent not to be unreasonably withheld: (a) enter into
any Material Agreement, (b) surrender or terminate any Material Agreement to
which it is a party (unless the other party thereto is in material default and
the termination of such Material Agreement would be commercially reasonable and
then only if Borrower shall have provided to Lender not less than five (5)
Business Days’ notice of such termination and such termination would not be
reasonably expected to result in a Material Adverse Change), (c) increase or
consent to the increase of the amount of any fees or charges payable by Borrower
under any Material Agreement, except for such increases as are expressly
provided for therein, or (d) modify, change, supplement, alter or amend, or
waive or release any of its rights and remedies under any Material Agreement.

 

5.2.10   Improvements. Borrower shall abstain from, and not permit the
commission of waste to the Property and shall not remove or alter in any
substantial manner, the structure or character of any Improvements without the
prior written consent of Lender.

 

5.2.11   Personal Property Borrower will not remove the Personal Property
without the prior written consent of Lender, except items of Personal Property
which are consumed or worn out in ordinary usage which shall be promptly
replaced by Borrower with other Personal Property of value equal to or greater
than the value of the replaced Personal Property.

 

VI.          INSURANCE, CASUALTY AND CONDEMNATION

 

Section 6.1    Insurance.

 

6.1.1     Insurance Policies.

 

(a)          During the term of the Loan, Borrower at its sole cost and expense
must provide Policies and certificates of insurance for types of insurance
described below all of which must be satisfactory to Lender as to form of
policy, amounts, deductibles, sublimits, types of coverage, exclusions and the
companies underwriting these coverages. In no event shall such Policies be
terminated or otherwise allowed to lapse. Borrower shall be responsible for its
own deductibles. Borrower shall also pay for any insurance, or any increase of
policy limits, not described in this Agreement that Borrower requires for its
own protection or for compliance with government statutes. Borrower’s insurance
shall be primary and without contribution from any insurance procured by Lender
including, without limitation, any insurance obtained by Lender pursuant to
Section 6.1.1(d).

 

Policies of insurance shall be delivered to Lender in accordance with the
following requirements:

 

(i)          Property insurance on the Improvements and the Personal Property
insuring against any peril now or hereafter included within the classification
“All Risk” or “Special Perils,” in each case (1) in an amount equal to 100% of
the Full Replacement Cost of the Improvements and Personal Property with a
waiver of depreciation and with a Replacement Cost Endorsement; (2) containing
an agreed amount endorsement with respect to the Improvements and Personal
Property waiving all co-insurance provisions; (3) providing for no deductible in
excess of $250,000.00 and (4) containing no margin clause unless approved by
Lender and (5) containing Ordinance or Law Coverage, Operation of Building Laws,
Demolition Costs and Increased Cost of Construction in an amount reasonably
required by Lender or if any of the Improvements or the use of the Property
constitute non-conforming structures then in the amount of 100% of the Full
Replacement Cost. The Full Replacement Cost shall be determined from time to
time by an appraiser or contractor designated and paid by Borrower and approved
by Lender or by an engineer or appraiser in the regular employ of the insurer.
The “Full Replacement Cost” for purposes of this Article VI shall mean the
estimated total cost of construction required to replace the Improvements with a
substitute of like utility, and using modern materials and current standards,
design and layout. For purposes of calculating Full Replacement Cost direct
(hard) costs shall include, without limitation, labor, materials, supervision
and contractor’s profit and overhead and indirect (soft) costs shall include,
without limitation, fees for architect’s plans and specifications, construction
financing costs, permits, sales taxes, insurance and other costs included in the
Marshall Valuation Service published by Marshall & Swifts.

 

 27LOAN AGREEMENT

 

 

(ii)         Commercial General Liability insurance, including liquor liability
insurance if applicable, against claims for personal injury, bodily injury,
death or property damage occurring upon, in or about the Property, such
insurance (1) to be on the so-called “occurrence” form with a combined single
limit of not less than Forty Million Dollars ($40,000,000.00); (2) to continue
at not less than this limit until required to be changed by Lender in writing by
reason of changed economic conditions making such protection inadequate; and
(iii) to cover at least the following hazards: (a) premises and operations; (b)
products and completed operations on an “if any” basis; (c) independent
contractors; (d) blanket contractual liability for all written and oral
contracts; and (e) contractual liability covering the indemnities contained in
this Agreement and the other Loan Documents to the extent available. The
required limit may be satisfied through a combination of Primary and Excess
Liability policies.

 

(iii)        Business Income insurance in an amount sufficient to prevent
Borrower from becoming a co-insurer within the terms of the applicable Policies,
and sufficient to recover twenty four (24) months Business Income and with an
Extended Period of Indemnity (“EPI”) of 12 months. The amount of such insurance
shall be increased from time to time during the term of the Loan as and when new
leases and renewal leases are entered into and rents payable increase or the
annual estimate of gross income from occupancy of the Property increases to
reflect such rental increases.

 

(iv)        If Lender determines at any time that any part of the Property is
located in an area identified on a Flood Hazard Boundary Map or Flood Insurance
Rate Map issued by the Federal Emergency Management Agency as having special
flood hazards and flood insurance has been made available, Borrower will
maintain a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount not less than the maximum amount of insurance
which is available under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994, as amended. In addition Difference in Conditions (DIC) insurance and/or
excess insurance from and against all losses, damages, costs, expenses, claims
and liabilities related to or arising from acts of flood, of such types, in such
amounts, with such deductibles, issued by such companies, and on such forms of
insurance policies as required by Lender, if Lender determines at any time that
any part of the Property is located in Flood Zone A or V.

 

(v)         During the period of any construction or renovation or alteration of
the Improvements, and only if the Property insurance (as described in Section
6.1.1(a)(i)) form does not otherwise provide coverage, a so-called “Builder’s
All Risk” insurance policy in non-reporting form for any Improvements under
construction, renovation or alteration including, without limitation, for
demolition and increased cost of construction or renovation, in an amount
approved by Lender including an Occupancy endorsement and Worker’s Compensation
Insurance covering all persons engaged in the construction, renovation or
alteration in an amount at least equal to the minimum required by statutory
limits of the State.

 

(vi)        Workers’ Compensation insurance, subject to the statutory limits of
the State, and employer’s liability insurance with a limit of at least
$1,000,000 per accident and per disease per employee, and $1,000,000 for disease
in the aggregate in respect of any work or operations on or about the Property,
or in connection with the Property or its operations (if applicable).

 

(vii)       Boiler & Machinery, or Equipment Breakdown Coverage, insurance
covering the major components of the central heating, air conditioning and
ventilating systems, boilers, other pressure vessels, high pressure piping and
machinery, elevators and escalators, if any, and other similar equipment
installed in the Improvements, in an amount equal to one hundred percent (100%)
of the full replacement cost of all equipment installed in, on or at the
Improvements. These Policies shall insure against physical damage to and loss of
occupancy and use of the Improvements arising out of an accident or breakdown.

 

 28LOAN AGREEMENT

 

 

(viii)      Insurance from and against all losses, damages, costs, expenses,
claims and liabilities related to or arising from acts of terrorism, of such
types, in such amounts, with such deductibles, issued by such companies, and on
such forms of insurance policies as required by Lender and as may be
commercially available; provided, however, that as to the original Borrower (but
not to any successor borrower), Borrower shall only be obligated to maintain
that amount of terrorism coverage that could be purchased with a premium that is
equal to two hundred percent (200%) of the premium, as determined by Lender,
that Borrower would need to pay to obtain All Risk Property insurance for the
Property without terrorism coverage.

 

(ix)         Business Automobile Insurance with a combined single limit of not
less than $1,000,000 per occurrence for bodily injury and property damage
arising out of the use of owned, non-owned, hired and/or leased automotive
equipment when such equipment is operated by Borrower, Borrower’s employees or
Borrower’s agents in connection with the Property.

 

(x)          Windstorm coverage, including coverage for Named Storms, in an
amount equal to the Full Replacement Cost, plus an amount equal to the Business
Income insurance and EPI contemplated in Subsection (a)(iii) of this Section
6.1.1 and on terms consistent with the commercial property Policy required under
Subsection (a)(i) of this Section 6.1.1, provided, however, that the deductible
for windstorm coverage shall not exceed the greater of (i) $250,000 or (ii) five
percent (5%) of the Full Replacement Cost.

 

(xi)         Insurance from or against all losses, damages, costs, expenses,
claims and liabilities related to or arising from earthquake on such form of
insurance policy and in such amount as required by Lender, and provided that the
deductible for earthquake coverage shall not exceed the greater of (i) $250,000
or (ii) five percent (5%) of the Full Replacement Cost.

 

(xii)        Such other insurance (i) as may from time to time be required by
Lender to replace coverage against any hazard, which as of the date hereof is
insured against under any of the Policies described in Subsections (a)(i)
through (a)(xi) of this Section 6.1.1, and (ii) as may from time to time be
reasonably required by Lender against other insurable hazards, including, but
not limited to, vandalism, earthquake, environmental, sinkhole and mine
subsidence.

 

(b)          Lender’s interest must be clearly stated by endorsement in the
Policies described in this Section 6.1.1 as follows:

 

(i)          The Policies referenced in Subsections (a)(i), (a)(iii), (a)(iv),
(a)(v), (a)(vii), (a)(x) and (a)(xi) of this Section 6.1.1 shall identify
“MetLife HCMJV 1, LP, and its Successors, Assigns, Affiliates, Partners and
Participants” under the New York Standard Mortgagee Clause (non-contributory)
endorsement.

 

(ii)         The Policies referenced in Sections 6.1.1(a)(ii) and 6.1.1(a)(ix)
shall name as additional insureds “MetLife HCMJV 1, LP, and its Successors,
Assigns, Affiliates, Partners and Participants”.

 

(iii)        The Policies referenced in Section 6.1.1(a)(viii) shall name Lender
in such form and manner as Lender shall require.

 

 29LOAN AGREEMENT

 

 

(iv)        All of the Policies referred to in Section 6.1.1 shall provide for
at least thirty (30) days’ written notice to Lender in the event of policy
cancellation and/or material change.

 

(c)          All the insurance companies must be authorized to do business in
New York State and the State and be approved by Lender. The insurance companies
must have a general policy rating of A.M. Best “Excellent” or better and a
financial class of X or better by A.M. Best. Notwithstanding the foregoing,
Lender hereby approves Hallmark Specialty Insurance as an insurance company
through July 26, 2017 notwithstanding its rating of A-, VIII, provided if such
rating decreases prior to July 26, 2017, Borrower shall replace, by the date
that is thirty (30) days from the date of such rating decrease, such insurance
company with an insurance company that meets the requirements set forth in this
subsection (c). In any event, upon renewal of Borrower’s insurance on July 26,
2017, Borrower shall replace Hallmark Specialty Insurance with an insurance
company that meets the requirements set forth in this subsection (c) if Hallmark
Specialty Insurance’s rating is not an “A” “X”. So called “Cut-through”
endorsements shall not be permitted. If there are any Securities issued with
respect to this Loan which have been assigned a rating by a Rating Agency, the
insurance company shall have a claims paying ability rating by such Rating
Agency equal to or greater than the rating of the highest class of the
Securities. Borrower shall deliver evidence satisfactory to Lender of payment of
premiums due under the Policies.

 

(d)          Certified copies of the Policies, and any endorsements, shall be
made available for inspection by Lender upon request. If Borrower fails to
obtain or maintain Policies and coverages as required by this Section 6.1.1,
then Lender shall have the right, following written notice to Borrower, but
shall not have the obligation immediately to procure any such Policies and
coverages at Borrower’s cost.

 

(e)          Borrower shall be required during the term of the Loan to continue
to provide Lender with original renewal Policies or replacements of the Policies
referenced in Section 6.1.1(a). Lender may accept Certificates of Insurance, if
satisfactory to Lender, evidencing Policies referenced in this Section 6.1.1
instead of requiring the actual Policies. Lender shall be provided with renewal
Certificates of Insurance, or Binders, prior to each expiration. The failure of
Borrower to maintain the insurance required under this Article VI shall not
constitute a waiver of Borrower’s obligation to fulfill these requirements.

 

(f)          All binders, Policies, endorsements, certificates, and cancellation
notices are to be sent to the Lender’s Address for Insurance Notification until
changed by notice from Lender.

 

(g)          If any Policy referred to in this Section 6.1.1 is written on a
blanket basis, a list of locations and their insurable values shall be provided,
as required by Lender. If the Property is located in an area for potential
catastrophic loss Borrower shall provide Lender with a Natural Hazard Loss
Analysis Report on an annual basis. This report is to be completed by a
recognized risk modeling company (e.g. RMS, EQE, AIR) approved by Lender.

 

6.1.2     Adjustment of Claims. Borrower hereby authorizes and empowers Lender
to settle, adjust or compromise any claims for damage to, or loss or destruction
of, all or a portion of the Property, regardless of whether there are Insurance
Proceeds available or whether any such Insurance Proceeds are sufficient in
amount to fully compensate for such damage, loss or destruction.

 

6.1.3     Assignment to Lender. The provisions of Section 3.2 of the Security
Instrument are hereby incorporated by reference into this Agreement to the same
extent and with the same force as if fully set forth herein.

 

 30LOAN AGREEMENT

 

 

Section 6.2    Casualty and Condemnation.

 

6.2.1     Casualty.

 

(a)          Borrower shall give prompt written notice of any casualty to the
Property to Lender whether or not required to be insured against. The notice
shall describe the nature and cause of the casualty and the extent of the damage
to the Property. Borrower covenants and agrees to commence and diligently pursue
to completion the Restoration.

 

(b)          Borrower assigns to Lender all Insurance Proceeds which Borrower is
entitled to receive in connection with a casualty whether or not such insurance
is required under this Agreement; provided that, if the cost of the repair,
restoration and rebuilding of any portion of the Property that has been
partially damaged or destroyed (the “Restoration”) does not exceed the Casualty
Threshold, as reasonably determined by Lender, and there is then no existing
Event of Default, Borrower shall be permitted to collect the Insurance Proceeds
for such claim and shall complete the Restoration in full compliance with all
Requirements to the same condition, character and general utility as nearly as
possible to that existing prior to the casualty and at least equal in value as
that existing prior to the casualty; and provided further that, if the cost of
the Restoration exceeds the Casualty Threshold, as reasonably determined by
Lender, and (1) an Event of Default does not currently exist, and (2) Lender has
determined that (i) there has not been an Impairment of the Security, and
(ii) the Restoration can be accomplished in full compliance with all
Requirements to the same condition, character and general utility as nearly as
possible to that existing prior to the casualty and at least equal in value as
that existing prior to the casualty, the Net Insurance Proceeds shall be applied
to the cost of Restoration in accordance with the terms of this Article VI.
Lender shall hold and disburse the Net Insurance Proceeds to the Restoration.

 

(c)          If the Net Insurance Proceeds are to be used for the Restoration in
accordance with this Article VI, Borrower shall comply with Lender’s
Requirements For Restoration as set forth in Section 6.2.3. Upon Borrower’s
satisfaction and completion of the Requirements For Restoration and upon
confirmation that there is no Event of Default then existing, Lender shall pay
any remaining Restoration Funds then held by Lender to Borrower.

 

(d)          In the event that the conditions for Restoration set forth in this
Section 6.2.1 have not been met, Lender may, at its option, apply the Net
Insurance Proceeds to the reduction of the Secured Indebtedness in such order as
Lender may determine and Lender may declare the entire Secured Indebtedness
immediately due and payable. After payment in full of the Secured Indebtedness,
any remaining Restoration Funds shall be paid to Borrower.

 

6.2.2     Condemnation.

 

(a)          If the Property or any part of the Property is taken by reason of
any Condemnation, Lender shall be entitled to all Condemnation Proceeds. At its
option, Lender shall be entitled to commence, appear in and prosecute in its own
name any action or proceeding or to make any compromise or settlement in
connection with such Condemnation. Borrower hereby irrevocably constitutes and
appoints Lender as its attorney-in-fact, which appointment is coupled with an
interest, to commence, appear in and prosecute any action or proceeding or to
make any compromise or settlement in connection with any such Condemnation.

 

 31LOAN AGREEMENT

 

 

(b)          Borrower assigns to Lender all Condemnation Proceeds which Borrower
is entitled to receive. In the event of any Condemnation, and provided (1) an
Event of Default does not currently exist, and (2) Lender has determined that
(i) there has not been an Impairment of the Security, and (ii) the Restoration
of any portion of the Property that has not been taken can be accomplished in
full compliance with all Requirements to the same condition, character and
general utility as nearly as possible to that existing prior to the taking and
at least equal in value as that existing prior to the taking, then Borrower
shall commence and diligently pursue to completion the Restoration. Lender shall
hold and disburse the Net Condemnation Proceeds to the Restoration.

 

(c)          In the event the Net Condemnation Proceeds are to be used for the
Restoration, Borrower shall comply with Lender’s Requirements For Restoration as
set forth in Section 6.2.3. Upon Borrower’s satisfaction and completion of the
Requirements For Restoration and upon confirmation that there is no Event of
Default then existing, Lender shall pay any remaining Restoration Funds then
held by Lender to Borrower.

 

(d)          In the event that the conditions for Restoration set forth in this
Section 6.2.2 have not been met, Lender may, at its option, apply the Net
Condemnation Proceeds to the reduction of the Secured Indebtedness in such order
as Lender may determine and Lender may declare the entire Secured Indebtedness
immediately due and payable. After payment in full of the Secured Indebtedness,
any remaining Restoration Funds shall be paid to Borrower.

 

6.2.3     Requirements For Restoration. Unless otherwise expressly agreed in a
writing signed by Lender, the following are the “Requirements For Restoration”:

 

(a)          If the Net Insurance Proceeds or Net Condemnation Proceeds are to
be used for the Restoration, prior to the commencement of any Restoration work
(the “Work”), Borrower shall provide Lender for its review and written approval
(i) complete plans and specifications for the Work which (A) have been approved
by all required Governmental Authorities, (B) have been approved by an architect
satisfactory to Lender (the “Architect”) and (C) are accompanied by Architect’s
signed statement of the total estimated cost of the Work (the “Approved Plans
and Specifications”); (ii) the amount of money which Lender reasonably
determines will be sufficient when added to the Net Insurance Proceeds or Net
Condemnation Proceeds to pay the entire cost of the Restoration (collectively
referred to as the “Restoration Funds”); (iii) evidence that the Approved Plans
and Specifications and the Work are in compliance with all Requirements; (iv) an
executed contract for construction with a contractor satisfactory to Lender (the
“Contractor”) in a form approved by Lender in writing; and (v) a surety bond
and/or guarantee of payment with respect to the completion of the Work. The bond
or guarantee shall be satisfactory to Lender in form and amount and shall be
signed by a surety or other entities who are acceptable to Lender.

 

(b)          Borrower shall not commence the Work, other than temporary work to
protect the Property or prevent interference with business, until Borrower shall
have complied with the requirements of subsection (a) of this Section 6.2.3. So
long as there does not currently exist an Event of Default and the following
conditions have been complied with or, in Lender’s discretion, waived, Lender
shall disburse the Restoration Funds in increments to Borrower, from time to
time as the Work progresses:

 

(i)          Architect shall be in charge of the Work.

 

 32LOAN AGREEMENT

 

 

(ii)         Lender shall disburse the Restoration Funds directly or through
escrow with a title company selected by Borrower and approved by Lender, upon
not less than ten (10) days’ prior written notice from Borrower to Lender and
Borrower’s delivery to Lender of (A) Borrower’s written request for payment (a
“Request for Payment”) accompanied by a certificate by Architect, certified to
the Certification Parties, in a form satisfactory to Lender which states that
(a) all of the Work completed to that date has been completed in compliance with
the Approved Plans and Specifications and in accordance with all Requirements,
(b) the amount requested has been paid or is then due and payable and is
properly a part of the cost of the Work, and (c) when added to all sums
previously paid by Lender, the requested amount does not exceed the value of the
Work completed to the date of such certificate; and (B) evidence satisfactory to
Lender that the balance of the Restoration Funds remaining after making the
payments shall be sufficient to pay the balance of the cost of the Work. Each
Request for Payment shall be accompanied by (x) waivers of liens covering that
part of the Work previously paid for, if any, (y) a title search or by other
evidence satisfactory to Lender that no mechanic’s or materialmen’s liens or
other similar liens for labor or materials supplied in connection with the Work
have been filed against the Property and not discharged of record, and (z) an
endorsement to the Title Insurance Policy insuring that no encumbrance exists on
or affects the Property other than the Permitted Exceptions.

 

(iii)        The final Request for Payment shall be accompanied by (i) a final
certificate of occupancy or other evidence of approval of appropriate
Governmental Authorities for the use and occupancy of the Improvements,
(ii) evidence that the Restoration has been completed in accordance with the
Approved Plans and Specifications and all Requirements, (iii) evidence that the
costs of the Restoration have been paid in full, and (iv) evidence that no
mechanic’s or similar liens for labor or material supplied in connection with
the Restoration are outstanding against the Property, including final waivers of
liens covering all of the Work and an endorsement to the Title Insurance Policy
insuring that no encumbrance exists on or affects the Property other than the
Permitted Exceptions.

 

(c)          If (i) within sixty (60) days after the occurrence of any damage,
destruction or Condemnation requiring Restoration, Borrower fails to submit to
Lender and receive Lender’s approval of plans and specifications or fails to
deposit with Lender the additional amount necessary to accomplish the
Restoration as provided in subparagraph (a) above, or (ii) after such plans and
specifications are approved by all such Governmental Authorities and Lender,
Borrower fails to commence promptly or diligently continue to completion the
Restoration, or (iii) Borrower becomes delinquent in payment to mechanics,
materialmen or others for the costs incurred in connection with the Restoration,
or (iv) there exists an Event of Default, then, in addition to all of the rights
herein set forth and after ten (10) days’ written notice of the non-fulfillment
of one or more of these conditions, Lender may apply the Restoration Funds to
reduce the Secured Indebtedness in such order as Lender may determine, and at
Lender’s option and in its sole discretion, Lender may declare the Secured
Indebtedness immediately due and payable together with the Prepayment Fee.

 

VII.         PROPERTY MANAGEMENT

 

Section 7.1    The Management Agreement. Borrower shall cause Manager to manage
the Property in accordance with the Management Agreement. Borrower shall (i)
diligently perform and observe all of the terms, covenants and conditions of the
Management Agreement on the part of Borrower to be performed and observed, (ii)
promptly notify Lender of any notice to Borrower of any default by Borrower in
the performance or observance of any of the terms, covenants or conditions of
the Management Agreement on the part of Borrower to be performed and observed,
and (iii) promptly deliver to Lender a copy of each financial statement,
business plan, capital expenditures plan, report and estimate received by it
under the Management Agreement. If Borrower defaults in the performance or
observance of any material term, covenant or condition of the Management
Agreement on the part of Borrower to be performed or observed, then, without
limiting Lender’s other rights or remedies under this Agreement or the other
Loan Documents, the Environmental Indemnity or the Guaranty, if any, and without
waiving or releasing Borrower from any of its obligations hereunder or under the
Management Agreement, Lender shall have the right after ten (10) days written
notice to Borrower, but shall be under no obligation, to pay any sums and to
perform any act as may be appropriate to cause all the material terms, covenants
and conditions of the Management Agreement on the part of Borrower to be
performed or observed.

 

 33LOAN AGREEMENT

 

 

Section 7.2   Prohibition Against Termination or Modification. Except with
regard to applicable automatic renewals as set forth in such Management
Agreement in effect as of the date hereof and provided no other modifications
are made in connection therewith, Borrower shall not surrender, terminate,
cancel, amend, modify, supplement, replace, renew or extend the Management
Agreement, or enter into any other agreement relating to the management or
operation of the Property with Manager or any other Person, or consent to the
assignment by the Manager of its interest under the Management Agreement, in
each case without the express consent of Lender (such consent not to be
unreasonably withheld). If at any time Lender consents to the appointment of a
new manager, such manager and Borrower shall, as a condition of Lender’s
consent, execute an assignment and subordination of management agreement in the
form then used by Lender.

 

Section 7.3   Replacement of Manager. Lender shall have the right, in its sole
discretion, to require Borrower to replace the Manager upon prior notice with a
Person reasonably approved by Lender upon the occurrence of any one or more of
the following events: (i) at any time following the occurrence and continuance
of an Event of Default and/or (ii) if Manager is in default of any material
provision under the Management Agreement beyond any applicable notice and cure
period or if at any time the Manager has engaged in gross negligence, fraud or
willful misconduct.

 

VIII.         CHANGE IN OWNERSHIP, PROHIBITION ON ADDITIONAL FINANCING AND
ADDITIONAL OBLIGATIONS

 

Section 8.1   Permitted Transfers of Interest in Borrower. Except as expressly
permitted herein, Borrower shall not cause or permit: (i) any part of the
Property or any direct or indirect interest in the Property, to be conveyed,
transferred, assigned, encumbered, sold or otherwise disposed of; or (ii) any
transfer, assignment or conveyance of any direct or indirect interest in
Borrower or its partners, stockholders, shareholders, members, beneficiaries, or
any of Borrower’s direct or indirect constituents or (iii) any merger,
reorganization, dissolution or other change in the ownership structure of
Borrower or any of the direct or indirect general partners or members of
Borrower, including, without limitation, any conversion of Borrower or any
direct or indirect general partner or member of Borrower to a limited
partnership, a limited liability partnership or a limited liability company
(collectively, a “Transfer” or “Transfers”).

 

The above prohibitions on Transfers shall not be applicable to (i) Ordinary
Course Transfers of ownership interests in Liable Party and Bluerock Residential
Holdings, LP, its operating partnership (“BR Operating Partnership”), so long as
Liable Party is traded on a U.S. national securities exchange and remains the
sole general partner of BR Operating Partnership; (ii) any Transfer by Carroll
Co-Invest IV Roswell, LLC, a Georgia limited liability company (the “Carroll
Member”), of up to one hundred percent (100%) of its ownership interest as of
the date hereof in BR Hawthorne Springhouse JV, LLC, a Delaware limited
liability company (the “Sole Member”), to an affiliate of MPC Partnership
Holdings LLC, a Georgia limited liability company (the “Carroll Parent”), so
long as at least either M. Patrick Carroll and/or Josh Champion (collectively or
individually) remains actively involved in the operation and management of such
transferee (the “Carroll Transferee”), the Carroll Member (to the extent that it
continues to hold, or control, any ownership interest in the Sole Member), and
the Carroll Parent and so long as satisfactory evidence is provided to Lender
confirming the status of such Carroll Transferee; (iii) Transfers as a result of
the death of a natural person; and/or (iv) Transfers in connection with estate
planning by a natural person to a spouse, son or daughter or descendant of
either, a stepson or stepdaughter or descendant of either.

 

Notwithstanding the foregoing, subject to the General Transfer Requirements, the
Transfers as described in each of the following clauses (i) through (iii) may
occur without the prior written approval of Lender (in each case, a “Permitted
Transfer”):

 

 34LOAN AGREEMENT

 

 

(i)          relating to the sale of a majority (or all) of the outstanding
shares (or partnership interests) of Liable Party or BR Operating Partnership,
or a merger, combination or “roll-up” of Liable Party or BR Operating
Partnership into a partnership, limited liability company or other entity or
participation in an UPREIT transaction, DOWNREIT transaction or similar
transaction with a real estate investment trust or other entity, with the
surviving entity having a net worth and liquidity that equals or exceeds that
which existed as of the date hereof and is advised by a manager that is
regularly engaged, directly or indirectly, in the business of making or owning
commercial real estate loans or operating commercial real estate properties in
the United States that is reasonably acceptable to Lender;

 

(ii)         by and among Borrower’s Affiliates, provided that Liable Party,
directly or indirectly, individually or jointly, Controls the management,
operations, business and affairs of Borrower following such Transfer (the “BR
Control Conditions”); and/or

 

(iii)        by the Carroll Member to BR Springhouse Managing Member, LLC, a
Delaware limited liability company, of membership interests in the Sole Member,
provided the BR Control Conditions remain satisfied.

 

Each Permitted Transfer shall further be subject to the following conditions:
(i) there shall be no Event of Default under the Loan Documents, the Guaranty or
the Environmental Indemnity that remains uncured beyond any applicable notice
and cure period (unless such default shall be cured in connection with the
Permitted Transfer); (ii) after giving effect to the Permitted Transfer, the
entity that comprises Borrower shall continue to be able to make the
representations and warranties set forth in Article IV hereof, and Borrower
shall furnish to Lender such information as Lender requests in order for Lender
to conduct due diligence, satisfactory to Lender, with respect to Section 4.1.5
and Section 4.1.29; (iii) Lender receives written notice thereof not later than
thirty (30) days prior to such contemplated Permitted Transfer; (iv) Lender has
reviewed and approved the Transfer documents and received organizational charts
reflecting the structure of Borrower prior to and after the Transfer and copies
of the then-current organizational documents of Borrower, including any
amendments; (v) Borrower pays or reimburses Lender, upon demand, for all of
Lender’s out-of-pocket costs (including reasonable attorneys’ fees) incurred in
reviewing the Transfer request; (vi) neither transferee nor any partner,
beneficiary, member, shareholder, stockholder, director or officer of transferee
is an affiliate of the MetLife Parties, is receiving asset management services
from the MetLife Parties or any affiliate of any of the MetLife Parties, and
none of the collateral for the Loan herein is owned wholly or partially by any
of the MetLife Parties or any affiliate of any of the MetLife Parties nor is any
of the MetLife Parties or any affiliate of any of the MetLife Parties providing
asset management services for such collateral; and (vii) Liable Party shall have
reaffirmed its status as “Guarantor” under the Guaranty and as an “Indemnitor”
under the Environmental Indemnity (or Liable Party shall have been replaced in
connection with the applicable Permitted Transfer with a Person meeting the
reasonable underwriting requirements of the MetLife Parties and having equal or
greater net worth and liquidity as Liable Party as of the date hereof, in which
case Liable Party shall be released from liability under the Guaranty and the
Environmental Indemnity arising from and after the Transfer and such replacement
Person shall confirm its status as “Guarantor” under the Guaranty and an
“Indemnitor” under the Environmental Indemnity) (the foregoing conditions in
clauses (i) through (vii), inclusive, shall constitute and be referred to
collectively as the “General Transfer Requirements”).

 

 35LOAN AGREEMENT

 

 

Any Transfer pursuant to and in accordance with the provisions set forth above
in this Section 8.1 will not relieve Borrower of its obligations under this
Agreement, the Note or any other Loan Document or the Environmental Indemnity,
or Liable Party of its obligations under the Guaranty, the Environmental
Indemnity, or under the Loan Documents to the extent applicable (unless Liable
Party shall have been replaced in connection with the applicable Permitted
Transfer with a Person meeting the reasonable underwriting requirements of the
MetLife Parties and having equal or greater net worth and liquidity as Liable
Party as of the date hereof, in which case Liable Party shall be released from
liability under the Guaranty and the Environmental Indemnity arising from and
after the Transfer).

 

In addition to the rights to Transfer set forth above, Borrower shall have a
one-time right to transfer the Property (the “One-Time Property Transfer”),
subject to the following conditions: (i) there being no Event of Default under
the Loan Documents, the Environmental Indemnity or the Guaranty at the time of
such One-Time Property Transfer; (ii) Lender’s approval of transferee; (iii) 
transferee shall be able to make the representations set forth in Article IV
hereof, including, without limitation, the representations set forth in Section
4.1.5 hereof; (iv) the cash flow, in the reasonable opinion of Lender, derived
from the Property shall be no less than 2.0 times the annual payments required
under the Loan during the period prior to the Principal and Interest Installment
Date and 1.5 times the annual payments required under the Loan during the period
from and after the Principal and Interest Installment Date; (v) the LTV at the
time of the One-Time Property Transfer shall not be greater than sixty-two
percent (62%); (vi) Borrower or transferee shall pay a fee equal to one percent
(1%) of the outstanding principal balance of the Note at the time of the
One-Time Property Transfer and assumption, together with a non-refundable
processing fee in the amount of $10,000; (vii)  transferee shall expressly
assume the Loan Documents and the Environmental Indemnity in a manner
satisfactory to Lender and an additional Liable Party acceptable to Lender shall
execute the Guaranty and the Environmental Indemnity with respect to events
arising or occurring from and after the date of the One-Time Property Transfer,
which additional Liable Party shall have (in the aggregate if more than one) a
net worth of not less than $150,000,000; (viii) transferee must have a net worth
not less than $25,000,000 as shown on a proforma balance sheet reflecting
transferee’s acquisition of the Property; (ix) transferee or sponsor must be of
institutional quality (e.g., an entity sponsored by a public real estate
investment trust, pension fund, insurance company, bank, private equity fund, or
similar fund or institution, or a high net worth individual controlled entity
active with institutional-quality properties, or an investment manager acting on
behalf of one or more of the foregoing) with assets under management of a least
$100 million and experienced in the ownership, management and leasing of
institutional properties similar to the Property; (x) Borrower or transferee
shall pay all costs and expenses incurred by Lender in connection with the
One-Time Property Transfer and assumption, including title insurance premiums,
documentation costs and reasonable attorneys’ fees; (xi) if the Loan has been
securitized, Lender shall have received confirmation that the assumption of the
Loan by transferee will not result in an adverse change in the rating of the
Securities by the Rating Agency; (xii) no One-Time Property Transfer shall
release Borrower or Liable Party from their respective obligations under the
Loan Documents, the Environmental Indemnity or the Guaranty with respect to
events arising or occurring prior to the date of such One-Time Property Transfer
(although such parties shall be released from liability for events first arising
or accruing from and after the date of such One-Time Property Transfer); and
(xiii) neither transferee nor any partner, beneficiary, member, shareholder,
stockholder, director or officer of transferee is an affiliate of the MetLife
Parties, is receiving asset management services from the MetLife Parties or any
affiliate of any of the MetLife Parties, and none of the collateral for the Loan
is owned wholly or partially by any of the MetLife Parties or any affiliate of
any of the MetLife Parties nor are any of the MetLife Parties or any affiliate
of any of the MetLife Parties providing asset management services for such
collateral. In the event that the proposed One-Time Property Transfer does not
satisfy all of the conditions set forth in clauses (i) through (xi), such
One-Time Property Transfer shall nevertheless be permitted, subject to Lender’s
approval of any such deviations.

 

Borrower shall pay all costs and expenses, including reasonable attorneys’ fees
and disbursements incurred by Lender in connection with any Transfer.

 

 36LOAN AGREEMENT

 

 

Section 8.2    Prohibition on Additional Financing. Borrower shall not incur or
permit the incurring of: (i) any financing in addition to the Loan that is
secured by a lien, security interest or other encumbrance of any part of the
Property (including any loan or financing which is repaid by assessments or
other taxes related to the Property including, without limitation, any
Property-Assessed Clean Energy loan) or (ii) any pledge or encumbrance of a
partnership, member or shareholder or beneficial interest or other direct or
indirect interest in Borrower (collectively “Secondary Financing”).
Notwithstanding the foregoing, Liable Party shall be permitted to maintain a
line of credit facility so long as any exercise of any remedies thereunder would
not result in a Transfer in violation of the terms hereof.

 

Section 8.3   Restrictions on Additional Obligations. During the term of the
Loan, Borrower shall not, without the prior written consent of Lender, become
liable with respect to any indebtedness or other obligation except for (i) the
Loan, (ii) Leases entered into in the ordinary course of owning and operating
the Property for the Use, (iii) other liabilities incurred in the ordinary
course of owning and operating the Property for the Use but excluding any loans
or borrowings, (iv) liabilities or indebtedness disclosed in writing to and
approved by Lender on or before the Execution Date, and (v) any other single
item of indebtedness or liability which does not exceed $100,000.00 or, when
aggregated with other items of indebtedness or liability, does not exceed
$200,000.00 (collectively, the “Permitted Indebtedness”).

 

Section 8.4    Statements Regarding Ownership. Borrower agrees to submit or
cause to be submitted to Lender within thirty (30) days after December 31st of
each calendar year during the term of the Loan and ten (10) days after any
written request by Lender, a sworn, notarized certificate, certified to the
Certification Parties, signed by an authorized (i) individual who is Borrower or
one of the individuals comprising Borrower, (ii) member of Borrower, (iii)
partner of Borrower or (iv) officer of Borrower, as the case may be, stating
whether (x) any part of the Property, or any interest in the Property, has been
conveyed, transferred, assigned, encumbered, or sold, and if so, to whom; (y)
any conveyance, transfer, pledge or encumbrance of any interest in Borrower has
been made and if so, to whom; or (z) there has been any change in the
individual(s) comprising Borrower or Borrower’s Constituents from those on the
Execution Date, and if so, a description of such change or changes.

 

IX.          ENVIRONMENTAL HAZARDS

 

Section 9.1   Representations and Warranties. Borrower hereby represents,
warrants, covenants and agrees to and with Lender that, except as otherwise
described in the environmental reports described on Schedule 9.1 attached hereto
(collectively, the “Environmental Reports”), (i) neither Borrower nor, to the
best of Borrower’s knowledge, after due inquiry, any Tenant, subtenant or
occupant of the Property, has at any time placed, suffered or permitted the
presence of any Hazardous Materials at, on, under, within or about the Property
except (x) as expressly approved by Lender in writing, or (y) de minimus amounts
of Hazardous Materials used or stored at the Property by Borrower or any Tenant
in the ordinary course which do not violate any Requirements of Environmental
Laws, and (ii) all operations or activities upon the Property, and any use or
occupancy of the Property by Borrower are presently and shall in the future be
in compliance with all Requirements of Environmental Laws, (iii) Borrower will
use best efforts to ensure that any Tenant, subtenant or occupant of the
Property shall in the future be in compliance with all Requirements of
Environmental Laws, (iv) all operations or activities upon the Property are
presently and shall in the future be in compliance with all Requirements of
Environmental Laws, (v) Borrower does not know of, and has not received, any
written or oral notice of other communication from any person or entity
(including, without limitation, a governmental entity) relating to Hazardous
Materials or Remedial Work pertaining thereto, of possible liability of any
person or entity pursuant to any Requirements of Environmental Laws, other
environmental conditions in connection with the Property, or any actual
administrative or judicial proceedings in connection with any of the foregoing,
(vi) Borrower shall not do or allow any Tenant or other user of the Property to
do any act that materially increases the dangers to human health or the
environment, poses an unreasonable risk of harm to any person or entity (whether
on or off the Property), impairs or may impair the value of the Property, is
contrary to any requirement of any insurer, constitutes a public or private
nuisance, constitutes waste, or violates any covenant, condition, agreement or
easement applicable to the Property, and (vii) Borrower has truthfully and fully
provided to Lender, in writing, any and all information relating to
environmental conditions in, on, under or from the Property that is known to
Borrower and that is contained in Borrower’s files and records, including,
without limitation, any reports relating to Hazardous Materials in, on, under or
from the Property and/or to the environmental condition of the Property.

 

 37LOAN AGREEMENT

 

 

Section 9.2   Remedial Work. In the event any Remedial Work is required under
any Requirements of Environmental Laws, Borrower shall perform or cause to be
performed the Remedial Work in compliance with the applicable law, regulation,
order or agreement; provided, however, that Borrower shall not be obligated to
undertake any Remedial Work with respect to the Existing Contamination except as
required pursuant to Section 21 of the Environmental Indemnity or as otherwise
required in order to be in compliance with all Requirements of Environmental
Laws. All Remedial Work shall be performed by one or more contractors, selected
by Borrower and approved in advance in writing by Lender, and under the
supervision of a consulting engineer, selected by Borrower and approved in
advance in writing by Lender. All costs and expenses of Remedial Work shall be
paid by Borrower including, without limitation, the charges of the contractor(s)
and/or the consulting engineer, and Lender’s reasonable attorneys’, architects’
and/or consultants’ fees and costs incurred in connection with monitoring or
review of the Remedial Work. In the event Borrower shall fail to timely
commence, or cause to be commenced, or fail to diligently prosecute to
completion, the Remedial Work, Lender may, but shall not be required to, cause
such Remedial Work to be performed, subject to the provisions of Section 7.5,
Section 7.6 and Section 7.7 of the Security Instrument.

 

Section 9.3    Environmental Site Assessment. Lender shall have the right, at
any time and from time to time, to undertake, at the expense of Borrower, an
environmental site assessment on the Property, including any testing that Lender
may determine, in its sole discretion, is necessary or desirable to ascertain
the environmental condition of the Property and the compliance of the Property
with Requirements of Environmental Laws; provided, however, that unless an Event
of Default has occurred and/or Lender has a reasonable expectation that there
has been an exposure to, introduction of, or release of Hazardous Materials or a
violation of any Requirements of Environmental Law, Lender shall not have the
right to undertake at the expense of Borrower such environmental site assessment
on the Property more frequently than every twelve (12) months. Borrower shall
cooperate fully with Lender and its consultants performing such assessments and
tests.

 

Section 9.4   Unsecured Obligations. No amounts which may become owing by
Borrower to Lender under this Article IX or under any other provision of this
Agreement as a result of a breach of or violation of this Article IX shall be
secured by the Security Instrument. The obligations shall continue in full force
and effect and any breach of this Article IX shall constitute an Event of
Default. The security title conveyed by the Security Instrument shall not secure
(i) any Unsecured Obligations, or (ii) any other obligations to the extent that
they are the same or have the same effect as any of the Unsecured Obligations.
The Unsecured Obligations shall continue in full force, and any breach or
default of any such obligations shall constitute a breach or default under this
Agreement but the proceeds of any foreclosure sale shall not be applied against
Unsecured Obligations. Subject to Section 12.20, nothing in this Section shall
in any way limit or otherwise affect the right of Lender to obtain a judgment in
accordance with applicable law for any deficiency in recovery of all obligations
that are secured by the Security Instrument following foreclosure,
notwithstanding that the deficiency judgment may result from diminution in the
value of the Property by reason of any event or occurrence pertaining to
Hazardous Materials or any Requirements of Environmental Laws.

 

 38LOAN AGREEMENT

 

 

X.           PARTICIPATION AND SALE OF LOAN

 

Section 10.1 Sale of Loan/Participation. Lender may sell, transfer or assign all
or any portion of its interest or one or more participation interests in the
Loan, the Loan Documents, the Guaranty, if any, and the Environmental Indemnity
at any time and from time to time, including, without limitation, its rights and
obligations as servicer of the Loan. Lender may issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in the Loan in
a rated or unrated public offering or private placement, including depositing
the Loan Documents, the Guaranty, if any, and the Environmental Indemnity with a
trust that may issue securities (the “Securities”). Lender may forward to each
purchaser, transferee, assignee, servicer, participant, investor or prospective
investor in such Securities (collectively, the “Investor”) and any Rating Agency
rating or assigning value to such Securities, all documents and information
which Lender now has or may hereafter acquire relating to the Loan and to
Borrower or any Liable Party and the Property, whether furnished by Borrower,
any Liable Party or otherwise, as Lender determines necessary or desirable. No
such sale, transfer, assignment, participation or securitization by Lender shall
increase in any material respect Borrower’s costs or obligations or reduce
Borrower’s rights in connection with the Loan. Borrower and Liable Party shall
provide an estoppel certificate or any other documents to the Investor or the
Rating Agency as may be reasonably requested by Lender, provided such
requirements do not unreasonably exceed Borrower’s reporting obligations under
the Loan Documents.

 

Section 10.2 Splitting of the Mortgage. The provisions of Section 5.2 of the
Security Instrument are hereby incorporated by reference into this Agreement to
the same extent and with the same force as if fully set forth herein.

 

Section 10.3 Cooperation. Borrower will cooperate with Lender and the Rating
Agencies in furnishing such information and providing such other assistance,
reports and legal opinions as Lender may request in connection with any such
transaction. In addition, Borrower acknowledges that Lender may release or
disclose to potential purchasers or transferees of the Loan, or potential
participants in the Loan, originals or copies of the Loan Documents, the
Guaranty, if any, the Environmental Indemnity, title information, engineering
reports, financial statements, operating statements, appraisals, Leases, rent
rolls, and all other materials, documents and information in Lender’s possession
or which Lender is entitled to receive under the Loan Documents, the Guaranty,
if any, and the Environmental Indemnity with respect to the Loan, Borrower, any
Liable Party or the Property. Borrower shall also furnish to such Investors or
such Rating Agency any and all information concerning the Property, the Leases,
the financial condition of Borrower or any Liable Party as may be requested by
Lender, any Investor or any Rating Agency in connection with any sale, transfer
or participation interest. Notwithstanding the foregoing, Lender shall be
responsible for all fees Lender incurs in connection with any such transaction.

 

XI.          DEFAULTS

 

Section 11.1  Event of Default.

 

Any of the following shall be deemed to be a material breach of Borrower’s
covenants in this Agreement and shall constitute a default (“Event of Default”):

 

(a)          The failure of Borrower to pay any installment of principal,
interest or principal and interest, any required escrow deposit or any other sum
required to be paid under any Loan Document, whether to Lender or otherwise,
within seven (7) days of the due date of such payment;

 

(b)          The failure of Borrower to perform or observe any other term,
provision, covenant, condition or agreement under any Loan Document for a period
of more than thirty (30) days after receipt of notice of such failure, which
such thirty (30) day period shall be extended as necessary as long as Borrower
is attempting in good faith to cure such failure but in no event longer than
sixty (60) days from the date of receipt of notice of such failure;

 

 39LOAN AGREEMENT

 

 

(c)          The filing by Borrower or any Liable Party (an “Insolvent Entity”)
of a voluntary petition or application for relief in bankruptcy, the filing
(other than by Lender) against an Insolvent Entity of an involuntary petition or
application for relief in bankruptcy that is not dismissed within sixty (60)
days, or an Insolvent Entity’s adjudication as a bankrupt or insolvent, or the
filing by an Insolvent Entity of any petition, application for relief or answer
seeking or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under any
present or future federal, state or other statute, law, code or regulation
relating to bankruptcy, insolvency or other relief for debtors, or an Insolvent
Entity’s seeking or consenting to or acquiescing in the appointment of any
trustee, custodian, conservator, receiver or liquidator of an Insolvent Entity
or of all or any substantial part of the Property or of any or all of the Rents
and Profits, or the making by an Insolvent Entity of any general assignment for
the benefit of creditors, or the admission in writing by an Insolvent Entity of
its inability to pay its debts generally as they become due;

 

(d)          If any warranty, representation, certification, financial statement
or other information made or furnished at any time pursuant to the terms of the
Loan Documents, the Guaranty, if any, or the Environmental Indemnity by Borrower
or by any Liable Party is materially false or misleading;

 

(e)          If Borrower suffers or permits the Property, or any part of the
Property, to be used in a manner that might (1) impair Borrower’s title to the
Property, (2) create rights of adverse use or possession, or (3) constitute an
implied dedication of any part of the Property; or

 

(f)           If Liable Party defaults under the Guaranty, if any, or Borrower
or Liable Party, if any, defaults under the Environmental Indemnity.

 

Section 11.2 Remedies. The provisions of Article VII of the Security Instrument
are hereby incorporated by reference into this Agreement to the same extent and
with the same force as if fully set forth herein.

 

Section 11.3 Duration of Events of Default. If any Event of Default occurs
(irrespective of whether or not the same consists of an ongoing condition, a
one-time occurrence, or otherwise), the same shall be deemed to continue at all
times thereafter; provided, however, that such Event of Default shall cease to
continue only if Lender shall accept, in writing, performance of the defaulted
obligation or shall execute and deliver a written agreement in which Lender
expressly states that such Event of Default has ceased to continue. Borrower
shall have no right to cure any Event of Default, and Lender shall not be
obligated under any circumstances whatsoever to accept such cure or performance
or to execute and deliver any such writing. Without limitation, this Section
shall govern in any case where reference is made in the Loan Documents, the
Guaranty, if any, and/or the Environmental Indemnity to (i) any “cure” (whether
by use of such word or otherwise) of any Event of Default, (ii) “during an Event
of Default,” “the continuance of an Event of Default” or “after an Event of
Default has ceased” (in each case, whether by use of such words or otherwise),
or (iii) any condition or event which continues beyond the time when the same
becomes an Event of Default.

 

 40LOAN AGREEMENT

 

 

XII.         MISCELLANEOUS

 

Section 12.1 Successors and Assigns; Terminology. This Agreement applies to
Lender, Liable Party and Borrower, and their heirs, legatees, devisees,
administrators, executors, successors and assigns. All covenants, promises and
agreements in this Agreement, by or on behalf of Borrower, shall inure to the
benefit of the legal representatives, successors and assigns of Lender. The term
“Borrower” shall include both the original Borrower and any subsequent owner or
owners of any of the Property. The term “Liable Party” shall include both the
original Liable Party, if any, and any subsequent or substituted Liable Party.
In this Agreement, whenever the context so requires, the masculine gender
includes the feminine and/or neuter, and the singular number includes the
plural.

 

Section 12.2 Lender’s Discretion. Whenever pursuant to this Agreement Lender
exercises any right given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Lender or any financial ratio is to be calculated
or determined, the decision of Lender to approve or disapprove or to decide
whether arrangements or terms are satisfactory or not satisfactory or Lender’s
calculation or determination shall (except as is otherwise expressly herein
provided) be in the sole discretion of Lender and, absent manifest error, shall
be final and conclusive.

 

Section 12.3 Governing Law. This Agreement, the Note, the other Loan Documents,
the Guaranty, if any, and the Environmental Indemnity, their construction,
interpretation, and enforcement, and the rights of Borrower and Lender, shall be
determined under, governed by, and construed in accordance with the internal
laws of the State, without regard to principles of conflicts of law.

 

Section 12.4 Modification. No modification, amendment, extension, discharge,
termination or waiver of any provision of this Agreement or of any other Loan
Document, nor consent to any departure by Borrower therefrom, shall in any event
be effective unless the same shall be in a writing signed by the party against
whom enforcement is sought, and then such waiver or consent shall be effective
only in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.

 

Section 12.5 Notices. All notices, demands and requests given or required to be
given by, pursuant to, or relating to, this Agreement shall be in writing. All
notices shall be deemed to have been properly given if mailed by United States
registered or certified mail, with return receipt requested, postage prepaid, or
by United States Express Mail or other comparable overnight courier service to
the parties at its address hereinafter set forth, or to such other address as
such party may hereafter specify in accordance with the provisions of this
Section 12.5. Any notice shall be deemed to have been received upon receipt or
refusal to accept delivery, in each case as shown on the return receipt or the
receipt of United States Express Mail or such overnight commercial courier
service.

 

If to Lender: MetLife HCMJV 1 REIT, LLC   c/o MetLife Real Estate Investors  
One Alliance Center   3500 Lenox Road NE, Suite 1800   Atlanta, GA  30326  
Attention:  Officer in Charge   Re: Roswell City Walk Apartments         And to:
MetLife HCMJV 1 REIT, LLC   c/o MetLife Real Estate Investors   One Alliance
Center   3500 Lenox Road NE, Suite 1800   Atlanta, GA  30326  
Attention:  Regional Associate General Counsel   Re: Roswell City Walk
Apartments

 

 41LOAN AGREEMENT

 

 

And to: MetLife HCMJV 1 REIT, LLC   c/o MetLife Investment Advisors, LLC   One
MetLife Way   Whippany, NJ 07981-1449   Attention:  Associate General Counsel –
MIM Unit Investments Law   Re: Roswell City Walk Apartments     If to Borrower:
BR Roswell, LLC   c/o Bluerock Real Estate, LLC   712 Fifth Avenue, 9th Floor  
New York, NY  10019   Attention:  Michael Konig and Jordan Ruddy     with a copy
to: Kaplan Voekler Cunningham & Frank PLC   1401 East Cary Street   Richmond,
Virginia 23219   Attention:  S. Edward Flanagan, Esq.

 

Section 12.6 Waiver of Jury Trial. To the fullest extent permitted by law,
Borrower and Lender HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY in any
action, proceeding and/or hearing on any matter whatsoever arising out of, or in
any way connected with, the Note, the Security Instrument or any of the other
Loan Documents, or the enforcement of any remedy under any law, statute, or
regulation. Neither party will seek to consolidate any such action in which a
jury has been waived, with any other action in which a jury trial cannot or has
not been waived. Each party has received the advice of counsel with respect to
this waiver.

 

Section 12.7 Headings. The Article and/or Section headings and the Table of
Contents in this Agreement are inserted only as a matter of convenience and for
reference, and in no way define, limit, or describe the scope or intent of any
provisions of this Agreement.

 

Section 12.8 Severability. If any provision of this Agreement should be held
unenforceable or void, then that provision shall be separated from the remaining
provisions and shall not affect the validity of this Agreement except that if
the unenforceable or void provision relates to the payment of any monetary sum,
then, Lender may, at its option, declare the Secured Indebtedness immediately
due and payable but without the payment of any Prepayment Fee.

 

Section 12.9 Preferences. Lender shall have the continuing and exclusive right
to apply or reverse and reapply any and all payments by Borrower to any portion
of the obligations of Borrower hereunder. To the extent Borrower makes a payment
or payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.

 

 42LOAN AGREEMENT

 

 

Section 12.10 Waiver of Notice. Borrower shall not be entitled to any notices of
any nature whatsoever from Lender except with respect to matters for which this
Agreement or the other Loan Documents specifically and expressly provide for the
giving of notice by Lender to Borrower and except with respect to matters for
which Borrower is not, pursuant to applicable Requirements, permitted to waive
the giving of notice. Borrower hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower.

 

Section 12.11 Remedies of Borrower. In the event that a claim or adjudication is
made that Lender or its agents have acted unreasonably or unreasonably delayed
acting in any case where, by law or under this Agreement, the other Loan
Documents or the Environmental Indemnity, Lender or such agent, as the case may
be, has an obligation to act reasonably or promptly, neither Lender nor its
agents shall be liable for any monetary damages, and Borrower’s sole remedy
shall be limited to commencing an action seeking injunctive relief or
declaratory judgment. Any action or proceeding to determine whether Lender has
acted reasonably shall be determined by an action seeking declaratory judgment.

 

Section 12.12 Expenses; Indemnity.

 

(a)          The provisions of Section 7.6 and Section 7.7 of the Security
Instrument are hereby incorporated by reference into this Agreement to the same
extent and with the same force as if fully set forth herein. Notwithstanding any
provision to the contrary contained herein or in the other Loan Documents,
Lender’s right to receive reimbursement of legal fees, attorney fees, reasonable
attorneys’ fees, or similar language shall be deemed to mean Lender’s reasonable
attorneys’ fees actually incurred and such provision shall not be subject to the
statutory presumption contained in O.C.G.A. Section 13-1-11.

 

(b)          Without limiting the effect of Section 12.12(a), Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys’ fees and costs incurred in the investigation,
defense, and settlement of 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 a default under Section 4.1.5 or Section 5.2.8 of this Agreement.

 

Section 12.13 Schedules and Exhibits Incorporated. The Schedules and Exhibits
annexed hereto are hereby incorporated herein as a part of this Agreement with
the same effect as if set forth in the body hereof.

 

Section 12.14 No Joint Venture or Partnership; No Third Party Beneficiaries.

 

(a)          Borrower and Lender intend that the relationships created hereunder
and under the other Loan Documents be solely that of borrower and lender.
Nothing herein or therein is intended to create a joint venture, partnership,
tenancy in common, or joint tenancy relationship between Borrower and Lender nor
to grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender.

 

(b)          This Agreement, the other Loan Documents and the Environmental
Indemnity are solely for the benefit of Lender and nothing contained in this
Agreement, the other Loan Documents or the Environmental Indemnity shall be
deemed to confer upon anyone other than Lender and Borrower any right to insist
upon or to enforce the performance or observance of any of the obligations
contained herein or therein. All conditions to the obligations of Lender to make
the Loan hereunder are imposed solely and exclusively for the benefit of Lender
and no other Person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that Lender
will refuse to make the Loan in the absence of strict compliance with any or all
thereof and no other Person shall under any circumstances be deemed to be a
beneficiary of such conditions, any or all of which may be freely waived in
whole or in part by Lender if, in Lender’s sole discretion, Lender deems it
advisable or desirable to do so.

 

 43LOAN AGREEMENT

 

  

Section 12.15 Publicity. All news releases, publicity or advertising by Borrower
or its affiliates through any media intended to reach the general public which
refers to the Loan Documents or the financing evidenced by the Loan Documents or
to Lender or any of its affiliates shall be subject to the prior written
approval of Lender; provided, however, Lender shall not be entitled to review or
approve any filings or any press releases that Borrower or its counsel
reasonably believe are required in order to comply with applicable laws,
including any applicable securities laws, provided that Lender and its
affiliates shall not be named in any press release without Lender’s prior
written consent.

 

Section 12.16 Waiver of Marshalling of Assets. To the fullest extent permitted
by law, Borrower, for itself and its successors and assigns, waives all rights
to a marshalling of the assets of Borrower, Borrower’s partners and others with
interests in Borrower, and of the Property, and shall not assert any right under
any laws pertaining to the marshalling of assets, the sale in inverse order of
alienation, homestead exemption, the administration of estates of decedents, or
any other matters whatsoever to defeat, reduce or affect the right of Lender
under the Loan Documents to a sale of the Property for the collection of the
Secured Indebtedness without any prior or different resort for collection or of
the right of Lender to the payment of the Secured Indebtedness out of the net
proceeds of the Property in preference to every other claimant whatsoever.

 

Section 12.17 Waiver of Offsets/Defenses/Counterclaims. Borrower hereby waives
the right to assert a counterclaim, other than a mandatory or compulsory
counterclaim, in any action or proceeding brought against it by Lender or its
agents or otherwise to offset any obligations to make the payments required by
the Loan Documents or the Environmental Indemnity. No failure by Lender to
perform any of its obligations hereunder shall be a valid defense to, or result
in any offset against, any payments which Borrower is obligated to make under
any of the Loan Documents or the Environmental Indemnity.

 

Section 12.18 Conflict; Construction of Documents; Reliance. In the event of any
conflict between the provisions of this Agreement and any of the other Loan
Documents or the Environmental Indemnity, the provisions of this Agreement shall
control. The parties hereto acknowledge that they were represented by competent
counsel in connection with the negotiation, drafting and execution of the Loan
Documents and the Environmental Indemnity and that such Loan Documents and the
Environmental Indemnity shall not be subject to the principle of construing
their meaning against the party which drafted same. Borrower acknowledges that,
with respect to the Loan, Borrower shall rely solely on its own judgment and
advisors in entering into the Loan without relying in any manner on any
statements, representations or recommendations of Lender or any parent,
subsidiary or affiliate of Lender. Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under any
of the Loan Documents, the Environmental Indemnity or any other agreements or
instruments that govern the Loan by virtue of the ownership by it or any parent,
subsidiary or affiliate of Lender of any equity interest any of them may acquire
in Borrower, and Borrower hereby irrevocably waives the right to raise any
defense or take any action on the basis of the foregoing with respect to
Lender’s exercise of any such rights or remedies. Borrower acknowledges that
Lender and its affiliates engage in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to
or competitive with the business of Borrower or its affiliates.

 

 44LOAN AGREEMENT

 

  

Section 12.19  Brokers and Financial Advisors. Borrower hereby represents that
it has dealt with no financial advisors, brokers, underwriters, placement
agents, agents or finders in connection with the transactions contemplated by
this Agreement other than CBRE Capital Markets (“Broker”), and Borrower shall be
solely responsible for payment of all commissions, finder’s fees or similar
amounts due and payable to Broker pursuant to the terms of their separate
agreement, all of which commissions, finder’s fees or similar amounts shall be
paid to Broker by Borrower on the Execution Date. Borrower shall indemnify,
defend and hold Lender and MetLife HCMJV 1, LP, and their respective affiliates,
partners and participants, and the officers, directors, agents, employees of
each of them, and the successors and assigns of each of them harmless from and
against any and all claims, liabilities, costs and expenses of any kind
(including Lender’s reasonable attorneys’ fees and disbursements) in any way
relating to or arising from a claim by any Person (including Broker) that such
Person acted on behalf of Borrower or Lender in connection with the transactions
contemplated herein. The provisions of this Section 12.19 shall survive the
expiration and termination of this Agreement and the payment of the Secured
Indebtedness. Borrower acknowledges that Lender may have been involved in other
transactions with Broker, and Borrower agrees that it shall have no rights
against Lender or defenses to Borrower’s obligations under the Loan Documents or
the Environmental Indemnity due to any such relationship.

 

Section 12.20  Exculpation. Upon the occurrence of an Event of Default, except
as provided in this Section 12.20, Lender will look solely to the Property and
the security under the Loan Documents for the repayment of the Secured
Indebtedness and will not enforce a deficiency judgment against Borrower.
However, nothing contained in this Section shall limit the rights of Lender to
proceed against Borrower and the general partners of Borrower (if any) and/or
Liable Party, if any, (i) to enforce any Leases entered into by Borrower or its
affiliates as Tenant; (ii) to recover damages actually incurred by Lender due to
fraud, material misrepresentation, material breach of warranty or intentional
physical waste committed by Borrower; (iii) to recover any Condemnation Proceeds
or Insurance Proceeds or other similar funds which have been applied by Borrower
in a manner prohibited by the Loan Documents or which, under the terms of the
Loan Documents, should have been paid to Lender; (iv) to recover any tenant
security deposits, tenant letters of credit or other deposits or fees paid to
Borrower that are part of the collateral for the Loan or prepaid rents for a
period of more than thirty (30) days which have been applied by Borrower in a
manner prohibited by the Loan Documents; (v) to recover Rents and Profits
received by Borrower after the first day of the month in which an Event of
Default occurs and prior to the date Lender acquires title to the Property which
have not been applied to the Secured Indebtedness or in accordance with the Loan
Documents to operating and maintenance expenses of the Property; (vi) to recover
damages, costs and expenses actually incurred by Lender and directly arising
from, or in connection with Article IX of this Agreement pertaining to Hazardous
Materials or the Environmental Indemnity; (vii) to recover all amounts due and
payable pursuant to Section 9 of the Note, Section 7.6 and Section 7.7 of the
Security Instrument and Section 12.12 hereof and any amount expended by Lender
in connection with the foreclosure of the Security Instrument; (viii) to recover
costs and damages arising from Borrower’s failure to pay Premiums or Impositions
in the event Borrower is not required to deposit such amounts with Lender
pursuant to Section 5.1.14(a) of this Agreement, but only to the extent adequate
Rents and Profits from the Property then exist to pay such Premiums and
Impositions (provided nothing herein shall be construed to preclude Lender from
looking to the Property and the security under the Loan Documents to recover
such costs and damages); and/or (ix) to recover damages arising from Borrower’s
failure to comply with Section 4.1.5 and/or Section 5.2.8 pertaining to ERISA.

 

The limitation of liability set forth in this Section 12.20 shall not apply and
the Loan shall be fully recourse in the event that prior to the repayment of the
Loan, Borrower commences a voluntary bankruptcy or insolvency proceeding or an
involuntary bankruptcy or insolvency proceeding is commenced against Borrower
(other than by the MetLife Parties) and is not dismissed within ninety (90) days
after Borrower obtains actual knowledge of filing. In addition, this agreement
shall not waive any rights which Lender would have under any provisions of the
Bankruptcy Code to file a claim for the full amount of the Loan or to require
that the Property shall continue to secure all of the Loan.

 

 45LOAN AGREEMENT

 

  

Notwithstanding the foregoing, the Loan shall be fully recourse to Borrower in
the event there is a Transfer or Secondary Financing except as permitted in the
Loan Documents or otherwise approved in writing by Lender.

 

Section 12.21  Prior Agreements. This Agreement, the other Loan Documents and
the Environmental Indemnity contain the entire agreement of the parties hereto
and thereto in respect of the transactions contemplated hereby and thereby, and
all prior agreements among or between such parties, whether oral or written,
including, without limitation, the loan application, are superseded by the terms
of this Agreement, the other Loan Documents and the Environmental Indemnity.

 

Section 12.22  Liability of Borrower. The obligations of Borrower under this
Agreement, the Security Instrument and the other Loan Documents are subject to
the limitations on recourse set forth in Section 12.20.

 

Section 12.23  Joint and Several Liability. If more than one Person has executed
this Agreement as “Borrower,” the representations, covenants, warranties and
obligations of all such Persons hereunder shall be joint and several.

 

Section 12.24  Counterparts. This Agreement may be executed in any number of
duplicate originals and each duplicate original shall be deemed to be an
original and all of which together shall constitute a single agreement.

 

Section 12.25  Time Of The Essence. Time shall be of the essence with respect to
all of Borrower’s obligations under this Agreement, the other Loan Documents and
the Environmental Indemnity.

 

Section 12.26  No Merger. In the event that Lender should become the owner of
the Property, there shall be no merger of the estate created by the Security
Instrument with the fee estate in the Property.

 

[NO FURTHER TEXT ON THIS PAGE]

 

 46LOAN AGREEMENT

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives, all as of the date of this
Agreement.

 

LENDER:

 

METLIFE HCMJV 1 REIT, LLC,   a Delaware limited liability company         By:
MetLife HCMJV 1, LP,     a Delaware limited partnership,     its manager  

 

  By: MetLife HCMJV 1 GP, LLC,       a Delaware limited liability company,      
its general partner  

 

  By: /s/ Thomas Ryan     Name: Thomas Ryan     Title: Director  

 

BORROWER:

 

BR ROSWELL, LLC,

a Delaware limited liability company

By: /s/ Jordan Ruddy   Name: Jordan Ruddy   Title: Authorized Signatory  

 

 Signature PageLOAN AGREEMENT

 

 

SCHEDULE 4.1.21

 

MATERIAL AGREEMENTS

 

1.Master Community and Bulk Services Agreement between Ballantyne Broadband
Partners, LLC d.b.a. Optical Communities and GGT LMI City Walk, LLC dated
September 24, 2014, as amended by Letter dated December 2, 2014 regarding Letter
Amendment 1 to Master Community and Bulk Services Agreement between Ballantyne
Broadband Partners, LLC d.b.a. Optical Communities and GGT LMI City Walk, LLC
dated September 24, 2014 and by Letter dated September 24, 2015 regarding Letter
Amendment 1 to Master Community and Bulk Services Agreement between Ballantyne
Broadband Partners, LLC d.b.a. Optical Communities and GGT LMI City Walk, LLC
dated September 24, 2014, together with Bulk Property Registration Agreement
with DirectTV and having a Submission Date of September 24, 2015 and Activation
Date of October 6, 2015, and together with Optical Communities MDU Right of
Entry Agreement for Broadband Service between Ballantyne Broadband Partners, LLC
d.b.a. Optical Communities and GGT LMI City Walk GA, LLC dated September 24,
2014, as amended by Letter dated October 15, 2014 regarding Letter Amendment 1
to the Optical Communities MDU Right of Entry Agreement for Broadband Service
between Ballantyne Broadband Partners, LLC d.b.a. Optical Communities and GGT
LMI City Walk GA, LLC dated September 24, 2014, by Letter dated December 2, 2014
regarding Letter Amendment 1 to the Optical Communities MDU Right of Entry
Agreement for Broadband Service between Ballantyne Broadband Partners, LLC
d.b.a. Optical Communities and GGT LMI City Walk GA, LLC dated September 24,
2014, and by Letter dated December 2, 2014 regarding Letter Amendment 2 to the
Optical Communities MDU Right of Entry Agreement for Broadband Service between
Ballantyne Broadband Partners, LLC d.b.a. Optical Communities and GGT LMI City
Walk GA, LLC dated September 24, 2014, and together with Optical Communities MDU
Right of Entry Agreement for Video Service between Ballantyne Broadband
Partners, LLC d.b.a. Optical Communities and GGT LMI City Walk GA, LLC dated
September 24, 2014

 

 LOAN AGREEMENT

 

 

SCHEDULE 4.1.35

 

REAs

 

Drainage Easement Agreement by and between Roswell Commons Group, L.P. and
Habitat for Humanity-North Central Georgia, Inc. and others, recorded November
18, 2013, in Deed Book 53351, Page 14, Fulton County, Georgia records.

 

 LOAN AGREEMENT

 

 

SCHEDULE 9.1

 

ENVIRONMENTAL REPORTS

 

Freddie Mac Multifamily Seller/Servicer Phase I Environmental Site Assessment,
Roswell City Walk, 3000 Forrest Walk, Roswell, Fulton County, Georgia 30075,
dated September 14, 2016, prepared by Blackstone Consulting LLC for CBRE Capital
Markets, Inc., Houston, Texas

 

Phase I Environmental Site Assessment of Roswell City Forrest Apartments, 3000
Forrest Walk, Roswell, Georgia 30075, ATC Project No. 301MET0043, dated October
14, 2016, prepared by ATC Group Services LLC

 

Prospective Purchaser Corrective Action Plan, Frazier Street Apartments, 6700
Wren Court and 188 Norcross Street, Roswell, Fulton County, Georgia, dated June
7, 2013, prepared by Terracon for Lennar Multifamily Investors, LLC and its
entity, GGT LMI City Walk GA, LLC

 

Prospective Purchaser Compliance Status Report, Frazier Street Apartments, 6700
Wren Court and 188 Norcross Street, Roswell, Fulton County, Georgia, dated
September 13, 2016, prepared by Terracon for GGT LMI City Walk GA, LLC, Atlanta,
Georgia

 

Letter from the Georgia Department of Natural Resources, Environmental
Protection Division, dated October 25, 2016 regarding Brownfield Limitation of
Liability – Frazier Street Apartments (sub-listed under HIS #10880, Dry Cleaning
Depot) 6700 Wren Street and 188 Norcross Street, Roswell, Fulton County, Georgia

 

 LOAN AGREEMENT

 

 

EXHIBIT A

 

LEGAL DESCRIPTION OF PROPERTY

 

All that tract or parcel of land lying and being in Land Lot 426 of the 1st
District, 2nd Section, City of Roswell, Fulton County Georgia and being more
particularly described as follows:

 

To Reach the TRUE POINT OF BEGINNING commence at a nail found on the northerly
mitered intersection of the northerly Right of Way of Norcross Street (Variable
R/W) and the easterly Right of Way of Frazier Street (Variable R/W); thence
running along the easterly Right of Way of Frazier Street (Variable R/W) North
01° 09' 00" East a distance of 97.50 feet to a 1/2” rebar found; thence South
87º 25' 18” East a distance of 1.98 feet to the TRUE POINT OF BEGINNING, from
point thus established and running along said Right of Way North 00° 49' 41"
East a distance of 618.33 feet to an iron pin set; thence leaving said Right of
Way South 88° 59' 39" East a distance of 572.40 feet to an iron pin set; thence
South 01° 09' 56" East a distance of 306.45 feet to a 1/2” rebar found; thence
North 82° 18' 10" East a distance of 85.64 feet to a 1/2" rebar and cap found;
thence North 86° 44' 06" East a distance of 78.09 feet to 1” open top pipe
found; thence South 06° 05' 06" West a distance of 399.71 feet to an iron pin
set on the northerly Right of Way of Norcross Street (Variable R/W); thence
running along said Right of Way the following courses: South 89° 19' 52" West a
distance of 42.30 feet to a point; thence running along a curve to the left an
arc length of 36.20 feet, (said curve having a radius of 319.00 feet, with a
chord bearing of South 86° 04' 49" West, and a chord length of 36.18 feet) to a
point; thence along a curve to the right an arc length of 61.20 feet, (said
curve having a radius of 1111.26 feet, with a chord bearing of South 84° 24' 25"
West, and a chord length of 61.19 feet) to a point; thence along a curve to the
right an arc length of 120.72 feet, (said curve having a radius of 1388.01 feet,
with a chord bearing of South 87° 43' 38" West, and a chord length of 120.68
feet) to a point; thence North 88° 28' 06" West a distance of 74.44 feet to a
point; thence running along a curve to the left an arc length of 29.61 feet,
(said curve having a radius of 16313.25 feet, with a chord bearing of North 88°
37' 21" West, and a chord length of 29.61 feet) to a point; thence North 89° 02'
19" West a distance of 91.10 feet to a point; thence running along a curve to
the left an arc length of 29.01 feet, (said curve having a radius of 219.00
feet, with a chord bearing of South 87° 10' 01" West, and a chord length of
28.99 feet) to a point; thence South 82° 44' 08" West a distance of 35.47 feet
to a point; thence leaving said Right of Way North 00° 23' 37" East a distance
of 101.05 feet to a 1/2” rebar found; thence North 86° 37' 42" West a distance
of 98.14 feet to a 1/2" rebar found; thence South 00° 26' 40" West a distance of
15.82 feet to a 1/2" rebar found; thence North 87° 25' 18" West a distance of
91.52 feet to the TRUE POINT OF BEGINNING. Said tract contains 10.280 Acres
(447,775 Square Feet).

 

TOGETHER WITH all easements appurtenant to the above described parcel as set
forth in that certain Drainage Easement Agreement dated November 14, 2013 among
Roswell Commons Group, L.P., Habitat for Humanity of North Fulton, Inc.,
Norcross Village Homeowners Association, Inc., Roswell Landings Condominium
Association, Inc. and Liberty Lofts and Townhomes Association, Inc., filed
November 18, 2013, recorded in Deed Book 53351, page 14, Fulton County, Georgia
records.

 

 LOAN AGREEMENT

 

 

EXHIBIT B

 

LEASING GUIDELINES

 

The following are the initial Leasing Guidelines:

 

(a)          All Leases entered into from and after the date hereof shall be on
a form of lease that is not materially different from the standard form of
apartment lease approved by Lender in connection with the closing of this Loan
(such approved form of Lease, the “Standard Lease Form”), with only those
modifications that do not materially and adversely affect the obligations of the
landlord;

 

(b)          All Leases shall have a maximum term of fifteen (15) months;

 

(c)          All Leases shall have an annual minimum rent payable at a market
rent for units with comparable size, location and view premiums, with
concessions not greater than generally available in units of comparable size and
location in the market area;

 

(d)          Borrower may (i) modify, amend or extend any residential Lease,
(ii) provide consents regarding subleases or assignments or other minor
deviations from the terms of any residential Lease, (iii) cancel, terminate or
accept surrender of any residential Lease, or (iv) exercise other lawful rights
and remedies with regard to any residential Lease, so long as such modification,
amendment, extension, consent, cancellation, termination, acceptance of
surrender, or exercise of rights and remedies is in the ordinary course of
business and all other provisions within the Leasing Guidelines are satisfied
(except to the extent with regard to a cancellation, termination or acceptance
of surrender); and

 

(e)          All payments of rent, additional rent or any other amounts due from
a Tenant to a landlord under any Lease shall be made in money of the United
States of America that at the time of payment shall be legal tender for the
payment of all obligations.

 

*          *          *

 

 LOAN AGREEMENT

 

 

EXHIBIT C

 

RENT ROLL

 

[SEE ATTACHED]

 

 LOAN AGREEMENT

 

 

EXHIBIT C-1

 

DELINQUENT AND PREPAID REPORT

 

[SEE ATTACHED]

 

 LOAN AGREEMENT

 

 

EXHIBIT D

 

ORGANIZATIONAL CHART

 

[SEE ATTACHED]

 

 LOAN AGREEMENT