ex107jeffersonatperim6e2






                                                                             EXHIBIT 10.7                                                                Jefferson at Perimeter     FIRST AMENDMENT TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                          AND OTHER LOAN DOCUMENTS                                  (Multipurpose)         This  FIRST  AMENDMENT  TO  MULTIFAMILY  LOAN  AND  SECURITY  AGREEMENT AND OTHER LOAN DOCUMENTS (this “Amendment”) dated as of June 11,  2018,  is  executed  by  and  between SIR  JEFFERSON,  LLC,  a  Delaware  limited  liability  company  (“Borrower”)  and FANNIE  MAE,  a  corporation  duly  organized  under  the  Federal  National  Mortgage  Association  Charter  Act,  as  amended,  12  U.S.C. §1716  et  seq.  and  duly   organized and existing under the laws of the United States (“Fannie Mae”).                                     RECITALS:         A.    Pursuant  to  that  certain  Multifamily  Loan  and  Security  Agreement  dated  as  of   October  31,  2017  (the  “Effective  Date”),  executed  by  and  between BRE  JEFFERSON  ST.   ANDREWS OWNER LLC, a Delaware limited liability company (“Original Borrower”) and   JONES  LANG  LASALLE  MULTIFAMILY,  LLC,  a  Delaware  limited  liability  company   (“Prior  Lender”)  (as  amended,  restated,  replaced,  supplemented,  or  otherwise  modified  from   time  to  time,  the  “Loan  Agreement”),  Prior  Lender  made  a  loan to  Original  Borrower  in the   original  principal  amount  of  Sixty-Five  Million  and  00/100  Dollars  ($65,000,000.00)  (the   “Mortgage Loan”), as evidenced by that certain Multifamily Note dated as of the Effective Date,   executed by Original Borrower and made payable to Prior Lender in the amount of the Mortgage  Loan (as amended, restated, replaced, supplemented, or otherwise modified from time to time,   the “Note”).         B.    In  addition  to  the  Loan  Agreement,  the  Mortgage  Loan  and  the  Note  are  also   secured  by,  among  other  things,  a  certain  Multifamily  Mortgage,  Deed  of  Trust,  or  Deed  to   Secure  Debt  dated  as  of  the  Effective  Date  (as  amended,  restated,  replaced,  supplemented  or   otherwise modified from time to time, the “Security Instrument”).         C.    Fannie  Mae  is  the  successor-in-interest  to  the  Prior  Lender  under  the  Loan   Agreement,  the  holder  of  the  Note  and  the  mortgagee  or  beneficiary  under  the  Security   Instrument.         D.    Prior Lender services the Mortgage Loan on behalf of Fannie Mae.         E.    Pursuant to  the Assumption and Release Agreement dated as of the date hereof   (“Assumption Agreement”) and this Amendment, Borrower has agreed to ratify and assume all   of  Original  Borrower’s  rights,  obligations,  and  liabilities  created  or  arising  under  the  Loan   Documents, as those rights, obligations and liabilities may have been modified in writing by this   Amendment, the Assumption Agreement or otherwise (“Assumption”).         F.    In consideration of Fannie Mae’s consent to the Assumption, Borrower and Fannie   Mae have agreed to make certain amendments to the Loan Agreement.         NOW,  THEREFORE,  in  consideration  of  the  mutual  promises  contained  in  this   Amendment and of other good and valuable consideration, the receipt and sufficiency of which   are hereby acknowledged, Borrower and Fannie Mae agree as follows:    First Amendment to Multifamily Loan and   Security Agreement and Other Loan   Documents (Multipurpose)              Form 6601                          Page 1   Fannie Mae                              08-13                   © 2013 Fannie Mae  





 






                               AGREEMENTS:  Section 1.  Recitals.       The recitals set forth above are incorporated herein by reference as if fully set forth in the  body of this Amendment.   Section 2.  Defined Terms.        Capitalized terms used and not specifically defined herein shall have the meanings given  to such terms in the Loan Agreement.   Section 3.  Amendment and Modification of Loan Documents.        (a)   Amendment and Modification of Loan Agreement.               (1)   Article 3 through Article 15 are hereby deleted and restated as set forth on        Exhibit C attached hereto and made a part hereof.              (2)   Schedule 1, Definitions, is hereby deleted in its entirety and replaced with        the Part I set forth on Exhibit A attached hereto and made a part hereof.               (3)   Exhibit  B,  Modifications  to  Multifamily  Loan  an  Security  Agreement        (Springing Cap) is deleted.          (b)  Amendment  and  Modification  of  Environmental  Indemnity  Agreement.   The  Environmental Indemnity Agreement is hereby amended as shown on Exhibit C attached hereto.   Section 4.  Modification of Summary of Loan Terms.       Part I of the Summary of Loan Terms is hereby deleted in its entirety and replaced with  the Part I set forth on Exhibit B attached hereto and made a part hereof.     Section 5.  Reserved.  Section 6.  Authorization.       Borrower represents and warrants that Borrower is duly authorized to execute and deliver  this Amendment and is and will continue to be duly authorized to perform its obligations under  the Loan Agreement, as amended hereby.   Section 7.  Compliance with Loan Documents.        The representations and warranties set forth in the Loan Documents, as amended hereby,  are true and correct with the same effect as if such representations and warranties had been made  on  the  date  hereof,  except  for  such  changes  as  are  specifically  permitted  under  the  Loan  Documents.   In  addition,  Borrower  has  complied  with  and  is  in  compliance  with  all  of  the  covenants set forth in the Loan Documents, as amended hereby.    First Amendment to Multifamily Loan and  Security Agreement and Other Loan  Documents (Multipurpose)              Form 6601                          Page 2  Fannie Mae                              08-13                   © 2013 Fannie Mae  





 






Section 8.  No Event of Default.        Borrower represents and warrants that, as of the date hereof, no Event of Default under  the Loan Documents, as amended hereby, or event or condition which, with the giving of notice  or  the  passage  of  time,  or  both,  would  constitute  an  Event  of  Default,  has  occurred  and  is  continuing.   Section 9.  Costs.        Borrower agrees to pay all fees and costs (including attorneys’ fees) incurred by Fannie  Mae and any Loan Servicer in connection with this Amendment.  Section 10. Continuing Force and Effect of Loan Documents.        Except  as  specifically modified or amended by the terms of this Amendment, all other  terms and provisions of the Loan Agreement and the other Loan Documents are incorporated by  reference  herein  and  in  all  respects  shall  continue  in  full  force  and  effect.   Borrower,  by  execution of this Amendment, hereby reaffirms, assumes and binds itself to all of the obligations,  duties, rights, covenants, terms and conditions that are contained in the Loan Agreement and the  other  Loan  Documents,  including  Section 15.01  (Governing  Law;  Consent  to  Jurisdiction  and  Venue),  Section 15.04  (Counterparts),  Section 15.07  (Severability;  Entire  Agreement;  Amendments) and Section 15.08 (Construction) of the Loan Agreement.   Section 11. Counterparts.        This Amendment 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.                        [Remainder of Page Intentionally Blank]    First Amendment to Multifamily Loan and  Security Agreement and Other Loan  Documents (Multipurpose)              Form 6601                          Page 3  Fannie Mae                              08-13                   © 2013 Fannie Mae  





 






 





 






 





 






                                 EXHIBIT A                          Modification to Definitions Schedule                                  SCHEDULE 1              TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                                Definitions Schedule             (Interest Rate Type – Structured ARM (1 and 3 Month LIBOR))         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.   “Adjustable Rate” has the meaning set forth in the Summary of Loan Terms.   “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  (Interest Rate Type - SARM)        Form 6101.SARM                        Page 1  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






      (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 (other than the shareholders or beneficial owners of any Publicly-Held  Corporation  or  a  Publicly-Held  Trust)  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.   “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.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                        Page 2  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“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 and any  other  party  for  the  establishment of any other fund, reserve or account affecting the Mortgage  Loan.   “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, (including, by way of illustration, the power to (1) elect the majority of the directors of  such entity; (2) make management decisions on behalf of or independently select the manager of  a limited liability company or the managing partner of a partnership; (3) independently remove  and then select a majority of those individuals exercising managerial authority over any entity;  and (4) limit or otherwise modify the extent of control over the management and operations of an  entity  by  any  Person  exercising  managerial  authority  over  such  entity),  whether  through  the  ownership of voting securities or other ownership interests, by contract or otherwise.   “Conversion” means the conversion of the Mortgage Loan from an adjustable rate to a fixed rate  and, if applicable, the extension of the Maturity Date of the Mortgage Loan to the New Maturity  Date.   “Conversion  Amendment”  means  Lender’s  then-current  form  of  Amendment  to  Multifamily  Loan and Security Agreement to be executed by Borrower and Lender to amend or restate all or  any  part  of  this  Loan  Agreement  (including  any  Schedules,  Exhibits  or  other  attachments) in  connection with, and reflecting the terms of, a Conversion of the Mortgage Loan.  “Conversion Closing Date” means,  after  Borrower  exercises  the  Conversion  Option, the date  designated by Lender for the closing of the Conversion which date (a) is a Business Day, (b) is  within  the  Conversion  Period,  and  (c) is  not  more  than  ten (10)  days  after  the  Conversion  Exercise Date.   “Conversion Effective Date” means, if the Conversion Exercise Date occurs on a Payment Date,  the  first (1st)  day  of  the  calendar  month  following  the  Conversion  Exercise  Date,  or,  if  the  Conversion Exercise Date occurs on any other day other than a Payment Date, the first (1st) day  of  the  second (2nd)  calendar  month  following  the  Conversion  Exercise  Date,  but  in  no  event  shall the Conversion Effective Date be after the last day of the Conversion Period.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                        Page 3  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“Conversion Exercise Date” means the date that Borrower accepts the rate quote provided by  Lender in connection with Borrower’s Rate Lock Request.   “Conversion Option” means Borrower’s one-time option to effect the Conversion pursuant to  the terms of the Loan Agreement.   “Conversion Period” means the period commencing on the first (1st) day of the second (2nd)  Loan Year and ending on the first (1st) day of the third (3rd) month prior to the Maturity Date of  the Mortgage Loan.   “Conversion Review Fee” has the meaning set forth in the Summary of Loan Terms.   “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.   “Current Index” has the meaning set forth in the Summary of Loan Terms.   “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.   “Debt  Service  Coverage  Ratio”  means  the  ratio  of  (a)  the  Net  Cash  Flow  of  the  Mortgaged  Property, to (b) the underwritten debt service for the Mortgage Loan at the proposed Fixed Rate  for the trailing twelve (12) month period from the date of the most recently received quarterly  financial  statements  prepared  by  Borrower  for  the  Mortgaged  Property,  provided  that  (1) the  interest rate used in determining such ratio shall be the greater of (A) the Fixed Rate, or (B) the  Underwriting Interest Rate (if any), and (2) an Amortization Period of three hundred sixty (360)  months shall be used in determining such ratio.   “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.   “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.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                        Page 4  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“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  Monthly  Principal  Component”  has  the  meaning  set  forth  in  the  Summary  of  Loan  Terms.   “Fixed  Rate”  means  an  interest  rate  per  annum  equal  to  the  sum  of  the  Investor  Yield,  the  Servicing Fee and the Guaranty Fee.   “Fixed Rate Amortization Factor” has the meaning set forth in the Summary of Loan Terms.  “Fixed Rate Option” means, in connection with a Conversion, Borrower’s selection of one (1)  of the following fixed rate options for the Mortgage Loan, which shall be effective from and after  the Conversion Effective Date:        (a)   seven (7) year term with a five (5) year yield maintenance period;        (b)   seven (7) year term with a six and one-half (6.5) year yield maintenance period;        (c)   ten (10) year term with a seven (7) year yield maintenance period; or    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                        Page 5  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






      (d)   ten (10) year term with a nine and one-half (9.5) year yield maintenance period.  “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.   “Good  Faith  Deposit”  means  a  fee  in  an  amount  equal  to  two  percent (2%)  of  the  unpaid  principal  balance  of  the  Mortgage  Loan  immediately  prior  to  the  Initial  Fixed  Rate  Payment  Date.   “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 - SARM)        Form 6101.SARM                        Page 6  Fannie Mae                              __-17                   © 2017 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.   “Guaranty Fee” has the meaning set forth in the Summary of Loan Terms.   “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.  “Index” has the meaning set forth in the Summary of Loan Terms.   “Initial Adjustable Rate” has the meaning set forth in the Summary of Loan Terms.   “Initial Fixed Rate Payment Date” means the first (1st) day of the calendar month following  the Conversion Effective Date.   “Initial Monthly Debt Service Payment” has the meaning set forth in the Summary of Loan  Terms.   “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,    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                        Page 7  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






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        (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 Initial Adjustable Rate or the Adjustable Rate, as applicable.   “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.  “Investor  Yield”  means,  in  connection  with  a  Conversion,  the  percentage  equal  to  (a) the  required net yield offered for purchase by Fannie Mae or (b) the MBS pass-through rate offered  for  purchase by regular buyers  of  mortgage backed  securities,  as  applicable, for a new Fannie  Mae mortgage loan with the same or substantially similar loan terms and credit characteristics as  the Mortgage Loan (taking into account the Fixed Rate Option selected by Borrower).   “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.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                        Page 8  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“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.   “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.   “Margin” has the meaning set forth in the Summary of Loan Terms.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                        Page 9  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“Material Commercial Lease” means:        (a)   any Lease that comprises five percent (5%) or more of the total gross income at  the Mortgaged Property on an annualized basis; or        (b)   regardless of the percentage of the total gross income at the Mortgaged Property  that it comprises, any Lease relating to:              (1)   solar power, thermal power generation, or co-power generation, or for the        installation of solar panels or any other electrical power generation equipment, and any        related power purchase agreement;              (2)   mineral rights or rights relating to subsurface oil and/or natural gas;              (3)   telecommunications or a cell tower; or              (4)   any  dwelling  unit  at  the  Mortgaged  Property  leased  to  Guarantor,  Key        Principal, or another Borrower Affiliate.   “Maturity Date” has the meaning set forth in the Summary of Loan Terms.   “Maximum Fixed Rate” means the maximum Fixed Rate to which the Mortgage Loan may be  converted, as determined by Lender, so that the Debt Service Coverage Ratio of the Mortgage  Loan is not less than the Minimum Conversion Debt Service Coverage Ratio.  “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  Conversion  Debt  Service  Coverage  Ratio”  has  the  meaning  set  forth  in  the  Summary of Loan Terms.   “Minimum Repairs Disbursement Amount” has the meaning set forth in the Summary of Loan  Terms.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                       Page 10  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“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.   “NCF  Determination  Notice”  means  the  notice  given by Lender to  Borrower  pursuant  to the  Conversion Option in which Lender establishes the Net Cash Flow and the Maximum Fixed Rate  to which the Mortgage Loan may be converted.   “NCF Determination Request” means the notice given by Borrower to Lender to exercise the  Conversion Option in which Borrower requests that Lender determines the Net Cash Flow and  the Maximum Fixed Rate to which the Mortgage Loan may be converted.   “Net Cash Flow” means, for any specified period, the total of (a) the net rental income for the  Mortgaged Property, plus (b) other allowable income for the Mortgaged Property, if any, minus  (c) operating expenses for the Mortgaged Property, minus (d) the full amount underwritten for  the Replacement Reserve Account (regardless of whether deposits have been or will be waived or  reduced), and as adjusted for economic vacancy and other factors by Lender for the specific asset  class or loan type.   “New Maturity Date” means the Maturity Date of the Mortgage Loan following the Conversion,  as  set  forth  on  the  Summary  of  Loan  Terms  attached  as  Schedule  2  to  the  Conversion  Amendment, which date may be the same as, or later than, the Maturity Date prior to the exercise  of the Conversion.   “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.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                       Page 11  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“OFAC” means the United States Treasury Department, Office of Foreign Assets Control, and  any successor thereto.   “Payment Change Date” has the meaning set forth in the Summary of Loan Terms.  “Payment Date” means the First Payment Date and the first (1st) 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).   “Personal  Property”  means  all  of  Borrower’s  present  and  hereafter  acquired  right,  title,  and  interest  in  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.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                       Page 12  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“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  Schedule”  means  that  certain  Schedule 4  (Prepayment  Premium  Schedule) to the Loan Agreement.   “Prepayment Premium Term” has the meaning set forth in the Summary of Loan Terms.   “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        (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.   “Rate Change Date” has the meaning set forth in the Summary of Loan Terms.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                       Page 13  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“Rate Lock Request” means a request from Borrower to Lender for a rate quote for the Fixed  Rate  (based  on  the  Fixed  Rate  Option  selected  by  Borrower)  which  shall  apply  after  the  Conversion Effective Date.   “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.   “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.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                       Page 14  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“Reserve/Escrow  Accounts”  means,  together,  the  Replacement  Reserve  Account  and  the  Repairs Escrow Account.   “Residential Lease” means a Lease of an individual dwelling unit.   “Restoration”  means  restoring  and  repairing  the  Mortgaged  Property  to  the  equivalent  of  its  physical condition immediately prior to such casualty or to another 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              (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 $3,000 payable to Lender.   “Sanctioned Country” means a country subject to either a targeted or 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   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                       Page 15  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






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.   “Servicing Fee” has the meaning set forth in the Summary of Loan Terms.   “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.   “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.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                       Page 16  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






“UCC” has the meaning set forth in the Security Instrument.   “UCC Collateral” has the meaning set forth in the Security Instrument.   “Underwriting  Interest  Rate”  means,  in  connection  with  the  Conversion,  the  then-current  minimum underwriting interest rate (if applicable) used by Lender for underwriting new loans  with the same or substantially similar loan terms and credit characteristics as the Mortgage Loan  (taking into account the Fixed Rate Option selected by Borrower).   “Voidable  Transfer”  means  any  fraudulent  conveyance,  preference  or  other  voidable  or  recoverable payment of money or transfer of property.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - SARM)        Form 6101.SARM                       Page 17  Fannie Mae                              __-17                   © 2017 Fannie Mae  





 






 





 






                                 EXHIBIT B                       Modification to Summary of Loan Terms                                   SCHEDULE 2              TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                               Summary of Loan Terms             (Interest Rate Type - Structured ARM (1 and 3 Month LIBOR))       I.    GENERAL PARTY AND MULTIFAMILY PROJECT INFORMATION                                  SIR JEFFERSON, LLC, a Delaware limited liability  Borrower                        company   Lender                          FANNIE MAE                                  STEADFAST INCOME REIT, INC., a Maryland  Key Principal                   corporation                                  STEADFAST INCOME REIT, INC., a Maryland  Guarantor                       corporation   Multifamily Project             Jefferson at Perimeter                                   ADDRESSES   Borrower’s General Business     c/o Steadfast Companies                                  18100 Von Karman Avenue, Suite 500  Address                         Irvine, California 92612                                 c/o Steadfast Companies                                 18100 Von Karman Avenue, Suite 500                                  Irvine, California 92612                                  Email:  anamarie.delrio@steadfastco.com                                 with a courtesy copy to Borrower’s counsel:1                                  Morris, Manning and Martin, LLP                                  1600 Atlanta Financial Center                                  3343 Peachtree Road, NE  Borrower’s Notice Address       Atlanta, GA 30326                                  Direct: 404.504.7652                                  Attention:  Christina M. Graham                                  Email: cmg@mmmlaw.com                                   1 Lender shall endeavor to give Borrower’s counsel a                                  courtesy copy of any notice given to Borrower by                                  Lender; provided, however, failure to provide such                                  courtesy copy notice shall not affect the validity or   Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - SARM)  Form 6102.SARM                        Page 1  Fannie Mae                              01-16                   © 2016 Fannie Mae  





 






                                sufficiency of any notice to Borrower, shall not affect                                  Lender’s rights and remedies hereunder or under any                                  other Loan Document, nor subject Lender to any claim                                  by or liability to Borrower.                                  4867 Ashford Dunwoody Road  Multifamily Project Address     Atlanta, Georgia  30338   Multifamily Project County      DeKalb   Key Principal’s General Business c/o Steadfast Companies                                  18100 Von Karman Avenue, Suite 500  Address                         Irvine, California 92612                                  c/o Steadfast Companies                                  18100 Von Karman Avenue, Suite 500  Key Principal’s Notice Address  Irvine, California 92612                                  Email:  anamarie.delrio@steadfastco.com   Guarantor’s General Business    c/o Steadfast Companies                                  18100 Von Karman Avenue, Suite 500  Address                         Irvine, California 92612                                 c/o Steadfast Companies                                 18100 Von Karman Avenue, Suite 500                                  Irvine, California 92612                                  Email:  anamarie.delrio@steadfastco.com                                 with a courtesy copy to Borrower’s counsel:1                                  Morris, Manning and Martin, LLP                                  1600 Atlanta Financial Center                                  3343 Peachtree Road, NE                                  Atlanta, GA 30326                                  Direct: 404.504.7652  Guarantor’s Notice Address      Attention:  Christina M. Graham                                  Email: cmg@mmmlaw.com                                   1 Lender shall endeavor to give Borrower’s counsel a                                  courtesy copy of any notice given to Borrower by                                  Lender; provided, however, failure to provide such                                  courtesy copy notice shall not affect the validity or                                  sufficiency of any notice to Borrower, shall not affect                                  Lender’s rights and remedies hereunder or under any                                  other Loan Document, nor subject Lender to any claim                                  by or liability to Borrower.                                  Fannie Mae  Lender’s General Business Address c/o Jones Lang LaSalle Multifamily, LLC    Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - SARM)  Form 6102.SARM                        Page 2  Fannie Mae                              01-16                   © 2016 Fannie Mae  





 






                                2177 Youngman Avenue                                  St. Paul, Minnesota 55116                                  Attention:  Loan Servicing                                   Fannie Mae                                  c/o Jones Lang LaSalle Multifamily, LLC   Lender’s Notice Address         2177 Youngman Avenue                                  St. Paul, Minnesota 55116                                  Attention:  Loan Servicing                                  loanservicing@am.jll.com                                   Fannie Mae                                  c/o Jones Lang LaSalle Multifamily, LLC  Lender’s Payment Address                                  7233 Solution Center                                  Chicago, Illinois 60677-7002    Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - SARM)  Form 6102.SARM                        Page 3  Fannie Mae                              01-16                   © 2016 Fannie Mae  





 






 





 






                                          EXHIBIT C                 AMENDMENT AND MODIFICATION OF LOAN AGREEMENT                                      [SEE ATTACHMENT]    First Amendment to Multifamily Loan and  Security Agreement and Other Loan  Documents (Multipurpose)                       Form 6601                                 Page C-1  Fannie Mae                                        08-13                         © 2013 Fannie Mae  





 






                    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.   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;    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                         Page 1  Article 3                                01-16                   © 2016 Fannie Mae  





 






             (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, or member of Borrower, Guarantor, or Key Principal or any Person having a         Restricted Ownership Interest in 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.    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;   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                         Page 2  Article 3                                01-16                   © 2016 Fannie Mae  





 






             (4)   fraud,  written  material  misrepresentation,  or  material  omission  by         Borrower,  Guarantor,  Key  Principal,  or  any  officer,  director,  partner,  manager,  or         member  of  Borrower,  Guarantor,  or  Key  Principal  or  any  Person  having  a  Restricted         Ownership Interest in 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,  or  member  of  Borrower,  Guarantor,  or  Key  Principal  or  any  Person         having a Restricted Ownership Interest in 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.    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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                         Page 3  Article 3                                01-16                   © 2016 Fannie Mae  





 






                    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.          (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.   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                         Page 4  Article 4                                01-16                   © 2016 Fannie Mae  





 






       (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.          (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                         Page 5  Article 4                                01-16                   © 2016 Fannie Mae  





 






                   (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:                      (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);    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                         Page 6  Article 4                                01-16                   © 2016 Fannie Mae  





 






             (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;                (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.          (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 (other than as a         creditor);                (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  Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                         Page 7  Article 4                                01-16                   © 2016 Fannie Mae  





 






             (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;                (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.   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                         Page 8  Article 4                                01-16                   © 2016 Fannie Mae  





 






       (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.          (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.          Neither Borrower nor the direct or indirect owners of Borrower is party to any type of   lockbox  agreement  or  other  similar  cash  management  arrangement  with  any  direct  or  indirect   owner of Borrower with respect to the Mortgaged Property that has not been approved by Lender   in  writing.   In  the  event  that  Lender  has  approved  any  such  arrangement,  Borrower  has,  at   Lender’s option, entered into a lockbox agreement or other similar cash management agreement   with Lender in form and substance acceptable to Lender.    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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                         Page 9  Article 4                                01-16                   © 2016 Fannie Mae  





 






 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.          (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 10  Article 4                                01-16                   © 2016 Fannie Mae  





 






             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;                (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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 11  Article 4                                01-16                   © 2016 Fannie Mae  





 






             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;                (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,   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 12  Article 4                                01-16                   © 2016 Fannie Mae  





 






 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:                      (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.          Neither Borrower nor the direct or indirect owners of Borrower shall enter into any type   of lockbox agreement or other similar cash management arrangement with any direct or indirect   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 13  Article 4                                01-16                   © 2016 Fannie Mae  





 






 owner of Borrower with respect to the Mortgaged Property without the prior written consent of   Lender.   In  the  event  that  Lender  issues  such  consent,  Borrower  shall,  at  Lender’s  option,  be   required  to  enter  into  a  lockbox  agreement  or  other  similar  cash  management  agreement  with   Lender in form and substance acceptable to Lender.                      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.          (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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 14  Article 4                                01-16                   © 2016 Fannie Mae  





 






       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;                      (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.   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 15  Article 5                                01-16                   © 2016 Fannie Mae  





 






       (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;                (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 16  Article 5                                01-16                   © 2016 Fannie Mae  





 






       (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).          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 17  Article 5                                01-16                   © 2016 Fannie Mae  





 






             (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.          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 18  Article 6                                01-16                   © 2016 Fannie Mae  





 






       (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  without         Lender’s prior written consent;                (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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 19  Article 6                                01-16                   © 2016 Fannie Mae  





 






       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;                      (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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 20  Article 6                                01-16                   © 2016 Fannie Mae  





 






             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).          (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).    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 21  Article 6                                01-16                   © 2016 Fannie Mae  





 






       (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                (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 22  Article 6                                01-16                   © 2016 Fannie Mae  





 






             (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.          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 23  Article 6                                01-16                   © 2016 Fannie Mae  





 






       (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. Notwithstanding  the  foregoing,   Borrower may accept up to five percent (5%) of Rents more than two (2) months prior to, but not   more than twelve (12) months prior to, the due date of such Rents, provided that such prepaid   Rents shall not be recorded as income or distributed to Borrower’s partners until such Rents are   actually earned.    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);  notwithstanding  the  foregoing,         Residential  Leases  having  initial  terms  of  less  than six (6) months  but  at  least  one  (1)         month shall be permitted so long as the total number of such Residential Leases does not         exceed ten percent (10%) of all residential units; 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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 24  Article 7                                01-16                   © 2016 Fannie Mae  





 






       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.                (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;    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 25  Article 7                                01-16                   © 2016 Fannie Mae  





 






                   (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.          (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.   Notwithstanding  the         foregoing,  Borrower  may  accept  up  to  five  percent  (5%)  of  Rents  more  than  two  (2)         months  prior  to,  but  not  more than  twelve  (12)  months  prior  to,  the  due  date  of  such         Rents, provided that such prepaid Rents  shall  not  be  recorded  as  income  or  distributed         to  Borrower’s  partners  until such Rents are actually earned.          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 26  Article 7                                01-16                   © 2016 Fannie Mae  





 






       (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;                (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 27  Article 7                                01-16                   © 2016 Fannie Mae  





 






       (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.    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;   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 28  Article 8                                01-16                   © 2016 Fannie Mae  





 






                   (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;                      (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 29  Article 8                                01-16                   © 2016 Fannie Mae  





 






                   (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                            (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;   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 30  Article 8                                01-16                   © 2016 Fannie Mae  





 






                   (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;                            (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:    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 31  Article 8                                01-16                   © 2016 Fannie Mae  





 






             (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.          (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 32  Article 8                                01-16                   © 2016 Fannie Mae  





 






             (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:                      (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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 33  Article 9                                01-16                   © 2016 Fannie Mae  





 






       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.    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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 34  Article 9                                01-16                   © 2016 Fannie Mae  





 






 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                      (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 35  Article 9                                01-16                   © 2016 Fannie Mae  





 






             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;                      (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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 36  Article 9                                01-16                   © 2016 Fannie Mae  





 






       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.          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 37  Article 9                                01-16                   © 2016 Fannie Mae  





 






       (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.    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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 38  Article 10                               01-16                   © 2016 Fannie Mae  





 






       (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).          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 39  Article 10                               01-16                   © 2016 Fannie Mae  





 






       (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.    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;   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 40  Article 11                               01-16                   © 2016 Fannie Mae  





 






                   (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; provided, however, that Borrower shall be permitted to grant an easement               over  the  Mortgaged  Property  to  a  publicly  operated  or  private  franchise  utility               provided that each of the following conditions is satisfied:                             (i)   Borrower  provides  Lender  with  at  least  thirty  (30)  days                     prior written notice of the proposed easement;                            (ii)  no Event of Default has occurred and is continuing, and no                     event or condition has occurred and is continuing that, with the giving of                     written notice or the passage of time, or both, would become an Event of                     Default;                            (iii) prior to the grant, Lender determines, in its sole discretion,                     (aa)  that  the  easement  will  not  materially  affect  the  operation,                     marketability, or value of the Mortgaged Property; the health or safety of                     tenants  or  visitors;  Lender’s  interest  in  the  Mortgaged  Property;  or                     Borrower’s access to the Mortgaged Property or the use of any easements                     or  amenities  which  benefit  the  Mortgaged  Property,  and  (bb)  that  the                     easement  will  not  result  in  the  loss  of  the  use  of  any  residential  or                     commercial units;                            (iv)  the  proposed  easement  and  all  rights  of  the  grantee                     thereunder are expressly subordinate to the lien of the Security Instrument;                            (v)   Borrower  has  paid  to  Lender  all  costs  and  expenses                     incurred by Lender in connection with reviewing Borrower’s request;                            (vi)  at Borrower’s expense, Borrower delivers an endorsement                     to  the  Lender’s  Loan  Policy  evidencing  the  recordation  of  the  easement                     and  an  update  to  the  Survey,  if  applicable,  to  reflect  the  easement  if                     plottable; and                            (vii) Lender  has  reviewed  and  approved  the  documents                     evidencing  the  proposed  easement,  and  Borrower  delivers  to  Lender    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 41  Article 11                               01-16                   © 2016 Fannie Mae  





 






                   recorded  copies  of  the  easement  and  signed  copies  of  any  unrecorded                     documents within ten (10) days following the granting of the easement.                     Any consideration paid to Borrower under this Section 11.02(b)(1)(E) shall                    be distributed as follows:                                  (AA)  first,  to  payment  of  all  of  Lender’s  out  of  pocket                     expenses, including but not limited to attorneys’ fees, as well as recording                     and title costs;                                  (BB)  second, to restoration or repair of the remainder of                     the Mortgaged Property, if applicable;                                  (CC)  third, an amount not to exceed $250 per individual                     dwelling  unit  (after  deducting  Borrower’s  cost  and  expense  incurred  in                     connection with the  granting of such easement) to Borrower for its own                     account; and                                  (DD)  fourth,  any  remaining  funds  will  be  deposited  into                     the Replacement Reserve;                      (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)    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 42  Article 11                               01-16                   © 2016 Fannie Mae  





 






             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.                (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)  at  Lender’s  sole               discretion,  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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 43  Article 11                               01-16                   © 2016 Fannie Mae  





 






             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.                (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);    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 44  Article 11                               01-16                   © 2016 Fannie Mae  





 






             (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;                      (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);    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 45  Article 11                               01-16                   © 2016 Fannie Mae  





 






             (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).          (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).    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 46  Article 11                               01-16                   © 2016 Fannie Mae  





 






       (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                      (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).   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 47  Article 11                               01-16                   © 2016 Fannie Mae  





 






       (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);                      (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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 48  Article 11                               01-16                   © 2016 Fannie Mae  





 






       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.    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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 49  Article 11                               01-16                   © 2016 Fannie Mae  





 






                         (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                      (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);    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 50  Article 11                               01-16                   © 2016 Fannie Mae  





 






                   (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.          (h)   Public Offering of Securities in Guarantor and/or Key Principal.           Notwithstanding  any  terms  to  the  contrary  in  Section  11.02(b)(2)  above,  Guarantor   and/or  Key  Principal  may  engage  in  a  public  offering  of  securities  of  Guarantor  and/or  Key   Principal, as applicable, and Lender shall waive any Transfer Fee otherwise due in connection   therewith,  so  long  as:   (1)  such public offering  shall  not occur  without  Lender’s  prior  written   notice  and  consent  to  the  same;  (2)  such  public  offering  shall  not  result  in  any  change  in  the   management and/or Control of Borrower; (3) such public offering shall not result in the dilution   of the aggregate ownership interests of Guarantor or Key Principal in Borrower to less than a   51% ownership  interest;  and (4)  following any such public  offering,  there is  no Transfer  of  a   Restricted Ownership Interest in Borrower.                           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;    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 51  Article 11                               01-16                   © 2016 Fannie Mae  





 






             (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));                (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 52  Article 12                               01-16                   © 2016 Fannie Mae  





 






       (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:                (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:   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 53  Article 12                               01-16                   © 2016 Fannie Mae  





 






             (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.          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 54  Article 12                               01-16                   © 2016 Fannie Mae  





 






       (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)).          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 55  Article 13                               01-16                   © 2016 Fannie Mae  





 






       (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.    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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 56  Article 13                               01-16                   © 2016 Fannie Mae  





 






             (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.                      (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 57  Article 13                               01-16                   © 2016 Fannie Mae  





 






             (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  (unless  Lender  has  agreed  to  issue  joint  checks  in               connection with a particular Replacement).  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.                      (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  (unless  Lender  has  agreed  to  issue  joint  checks  in  connection  with  a               particular  Replacement),  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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 58  Article 13                               01-16                   © 2016 Fannie Mae  





 






             (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                      (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;    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 59  Article 13                               01-16                   © 2016 Fannie Mae  





 






                   (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, 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).                (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;    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 60  Article 13                               01-16                   © 2016 Fannie Mae  





 






                   (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.                      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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 61  Article 13                               01-16                   © 2016 Fannie Mae  





 






                   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;                            (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 62  Article 13                               01-16                   © 2016 Fannie Mae  





 






             (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).          (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.  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).    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 63  Article 13                               01-16                   © 2016 Fannie Mae  





 






       (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).          (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 64  Article 13                               01-16                   © 2016 Fannie Mae  





 






             (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;                (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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 65  Article 13                               01-16                   © 2016 Fannie Mae  





 






                   (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:                (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 66  Article 14                               01-16                   © 2016 Fannie Mae  





 






       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.         (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 67  Article 14                               01-16                   © 2016 Fannie Mae  





 






 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.    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;    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 68  Article 14                               01-16                   © 2016 Fannie Mae  





 






             (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.          (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:    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 69  Article 14                               01-16                   © 2016 Fannie Mae  





 






             (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;                (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 70  Article 14                               01-16                   © 2016 Fannie Mae  





 






       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                (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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 71  Article 14                               01-16                   © 2016 Fannie Mae  





 






 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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 72  Article 14                               01-16                   © 2016 Fannie Mae  





 






                      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.         (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    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 73  Article 15                               01-16                   © 2016 Fannie Mae  





 






                   (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.          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 74  Article 15                               01-16                   © 2016 Fannie Mae  





 






 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.          (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.    Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 75  Article 15                               01-16                   © 2016 Fannie Mae  





 






 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.          (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 Error! Reference source not found.Error! Reference source   not found.Error! Reference source not found., 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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 76  Article 15                               01-16                   © 2016 Fannie Mae  





 






 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.    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.   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 77  Article 15                               01-16                   © 2016 Fannie Mae  





 






 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.    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   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 78  Article 15                               01-16                   © 2016 Fannie Mae  





 






 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.                         [Remainder of Page Intentionally Blank]   Multifamily  Loan  and  Security  Agreement  (Non-Recourse)                       Form 6001.NR                        Page 79  Article 15                               01-16                   © 2016 Fannie Mae  





 






 





 






                                 EXHIBIT D        AMENDMENT AND MODIFICATION OF ENVIRONMENTAL INDEMNITY                                  AGREEMENT   1.    Section 8(b) is hereby deleted in its entirety and replaced with the following:         (b)   Borrower  shall  be  fully  and  personally  liable  for  its  obligations  under  this              Agreement.   To  the  extent  permitted  by  law,  Borrower’s  liability  shall  not  be              limited by the amount of the Indebtedness, the repayment of the Indebtedness or              otherwise (including as a result of any limitation on personal liability set forth in              the Loan Agreement or any other Loan Document).    First Amendment to Multifamily Loan and  Security Agreement and Other Loan  Documents (Multipurpose)              Form 6601                        Page D-1  Fannie Mae                              08-13                   © 2013 Fannie Mae