Exhibit 10.44





 


MULTIFAMILY
LOAN AND SECURITY AGREEMENT


(NON-RECOURSE)


 


BY AND BETWEEN


 


ASPEN
2016 LLC, a

Delaware limited liability company


 


AND


 


CAPITAL
ONE MULTIFAMILY FINANCE, LLC, a

Delaware limited liability company


 


DATED AS OF


 


June 27, 2016


 





 




     


     


    

  


TABLE OF CONTENTS


 


	Article 1 - DEFINITIONS; SUMMARY OF MORTGAGE LOAN TERMS	1
	 	 	 
	Section 1.01	Defined Terms	1
	Section 1.02	Schedules, Exhibits, and Attachments Incorporated	1
	 	 	 
	Article 2 - GENERAL MORTGAGE LOAN TERMS	2
	 	 	 
	Section 2.01	Mortgage loan origination and security	2
	(a)	Making of Mortgage Loan	2
	(b)	Security for Mortgage Loan	2
	(c)	Protective Advances	2
	Section 2.02	Payments on Mortgage Loan	2
	(a)	Debt Service Payments	2
	(b)	Capitalization of Accrued But Unpaid Interest	3
	(c)	Late Charges	3
	(d)	Default Rate	4
	(e)	Address for Payments	5
	(f)	Application of Payments	5
	Section 2.03	Lockout/Prepayment	6
	(a)	Prepayment; Prepayment Lockout; Prepayment Premium	6
	(b)	Voluntary Prepayment in Full	6
	(c)	Acceleration of Mortgage Loan	7
	(d)	Application of Collateral	7
	(e)	Casualty and Condemnation	7
	(f)	No Effect on Payment Obligations	8
	(g)	Loss Resulting from Prepayment	8
	 	 	 
	Article 3 - PERSONAL LIABILITY	8
	 	 	 
	Section 3.01	Non-Recourse Mortgage Loan; Exceptions	8
	Section 3.02	Personal Liability of Borrower (Exceptions to Non-Recourse Provision)	9
	(a)	Personal Liability Based on Lender’s Loss	9
	(b)	Full Personal Liability for Mortgage Loan	10
	Section 3.03	Personal Liability for Indemnity Obligations	10
	Section 3.04	Lender’s Right to Forego Rights Against Mortgaged Property	11
	 	 	 
	Article 4 - BORROWER STATUS	11
	 	 	 
	Section 4.01	Representations and Warranties	11
	(a)	Due Organization and Qualification	11
	(b)	Location	11
	(c)	Power and Authority	12
	(d)	Due Authorization	12
	(e)	Valid and Binding Obligations	12
	(f)	Effect of Mortgage Loan on Borrower’s Financial Condition	12
	(g)	Economic Sanctions, Anti-Money Laundering, and Anti-Corruption	13
	(h)	Borrower Single Asset Status	13
	(i)	No Bankruptcies or Judgments	15
	(j)	No Actions or Litigation	15
	(k)	Payment of Taxes, Assessments, and Other Charges	15


 


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	(l)	Not a Foreign Person	16
	(m)	ERISA	16
	(n)	Default Under Other Obligations	16
	(o)	Prohibited Person	16
	(p)	No Contravention	17
	(q)	Lockbox Arrangement	17
	Section 4.02	Covenants	17
	(a)	Maintenance of Existence; Organizational Documents	17
	(b)	Economic Sanctions, Anti-Money Laundering, and Anti-Corruption	18
	(c)	Payment of Taxes, Assessments, and Other Charges	18
	(d)	Borrower Single Asset Status	18
	(e)	ERISA	20
	(f)	Notice of Litigation or Insolvency	20
	(g)	Payment of Costs, Fees, and Expenses	20
	(h)	Restrictions on Distributions	21
	(i)	Lockbox Arrangement	21
	 	 	 
	Article 5 - THE MORTGAGE LOAN	21
	 	 	 
	Section 5.01	Representations and Warranties	21
	(a)	Receipt and Review of Loan Documents	21
	(b)	No Default	22
	(c)	No Defenses	22
	(d)	Loan Document Taxes	22
	Section 5.02	Covenants	22
	(a)	Ratification of Covenants; Estoppels; Certifications	22
	(b)	Further Assurances	23
	(c)	Sale of Mortgage Loan	23
	(d)	Limitations on Further Acts of Borrower	24
	(e)	Financing Statements; Record Searches	24
	(f)	Loan Document Taxes	25
	 	 	 
	Article 6 - PROPERTY USE, PRESERVATION, AND MAINTENANCE	25
	 	 	 
	Section 6.01	Representations and Warranties	25
	(a)	Compliance with Law; Permits and Licenses	25
	(b)	Property Characteristics	26
	(c)	Property Ownership	26
	(d)	Condition of the Mortgaged Property	26
	(e)	Personal Property	26
	Section 6.02	Covenants	26
	(a)	Use of Property	26
	(b)	Property Maintenance	27
	(c)	Property Preservation	29
	(d)	Property Inspections	29
	(e)	Compliance with Laws	30
	Section 6.03	Mortgage Loan Administration Matters Regarding the Property	30
	(a)	Property Management	30
	(b)	Subordination of Fees to Affiliated Property Managers	31
	(c)	Property Condition Assessment	31


 


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	Article 7 - LEASES AND RENTS	31
	 	 	 
	Section 7.01	Representations and Warranties	31
	(a)	Prior Assignment of Rents	31
	(b)	Prepaid Rents	31
	Section 7.02	Covenants	32
	(a)	Leases	32
	(b)	Commercial Leases	32
	(c)	Payment of Rents	34
	(d)	Assignment of Rents	34
	(e)	Further Assignments of Leases and Rents	34
	(f)	Options to Purchase by Tenants	34
	Section 7.03	Mortgage Loan Administration Regarding Leases and Rents	34
	(a)	Material Commercial Lease Requirements	34
	(b)	Residential Lease Form	35
	 	 	 
	Article 8 - BOOKS AND RECORDS; FINANCIAL REPORTING	35
	 	 	 
	Section 8.01	Representations and Warranties	35
	(a)	Financial Information	35
	(b)	No Change in Facts or Circumstances	35
	Section 8.02	Covenants	36
	(a)	Obligation to Maintain Accurate Books and Records	36
	(b)	Items to Furnish to Lender	36
	(c)	Audited Financials	39
	(d)	Delivery of Books and Records	39
	Section 8.03	Mortgage Loan Administration Matters Regarding Books and Records and Financial Reporting	39
	(a)	Lender’s Right to Obtain Audited Books and Records	39
	(b)	Credit Reports; Credit Score	40
	 	 	 
	Article 9 – INSURANCE	40
	 	 	 
	Section 9.01	Representations and Warranties	40
	(a)	Compliance with Insurance Requirements	40
	(b)	Property Condition	40
	Section 9.02	Covenants	40
	(a)	Insurance Requirements	40
	(b)	Delivery of Policies, Renewals, Notices, and Proceeds	41
	Section 9.03	Mortgage Loan Administration Matters Regarding Insurance	42
	(a)	Lender’s Ongoing Insurance Requirements	42
	(b)	Application of Proceeds on Event of Loss	42
	(c)	Payment Obligations Unaffected	44
	(d)	Foreclosure Sale	45
	(e)	Appointment of Lender as Attorney-In-Fact	45
	 	 	 
	Article 10 - CONDEMNATION	45
	 	 	 
	Section 10.01	Representations and Warranties	45
	(a)	Prior Condemnation Action	45
	(b)	Pending Condemnation Actions	45


 


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	Section 10.02	Covenants	46
	(a)	Notice of Condemnation	46
	(b)	Condemnation Proceeds	46
	Section 10.03	Mortgage Loan Administration Matters Regarding Condemnation	46
	(a)	Application of Condemnation Awards	46
	(b)	Payment Obligations Unaffected	46
	(c)	Appointment of Lender as Attorney-In-Fact	46
	(d)	Preservation of Mortgaged Property	47
	 	 	 
	Article 11 - LIENS, TRANSFERS, AND ASSUMPTIONS	47
	 	 	 
	Section 11.01	Representations and Warranties	47
	(a)	No Labor or Materialmen’s Claims	47
	(b)	No Other Interests	47
	Section 11.02	Covenants	48
	(a)	Liens; Encumbrances	48
	(b)	Transfers	48
	(c)	No Other Indebtedness	51
	(d)	No Mezzanine Financing or Preferred Equity	51
	Section 11.03	Mortgage Loan Administration Matters Regarding Liens, Transfers, and Assumptions	51
	(a)	Assumption of Mortgage Loan	51
	(b)	Transfers to Key Principal-Owned Affiliates or Guarantor-Owned Affiliates	53
	(c)	Estate Planning	53
	(d)	Termination or Revocation of Trust	54
	(e)	Death of Key Principal or Guarantor; Transfer Due to Death	54
	(f)	Bankruptcy of Guarantor	56
	(g)	Further Conditions to Transfers and Assumption	57
	(h)	Further Transfers Affecting Clipper Realty L.P.	57
	 	 	 
	Article 12 - IMPOSITIONS	61
	 	 	 
	Section 12.01	Representations and Warranties	61
	(a)	Payment of Taxes, Assessments, and Other Charges	61
	Section 12.02	Covenants	61
	(a)	Imposition Deposits, Taxes, and Other Charges	61
	Section 12.03	Mortgage Loan Administration Matters Regarding Impositions	62
	(a)	Maintenance of Records by Lender	62
	(b)	Imposition Accounts	62
	(c)	Payment of Impositions; Sufficiency of Imposition Deposits	62
	(d)	Imposition Deposits Upon Event of Default	63
	(e)	Contesting Impositions	63
	(f)	Release to Borrower	64
	 	 	 
	Article 13 - REPLACEMENT RESERVE AND REPAIRS	64
	 	 	 
	Section 13.01	Covenants	64
	(a)	Initial Deposits to Replacement Reserve Account and Repairs Escrow Account	64
	(b)	Monthly Replacement Reserve Deposits	64
	(c)	Payment for Replacements and Repairs	64
	(d)	Assignment of Contracts for Replacements and Repairs	65


 


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	(e)	Indemnification	65
	(f)	Amendments to Loan Documents	65
	(g)	Administrative Fees and Expenses	65
	Section 13.02	Mortgage Loan Administration Matters Regarding Reserves	66
	(a)	Accounts, Deposits, and Disbursements	66
	(b)	Approvals of Contracts; Assignment of Claims	73
	(c)	Delays and Workmanship	73
	(d)	Appointment of Lender as Attorney-In-Fact	73
	(e)	No Lender Obligation	74
	(f)	No Lender Warranty	74
	 	 	 
	Article 14 - DEFAULTS/REMEDIES	74
	 	 	 
	Section 14.01	Events of Default	74
	(a)	Automatic Events of Default	74
	(b)	Events of Default Subject to a Specified Cure Period	75
	(c)	Events of Default Subject to Extended Cure Period	76
	Section 14.02	Remedies	76
	(a)	Acceleration; Foreclosure	76
	(b)	Loss of Right to Disbursements from Collateral Accounts	77
	(c)	Remedies Cumulative	77
	Section 14.03	Additional Lender Rights; Forbearance	78
	(a)	No Effect Upon Obligations	78
	(b)	No Waiver of Rights or Remedies	78
	(c)	Appointment of Lender as Attorney-In-Fact	79
	(d)	Borrower Waivers	80
	Section 14.04	Waiver of Marshaling	81
	 	 	 
	Article 15 - MISCELLANEOUS	81
	 	 	 
	Section 15.01	Governing Law; Consent to Jurisdiction and Venue	81
	(a)	Governing Law	81
	(b)	Venue	81
	Section 15.02	Notice	82
	(a)	Process of Serving Notice	82
	(b)	Change of Address	82
	(c)	Default Method of Notice	82
	(d)	Receipt of Notices	83
	Section 15.03	Successors and Assigns Bound; Sale of Mortgage Loan	83
	(a)	Binding Agreement	83
	(b)	Sale of Mortgage Loan; Change of Servicer	83
	Section 15.04	Counterparts	83
	Section 15.05	Joint and Several (or Solidary) Liability	83
	Section 15.06	Relationship of Parties; No Third Party Beneficiary	83
	(a)	Solely Creditor and Debtor	83
	(b)	No Third Party Beneficiaries	84


 


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	Section 15.07	Severability; Entire Agreement; Amendments	84
	Section 15.08	Construction	84
	Section 15.09	Mortgage Loan Servicing	85
	Section 15.10	Disclosure of Information	85
	Section 15.11	Waiver; Conflict	86
	Section 15.12	No Reliance	86
	Section 15.13	Subrogation	86
	Section 15.14	Counting of Days	86
	Section 15.15	Revival and Reinstatement of Indebtedness	87
	Section 15.16	Time is of the Essence	87
	Section 15.17	Final Agreement	87
	Section 15.18	WAIVER OF TRIAL BY JURY	87


 


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SCHEDULES & EXHIBITS


 


	Schedules	 	 	 	 
	Schedule 1	 	Definitions Schedule (required)	 	Form 6101.FR
	Schedule 2	 	Summary of Loan Terms (required)	 	Form 6102.FR
	Schedule 2	 	Addenda to Schedule 2 (New York Gap Note Modification)	 	Form 6102.19.FR
	Schedule 2	 	Addenda to Schedule 2 (Bond Regulatory Agreement)	 	Form 6102.22
	Schedule 3	 	Interest Rate Type Provisions (required)	 	Form 6103.FR
	Schedule 4	 	Prepayment Premium Schedule (required)	 	Form 6104.01
	Schedule 5	 	Required Replacement Schedule (required)	 	 
	Schedule 6	 	Required Repair Schedule (required)	 	 
	Schedule 7	 	Exceptions to Representations and Warranties Schedule (required)	 	 


 


 


	Exhibits	 	 	 	 
	Exhibit A	 	Modifications to Multifamily Loan and Security Agreement (New York Gap Note Modification)	 	Form 6234
	Exhibit B	 	Modifications to Multifamily Loan and Security Agreement (Bond Redemption and Bond Regulatory Agreement) (HDC)	 	Form 6238
	Exhibit C	 	Modifications to Multifamily Loan and Security Agreement (HPD Regulatory Agreement)	 	 
	Exhibit D	 	Modifications to Multifamily Loan and Security Agreement (Shuttle Service Reserve)	 	 


  


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MULTIFAMILY
LOAN AND SECURITY AGREEMENT


(Non-Recourse)


 


This MULTIFAMILY LOAN
AND SECURITY AGREEMENT (as amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Loan
Agreement”) is made as of the Effective Date (as hereinafter defined) by and between ASPEN 2016 LLC, a Delaware
limited liability company (“Borrower”), CAPITAL ONE MULTIFAMILY FINANCE,
LLC, a Delaware limited liability company (“Lender”).


 


RECITALS:


 


WHEREAS, Borrower desires
to obtain the Mortgage Loan (as hereinafter defined) from Lender to be secured by the Mortgaged Property (as hereinafter defined);
and


 


WHEREAS, Lender is
willing to make the Mortgage Loan on the terms and conditions contained in this Loan Agreement and in the other Loan Documents
(as hereinafter defined);


 


NOW, THEREFORE, in
consideration of the making of the Mortgage Loan by Lender and other good and valuable consideration, the receipt and adequacy
of which are hereby conclusively acknowledged, the parties hereby covenant, agree, represent, and warrant as follows:


 


AGREEMENTS:


 


Article
1 - DEFINITIONS; SUMMARY OF MORTGAGE

LOAN TERMS


 


Section
1.01              Defined Terms.


 


Capitalized terms not
otherwise defined in the body of this Loan Agreement shall have the meanings set forth in the Definitions Schedule attached as
Schedule 1 to this Loan Agreement.


 


Section
1.02              Schedules, Exhibits, and Attachments Incorporated.


 


The schedules, exhibits,
and any other addenda or attachments are incorporated fully into this Loan Agreement by this reference and each constitutes a substantive
part of this Loan Agreement.


 


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Article
2 - GENERAL MORTGAGE LOAN TERMS


 


Section
2.01              Mortgage Loan Origination and Security.


 


(a)          Making
of Mortgage Loan.


 


Subject to the terms
and conditions of this Loan Agreement and the other Loan Documents, Lender hereby makes the Mortgage Loan to Borrower, and Borrower
hereby accepts the Mortgage Loan from Lender. Borrower covenants and agrees that it shall:


 


(1)         pay
the Indebtedness, including the Prepayment Premium, if any (whether in connection with any voluntary prepayment or in connection
with an acceleration by Lender of the Indebtedness), in accordance with the terms of this Loan Agreement and the other Loan Documents;
and


 


(2)         perform,
observe, and comply with this Loan Agreement and all other provisions of the other Loan Documents.


 


(b)          Security
for Mortgage Loan.


 


The Mortgage Loan is
made pursuant to this Loan Agreement, is evidenced by the Note, and is secured by the Security Instrument, this Loan Agreement,
and the other Loan Documents that are expressly stated to be security for the Mortgage Loan.


 


(c)          Protective
Advances.


 


As provided in the
Security Instrument, Lender may take such actions or disburse such funds as Lender reasonably deems necessary to perform the obligations
of Borrower under this Loan Agreement and the other Loan Documents and to protect Lender’s interest in the Mortgaged Property.


 


Section
2.02              Payments on Mortgage Loan.


 


(a)          Debt
Service Payments.


 


(1)         Short
Month Interest.


 


If the date
the Mortgage Loan proceeds are disbursed is any day other than the first day of the month, interest for the period beginning on
the disbursement date and ending on and including the last day of the month in which the disbursement occurs shall be payable by
Borrower on the date the Mortgage Loan proceeds are disbursed. In the event that the disbursement date is not the same as the Effective
Date, then:


 


(A)         the
disbursement date and the Effective Date must be in the same month, and


 


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(B)         the
Effective Date shall not be the first day of the month.


 


(2)         Interest
Accrual and Computation.


 


Except as
provided in Section 2.02(a)(1), interest shall be paid in arrears. Interest shall accrue as provided in the Schedule of Interest
Rate Type Provisions and shall be computed in accordance with the Interest Accrual Method. If the Interest Accrual Method is “Actual/360,”
Borrower acknowledges and agrees that the amount allocated to interest for each month will vary depending on the actual number
of calendar days during such month.


 


(3)         Monthly
Debt Service Payments.


 


Consecutive
monthly debt service installments (comprised of either interest only or principal and interest, depending on the Amortization Type),
each in the amount of the applicable Monthly Debt Service Payment, shall be due and payable on the First Payment Date, and on each
Payment Date thereafter until the Maturity Date, at which time all Indebtedness shall be due. Any regularly scheduled Monthly Debt
Service Payment that is received by Lender before the applicable Payment Date shall be deemed to have been received on such Payment
Date solely for the purpose of calculating interest due. All payments made by Borrower under this Loan Agreement shall be made
without set-off, counterclaim, or other defense.


 


(4)         Payment
at Maturity.


 


The unpaid
principal balance of the Mortgage Loan, any Accrued Interest thereon and all other Indebtedness shall be due and payable on the
Maturity Date.


 


(5)         Interest
Rate Type.


 


See the Schedule
of Interest Rate Type Provisions for additional provisions, if any, specific to the Interest Rate Type.


 


(b)          Capitalization
of Accrued But Unpaid Interest.


 


Any accrued and unpaid
interest on the Mortgage Loan remaining past due for thirty (30) days or more may, at Lender’s election, be added to
and become part of the unpaid principal balance of the Mortgage Loan.


 


(c)          Late
Charges.


 


(1)         If
any Monthly Debt Service Payment due hereunder is not received by Lender within ten (10) days (or fifteen (15) days for
any Mortgaged Property located in Mississippi or North Carolina to comply with applicable law) after the applicable Payment Date,
or any amount payable under this Loan Agreement (other than the payment due on the Maturity Date for repayment of the Mortgage
Loan in full) or any other Loan Document is not received by Lender within ten (10) days (or fifteen (15) days for any
Mortgaged Property located in Mississippi or North Carolina to comply with applicable law) after the date such amount is due, inclusive
of the date on which such amount is due, Borrower shall pay to Lender, immediately without demand by Lender, the Late Charge.


 


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The Late Charge
is payable in addition to, and not in lieu of, any interest payable at the Default Rate pursuant to Section 2.02(d).


 


(2)         Borrower
acknowledges and agrees that:


 


(A)         its
failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Mortgage Loan;


 


(B)         it
is extremely difficult and impractical to determine those additional expenses;


 


(C)         Lender
is entitled to be compensated for such additional expenses; and


 


(D)         the
Late Charge represents a fair and reasonable estimate, taking into account all circumstances existing on the date hereof, of the
additional expenses Lender will incur by reason of any such late payment.


 


(d)          Default
Rate.


 


(1)         Default
interest shall be paid as follows:


 


(A)         If
any amount due in respect of the Mortgage Loan (other than amounts due on the Maturity Date) remains past due for thirty (30)
days or more, interest on such unpaid amount(s) shall accrue from the date payment is due at the Default Rate and shall be payable
upon demand by Lender.


 


(B)         If
any Indebtedness due is not paid in full on the Maturity Date, then interest shall accrue at the Default Rate on all such unpaid
amounts from the Maturity Date until fully paid and shall be payable upon demand by Lender.


 


Absent a demand
by Lender, any such amounts shall be payable by Borrower in the same manner as provided for the payment of Monthly Debt Service
Payments. To the extent permitted by applicable law, interest shall also accrue at the Default Rate on any judgment obtained by
Lender against Borrower in connection with the Mortgage Loan. To the extent Borrower or any other Person is vested with a right
of redemption, interest shall continue to accrue at the Default Rate during any redemption period until such time as the Mortgaged
Property has been redeemed.


 


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(2)         Borrower
acknowledges and agrees that:


 


(A)         its
failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Mortgage Loan; and


 


(B)         in
connection with any failure to timely pay all amounts due in respect of the Mortgage Loan on the Maturity Date, or during the time
that any amount due in respect of the Mortgage Loan is delinquent for more than thirty (30) days:


 


(i)          Lender’s
risk of nonpayment of the Mortgage Loan will be materially increased;


 


(ii)         Lender’s
ability to meet its other obligations and to take advantage of other investment opportunities will be adversely impacted;


 


(iii)        Lender
will incur additional costs and expenses arising from its loss of the use of the amounts due;


 


(iv)        it
is extremely difficult and impractical to determine such additional costs and expenses;


 


(v)         Lender
is entitled to be compensated for such additional risks, costs, and expenses; and


 


(vi)        the
increase from the Interest Rate to the Default Rate represents a fair and reasonable estimate of the additional risks, costs, and
expenses Lender will incur by reason of Borrower’s delinquent payment and the additional compensation Lender is entitled
to receive for the increased risks of nonpayment associated with a delinquency on the Mortgage Loan (taking into account all circumstances
existing on the Effective Date).


 


(e)          Address
for Payments.


 


All payments due pursuant
to the Loan Documents shall be payable at Lender’s Payment Address, or such other place and in such manner as may be designated
from time to time by written notice to Borrower by Lender.


 


(f)          Application
of Payments.


 


If at any time Lender
receives, from Borrower or otherwise, any payment in respect of the Indebtedness that is less than all amounts due and payable
at such time, then Lender may apply such payment to amounts then due and payable in any manner and in any order determined by Lender
or hold in suspense and not apply such payment at Lender’s election. Neither Lender’s acceptance of a payment that
is less than all amounts then due and payable, nor Lender’s application of, or suspension of the application of, such payment,
shall constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding
the application of any such payment to the Indebtedness, Borrower’s obligations under this Loan Agreement and the other Loan
Documents shall remain unchanged.


 


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Section
2.03              Lockout/Prepayment.


 


(a)          Prepayment;
Prepayment Lockout; Prepayment Premium.


 


(1)         Borrower
shall not make a voluntary full or partial prepayment on the Mortgage Loan during any Prepayment Lockout Period nor shall Borrower
make a voluntary partial prepayment at any time. Except as expressly provided in this Loan Agreement (including as provided in
the Prepayment Premium Schedule), a Prepayment Premium calculated in accordance with the Prepayment Premium Schedule shall be payable
in connection with any prepayment of the Mortgage Loan.


 


(2)         If
a Prepayment Lockout Period applies to the Mortgage Loan, and during such Prepayment Lockout Period Lender accelerates the unpaid
principal balance of the Mortgage Loan or otherwise applies collateral held by Lender to the repayment of any portion of the unpaid
principal balance of the Mortgage Loan, the Prepayment Premium shall be due and payable and equal to the amount obtained by multiplying
the percentage indicated (if at all) in the Prepayment Premium Schedule by the amount of principal being prepaid at the time of
such acceleration or application.


 


(b)          Voluntary
Prepayment in Full.


 


At any time after the
expiration of any Prepayment Lockout Period, Borrower may voluntarily prepay the Mortgage Loan in full on a Permitted Prepayment
Date so long as:


 


(1)         Borrower
delivers to Lender a Prepayment Notice specifying the Intended Prepayment Date not more than sixty (60) days, but not less
than thirty (30) days (if given via U.S. Postal Service) or twenty (20) days (if given via facsimile, e-mail, or overnight
courier) prior to such Intended Prepayment Date; and


 


(2)         Borrower
pays to Lender an amount equal to the sum of:


 


(A)         the
entire unpaid principal balance of the Mortgage Loan; plus


 


(B)         all
Accrued Interest (calculated through the last day of the month in which the prepayment occurs); plus


 


(C)         the
Prepayment Premium; plus


 


(D)         all
other Indebtedness.


 


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In connection with any such voluntary prepayment,
Borrower acknowledges and agrees that interest shall always be calculated and paid through the last day of the month in which the
prepayment occurs (even if the Permitted Prepayment Date for such month is not the last day of such month, or if Lender approves
prepayment on an Intended Prepayment Date that is not a Permitted Prepayment Date). Borrower further acknowledges that Lender is
not required to accept a voluntary prepayment of the Mortgage Loan on any day other than a Permitted Prepayment Date. However,
if Lender does approve an Intended Prepayment Date that is not a Permitted Prepayment Date and accepts a prepayment on such Intended
Prepayment Date, such prepayment shall be deemed to be received on the immediately following Permitted Prepayment Date. If Borrower
fails to prepay the Mortgage Loan on the Intended Prepayment Date for any reason (including on any Intended Prepayment Date that
is approved by Lender) and such failure either continues for five (5) Business Days, or into the following month, Lender shall
have the right to recalculate the payoff amount. If Borrower prepays the Mortgage Loan either
in the following month or more than five (5) Business Days after the Intended Prepayment Date that was approved by
Lender, Lender shall also have the right to recalculate the payoff amount based upon the amount of such payment and the date such
payment was received by Lender. Borrower shall immediately pay to Lender any additional amounts required by any such recalculation.


 


(c)          Acceleration
of Mortgage Loan.


 


Upon acceleration of
the Mortgage Loan, Borrower shall pay to Lender:


 


(1)         the
entire unpaid principal balance of the Mortgage Loan;


 


(2)         all
Accrued Interest (calculated through the last day of the month in which the acceleration occurs);


 


(3)         the
Prepayment Premium; and


 


(4)         all
other Indebtedness.


 


(d)          Application
of Collateral.


 


Any application by
Lender of any collateral or other security to the repayment of all or any portion of the unpaid principal balance of the Mortgage
Loan prior to the Maturity Date in accordance with the Loan Documents shall be deemed to be a prepayment by Borrower. Any such
prepayment shall require the payment to Lender by Borrower of the Prepayment Premium calculated on the amount being prepaid in
accordance with this Loan Agreement.


 


(e)          Casualty
and Condemnation.


 


Notwithstanding any
provision of this Loan Agreement to the contrary, no Prepayment Premium shall be payable with respect to any prepayment occurring
as a result of the application of any insurance proceeds or amounts received in connection with a Condemnation Action in accordance
with this Loan Agreement.


 


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(f)          No
Effect on Payment Obligations.


 


Unless otherwise expressly
provided in this Loan Agreement, any prepayment required by any Loan Document of less than the entire unpaid principal balance
of the Mortgage Loan shall not extend or postpone the due date of any subsequent Monthly Debt Service Payments, Monthly Replacement
Reserve Deposit, or other payment, or change the amount of any such payments or deposits.


 


(g)          Loss
Resulting from Prepayment.


 


In any circumstance
in which a Prepayment Premium is due under this Loan Agreement, Borrower acknowledges that:


 


(1)         any
prepayment of the unpaid principal balance of the Mortgage Loan, whether voluntary or involuntary, or following the occurrence
of an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional risk,
expense, and frustration or impairment of Lender’s ability to meet its commitments to third parties;


 


(2)         it
is extremely difficult and impractical to ascertain the extent of such losses, risks, and damages;


 


(3)         the
formula for calculating the Prepayment Premium represents a reasonable estimate of the losses, risks, and damages Lender will incur
as a result of a prepayment; and


 


(4)         the
provisions regarding the Prepayment Premium contained in this Loan Agreement are a material part of the consideration for the Mortgage
Loan, and that the terms of the Mortgage Loan are in other respects more favorable to Borrower as a result of Borrower’s
voluntary agreement to such prepayment provisions.


 


Article
3 - PERSONAL LIABILITY


 


Section
3.01              Non-Recourse Mortgage Loan; Exceptions.


 


Except as otherwise
provided in this Article 3 or in any other Loan Document, none of Borrower, or any director, officer, manager, member, partner,
shareholder, trustee, trust beneficiary, or employee of Borrower, shall have personal liability under this Loan Agreement or any
other Loan Document for the repayment of the Indebtedness or for the performance of any other obligations of Borrower under the
Loan Documents, and Lender’s only recourse for the satisfaction of such Indebtedness and the performance of such obligations
shall be Lender’s exercise of its rights and remedies with respect to the Mortgaged Property and any other collateral held
by Lender as security for the Indebtedness. This limitation on Borrower’s liability shall not limit or impair Lender’s
enforcement of its rights against Guarantor under any Loan Document.


 


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Section
3.02              Personal Liability of Borrower (Exceptions to Non-Recourse Provision).


 


(a)          Personal
Liability Based on Lender’s Loss.


 


Borrower shall be personally
liable to Lender for the repayment of the portion of the Indebtedness equal to any loss or damage suffered by Lender as a result
of, subject to any notice and cure period, if any:


 


(1)         failure
to pay as directed by Lender upon demand after an Event of Default (to the extent actually received by Borrower):


 


(A)         all
Rents to which Lender is entitled under the Loan Documents; and


 


(B)         the
amount of all security deposits then held or thereafter collected by Borrower from tenants and not properly applied pursuant to
the applicable Leases;


 


(2)         failure
to maintain all insurance policies required by the Loan Documents, except to the extent Lender has the obligation to pay the premiums
pursuant to Section 12.03(c);


 


(3)         failure
to apply all insurance proceeds received by Borrower or any amounts received by Borrower in connection with a Condemnation Action,
as required by the Loan Documents;


 


(4)         failure
to comply with any provision of this Loan Agreement or any other Loan Document relating to the delivery of books and records, statements,
schedules, and reports;


 


(5)         except
to the extent directed otherwise by Lender pursuant to Section 3.02(a)(1), failure to apply Rents to the ordinary and necessary
expenses of owning and operating the Mortgaged Property and Debt Service Amounts, as and when each is due and payable, except that
Borrower will not be personally liable with respect to Rents that are distributed by Borrower in any calendar year if Borrower
has paid all ordinary and necessary expenses of owning and operating the Mortgaged Property and Debt Service Amounts for such calendar
year;


 


(6)         waste
or abandonment of the Mortgaged Property; or


 


(7)         grossly
negligent or reckless unintentional material misrepresentation or omission by Borrower, Guarantor, Key Principal, or any officer,
director, partner, manager, member, shareholder, or trustee of Borrower, Guarantor, or Key Principal in connection with on-going
financial or other reporting required by the Loan Documents, or any request for action or consent by Lender.


 


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Notwithstanding the foregoing, Borrower
shall not have personal liability under clauses (1), (3), or (5) above to the extent that Borrower lacks the legal right to
direct the disbursement of the applicable funds due to an involuntary Bankruptcy Event that occurs without the consent, encouragement,
or active participation of (A) Borrower, Guarantor, or Key Principal, (B) any Person Controlling Borrower, Guarantor, or Key Principal
or (C) any Person Controlled by or under common Control with Borrower, Guarantor, or Key Principal.


 


(b)          Full
Personal Liability for Mortgage Loan.


 


Borrower shall be personally
liable to Lender for the repayment of all of the Indebtedness, and the Mortgage Loan shall be fully recourse to Borrower, upon
the occurrence of any of the following:


 


(1)         failure
by Borrower to comply with the single-asset entity requirements of Section 4.02(d) of this Loan Agreement;


 


(2)         a
Transfer (other than a conveyance of the Mortgaged Property at a Foreclosure Event pursuant to the Security Instrument and this
Loan Agreement) that is not permitted under this Loan Agreement or any other Loan Document;


 


(3)         the
occurrence of any Bankruptcy Event (other than an acknowledgement in writing as described in clause (b) of the definition of “Bankruptcy
Event”); provided, however, in the event of an involuntary Bankruptcy Event, Borrower shall only be personally
liable if such involuntary Bankruptcy Event occurs with the consent, encouragement, or active participation of (A) Borrower, Guarantor,
or Key Principal, (B) any Person Controlling Borrower, Guarantor, or Key Principal, or (C) any Person Controlled by or under common
Control with Borrower, Guarantor, or Key Principal;


 


(4)         fraud,
written material misrepresentation, or material omission by Borrower, Guarantor, Key Principal, or any officer, director, partner,
manager, member, shareholder, or trustee of Borrower, Guarantor, or Key Principal in connection with any application for or creation
of the Indebtedness; or


 


(5)         fraud,
written intentional material misrepresentation, or intentional material omission by Borrower, Guarantor, Key Principal, or any
officer, director, partner, manager, member, shareholder, or trustee of Borrower, Guarantor, or Key Principal in connection with
on-going financial or other reporting required by the Loan Documents, or any request for action or consent by Lender.


 


Section
3.03              Personal Liability for Indemnity Obligations.


 


Borrower shall be personally
and fully liable to Lender for Borrower’s indemnity obligations under Section 13.01(e) of this Loan Agreement, the Environmental
Indemnity Agreement, and any other express indemnity obligations provided by Borrower under any Loan Document. Borrower’s
liability for such indemnity obligations shall not be limited by the amount of the Indebtedness, the repayment of the Indebtedness,
or otherwise, provided that Borrower’s liability for such indemnities shall not include any loss caused by the gross negligence
or willful misconduct of Lender as determined by a court of competent jurisdiction pursuant to a final non-appealable court order.


 





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Section
3.04              Lender’s Right to Forego Rights Against Mortgaged Property.


 


To the extent that
Borrower has personal liability under this Loan Agreement or any other Loan Document, Lender may exercise its rights against Borrower
personally to the fullest extent permitted by applicable law without regard to whether Lender has exercised any rights against
the Mortgaged Property, the UCC Collateral, or any other security, or pursued any rights against Guarantor, or pursued any other
rights available to Lender under this Loan Agreement, any other Loan Document, or applicable law. For purposes of this Section
3.04 only, the term “Mortgaged Property” shall not include any funds that have been applied by Borrower as required
or permitted by this Loan Agreement prior to the occurrence of an Event of Default, or that Borrower was unable to apply as required
or permitted by this Loan Agreement because of a Bankruptcy Event. To the fullest extent permitted by applicable law, in any action
to enforce Borrower’s personal liability under this Article 3, Borrower waives any right to set off the value of the Mortgaged
Property against such personal liability.


 


Article
4 - BORROWER STATUS


 


Section
4.01              Representations and Warranties.


 


The representations
and warranties made by Borrower to Lender in this Section 4.01 are made as of the Effective Date and are true and correct except
as disclosed on the Exceptions to Representations and Warranties Schedule.


 


(a)          Due
Organization and Qualification.


 


Borrower is validly
existing and qualified to transact business and is in good standing in the state in which it is formed or organized, the Property
Jurisdiction, and in each other jurisdiction that qualification or good standing is required according to applicable law to conduct
its business with respect to the Mortgaged Property and where the failure to be so qualified or in good standing would adversely
affect Borrower’s operation of the Mortgaged Property or the validity, enforceability or the ability of Borrower to perform
its obligations under this Loan Agreement or any other Loan Document.


 


(b)          Location.


 


Borrower’s General
Business Address is Borrower’s principal place of business and principal office.


 


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(c)          Power
and Authority.


 


Borrower has the requisite
power and authority:


 


(1)         to
own the Mortgaged Property and to carry on its business as now conducted and as contemplated to be conducted in connection with
the performance of its obligations under this Loan Agreement and under the other Loan Documents to which it is a party; and


 


(2)         to
execute and deliver this Loan Agreement and the other Loan Documents to which it is a party, and to carry out the transactions
contemplated by this Loan Agreement and the other Loan Documents to which it is a party.


 


(d)          Due
Authorization.


 


The execution, delivery,
and performance of this Loan Agreement and the other Loan Documents to which it is a party have been duly authorized by all necessary
action and proceedings by or on behalf of Borrower, and no further approvals or filings of any kind, including any approval of
or filing with any Governmental Authority, are required by or on behalf of Borrower as a condition to the valid execution, delivery,
and performance by Borrower of this Loan Agreement or any of the other Loan Documents to which it is a party, except filings required
to perfect and maintain the liens to be granted under the Loan Documents and routine filings to maintain good standing and its
existence.


 


(e)          Valid
and Binding Obligations.


 


This Loan Agreement
and the other Loan Documents to which it is a party have been duly executed and delivered by Borrower and constitute the legal,
valid, and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as such
enforceability may be limited by applicable Insolvency Laws or by the exercise of discretion by any court.


 


(f)          Effect
of Mortgage Loan on Borrower’s Financial Condition.


 


The Mortgage Loan will
not render Borrower Insolvent. Borrower has sufficient working capital, including proceeds from the Mortgage Loan, cash flow from
the Mortgaged Property, or other sources, not only to adequately maintain the Mortgaged Property, but also to pay all of Borrower’s
outstanding debts as they come due, including all Debt Service Amounts, exclusive of Borrower’s ability to refinance or pay
in full the Mortgage Loan on the Maturity Date. In connection with the execution and delivery of this Loan Agreement and the other
Loan Documents (and the delivery to, or for the benefit of, Lender of any collateral contemplated thereunder), and the incurrence
by Borrower of the obligations under this Loan Agreement and the other Loan Documents, Borrower did not receive less than reasonably
equivalent value in exchange for the incurrence of the obligations of Borrower under this Loan Agreement and the other Loan Documents.


 


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(g)          Economic
Sanctions, Anti-Money Laundering, and Anti-Corruption.


 


(1)         None
of Borrower, Guarantor, or Key Principal, nor to Borrower’s knowledge, any Person Controlling Borrower, Guarantor, or Key
Principal, nor any Person Controlled by Borrower, Guarantor, or Key Principal that also has a direct or indirect ownership interest
in Borrower, Guarantor, or Key Principal, is in violation of any applicable civil or criminal laws or regulations, including those
requiring internal controls, intended to prohibit, prevent, or regulate money laundering, drug trafficking, terrorism, or corruption,
of the United States and the jurisdiction where the Mortgaged Property is located or where the Person resides, is domiciled, or
has its principal place of business.


 


(2)         None
of Borrower, Guarantor, or Key Principal, nor to Borrower’s knowledge, any Person Controlling Borrower, Guarantor, or Key
Principal, nor any Person Controlled by Borrower, Guarantor, or Key Principal that also has a direct or indirect ownership interest
in Borrower, Guarantor, or Key Principal, is a Person:


 


(A)         against
whom proceedings are pending for any alleged violation of any laws described in Section 4.01(g)(1);


 


(B)         that
has been convicted of any violation of, has been subject to civil penalties or Economic Sanctions pursuant to, or had any of its
property seized or forfeited under, any laws described in Section 4.01(g)(1); or


 


(C)         with
whom any United States Person, any entity organized under the laws of the United States or its constituent states or territories,
or any entity, regardless of where organized, having its principal place of business within the United States or any of its territories,
is a Sanctioned Person or is otherwise prohibited from transacting business of the type contemplated by this Loan Agreement and
the other Loan Documents under any other applicable law.


 


(3)         Borrower,
Guarantor, and Key Principal are in compliance with all applicable Economic Sanctions laws and regulations.


 


(h)          Borrower
Single Asset Status.


 


Borrower:


 


(1)         does
not own or lease any real property, personal property, or assets other than the Mortgaged Property;


 


(2)         does
not own, operate, or participate in any business other than the leasing, ownership, management, operation, and maintenance of the
Mortgaged Property;


 


(3)         has
no material financial obligation under or secured by any indenture, mortgage, deed of trust, deed to secure debt, loan agreement,
or other agreement or instrument to which Borrower is a party, or by which Borrower is otherwise bound, or to which the Mortgaged
Property is subject or by which it is otherwise encumbered, other than:


 





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(A)         unsecured
trade payables incurred in the ordinary course of the operation of the Mortgaged Property (exclusive of amounts for rehabilitation,
restoration, repairs, or replacements of the Mortgaged Property) that (i) are not evidenced by a promissory note, (ii) are payable
within sixty (60) days of the date incurred, and (iii) as of the Effective Date, do not exceed, in the aggregate, four percent (4%)
of the original principal balance of the Mortgage Loan;


 


(B)         if
the Security Instrument grants a lien on a leasehold estate, Borrower’s obligations as lessee under the ground lease creating
such leasehold estate; and


 


(C)         obligations
under the Loan Documents and obligations secured by the Mortgaged Property to the extent permitted by the Loan Documents;


 


(4)         has
maintained its financial statements, accounting records, and other partnership, real estate investment trust, limited liability
company, or corporate documents, as the case may be, separate from those of any other Person (unless Borrower’s assets have
been included in a consolidated financial statement prepared in accordance with generally accepted accounting principles);


 


(5)         has
not commingled its assets or funds with those of any other Person, unless such assets or funds can easily be segregated and identified
in the ordinary course of business from those of any other Person;


 


(6)         has
been adequately capitalized in light of its contemplated business operations (but nothing contained in this Agreement shall require
any party to contribute any capital to Borrower);


 


(7)         has
not assumed, guaranteed, or pledged its assets to secure the liabilities or obligations of any other Person (except in connection
with the Mortgage Loan or other mortgage loans that have been paid in full or collaterally assigned to Lender, including in connection
with any Consolidation, Extension and Modification Agreement or similar instrument), or held out its credit as being available
to satisfy the obligations of any other Person;


 


(8)         has
not made loans or advances to any other Person; and


 


(9)         has
not entered into, and is not a party to, any transaction with any Borrower Affiliate, except in the ordinary course of business
and on terms which are no more favorable to any such Borrower Affiliate than would be obtained in a comparable arm’s length
transaction with an unrelated third party.


 


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(i)          No
Bankruptcies or Judgments.


 


None of Borrower, Guarantor,
or Key Principal, nor to Borrower’s knowledge, any Person Controlling Borrower, Guarantor, or Key Principal, nor any Person
Controlled by Borrower, Guarantor, or Key Principal that also has a direct or indirect ownership interest in Borrower, Guarantor,
or Key Principal, is currently:


 


(1)         the
subject of or a party to any completed or pending bankruptcy, reorganization, including any receivership or other insolvency proceeding;


 


(2)         preparing
or intending to be the subject of a Bankruptcy Event; or


 


(3)         the
subject of any judgment unsatisfied of record or docketed in any court; or


 


(4)         Insolvent.


 


(j)          No
Actions or Litigation.


 


(1)         There
are no claims, actions, suits, or proceedings at law or in equity by or before any Governmental Authority now pending against or,
to Borrower’s knowledge, threatened against or affecting Borrower or the Mortgaged Property not otherwise covered by insurance
(except claims, actions, suits, or proceedings regarding fair housing, anti-discrimination, or equal opportunity, which shall always
be disclosed); and


 


(2)         there
are no claims, actions, suits, or proceedings at law or in equity by or before any Governmental Authority now pending or, to Borrower’s
knowledge, threatened against or affecting Guarantor or Key Principal, which claims, actions, suits, or proceedings, if adversely
determined (individually or in the aggregate) reasonably would be expected to materially adversely affect the financial condition
or business of Borrower, Guarantor, or Key Principal or the condition, operation, or ownership of the Mortgaged Property (except
claims, actions, suits, or proceedings regarding fair housing, anti-discrimination, or equal opportunity, which shall always be
deemed material).


 


(k)          Payment
of Taxes, Assessments, and Other Charges.


 


Borrower confirms that:


 


(1)         it
has filed all federal, state, county, and municipal tax returns and reports required to have been filed by Borrower;


 


(2)         it
has paid, before any fine, penalty, interest, lien, or costs may be added thereto, all taxes, governmental charges, and assessments
due and payable with respect to such returns and reports;


 





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(3)         there
is no controversy or objection pending, or to the knowledge of Borrower, threatened in respect of any tax returns of Borrower;
and


 


(4)         it
has made adequate reserves on its books and records for all taxes that have accrued but which are not yet due and payable.


 


(l)          Not
a Foreign Person.


 


Borrower is not a “foreign
person” within the meaning of Section 1445(f)(3) of the Internal Revenue Code.


 


(m)          ERISA.


 


Borrower represents
and warrants that:


 


(1)         Borrower
is not an Employee Benefit Plan;


 


(2)         no
asset of Borrower constitutes “plan assets” (within the meaning of Section 3(42) of ERISA and Department of Labor
Regulation Section 2510.3-101) of an Employee Benefit Plan;


 


(3)         no
asset of Borrower is subject to any laws of any Governmental Authority governing the assets of an Employee Benefit Plan; and


 


(4)         neither
Borrower nor any ERISA Affiliate is subject to any obligation or liability with respect to any ERISA Plan.


 


(n)          Default
Under Other Obligations.


 


(1)         The
execution, delivery, and performance of the obligations imposed on Borrower under this Loan Agreement and the Loan Documents to
which it is a party will not cause Borrower to be in default under the provisions of any agreement, judgment, or order to which
Borrower is a party or by which Borrower is bound.


 


(2)         None
of Borrower, Guarantor, or Key Principal is in default under any obligation to Lender.


 


(o)          Prohibited
Person.


 


None of Borrower, Guarantor,
or Key Principal is a Prohibited Person, nor to Borrower’s knowledge, is any Person:


 


(1)         Controlling
Borrower, Guarantor, or Key Principal a Prohibited Person; or


 


(2)         Controlled
by and having a direct or indirect ownership interest in Borrower, Guarantor, or Key Principal a Prohibited Person.


 





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(p)          No
Contravention.


 


Neither the execution
and delivery of this Loan Agreement and the other Loan Documents to which Borrower is a party, nor the fulfillment of or compliance
with the terms and conditions of this Loan Agreement and the other Loan Documents to which Borrower is a party, nor the performance
of the obligations of Borrower under this Loan Agreement and the other Loan Documents does or will conflict with or result in any
breach or violation of, or constitute a default under, any of the terms, conditions, or provisions of Borrower’s organizational
documents, or any indenture, existing agreement, or other instrument to which Borrower is a party or to which Borrower, the Mortgaged
Property, or other assets of Borrower are subject.


 


(q)          Lockbox
Arrangement.


 


Borrower is not party
to any type of lockbox agreement or similar cash management arrangement that has not been approved by Lender in writing, and no
direct or indirect owner of Borrower is party to any type of lockbox agreement or similar cash management arrangement with respect
to Rents or other income from the Mortgaged Property that has not been approved by Lender in writing.


 


Section
4.02              Covenants.


 


(a)          Maintenance
of Existence; Organizational Documents.


 


Borrower shall maintain
its existence, its entity status, franchises, rights, and privileges under the laws of the state of its formation or organization
(as applicable). Borrower shall continue to be duly qualified and in good standing to transact business in each jurisdiction in
which qualification or standing is required according to applicable law to conduct its business with respect to the Mortgaged Property
and where the failure to do so would adversely affect Borrower’s operation of the Mortgaged Property or the validity, enforceability,
or the ability of Borrower to perform its obligations under this Loan Agreement or any other Loan Document. Neither Borrower nor
any partner, member, manager, officer, or director of Borrower shall:


 


(1)         make
or allow any material change to the organizational documents or organizational structure of Borrower, including changes relating
to the Control of Borrower, or


 


(2)         file
any action, complaint, petition, or other claim to:


 


(A)         divide,
partition, or otherwise compel the sale of the Mortgaged Property, or


 


(B)         otherwise
change the Control of Borrower.


 





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(b)          Economic
Sanctions, Anti-Money Laundering, and Anti-Corruption.


 


(1)         Borrower,
Guarantor, Key Principal, and any Person Controlling Borrower, Guarantor, or Key Principal, or any Person Controlled by Borrower,
Guarantor, or Key Principal that also has a direct or indirect ownership interest in Borrower, Guarantor, or Key Principal shall
remain in compliance with any applicable civil or criminal laws or regulations (including those requiring internal controls) intended
to prohibit, prevent, or regulate money laundering, drug trafficking, terrorism, or corruption, of the United States and the jurisdiction
where the Mortgaged Property is located or where the Person resides, is domiciled, or has its principal place of business.


 


(2)         At
no time shall Borrower, Guarantor, or Key Principal, or any Person Controlling Borrower, Guarantor, or Key Principal, or any Person
Controlled by Borrower, Guarantor, or Key Principal that also has a direct or indirect ownership interest in Borrower, Guarantor,
or Key Principal, be a Person:


 


(A)         against
whom proceedings are pending for any alleged violation of any laws described in Section 4.02(b)(1);


 


(B)         that
has been convicted of any violation of, has been subject to civil penalties or Economic Sanctions pursuant to, or had any of its
property seized or forfeited under, any laws described in Section 4.02(b)(1); or


 


(C)         with
whom any United States Person, any entity organized under the laws of the United States or its constituent states or territories,
or any entity, regardless of where organized, having its principal place of business within the United States or any of its territories,
is a Sanctioned Person or is otherwise prohibited from transacting business of the type contemplated by this Loan Agreement and
the other Loan Documents under any other applicable law.


 


(3)         Borrower,
Guarantor, and Key Principal shall at all times remain in compliance with any applicable Economic Sanctions laws and regulations.


 


(c)          Payment
of Taxes, Assessments, and Other Charges.


 


Borrower shall file
all federal, state, county, and municipal tax returns and reports required to be filed by Borrower and shall pay, before any fine,
penalty, interest, or cost may be added thereto, all taxes payable with respect to such returns and reports.


 


(d)          Borrower
Single Asset Status.


 


Until the Indebtedness
is fully paid, Borrower:


 


(1)         shall
not acquire or lease any real property, personal property, or assets other than the Mortgaged Property;


 





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(2)         shall
not acquire, own, operate, or participate in any business other than the leasing, ownership, management, operation, and maintenance
of the Mortgaged Property;


 


(3)         shall
not commingle its assets or funds with those of any other Person, unless such assets or funds can easily be segregated and identified
in the ordinary course of business from those of any other Person;


 


(4)         shall
maintain its financial statements, accounting records, and other partnership, real estate investment trust, limited liability company,
or corporate documents, as the case may be, separate from those of any other Person (unless Borrower’s assets are included
in a consolidated financial statement prepared in accordance with generally accepted accounting principles);


 


(5)         shall
have no material financial obligation under any indenture, mortgage, deed of trust, deed to secure debt, loan agreement, or other
agreement or instrument to which Borrower is a party or by which Borrower is otherwise bound, or to which the Mortgaged Property
is subject or by which it is otherwise encumbered, other than:


 


(A)         unsecured
trade payables incurred in the ordinary course of the operation of the Mortgaged Property (exclusive of amounts (i) to be paid
out of the Replacement Reserve Account or Repairs Escrow Account, or (ii) for rehabilitation, restoration, repairs, or replacements
of the Mortgaged Property or otherwise approved by Lender) so long as such trade payables (1) are not evidenced by a promissory
note, (2) are payable within sixty (60) days of the date incurred, and (3) as of any date, do not exceed, in the aggregate,
two percent (2%) of the original principal balance of the Mortgage Loan; provided, however, that otherwise compliant outstanding
trade payables may exceed two percent (2%) up to an aggregate amount of four percent (4%) of the original principal balance
of the Mortgage Loan for a period (beginning on or after the Effective Date) not to exceed ninety (90) consecutive days;


 


(B)         if
the Security Instrument grants a lien on a leasehold estate, Borrower’s obligations as lessee under the ground lease creating
such leasehold estate; and


 


(C)         obligations
under the Loan Documents and obligations secured by the Mortgaged Property to the extent permitted by the Loan Documents;


 


(6)         shall
not assume, guaranty, or pledge its assets to secure the liabilities or obligations of any other Person (except in connection with
the Mortgage Loan or other mortgage loans that have been paid in full or collaterally assigned to Lender, including in connection
with any Consolidation, Extension and Modification Agreement or similar instrument) or hold out its credit as being available to
satisfy the obligations of any other Person;


 





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(7)         shall
not make loans or advances to any other Person; or


 


(8)         shall
not enter into, or become a party to, any transaction with any Borrower Affiliate, except in the ordinary course of business and
on terms which are no more favorable to any such Borrower Affiliate than would be obtained in a comparable arm’s-length transaction
with an unrelated third party.


 


(e)          ERISA.


 


Borrower covenants
that:


 


(1)         no
asset of Borrower shall constitute “plan assets” (within the meaning of Section 3(42) of ERISA and Department
of Labor Regulation Section 2510.3-101) of an Employee Benefit Plan;


 


(2)         no
asset of Borrower shall be subject to the laws of any Governmental Authority governing the assets of an Employee Benefit Plan;
and


 


(3)         neither
Borrower nor any ERISA Affiliate shall incur any obligation or liability with respect to any ERISA Plan.


 


(f)          Notice
of Litigation or Insolvency.


 


Borrower shall give
immediate written notice to Lender of any claims, actions, suits, or proceedings at law or in equity (including any insolvency,
bankruptcy, or receivership proceeding) by or before any Governmental Authority pending or, to Borrower’s knowledge, threatened
against or affecting Borrower, Guarantor, Key Principal, or the Mortgaged Property, which claims, actions, suits, or proceedings,
if adversely determined reasonably would be expected to materially adversely affect the financial condition or business of Borrower,
Guarantor, or Key Principal, or the condition, operation, or ownership of the Mortgaged Property (including any claims, actions,
suits, or proceedings regarding fair housing, anti-discrimination, or equal opportunity, which shall always be deemed material).


 


(g)          Payment
of Costs, Fees, and Expenses.


 


In addition to the
payments specified in this Loan Agreement, Borrower shall pay, on demand, all of Lender’s out-of-pocket fees, costs, charges,
or expenses (including the reasonable fees and expenses of attorneys, accountants, and other experts) incurred by Lender in connection
with:


 


(1)         any
amendment to, or consent, or waiver required under, this Loan Agreement or any of the Loan Documents (whether or not any such amendments,
consents, or waivers are entered into);


 


(2)         defending
or participating in any litigation arising from actions by third parties and brought against or involving Lender with respect to:


 





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(A)         the
Mortgaged Property;


 


(B)         any
event, act, condition, or circumstance in connection with the Mortgaged Property; or


 


(C)         the
relationship between or among Lender, Borrower, Key Principal, and Guarantor in connection with this Loan Agreement or any of the
transactions contemplated by this Loan Agreement;


 


(3)         the
administration or enforcement of, or preservation of rights or remedies under, this Loan Agreement or any other Loan Documents
including or in connection with any litigation or appeals, any Foreclosure Event or other disposition of any collateral granted
pursuant to the Loan Documents; and


 


(4)         any
Bankruptcy Event or Guarantor Bankruptcy Event.


 


(h)          Restrictions
on Distributions.


 


No distributions or
dividends of any nature with respect to Rents or other income from the Mortgaged Property shall be made to any Person having a
direct ownership interest in Borrower if an Event of Default has occurred and is continuing.


 


(i)          Lockbox
Arrangement.


 


Borrower shall not
enter into any type of lockbox agreement or similar cash management arrangement that has not been approved by Lender in writing,
and no direct or indirect owner of Borrower shall enter into any type of lockbox agreement or similar cash management arrangement
with respect to Rents or other income from the Mortgaged Property that has not been approved by Lender in writing. Lender’s
approval of any such cash management arrangement may be conditioned upon requiring Borrower to enter into a lockbox agreement or
similar cash management arrangement with Lender in form and substance acceptable to Lender with regard to Rents and other income
from the Mortgaged Property.


 


Article
5 - THE MORTGAGE LOAN


 


Section
5.01              Representations and Warranties.


 


The representations
and warranties made by Borrower to Lender in this Section 5.01 are made as of the Effective Date and are true and correct except
as disclosed on the Exceptions to Representations and Warranties Schedule.


 


(a)          Receipt
and Review of Loan Documents.


 


Borrower has received
and reviewed this Loan Agreement and all of the other Loan Documents.


 





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(b)          No
Default.


 


No default exists under
any of the Loan Documents.


 


(c)          No
Defenses.


 


The Loan Documents
are not currently subject to any right of rescission, set-off, counterclaim, or defense by either Borrower or Guarantor, including
the defense of usury, and neither Borrower nor Guarantor has asserted any right of rescission, set-off, counterclaim, or defense
with respect thereto.


 


(d)          Loan
Document Taxes.


 


All mortgage, mortgage
recording, stamp, intangible, or any other similar taxes required to be paid by any Person under applicable law currently in effect
in connection with the execution, delivery, recordation, filing, registration, perfection, or enforcement of any of the Loan Documents,
including the Security Instrument, have been paid or will be paid in the ordinary course of the closing of the Mortgage Loan.


 


Section
5.02              Covenants.


 


(a)          Ratification
of Covenants; Estoppels; Certifications.


 


Borrower shall:


 


(1)         promptly
notify Lender in writing upon any violation of any covenant set forth in any Loan Document of which Borrower has notice or knowledge;
provided, however, any such written notice by Borrower to Lender shall not relieve Borrower of, or result in a waiver
of, any obligation under this Loan Agreement or any other Loan Document; and


 


(2)         within
ten (10) days after a request from Lender, provide a written statement, signed and acknowledged by Borrower, certifying to
Lender or any person designated by Lender, as of the date of such statement:


 


(A)         that
the Loan Documents are unmodified and in full force and effect (or, if there have been modifications, that the Loan Documents are
in full force and effect as modified and setting forth such modifications);


 


(B)         the
unpaid principal balance of the Mortgage Loan;


 


(C)         the
date to which interest on the Mortgage Loan has been paid;


 





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(D)         that
Borrower is not in default in paying the Indebtedness or in performing or observing any of the covenants or agreements contained
in this Loan Agreement or any of the other Loan Documents (or, if Borrower is in default, describing such default in reasonable
detail);


 


(E)         whether
or not there are then-existing any setoffs or defenses known to Borrower against the enforcement of any right or remedy of Lender
under the Loan Documents; and


 


(F)         any
additional facts reasonably requested in writing by Lender.


 


(b)          Further
Assurances.


 


(1)         Other
Documents As Lender May Require.


 


Within ten (10)
days after request by Lender, Borrower shall, subject to Section 5.02(d) below, execute, acknowledge, and deliver, at its cost
and expense, all further acts, deeds, conveyances, assignments, financing statements, transfers, documents, agreements, assurances,
and such other instruments as Lender may reasonably require from time to time in order to better assure, grant, and convey to Lender
the rights intended to be granted, now or in the future, to Lender under this Loan Agreement and the other Loan Documents.


 


(2)         Corrective
Actions.


 


Within ten (10)
days after request by Lender, Borrower shall provide, or cause to be provided, to Lender, at Borrower’s cost and expense,
such further documentation or information reasonably deemed necessary or appropriate by Lender in the exercise of its rights under
the related commitment letter between Borrower and Lender or to correct patent mistakes in the Loan Documents, the Title Policy,
or the funding of the Mortgage Loan.


 


(c)          Sale
of Mortgage Loan.


 


Borrower shall, subject
to Section 5.02(d) below:


 


(1)         comply
with the reasonable requirements of Lender or any Investor of the Mortgage Loan or provide, or cause to be provided, to Lender
or any Investor of the Mortgage Loan within ten (10) days of the request, at Borrower’s cost and expense, such further
documentation or information as Lender or Investor may reasonably require, in order to enable:


 


(A)         Lender
to sell the Mortgage Loan to such Investor;


 


(B)         Lender
to obtain a refund of any commitment fee from any such Investor; or


 


(C)         any
such Investor to further sell or securitize the Mortgage Loan;


 





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(2)         ratify
and affirm in writing the representations and warranties set forth in any Loan Document as of such date specified by Lender modified
as necessary to reflect changes that have occurred subsequent to the Effective Date;


 


(3)         confirm
that Borrower is not in default in paying the Indebtedness or in performing or observing any of the covenants or agreements contained
in this Loan Agreement or any of the other Loan Documents (or, if Borrower is in default, describing such default in reasonable
detail); and


 


(4)         execute
and deliver to Lender and/or any Investor such other documentation, including any amendments, corrections, deletions, or additions
to this Loan Agreement or other Loan Document(s) as is reasonably required by Lender or such Investor.


 


(d)          Limitations
on Further Acts of Borrower.


 


Nothing in Section
5.02(b) and Section 5.02(c) shall require Borrower to do any further act that has the effect of:


 


(1)         changing
the economic terms of the Mortgage Loan set forth in the related commitment letter between Borrower and Lender;


 


(2)         imposing
on Borrower or Guarantor greater personal liability under the Loan Documents than that set forth in the related commitment letter
between Borrower and Lender; or


 


(3)         materially
changing the rights and obligations of Borrower or Guarantor under the commitment letter.


 


(e)          Financing
Statements; Record Searches.


 


(1)         Borrower
shall pay all costs and expenses associated with:


 


(A)         any
filing or recording of any financing statements, including all continuation statements, termination statements, and amendments
or any other filings related to security interests in or liens on collateral; and


 


(B)         any
record searches for financing statements that Lender may require.


 


(2)         Borrower
hereby authorizes Lender to file any financing statements, continuation statements, termination statements, and amendments (including
an “all assets” or “all personal property” collateral description or words of similar import) in form and
substance as Lender may require in order to protect and preserve Lender’s lien priority and security interest in the Mortgaged
Property (and to the extent Lender has filed any such financing statements, continuation statements, or amendments prior to the
Effective Date, such filings by Lender are hereby authorized and ratified by Borrower).


 





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(f)          Loan
Document Taxes.


 


Borrower shall pay,
on demand, any transfer taxes, documentary taxes, assessments, or charges made by any Governmental Authority in connection with
the execution, delivery, recordation, filing, registration, perfection, or enforcement of any of the Loan Documents or the Mortgage
Loan.


 


Article
6 - PROPERTY USE, PRESERVATION, AND MAINTENANCE


 


Section
6.01              Representations and Warranties.


 


The representations
and warranties made by Borrower to Lender in this Section 6.01 are made as of the Effective Date and are true and correct except
as disclosed on the Exceptions to Representations and Warranties Schedule.


 


(a)          Compliance
with Law; Permits and Licenses.


 


(1)         To
Borrower’s knowledge, all improvements to the Land and the use of the Mortgaged Property comply with all applicable laws,
ordinances, statutes, rules, and regulations, including all applicable statutes, rules, and regulations pertaining to requirements
for equal opportunity, anti-discrimination, fair housing, and rent control, and Borrower has no knowledge of any action or proceeding
(or threatened action or proceeding) regarding noncompliance or nonconformity with any of the foregoing.


 


(2)         To
Borrower’s knowledge, there is no evidence of any illegal activities on the Mortgaged Property.


 


(3)         To
Borrower’s knowledge, no permits or approvals from any Governmental Authority, other than those previously obtained and furnished
to Lender, are necessary for the commencement and completion of the Repairs or Replacements, as applicable, other than those permits
or approvals which will be timely obtained in the ordinary course of business.


 


(4)         All
required permits, licenses, and certificates to comply with all zoning and land use statutes, laws, ordinances, rules, and regulations,
and all applicable health, fire, safety, and building codes, and for the lawful use and operation of the Mortgaged Property, including
certificates of occupancy, apartment licenses, or the equivalent, have been obtained and are in full force and effect.


 


(5)         No
portion of the Mortgaged Property has been purchased with the proceeds of any illegal activity.


 





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(b)          Property
Characteristics.


 


(1)         The
Mortgaged Property contains at least:


 


(A)         the
Property Square Footage;


 


(B)         the
Total Parking Spaces; and


 


(C)         the
Total Residential Units.


 


(2)         No
part of the Land is included or assessed under or as part of another tax lot or parcel, and no part of any other property is included
or assessed under or as part of the tax lot or parcels for the Land.


 


(c)          Property
Ownership.


 


Borrower is sole owner
or ground lessee of the Mortgaged Property.


 


(d)          Condition
of the Mortgaged Property.


 


(1)         Borrower
has not made any claims, and to Borrower’s knowledge, no claims have been made, against any contractor, engineer, architect,
or other party with respect to the construction or condition of the Mortgaged Property or the existence of any structural or other
material defect therein; and


 


(2)         neither
the Land nor the Improvements has sustained any damage other than damage which has been fully repaired, or is fully insured and
is being repaired in the ordinary course of business.


 


(e)          Personal
Property.


 


Borrower owns (or,
to the extent disclosed on the Exceptions to Representations and Warranties Schedule, leases) all of the Personal Property that
is material to and is used in connection with the management, ownership, and operation of the Mortgaged Property.


 


Section
6.02              Covenants


 


(a)          Use
of Property.


 


From and after the
Effective Date, Borrower shall not, unless required by applicable law or Governmental Authority:


 


(1)         change
the use of all or any part of the Mortgaged Property;


 


(2)         convert
any individual dwelling units or common areas to commercial use, or convert any common area or commercial use to individual dwelling
units;


 





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(3)         initiate
or acquiesce in a change in the zoning classification of the Land;


 


(4)         establish
any condominium or cooperative regime with respect to the Mortgaged Property;


 


(5)         subdivide
the Land; or


 


(6)         suffer,
permit, or initiate the joint assessment of any Mortgaged Property with any other real property constituting a tax lot separate
from such Mortgaged Property which could cause the part of the Land to be included or assessed under or as part of another tax
lot or parcel, or any part of any other property to be included or assessed under or as part of the tax lot or parcels for the
Land.


 


(b)          Property
Maintenance.


 


Borrower shall:


 


(1)         pay
the expenses of operating, managing, maintaining, and repairing the Mortgaged Property (including insurance premiums, utilities,
Repairs, and Replacements) before the last date upon which each such payment may be made without any penalty or interest charge
being added;


 


(2)         keep
the Mortgaged Property in good repair and marketable condition (ordinary wear and tear excepted) (including the replacement of
Personalty and Fixtures with items of equal or better function and quality) and subject to Section 9.03(b)(3) and Section 10.03(d)
restore or repair promptly, in a good and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its
original condition or condition immediately prior to the damage (if improved after the Effective Date), whether or not any insurance
proceeds or amounts received in connection with a Condemnation Action are available to cover any costs of such restoration or repair;


 


(3)         commence
all Required Repairs, Additional Lender Repairs, and Additional Lender Replacements as follows:


 


(A)         with
respect to any Required Repairs, promptly following the Effective Date (subject to Force Majeure, if applicable), in accordance
with the timelines set forth on the Required Repair Schedule, or if no timelines are provided, as soon as practical following the
Effective Date;


 


(B)         with
respect to Additional Lender Repairs, in the event that Lender determines that Additional Lender Repairs are necessary from time
to time or pursuant to Section 6.03(c), promptly following Lender’s written notice of such Additional Lender Repairs (subject
to Force Majeure, if applicable), commence any such Additional Lender Repairs in accordance with Lender’s timelines, or if
no timelines are provided, as soon as practical;


 





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(C)         with
respect to Additional Lender Replacements, in the event that Lender determines that Additional Lender Replacements are necessary
from time to time or pursuant to Section 6.03(c), promptly following Lender’s written notice of such Additional Lender Replacements
(subject to Force Majeure, if applicable), commence any such Additional Lender Replacements in accordance with Lender’s timelines,
or if no timelines are provided, as soon as practical;


 


(4)         make,
construct, install, diligently perform, and complete all Replacements and Repairs:


 


(A)         in
a good and workmanlike manner as soon as practicable following the commencement thereof, free and clear of any Liens, including
mechanics’ or materialmen’s liens and encumbrances (except Permitted Encumbrances and mechanics’ or materialmen’s
liens which attach automatically under the laws of any Governmental Authority upon the commencement of any work upon, or delivery
of any materials to, the Mortgaged Property and for which Borrower is not delinquent in the payment for any such work or materials);


 


(B)         in
accordance with all applicable laws, ordinances, rules, and regulations of any Governmental Authority, including applicable building
codes, special use permits, and environmental regulations;


 


(C)         in
accordance with all applicable insurance and bonding requirements; and


 


(D)         within
all timeframes required by Lender, and Borrower acknowledges that it shall be an Event of Default if Borrower abandons or ceases
work on any Repair at any time prior to the completion of the Repairs for a period of longer than twenty (20) days (except
when Force Majeure exists and Borrower is diligently pursuing the reinstitution of such work, provided, however, any such abandonment
or cessation shall not in any event allow the Repair to be completed after the Completion Period, subject to Force Majeure); and


 


(5)         subject
to the terms of Section 6.03(a) provide for professional management of the Mortgaged Property by a residential rental property
manager satisfactory to Lender under a contract approved by Lender in writing;


 


(6)         give
written notice to Lender of, and, unless otherwise directed in writing by Lender, appear in and defend any action or proceeding
purporting to affect the Mortgaged Property, Lender’s security for the Mortgage Loan, or Lender’s rights under this
Loan Agreement; and


 


(7)         upon
Lender’s written request, submit to Lender any contracts or work orders described in Section 13.02(b).


 





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(c)          Property
Preservation.


 


Borrower shall:


 


(1)         not
commit waste or abandon or (ordinary wear and tear excepted) permit impairment or deterioration of the Mortgaged Property;


 


(2)         except
as otherwise permitted herein in connection with Repairs and Replacements, not remove, demolish, or alter the Mortgaged Property
or any part of the Mortgaged Property (or permit any tenant or any other person to do the same) except in connection with the replacement
of tangible Personalty or Fixtures (provided such Personalty and Fixtures are replaced with items of equal or better function and
quality);


 


(3)         not
engage in or knowingly permit, and shall take appropriate measures to prevent and abate or cease and desist, any illegal activities
at the Mortgaged Property that could endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture
of the Land or otherwise materially impair the lien created by the Security Instrument or Lender’s interest in the Mortgaged
Property;


 


(4)         not
permit any condition to exist on the Mortgaged Property that would invalidate any part of any insurance coverage required by this
Loan Agreement; or


 


(5)         not
subject the Mortgaged Property to any voluntary, elective, or non-compulsory tax lien or assessment (or opt in to any voluntary,
elective, or non-compulsory special tax district or similar regime).


 


(d)          Property
Inspections.


 


Borrower shall:


 


(1)         permit
Lender, its agents, representatives, and designees to enter upon and inspect the Mortgaged Property (including in connection with
any Replacement or Repair, or to conduct any Environmental Inspection pursuant to the Environmental Indemnity Agreement), and shall
cooperate and provide access to all areas of the Mortgaged Property (subject to the rights of tenants under the Leases):


 


(A)         during
normal business hours;


 


(B)         at
such other reasonable time upon reasonable notice of not less than one (1) Business Day;


 


(C)         at
any time when exigent circumstances exist; or


 


(D)         at
any time after an Event of Default has occurred and is continuing; and


 





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(2)         pay
for reasonable costs or expenses incurred by Lender or its agents in connection with any such inspections.


 


(e)          Compliance
with Laws.


 


Borrower shall:


 


(1)         comply
with all laws, ordinances, statutes, rules, and regulations of any Governmental Authority and all recorded lawful covenants and
agreements relating to or affecting the Mortgaged Property, including all laws, ordinances, statutes, rules and regulations, and
covenants pertaining to construction of improvements on the Land, fair housing, and requirements for equal opportunity, anti-discrimination,
and Leases;


 


(2)         procure
and maintain all required permits, licenses, charters, registrations, and certificates necessary to comply with all zoning and
land use statutes, laws, ordinances, rules and regulations, and all applicable health, fire, safety, and building codes and for
the lawful use and operation of the Mortgaged Property, including certificates of occupancy, apartment licenses, or the equivalent;


 


(3)         comply
with all applicable laws that pertain to the maintenance and disposition of tenant security deposits;


 


(4)         at
all times maintain records sufficient to demonstrate compliance with the provisions of this Section 6.02(e); and


 


(5)         promptly
after receipt or notification thereof, provide Lender copies of any building code or zoning violation from any Governmental Authority
with respect to the Mortgaged Property.


 


Section
6.03              Mortgage Loan Administration Matters Regarding the Property.


 


(a)          Property
Management.


 


From and after the
Effective Date, each property manager and each property management agreement must be approved by Lender. If, in connection with
the making of the Mortgage Loan, or at any later date, Lender waives in writing the requirement that Borrower enter into a written
contract for management of the Mortgaged Property, and Borrower later elects to enter into a written contract or change the management
of the Mortgaged Property, such new property manager or the property management agreement must be approved by Lender. As a condition
to any approval by Lender, Lender may require that Borrower and such new property manager enter into a collateral assignment of
the property management agreement on a form approved by Lender. As of the Effective Date, Lender approves ASPEN 2016 LLC as property
manager.


  


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(b)          Subordination
of Fees to Affiliated Property Managers.


 


Any property manager
that is a Borrower Affiliate to whom fees are payable for the management of the Mortgaged Property must enter into an assignment
of management agreement or other agreement with Lender, in a form approved by Lender, providing for subordination of those fees
and such other provisions as Lender may require.


 


(c)          Property
Condition Assessment.


 


If, in connection with
any inspection of the Mortgaged Property, Lender determines that the condition of the Mortgaged Property has deteriorated (ordinary
wear and tear excepted) since the Effective Date, Lender may obtain, at Borrower’s expense, a property condition assessment
of the Mortgaged Property. Lender’s right to obtain a property condition assessment pursuant to this Section 6.03(c) shall
be in addition to any other rights available to Lender under this Loan Agreement in connection with any such deterioration. Any
such inspection or property condition assessment may result in Lender requiring Additional Lender Repairs or Additional Lender
Replacements as further described in Section 13.02(a)(9)(B).


 


Article
7 - LEASES AND RENTS


 


Section
7.01              Representations and Warranties.


 


The representations
and warranties made by Borrower to Lender in this Section 7.01 are made as of the Effective Date and are true and correct except
as disclosed on the Exceptions to Representations and Warranties Schedule.


 


(a)          Prior
Assignment of Rents.


 


Borrower has not executed
any:


 


(1)         prior
assignment of Rents (other than an assignment of Rents securing prior indebtedness that has been paid off and discharged or will
be paid off and discharged with the proceeds of the Mortgage Loan); or


 


(2)         instrument
which would prevent Lender from exercising its rights under this Loan Agreement or the Security Instrument.


 


(b)          Prepaid
Rents.


 


Borrower has not accepted,
and does not expect to receive prepayment of, any Rents for more than two (2) months prior to the due dates of such Rents.


 





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Section
7.02              Covenants.


 


(a)          Leases.


 


Borrower shall:


 


(1)         comply
with and observe Borrower’s obligations under all Leases, including Borrower’s obligations pertaining to the maintenance
and disposition of tenant security deposits;


 


(2)         surrender
possession of the Mortgaged Property, including all Leases and all security deposits and prepaid Rents, immediately upon appointment
of a receiver or Lender’s entry upon and taking of possession and control of the Mortgaged Property, as applicable;


 


(3)         require
that all Residential Leases have initial lease terms of not less than six (6) months and not more than twenty-four (24)
months (however, if customary in the applicable market for properties comparable to the Mortgaged Property, Residential Leases
with terms of less than six (6) months (but in no case less than one (1) month) may be permitted with Lender’s
prior written consent); and


 


(4)         promptly
provide Lender a copy of any non-Residential Lease at the time such Lease is executed (subject to Lender’s consent rights
for Material Commercial Leases in Section 7.02(b)) and, upon Lender’s written request, promptly provide Lender a copy of
any Residential Lease then in effect.


 


(b)          Commercial
Leases.


 


(1)         With
respect to Material Commercial Leases, Borrower shall not:


 


(A)         enter
into any Material Commercial Lease except with the prior written consent of Lender; or


 


(B)         modify
the terms of, extend, or terminate any Material Commercial Lease (including any Material Commercial Lease in existence on the Effective
Date) without the prior written consent of Lender.


 


In the event
that Lender’s consent with respect to any Material Commercial Lease or modification or amendment thereto pursuant to the
terms of subsection (1) above is required, Borrower shall provide Lender with a written request seeking Lender’s consent
together with a copy of the proposed Material Commercial Lease or amendment or modification to the Material Commercial Lease (as
applicable) together with all information reasonably necessary in order for Lender to make a determination with respect to such
request. Upon receipt of such request and all information requested by Lender in order to make its determination, Lender (1) shall
not unreasonably withhold its consent with respect to such request, and (2) shall provide its approval or denial of such request
within thirty (30) days of the date upon which all information that has been requested by Lender in order to make its determination
has been received.


 





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(2)         With
respect to any non-Material Commercial Lease, Borrower shall not:


 


(A)         enter
into any non-Material Commercial Lease that materially alters the use and type of operation of the premises subject to the Lease
in effect as of the Effective Date or reduces the number or size of residential units at the Mortgaged Property; or


 


(B)         modify
the terms of any non-Material Commercial Lease (including any non-Material Commercial Lease in existence on the Effective Date)
in any way that materially alters the use and type of operation of the premises subject to such non-Material Commercial Lease in
effect as of the Effective Date, reduces the number or size of residential units at the Mortgaged Property, or results in such
non-Material Commercial Lease being deemed a Material Commercial Lease.


 


(3)         With
respect to any Material Commercial Lease or non-Material Commercial Lease, Borrower shall cause the applicable tenant to provide
within ten (10) days after a request by Borrower, a certificate of estoppel, or if not provided
by tenant within such ten (10) day period, Borrower shall provide such certificate of estoppel, certifying:


 


(A)         that
such Material Commercial Lease or non-Material Commercial Lease is unmodified and in full force and effect (or if there have been
modifications, that such Material Commercial Lease or non-Material Commercial Lease is in full force and effect as modified and
stating the modifications);


 


(B)         the
term of the Lease including any extensions thereto;


 


(C)         the
dates to which the Rent and any other charges hereunder have been paid by tenant;


 


(D)         the
amount of any security deposit delivered to Borrower as landlord;


 


(E)         whether
or not Borrower is in default (or whether any event or condition exists which, with the passage of time, would constitute an event
of default) under such Lease;


 


(F)         the
address to which notices to tenant should be sent; and


 


(G)         any
other information as may be reasonably required by Lender.


 





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(c)          Payment
of Rents.


 


Borrower shall:


 


(1)         pay
to Lender upon demand all Rents after an Event of Default has occurred and is continuing;


 


(2)         cooperate
with Lender’s efforts in connection with the assignment of Rents set forth in the Security Instrument; and


 


(3)         not
accept Rent under any Lease (whether a Residential Lease or a non-Residential Lease) for more than two (2) months in advance.


 


(d)          Assignment
of Rents.


 


Borrower shall not:


 


(1)         perform
any acts nor execute any instrument that would prevent Lender from exercising its rights under the assignment of Rents granted
in the Security Instrument or in any other Loan Document; nor


 


(2)         interfere
with Lender’s collection of such Rents.


 


(e)          Further
Assignments of Leases and Rents.


 


Borrower shall execute
and deliver any further assignments of Leases and Rents as Lender may reasonably require.


 


(f)          Options
to Purchase by Tenants.


 


No Lease (whether a
Residential Lease or a non-Residential Lease) shall contain an option to purchase, right of first refusal to purchase or right
of first offer to purchase, except as required by applicable law.


 


Section
7.03              Mortgage Loan Administration Regarding Leases and Rents.


 


(a)          Material
Commercial Lease Requirements.


 


Each Material Commercial
Lease, including any renewal or extension of any Material Commercial Lease in existence as of the Effective Date, shall provide,
directly or pursuant to a subordination, non-disturbance and attornment agreement approved by Lender, that:


 


(1)         the
tenant shall, upon written notice from Lender after the occurrence of an Event of Default, pay all Rents payable under such Lease
to Lender;


 


(2)         such
Lease and all rights of the tenant thereunder are expressly subordinate to the lien of the Security Instrument;


 





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(3)         the
tenant shall attorn to Lender and any purchaser at a Foreclosure Event (such attornment to be self-executing and effective upon
acquisition of title to the Mortgaged Property by any purchaser at a Foreclosure Event or by Lender in any manner);


 


(4)         the
tenant agrees to execute such further evidences of attornment as Lender or any purchaser at a Foreclosure Event may from time to
time request; and


 


(5)         such
Lease shall not terminate as a result of a Foreclosure Event unless Lender or any other purchaser at such Foreclosure Event affirmatively
elects to terminate such Lease pursuant to the terms of the subordination, non-disturbance and attornment agreement.


 


(b)          Residential
Lease Form.


 


All Residential Leases
entered into from and after the Effective Date shall be on forms approved by Lender.


 


Article
8 - BOOKS AND RECORDS; FINANCIAL REPORTING


 


Section
8.01              Representations and Warranties.


 


The representations
and warranties made by Borrower to Lender in this Section 8.01 are made as of the Effective Date and are true and correct except
as disclosed on the Exceptions to Representations and Warranties Schedule.


 


(a)          Financial
Information.


 


All financial statements
and data, including statements of cash flow and income and operating expenses, that have been delivered to Lender in respect of
the Mortgaged Property:


 


(1)         are
true, complete, and correct in all material respects; and


 


(2)         accurately
represent the financial condition of the Mortgaged Property as of such date.


 


(b)          No
Change in Facts or Circumstances.


 


All information in
the Loan Application and in all financial statements, rent rolls, reports, certificates, and other documents submitted in connection
with the Loan Application are complete and accurate in all material respects. There has been no material adverse change in any
fact or circumstance that would make any such information incomplete or inaccurate.


 





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Section
8.02              Covenants.


 


(a)          Obligation
to Maintain Accurate Books and Records.


 


Borrower shall keep
and maintain at all times at the Mortgaged Property or the property management agent’s offices or Borrower’s General
Business Address and, upon Lender’s written request, shall make available at the Land:


 


(1)         complete
and accurate books of account and records (including copies of supporting bills and invoices) adequate to reflect correctly the
operation of the Mortgaged Property; and


 


(2)         copies
of all written contracts, Leases, and other instruments that affect Borrower or the Mortgaged Property.


 


(b)          Items
to Furnish to Lender.


 


Borrower shall furnish
to Lender the following, certified as true, complete, and accurate, in all material respects, by an individual having authority
to bind Borrower (or Guarantor, as applicable), in such form and with such detail as Lender reasonably requires:


 


(1)         within
forty-five (45) days after the end of each first, second, and third calendar quarter, a statement of income and expenses for
Borrower on a year-to-date basis as of the end of each calendar quarter;


 


(2)         within
one hundred twenty (120) days after the end of each calendar year:


 


(A)         for
any Borrower and any Guarantor that is an entity, a statement of income and expenses and a statement of cash flows for such calendar
year;


 


(B)         for
any Borrower and any Guarantor that is an individual, or a trust established for estate-planning purposes, a personal financial
statement for such calendar year;


 


(C)         when
requested in writing by Lender, balance sheet(s) showing all assets and liabilities of Borrower and Guarantor and a statement of
all contingent liabilities as of the end of such calendar year;


 


(D)         if
an energy consumption metric for the Mortgaged Property is required to be reported to any Governmental Authority, the Fannie Mae
Energy Performance Metrics report, as generated by ENERGY STAR® Portfolio Manager, for the Mortgaged Property for
such calendar year, which report must include the ENERGY STAR score, the Source Energy Use Intensity (EUI), the month and year
ending period for such ENERGY STAR score and such Source Energy Use Intensity, and the ENERGY STAR Portfolio Manager Property Identification
Number; provided that, if the Governmental Authority does not require the use of ENERGY STAR Portfolio Manager for the reporting
of the energy consumption metric and Borrower does not use ENERGY STAR Portfolio Manager, then Borrower shall furnish to Lender
the Source Energy Use Intensity for the Mortgaged Property for such calendar year;


 





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(E)         a
written certification ratifying and affirming that:


 


(i)          Borrower
has taken no action in violation of Section 4.02(d) regarding its single asset status;


 


(ii)         Borrower
has received no notice of any building code violation, or if Borrower has received such notice, evidence of remediation;


 


(iii)        Borrower
has made no application for rezoning nor received any notice that the Mortgaged Property has been or is being rezoned; and


 


(iv)        Borrower
has taken no action and has no knowledge of any action that would violate the provisions of Section 11.02(b)(1)(F) regarding liens
encumbering the Mortgaged Property;


 


(F)         an
accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and
identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact
at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts;
and


 


(G)         written
confirmation of:


 


(i)          any
changes occurring since the Effective Date (or that no such changes have occurred since the Effective Date) in (1) the direct owners
of Borrower, (2) the indirect owners (and any non-member managers) of Borrower that Control Borrower (excluding any Publicly-Held
Corporations or Publicly-Held Trusts), or (3) the indirect owners of Borrower that hold twenty-five percent (25%) or more
of the ownership interests in Borrower (excluding any Publicly-Held Corporations or Publicly-Held Trusts), and their respective
interests;


 


(ii)         the
names of all officers and directors of (1) any Borrower which is a corporation, (2) any corporation which is a general partner
of any Borrower which is a partnership, or (3) any corporation which is the managing member or non-member manager of any Borrower
which is a limited liability company; and


 





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(iii)        the
names of all managers who are not members of (1) any Borrower which is a limited liability company, (2) any limited liability company
which is a general partner of any Borrower which is a partnership, or (3) any limited liability company which is the managing member
or non-member manager of any Borrower which is a limited liability company; and


 


(H)         if
not already provided pursuant to Section 8.02(b)(2)(A) above, a statement of income and expenses for Borrower’s operation
of the Mortgaged Property on a year-to-date basis as of the end of each calendar year;


 


(3)         within
forty-five (45) days after the end of each first, second, and third calendar quarter and within one hundred twenty (120)
days after the end of each calendar year, and at any other time upon Lender’s written request, a rent schedule for the Mortgaged
Property showing the name of each tenant and for each tenant, the space occupied, the lease expiration date, the rent payable for
the current month, the date through which rent has been paid, and any related information requested by Lender; and


 


(4)         upon
Lender’s written request (but, absent an Event of Default, no more frequently than once in any six (6) month period):


 


(A)         any
item described in Section 8.02(b)(1) or Section 8.02(b)(2) for Borrower, certified as true, complete, and accurate by an individual
having authority to bind Borrower;


 


(B)         a
property management or leasing report for the Mortgaged Property, showing the number of rental applications received from tenants
or prospective tenants and deposits received from tenants or prospective tenants, and any other information requested by Lender;


 


(C)         a
statement of income and expenses for Borrower’s operation of the Mortgaged Property on a year-to-date basis as of the end
of each month for such period as requested by Lender, which statement shall be delivered within thirty (30) days after the
end of such month requested by Lender;


 


(D)         a
statement of real estate owned directly or indirectly by Borrower and Guarantor for such period as requested by Lender, which statement(s)
shall be delivered within thirty (30) days after the end of such month requested by Lender; and


 


(E)         a
statement that identifies:


 


(i)          the
direct owners of Borrower and their respective interests;


 





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(ii)         the
indirect owners (and any non-member managers) of Borrower that Control Borrower (excluding any Publicly-Held Corporations or Publicly-Held
Trusts) and their respective interests; and


 


(iii)        the
indirect owners of Borrower that hold twenty-five percent (25%) or more of the ownership interests in Borrower (excluding
any Publicly-Held Corporations or Publicly-Held Trusts) and their respective interests.


 


(c)          Audited
Financials.


 


In the event Borrower
or Guarantor receives or obtains any audited financial statements and such financial statements are required to be delivered to
Lender under Section 8.02(b), Borrower shall deliver or cause to be delivered to Lender the audited versions of such financial
statements.


 


(d)          Delivery
of Books and Records.


 


If an Event of Default
has occurred and is continuing, Borrower shall deliver to Lender, upon written demand, all books and records relating to the Mortgaged
Property or its operation.


 


Section
8.03              Mortgage Loan Administration Matters Regarding Books and Records
and Financial Reporting.


 


(a)          Lender’s
Right to Obtain Audited Books and Records.


 


Lender may require
that Borrower’s or Guarantor’s books and records be audited, at Borrower’s expense, by an independent certified
public accountant selected by Lender in order to produce or audit any statements, schedules, and reports of Borrower, Guarantor,
or the Mortgaged Property required by Section 8.02, if:


 


(1)         Borrower
or Guarantor fails to provide in a timely manner the statements, schedules, and reports required by Section 8.02 and, thereafter,
Borrower or Guarantor fails to provide such statements, schedules, and reports within the cure period provided in Section 14.01(c);


 


(2)         the
statements, schedules, and reports submitted to Lender pursuant to Section 8.02 are not full, complete, and accurate in all material
respects as determined by Lender and, thereafter, Borrower or Guarantor fails to provide such statements, schedules, and reports
within the cure period provided in Section 14.01(c); or


 


(3)         an
Event of Default has occurred and is continuing.


 


Notwithstanding the
foregoing, the ability of Lender to require the delivery of audited financial statements shall be limited to not more than once
per Borrower’s fiscal year so long as no Event of Default has occurred during such fiscal year (or any event which, with
the giving of written notice or the passage of time, or both, would constitute an Event of Default has occurred and is continuing).
Borrower shall cooperate with Lender in order to satisfy the provisions of this Section 8.03(a). All related costs and expenses
of Lender shall become immediately due and payable by Borrower within ten (10) Business Days after demand therefor.


 





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(b)          Credit
Reports; Credit Score.


 


No more often than
once in any twelve (12) month period, Lender is authorized to obtain a credit report (if applicable) on Borrower or Guarantor,
the cost of which report shall be paid by Borrower. Lender is authorized to obtain a Credit Score (if applicable) for Borrower
or Guarantor at any time at Lender’s expense.


 


Article
9 - INSURANCE


 


Section
9.01              Representations and Warranties.


 


The representations
and warranties made by Borrower to Lender in this Section 9.01 are made as of the Effective Date and are true and correct except
as disclosed on the Exceptions to Representations and Warranties Schedule.


 


(a)          Compliance
with Insurance Requirements.


 


Borrower is in compliance
with Lender’s insurance requirements (or has obtained a written waiver from Lender for any non-compliant coverage) and has
timely paid all premiums on all required insurance policies.


 


(b)          Property
Condition.


 


(1)         The
Mortgaged Property has not been damaged by fire, water, wind, or other cause of loss; or


 


(2)         if
previously damaged, any previous damage to the Mortgaged Property has been repaired and the Mortgaged Property has been fully restored.


 


Section
9.02              Covenants.


 


(a)          Insurance
Requirements.


 


(1)         As
required by Lender and applicable law, and as may be modified from time to time, Borrower shall:


 





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(A)         keep
the Improvements insured at all times against any hazards, which insurance shall include coverage against loss by fire and all
other perils insured by the “special causes of loss” coverage form, general boiler and machinery coverage, business
income coverage, and flood (if any of the Improvements are located in an area identified by the Federal Emergency Management Agency
(or any successor) as an area having special flood hazards and to the extent flood insurance is available in that area), and may
include sinkhole insurance, mine subsidence insurance, earthquake insurance, terrorism insurance, windstorm insurance and, if the
Mortgaged Property does not conform to applicable building, zoning, or land use laws, ordinance and law coverage;


 


(B)         maintain
at all times commercial general liability insurance, workmen’s compensation insurance, and such other liability, errors and
omissions, and fidelity insurance coverage; and


 


(C)         maintain
builder’s risk and public liability insurance, and other insurance in connection with completing the Repairs or Replacements,
as applicable.


 


(b)          Delivery
of Policies, Renewals, Notices, and Proceeds.


 


Borrower shall:


 


(1)         cause
all insurance policies (including any policies not otherwise required by Lender) which can be endorsed with standard non-contributing,
non-reporting mortgagee clauses making loss payable to Lender (or Lender’s assigns) to be so endorsed;


 


(2)         promptly
deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies and all receipts for
paid premiums;


 


(3)         deliver
evidence, in form and content acceptable to Lender, that each required insurance policy under this Article 9 has been renewed not
less than fifteen (15) days prior to the applicable expiration date, and (if such evidence is other than an original or duplicate
original of a renewal policy) deliver the original or duplicate original of each renewal policy (or such other evidence of insurance
as may be required by or acceptable to Lender) in form and content acceptable to Lender within ninety (90) days after the
applicable expiration date of the original insurance policy;


 


(4)         provide
immediate written notice to the insurance company and to Lender of any event of loss;


 


(5)         execute
such further evidence of assignment of any insurance proceeds as Lender may require; and


 


(6)         provide
immediate written notice to Lender of Borrower’s receipt of any insurance proceeds under any insurance policy required by
Section 9.02(a)(1) above and, if requested by Lender, deliver to Lender all of such proceeds received by Borrower to be applied
by Lender in accordance with this Article 9.


 





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Section
9.03              Mortgage Loan Administration Matters Regarding Insurance


 


(a)          Lender’s
Ongoing Insurance Requirements.


 


Borrower acknowledges
that Lender’s insurance requirements may change from time to time. All insurance policies and renewals of insurance policies
required by this Loan Agreement shall be:


 


(1)         in
the form and with the terms required by Lender;


 


(2)         in
such amounts, with such maximum deductibles and for such periods required by Lender; and


 


(3)         issued
by insurance companies satisfactory to Lender.


 


Borrower
acknowledges that any failure OF BORROWER to comply with THE REQUIREMENTS SET FORTH IN Section 9.02(a) or
Section 9.02(b)(3) above shall permit lender to purchase the applicable insurance
at Borrower’s cost. Such insurance may, but need not, protect Borrower’s interests. The coverage that Lender purchases
may not pay any claim that Borrower makes or any claim that is made against Borrower in connection with the Mortgaged Property.
If Lender purchases insurance for the Mortgaged Property as permitted hereunder, Borrower will be responsible for the costs of
that insurance, including interest at the Default Rate and any other charges Lender may impose in connection with the placement
of the insurance until the effective date of the cancellation or the expiration of the insurance. The costs of the insurance shall
be added to Borrower’s total outstanding balance or obligation and shall constitute additional Indebtedness. The costs of
the insurance may be more than the cost of insurance Borrower may be able to obtain on its own. Borrower may later cancel any insurance
purchased by Lender, but only after providing evidence that Borrower has obtained insurance as required by this Loan Agreement
and the other Loan Documents.


 


(b)          Application
of Proceeds on Event of Loss.


 


(1)         Upon
an event of loss, Lender may, at Lender’s option:


 


(A)         hold
such proceeds to be applied to reimburse Borrower for the cost of Restoration (in accordance with Lender’s then-current policies
relating to the restoration of casualty damage on similar multifamily residential properties); or


 





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(B)         apply
such proceeds to the payment of the Indebtedness, whether or not then due; provided, however, Lender shall not apply
insurance proceeds to the payment of the Indebtedness and shall permit Restoration pursuant to Section 9.03(b)(1)(A) if all of
the following conditions are met:


 


(i)          no
Event of Default has occurred and is continuing (or any event which, with the giving of written notice or the passage of time,
or both, would constitute an Event of Default has occurred and is continuing);


 


(ii)         Lender
determines that the combination of insurance proceeds and amounts provided by Borrower will be sufficient funds to complete the
Restoration;


 


(iii)        Lender
determines that the net operating income generated by the Mortgaged Property after completion of the Restoration will be sufficient
to support a debt service coverage ratio not less than the debt service coverage ratio immediately prior to the event of loss,
but in no event less than 1.0x (the debt service coverage ratio shall be calculated on a thirty (30) year amortizing basis
(if applicable, on a proforma basis approved by Lender) in all events and shall include all operating costs and other
expenses, Imposition Deposits, deposits to Collateral Accounts, and Mortgage Loan repayment obligations);


 


(iv)        Lender
determines that the Restoration will be completed before the earlier of (1) one year before the stated Maturity Date, or (2)
one year after the date of the loss or casualty; and


 


(v)         Borrower
provides Lender, upon written request, evidence of the availability during and after the Restoration of the insurance required
to be maintained by Borrower pursuant to this Loan Agreement.


 


After the completion
of Restoration in accordance with the above requirements, as determined by Lender, the balance, if any, of such proceeds shall
be returned to Borrower.


 


(2)         Notwithstanding
the foregoing, if any loss is estimated to be in an amount equal to or less than $50,000, Lender shall not exercise its rights
and remedies as power-of-attorney herein and shall allow Borrower to make proof of loss, to adjust and compromise any claims under
policies of property damage insurance, to appear in and prosecute any action arising from such policies of property damage insurance,
and to collect and receive the proceeds of property damage insurance; provided that each of the following conditions shall
be satisfied:


 


(A)         Borrower
shall immediately notify Lender of the casualty giving rise to the claim;


 





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(B)         no
Event of Default has occurred and is continuing (or any event which, with the giving of written notice or the passage of time,
or both, would constitute an Event of Default has occurred and is continuing);


 


(C)         the
Restoration will be completed before the earlier of (i) one year before the stated Maturity Date, or (ii) one year after the date
of the loss or casualty;


 


(D)         Lender
determines that the combination of insurance proceeds and amounts provided by Borrower will be sufficient funds to complete the
Restoration;


 


(E)         all
proceeds of property damage insurance shall be issued in the form of joint checks to Borrower and Lender;


 


(F)         all
proceeds of property damage insurance shall be applied to the Restoration;


 


(G)         Borrower
shall deliver to Lender evidence satisfactory to Lender of completion of the Restoration and obtainment of all lien releases;


 


(H)         Borrower
shall have complied to Lender’s satisfaction with the foregoing requirements on any prior claims subject to this provision,
if any; and


 


(I)         Lender
shall have the right to inspect the Mortgaged Property (subject to the rights of tenants under the Leases).


 


(3)         If
Lender elects to apply insurance proceeds to the Indebtedness in accordance with the terms of this Loan Agreement, Borrower shall
not be obligated to restore or repair the Mortgaged Property. Rather, Borrower shall restrict access to the damaged portion of
the Mortgaged Property and, at its expense and regardless of whether such costs are covered by insurance, clean up any debris resulting
from the casualty event, and, if required or otherwise permitted by Lender, demolish or raze any remaining part of the damaged
Mortgaged Property to the extent necessary to keep and maintain the Mortgaged Property in a safe, habitable, and marketable condition.
Nothing in this Section 9.03(b) shall affect any of Lender’s remedial rights against Borrower in connection with a breach
by Borrower of any of its obligations under this Loan Agreement or under any Loan Document, including any failure to timely pay
Monthly Debt Service Payments or maintain the insurance coverage(s) required by this Loan Agreement.


 





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(c)          Payment
Obligations Unaffected.


 


The application of
any insurance proceeds to the Indebtedness shall not extend or postpone the Maturity Date, or the due date or the full payment
of any Monthly Debt Service Payment, Monthly Replacement Reserve Deposit, or any other installments referred to in this Loan Agreement
or in any other Loan Document. Notwithstanding the foregoing, if Lender applies insurance proceeds to the Indebtedness in connection
with a casualty of less than the entire Mortgaged Property, and after such application of proceeds the debt service coverage ratio
(as determined by Lender) is less than 1.25x based on the then-applicable Monthly Debt Service Payment and the anticipated on-going
net operating income of the Mortgaged Property after such casualty event, then Lender may, at its discretion, permit an adjustment
to the Monthly Debt Service Payments that become due and owing thereafter, based on Lender’s then-current underwriting requirements.
In no event shall the preceding sentence obligate Lender to make any adjustment to the Monthly Debt Service Payments.


 


(d)          Foreclosure
Sale.


 


If the Mortgaged Property
is transferred pursuant to a Foreclosure Event or Lender otherwise acquires title to the Mortgaged Property, Borrower acknowledges
that Lender shall automatically succeed to all rights of Borrower in and to any insurance policies and unearned insurance premiums
applicable to the Mortgaged Property and in and to the proceeds resulting from any damage to the Mortgaged Property prior to such
Foreclosure Event or such acquisition.


 


(e)          Appointment
of Lender as Attorney-In-Fact.


 


Borrower hereby authorizes
and appoints Lender as attorney-in-fact pursuant to Section 14.03(c).


 


Article
10 - CONDEMNATION


 


Section
10.01              Representations and Warranties.


 


The representations
and warranties made by Borrower to Lender in this Section 10.01 are made as of the Effective Date and are true and correct except
as disclosed on the Exceptions to Representations and Warranties Schedule.


 


(a)          Prior
Condemnation Action.


 


No part of the Mortgaged
Property has been taken in connection with a Condemnation Action.


 


(b)          Pending
Condemnation Actions.


 


No Condemnation Action
is pending nor, to Borrower’s knowledge, is threatened for the partial or total condemnation or taking of the Mortgaged Property.


 





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Section
10.02              Covenants.


 


(a)          Notice
of Condemnation.


 


Borrower shall:


 


(1)         promptly
notify Lender of any Condemnation Action of which Borrower has knowledge;


 


(2)         appear
in and prosecute or defend, at its own cost and expense, any action or proceeding relating to any Condemnation Action, including
any defense of Lender’s interest in the Mortgaged Property tendered to Borrower by Lender, unless otherwise directed by Lender
in writing; and


 


(3)         execute
such further evidence of assignment of any condemnation award in connection with a Condemnation Action as Lender may require.


 


(b)          Condemnation
Proceeds.


 


Borrower shall pay
to Lender all awards or proceeds of a Condemnation Action promptly upon receipt.


 


Section
10.03              Mortgage Loan Administration Matters Regarding Condemnation.


 


(a)          Application
of Condemnation Awards.


 


Lender may apply any
awards or proceeds of a Condemnation Action, after the deduction of Lender’s expenses incurred in the collection of such
amounts, to:


 


(1)         the
restoration or repair of the Mortgaged Property, if applicable;


 


(2)         the
payment of the Indebtedness, with the balance, if any, paid to Borrower; or


 


(3)         Borrower.


 


(b)          Payment
Obligations Unaffected.


 


The application of
any awards or proceeds of a Condemnation Action to the Indebtedness shall not extend or postpone the Maturity Date, or the due
date or the full payment of any Monthly Debt Service Payment, Monthly Replacement Reserve Deposit, or any other installments referred
to in this Loan Agreement or in any other Loan Document.


 


(c)          Appointment
of Lender as Attorney-In-Fact.


 


Borrower hereby authorizes
and appoints Lender as attorney-in-fact pursuant to Section 14.03(c).


 





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(d)          Preservation
of Mortgaged Property.


 


If a Condemnation Action
results in or from damage to the Mortgaged Property and Lender elects to apply the proceeds or awards from such Condemnation Action
to the Indebtedness in accordance with the terms of this Loan Agreement, Borrower shall not be obligated to restore or repair the
Mortgaged Property. Rather, Borrower shall restrict access to any portion of the Mortgaged Property which has been damaged or destroyed
in connection with such Condemnation Action and, at Borrower’s expense and regardless of whether such costs are covered by
insurance, clean up any debris resulting in or from the Condemnation Action, and, if required by any Governmental Authority or
otherwise permitted by Lender, demolish or raze any remaining part of the damaged Mortgaged Property to the extent necessary to
keep and maintain the Mortgaged Property in a safe, habitable, and marketable condition. Nothing in this Section 10.03(d) shall
affect any of Lender’s remedial rights against Borrower in connection with a breach by Borrower of any of its obligations
under this Loan Agreement or under any Loan Document, including any failure to timely pay Monthly Debt Service Payments or maintain
the insurance coverage(s) required by this Loan Agreement.


 


Article
11 - LIENS, TRANSFERS, AND ASSUMPTIONS


 


Section
11.01              Representations and Warranties.


 


The representations
and warranties made by Borrower to Lender in this Section 11.01 are made as of the Effective Date and are true and correct except
as disclosed on the Exceptions to Representations and Warranties Schedule.


 


(a)          No
Labor or Materialmen’s Claims.


 


All parties furnishing
labor and materials on behalf of Borrower have been paid in full. There are no mechanics’ or materialmen’s liens (whether
filed or unfiled) outstanding for work, labor, or materials (and no claims or work outstanding that under applicable law could
give rise to any such mechanics’ or materialmen’s liens) affecting the Mortgaged Property, whether prior to, equal
with, or subordinate to the lien of the Security Instrument.


 


(b)          No
Other Interests.


 


No Person:


 


(1)         other
than Borrower has any possessory ownership or interest in the Mortgaged Property or right to occupy the same except under and pursuant
to the provisions of existing Leases, the material terms of all such Leases having been previously disclosed in writing to Lender;
nor


 


(2)         has
an option, right of first refusal, or right of first offer (except as required by applicable law) to purchase the Mortgaged Property,
or any interest in the Mortgaged Property.


 





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Section
11.02              Covenants.


 


(a)          Liens;
Encumbrances.


 


Borrower shall not
permit the grant, creation, or existence of any Lien, whether voluntary, involuntary, or by operation of law, on all or any portion
of the Mortgaged Property (including any voluntary, elective, or non-compulsory tax lien or assessment pursuant to a voluntary,
elective, or non-compulsory special tax district or similar regime) other than:


 


(1)         Permitted
Encumbrances;


 


(2)         the
creation of:


 


(A)         any
tax lien, municipal lien, utility lien, mechanics’ lien, materialmen’s lien, or judgment lien against the Mortgaged
Property if bonded off, released of record, or otherwise remedied to Lender’s satisfaction within sixty (60) days after
the earlier of the date Borrower has actual notice or constructive notice of the existence of such lien; or


 


(B)         any
mechanics’ or materialmen’s liens which attach automatically under the laws of any Governmental Authority upon the
commencement of any work upon, or delivery of any materials to, the Mortgaged Property and for which Borrower is not delinquent
in the payment for any such work or materials; and


 


(3)         the
lien created by the Loan Documents.


 


(b)          Transfers.


 


(1)         Mortgaged
Property.


 


Borrower
shall not Transfer, or cause or permit a Transfer of, all or any part of the Mortgaged Property (including any interest in the
Mortgaged Property) other than:


 


(A)         a
Transfer to which Lender has consented in writing;


 


(B)         Leases
permitted pursuant to the Loan Documents;


 


(C)         [reserved];


 


(D)         a
Transfer of obsolete or worn out Personalty or Fixtures that are contemporaneously replaced by items of equal or better function
and quality which are free of Liens (other than those created by the Loan Documents);


 


(E)         the
grant of an easement, servitude, or restrictive covenant to which Lender has consented, and Borrower has paid to Lender, upon demand,
all costs and expenses incurred by Lender in connection with reviewing Borrower’s request;


 





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(F)         a
lien permitted pursuant to Section 11.02(a) of this Loan Agreement; or


 


(G)         the
conveyance of the Mortgaged Property following a Foreclosure Event.


 


(2)         Interests
in Borrower, Key Principal, or Guarantor.


 


Other than
a Transfer to which Lender has consented in writing, Borrower shall not Transfer, or cause or permit to be Transferred:


 


(A)         any
direct or indirect ownership interest in Borrower, Key Principal, or Guarantor (if applicable) if such Transfer would cause a change
in Control;


 


(B)         a
direct or indirect Restricted Ownership Interest in Borrower, Key Principal, or Guarantor (if applicable);


 


(C)         fifty
percent (50%) or more of Key Principal’s or Guarantor’s direct or indirect ownership interests in Borrower that
existed on the Effective Date (individually or on an aggregate basis);


 


(D)         the
economic benefits or rights to cash flows attributable to any ownership interests in Borrower, Key Principal, or Guarantor (if
applicable) separate from the Transfer of the underlying ownership interests if the Transfer of the underlying ownership interest
is prohibited by this Loan Agreement; or


 


(E)         a
Transfer to a new key principal or new guarantor (if such new key principal or guarantor is an entity), which entity has an organizational
existence termination date that ends before the Maturity Date.


 


Notwithstanding
the foregoing, if a Publicly-Held Corporation or a Publicly-Held Trust Controls Borrower, Key Principal, or Guarantor, or owns
a direct or indirect Restricted Ownership Interest in Borrower, Key Principal, or Guarantor, a Transfer of any ownership interests
in such Publicly-Held Corporation or Publicly-Held Trust shall not be prohibited under this Loan Agreement as long as (i) such
Transfer does not result in a conversion of such Publicly-Held Corporation or Publicly-Held Trust to a privately held entity, and
(ii) Borrower provides written notice to Lender not later than thirty (30) days thereafter of any such Transfer that results
in any Person owning ten percent (10%) or more of the ownership interests in such Publicly-Held Corporation or Publicly-Held
Trust.


 





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(3)         Name
Change or Entity Conversion.


 


Lender shall
consent to Borrower changing its name, changing its jurisdiction of organization, or converting from one type of legal entity into
another type of legal entity for any lawful purpose, provided that:


 


(A)         Lender
receives written notice at least thirty (30) days prior to such change or conversion, which notice shall include organizational
charts that reflect the structure of Borrower both prior to and subsequent to such name change or entity conversion;


 


(B)         such
Transfer is not otherwise prohibited under the provisions of Section 11.02(b)(2);


 


(C)         Borrower
executes an amendment to this Loan Agreement and any other Loan Documents required by Lender documenting the name change or entity
conversion;


 


(D)         Borrower
agrees and acknowledges, at Borrower’s expense, that (i) Borrower will execute and record in the land records any instrument
required by the Property Jurisdiction to be recorded to evidence such name change or entity conversion (or provide Lender with
written confirmation from the title company (via electronic mail or letter) that no such instrument is required), (ii) Borrower
will execute any additional documents required by Lender, including the amendment to this Loan Agreement, and allow such documents
to be recorded or filed in the land records of the Property Jurisdiction, (iii) Lender will obtain a “date down” endorsement
to the Lender’s Title Policy (or obtain a new Title Policy if a “date down” endorsement is not available in the
Property Jurisdiction), evidencing title to the Mortgaged Property being in the name of the successor entity and the Lien of the
Security Instrument against the Mortgaged Property, and (iv) Lender will file any required UCC-3 financing statement and make any
other filing deemed necessary to maintain the priority of its Liens on the Mortgaged Property; and


 


(E)         no
later than ten (10) days subsequent to such name change or entity conversion, Borrower shall provide Lender (i) the documentation
filed with the appropriate office in Borrower’s state of formation evidencing such name change or entity conversion, (ii)
copies of the organizational documents of Borrower, including any amendments, filed with the appropriate office in Borrower’s
state of formation reflecting the post-conversion Borrower name, form of organization, and structure, and (iii) if available, new
certificates of good standing or valid formation for Borrower.


 





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(4)         No
Delaware Statutory Trust or Series LLC Conversion.


 


Notwithstanding
any provisions herein to the contrary, no Borrower, Guarantor, or Key Principal shall convert to a Delaware Statutory Trust or
a series limited liability company.


 


(c)          No
Other Indebtedness.


 


Other than the Mortgage
Loan, Borrower shall not incur or be obligated at any time with respect to any loan or other indebtedness (except trade payables
as otherwise permitted in this Loan Agreement), including any indebtedness secured by a Lien on, or the cash flows from, the Mortgaged
Property.


 


(d)          No
Mezzanine Financing or Preferred Equity.


 


Neither Borrower nor
any direct or indirect owner of Borrower shall: (1) incur any Mezzanine Debt other than Permitted Mezzanine Debt; (2) issue any
Preferred Equity other than Permitted Preferred Equity; or (3) incur any similar indebtedness or issue any similar equity.


 


Section
11.03              Mortgage Loan Administration Matters Regarding Liens, Transfers,
and Assumptions.


 


(a)          Assumption
of Mortgage Loan.


 


Lender shall consent
to a Transfer of the Mortgaged Property to and an assumption of the Mortgage Loan by a new borrower if each of the following conditions
is satisfied prior to the Transfer:


 


(1)         Borrower
has submitted to Lender all information required by Lender to make the determination required by this Section 11.03(a);


 


(2)         no
Event of Default has occurred and is continuing, and no event which, with the giving of written notice or the passage of time,
or both, would constitute an Event of Default has occurred and is continuing;


 


(3)         Lender
determines that:


 


(A)         the
proposed new borrower, new key principal, and any other new guarantor fully satisfy all of Lender’s then-applicable borrower,
key principal, or guarantor eligibility, credit, management, and other loan underwriting standards, which shall include an analysis
of (i) the previous relationships between Lender and the proposed new borrower, new key principal, new guarantor, and any Person
in Control of them, and the organization of the new borrower, new key principal, and new guarantor (if applicable), and (ii) the
operating and financial performance of the Mortgaged Property, including physical condition and occupancy;


 





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(B)         none
of the proposed new borrower, new key principal, and any new guarantor, or any owners of the proposed new borrower, new key principal,
and any new guarantor, are a Prohibited Person; and


 


(C)         none
of the proposed new borrower, new key principal, and any new guarantor (if any of such are entities) shall have an organizational
existence termination date that ends before the Maturity Date;


 


(4)         [reserved];


 


(5)         the
proposed new borrower has:


 


(A)         executed
an assumption agreement acceptable to Lender that, among other things, requires the proposed new borrower to assume and perform
all obligations of Borrower (or any other transferor), and that may require that the new borrower comply with any provisions of
any Loan Document that previously may have been waived by Lender for Borrower, subject to the terms of Section 11.03(g);


 


(B)         if
required by Lender, delivered to the Title Company for filing and/or recording in all applicable jurisdictions, all applicable
Loan Documents including the assumption agreement to correctly evidence the assumption and the confirmation, continuation, perfection,
and priority of the Liens created hereunder and under the other Loan Documents; and


 


(C)         delivered
to Lender a “date-down” endorsement to the Title Policy acceptable to Lender (or a new title insurance policy if a
“date-down” endorsement is not available);


 


(6)         one
or more individuals or entities acceptable to Lender as new guarantors have executed and delivered to Lender:


 


(A)         an
assumption agreement acceptable to Lender that requires the new guarantor to assume and perform all obligations of Guarantor under
any Guaranty given in connection with the Mortgage Loan; or


 


(B)         a
substitute Non-Recourse Guaranty and other substitute guaranty in a form acceptable to Lender;


 


(7)         Lender
has reviewed and approved the Transfer documents; and


 


(8)         Lender
has received the fees described in Section 11.03(g).


 





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(b)          Transfers
to Key Principal-Owned Affiliates or Guarantor-Owned Affiliates.


 


(1)         Except
as otherwise covered in Section 11.03(b)(2) below, Transfers of direct or indirect ownership interests in Borrower to Key Principal
or Guarantor, or to a transferee through which Key Principal or Guarantor (as applicable) Controls Borrower with the same rights
and abilities as Key Principal or Guarantor (as applicable) Controls Borrower immediately prior to the date of such Transfer, shall
be consented to by Lender if:


 


(A)         such
Transfer satisfies the applicable requirements of Section 11.03(a), other than Section 11.03(a)(5); and


 


(B)         after
giving effect to any such Transfer, each Key Principal or Guarantor (as applicable) continues to own not less than fifty percent (50%)
of such Key Principal’s or Guarantor’s (as applicable) direct or indirect ownership interests in Borrower that existed
on the Effective Date.


 


(2)         Transfers
of direct or indirect interests in Borrower held by a Key Principal or Guarantor to other Key Principals or Guarantors, as applicable,
shall be consented to by Lender if such Transfer satisfies the following conditions:


 


(A)         the
Transfer does not cause a change in the Control of Borrower; and


 


(B)         the
transferor Key Principal or Guarantor maintains the same right and ability to Control Borrower as existed prior to the Transfer.


 


If the conditions set forth in this Section
11.03(b) are satisfied, the Transfer Fee shall be waived provided Borrower shall pay the Review Fee and out-of-pocket costs set
forth in Section 11.03(g).


 


(c)          Estate
Planning.


 


Notwithstanding the
provisions of Section 11.02(b)(2), so long as (1) the Transfer does not cause a change in the Control of Borrower, and (2) Key
Principal and Guarantor, as applicable, maintain the same right and ability to Control Borrower as existed prior to the Transfer,
Lender shall consent to Transfers of direct or indirect ownership interests in Borrower and Transfers of direct or indirect ownership
interests in an entity Key Principal or entity Guarantor to:


 


(A)         Immediate
Family Members of such transferor, each of whom must have obtained the legal age of majority;


 


(B)         United
States domiciled trusts established for the benefit of the transferor or Immediate Family Members of the transferor; or


 





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(C)         partnerships
or limited liability companies of which the partners or members, respectively, are comprised entirely of (i) such transferor and
Immediate Family Members (each of whom must have obtained the legal age of majority) of such transferor, (ii) Immediate Family
Members (each of whom must have obtained the legal age of majority) of such transferor, or (iii) United States domiciled trusts
established for the benefit of the transferor or Immediate Family Members of the transferor.


 


If the conditions set forth in this Section
11.03(c) are satisfied, the Transfer Fee shall be waived provided Borrower shall pay the Review Fee and out-of-pocket costs set
forth in Section 11.03(g).


 


(d)          Termination
or Revocation of Trust.


 


If any of Borrower,
Guarantor, or Key Principal is a trust, or if Control of Borrower, Guarantor, or Key Principal is Transferred or if a Restricted
Ownership Interest in Borrower, Guarantor, or Key Principal would be Transferred due to the termination or revocation of a trust,
the termination or revocation of such trust is an unpermitted Transfer; provided that the termination or revocation of the trust
due to the death of an individual trustor shall not be considered an unpermitted Transfer so long as:


 


(1)         Lender
is notified within thirty (30) days of the death; and


 


(2)         such
Borrower, Guarantor, Key Principal, or other Person, as applicable, is replaced with an individual or entity acceptable to Lender,
in accordance with the provisions of Section 11.03(a) within ninety (90) days of the date of the death causing the termination
or revocation.


 


If the conditions set forth in this Section
11.03(d) are satisfied, the Transfer Fee shall be waived; provided Borrower shall pay the Review Fee and out-of-pocket costs set
forth in Section 11.03(g).


 


(e)          Death
of Key Principal or Guarantor; Transfer Due to Death.


 


(1)         If
a Key Principal or Guarantor that is a natural person dies, or if Control of Borrower, Guarantor, or Key Principal is Transferred,
or if a Restricted Ownership Interest in Borrower, Guarantor, or Key Principal would be Transferred as a result of the death of
a Person (except in the case of trusts which is addressed in Section 11.03(d)), Borrower must notify Lender in writing within ninety (90)
days in the event of such death. Unless waived in writing by Lender, the deceased shall be replaced by an individual or entity
within one hundred eighty (180) days, subject to Borrower’s satisfaction of the following conditions:


 


(A)         Borrower
has submitted to Lender all information required by Lender to make the determination required by this Section 11.03(e);


 





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(B)         Lender
determines that, if applicable:


 


(i)          any
proposed new key principal and any other new guarantor (or Person Controlling such new key principal or new guarantor) fully satisfies
all of Lender’s then-applicable key principal or guarantor eligibility, credit, management, and other loan underwriting standards
(including any standards with respect to previous relationships between Lender and the proposed new key principal and new guarantor
(or Person Controlling such new key principal or new guarantor) and the organization of the new key principal and new guarantor);


 


(ii)         none
of any proposed new key principal or any new guarantor, or any owners of the proposed new key principal or any new guarantor, is
a Prohibited Person; and


 


(iii)        none
of any proposed new key principal or any new guarantor (if any of such are entities) shall have an organizational existence termination
date that ends before the Maturity Date; and


 


(C)         if
applicable, one or more individuals or entities acceptable to Lender as new guarantors have executed and delivered to Lender:


 


(i)          an
assumption agreement acceptable to Lender that requires the new guarantor to assume and perform all obligations of Guarantor under
any Guaranty given in connection with the Mortgage Loan; or


 


(ii)         a
substitute Non-Recourse Guaranty and other substitute guaranty in a form acceptable to Lender.


 


(2)         In
the event a replacement Key Principal, Guarantor, or other Person is required by Lender due to the death described in this Section
11.03(e), and such replacement has not occurred within such period, the period for replacement may be extended by Lender to a date
not more than one year from the date of such death; however, Lender may require as a condition to any such extension that:


 


(A)         the
then-current property manager be replaced with a property manager reasonably acceptable to Lender (or if a property manager has
not been previously engaged, a property manager reasonably acceptable to Lender be engaged); or


 


(B)         a
lockbox agreement or similar cash management arrangement (with the property manager) reasonably acceptable to Lender during such
extended replacement period be instituted.


 


 


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If the conditions set forth in this Section
11.03(e) are satisfied, the Transfer Fee shall be waived, provided Borrower shall pay the Review Fee and out-of-pocket costs set
forth in Section 11.03(g).


 


(f)          Bankruptcy
of Guarantor.


 


(1)         Upon
the occurrence of any Guarantor Bankruptcy Event, unless waived in writing by Lender, the applicable Guarantor shall be replaced
by an individual or entity within ninety (90) days of such Guarantor Bankruptcy Event, subject to Borrower’s satisfaction
of the following conditions:


 


(A)         Borrower
has submitted to Lender all information required by Lender to make the determination required by this Section 11.03(f);


 


(B)         Lender
determines that:


 


(i)          the
proposed new guarantor fully satisfies all of Lender’s then-applicable guarantor eligibility, credit, management, and other
loan underwriting standards (including any standards with respect to previous relationships between Lender and the proposed new
guarantor and the organization of the new guarantor (if applicable));


 


(ii)         no
new guarantor is a Prohibited Person; and


 


(iii)        no
new guarantor (if any of such are entities) shall have an organizational existence termination date that ends before the Maturity
Date; and


 


(C)         one
or more individuals or entities acceptable to Lender as new guarantors have executed and delivered to Lender:


 


(i)          an
assumption agreement acceptable to Lender that requires the new guarantor to assume and perform all obligations of Guarantor under
any Guaranty given in connection with the Mortgage Loan; or


 


(ii)         a
substitute Non-Recourse Guaranty and other substitute guaranty in a form acceptable to Lender.


 


(2)         In
the event a replacement Guarantor is required by Lender due to the Guarantor Bankruptcy Event described in this Section 11.03(f),
and such replacement has not occurred within such period, the period for replacement may be extended by Lender in its discretion;
however, Lender may require as a condition to any such extension that:


 


(A)         the
then-current property manager be replaced with a property manager reasonably acceptable to Lender (or if a property manager has
not been previously engaged, a property manager reasonably acceptable to Lender be engaged); or


  


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(B)         a
lockbox agreement or similar cash management arrangement (with the property manager) reasonably acceptable to Lender during such
extended replacement period be instituted.


 


If the conditions set forth in this Section
11.03(f) are satisfied, the Transfer Fee shall be waived, provided Borrower shall pay the Review Fee and out-of-pocket costs set
forth in Section 11.03(g).


 


(g)          Further
Conditions to Transfers and Assumption.


 


(1)         In
connection with any Transfer of the Mortgaged Property, or an ownership interest in Borrower, Key Principal, or Guarantor for which
Lender’s approval is required under this Loan Agreement (including Section 11.03(a)), Lender may, as a condition to any such
approval, require:


 


(A)         additional
collateral, guaranties, or other credit support to mitigate any risks concerning the proposed transferee or the performance or
condition of the Mortgaged Property;


 


(B)         amendment
of the Loan Documents to delete or modify any specially negotiated terms or provisions previously granted for the exclusive benefit
of original Borrower, Key Principal, or Guarantor and to restore the original provisions of the standard Fannie Mae form multifamily
loan documents, to the extent such provisions were previously modified; or


 


(C)         a
modification to the amounts required to be deposited into the Reserve/Escrow Account pursuant to the terms of Section 13.02(a)(3)(B).


 


(2)         In
connection with any request by Borrower for consent to a Transfer, Borrower shall pay to Lender upon demand:


 


(A)         the
Transfer Fee (to the extent charged by Lender);


 


(B)         the
Review Fee (regardless of whether Lender approves or denies such request); and


 


(C)         all
of Lender’s out-of-pocket costs (including reasonable attorneys’ fees) incurred in reviewing the Transfer request,
regardless of whether Lender approves or denies such request.


 





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(h)          Further
Transfers Affecting Clipper Realty L.P.


 


The following
Transfers to the extent otherwise prohibited by the terms and provisions of this Article 11, including, without limitation, Section
11.02(b)(2), shall be permitted (without payment of the Transfer Fee) provided the conditions set forth herein are satisfied:


 


(1)          A
Transfer that results in the cumulative Transfer of more than 50% of the limited partnership interests (“Investor Interests”)
in Clipper Realty L.P. (“Clipper”) to other limited partners or to other third party transferees (“Investor
Interest Transfer”), provided that each of the following conditions is satisfied:


 


(A)         Borrower
provides Lender with at least 30 days prior Notice of the proposed Investor Interest Transfer.


 


(B)         At
the time of the proposed Investor Interest Transfer, no Event of Default has occurred and is continuing and no event or condition
has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.


 


(C)         Following
the Investor Interest Transfer, Control and management of the day-to-day operations of Borrower continue to be held by Clipper
Realty Inc. (“Clipper Realty”).


 


(D)         At
any time that one Person (or a group of affiliated Persons) acquire as a result of the Investor Interest Transfer 25% or more of
the aggregate of direct or indirect interests in Borrower the following additional requirements shall be satisfied:


 


(1)         Borrower
pays to Lender the Review Fee (regardless of whether Lender approves or denies such request);


 


(2)         Borrower
pays to Lender all of Lender’s out-of-pocket costs (including reasonable attorneys’ fees) incurred in reviewing the
Transfer request, regardless of whether Lender approves or denies such request; and


 


(3)         Lender
shall receive customary credit, background and associated searches that are acceptable to Lender.


 


(E)         Lender
receives organizational charts reflecting the structure of Borrower prior to and after the Investor Interest Transfer and copies
of the then-current organizational documents of Clipper, including any amendments.


 


(F)         
None of any proposed transferee is a Prohibited Person;


 





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(G)         With
respect to such Investor Interest Transfer, the terms and provisions of the Bond Regulatory Agreement have been complied with
and Borrower delivers a certification to Lender confirming same together with copies of any required approvals (if any).


 


(2)         The
sale or Transfer of limited partnership interests in Clipper to Clipper Realty and, in connection with such sale or transfer,
such limited partnership interests shall be converted to general partnership interests (the “GP Interest Transfer”)
shall be permitted without Lender’s consent provided that each of the following conditions is satisfied:


 


(A)         Borrower
provides Lender with Notice of the GP Interest Transfer within thirty (30) days after the GP Interest Transfer is complete and
identifies the limited partner that made such GP Interest Transfer.


 


(B)         At
the time of the GP Interest Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred
and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.


 


(C)         The
transferee of the GP Interest Transfer is Clipper Realty.


 


(D)         Following
the GP Interest Transfer, Control and management of the day-to-day operations of Borrower continue to be held by Clipper Realty.


 


(E)         Lender
receives organizational charts reflecting the structure of Borrower prior to and after the GP Interest Transfer and copies of the
then-current organizational documents of Clipper, including any amendments.


 


(F)         with
respect to such GP Interest Transfer, the terms and provisions of the Bond Regulatory Agreement have been complied with and Borrower
delivers a certification to Lender confirming same together with copies of any required approvals (if any).


 


(3)         The
sale or Transfer of general partnership interests in Clipper owned by Clipper Realty to an existing limited partner or to additional
third party transferees and, in connection with such sale or transfer, such general partnership interests shall be converted to
limited partnership interests (the “LP Interest Transfer”) provided that each of the following conditions is
satisfied:


 





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		(A)	No such
                                         LP Interest Transfer shall exceed in any case in the aggregate more than twenty percent
                                         (20%) of the general partnership interests in Clipper such that at no time shall Clipper
                                         Realty ever own less than 76.79% general partnership interest in Clipper.



 


		(B)	Borrower provides Lender with at least 30 days prior
Notice of the proposed LP Interest Transfer if the proposed LP Interest Transfer.



 


		(C)	At the time of the LP Interest Transfer, no Event of
Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice
or the passage of time, or both, would become an Event of Default.



 


		(D)	Following the LP Interest Transfer, Control and management
of the day-to-day operations of Borrower continue to be held by Clipper Realty.



 


		(E)	At any time that one Person (or a group of affiliated
Persons) acquire as a result of the LP Interest Transfer 25% or more of the aggregate direct or indirect interests in Borrower,
the following shall be satisfied:



 


		(1)	Borrower pays to Lender the Review Fee (regardless of
whether Lender approves or denies such request);



 


		(2)	Borrower pays to Lender all of Lender’s out-of-pocket
costs (including reasonable attorneys’ fees) incurred in reviewing the Transfer request, regardless of whether Lender approves
or denies such request; and



 


		(3)	Lender shall receive customary credit, background and
associated searches that are acceptable to Lender.



 


		(F)	Lender receives organizational charts reflecting the
structure of Borrower prior to and after the Investor Interest Transfer and copies of the then-current organizational documents
of Clipper Realty, including any amendments.



 


		(G)	none of any proposed transferee is a Prohibited Person.



 


		(H)	with respect to such Investor Interest Transfer, the
terms and provisions of the Bond Regulatory Agreement have been complied with and Borrower delivers a certification to Lender
confirming same together with copies of any required approvals (if any).



 





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Article
12 - IMPOSITIONS


 


Section
12.01              Representations and Warranties.


 


The representations
and warranties made by Borrower to Lender in this Section 12.01 are made as of the Effective Date and are true and correct except
as disclosed on the Exceptions to Representations and Warranties Schedule.


 


(a)          Payment
of Taxes, Assessments, and Other Charges.


 


Borrower has:


 


(1)         paid
(or with the approval of Lender, established an escrow fund sufficient to pay when due and payable) all amounts and charges relating
to the Mortgaged Property that have become due and payable before any fine, penalty interest, lien, or costs may be added thereto,
including Impositions, leasehold payments, and ground rents;


 


(2)         paid
all Taxes for the Mortgaged Property that have become due before any fine, penalty interest, lien, or costs may be added thereto
pursuant to any notice of assessment received by Borrower and any and all taxes that have become due against Borrower before any
fine, penalty interest, lien, or costs may be added thereto;


 


(3)         no
knowledge of any basis for any additional assessments;


 


(4)         no
knowledge of any presently pending special assessments against all or any part of the Mortgaged Property, or any presently pending
special assessments against Borrower; and


 


(5)         not
received any written notice of any contemplated special assessment against the Mortgaged Property, or any contemplated special
assessment against Borrower.


 


Section
12.02               Covenants.


 


(a)          Imposition
Deposits, Taxes, and Other Charges.


 


Borrower shall:


 


(1)         deposit
the Imposition Deposits with Lender on each Payment Date (or on another day designated in writing by Lender) in amount sufficient,
in Lender’s discretion, to enable Lender to pay each Imposition before the last date upon which such payment may be made
without any penalty or interest charge being added, plus an amount equal to no more than one-sixth (1/6) (or the amount permitted
by applicable law) of the Impositions for the trailing twelve (12) months (calculated based on the aggregate annual Imposition
costs divided by twelve (12) and multiplied by two (2));


 





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(2)         deposit
with Lender, within ten (10) days after written notice from Lender (subject to applicable law), such additional amounts estimated
by Lender to be reasonably necessary to cure any deficiency in the amount of the Imposition Deposits held for payment of a specific
Imposition;


 


(3)         except
as set forth in Section 12.03(c) below, pay all Impositions, leasehold payments, ground rents, and Taxes when due and before any
fine, penalty, interest, lien, or costs may be added thereto;


 


(4)         promptly
deliver to Lender a copy of all notices of, and invoices for, Impositions, and, if Borrower pays any Imposition directly, Borrower
shall promptly furnish to Lender receipts evidencing such payments; and


 


(5)         promptly
deliver to Lender a copy of all notices of any special assessments and contemplated special assessments against the Mortgaged Property
or Borrower.


 


Section
12.03              Mortgage Loan Administration Matters Regarding Impositions.


 


(a)          Maintenance
of Records by Lender.


 


Lender shall maintain
records of the monthly and aggregate Imposition Deposits held by Lender for the purpose of paying Taxes, insurance premiums, and
each other obligation of Borrower for which Imposition Deposits are required.


 


(b)          Imposition
Accounts.


 


All Imposition Deposits
shall be held in an institution (which may be Lender, if Lender is such an institution) whose deposits or accounts are insured
or guaranteed by a federal agency and which accounts meet the standards for custodial accounts as required by Lender from time
to time. Lender shall not be obligated to open additional accounts, or deposit Imposition Deposits in additional institutions,
when the amount of the Imposition Deposits exceeds the maximum amount of the federal deposit insurance or guaranty. No interest,
earnings, or profits on the Imposition Deposits shall be paid to Borrower unless applicable law so requires. Imposition Deposits
shall not be trust funds, nor shall they operate to reduce the Indebtedness, unless applied by Lender for that purpose in accordance
with this Loan Agreement. For the purposes of 9-104(a)(3) of the UCC, Lender is the owner of the Imposition Deposits and shall
be deemed a “customer” with sole control of the account holding the Imposition Deposits.


 


(c)          Payment
of Impositions; Sufficiency of Imposition Deposits.


 


Lender may pay an Imposition
according to any bill, statement, or estimate from the appropriate public office or insurance company without inquiring into the
accuracy of the bill, statement, or estimate or into the validity of the Imposition. Imposition Deposits shall be required to be
used by Lender to pay Taxes, insurance premiums and any other individual Imposition only if:


 


 


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(1)         no
Event of Default exists;


 


(2)         Borrower
has timely delivered to Lender all applicable bills or premium notices that it has received; and


 


(3)         sufficient
Imposition Deposits are held by Lender for each Imposition at the time such Imposition becomes due and payable.


 


Lender shall have no
liability to Borrower or any other Person for failing to pay any Imposition if any of the conditions are not satisfied. If at any
time the amount of the Imposition Deposits held for payment of a specific Imposition exceeds the amount reasonably deemed necessary
by Lender to be held in connection with such Imposition, the excess may be credited against future installments of Imposition Deposits
for such Imposition.


 


(d)          Imposition
Deposits Upon Event of Default.


 


If an Event of Default
has occurred and is continuing, Lender may apply any Imposition Deposits, in such amount and in such order as Lender determines,
to pay any Impositions or as a credit against the Indebtedness.


 


(e)          Contesting
Impositions.


 


Other than insurance
premiums, Borrower may contest, at its expense, by appropriate legal proceedings, the amount or validity of any Imposition if:


 


(1)         Borrower
notifies Lender of the commencement or expected commencement of such proceedings;


 


(2)         Lender
determines that the Mortgaged Property is not in danger of being sold or forfeited;


 


(3)         Borrower
deposits with Lender (or the applicable Governmental Authority if required by applicable law) reserves sufficient to pay the contested
Imposition, if required by Lender (or the applicable Governmental Authority);


 


(4)         Borrower
furnishes whatever additional security is required in the proceedings or is reasonably requested in writing by Lender; and


 


(5)         Borrower
commences, and at all times thereafter diligently prosecutes, such contest in good faith until a final determination is made by
the applicable Governmental Authority.


 





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(f)          Release
to Borrower.


 


Upon payment in full
of all sums secured by the Security Instrument and this Loan Agreement and release by Lender of the lien of the Security Instrument,
Lender shall disburse to Borrower the balance of any Imposition Deposits then on deposit with Lender.


 


Article
13 - REPLACEMENT RESERVE AND REPAIRS


 


Section
13.01              Covenants.


 


(a)          Initial
Deposits to Replacement Reserve Account and Repairs Escrow Account.


 


On the Effective Date,
Borrower shall pay to Lender:


 


(1)         the
Initial Replacement Reserve Deposit for deposit into the Replacement Reserve Account; and


 


(2)         the
Repairs Escrow Deposit for deposit into the Repairs Escrow Account.


 


(b)          Monthly
Replacement Reserve Deposits.


 


Borrower shall deposit
the applicable Monthly Replacement Reserve Deposit into the Replacement Reserve Account on each Payment Date.


 


(c)          Payment
for Replacements and Repairs.


 


Borrower shall:


 


(1)         pay
all invoices for the Replacements and Repairs, regardless of whether funds on deposit in the Replacement Reserve Account or the
Repairs Escrow Account, as applicable, are sufficient, prior to any request for disbursement from the Replacement Reserve Account
or the Repairs Escrow Account, as applicable (unless Lender has agreed to issue joint checks in connection with a particular Replacement
or Repair);


 


(2)         pay
all applicable fees and charges of any Governmental Authority on account of the Replacements and Repairs, as applicable; and


 


(3)         provide
evidence satisfactory to Lender of completion of the Replacements and any Required Repairs (within the Completion Period or within
such other period or by such other date set forth in the Required Repair Schedule and any Borrower Requested Repairs and Additional
Lender Repairs (by the date specified by Lender for any such Borrower Requested Repairs or Additional Lender Repairs)).


 





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(d)          Assignment
of Contracts for Replacements and Repairs.


 


Borrower shall collaterally
assign to Lender as additional security any contract or subcontract for Replacements or Repairs, upon Lender’s written request,
on a form of assignment approved by Lender.


 


(e)          Indemnification.


 


If Lender elects to
exercise its rights under Section 14.03 due to Borrower’s failure to timely commence or complete any Replacements or Repairs,
Borrower shall indemnify and hold Lender harmless for, from and against any and all actions, suits, claims, demands, liabilities,
losses, damages, obligations, and costs or expenses, including litigation costs and reasonable attorneys’ fees, arising from
or in any way connected with the performance by Lender of the Replacements or Repairs or investment of the Reserve/Escrow Account
Funds; provided that Borrower shall have no indemnity obligation if such actions, suits, claims, demands, liabilities, losses,
damages, obligations, and costs or expenses, including litigation costs and reasonable attorneys’ fees, arise as a result
of the willful misconduct or gross negligence of Lender, Lender’s agents, employees, or representatives as determined by
a court of competent jurisdiction pursuant to a final non-appealable court order.


 


(f)          Amendments
to Loan Documents.


 


Subject to Section
5.02, Borrower shall execute and deliver to Lender, upon written request, an amendment to this Loan Agreement, the Security Instrument,
and any other Loan Document deemed necessary or desirable to perfect Lender’s lien upon any portion of the Mortgaged Property
for which Reserve/Escrow Account Funds were expended.


 


(g)          Administrative
Fees and Expenses.


 


Borrower shall pay
to Lender:


 


(1)         by
the date specified in the applicable invoice, the Repairs Escrow Account Administrative Fee and the Replacement Reserve Account
Administration Fee for Lender’s services in administering the Repairs Escrow Account and Replacement Reserve Account and
investing the funds on deposit in the Repairs Escrow Account and the Replacement Reserve Account, respectively;


 


(2)         upon
demand, a reasonable inspection fee, not exceeding the Maximum Inspection Fee, for each inspection of the Mortgaged Property by
Lender in connection with a Repair or Replacement, plus all other reasonable costs and out-of-pocket expenses relating to such
inspections; and


 


(3)         upon
demand, all reasonable fees charged by any engineer, architect, inspector or other person inspecting the Mortgaged Property on
behalf of Lender for each inspection of the Mortgaged Property in connection with a Repair or Replacement, plus all other reasonable
costs and out-of-pocket expenses relating to such inspections.


 





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Section
13.02              Mortgage Loan Administration Matters Regarding Reserves.


 


(a)          Accounts,
Deposits, and Disbursements.


 


(1)         Custodial
Accounts.


 


(A)         The
Replacement Reserve Account shall be an interest-bearing account that meets the standards for custodial accounts as required by
Lender from time to time. Lender shall not be responsible for any losses resulting from the investment of the Replacement Reserve
Deposits or for obtaining any specific level or percentage of earnings on such investment. All interest, if any, earned on the
Replacement Reserve Deposits shall be added to and become part of the Replacement Reserve Account; provided, however,
if applicable law requires, and so long as no Event of Default has occurred and is continuing under any of the Loan Documents,
Lender shall pay to Borrower the interest earned on the Replacement Reserve Account not less frequently than the Replacement Reserve
Account Interest Disbursement Frequency. In no event shall Lender be obligated to disburse funds from the Reserve/Escrow Account
if an Event of Default has occurred and is continuing.


 


(B)         Lender
shall not be obligated to deposit the Repairs Escrow Deposits into an interest-bearing account.


 


(2)         Disbursements
by Lender Only.


 


Only Lender
or a designated representative of Lender may make disbursements from the Replacement Reserve Account and the Repairs Escrow Account.
Except as provided in Section 13.02(a)(8), disbursements shall only be made upon Borrower request and after satisfaction of all
conditions for disbursement.


 


(3)         Adjustment
to Deposits.


 


(A)         Mortgage
Loan Terms Exceeding Ten (10) Years.


 


If the Loan
Term exceeds ten (10) years (or five (5) years in the case of any Mortgaged Property that is an “affordable housing
property” as indicated on the Summary of Loan Terms), a property condition assessment shall be ordered by Lender for the
Mortgaged Property at the expense of Borrower (which expense may be paid out of the Replacement Reserve Account if excess funds
are available). The property condition assessment shall be performed no earlier than the sixth (6th) month and no later than
the ninth (9th) month of the tenth (10th) Loan Year and every tenth (10th) Loan Year thereafter if the Loan Term
exceeds twenty (20) years (or the fifth (5th) Loan Year in the case of any Mortgaged Property that is an “affordable
housing property” as indicated on the Summary of Loan Terms and every fifth (5th) Loan Year thereafter if the Loan Term
exceeds ten (10) years). After review of the property condition assessment, the amount of the Monthly Replacement Reserve
Deposit may be adjusted by Lender for the remaining Loan Term by written notice to Borrower so that the Monthly Replacement Reserve
Deposits are sufficient to fund the Replacements as and when required and/or the amount to be held in the Repairs Escrow Account
may be adjusted by Lender so that the Repairs Escrow Deposit is sufficient to fund the Repairs as and when required.


 





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(B)         Transfers.


 


In connection
with any Transfer of the Mortgaged Property, or any Transfer of an ownership interest in Borrower, Guarantor, or Key Principal
that requires Lender’s consent, Lender may review the amounts on deposit, if any, in the Replacement Reserve Account or the
Repairs Escrow Account, the amount of the Monthly Replacement Reserve Deposit and the likely repairs and replacements required
by the Mortgaged Property, and the related contingencies which may arise during the remaining Loan Term. Based upon that review,
Lender may require an additional deposit to the Replacement Reserve Account or the Repairs Escrow Account, or an increase in the
amount of the Monthly Replacement Reserve Deposit as a condition to Lender’s consent to such Transfer.


 


(4)         Insufficient
Funds.


 


Lender may,
upon thirty (30) days’ prior written notice to Borrower, require an additional deposit(s) to the Replacement Reserve
Account or Repairs Escrow Account, or an increase in the amount of the Monthly Replacement Reserve Deposit, if Lender determines
that the amounts on deposit in either the Replacement Reserve Account or the Repairs Escrow Account are not sufficient to cover
the costs for Required Repairs or Required Replacements or, pursuant to the terms of Section 13.02(a)(9), not sufficient to cover
the costs for Borrower Requested Repairs, Additional Lender Repairs, Borrower Requested Replacements, or Additional Lender Replacements.
Borrower’s agreement to complete the Replacements or Repairs as required by this Loan Agreement shall not be affected by
the insufficiency of any balance in the Replacement Reserve Account or the Repairs Escrow Account, as applicable.


 


(5)         Disbursements
for Replacements and Repairs.


 


(A)         Disbursement
requests may only be made after completion of the applicable Replacements and only to reimburse Borrower for the actual approved
costs of the Replacements. Lender shall not disburse from the Replacement Reserve Account the costs of routine maintenance to the
Mortgaged Property or for costs which are to be reimbursed from the Repairs Escrow Account or any similar account. Disbursement
from the Replacement Reserve Account shall not be made more frequently than the Maximum Replacement Reserve Disbursement Interval.
Other than in connection with a final request for disbursement, disbursements from the Replacement Reserve Account shall not be
less than the Minimum Replacement Reserve Disbursement Amount.


 





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(B)         Disbursement
requests may only be made after completion of the applicable Repairs and only to reimburse Borrower for the actual cost of the
Repairs, up to the Maximum Repair Cost. Lender shall not disburse any amounts which would cause the funds remaining in the Repairs
Escrow Account after any disbursement (other than with respect to the final disbursement) to be less than the Maximum Repair Cost
of the then-current estimated cost of completing all remaining Repairs. Lender shall not disburse from the Repairs Escrow Account
the costs of routine maintenance to the Mortgaged Property or for costs which are to be reimbursed from the Replacement Reserve
Account or any similar account. Disbursement from the Repairs Escrow Account shall not be made more frequently than the Maximum
Repair Disbursement Interval. Other than in connection with a final request for disbursement, disbursements from the Repairs Escrow
Account shall not be less than the Minimum Repairs Disbursement Amount.


 


(6)         Disbursement
Requests.


 


Each request
by Borrower for disbursement from the Replacement Reserve Account or the Repairs Escrow Account must be in writing, must specify
the Replacement or Repair for which reimbursement is requested (provided that for any Borrower Requested Replacements, Borrower
Requested Repairs, Additional Lender Replacements, and Additional Lender Repairs, Lender shall have approved the use of the Reserve/Escrow
Account Funds for such replacements or repairs pursuant to the terms of Section 13.02(a)(9)), and must:


 


(A)         if
applicable, specify the quantity and price of the items or materials purchased, grouped by type or category;


 


(B)         if
applicable, specify the cost of all contracted labor or other services involved in the Replacement or Repair for which such request
for disbursement is made;


 


(C)         if
applicable, include copies of invoices for all items or materials purchased and all contracted labor or services provided;


 


(D)         include
evidence of payment of such Replacement or Repair satisfactory to Lender (unless Lender has agreed to issue joint checks in connection
with a particular Repair or Replacement as provided in this Loan Agreement); and


 





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(E)         contain
a certification by Borrower that the Repair or Replacement has been completed lien free and in a good and workmanlike manner, in
accordance with any plans and specifications previously approved by Lender (if applicable) and in compliance with all applicable
laws, ordinances, rules, and regulations of any Governmental Authority having jurisdiction over the Mortgaged Property, and otherwise
in accordance with the provisions of this Loan Agreement.


 


(7)         Conditions
to Disbursement.


 


Lender may
require any or all of the following at the expense of Borrower as a condition to disbursement of funds from the Replacement Reserve
Account or the Repairs Escrow Account (provided that for any Borrower Requested Replacements, Borrower Requested Repairs, Additional
Lender Replacements, and Additional Lender Repairs, Lender shall have approved the use of the Reserve/Escrow Account Funds for
such replacements or repairs pursuant to the terms of Section 13.02(a)(9)):


 


(A)         an
inspection by Lender of the Mortgaged Property and the applicable Replacement or Repair;


 


(B)         an
inspection or certificate of completion by an appropriate independent qualified professional (such as an architect, engineer or
property inspector, depending on the nature of the Repair or Replacement) selected by Lender;


 


(C)         either:


 


(i)          a
search of title to the Mortgaged Property effective to the date of disbursement; or


 


(ii)         a
“date-down” endorsement to Lender’s Title Policy (or a new Lender’s Title Policy if a “date-down”
is not available) extending the effective date of such policy to the date of disbursement (provided that Lender agrees it shall
not require a “date down” endorsement for disbursements of less than $250,000 in the aggregate), and showing no Liens
other than (1) Permitted Encumbrances, (2) liens which Borrower is diligently contesting in good faith that have been bonded off
to the satisfaction of Lender, or (3) mechanics’ or materialmen’s liens which attach automatically under the laws of
any Governmental Authority upon the commencement of any work upon, or delivery of any materials to, the Mortgaged Property and
for which Borrower is not delinquent in the payment for any such work or materials; and


 


(D)         an
acknowledgement of payment, waiver of claims, and release of lien for work performed and materials supplied from each contractor,
subcontractor or materialman in accordance with the requirements of applicable law and covering all work performed and materials
supplied (including equipment and fixtures) for the Mortgaged Property by that contractor, subcontractor, or materialman through
the date covered by the disbursement request (or, in the event that payment to such contractor, subcontractor, or materialman is
to be made by a joint check, the release of lien shall be effective through the date covered by the previous disbursement).


 





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(8)         Joint
Checks for Periodic Disbursements.


 


Lender may,
upon Borrower’s written request, issue joint checks, payable to Borrower and the applicable supplier, materialman, mechanic,
contractor, subcontractor, or other similar party, if:


 


(A)         the
cost of the Replacement or Repair exceeds the Replacement Threshold or the Repair Threshold, as applicable, and the contractor
performing such Replacement or Repair requires periodic payments pursuant to the terms of the applicable written contract;


 


(B)         the
contract for such Repair or Replacement requires payment upon completion of the applicable portion of the work;


 


(C)         Borrower
makes the disbursement request after completion of the applicable portion of the work required to be completed under such contract;


 


(D)         the
materials for which the request for disbursement has been made are on site at the Mortgaged Property and are properly secured or
installed;


 


(E)         Lender
determines that the remaining funds in the Replacement Reserve Account designated for such Replacement, or in the Repairs Escrow
Account designated for such Repair, as applicable, are sufficient to pay such costs and the then-current estimated cost of completing
all remaining Required Replacements or Required Repairs (at the Maximum Repair Cost), as applicable, and any other Borrower Requested
Replacements, Borrower Requested Repairs, Additional Lender Replacements, or Additional Lender Repairs that have been previously
approved by Lender;


 


(F)         each
supplier, materialman, mechanic, contractor, subcontractor, or other similar party receiving payments shall have provided, if requested
in writing by Lender, a waiver of liens with respect to amounts which have been previously paid to them; and


 


(G)         all
other conditions for disbursement have been satisfied.


 


(9)         Replacements
and Repairs Other than Required Replacements or Required Repairs.


 


(A)         Borrower
Requested Replacements and Borrower Requested Repairs.


 





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Borrower may
submit a disbursement request from the Replacement Reserve Account or the Repairs Escrow Account to reimburse Borrower for any
Borrower Requested Replacement or Borrower Requested Repair. The disbursement request must be in writing and include an explanation
for such request. Lender shall make disbursements for Borrower Requested Replacements or Borrower Requested Repairs if:


 


(i)          they
are of the type intended to be covered by the Replacement Reserve Account or the Repairs Escrow Account, as applicable;


 


(ii)         the
costs are commercially reasonable;


 


(iii)        the
amount of funds in the Replacement Reserve Account or Repairs Escrow Account, as applicable, is sufficient to pay such costs and
the then-current estimated cost of completing all remaining Required Replacements or Required Repairs (at the Maximum Repair Cost),
as applicable, and any other Borrower Requested Replacements, Borrower Requested Repairs, Additional Lender Replacements or Additional
Lender Repairs that have been previously approved by Lender; and


 


(iv)        all
conditions for disbursement from the Replacement Reserve Account or Repairs Escrow Account, as applicable, have been satisfied.


 


Nothing in this
Loan Agreement shall limit Lender’s right to require an additional deposit to the Replacement Reserve Account or an increase
to the Monthly Replacement Reserve Deposit in connection with any such Borrower Requested Replacements, or an additional deposit
to the Repairs Escrow Account for any such Borrower Requested Repairs.


 


(B)         Additional
Lender Replacements and Additional Lender Repairs.


 


Lender may
require, as set forth in Section 6.02(b), Section 6.03(c), or otherwise from time to time, upon written notice to Borrower, that
Borrower make Additional Lender Replacements or Additional Lender Repairs. Lender shall make disbursements from the Replacement
Reserve Account for Additional Lender Replacements or from the Repairs Escrow Account for Additional Lender Repairs, as applicable,
if:


 


(i)          the
costs are commercially reasonable;


 





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(ii)         the
amount of funds in the Replacement Reserve Account or the Repairs Escrow Account, as applicable, is sufficient to pay such costs
and the then-current estimated cost of completing all remaining Required Replacements or Required Repairs (at the Maximum Repair
Cost), as applicable, and any other Borrower Requested Replacements, Borrower Requested Repairs, Additional Lender Replacements,
or Additional Lender Repairs that have been previously approved by Lender; and


 


(iii)        all
conditions for disbursement from the Replacement Reserve Account or Repairs Escrow Account, as applicable, have been satisfied.


 


Nothing in this
Loan Agreement shall limit Lender’s right to require an additional deposit to the Replacement Reserve Account or an increase
to the Monthly Replacement Reserve Deposit for any such Additional Lender Replacements or an additional deposit to the Repairs
Escrow Account for any such Additional Lender Repair.


 


(10)        Excess
Costs.


 


In the event
any Replacement or Repair exceeds the approved cost set forth on the Required Replacement Schedule for Replacements, or the Maximum
Repair Cost for Repairs, Borrower may submit a disbursement request to reimburse Borrower for such excess cost. The disbursement
request must be in writing and include an explanation for such request. Lender shall make disbursements from the Replacement Reserve
Account or the Repairs Escrow Account, as applicable, if:


 


(A)         the
excess cost is commercially reasonable;


 


(B)         the
amount of funds in the Replacement Reserve Account or the Repairs Escrow Account, as applicable, is sufficient to pay such costs
and the then-current estimated cost of completing all remaining Required Replacements or Required Repairs (at the Maximum Repair
Cost), as applicable, and any other Borrower Requested Replacements, Borrower Requested Repairs, Additional Lender Replacements,
or Additional Lender Repairs that have been previously approved by Lender; and


 


(C)         all
conditions for disbursement from the Replacement Reserve Account or the Repairs Escrow Account have been satisfied.


 


(11)        Final
Disbursements.


 


Upon completion
of all Repairs in accordance with this Loan Agreement and so long as no Event of Default has occurred and is continuing, Lender
shall disburse to Borrower any amounts then remaining in the Repairs Escrow Account. Upon payment in full of the Indebtedness and
release by Lender of the lien of the Security Instrument, Lender shall disburse to Borrower any and all amounts then remaining
in the Replacement Reserve Account and the Repairs Escrow Account (if not previously released).


 





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(b)          Approvals
of Contracts; Assignment of Claims.


 


Lender retains the
right to approve all contracts or work orders with materialmen, mechanics, suppliers, subcontractors, contractors, or other parties
providing labor or materials in connection with the Replacements or Repairs if such contract or work order exceeds $250,000. Notwithstanding
Borrower’s assignment (in the Security Instrument) of its rights and claims against all Persons supplying labor or materials
in connection with the Replacement or Repairs, Lender will not pursue any such right or claim unless an Event of Default has occurred
and is continuing or as otherwise provided in Section 14.03(c).


 


(c)          Delays
and Workmanship.


 


If any work for any
Replacement or Repair has not timely commenced, has not been timely performed in a workmanlike manner, or has not been timely completed
in a workmanlike manner, Lender may, without notice to Borrower:


 


(1)         withhold
disbursements from the Replacement Reserve Account or Repairs Escrow Account for such unsatisfactory Replacement or Repair, as
applicable;


 


(2)         proceed
under existing contracts or contract with third parties to make or complete such Replacement or Repair;


 


(3)         apply
the funds in the Replacement Reserve Account or Repairs Escrow Account toward the labor and materials necessary to make or complete
such Replacement or Repair, as applicable; or


 


(4)         exercise
any and all other remedies available to Lender under this Loan Agreement or any other Loan Document, including any remedies otherwise
available upon an Event of Default pursuant to the terms of Section 14.02.


 


To facilitate Lender’s
completion or making of such Replacements or Repairs, Lender shall have the right to enter onto the Mortgaged Property and perform
any and all work and labor necessary to make or complete the Replacements or Repairs and employ watchmen to protect the Mortgaged
Property from damage. All funds so expended by Lender shall be deemed to have been advanced to Borrower, shall be part of the Indebtedness
and shall be secured by the Security Instrument and this Loan Agreement.


 


(d)          Appointment
of Lender as Attorney-In-Fact.


 


Borrower hereby authorizes
and appoints Lender as attorney-in-fact pursuant to Section 14.03(c).


 





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(e)          No
Lender Obligation.


 


Nothing in this Loan
Agreement shall:


 


(1)         make
Lender responsible for making or completing the Replacements or Repairs;


 


(2)         require
Lender to expend funds, whether from the Replacement Reserve Account, the Repairs Escrow Account, or otherwise, to make or complete
any Replacement or Repair;


 


(3)         obligate
Lender to proceed with the Replacements or Repairs; or


 


(4)         obligate
Lender to demand from Borrower additional sums to make or complete any Replacement or Repair.


 


(f)          No
Lender Warranty.


 


Lender’s approval
of any plans for any Replacement or Repair, release of funds from the Replacement Reserve Account or Repairs Escrow Account, inspection
of the Mortgaged Property by Lender or its agents, representatives, or designees, or other acknowledgment of completion of any
Replacement or Repair in a manner satisfactory to Lender shall not be deemed an acknowledgment or warranty to any Person that the
Replacement or Repair has been completed in accordance with applicable building, zoning, or other codes, ordinances, statutes,
laws, regulations, or requirements of any Governmental Authority, such responsibility being at all times exclusively that of Borrower.


 


Article
14 - DEFAULTS/REMEDIES


 


Section
14.01              Events of Default.


 


The occurrence of any
one or more of the following in this Section 14.01 shall constitute an Event of Default under this Loan Agreement.


 


(a)          Automatic
Events of Default.


 


Any of the following
shall constitute an automatic Event of Default:


 


(1)         any
failure by Borrower to pay or deposit when due any amount required by the Note, this Loan Agreement or any other Loan Document;


 


(2)         any
failure by Borrower to maintain the insurance coverage required by any Loan Document;


 


(3)         any
failure by Borrower to comply with the provisions of Section 4.02(d) relating to its single asset status;


 





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(4)         if
any warranty, representation, certification, or statement of Borrower, Guarantor, or Key Principal in this Loan Agreement or any
of the other Loan Documents is false, inaccurate, or misleading in any material respect when made;


 


(5)         fraud,
gross negligence, willful misconduct, or material misrepresentation or material omission by or on behalf of Borrower, Guarantor,
or Key Principal or any of their officers, directors, trustees, partners, members, or managers in connection with:


 


(A)         the
application for, or creation of, the Indebtedness;


 


(B)         any
financial statement, rent roll, or other report or information provided to Lender during the term of the Mortgage Loan; or


 


(C)         any
request for Lender’s consent to any proposed action, including a request for disbursement of Reserve/Escrow Account Funds
or Collateral Account Funds;


 


(6)         the
occurrence of any Transfer not permitted by the Loan Documents;


 


(7)         the
occurrence of a Bankruptcy Event;


 


(8)         the
commencement of a forfeiture action or other similar proceeding, whether civil or criminal, which, in Lender’s reasonable
judgment, could result in a forfeiture of the Mortgaged Property or otherwise materially impair the lien created by this Loan Agreement
or the Security Instrument or Lender’s interest in the Mortgaged Property;


 


(9)         if
Borrower, Guarantor, or Key Principal is a trust, or if Control of Borrower, Guarantor, or Key Principal is Transferred or if a
Restricted Ownership Interest in Borrower, Guarantor, or Key Principal would be Transferred due to the termination or revocation
of a trust, the termination or revocation of such trust, except as set forth in Section 11.03(d);


 


(10)        any
failure by Borrower to complete any Repair related to fire, life, or safety issues in accordance with the terms of this Loan Agreement
within the Completion Period (or such other date set forth on the Required Repair Schedule or otherwise required by Lender in writing
for such Repair); or


 


(11)        any
exercise by the holder of any other debt instrument secured by a mortgage, deed of trust, or deed to secure debt on the Mortgaged
Property of a right to declare all amounts due under that debt instrument immediately due and payable.


 


(b)          Events
of Default Subject to a Specified Cure Period.


 


Any of the following
shall constitute an Event of Default subject to the cure period set forth in the Loan Documents:


 





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(1)         if
Key Principal or Guarantor is a natural person, the death of such individual, unless all requirements of Section 11.03(e) are met;


 


(2)         the
occurrence of a Guarantor Bankruptcy Event, unless requirements of Section 11.03(f) are met;


 


(3)         any
failure by Borrower, Key Principal, or Guarantor to comply with the provisions of Section 5.02(b) and Section 5.02(c); or


 


(4)         any
failure by Borrower to perform any obligation under this Loan Agreement or any Loan Document that is subject to a specified written
notice and cure period, which failure continues beyond such specified written notice and cure period as set forth herein or in
the applicable Loan Document.


 


(c)          Events
of Default Subject to Extended Cure Period.


 


The following shall
constitute an Event of Default if the existence of such condition or event, or such failure to perform or default in performance
continues for a period of thirty (30) days after written notice by Lender to Borrower of the existence of such condition or
event, or of such failure to perform or default in performance, provided, however, such period may be extended for up to an additional
thirty (30) days if Borrower, in the discretion of Lender, is diligently pursuing a cure of such; provided, further, however,
no such written notice, grace period, or extension shall apply if, in Lender’s discretion, immediate exercise by Lender of
a right or remedy under this Loan Agreement or any Loan Document is required to avoid harm to Lender or impairment of the Mortgage
Loan (including the Loan Documents), the Mortgaged Property or any other security given for the Mortgage Loan:


 


(1)         any
failure by Borrower to perform any of its obligations under this Loan Agreement or any Loan Document (other than those specified
in Section 14.01(a) or Section 14.01(b) above) as and when required.


 


Section
14.02              Remedies.


 


(a)          Acceleration;
Foreclosure.


 


If an Event of Default
has occurred and is continuing, the entire unpaid principal balance of the Mortgage Loan, any Accrued Interest, interest accruing
at the Default Rate, the Prepayment Premium (if applicable), and all other Indebtedness, at the option of Lender, shall immediately
become due and payable, without any prior written notice to Borrower, unless applicable law requires otherwise (and in such case,
after any required written notice has been given). Lender may exercise this option to accelerate regardless of any prior forbearance.
In addition, Lender shall have all rights and remedies afforded to Lender hereunder and under the other Loan Documents, including,
foreclosure on and/or the power of sale of the Mortgaged Property, as provided in the Security Instrument, and any rights and remedies
available to Lender at law or in equity (subject to Borrower’s statutory rights of reinstatement, if any). Any proceeds of
a Foreclosure Event may be held and applied by Lender as additional collateral for the Indebtedness pursuant to this Loan Agreement.
Notwithstanding the foregoing, the occurrence of any Bankruptcy Event shall automatically accelerate the Mortgage Loan and all
obligations and Indebtedness shall be immediately due and payable without written notice or further action by Lender.


 





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(b)          Loss
of Right to Disbursements from Collateral Accounts.


 


If an Event of Default
has occurred and is continuing, Borrower shall immediately lose all of its rights to receive disbursements from the Reserve/Escrow
Accounts and any Collateral Accounts. During the continuance of any such Event of Default, Lender may use the Reserve/Escrow Account
Funds and any Collateral Account Funds (or any portion thereof) for any purpose, including:


 


(1)         repayment
of the Indebtedness, including principal prepayments and the Prepayment Premium applicable to such full or partial prepayment,
as applicable (however, such application of funds shall not cure or be deemed to cure any Event of Default);


 


(2)         reimbursement
of Lender for all losses and expenses (including reasonable legal fees) suffered or incurred by Lender as a result of such Event
of Default;


 


(3)         completion
of the Replacement or Repair or for any other replacement or repair to the Mortgaged Property; and


 


(4)         payment
of any amount expended in exercising (and the exercise of) all rights and remedies available to Lender at law or in equity or under
this Loan Agreement or under any of the other Loan Documents.


 


Nothing in this Loan
Agreement shall obligate Lender to apply all or any portion of the Reserve/Escrow Account Funds or Collateral Account Funds on
account of any Event of Default by Borrower or to repayment of the Indebtedness or in any specific order of priority.


 


(c)          Remedies
Cumulative.


 


Each right and remedy
provided in this Loan Agreement is distinct from all other rights or remedies under this Loan Agreement or any other Loan Document
or afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively,
in any order. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of additional
default by Borrower in order to exercise any of its remedies with respect to an Event of Default.


 





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Section
14.03              Additional Lender Rights; Forbearance.


 


(a)          No
Effect Upon Obligations.


 


Lender may, but shall
not be obligated to, agree with Borrower, from time to time, and without giving notice to, or obtaining the consent of, or having
any effect upon the obligations of, Guarantor, Key Principal, or other third party obligor, to take any of the following actions:


 


(1)         the
time for payment of the principal of or interest on the Indebtedness may be extended, or the Indebtedness may be renewed in whole
or in part;


 


(2)         the
rate of interest on or period of amortization of the Mortgage Loan or the amount of the Monthly Debt Service Payments payable under
the Loan Documents may be modified;


 


(3)         the
time for Borrower’s performance of or compliance with any covenant or agreement contained in any Loan Document, whether presently
existing or hereinafter entered into, may be extended or such performance or compliance may be waived;


 


(4)         any
or all payments due under this Loan Agreement or any other Loan Document may be reduced;


 


(5)         any
Loan Document may be modified or amended by Lender and Borrower in any respect, including an increase in the principal amount of
the Mortgage Loan;


 


(6)         any
amounts under this Loan Agreement or any other Loan Document may be released;


 


(7)         any
security for the Indebtedness may be modified, exchanged, released, surrendered, or otherwise dealt with, or additional security
may be pledged or mortgaged for the Indebtedness;


 


(8)         the
payment of the Indebtedness or any security for the Indebtedness, or both, may be subordinated to the right to payment or the security,
or both, of any other present or future creditor of Borrower; or


 


(9)         any
other terms of the Loan Documents may be modified.


 





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(b)          No
Waiver of Rights or Remedies.


 


Any waiver of an Event
of Default or forbearance by Lender in exercising any right or remedy under this Loan Agreement or any other Loan Document or otherwise
afforded by applicable law, shall not be a waiver of any other Event of Default or preclude the exercise or failure to exercise
of any other right or remedy. The acceptance by Lender of payment of all or any part of the Indebtedness after the due date of
such payment, or in an amount which is less than the required payment, shall not be a waiver of Lender’s right to require
prompt payment when due of all other payments on account of the Indebtedness or to exercise any remedies for any failure to make
prompt payment. Enforcement by Lender of any security for the Indebtedness shall not constitute an election by Lender of remedies
so as to preclude the exercise or failure to exercise of any other right available to Lender. Lender’s receipt of any insurance
proceeds or amounts in connection with a Condemnation Action shall not operate to cure or waive any Event of Default.


 


(c)          Appointment
of Lender as Attorney-In-Fact.


 


Borrower hereby irrevocably
makes, constitutes, and appoints Lender (and any officer of Lender or any Person designated by Lender for that purpose) as Borrower’s
true and lawful proxy and attorney-in-fact (and agent-in-fact) in Borrower’s name, place, and stead, with full power of substitution,
to:


 


(1)         use
any of the funds in the Replacement Reserve Account or Repairs Escrow Account for the purpose of making or completing the Replacements
or Repairs;


 


(2)         make
such additions, changes, and corrections to the Replacements or Repairs as shall be necessary or desirable to complete the Replacements
or Repairs;


 


(3)         employ
such contractors, subcontractors, agents, architects, and inspectors as shall be required for such purposes;


 


(4)         pay,
settle, or compromise all bills and claims for materials and work performed in connection with the Replacements or Repairs, or
as may be necessary or desirable for the completion of the Replacements or Repairs, or for clearance of title;


 


(5)         adjust
and compromise any claims under any and all policies of insurance required pursuant to this Loan Agreement and any other Loan Document,
subject only to Borrower’s rights under this Loan Agreement;


 


(6)         appear
in and prosecute any action arising from any insurance policies;


 


(7)         collect
and receive the proceeds of insurance, and to deduct from such proceeds Lender’s expenses incurred in the collection of such
proceeds;


 


(8)         commence,
appear in, and prosecute, in Lender’s or Borrower’s name, any Condemnation Action;


 


(9)         settle
or compromise any claim in connection with any Condemnation Action;


 


(10)        execute
all applications and certificates in the name of Borrower which may be required by any of the contract documents;


 





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(11)        prosecute
and defend all actions or proceedings in connection with the Mortgaged Property or the rehabilitation and repair of the Mortgaged
Property;


 


(12)        take
such actions as are permitted in this Loan Agreement and any other Loan Documents;


 


(13)        execute
such financing statements and other documents and to do such other acts as Lender may require to perfect and preserve Lender’s
security interest in, and to enforce such interests in, the collateral; and


 


(14)        carry
out any remedy provided for in this Loan Agreement and any other Loan Documents, including endorsing Borrower’s name to checks,
drafts, instruments and other items of payment and proceeds of the collateral, executing change of address forms with the postmaster
of the United States Post Office serving the address of Borrower, changing the address of Borrower to that of Lender, opening all
envelopes addressed to Borrower, and applying any payments contained therein to the Indebtedness.


 


Borrower hereby
acknowledges that the constitution and appointment of such proxy and attorney-in-fact are coupled with an interest and are irrevocable
and shall not be affected by the disability or incompetence of Borrower. Borrower specifically acknowledges and agrees that this
power of attorney granted to Lender may be assigned by Lender to Lender’s successors or assigns as holder of the Note (and
the other Loan Documents). The foregoing powers conferred on Lender under this Section 14.03(c) shall not impose any duty upon
Lender to exercise any such powers and shall not require Lender to incur any expense or take any action. Borrower hereby ratifies
and confirms all that such attorney-in-fact may do or cause to be done by virtue of any provision of this Loan Agreement and any
other Loan Documents.


 


Notwithstanding
the foregoing provisions, Lender shall not exercise its rights as set forth in this Section 14.03(c) unless: (A) an Event of Default
has occurred and is continuing, or (B) Lender determines, in its discretion, that exigent circumstances exist or that such exercise
is necessary or prudent in order to protect and preserve the Mortgaged Property, or Lender’s lien priority and security interest
in the Mortgaged Property.


 


(d)          Borrower
Waivers.


 


If more than one Person
signs this Loan Agreement as Borrower, each Borrower, with respect to any other Borrower, hereby agrees that Lender, in its discretion,
may:


 


(1)         bring
suit against Borrower, or any one or more of Borrower, jointly and severally, or against any one or more of them;


 


(2)         compromise
or settle with any one or more of the persons constituting Borrower, for such consideration as Lender may deem proper;


 


(3)         release
one or more of the persons constituting Borrower, from liability; or


 





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(4)         otherwise
deal with Borrower, or any one or more of them, in any manner, and no such action shall impair the rights of Lender to collect
from any Borrower the full amount of the Indebtedness.


 


Section
14.04              Waiver of Marshaling.


 


Notwithstanding the
existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender shall have the
right to determine the order in which any or all of the Mortgaged Property shall be subjected to the remedies provided in this
Loan Agreement, any other Loan Document or applicable law. Lender shall have the right to determine the order in which all or any
part of the Indebtedness is satisfied from the proceeds realized upon the exercise of such remedies. Borrower and any party who
now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of this Loan
Agreement waives any and all right to require the marshaling of assets or to require that any of the Mortgaged Property be sold
in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with
the exercise of any of the remedies permitted by applicable law or provided in this Loan Agreement or any other Loan Documents.


 


Lender shall account
for any moneys received by Lender in respect of any foreclosure on or disposition of collateral hereunder and under the other Loan
Documents provided that Lender shall not have any duty as to any collateral, and Lender shall be accountable only for amounts that
it actually receives as a result of the exercise of such powers. NONE OF LENDER OR ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, OR REPRESENTATIVES SHALL BE RESPONSIBLE TO BORROWER (a) FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE,
EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED PURSUANT
TO A FINAL, NON-APPEALABLE COURT ORDER BY A COURT OF COMPETENT JURISDICTION, NOR (b) FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL
DAMAGES.


 


Article
15 - MISCELLANEOUS


 


Section
15.01              Governing Law; Consent to Jurisdiction and Venue.


 


(a)          Governing
Law.


 


This Loan Agreement
and any other Loan Document which does not itself expressly identify the law that is to apply to it, shall be governed by the laws
of the Property Jurisdiction without regard to the application of choice of law principles.


 





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(b)          Venue.


 


Any controversy arising
under or in relation to this Loan Agreement or any other Loan Document shall be litigated exclusively in the Property Jurisdiction
without regard to conflicts of laws principles. The state and federal courts and authorities with jurisdiction in the Property
Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to this Loan Agreement
or any other Loan Document. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation
and waives any other venue to which it might be entitled by virtue of domicile, habitual residence, or otherwise.


 


Section
15.02              Notice.


 


(a)          Process
of Serving Notice.


 


Except as otherwise
set forth herein or in any other Loan Document, all notices under this Loan Agreement and any other Loan Document shall be:


 


(1)         in
writing and shall be:


 


(A)         delivered,
in person;


 


(B)         mailed,
postage prepaid, either by registered or certified delivery, return receipt requested;


 


(C)         sent
by overnight courier; or


 


(D)         sent
by electronic mail with originals to follow by overnight courier;


 


(2)         addressed
to the intended recipient at Borrower’s Notice Address and Lender’s Notice Address, as applicable; and


 


(3)         deemed
given on the earlier to occur of:


 


(A)         the
date when the notice is received by the addressee; or


 


(B)         if
the recipient refuses or rejects delivery, the date on which the notice is so refused or rejected, as conclusively established
by the records of the United States Postal Service or such express courier service.


 


(b)          Change
of Address.


 


Any party to this Loan
Agreement may change the address to which notices intended for it are to be directed by means of notice given to the other parties
identified on the Summary of Loan Terms in accordance with this Section 15.02.


 


(c)          Default
Method of Notice.


 


Any required notice
under this Loan Agreement or any other Loan Document which does not specify how notices are to be given shall be given in accordance
with this Section 15.02.


 





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(d)          Receipt
of Notices.


 


Neither Borrower nor
Lender shall refuse or reject delivery of any notice given in accordance with this Loan Agreement. Each party is required to acknowledge,
in writing, the receipt of any notice upon request by the other party.


 


Section
15.03              Successors and Assigns Bound; Sale of Mortgage Loan.


 


(a)          Binding
Agreement.


 


This Loan Agreement
shall bind, and the rights granted by this Loan Agreement shall inure to, the successors and assigns of Lender and the permitted
successors and assigns of Borrower. However, a Transfer not permitted by this Loan Agreement shall be an Event of Default and shall
be void ab initio.


 


(b)          Sale
of Mortgage Loan; Change of Servicer.


 


Nothing in this Loan
Agreement shall limit Lender’s (including its successors and assigns) right to sell or transfer the Mortgage Loan or any
interest in the Mortgage Loan. The Mortgage Loan or a partial interest in the Mortgage Loan (together with this Loan Agreement
and the other Loan Documents) may be sold one or more times without prior written notice to Borrower. A sale may result in a change
of the Loan Servicer.


 


Section
15.04              Counterparts.


 


This Loan Agreement
may be executed in any number of counterparts with the same effect as if the parties hereto had signed the same document and all
such counterparts shall be construed together and shall constitute one instrument.


 


Section
15.05              Joint and Several (or Solidary) Liability.


 


If more than one Person
signs this Loan Agreement as Borrower, the obligations of such Persons shall be joint and several (solidary instead for purposes
of Louisiana law).


 


Section
15.06              Relationship of Parties; No Third Party Beneficiary.


 


(a)          Solely
Creditor and Debtor.


 


The relationship between
Lender and Borrower shall be solely that of creditor and debtor, respectively, and nothing contained in this Loan Agreement shall
create any other relationship between Lender and Borrower. Nothing contained in this Loan Agreement shall constitute Lender as
a joint venturer, partner, or agent of Borrower, or render Lender liable for any debts, obligations, acts, omissions, representations,
or contracts of Borrower.


 





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(b)          No
Third Party Beneficiaries.


 


No creditor of any
party to this Loan Agreement and no other Person shall be a third party beneficiary of this Loan Agreement or any other Loan Document
or any account created or contemplated under this Loan Agreement or any other Loan Document. Nothing contained in this Loan Agreement
shall be deemed or construed to create an obligation on the part of Lender to any third party nor shall any third party have a
right to enforce against Lender any right that Borrower may have under this Loan Agreement. Without limiting the foregoing:


 


(1)         any
Servicing Arrangement between Lender and any Loan Servicer shall constitute a contractual obligation of such Loan Servicer that
is independent of the obligation of Borrower for the payment of the Indebtedness;


 


(2)         Borrower
shall not be a third party beneficiary of any Servicing Arrangement; and


 


(3)         no
payment by the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness.


 


Section
15.07              Severability; Entire Agreement; Amendments.


 


The invalidity or unenforceability
of any provision of this Loan Agreement or any other Loan Document shall not affect the validity or enforceability of any other
provision of this Loan Agreement or of any other Loan Document, all of which shall remain in full force and effect, including the
Guaranty. This Loan Agreement contains the complete and entire agreement among the parties as to the matters covered, rights granted,
and the obligations assumed in this Loan Agreement. This Loan Agreement may not be amended or modified except by written agreement
signed by the parties hereto.


 


Section
15.08              Construction.


 


(a)          The
captions and headings of the sections of this Loan Agreement and the Loan Documents are for convenience only and shall be disregarded
in construing this Loan Agreement and the Loan Documents.


 


(b)          Any
reference in this Loan Agreement to an “Exhibit” or “Schedule” or a “Section” or an “Article”
shall, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit or Schedule attached to this
Loan Agreement or to a Section or Article of this Loan Agreement.


 


(c)          Any
reference in this Loan Agreement to a statute or regulation shall be construed as referring to that statute or regulation as amended
from time to time.


 


(d)          Use
of the singular in this Loan Agreement includes the plural and use of the plural includes the singular.


 





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(e)          As
used in this Loan Agreement, the term “including” means “including, but not limited to” or “including,
without limitation,” and is for example only and not a limitation.


 


(f)          Whenever
Borrower’s knowledge is implicated in this Loan Agreement or the phrase “to Borrower’s knowledge” or a
similar phrase is used in this Loan Agreement, Borrower’s knowledge or such phrase(s) shall be interpreted to mean to the
best of Borrower’s knowledge after reasonable and diligent inquiry and investigation.


 


(g)          Unless
otherwise provided in this Loan Agreement, if Lender’s approval, designation, determination, selection, estimate, action,
or decision is required, permitted, or contemplated hereunder, such approval, designation, determination, selection, estimate,
action, or decision shall be made in Lender’s sole and absolute discretion.


 


(h)          All
references in this Loan Agreement to a separate instrument or agreement shall include such instrument or agreement as the same
may be amended or supplemented from time to time pursuant to the applicable provisions thereof.


 


(i)          “Lender
may” shall mean at Lender’s discretion, but shall not be an obligation.


 


(j)          If
the Mortgage Loan proceeds are disbursed on a date that is later than the Effective Date, as described in Section 2.02(a)(1), the
representations and warranties in the Loan Documents with respect to the ownership and operation of the Mortgaged Property shall
be deemed to be made as of the disbursement date.


 


Section
15.09              Mortgage Loan Servicing.


 


All actions regarding
the servicing of the Mortgage Loan, including the collection of payments, the giving and receipt of notice, inspections of the
Mortgaged Property, inspections of books and records, and the granting of consents and approvals, may be taken by the Loan Servicer
unless Borrower receives notice to the contrary. If Borrower receives conflicting notices regarding the identity of the Loan Servicer
or any other subject, any such written notice from Lender shall govern. The Loan Servicer may change from time to time (whether
related or unrelated to a sale of the Mortgage Loan). If there is a change of the Loan Servicer, Borrower will be given written
notice of the change.


 


Section
15.10              Disclosure of Information.


 


Lender may furnish
information regarding Borrower, Key Principal, or Guarantor, or the Mortgaged Property to third parties with an existing or prospective
interest in the servicing, enforcement, evaluation, performance, purchase, or securitization of the Mortgage Loan, including trustees,
master servicers, special servicers, rating agencies, and organizations maintaining databases on the underwriting and performance
of multifamily mortgage loans. Borrower irrevocably waives any and all rights it may have under applicable law to prohibit such
disclosure, including any right of privacy.


 





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Section
15.11              Waiver; Conflict.


 


No specific waiver
of any of the terms of this Loan Agreement shall be considered as a general waiver. If any provision of this Loan Agreement is
in conflict with any provision of any other Loan Document, the provision contained in this Loan Agreement shall control.


 


Section
15.12              No Reliance.


 


Borrower acknowledges,
represents, and warrants that:


 


(a)          it
understands the nature and structure of the transactions contemplated by this Loan Agreement and the other Loan Documents;


 


(b)          it
is familiar with the provisions of all of the documents and instruments relating to such transactions;


 


(c)          it
understands the risks inherent in such transactions, including the risk of loss of all or any part of the Mortgaged Property;


 


(d)          it
has had the opportunity to consult counsel; and


 


(e)          it
has not relied on Lender for any guidance or expertise in analyzing the financial or other consequences of the transactions contemplated
by this Loan Agreement or any other Loan Document or otherwise relied on Lender in any manner in connection with interpreting,
entering into, or otherwise in connection with this Loan Agreement, any other Loan Document, or any of the matters contemplated
hereby or thereby.


 


Section
15.13               Subrogation.


 


If, and to the extent
that, the proceeds of the Mortgage Loan are used to pay, satisfy, or discharge any obligation of Borrower for the payment of money
that is secured by a pre-existing mortgage, deed of trust, or other lien encumbering the Mortgaged Property, such Mortgage Loan
proceeds shall be deemed to have been advanced by Lender at Borrower’s request, and Lender shall automatically, and without
further action on its part, be subrogated to the rights, including lien priority, of the owner or holder of the obligation secured
by such prior lien, whether or not such prior lien is released.


 


Section
15.14              Counting of Days.


 


Except where otherwise
specifically provided, any reference in this Loan Agreement to a period of “days” means calendar days, not Business
Days. If the date on which Borrower is required to perform an obligation under this Loan Agreement is not a Business Day, Borrower
shall be required to perform such obligation by the Business Day immediately preceding such date; provided, however,
in respect of any Payment Date, or if the Maturity Date is other than a Business Day, Borrower shall be obligated to make such
payment by the Business Day immediately following such date.


 





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Section
15.15              Revival and Reinstatement of Indebtedness.


 


If the payment of all
or any part of the Indebtedness by Borrower, Guarantor, or any other Person, or the transfer to Lender of any collateral or other
property should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’
rights, including provisions of the Insolvency Laws relating to a Voidable Transfer, and if Lender is required to repay or restore,
in whole or in part, any such Voidable Transfer, or elects to do so upon the advice of its counsel, then the amount of such Voidable
Transfer or the amount of such Voidable Transfer that Lender is required or elects to repay or restore, including all reasonable
costs, expenses, and attorneys’ fees incurred by Lender in connection therewith, and the Indebtedness shall be automatically
revived, reinstated, and restored by such amount and shall exist as though such Voidable Transfer had never been made.


 


Section
15.16              Time is of the Essence.


 


Borrower agrees that,
with respect to each and every obligation and covenant contained in this Loan Agreement and the other Loan Documents, time is of
the essence.


 


Section
15.17              Final Agreement.


 


THIS LOAN AGREEMENT
ALONG WITH ALL OF THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES. All prior or contemporaneous agreements, understandings, representations, and statements,
oral or written, are merged into this Loan Agreement and the other Loan Documents. This Loan Agreement, the other Loan Documents,
and any of their provisions may not be waived, modified, amended, discharged, or terminated except by an agreement in writing signed
by the party against which the enforcement of the waiver, modification, amendment, discharge, or termination is sought, and then
only to the extent set forth in that agreement.


 


Section
15.18              WAIVER OF TRIAL BY JURY.


 


TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF BORROWER AND LENDER (a) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS LOAN AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER, THAT IS TRIABLE OF RIGHT BY A JURY, AND (b)
WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL
COUNSEL.


 





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[Remainder of Page Intentionally Blank]


 





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IN WITNESS WHEREOF,
Borrower and Lender have signed and delivered this Loan Agreement under seal (where applicable) or have caused this Loan Agreement
to be signed and delivered under seal (where applicable) by their duly authorized representatives. Where applicable law so provides,
Borrower and Lender intend that this Loan Agreement shall be deemed to be signed and delivered as a sealed instrument.


 


	 	BORROWER:
	 	 	 
	 	ASPEN 2016 LLC, a
	 	Delaware limited liability company
	 	 	 
	 	By:	CLIPPER REALTY L.P., a
	 	 	Delaware limited partnership,
	 	 	its sole member


 


	 	By:	/s/ David Bistricer	(SEAL)
	 	Name:  	David Bistricer	 
	 	Title:    	Authorized Signatory	 


 


[SIGNATURES CONTINUE ON NEXT PAGE]


 


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	 	LENDER:	 
	 	 	 
	 	CAPITAL ONE MULTIFAMILY FINANCE, LLC, a






	 	Delaware limited liability company	 
	 	 	 	 
	 	By:	/s/ Nathan D. Burlingame	[SEAL]
	 	Name:	Nathan D. Burlingame	 
	 	Title:	
        Vice President 
	 


 


	Multifamily Loan and Security Agreement

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SCHEDULE 1


TO MULTIFAMILY LOAN AND SECURITY AGREEMENT


 


Definitions Schedule


(Interest Rate Type – Fixed Rate)


 


Capitalized terms used
in the Loan Agreement have the meanings given to such terms in this Definitions Schedule.


 


“Accrued Interest” means
unpaid interest, if any, on the Mortgage Loan that has not been added to the unpaid principal balance of the Mortgage Loan pursuant
to Section 2.02(b) (Capitalization of Accrued But Unpaid Interest) of the Loan Agreement.


 


“Additional Lender Repairs”
means repairs of the type listed on the Required Repair Schedule but not otherwise identified thereon that are determined advisable
by Lender to keep the Mortgaged Property in good order and repair (ordinary wear and tear excepted) and in good marketable condition
or to prevent deterioration of the Mortgaged Property.


 


“Additional Lender Replacements”
means replacements of the type listed on the Required Replacement Schedule but not otherwise identified thereon that are determined
advisable by Lender to keep the Mortgaged Property in good order and repair (ordinary wear and tear excepted) and in good marketable
condition or to prevent deterioration of the Mortgaged Property.


 


“Amortization Period”
has the meaning set forth in the Summary of Loan Terms.


 


“Amortization Type”
has the meaning set forth in the Summary of Loan Terms.


 


“Bank Secrecy Act” means
the Bank Secrecy Act of 1970, as amended (e.g., 31 U.S.C. Sections 5311-5330).


 


“Bankruptcy Event” means
any one or more of the following:


 


(a)       the
commencement, filing or continuation of a voluntary case or proceeding under one or more of the Insolvency Laws by Borrower;


 


(b)       the
acknowledgment in writing by Borrower (other than to Lender in connection with a workout) that it is unable to pay its debts generally
as they mature;


 


(c)       the
making of a general assignment for the benefit of creditors by Borrower;


 


(d)       the
commencement, filing or continuation of an involuntary case or proceeding under one or more Insolvency Laws against Borrower; or


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

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(e)       the
appointment of a receiver (other than a receiver appointed at the direction or request of Lender under the terms of the Loan Documents),
liquidator, custodian, sequestrator, trustee or other similar officer who exercises control over Borrower or any substantial part
of the assets of Borrower;


 


provided, however, that any proceeding
or case under (d) or (e) above shall not be a Bankruptcy Event until the ninetieth (90th) day after filing (if not earlier
dismissed) so long as such proceeding or case occurred without the consent, encouragement or active participation of (1) Borrower,
Guarantor, or Key Principal, (2) any Person Controlling Borrower, Guarantor, or Key Principal, or (3) any Person Controlled by
or under common Control with Borrower, Guarantor, or Key Principal (in which event such case or proceeding shall be a Bankruptcy
Event immediately).


 


“Borrower” means, individually
(and jointly and severally (solidarily instead for purposes of Louisiana law) if more than one), the entity (or entities) identified
as “Borrower” in the first paragraph of the Loan Agreement.


 


“Borrower Affiliate”
means, as to Borrower, Guarantor or Key Principal:


 


(a)       any
Person that owns any direct ownership interest in Borrower, Guarantor or Key Principal;


 


(b)       any
Person that indirectly owns, with the power to vote, twenty percent (20%) or more of the ownership interests in Borrower,
Guarantor or Key Principal;


 


(c)       any
Person Controlled by, under common Control with, or which Controls, Borrower, Guarantor or Key Principal;


 


(d)       any
entity in which Borrower, Guarantor or Key Principal directly or indirectly owns, with the power to vote, twenty percent (20%)
or more of the ownership interests in such entity; or


 


(e)       any
other individual that is related (to the third degree of consanguinity) by blood or marriage to Borrower, Guarantor or Key Principal.


 


“Borrower Requested Repairs”
means repairs not listed on the Required Repair Schedule requested by Borrower to be reimbursed from the Repairs Escrow Account
and determined advisable by Lender to keep the Mortgaged Property in good order and repair and in a good marketable condition or
to prevent deterioration of the Mortgaged Property.


 


“Borrower Requested Replacements”
means replacements not listed on the Required Replacement Schedule requested by Borrower to be reimbursed from the Replacement
Reserve Account and determined advisable by Lender to keep the Mortgaged Property in good order and repair and in a good marketable
condition or to prevent deterioration of the Mortgaged Property.


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 2
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


“Borrower’s General Business
Address” has the meaning set forth in the Summary of Loan Terms.


 


“Borrower’s Notice Address”
has the meaning set forth in the Summary of Loan Terms.


 


“Business Day” means
any day other than (a) a Saturday, (b) a Sunday, (c) a day on which Lender is not open for business, or (d) a day on which the
Federal Reserve Bank of New York is not open for business.


 


“Collateral Account Funds”
means, collectively, the funds on deposit in any or all of the Collateral Accounts, including the Reserve/Escrow Account Funds.


 


“Collateral Accounts”
means any account designated as such by Lender pursuant to a Collateral Agreement or as established pursuant to this Loan Agreement,
including the Reserve/Escrow Account.


 


“Collateral Agreement”
means any separate agreement between Borrower and Lender for the establishment of any other fund, reserve or account.


 


“Completion Period”
has the meaning set forth in the Summary of Loan Terms.


 


“Condemnation Action”
has the meaning set forth in the Security Instrument.


 


“Control” (including
with correlative meanings, such as “Controlling,” “Controlled by” and “under common Control with”)
means, as applied to any entity, the possession, directly or indirectly, of the power to direct or cause the direction of the management
and operations of such entity, whether through the ownership of voting securities or other ownership interests, by contract or
otherwise.


 


“Credit Score” means
a numerical value or a categorization derived from a statistical tool or modeling system used to measure credit risk and predict
the likelihood of certain credit behaviors, including default.


 


“Debt Service Amounts”
means the Monthly Debt Service Payments and all other amounts payable under the Loan Agreement, the Note, the Security Instrument
or any other Loan Document.


 


“Default Rate” means
an interest rate equal to the lesser of:


 


(a)       the
sum of the Interest Rate plus four (4) percentage points; or


 


(b)       the
maximum interest rate which may be collected from Borrower under applicable law.


 


“Definitions Schedule”
means this Schedule 1 (Definitions Schedule) to the Loan Agreement.


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 3
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


“Economic Sanctions”
means any economic or financial sanction administered or enforced by the United States Government (including, without limitation,
those administered by OFAC at http://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx),
the U.S. Department of Commerce, or the U.S. Department of State.


 


“Effective Date” has
the meaning set forth in the Summary of Loan Terms.


 


“Employee Benefit Plan”
means a plan described in Section 3(3) of ERISA, regardless of whether the plan is subject to ERISA.


 


“Enforcement Costs”
has the meaning set forth in the Security Instrument.


 


“Environmental Indemnity Agreement”
means that certain Environmental Indemnity Agreement dated as of the Effective Date made by Borrower to and for the benefit of
Lender, as the same may be amended, restated, replaced, supplemented, or otherwise modified from time to time.


 


“Environmental Inspections”
has the meaning set forth in the Environmental Indemnity Agreement.


 


“Environmental Laws”
has the meaning set forth in the Environmental Indemnity Agreement.


 


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


 


“ERISA Affiliate” shall
mean, with respect to Borrower, any entity that, together with Borrower, would be treated as a single employer under Section 414(b)
or (c) of the Internal Revenue Code, or Section 4001(a)(14) of ERISA, or the regulations thereunder.


 


“ERISA Plan” means any
employee pension benefit plan within the meaning of Section 3(2) of ERISA (or related trust) that is subject to the requirements
of Title IV of ERISA, Sections 430 or 431 of the Internal Revenue Code, or Sections 302, 303, or 304 of ERISA, which is maintained
or contributed to by Borrower or its ERISA Affiliates.


 


“Event of Default” means
the occurrence of any event listed in Section 14.01 (Events of Default) of the Loan Agreement.


 


“Exceptions to Representations
and Warranties Schedule” means that certain Schedule 7 (Exceptions to Representations and Warranties Schedule)
to the Loan Agreement.


 


“First Payment Date”
has the meaning set forth in the Summary of Loan Terms.


 


“First Principal and Interest
Payment Date” has the meaning set forth in the Summary of Loan Terms, if applicable.


 


“Fixed Rate” has the
meaning set forth in the Summary of Loan Terms.


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 4
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


“Fixtures” has the meaning
set forth in the Security Instrument.


 


“Force Majeure” shall
mean acts of God, acts of war, civil disturbance, governmental action (including the revocation or refusal to grant licenses or
permits, where such revocation or refusal is not due to the fault of Borrower), strikes, lockouts, fire, unavoidable casualties
or any other causes beyond the reasonable control of Borrower (other than lack of financing), and of which Borrower shall have
notified Lender in writing within ten (10) days after its occurrence.


 


“Foreclosure Event”
means:


 


(a)       foreclosure
under the Security Instrument;


 


(b)       any
other exercise by Lender of rights and remedies (whether under the Security Instrument or under applicable law, including Insolvency
Laws) as holder of the Mortgage Loan and/or the Security Instrument, as a result of which Lender (or its designee or nominee) or
a third party purchaser becomes owner of the Mortgaged Property;


 


(c)       delivery
by Borrower to Lender (or its designee or nominee) of a deed or other conveyance of Borrower’s interest in the Mortgaged
Property in lieu of any of the foregoing; or


 


(d)       in
Louisiana, any dation en paiement.


 


“Goods” has the meaning set forth in the
Security Instrument.


 


“Governmental Authority”
means any court, board, commission, department or body of any municipal, county, state or federal governmental unit, or any subdivision
of any of them, that has or acquires jurisdiction over Borrower or the Mortgaged Property or the use, operation or improvement
of the Mortgaged Property.


 


“Guarantor” means, individually
and collectively, any guarantor of the Indebtedness or any other obligation of Borrower under any Loan Document.


 


“Guarantor Bankruptcy Event”
means any one or more of the following:


 


(a)       the
commencement, filing or continuation of a voluntary case or proceeding under one or more of the Insolvency Laws by Guarantor;


 


(b)       the
acknowledgment in writing by Guarantor (other than to Lender in connection with a workout) that it is unable to pay its debts generally
as they mature;


 


(c)       the
making of a general assignment for the benefit of creditors by Guarantor;


 


(d)       the
commencement, filing or continuation of an involuntary case or proceeding under one or more Insolvency Laws against Guarantor;
or


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 5
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


(e)       the
appointment of a receiver, liquidator, custodian, sequestrator, trustee or other similar officer who exercises control over Guarantor
or any substantial part of the assets of Guarantor, as applicable;


 


provided, however, that any proceeding
or case under (d) or (e) above shall not be a Guarantor Bankruptcy Event until the ninetieth (90th) day after filing (if not
earlier dismissed) so long as such proceeding or case occurred without the consent, encouragement or active participation of (1) Borrower,
Guarantor or Key Principal, (2) any Person Controlling Borrower, Guarantor or Key Principal, or (3) any Person Controlled by or
under common Control with Borrower, Guarantor or Key Principal (in which event such case or proceeding shall be a Guarantor Bankruptcy
Event immediately).


 


“Guarantor’s General Business
Address” has the meaning set forth in the Summary of Loan Terms.


 


“Guarantor’s Notice Address”
has the meaning set forth in the Summary of Loan Terms.


 


“Guaranty” means, individually
and collectively, any Payment Guaranty, Non-Recourse Guaranty or other guaranty executed by Guarantor in connection with the Mortgage
Loan.


 


“Immediate Family Members”
means a child, stepchild, grandchild, spouse, sibling, or parent, each of whom is not a Prohibited Person.


 


“Imposition Deposits”
has the meaning set forth in the Security Instrument.


 


“Impositions” has the
meaning set forth in the Security Instrument.


 


“Improvements” has the
meaning set forth in the Security Instrument.


 


“Indebtedness” has the
meaning set forth in the Security Instrument.


 


“Initial Replacement Reserve Deposit”
has the meaning set forth in the Summary of Loan Terms.


 


“Insolvency Laws” means
the United States Bankruptcy Code, 11 U.S.C. Section 101, et seq., together with any other federal or state law affecting
debtor and creditor rights or relating to the bankruptcy, insolvency, reorganization, arrangement, moratorium, readjustment of
debt, dissolution, liquidation or similar laws, proceedings, or equitable principles affecting the enforcement of creditors’
rights, as amended from time to time.


 


“Insolvent” means:


 


(a)       that
the sum total of all of a specified Person’s liabilities (whether secured or unsecured, contingent or fixed, or liquidated
or unliquidated) is in excess of the value of such Person’s non-exempt assets, i.e., all of the assets of such Person that
are available to satisfy claims of creditors; or


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 6
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


(b)       such
Person’s inability to pay its debts as they become due.


 


“Intended Prepayment Date”
means the date upon which Borrower intends to make a prepayment on the Mortgage Loan, as set forth in the Prepayment Notice.


 


“Interest Accrual Method”
has the meaning set forth in the Summary of Loan Terms.


 


“Interest Only Term”
has the meaning set forth in the Summary of Loan Terms.


 


“Interest Rate” means
the Fixed Rate.


 


“Interest Rate Type”
has the meaning set forth in the Summary of Loan Terms.


 


“Internal Revenue Code”
means the Internal Revenue Code of 1986, as amended.


 


“Investor” means any
Person to whom Lender intends to (a) sell, transfer, deliver or assign the Mortgage Loan in the secondary mortgage market, or (b)
sell an MBS backed by the Mortgage Loan.


 


“Key Principal” means,
collectively:


 


(a)       the
natural person(s) or entity that Controls Borrower that Lender determines is critical to the successful operation and management
of Borrower and the Mortgaged Property, as identified as such in the Summary of Loan Terms; or


 


(b)       any
natural person or entity who becomes a Key Principal after the date of the Loan Agreement and is identified as such in an assumption
agreement, or another amendment or supplement to the Loan Agreement.


 


“Key Principal’s General
Business Address” has the meaning set forth in the Summary of Loan Terms.


 


“Key Principal’s Notice
Address” has the meaning set forth in the Summary of Loan Terms.


 


“Land” means the land
described in Exhibit A to the Security Instrument.


 


“Last Interest Only Payment Date”
has the meaning set forth in the Summary of Loan Terms, if applicable.


 


“Late Charge” means
an amount equal to the delinquent amount then due under the Loan Documents multiplied by five percent (5%).


 


“Leases” has the meaning
set forth in the Security Instrument.


 


“Lender” means the entity
identified as “Lender” in the first paragraph of the Loan Agreement and its transferees, successors and assigns, or
any subsequent holder of the Note.


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 7
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


“Lender’s General Business
Address” has the meaning set forth in the Summary of Loan Terms.


 


“Lender’s Notice Address”
has the meaning set forth in the Summary of Loan Terms.


 


“Lender’s Payment Address”
has the meaning set forth in the Summary of Loan Terms.


 


“Lien” has the meaning
set forth in the Security Instrument.


 


“Loan Agreement” means
the Multifamily Loan and Security Agreement dated as of the Effective Date executed by and between Borrower and Lender to which
this Definitions Schedule is attached, as the same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.


 


“Loan Amount” has the
meaning set forth in the Summary of Loan Terms.


 


“Loan Application” means
the application for the Mortgage Loan submitted by Borrower to Lender.


 


“Loan Documents” means
the Note, the Loan Agreement, the Security Instrument, the Environmental Indemnity Agreement, the Guaranty, all guaranties, all
indemnity agreements, all Collateral Agreements, all O&M Plans, and any other documents now or in the future executed by Borrower,
Guarantor, Key Principal, any other guarantor or any other Person in connection with the Mortgage Loan, as such documents may be
amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Loan Servicer” means
the entity that from time to time is designated by Lender to collect payments and deposits and receive notices under the Note,
the Loan Agreement, the Security Instrument and any other Loan Document, and otherwise to service the Mortgage Loan for the benefit
of Lender. Unless Borrower receives notice to the contrary, the Loan Servicer shall be the Lender originally named on the Summary
of Loan Terms.


 


“Loan Term” has the
meaning set forth in the Summary of Loan Terms.


 


“Loan Year” has the
meaning set forth in the Summary of Loan Terms.


 


“Material Commercial Lease”
means any Lease that is not a Residential Lease, and which is:


 


(a)       a
Lease comprising five percent (5%) or more of total gross income of the Mortgaged Property on an annualized basis;


 


(b)       a
master Lease (which term “master Lease” shall include any master Lease to a single corporate tenant);


 


(c)       a
cell tower Lease;


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 8
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


(d)       a
solar (power) Lease;


 


(e)       a
solar power purchase agreement; or


 


(f)       a
Lease of oil, gas, or mineral rights.


 


“Maturity Date” has
the meaning set forth in the Summary of Loan Terms.


 


“Maximum Inspection Fee”
has the meaning set forth in the Summary of Loan Terms.


 


“Maximum Repair Cost”
shall be the amount(s) set forth in the Required Repair Schedule, if any.


 


“Maximum Repair Disbursement Interval”
has the meaning set forth in the Summary of Loan Terms.


 


“Maximum Replacement Reserve Disbursement
Interval” has the meaning set forth in the Summary of Loan Terms.


 


“MBS” means an investment
security that represents an undivided beneficial interest in a pool of mortgage loans or participation interests in mortgage loans
held in trust pursuant to the terms of a governing trust document.


 


“Mezzanine Debt” means
a loan to a direct or indirect owner of Borrower secured by a pledge of such owner’s interest in an entity owning a direct
or indirect interest in Borrower.


 


“Minimum Repairs Disbursement
Amount” has the meaning set forth in the Summary of Loan Terms.


 


“Minimum Replacement Reserve Disbursement
Amount” has the meaning set forth in the Summary of Loan Terms.


 


“Monthly Debt Service Payment”
has the meaning set forth in the Summary of Loan Terms.


 


“Monthly Replacement Reserve Deposit”
has the meaning set forth in the Summary of Loan Terms.


 


“Mortgage Loan” means
the mortgage loan made by Lender to Borrower in the principal amount of the Note made pursuant to the Loan Agreement, evidenced
by the Note and secured by the Loan Documents that are expressly stated to be security for the Mortgage Loan.


 


“Mortgaged Property”
has the meaning set forth in the Security Instrument.


 


“Multifamily Project”
has the meaning set forth in the Summary of Loan Terms.


 


“Multifamily Project Address”
has the meaning set forth in the Summary of Loan Terms.


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 9
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


“Non-Recourse Guaranty”
means, if applicable, that certain Guaranty of Non-Recourse Obligations of even date herewith executed by Guarantor to and for
the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Note” means that certain
Multifamily Note of even date herewith in the original principal amount of the stated Loan Amount made by Borrower in favor of
Lender, and all schedules, riders, allonges and addenda attached thereto, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.


 


“O&M Plan” has the
meaning set forth in the Environmental Indemnity Agreement.


 


“OFAC” means the United
States Treasury Department, Office of Foreign Assets Control, and any successor thereto.


 


“Payment Date” means
the First Payment Date and the first day of each month thereafter until the Mortgage Loan is fully paid.


 


“Payment Guaranty” means,
if applicable, that certain Guaranty (Payment) of even date herewith executed by Guarantor to and for the benefit of Lender, as
the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Permitted Encumbrance”
has the meaning set forth in the Security Instrument.


 


“Permitted Mezzanine Debt”
means Mezzanine Debt incurred by a direct or indirect owner or owners of Borrower where the exercise of any of the rights and remedies
by the holder or holders of the Mezzanine Debt would not in any circumstance cause (a) a change in Control in Borrower, Key Principal,
or Guarantor, or (b) a Transfer of a direct or indirect Restricted Ownership Interest in Borrower, Key Principal, or Guarantor.


 


“Permitted Preferred Equity”
means Preferred Equity that does not (a) require mandatory dividends, distributions, payments or returns (including at maturity
or in connection with a redemption), or (b) provide the Preferred Equity owner with rights or remedies on account of a failure
to receive any preferred dividends, distributions, payments or returns (or, if such rights are provided, the exercise of such rights
do not violate the Loan Documents or are otherwise exercised with the prior written consent of Lender in accordance with Article
11 (Liens, Transfers and Assumptions) of the Loan Agreement and the payment of all applicable fees and expenses as set forth in
Section 11.03(g) (Further Conditions to Transfers and Assumption)).


 


“Permitted Prepayment Date”
means the last Business Day of a calendar month.


 


“Person” means an individual,
an estate, a trust, a corporation, a partnership, a limited liability company or any other organization or entity (whether governmental
or private).


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 10
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


“Personal Property”
means the Goods, accounts, choses of action, chattel paper, documents, general intangibles (including Software), payment intangibles,
instruments, investment property, letter of credit rights, supporting obligations, computer information, source codes, object codes,
records and data, all telephone numbers or listings, claims (including claims for indemnity or breach of warranty), deposit accounts
and other property or assets of any kind or nature related to the Land or the Improvements, including operating agreements, surveys,
plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements,
and all other intangible property and rights relating to the operation of, or used in connection with, the Land or the Improvements,
including all governmental permits relating to any activities on the Land.


 


“Personalty” has the
meaning set forth in the Security Instrument.


 


“Preferred Equity” means
a direct or indirect equity ownership interest in, economic interests in, or rights with respect to, Borrower that provide an equity
owner preferred dividend, distribution, payment, or return treatment relative to other equity owners.


 


“Prepayment Lockout Period”
has the meaning set forth in the Summary of Loan Terms.


 


“Prepayment Notice”
means the written notice that Borrower is required to provide to Lender in accordance with Section 2.03 (Lockout/Prepayment)
of the Loan Agreement in order to make a prepayment on the Mortgage Loan, which shall include, at a minimum, the Intended Prepayment
Date.


 


“Prepayment Premium”
means the amount payable by Borrower in connection with a prepayment of the Mortgage Loan, as provided in Section 2.03 (Lockout/Prepayment)
of the Loan Agreement and calculated in accordance with the Prepayment Premium Schedule.


 


“Prepayment Premium Period End
Date” or “Yield Maintenance Period End Date” has the meaning set forth in the Summary of Loan
Terms.


 


“Prepayment Premium Period Term”
or “Yield Maintenance Period Term” has the meaning set forth in the Summary of Loan Terms.


 


“Prepayment Premium Schedule”
means that certain Schedule 4 (Prepayment Premium Schedule) to the Loan Agreement.


 


“Prohibited Person”
means:


 


(a)       any
Person with whom Lender or Fannie Mae is prohibited from doing business pursuant to any law, rule, regulation, judicial proceeding
or administrative directive; or


 


(b)       any
Person identified on the United States Department of Housing and Urban Development’s “Limited Denial of Participation,
HUD Funding Disqualifications and Voluntary Abstentions List,” or on the General Services Administration’s “System
for Award Management (SAM)” exclusion list, each of which may be amended from time to time, and any successor or replacement
thereof; or


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 11
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


(c)       any
Person that is determined by Fannie Mae to pose an unacceptable credit risk due to the aggregate amount of debt of such Person
owned or held by Fannie Mae; or


 


(d)       any
Person that has caused any unsatisfactory experience of a material nature with Fannie Mae or Lender, such as a default, fraud,
intentional misrepresentation, litigation, arbitration or other similar act.


 


“Property Jurisdiction”
has the meaning set forth in the Security Instrument.


 


“Property Square Footage”
has the meaning set forth in the Summary of Loan Terms.


 


“Publicly-Held Corporation”
means a corporation, the outstanding voting stock of which is registered under Sections 12(b) or 12(g) of the Securities Exchange
Act of 1934, as amended.


 


“Publicly-Held Trust”
means a real estate investment trust, the outstanding voting shares or beneficial interests of which are registered under Sections 12(b)
or 12(g) of the Securities Exchange Act of 1934, as amended.


 


“Rents” has the meaning
set forth in the Security Instrument.


 


“Repair Threshold” has
the meaning set forth in the Summary of Loan Terms.


 


“Repairs” means, individually
and collectively, the Required Repairs, Borrower Requested Repairs, and Additional Lender Repairs.


 


“Repairs Escrow Account”
means the account established by Lender into which the Repairs Escrow Deposit is deposited to fund the Repairs.


 


“Repairs Escrow Account Administrative
Fee” has the meaning set forth in the Summary of Loan Terms.


 


“Repairs Escrow Deposit”
has the meaning set forth in the Summary of Loan Terms.


 


“Replacement Reserve Account”
means the account established by Lender into which the Replacement Reserve Deposits are deposited to fund the Replacements.


 


“Replacement Reserve Account Administration
Fee” has the meaning set forth in the Summary of Loan Terms.


 


“Replacement Reserve Account Interest
Disbursement Frequency” has the meaning set forth in the Summary of Loan Terms.


 


“Replacement Reserve Deposits”
means the Initial Replacement Reserve Deposit, Monthly Replacement Reserve Deposits and any other deposits to the Replacement Reserve
Account required by the Loan Agreement.


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 12
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


“Replacement Threshold”
has the meaning set forth in the Summary of Loan Terms.


 


“Replacements” means,
individually and collectively, the Required Replacements, Borrower Requested Replacements and Additional Lender Replacements.


 


“Required Repair Schedule”
means that certain Schedule 6 (Required Repair Schedule) to the Loan Agreement.


 


“Required Repairs” means
those items listed on the Required Repair Schedule.


 


“Required Replacement Schedule”
means that certain Schedule 5 (Required Replacement Schedule) to the Loan Agreement.


 


“Required Replacements”
means those items listed on the Required Replacement Schedule.


 


“Reserve/Escrow Account Funds”
means, collectively, the funds on deposit in the Reserve/Escrow Accounts.


 


“Reserve/Escrow Accounts”
means, together, the Replacement Reserve Account and the Repairs Escrow Account.


 


“Residential Lease”
means a Lease of an individual dwelling unit and shall not include any master Lease (which term “master Lease” includes
any master Lease to a single corporate tenant).


 


“Restoration” means
restoring and repairing the Mortgaged Property to the equivalent of its physical condition immediately prior to the casualty or
to a condition approved by Lender following a casualty.


 


“Restricted Ownership Interest”
means, with respect to any entity, the following:


 


(a)         if
such entity is a general partnership or a joint venture, fifty percent (50%) or more of all general partnership or joint venture
interests in such entity;


 


(b)         if
such entity is a limited partnership:


 


(1)       the
interest of any general partner; or


 


(2)       fifty
percent (50%) or more of all limited partnership interests in such entity;


 


(c)         if
such entity is a limited liability company or a limited liability partnership:


 


(1)       the
interest of any managing member or the contractual rights of any non-member manager; or


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 13
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


(2)       fifty
percent (50%) or more of all membership or other ownership interests in such entity;


 


(d)         if
such entity is a corporation (other than a Publicly-Held Corporation) with only one class of voting stock, fifty percent (50%)
or more of voting stock in such corporation;


 


(e)         if
such entity is a corporation (other than a Publicly-Held Corporation) with more than one class of voting stock, the amount of shares
of voting stock sufficient to have the power to elect the majority of directors of such corporation; or


 


(f)         if
such entity is a trust (other than a land trust or a Publicly-Held Trust), the power to Control such trust vested in the trustee
of such trust or the ability to remove, appoint or substitute the trustee of such trust (unless the trustee of such trust after
such removal, appointment or substitution is a trustee identified in the trust agreement approved by Lender).


 


“Review Fee” means the
non-refundable fee of Three Thousand Dollars ($3,000) payable to Lender.


 


“Sanctioned Country”
means a country subject to a comprehensive country-wide sanctions program administered and enforced by OFAC, which list is updated
from time to time.


 


“Sanctioned Person”
means (a) a Person named on the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC, available
at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time;
(b) (1) an agency of the government of a Sanctioned Country, (2) an organization controlled by a Sanctioned Country, or (3) a Person
resident in a Sanctioned Country, to the extent any Person described in clauses (1), (2) or (3) is the subject of a sanctions program
administered by OFAC; and, (c) a Person whose property and interests in property are blocked pursuant to an Executive Order or
regulations administered by OFAC consistent with the guidance issued by OFAC.


 


“Schedule of Interest Rate Type
Provisions” means that certain Schedule 3 (Schedule of Interest Rate Type Provisions) to the Loan Agreement.


 


“Security Instrument”
means that certain multifamily mortgage, deed to secure debt or deed of trust executed and delivered by Borrower as security for
the Mortgage Loan and encumbering the Mortgaged Property, including all riders or schedules attached thereto, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to time.


 


“Servicing Arrangement”
means any arrangement between Lender and the Loan Servicer for loss sharing or interim advancement of funds.


 


“Summary of Loan Terms”
means that certain Schedule 2 (Summary of Loan Terms) to the Loan Agreement.


 


“Taxes” has the meaning
set forth in the Security Instrument.


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 14
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 


“Title Policy” means
the mortgagee’s loan policy of title insurance issued in connection with the Mortgage Loan and insuring the lien of the Security
Instrument as set forth therein, as approved by Lender.


 


“Total Parking Spaces”
has the meaning set forth in the Summary of Loan Terms.


 


“Total Residential Units”
has the meaning set forth in the Summary of Loan Terms.


 


“Transfer” means:


 


(a)       a
sale, assignment, transfer or other disposition (whether voluntary, involuntary, or by operation of law), other than Residential
Leases, Material Commercial Leases or non-Material Commercial Leases permitted by this Loan Agreement;


 


(b)       a
granting, pledging, creating or attachment of a lien, encumbrance or security interest (whether voluntary, involuntary, or by operation
of law);


 


(c)       an
issuance or other creation of a direct or indirect ownership interest;


 


(d)       a
withdrawal, retirement, removal or involuntary resignation of any owner or manager of a legal entity; or


 


(e)       a
merger, consolidation, dissolution or liquidation of a legal entity.


 


“Transfer Fee” means
a fee equal to one percent (1%) of the unpaid principal balance of the Mortgage Loan payable to Lender.


 


“UCC” has the meaning
set forth in the Security Instrument.


 


“UCC Collateral” has
the meaning set forth in the Security Instrument.


 


“Voidable Transfer”
means any fraudulent conveyance, preference or other voidable or recoverable payment of money or transfer of property.


 


“Yield Maintenance Period End
Date” or “Prepayment Premium Period End Date” has the meaning set forth in the Summary of Loan
Terms.


 


“Yield Maintenance Period Term”
or “Prepayment Premium Period Term” has the meaning set forth in the Summary of Loan Terms.


 


[INITIALS FOLLOW ON NEXT PAGE]


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 15
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    

 





	 	BORROWER’S INITIALS: 	/S/ DB	 


 


	Schedule 1 to Multifamily Loan and

Security Agreement - Definitions Schedule

(Interest Rate Type - Fixed Rate)	Form 6101.FR	Page 16
	Fannie Mae	01-16	© 2016 Fannie Mae


 




     


     


    











 


SCHEDULE 2


TO MULTIFAMILY LOAN AND SECURITY AGREEMENT


 


Summary of Loan Terms


(Interest Rate Type - Fixed Rate)


 


	I.         GENERAL PARTY AND MULTIFAMILY PROJECT INFORMATION
	 
	Borrower	ASPEN 2016 LLC, a

Delaware limited liability company
	 	 
	Lender	CAPITAL ONE MULTIFAMILY FINANCE, LLC, a Delaware limited liability company
	 	 
	Key Principal	
        CLIPPER REALTY INC., a

        Maryland corporation

         

        CLIPPER REALTY L.P., a

        Delaware limited partnership

	 	 
	Guarantor	
        CLIPPER REALTY INC., a

        Maryland corporation

         

        CLIPPER REALTY L.P., a

        Delaware limited partnership

	 	 
	Multifamily Project	The Aspen Apartments 
	 	 
	ADDRESSES
	 
	Borrower’s General Business Address	4611 12th Avenue

Suite 1-L

Brooklyn, New York 11219

Attn: David Bistricer
	 	 
	Borrower’s Notice Address	4611 12th Avenue

Suite 1-L

Brooklyn, New York 11219

Attn: David Bistricer

david@clipperequity.com 
	 	 
	Multifamily Project Address	1955 First Avenue, New York, New York 10029


 


	Schedule 2 to Multifamily Loan and

Security Agreement - Summary of Loan

Terms (Interest Rate Type - Fixed Rate)	Form 6102.FR	Page 1
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    

 


	Multifamily Project County	New York
	 	 
	Key Principal’s General Business Address	4611 12th Avenue

Suite 1-L

Brooklyn, New York 11219

Attn: David Bistricer
	 	 
	Key Principal’s Notice Address	4611 12th Avenue

Suite 1-L

Brooklyn, New York 11219

Attn: David Bistricer

david@clipperequity.com
	 	 
	Guarantor’s General Business Address	
        CLIPPER REALTY INC., a

        Maryland corporation

        4611 12th Avenue

        Suite 1-L

        Brooklyn, New York 11219

        Attn: David Bistricer

         

        CLIPPER REALTY L.P., a

        Delaware limited partnership

        4611 12th Avenue

        Suite 1-L

        Brooklyn, New York 11219

        Attn: David Bistricer

	 	 
	Guarantor’s Notice Address	
        CLIPPER REALTY INC., a

        Maryland corporation

        4611 12th Avenue

        Suite 1-L

        Brooklyn, New York 11219

        Attn: David Bistricer

        david@clipperequity.com

         

        CLIPPER REALTY L.P., a

        Delaware limited partnership

        4611 12th Avenue

        Suite 1-L

        Brooklyn, New York 11219

        Attn: David Bistricer

        david@clipperequity.com



 


	Schedule 2 to Multifamily Loan and

Security Agreement - Summary of Loan

Terms (Interest Rate Type - Fixed Rate)	Form 6102.FR	Page 2
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    

 


	Lender’s General Business Address	7600 Wisconsin Avenue, Suite 800

Bethesda, MD  20814
	 	 
	Lender’s Notice Address	Capital One Multifamily Finance, LLC

7600 Wisconsin Avenue, Suite 800

Bethesda, MD  20814

Attn:  Asset Management

Email Address:  AssetManagement@capitalone.com
	 	 
	Lender’s Payment Address	Capital One Multifamily Finance, LLC

7600 Wisconsin Avenue, Suite 800

Bethesda, MD  20814

Attn:  Loan Servicing


 


	II.         MULTIFAMILY PROJECT INFORMATION
	 
	Property Square Footage	49,357.954
	 	 
	Total Parking Spaces	61
	 	 
	Total Residential Units	232
	 	 
	Affordable Housing Property	
        x      Yes

         ̈       No



 


	III.         MORTGAGE LOAN INFORMATION
	 
	Amortization Period	360 months
	 	 
	Amortization Type	
         ̈       Amortizing

         ̈       Full
        Term Interest Only

        x       Partial
        Interest Only

	 	 
	Effective Date	June 27, 2016
	 	 
	First Payment Date	The first day of August, 2016.
	 	 
	First Principal and Interest Payment Date	The first day of August, 2017


 


	Schedule 2 to Multifamily Loan and

Security Agreement - Summary of Loan

Terms (Interest Rate Type - Fixed Rate)	Form 6102.FR	Page 3
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    

 


	Fixed Rate	3.68%
	 	 
	Interest Accrual Method 	
         ̈       30/360
        (computed on the basis of a three hundred sixty (360) day year consisting of twelve (12) thirty (30) day months).

         

        or

         

        x       Actual/360
        (computed on the basis of a three hundred sixty (360) day year and the actual number of calendar days during the applicable
        month, calculated by multiplying the unpaid principal balance of the Mortgage Loan by the Interest Rate, dividing the product by
        three hundred sixty (360), and multiplying the quotient obtained by the actual number of days elapsed in the applicable month).

	 	 
	Interest Only Term	12 months
	 	 
	Interest Rate	The Fixed Rate
	 	 
	Interest Rate Type	Fixed Rate
	 	 
	Last Interest Only Payment Date	The first day of July, 2017.
	 	 
	Loan Amount	$70,000,000.00
	 	 
	Loan Term	144 months
	 	 
	Loan Year	The period beginning on the Effective Date and ending on the last day of June, 2017, and each successive twelve (12) month period thereafter.
	 	 
	Maturity Date	The first day of July, 2028, or any earlier date on which the unpaid principal balance of the Mortgage Loan becomes due and payable by acceleration or otherwise.


 


	Schedule 2 to Multifamily Loan and

Security Agreement - Summary of Loan

Terms (Interest Rate Type - Fixed Rate)	Form 6102.FR	Page 4
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    

 


	Monthly Debt Service Payment	
        (i)          $221,822.22
        for the First Payment Date;

         

        (ii)          for
        each Payment Date thereafter through and including the Last Interest Only Payment Date:

         

        (a)       $200,355.56
        if the prior month was a 28-day month;

         

        (b)       $207,511.11
        if the prior month was a 29-day month;

         

        (c)       $214,666.67
        if the prior month was a 30-day month; and

         

        (d)       $221,822.22
        if the prior month was a 31-day month; and

         

        (iii)          $321,406.76
        for the First Principal and Interest Payment Date and each Payment Date thereafter until the Mortgage Loan is fully paid.

	 	 
	Prepayment Lockout Period	0 year(s) from the Effective Date


 


	IV.        YIELD MAINTENANCE/PREPAYMENT PREMIUM INFORMATION
	 
	
        Yield Maintenance Period End Date

         

        or

         

        Prepayment Premium Period End Date
	The last day of December, 2027.
	 	 
	
        Yield Maintenance Period Term

         

        or

         

        Prepayment Premium Period Term
	138 months


 


	Schedule 2 to Multifamily Loan and

Security Agreement - Summary of Loan

Terms (Interest Rate Type - Fixed Rate)	Form 6102.FR	Page 5
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    

 


	V.       RESERVE INFORMATION
	 
	Completion Period	Within six (6) months after the Effective Date or as otherwise shown on the Required Repair Schedule.
	 	 
	Initial Replacement Reserve Deposit	$36,979.00
	 	 
	Maximum Inspection Fee	$1,200.00
	 	 
	Maximum Repair Disbursement Interval	One (1) time per calendar quarter
	 	 
	Maximum Replacement Reserve Disbursement Interval	One (1) time per calendar quarter
	 	 
	Minimum Repairs Disbursement Amount	$5,000.00
	 	 
	Minimum Replacement Reserve Disbursement Amount	$5,000.00
	 	 
	Monthly Replacement Reserve Deposit	$5,189.84
	 	 
	Repair Threshold	$25,000.00
	 	 
	Repairs Escrow Account Administrative Fee	$200.00, payable one time
	 	 
	Repairs Escrow Deposit	$0.00
	 	 
	Replacement Reserve Account Administration Fee	$250.00 payable annually
	 	 
	Replacement Reserve Account Interest Disbursement Frequency	Annually
	 	 
	Replacement Threshold	$5,000.00


 


	Schedule 2 to Multifamily Loan and

Security Agreement - Summary of Loan

Terms (Interest Rate Type - Fixed Rate)	Form 6102.FR	Page 6
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    

 





	 	BORROWER’S INITIALS: 	/S/ DB	 


 


	Schedule 2 to Multifamily Loan and

Security Agreement - Summary of Loan

Terms (Interest Rate Type - Fixed Rate)	Form 6102.FR	Page 7
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    






 





Modifications to Multifamily Loan and
Security Agreement


 


ADDENDA TO SCHEDULE 2 – SUMMARY
OF LOAN TERMS


(New York Gap Note Modifications)


(Interest Rate Type - Fixed Rate)


 


1.          The
following is hereby added to Section III (“Mortgage Loan Information”) of the Summary of Loan Terms at the end of the
cell entitled “Monthly Debt Service Payment:”


   


	Monthly GAP Debt Service Payment	 	
        (i)          $79,644.59
        for the First Payment Date;

         

        (ii)         for
        each Payment Date thereafter through and including the Last Interest Only Payment Date:

         

        (a)          $71,937.05
        if the prior month was a 28-day month;

         

        (b)          $74,506.23
        if the prior month was a 29-day month;

         

        (c)          $77,075.41
        if the prior month was a 30-day month; and

         

        (d)          $79,644.59
        if the prior month was a 31-day month; and

         

        (iii)        $115,400.12
        for the First Principal and Interest Payment Date and each Payment Date thereafter until the Mortgage Loan is fully paid.



 


2.          The
following new section is hereby added to the Summary of Loan Terms:


 


	VI.   GAP NOTE
	 
	GAP Note	That certain GAP Multifamily Note dated as of June 27, 2016 in the original principal amount of $25,133,287.00 made by Borrower in favor of Lender, and all schedules, riders, allonges and addenda attached thereto, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.  The Note amends, restates, consolidates and supersedes the Gap Note.	 


 


[INITIALS FOLLOW ON NEXT PAGE]


 


	Modifications to Multifamily Loan and Security Agreement - Schedule 2 Addenda - Summary of Loan Terms (New York Gap Note Modifications) (Interest Rate Type – Fixed Rate)	Form 6102.19.FR	Page 1
	Fannie Mae	07-11	© 2011 Fannie Mae


 




     


     


    

 





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	Modifications to Multifamily Loan and Security Agreement - Schedule 2 Addenda - Summary of Loan Terms (New York Gap Note Modifications) (Interest Rate Type – Fixed Rate)	Form 6102.19.FR	Page 2
	Fannie Mae	07-11	© 2011 Fannie Mae


 




     


     


    











 


Modifications
to Multifamily Loan and Security Agreement


 


ADDENDA TO SCHEDULE 2 – SUMMARY OF
LOAN TERMS


(Bond Regulatory Agreement)


 


	VII.Bond Regulatory Agreement
	 
	Agency	New York City Housing Development Corporation 	 
	 	 	 
	Bond Trustee	The Bank of New York	 


 


[INITIALS FOLLOW ON NEXT PAGE]


 


	Modifications to Multifamily Loan and Security Agreement - Schedule 2 Addenda - Summary of Loan Terms (Bond Regulatory Agreement)	Form 6102.22	Page 1
	Fannie Mae	08-14	© 2014 Fannie Mae


 




     


     


    

 





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	Modifications to Multifamily Loan and Security Agreement - Schedule 2 Addenda - Summary of Loan Terms (Bond Regulatory Agreement)	Form 6102.22	Page 2
	Fannie Mae	08-14	© 2014 Fannie Mae


 




     


     


    

 


SCHEDULE 3


TO MULTIFAMILY LOAN AND SECURITY AGREEMENT


 


Schedule of Interest Rate Type Provisions


(Fixed Rate)


 





		1.	Defined Terms.



 


Capitalized terms not
otherwise defined in this Schedule have the meanings given to such terms in the Definitions Schedule to the Loan Agreement.


 


		2.	Interest Accrual.



 


Except as otherwise
provided in the Loan Agreement, interest shall accrue at the Interest Rate until fully paid.




 


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	Schedule 3 to Multifamily Loan and Security Agreement - Interest Rate Type Provisions (Fixed Rate)	Form 6103.FR	Page 1
	Fannie Mae	01-11	© 2011 Fannie Mae


 


 




     


     


    

 





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	Schedule 3 to Multifamily Loan and Security Agreement - Interest Rate Type Provisions (Fixed Rate)	Form 6103.FR	Page 2
	Fannie Mae	01-11	© 2011 Fannie Mae


 




     


     


    

  


SCHEDULE 4


TO MULTIFAMILY LOAN AND SECURITY AGREEMENT


 


Prepayment Premium Schedule


(Standard Yield Maintenance – Fixed
Rate)


 


		1.	Defined Terms.



 


All capitalized terms used
but not defined in this Prepayment Premium Schedule shall have the meanings assigned to them in the Loan Agreement.


 


		2.	Prepayment Premium.



 


Any Prepayment Premium
payable under Section 2.03 (Lockout/Prepayment) of the Loan Agreement shall be computed as follows:


 


(a)          If
the prepayment is made at any time after the Effective Date and before the Yield Maintenance Period End Date, the Prepayment Premium
shall be the greater of:


 


(1)         one
percent (1%) of the amount of principal being prepaid; or


 


(2)         the
product obtained by multiplying:


 


(A)         the
amount of principal being prepaid,


 


by


 


(B)         the
difference obtained by subtracting from the Fixed Rate on the Mortgage Loan, the Yield Rate (as defined below) on the twenty-fifth (25th)
Business Day preceding (i) the Intended Prepayment Date, or (ii) the date Lender accelerates the Mortgage Loan or otherwise
accepts a prepayment pursuant to Section 2.03(d) (Application of Collateral) of the Loan Agreement,


 


by


 


(C)         the
present value factor calculated using the following formula:


 





	 	1 - (1 + r)-n/12	 
	 	r	 


 





[r =        Yield Rate


 


n =         the number
of months remaining between (i) either of the following: (x) in the case of a voluntary prepayment, the last day of the
month in which the prepayment is made, or (y) in any other case, the date on which Lender accelerates the unpaid principal
balance of the Mortgage Loan and (ii) the Yield Maintenance Period End Date.


 


	Schedule 4 to Multifamily Loan and Security Agreement (Prepayment Premium Schedule – Standard Yield Maintenance – Fixed Rate)	Form 6104.01	Page 1
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    

 


For purposes of this clause (2),
the “Yield Rate” means the yield calculated by interpolating the yields for the immediately shorter and longer
term U.S. “Treasury constant maturities” (as reported in the Federal Reserve Statistical Release H.15 Selected Interest
Rates (the “Fed Release”) under the heading “U.S. government securities”) closest to the remaining
term of the Yield Maintenance Period Term, as follows (rounded to three (3) decimal places):


 





 


		a =	the yield for the longer U.S. Treasury constant maturity



		b =	the yield for the shorter U.S. Treasury constant maturity



		x =	the term of the longer U.S. Treasury constant maturity



		y =	the term of the shorter U.S. Treasury constant maturity



		z =	“n” (as defined in the present value factor calculation
above) divided by twelve (12).



 


Notwithstanding any provision to
the contrary, if “z” equals a term reported under the U.S. “Treasury constant maturities” subheading
in the Fed Release, the yield for such term shall be used, and interpolation shall not be necessary. If publication of the Fed
Release is discontinued by the Federal Reserve Board, Lender shall determine the Yield Rate from another source selected by Lender.
Any determination of the Yield Rate by Lender will be binding absent manifest error.]


 


(b)          If
the prepayment is made on or after the Yield Maintenance Period End Date but before the last calendar day of the fourth (4th)
month prior to the month in which the Maturity Date occurs, the Prepayment Premium shall be one percent (1%) of the amount
of principal being prepaid. 


 


	Schedule 4 to Multifamily Loan and Security Agreement (Prepayment Premium Schedule – Standard Yield Maintenance – Fixed Rate)	Form 6104.01	Page 2
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    

 


(c)          Notwithstanding
the provisions of Section 2.03 (Lockout/Prepayment) of the Loan Agreement, no Prepayment Premium shall be payable with respect
to any prepayment made on or after the last calendar day of the fourth (4th) month prior to the month in which the Maturity
Date occurs.


 


[INITIALS FOLLOW ON NEXT PAGE]


 


	Schedule 4 to Multifamily Loan and Security Agreement (Prepayment Premium Schedule – Standard Yield Maintenance – Fixed Rate)	Form 6104.01	Page 3
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    




 


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	Schedule 4 to Multifamily Loan and Security Agreement (Prepayment Premium Schedule – Standard Yield Maintenance – Fixed Rate)	Form 6104.01	Page 4
	Fannie Mae	08-13	© 2013 Fannie Mae


 




     


     


    

  


SCHEDULE 5 TO


 


MULTIFAMILY LOAN AND SECURITY AGREEMENT


 


Required Replacement Schedule


 


		·	Plant materials at the terrace



 


		·	Wall-mounted exterior lighting



 


		·	Scrape and paint stairs



 


		·	Repaint brick masonry



 


		·	Roof replacement



 


		·	Fitness room equipment and finishes



 


		·	Recreation room equipment and finishes



 


		·	Laundry room finishes



 


		·	Domestic water pumps



 


		·	Domestic water heater storage tanks



 


		·	Central boiler component refurnish



 


		·	Through-wall AC



 


		·	Replace fire pump



 


		·	Replace alarm panel



 


		·	Common area hallway carpet and corridor flooring replacement



 


		·	Wood flooring replacement in units



 


		·	Refrigerator



 


		·	Range/Stove



 


		·	Microwave



 


		·	Dishwasher



 


[INITIALS FOLLOW ON NEXT PAGE]


 





	Multifamily Loan and Security Agreement

 (Non-Recourse)	Form 6001.NR	Page 1
	Schedule 5	01-16	© 2016 Fannie Mae







 




     


     


    

  





	 	BORROWER’S INITIALS: 	/S/ DB	 


 





	Multifamily Loan and Security Agreement

 (Non-Recourse)	Form 6001.NR	Page 2
	Schedule 5	01-16	© 2016 Fannie Mae







 




     


     


    

  


SCHEDULE 6 TO


 


MULTIFAMILY LOAN AND SECURITY AGREEMENT


 


Required Repair Schedule


 


	Repair Description	 	Estimated Cost	 	 	Maximum Repair
 Cost	 	Completion Date
	Investigate the source of the water intrusion in the seventh floor hallway and in Unit 539.  The source of the intrusion should be repaired and the impacted materials should be replaced	 	$	0.00	 	 	N/A	 	180 days



 


[INITIALS FOLLOW ON NEXT PAGE]


 





	Multifamily Loan and Security Agreement

 (Non-Recourse)	Form 6001.NR	Page 1
	Schedule 6	01-16	© 2016 Fannie Mae







 




     


     


    

  





	 	BORROWER’S INITIALS: 	/S/ DB	 


  





	Multifamily Loan and Security Agreement

 (Non-Recourse)	Form 6001.NR	Page 2
	Schedule 6	01-16	© 2016 Fannie Mae


  




     


     


    

 


SCHEDULE 7 TO


 


MULTIFAMILY LOAN AND SECURITY AGREEMENT


 


Exceptions to Representations and Warranties
Schedule


 


		1.	Section 4.0l(a). Borrower is in the process of completing the required publication requirement
in New York and shall complete same within thirty (30) days of the Closing Date.



 


		2.	Section 6.0l(a)(1). There are the following two open sidewalk violations of record with
respect to the Mortgaged Property:



 


Notice of Sidewalk Violation No. 81492 (filed on 12/17/2008)


 


Notice of Sidewalk Violation No. 18261 (filed on 09/24/1980)


 


		3.	Section 11.01(b)(2): NEW YORK SMSA LIMITED PARTNERSHIP, d/b/a Verizon Wireless, maintains
a right of first refusal to purchase the Mortgaged Property under Section 13 of that certain Lease Agreement, dated as of August
1, 2005, by and between 100 STREET TRI VENTURE LLC and NEW YORK SMSA LIMITED PARTNERSHIP, d/b/a Verizon Wireless (as the same may
be amended, restated, modified, supplemented or assigned).



 


[INITIALS FOLLOW ON NEXT PAGE]


 





	Multifamily Loan and Security Agreement

 (Non-Recourse)	Form 6001.NR	Page 1
	Schedule 7	01-16	© 2016 Fannie Mae







 




     


     


    

 





	 	BORROWER’S INITIALS: 	/S/ DB	 





 





	Multifamily Loan and Security Agreement

 (Non-Recourse)	Form 6001.NR	Page 2
	Schedule 7	01-16	© 2016 Fannie Mae







 




     


     


    

 


EXHIBIT A


 


MODIFICATIONS TO MULTIFAMILY LOAN AND
SECURITY AGREEMENT


(New York Gap Note Modifications)


 


The foregoing Loan
Agreement is hereby modified as follows:


 


1.       Capitalized
terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.


 


2.       The
Definitions Schedule is hereby amended by adding the following new definitions in the appropriate alphabetical order:


 


“GAP Note”
has the meaning set forth in the Summary of Loan Terms.


 


“GAP Security Instrument”
means that certain multifamily mortgage, deed to secure debt or deed of trust executed and delivered by Borrower as security for
the Mortgage Loan and encumbering the Mortgaged Property, including all riders or schedules attached thereto, as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to time. The Security Instrument amends, restates, consolidates
and supersedes the GAP Security Instrument.


 


“Monthly GAP Debt Service
Payment” has the meaning set forth in the Summary of Loan Terms.


 


3.       The
definitions of “Monthly Debt Service Payment,” “Note” and “Security Instrument” in the Definitions
Schedule are hereby deleted and restated in their entirety to read as follows:


 


“Monthly Debt Service
Payment” has the meaning set forth in the Summary of Loan Terms and which amount includes the Monthly GAP Debt Service
Payment.


 


“Note” means
that certain Amended and Restated Multifamily Note of even date herewith in the original principal amount of the stated Loan Amount
made by Borrower in favor of Lender, and all schedules, riders, allonges and addenda attached thereto, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time. The Note amends, restates, consolidates and supersedes
the GAP Note.


 


“Security Instrument”
means that certain consolidation, extension and modification agreement, multifamily mortgage, deed to secure debt or deed of trust
executed and delivered by Borrower as security for the Mortgage Loan and encumbering the Mortgaged Property, including all riders
or schedules attached thereto, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to
time. The Security Instrument amends, restates, consolidates and supersedes the GAP Security Instrument.


 


[INITIALS FOLLOW ON NEXT PAGE]


 


	Modifications to Multifamily Loan and

Security Agreement (New York Gap Note

Modifications)	Form 6234	Page 1
	Fannie Mae	07-11	© 2011 Fannie Mae


 




     


     


    

 





	 	BORROWER’S INITIALS: 	/S/ DB	 


 


	Modifications to Multifamily Loan and

Security Agreement (New York Gap Note

Modifications)	Form 6234	Page 2
	Fannie Mae	07-11	© 2011 Fannie Mae


 




     


     


    



 


EXHIBIT B


 


MODIFICATIONS TO MULTIFAMILY LOAN AND
SECURITY AGREEMENT


(Bond Redemption and Bond Regulatory
Agreement) (HDC)


 


The foregoing Loan Agreement is hereby modified
as follows:


 


1.          Capitalized
terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.


 


2.          The
Definitions Schedule is hereby amended by adding the following new definitions in the appropriate alphabetical order:


 


“Agency” has the meaning set forth
on the Summary of Loan Terms.


 


“Bond Regulatory Agreement” has
the meaning set forth in the Security Instrument.


 


“Bond Trustee” has the meaning
set forth on the Summary of Loan Terms.


 


“Trust Indenture” has the meaning
set forth in the Security Instrument.


 


3.          Section
3.02(a) (Personal Liability Based on Lender’s Loss) of the Loan Agreement is hereby amended by adding the following subsection
to the end thereof:


 


(18)        failure
of Borrower to comply with Section 14.01(ba)(12) and Section 14.01(ba)(13)
of this Loan Agreement; or


 


(19)        (A)
failure of the Bonds (as defined in the Trust Indenture and issued in connection therewith) to be paid and redeemed; or (B) any
losses directly or indirectly related to the Bonds or the documents executed in connection with the Bonds.


 


4.          Section
14.01(ba) (Automatic Events of Default Subject to a Cure Period)
of the Loan Agreement is hereby amended by adding the following provisionprovisions to the end thereof:


 


(12)        any
default beyond the expiration of any applicable cure period under the Bond Regulatory Agreement; or


 


(13)        the
institution of any adverse proceeding against the Mortgaged Property or Borrower relating to the Bonds (as defined in the Trust
Indenture), including the payment and redemption of the Bonds.


 


	Modifications to Multifamily Loan and

Security Agreement (Bond Redemption

and Bond Regulatory Agreement)	Form 6238	Page 1
	Fannie Mae	08-14	© 2014 Fannie Mae


 




     


     


    

 


5.          The
following article is hereby added to the Loan Agreement as Article 16 (Items Related to Bond Regulatory Agreements):


 


ARTICLE 16 – ITEMS RELATED
TO BOND REGULATORY AGREEMENTS


 


Section 16.01    Notice
of Default Under Bond Regulatory Agreement.


 


Within three (3) Business Days
after Borrower’s receipt, Borrower shall provide Lender with a copy of any default notice, any warning letter, or any similar
communication from the Agency or any other compliance monitoring designee, and shall identify the manner in which Borrower or the
Mortgaged Property is alleged to be non-compliant.


 


Section 16.02    Compliance.


 


Pursuant to Section 11 of the
Bond Regulatory Agreement Borrower is required to provide evidence of compliance to the Agency verifying compliance with the Bond
Regulatory Agreement. Borrower covenants and agrees to comply with all requirements of the Bond Regulatory Agreement and to provide
Lender with a copy of all reports, certifications, and documents within five (5) Business Days after filing the same with the applicable
agency.


 


Further,
Section 8.02(b)(2)(E) (Items to Furnish to Lender) of the Loan Agreement is hereby amended by adding the following
provision to the end thereof:


 


(v)         Borrower
is in full compliance with the Bond Regulatory Agreement.


 


Section 16.03    Amendment
of Bond Regulatory Agreement. 


 


The Bond Regulatory Agreement
may not be amended, modified, or terminated without the written consent of Lender.


 


Section 16.04    Property
Management After Event of Default. 


 


As
of the Effective Date, Lender has approved Borrower as self-manager of the Mortgaged Property; provided, however, that after the
occurrence of an Event of Default, Borrower shall promptly engage a third-party property manager for management of the Mortgaged
Property, and the identity of such third-party property manager and the form of written agreement between such third-party property
manager and Borrower shall be subject to Lender approval. Nothing in this section shall be construed to limit or otherwise affect
Lender’s rights as otherwise provided in the Loan Documents regarding management of the Mortgaged Property, the property
manager, and/or any property management agreement.


 


[INITIALS FOLLOW ON NEXT PAGE]


 


	Modifications to Multifamily Loan and

Security Agreement (Bond Redemption

and Bond Regulatory Agreement)	Form 6238	Page 2
	Fannie Mae	08-14	© 2014 Fannie Mae


 




     


     


    

 





	 	BORROWER’S INITIALS: 	/S/ DB	 


 


	Modifications to Multifamily Loan and

Security Agreement (Bond Redemption

and Bond Regulatory Agreement)	Form 6238	Page 3
	Fannie Mae	08-14	© 2014 Fannie Mae


 




     


     


    











 


EXHIBIT C


 


MODIFICATIONS TO MULTIFAMILY LOAN AND
SECURITY AGREEMENT


(HPD Regulatory Agreement)


 


The foregoing Loan
Agreement is hereby modified as follows:


 


1.       Capitalized
terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.


 


2.       The
Definitions Schedule is hereby amended by adding the following new definitions in the appropriate alphabetical order:


 


“HPD Regulatory Agreement”
means, collectively:


 


		(i)	that certain Deed, dated as of November 13, 2002, by and between THE CITY OF NEW YORK, a municipal
corporation formed pursuant to the laws of the State of New York, acting by and through its DEPARTMENT OF HOUSING PRESERVATION
AND DEVELOPMENT (“HPD”), as Grantor, and 100 STREET TRI VENTURE LLC, a New York limited liability company (“100
Street Tri Venture”), as Grantee, recorded in the Office of the City Register of the City of New York, Borough of Manhattan
(“Official Records”), as CRFN 2003000142549; and



 


		(ii)	that certain Land Disposition Agreement, dated as of November 13, 2002, by and between HPD and
100 Tri Street Venture, recorded in the Official Records as CRFN 2003000142548.



 


3.       Section 3.02(a)
(Personal Liability Based on Lender’s Loss) of the Loan Agreement is hereby amended by adding the following subsection to
the end thereof:


 


(10)       failure
of Borrower to comply with Section 14.01(a)(14) of this Loan Agreement.


 


4.       Section 14.01(a)
(Automatic Events of Default) of the Loan Agreement is hereby amended by adding the following provision to the end thereof:


 


(14)       any
default beyond the expiration of any applicable cure period under the HPD Regulatory Agreement.


 


	Modifications to Multifamily Loan and

Security Agreement (HPD Regulatory

Agreement)	 	Page 1
	Fannie Mae	 	© 2014 Fannie Mae


 




     


     


    

 


5.       The
following article is hereby added to the Loan Agreement as Article 17 (Items Related to HPD Regulatory Agreement):


 


ARTICLE 17 – ITEMS RELATED
TO HPD REGULATORY AGREEMENT


 


Section 17.01  Notice of
Default Under HPD Regulatory Agreement.


 


Within three (3)
Business Days after Borrower’s receipt, Borrower shall provide Lender with a copy of any default notice, any warning letter,
or any similar communication from the respective agency or any other compliance monitoring designee for the HPD Regulatory Agreement,
and shall identify the manner in which Borrower or the Mortgaged Property is alleged to be non-compliant.


 


Section 17.02  Compliance.


 


Borrower
may be required to provide evidence of compliance to the respective agency verifying compliance with the HPD Regulatory Agreement,
as applicable in accordance with the HPD Regulatory Agreement. Borrower covenants and agrees to comply with all requirements of
the HPD Regulatory Agreement and to provide Lender with a copy of all reports, certifications, and documents within five (5)
Business Days after filing the same with the respective agency.


 


Section
17.03  Amendment of HPD Regulatory Agreement. 


 


The HPD Regulatory
Agreement may not be amended, modified, or terminated without the written consent of Lender.


 


Section
17.04  Property Management After Event of Default. 


 


As of the
Effective Date, Lender has approved Borrower as self-manager of the Mortgaged Property; provided, however, that after
the occurrence of an Event of Default, Borrower shall promptly engage a third-party property manager for management of the Mortgaged
Property, and the identity of such third-party property manager and the form of written agreement between such third-party property
manager and Borrower shall be subject to Lender approval. Nothing in this section shall be construed to limit or otherwise affect
Lender’s rights as otherwise provided in the Loan Documents regarding management of the Mortgaged Property, the property
manager, and/or any property management agreement.


 


[INITIALS FOLLOW ON NEXT PAGE]


 


	Modifications to Multifamily Loan and

Security Agreement (HPD Regulatory

Agreement)	 	Page 2
	Fannie Mae	 	© 2014 Fannie Mae


 




     


     


    

 





	 	BORROWER’S INITIALS: 	/S/ DB	 


 


	Modifications to Multifamily Loan and

Security Agreement (HPD Regulatory

Agreement)	 	Page 3
	Fannie Mae	 	© 2014 Fannie Mae


 




     


     


    






 


EXHIBIT D


 


MODIFICATIONS TO MULTIFAMILY LOAN AND
SECURITY AGREEMENT


(Shuttle Service Reserve)


 


The foregoing Loan
Agreement is hereby modified as follows:


 


1.       Capitalized
terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.


 


2.       The
Definitions Schedule is hereby amended by adding the following new definitions in the appropriate alphabetical order:


 


“Initial
Shuttle Service Reserve Deposit” means $299,620.00.


 


“Shuttle
Service Reserve Account” means a custodial account as required by Lender from time to time.


 


“Shuttle
Service Reserve Account Funds” means, collectively, the Initial Shuttle Service Reserve Deposit and all other funds from
time to time held in the Shuttle Service Reserve Account.


 


“Statement
Period” means the twelve (12) month period shown on the most recent financial statement submitted by Borrower to
Lender.


 


	Modifications to Multifamily
Loan and

Security Agreement (Shuttle Service

Reserve)	 	Page 1
	Fannie Mae	 	 


 




     


     


    

 


3.       The
following article is hereby added to the Loan Agreement as Article 18 (Shuttle Service Reserve):


 


ARTICLE
18 – SHUTTLE SERVICE RESERVE


 


Section 18.   Recitals Regarding
Shuttle Service


 


As of the
Effective Date, the Borrower provides a private shuttle service (the “Shuttle Service”) for residents of the
Mortgaged Property to travel to the Lexington Avenue subway station located at Lexington Avenue and 96th Street in Manhattan,
New York.  The Metropolitan Transportation Authority of New York City is currently scheduled to open a new subway station
in December, 2016, located at 96th Street and 2nd Avenue in Manhattan, New York (the “Second Avenue
Station”), which location is less than four blocks from the Mortgaged Property. Borrower intends to continue to provide
the Shuttle Service until the time the Second Avenue Station is opened for use by the public.


 


Section
18.01   Covenants.


 


(a)       Shuttle
Service; Initial Deposit to Shuttle Reserve Account.


 


At its own
cost and expense, without reliance on or use of the Shuttle Service Reserve Account Funds, Borrower intends to provide the Shuttle
Service until the time the Second Avenue Station is opened for use by the public.


 


On the Effective
Date, Borrower shall pay to Lender the Initial Shuttle Service Reserve Deposit for deposit into the Shuttle Service Reserve Account.


 


(b)       Administrative
Fees and Expenses; Costs of Collection.


 


Borrower
shall pay within ten (10) days of request from Lender all reasonable costs and expenses incurred by Lender in connection with
collecting, holding and disbursing the Shuttle Service Reserve Account Funds pursuant to this Article 18 (Shuttle Service
Reserve). In addition, Borrower agrees to pay, within ten (10) days of request from Lender, all costs and expenses incurred
by Lender (including but not limited to court costs and attorneys’ fees and expenses) in exercising any of Lender’s
rights or obligations pursuant to the terms of this Loan Agreement or holding the Shuttle Service Reserve Account Funds.


 


	Modifications to Multifamily Loan and

Security Agreement (Shuttle Service

Reserve)	 	Page 2
	Fannie Mae	 	 


 




     


     


    

 


Section
18.02   Mortgage Loan Administration Matters Regarding Shuttle Service Reserve Account.


 


(a)       Accounts,
Deposits and Disbursements.


 


(1)       Custodial
Account.


 


The Shuttle
Service Reserve Account shall be deemed a Collateral Account under this Loan Agreement and any Shuttle Service Reserve Account
Funds shall be deemed part of the Collateral Account Funds under this Loan Agreement. The Shuttle Service Reserve Account shall
be an interest-bearing account which meets the standards for custodial accounts as required by Lender from time to time. Lender
shall not be responsible for any losses resulting from the investment of the Shuttle Service Reserve Account Funds or for obtaining
any specific level or percentage of earnings on such investment. All interest earned on the Shuttle Service Reserve Account Funds
shall be added to and become part of such Shuttle Service Reserve Account; provided, however, if applicable law requires,
and so long as no Event of Default has occurred and is continuing under any of the Loan Documents, Lender shall pay to Borrower
the interest earned on the Shuttle Service Reserve Account not less than once a quarter. In no event shall Lender be obligated
to disburse funds from the Shuttle Service Reserve Account if (A) an Event of Default has occurred and is continuing at the
time the disbursement request is made or (B) an Event of Default has occurred at any time during the applicable Statement
Period.


 


(2)       Disbursements
from Shuttle Service Reserve Account.


 


Nothing in
this Loan Agreement shall obligate Lender to apply all or any portion of the Shuttle Service Reserve Funds to cure any Event of
Default or to reduce the Indebtedness.


 


(3)       Disbursement
Request.


 


(A)       Lender
shall disburse to Borrower any and all amounts in the Shuttle Service Reserve Account upon receipt of a request in writing received
by Lender no later than ten (10) Business Days before the requested date of disbursement. The request shall include:


 


(i)       written
evidence, sufficient to Lender in its reasonable discretion, that (A) the Second Avenue Station has been opened for use by the
public, and (B) Borrower has ceased providing Shuttle Service;


 


	Modifications to Multifamily Loan and

Security Agreement (Shuttle Service

Reserve)	 	Page 3
	Fannie Mae	 	 


 




     


     


    

 


(ii)       unless
already delivered to Lender, certified current financial statements from Borrower’s operation of the Mortgaged Property,
for the prior month, and reconciled bank statements for the three (3) months preceding such request;


 


(iii)       a
certification by Borrower that no Event of Default has occurred and is continuing under the Loan Documents; and


 


(iv)       such
other information regarding the Mortgaged Property as Lender reasonably requests.


 


(C)       The
disbursement shall be expressly conditioned upon no Event of Default or event or condition which, with the giving of notice or
the passage of time, or both, would give rise to an Event of Default existing at either the time Borrower requests the disbursement
from the Shuttle Service Reserve Account or the time of such disbursement. Borrower is and shall remain obligated and responsible
for the payment of all amounts due under the Loan Documents regardless of whether disbursement from the Shuttle Service Reserve
Account is made by Lender pursuant to the terms of this Loan Agreement.


 


(D)       Notwithstanding
the foregoing, Lender shall disburse to Borrower any and all amounts then remaining in the Shuttle Service Reserve Account within
ten (10) days following Borrower’s payment in full of the Indebtedness and release by Lender of the Lien of the Security
Instrument.


 


(4)       Review
of Funding Requirement.


 


In connection
with any Transfer of the Mortgaged Property, or any Transfer of an ownership interest in Borrower, Guarantor or Key Principal that
requires Lender’s consent, Lender may review the amounts on deposit, if any, in the Shuttle Service Reserve Account and the
related contingencies which may arise during the remaining Loan Term. Based upon that review, Lender may require an additional
deposit to the Shuttle Service Reserve Account as a condition to Lender’s consent to such Transfer. In all events, the transferee
shall be required to assume Borrower’s duties and obligations under this Loan Agreement.


 


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Security Agreement (Shuttle Service

Reserve)	 	Page 4
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(b)       Lender
as Attorney-In-Fact.


 


Borrower
hereby authorizes and appoints Lender as attorney-in-fact pursuant to Section 14.03(c) (Appointment of Lender as Attorney-In-Fact).


 


[INITIALS FOLLOW ON NEXT PAGE]


 


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Reserve)	 	Page 5
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	 	BORROWER’S INITIALS: 	/S/ DB	 





 


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Security Agreement (Shuttle Service

Reserve)	 	Page 6
	Fannie Mae