Document:

EX-10.2

 Exhibit 10.2 

Freddie Mac Loan Number: 504193775 

Property Name: Alexis Gardens 

MULTIFAMILY NOTE 
 FIXED
RATE DEFEASANCE 
 (Revised 5-20-2015) 
  

			
	US $17,384,000.00	  	Effective Date: As of August 12, 2015

 FOR VALUE RECEIVED, SNR 27 ALEXIS GARDENS OWNER LLC, a Delaware limited liability company (together with such
party’s or parties’ successors and assigns, “Borrower”) jointly and severally (if more than one), promises to pay to the order of WALKER & DUNLOP, LLC, a Delaware limited liability company, the principal
sum of $17,384,000.00, with interest on the unpaid principal balance, as hereinafter provided. 
  

	1.	Defined Terms. 

  

	 	(a)	As used in this Note: 

 “Base Recourse” means a portion of the Indebtedness
equal to 0% of the original principal balance of this Note. 
 “Business Day” means any day other than a Saturday, a Sunday
or any other day on which Lender or the national banking associations are not open for business. 
 “Cut-off Date” means
the 12th Installment Due Date. 
 “Defeasance Date” means the 2nd anniversary of the “startup date” of the last REMIC within the meaning of Section 860G(a)(9) of the Tax Code which holds all or any portion of the Loan. 

“Default Rate” means an annual interest rate equal to 4 percentage points above the Fixed Interest Rate. However, at no
time will the Default Rate exceed the Maximum Interest Rate. 
 “Defeasance Period” is the period beginning the day after
the Defeasance Date until but not including the first day of the Window Period. The Defeasance Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date. 

“First Installment Due Date” means October 1, 2015. 

“First Principal and Interest Installment Due Date” means October 1, 2020. 

“Fixed Interest Rate” means the annual interest rate of 4.25%. 

“Installment Due Date” means, for any monthly installment of interest-only or principal and interest, the date on which such
monthly installment is due and payable pursuant to Section 3 of this Note. 
 “Lender” means the holder from time to
time of this Note. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	

 “Loan” means the loan evidenced by this Note. 

“Loan Agreement” means the Multifamily Loan and Security Agreement entered into by and between Borrower and Lender, effective
as of the effective date of this Note, as amended, modified or supplemented from time to time. 
 “Lockout Period” means
the period beginning on the day that this Note is assigned to a REMIC trust until and including the Defeasance Date. The Lockout Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date. 

“Maturity Date” means the earlier of (i) September 1, 2025 (“Scheduled Maturity Date”) and
(ii) the date on which the unpaid principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any right or remedy under any Loan Document; provided, however,
that if the unpaid principal balance of this Note becomes due and payable by acceleration but such acceleration is rendered null and void and of no further force and effect by operation of law or agreement by Lender, such acceleration will have no
effect on the Maturity Date. 
 “Maximum Interest Rate” means the rate of interest which results in the maximum amount of
interest allowed by applicable law. 
 “Prepayment Premium Period” means the period during which, if a prepayment of
principal occurs, a prepayment premium will be payable by Borrower to Lender. 
  

	 	(a)	If this Note is assigned to a REMIC trust prior to the Cut-off Date, then the Prepayment Premium Period is the period from and including the date of this Note until but not including the day that this Note is assigned
to a REMIC trust. 

  

	 	(b)	If this Note is assigned to a REMIC trust after the Cut-off Date or is not assigned to a REMIC trust, then the Prepayment Premium Period is the period from and including the date of this Note until but not including the
first day of the Window Period. 

 “Security Instrument” means the multifamily mortgage, deed to secure debt
or deed of trust effective as of the effective date of this Note, from Borrower to or for the benefit of Lender and securing this Note, as amended, modified or supplemented from time to time. 

“Window Period” means the 3 consecutive calendar month period prior to the Scheduled Maturity Date. 

“Yield Maintenance Expiration Date” means March 1, 2025. 

“Yield Maintenance Period” means the period from and including the date of this Note until but not including (i) the day
that this Note is assigned to a REMIC trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the Yield Maintenance Expiration Date, if this Note is not assigned to a REMIC trust or if this Note is assigned to a
REMIC trust on or after the Cut-off Date. 
  

	 	(b)	Other capitalized terms used but not defined in this Note will have the meanings given to such terms in the Loan Agreement. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 2

	2.	Address for Payment. All payments due under this Note will be payable at 7501 Wisconsin Avenue, Suite 1200E, Bethesda, Maryland 20814-6531, or such other place as may be designated by Notice to Borrower from or
on behalf of Lender. 

  

	3.	Payments. 

  

	 	(a)	Interest will accrue on the outstanding principal balance of this Note at the Fixed Interest Rate, subject to the provisions of Section 8 of this Note. 

 

	 	(b)	Interest under this Note will be computed, payable and allocated on the basis of an actual/360 interest calculation schedule (interest is payable for the actual number of days in each month, and each month’s
interest is calculated by multiplying the unpaid principal amount of this Note as of the first day of the month for which interest is being calculated by the Fixed Interest Rate, dividing the product by 360, and multiplying the quotient by the
number of days in the month for which interest is being calculated). The portion of the monthly installment of principal and interest under this Note attributable to principal and the portion attributable to interest will vary based upon the number
of days in the month for which such installment is paid. Each monthly payment of principal and interest will first be applied to pay in full interest due, and the balance of the monthly installment payment paid by Borrower will be credited to
principal. 

  

	 	(c)	Unless disbursement of principal is made by Lender to Borrower on the first day of a calendar month, interest for the period beginning on the date of disbursement and ending on and including the last day of such
calendar month will be payable by Borrower simultaneously with the execution of this Note. If disbursement of principal is made by Lender to Borrower on the first day of a calendar month, then no payment will be due from Borrower at the time of the
execution of this Note. The Installment Due Date for the first monthly installment payment under Section 3(d) of interest-only or principal and interest, as applicable, will be the First Installment Due Date set forth in Section 1(a) of
this Note. Except as provided in this Section 3(c), Section 10, and in Section 11, accrued interest will be payable in arrears. 

  

					
	(d)	 	  (i)        	 	Beginning on the First Installment Due Date, and continuing until and including the Installment Due Date immediately prior to the First Principal and Interest Installment Due Date, accrued interest-only will be payable by Borrower
in consecutive monthly installments due and payable on the first day of each calendar month. The amount of each monthly installment of interest-only payable pursuant to this Section 3(d)(i) on an Installment Due Date will vary, and will equal
$2,100.56667 multiplied by the number of days in the month prior to the Installment Due Date.
			
		 	  (ii)	 	Beginning on the First Principal and Interest Installment Due Date, and continuing until and including the monthly installment due on the Maturity Date, principal and accrued interest will be payable by Borrower in consecutive
monthly installments due and payable on the first day of each calendar month. The amount of the monthly installment of principal and interest payable pursuant to this Section 3(d)(ii) on an Installment Due Date will be $85,519.00.

  

	 	(e)	Reserved. 

  

	 	(f)	Reserved. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 3

	 	(g)	Reserved. 

  

	 	(h)	All remaining Indebtedness, including all principal and interest, will be due and payable by Borrower on the Maturity Date. 

  

	 	(i)	Reserved. 

  

	 	(j)	All payments under this Note must be made in immediately available U.S. funds. 

  

	 	(k)	Any regularly scheduled monthly installment of interest-only or principal and interest payable pursuant to this Section 3 that is received by Lender before the date it is due will be deemed to have been received on
the due date for the purpose of calculating interest due. 

  

	 	(l)	Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may be added to and become part of the unpaid principal balance of this Note and any reference to “accrued interest”
will refer to accrued interest which has not become part of the unpaid principal balance. Any amount added to principal pursuant to the Loan Documents will bear interest at the applicable rate or rates specified in this Note and will be payable with
such interest upon demand by Lender and absent such demand, as provided in this Note for the payment of principal and interest. 

  

	 	(m)	Reserved. 

  

	 	(n)	Reserved. 

  

	4.	Application of Partial Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, Lender may apply
the amount received to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Borrower agrees that neither Lender’s acceptance of a payment from Borrower in an amount that is less than all
amounts then due and payable nor Lender’s application of such payment will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction. 

 

	5.	Security. The Indebtedness is secured by, among other things, the Security Instrument and reference is made to the Security Instrument and the Loan Agreement for other rights with respect to collateral for the
Indebtedness. 

  

	6.	Acceleration. If an Event of Default has occurred and is continuing, the entire unpaid principal balance, any accrued interest, any prepayment premium payable under Section 10 and Section 11, and all
other amounts payable under this Note and any other Loan Document, will at once become due and payable, at the option of Lender, without any prior Notice to Borrower (except if notice is required by applicable law, then after such notice). Lender
may exercise this option to accelerate regardless of any prior forbearance. For purposes of exercising such option, Lender will calculate the prepayment premium as if prepayment occurred on the date of acceleration. If prepayment occurs thereafter,
Lender will recalculate the prepayment premium as of the actual prepayment date. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 4

	7.	Late Charge. 

  

	 	(a)	If any monthly installment of interest or principal and interest or other amount payable under this Note or under the Loan Agreement or any other Loan Document is not received in full by Lender within 10 days after the
installment or other amount is due, counting from and including the date such installment or other amount is due (unless applicable law requires a longer period of time before a late charge may be imposed, in which event such longer period will be
substituted), Borrower must pay to Lender, immediately and without demand by Lender, a late charge equal to 5% of such installment or other amount due (unless applicable law requires a lesser amount be charged, in which event such lesser amount will
be substituted). If the Loan is not fully amortizing, the late charge will not be due on the final payment of principal owed on the Maturity Date if such payment is not timely made. 

 

	 	(b)	Borrower acknowledges that its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan and that it is extremely difficult and impractical to determine those
additional expenses. Borrower agrees that the late charge payable pursuant to this Section represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional expenses Lender will
incur by reason of such late payment. The late charge is payable in addition to, and not in lieu of, any interest payable at the Default Rate pursuant to Section 8. 

 

	8.	Default Rate. 

  

	 	(a)	So long as (i) any monthly installment under this Note remains past due for 30 days or more or (ii) any other Event of Default has occurred and is continuing, then notwithstanding anything in
Section 3 of this Note to the contrary, interest under this Note will accrue on the unpaid principal balance from the Installment Due Date of the first such unpaid monthly installment or the occurrence of such other Event of Default, as
applicable, at the Default Rate. 

  

	 	(b)	From and after the Maturity Date, the unpaid principal balance will continue to bear interest at the Default Rate until and including the date on which the entire principal balance is paid in full. 

 

	 	(c)	Borrower acknowledges that (i) its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan, (ii) during the time that any monthly installment under
this Note is delinquent for 30 days or more, Lender will incur additional costs and expenses arising from its loss of the use of the money due and from the adverse impact on Lender’s ability to meet its other obligations and to take advantage
of other investment opportunities, and (iii) it is extremely difficult and impractical to determine those additional costs and expenses. Borrower also acknowledges that, during the time that any monthly installment under this Note is delinquent
for 30 days or more or any other Event of Default has occurred and is continuing, Lender’s risk of nonpayment of this Note will be materially increased and Lender is entitled to be compensated for such increased risk. Borrower agrees that the
increase in the rate of interest payable under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional costs and expenses Lender will incur
by reason of the Borrower’s delinquent payment and the additional compensation Lender is entitled to receive for the increased risks of nonpayment associated with a delinquent loan. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 5

	9.	Limits on Personal Liability. 

  

	 	(a)	Except as otherwise provided in this Section 9, Borrower will have no personal liability under this Note, the Loan Agreement or any other Loan Document for the repayment of the Indebtedness or for the performance
of or compliance with any other obligations of Borrower under the Loan Documents and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and
remedies with respect to the Mortgaged Property and to any other collateral held by Lender as security for the Indebtedness. This limitation on Borrower’s liability will not limit or impair Lender’s enforcement of its rights against any
Guarantor of the Indebtedness or any Guarantor of any other obligations of Borrower. 

  

	 	(b)	Borrower will be personally liable to Lender for the amount of the Base Recourse, plus any other amounts for which Borrower has personal liability under this Section 9. 

 

	 	(c)	In addition to the Base Recourse, Borrower will be personally liable to Lender for the repayment of a further portion of the Indebtedness equal to any loss or damage suffered by Lender as a result of the occurrence of
any of the following events: 

  

	 	(i)	Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower
from tenants then in residence. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument
because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding. 

  

	 	(ii)	Borrower fails to apply all Insurance proceeds and Condemnation proceeds as required by the Loan Agreement. However, Borrower will not be personally liable for any failure described in this Section 9(c)(ii) if
Borrower is unable to apply Insurance or Condemnation proceeds as required by the Loan Agreement because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding. 

 

	 	(iii)	Either of the following occurs: 

  

	 	(A)	Borrower fails to deliver the statements, schedules and reports required by Section 6.07 of the Loan Agreement and Lender exercises its right to audit those statements, schedules and reports. 

 

	 	(B)	If an Event of Default has occurred and is continuing, Borrower fails to deliver all books and records relating to the Mortgaged Property or its operation in accordance with the provisions of Section 6.07 of the
Loan Agreement. 

  

	 	(iv)	Borrower fails to pay when due in accordance with the terms of the Loan Agreement the amount of any item below marked “Deferred”; provided however, that if no item is marked “Deferred”, this
Section 9(c)(iv) will be of no force or effect. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 6

			
	[Collect]	  	Property Insurance premiums or other Insurance premiums
	[Collect]	  	Taxes or payments in lieu of taxes (PILOT)
	[Deferred]	  	water and sewer charges (that could become a lien on the Mortgaged Property)
	[N/A]	  	Ground Rents
	[Deferred]	  	assessments or other charges (that could become a lien on the Mortgaged Property), including home owner association dues

  

	 	(v)	Borrower engages in any willful act of material waste of the Mortgaged Property. 

  

	 	(vi)	Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v)
of the Loan Agreement (subject to possible full recourse liability as set forth in Section 9(f)(ii)). 

  

	 	(vii)	Any of the following Transfers occurs: 

  

	 	(A)	Any Person that is not an Affiliate creates a mechanic’s lien or other involuntary lien or encumbrance against the Mortgaged Property and Borrower has not complied with the provisions of the Loan Agreement.

  

	 	(B)	A Transfer of property by devise, descent or operation of law occurs upon the death of a natural person and such Transfer does not meet the requirements set forth in the Loan Agreement. 

 

	 	(C)	Borrower grants an easement that does not meet the requirements set forth in the Loan Agreement. 

  

	 	(D)	Borrower executes a Lease that does not meet the requirements set forth in the Loan Agreement. 

  

	 	(viii)	The Mortgaged Property is subject to any oil or gas lease, pipeline agreement or other instrument related to the production or sale of oil or natural gas that under applicable state law has been given priority over the
Security Instrument. 

  

	 	(ix)	through (xviii) are Reserved. 

  

	 	(xix)	Borrower fails to complete any Property Improvement Alterations that have been commenced in accordance with Section 6.09(e)(v) of the Loan Agreement. 

 

	 	(d)	In addition to the Base Recourse, Borrower will be personally liable to Lender for all of the following: 

  

	 	(i)	Borrower will be personally liable for the performance of all of Borrower’s obligations under Sections 6.12 and 10.02(b) of the Loan Agreement (relating to environmental matters). 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 7

	 	(ii)	Borrower will be personally liable for the costs of any audit under Section 6.07 of the Loan Agreement. 

  

	 	(iii)	Borrower will be personally liable for any costs and expenses incurred by Lender in connection with the collection of any amount for which Borrower is personally liable under this Section 9, including
Attorneys’ Fees and Costs and the costs of conducting any independent audit of Borrower’s books and records to determine the amount for which Borrower has personal liability. 

 

	 	(iv)	through (vii) are Reserved. 

  

	 	(e)	All payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents will be applied first to the
portion of the Indebtedness for which Borrower has no personal liability. 

  

	 	(f)	Notwithstanding the Base Recourse, Borrower will become personally liable to Lender for the repayment of all of the Indebtedness upon the occurrence of any of the following Events of Default: 

 

	 	(i)	Borrower fails to comply with Section 6.13(a)(i) or (ii) of the Loan Agreement or any SPE Equity Owner fails to comply with Section 6.13(b)(i) or (ii) of the Loan Agreement. 

 

	 	(ii)	Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v)
of the Loan Agreement and a court of competent jurisdiction holds or determines that such failure or combination of failures is the basis, in whole or in part, for the substantive consolidation of the assets and liabilities of Borrower or any SPE
Equity Owner with the assets and liabilities of a debtor pursuant to Title 11 of the Bankruptcy Code. 

  

	 	(iii)	A Transfer that is an Event of Default under Section 7.02 of the Loan Agreement occurs other than a Transfer set forth in Section 9(c)(vii) above (for which Borrower will have personal liability for
Lender’s loss or damage); provided, however, that Borrower will not have any personal liability for a Transfer consisting solely of the involuntary removal or involuntary withdrawal of a general partner in a limited partnership or a manager in
a limited liability company. 

  

	 	(iv)	There was fraud or written material misrepresentation by Borrower or any officer, director, partner, member, or employee of Borrower in connection with the application for or creation of the Indebtedness or there is
fraud in connection with any request for any action or consent by Lender. 

  

	 	(v)	Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy Code. 

  

	 	(vi)	Borrower or any SPE Equity Owner voluntarily becomes subject to any reorganization, receivership, insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and
creditor rights. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 8

	 	(vii)	The Mortgaged Property or any part of the Mortgaged Property becomes an asset in a voluntary bankruptcy or becomes subject to any voluntary reorganization, receivership, insolvency proceeding, or other similar voluntary
proceeding pursuant to any other federal or state law affecting debtor and creditor rights. 

  

	 	(viii)	An order of relief is entered against Borrower or any SPE Equity Owner pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding
initiated or joined in by a Related Party. 

  

	 	(ix)	An involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use
commercially reasonable efforts to dismiss such proceeding or has consented to such proceeding. “Commercially reasonable efforts” will not require any direct or indirect interest holders in Borrower or any SPE Equity Owner to contribute or
cause the contribution of additional capital to Borrower or any SPE Equity Owner. 

  

	 	(x)	through (xii) are reserved. 

  

	 	(g)	For purposes of Sections 9(f) and (h), the term “Related Party” will include all of the following: 

  

	 	(i)	Borrower, any Guarantor, or any SPE Equity Owner. 

  

	 	(ii)	Any Person that holds, directly or indirectly, any ownership interest (including any shareholder, member or partner) in Borrower, any Guarantor, or any SPE Equity Owner or any Person that has a right to manage Borrower,
any Guarantor, or any SPE Equity Owner. 

  

	 	(iii)	Any Person in which Borrower, any Guarantor, or any SPE Equity Owner has any ownership interest (direct or indirect) or right to manage. 

 

	 	(iv)	Any Person in which any partner, shareholder, or member of Borrower, any Guarantor, or any SPE Equity Owner has an ownership interest or right to manage. 

 

	 	(v)	Any Person in which any Person holding an interest in Borrower, any Guarantor, or any SPE Equity Owner also has any ownership interest. 

 

	 	(vi)	Any creditor (as defined in the Bankruptcy Code) of Borrower that is related by blood, marriage or adoption to Borrower, any Guarantor, or any SPE Equity Owner. 

 

	 	(vii)	Any creditor (as defined in the Bankruptcy Code) of Borrower that is related to any partner, shareholder or member of, or any other Person holding an interest in, Borrower, any Guarantor, or any SPE Equity Owner.

  

	 	(h)	If Borrower, any Guarantor, any SPE Equity Owner, or any Related Party has solicited creditors to initiate or participate in any proceeding referred to in Section 9(f), regardless of whether any of the creditors
solicited actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related Party. 

  

	 	(i)	To the extent that Borrower has personal liability under this Section 9, Lender may, to the fullest extent permitted by applicable law, exercise its rights against Borrower personally without regard to whether
Lender has exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any Guarantor, or pursued any other rights available to Lender under this Note, the Loan Agreement, any other Loan Document, or
applicable law. To the fullest extent permitted by applicable law, in any action to enforce Borrower’s personal liability under this Section 9, Borrower waives any right to set off the value of the Mortgaged Property against such personal
liability. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 9

	10.	Voluntary and Involuntary Prepayments (Section Applies unless and until Loan is Assigned to REMIC Trust Prior to the Cut-off Date). 

 

	 	(a)	This Section 10 will apply: 

  

	 	(i)	Until this Note is assigned to the REMIC trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date. 

  

	 	(ii)	If this Note is assigned to a REMIC trust on or after the Cut-off Date. 

  

	 	(iii)	If this Note is not assigned to a REMIC trust. 

 This Section 10 will be of no effect
after this Note is assigned to a REMIC trust, if this Note is assigned to the REMIC trust prior to the Cut-off Date. 
  

	 	(b)	Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under
this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment
under this Note. 

  

	 	(c)	To make a voluntary prepayment of all of the unpaid principal balance of this Note, Borrower must designate the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of
such prepayment. Upon receipt of such Notice from Borrower, if a voluntary prepayment is not permitted, Lender will notify Borrower. If a voluntary prepayment is permitted, Borrower may voluntarily prepay all of the unpaid principal balance of this
Note on an Installment Due Date. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 10 only, then the term “Installment Due
Date” will mean the Business Day immediately preceding the scheduled Installment Due Date. 

  

	 	(d)	 If a voluntary prepayment is permitted, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than
an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 10(c) and meets the other requirements set forth in this Section 10(d). Borrower acknowledges that Lender has agreed that Borrower may prepay
principal on a Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 10

	 	
immediately following such prepayment and Borrower must pay to Lender all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately
following such prepayment. 

  

	 	(e)	Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all or any part of the principal
of this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment, plus
(iii) if the prepayment occurs during the Prepayment Premium Period, any prepayment premium calculated pursuant to Section 10(f). 

  

	 	(f)	Except as provided in Section 10(g), a prepayment premium will be due and payable by Borrower in connection with any prepayment of principal under this Note during the Prepayment Premium Period. The prepayment
premium will be computed as follows: 

  

	 	(i)	For any prepayment made during the Yield Maintenance Period, the prepayment premium will be whichever is the greater of Sections 10(f)(i)(A) and (B) below: 

 

	 	(A)	1.0% of the amount of principal being prepaid; or 

  

	 	(B)	the product obtained by multiplying: 

  

	 	(1)	the amount of principal being prepaid or accelerated, by 

  

	 	(2)	the excess (if any) of the Monthly Note Rate over the Assumed Reinvestment Rate, by 

  

	 	(3)	the Present Value Factor. 

 For purposes of Section 10(f)(i)(B), the following definitions
will apply: 
 Monthly Note Rate: 1/12 of the Fixed Interest Rate, expressed as a decimal calculated to 5 digits. 

Prepayment Date: in the case of a voluntary prepayment, the date on which the prepayment is made; in the case of the application by
Lender of collateral or security to a portion of the principal balance, the date of such application. 
 Assumed Reinvestment Rate:
1/12 of the yield rate expressed as a decimal to 2 digits, as of the close of the trading session which is 5 Business Days before the Prepayment Date, found among the Daily Treasury Yield Curve Rates, commonly known as Constant Maturity Treasury
(“CMT”) rates, with a maturity equal to the remaining Yield Maintenance Period, as reported on the U.S. Department of the Treasury website. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 11

 If no published CMT maturity matches the remaining Yield Maintenance Period, Lender will
interpolate as a decimal to 2 digits the yield rate between (a) the CMT with a maturity closest to, but shorter than, the remaining Yield Maintenance Period, and (b) the CMT with a maturity closest to, but longer than, the remaining Yield
Maintenance Period, as follows: 
  
 

 
  

			
	A =	  	yield rate for the CMT with a maturity shorter than the remaining Yield Maintenance Period
	B =	  	yield rate for the CMT with a maturity longer than the remaining Yield Maintenance Period
	C =	  	number of months to maturity for the CMT maturity shorter than the remaining Yield Maintenance Period
	D =	  	number of months to maturity for the CMT maturity longer than the remaining Yield Maintenance Period
	E =	  	number of months remaining in the Yield Maintenance Period

 In the event the U.S. Department of the Treasury ceases publication of the CMT rates, the Assumed Reinvestment
Rate will equal the yield rate on the first U.S. Treasury security which is not callable or indexed to inflation and which matures after the expiration of the Yield Maintenance Period. 

The Assumed Reinvestment Rate may be a positive number, a negative number or zero. 

If the Assumed Reinvestment Rate is a positive number or a negative number, Lender will calculate the prepayment premium using such positive
number or negative number, as appropriate, as the Assumed Reinvestment Rate in 10(f)(i)(B)(2) and in the calculation of the Present Value Factor. 

If the Assumed Reinvestment Rate is zero, Lender will calculate the prepayment premium twice as set forth in (I) and (II) below and will
average the results to determine the actual prepayment premium. 
  

	 	(I)	Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of one basis point (+0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor. 

 

	 	(II)	Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of negative one basis point (-0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 12

 Present Value Factor: the factor that discounts to present value the costs resulting to
Lender from the difference in interest rates during the months remaining in the Yield Maintenance Period, using the Assumed Reinvestment Rate as the discount rate, with monthly compounding, expressed numerically as follows: 

 
 

 
 n = the number of months remaining in Yield Maintenance Period; provided, however, if a prepayment
occurs on an Installment Due Date, then the number of months remaining in the Yield Maintenance Period will be calculated beginning with the month in which such prepayment occurs and if such prepayment occurs on a Business Day other than an
Installment Due Date, then the number of months remaining in the Yield Maintenance Period will be calculated beginning with the month immediately following the date of such prepayment. 

ARR = Assumed Reinvestment Rate 
  

	 	(ii)	For any prepayment made after the expiration of the Yield Maintenance Period but during the remainder of the Prepayment Premium Period, the prepayment premium will be 1.0% of the amount of principal being prepaid.

  

	 	(g)	Notwithstanding any other provision of this Section 10, no prepayment premium will be payable with respect to any of the following: 

 

	 	(i)	Any prepayment made during the Window Period. 

  

	 	(ii)	Any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award. 

  

	 	(iii)	Any prepayment required under the terms of the Loan Agreement in connection with a Condemnation proceeding. 

  

	 	(iv)	Reserved. 

  

	 	(h)	Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or
change the amount of such installments. 

  

	 	(i)	Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring
loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment,
and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in this Note represents a reasonable
estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other
respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 13

	11.	Voluntary and Involuntary Prepayments During the Lockout Period and During the Defeasance Period (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). 

 

	 	(a)	This Section 11 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 11 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off
Date or if this Note is not assigned to a REMIC trust. 

  

	 	(b)	Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under
this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment
under this Note. 

  

	 	(c)	Borrower may not voluntarily prepay any portion of the principal balance of this Note during the Lockout Period or during the Defeasance Period; provided, however, any prepayment occurring as a result of the application
of any Insurance proceeds or Condemnation award under the Loan Agreement will be permitted during the Lockout Period and during the Defeasance Period. If any portion of the principal balance of this Note is prepaid during the Lockout Period or
during the Defeasance Period by reason of the application by Lender of any proceeds of collateral or other security to any portion of the unpaid principal balance of this Note or following a determination that the prohibition on voluntary
prepayments during the Lockout Period or during the Defeasance Period is in contravention of applicable law, then Borrower must also pay to Lender upon demand by Lender, a prepayment premium equal to 5.0% of the amount of principal being prepaid.

  

	 	(d)	Notwithstanding any other provision of this Section 11, no prepayment premium will be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result
of the application of any Insurance proceeds or Condemnation award under the Loan Agreement. 

  

	 	(e)	After the expiration of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date
for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to
payments made under this Section 11 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date. 

 

	 	(f)	Notwithstanding Section 11(e) above, following the end of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than
an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 11(e) and meets the other requirements set forth in this Section 11(f). Borrower acknowledges that Lender has agreed that Borrower may prepay
principal on a Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such
prepayment and Borrower must pay to Lender all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 14

	 	(g)	Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all or any part of the principal
of this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment.

  

	 	(h)	Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or
change the amount of such installments. 

  

	 	(i)	Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring
loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment,
and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in Section 11(c) of this Note
represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the lockout and prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that
the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions. 

 

	 	(j)	If, after the expiration of the Lockout Period, Borrower defeases the Loan as described in Section 11.12 of the Loan Agreement during the Defeasance Period, Borrower will not have the right to voluntarily prepay
any of the principal of this Note at any time. 

  

	12.	Defeasance (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). 

  

	 	(a)	This Section 12 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 12 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off
Date or if this Note is not assigned to a REMIC trust. 

  

	 	(b)	Section 5 of this Note is amended by adding a new paragraph at the end of the Section as follows: 

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan
Agreement, the Indebtedness will be secured by the Pledge Agreement and reference will be made to the Pledge Agreement for other rights of Lender as to collateral for the Indebtedness. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 15

	 	(c)	Section 9 of this Note is amended by adding a new paragraph at the end thereof as follows: 

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan
Agreement, Borrower will have no personal liability under this Note or the Pledge Agreement for the repayment of the Indebtedness or for the performance of any other obligations of Borrower under this Note or the Pledge Agreement (other than any
liability under Section 6.12 or Section 10.02 of the Loan Agreement for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date), and Lender’s only recourse for the
satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the collateral held by Lender under the Pledge Agreement as security for the Indebtedness. 

 

	 	(d)	Section 21(a) of this Note is amended by adding a new paragraph at the end of that subsection as follows: 

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan
Agreement, all Notices, demands and other communications required or permitted to be given pursuant to this Note will be given in accordance with the Pledge Agreement. 
  

	13.	Costs and Expenses. To the fullest extent allowed by applicable law, Borrower must pay all expenses and costs, including Attorneys’ Fees and Costs incurred by Lender as a result of any default under this
Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including
any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding. Borrower acknowledges and agrees that, in connection with each request by Borrower under this Note or any Loan Document,
Borrower must pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies (if applicable), regardless of whether the matter is approved, denied or withdrawn. 

 

	14.	Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Loan Agreement, or any other Loan Document, or otherwise afforded by applicable law, will not be a waiver of or
preclude the exercise of that or any other right or remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, will not be a waiver of Lender’s right to require
prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s obligations under this Note will not constitute an
election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender. 

  

	15.	Waivers. Borrower and all endorsers and Guarantors of this Note and all other third party obligors waive presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or
accelerate payment or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness. 

  

	16.	 Loan Charges. Neither this Note nor any of the other Loan Documents will be construed to create a contract for the use, forbearance, or
detention of money requiring payment of interest at a rate greater than the Maximum Interest Rate. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan is
interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together with other charges 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 16

	 	
provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate
that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting the
amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, will be deemed
to be allocated and spread ratably over the stated term of this Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner that the rate of interest so computed is uniform throughout the stated
term of this Note. 

  

	17.	Commercial Purpose. Borrower represents that Borrower is incurring the Indebtedness solely for the purpose of carrying on a business or commercial enterprise, and not for personal, family, household, or
agricultural purposes. 

  

	18.	Counting of Days. Any reference in this Note to a period of “days” means calendar days, not Business Days, except where otherwise specifically provided. 

 

	19.	Governing Law. This Note will be governed by the law of the Property Jurisdiction. 

  

	20.	Captions. The captions of the Sections of this Note are for convenience only and will be disregarded in construing this Note. 

 

	21.	Notices; Written Modifications. 

  

	 	(a)	All Notices, demands, and other communications required or permitted to be given pursuant to this Note will be given in accordance with Section 11.03 of the Loan Agreement. 

 

	 	(b)	Any modification or amendment to this Note will be ineffective unless in writing and signed by the party sought to be charged with such modification or amendment; provided, however, in the event of a Transfer under the
terms of the Loan Agreement that requires Lender’s consent, any or some or all of the Modifications to Multifamily Note set forth in Exhibit A to this Note may be modified or rendered void by Lender at Lender’s option, by
Notice to Borrower and the transferee, as a condition of Lender’s consent. 

  

	22.	Consent to Jurisdiction and Venue. Borrower agrees that any controversy arising under or in relation to this Note may be litigated in the Property Jurisdiction. The state and federal courts and authorities with
jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that will arise under or in relation to this Note. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and
waives any other venue to which it might be entitled by virtue of domicile, habitual residence, or otherwise. However, nothing in this Note is intended to limit any right that Lender may have to bring any suit, action, or proceeding relating to
matters arising under this Note in any court of any other jurisdiction. 

  

	23.	WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (a) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER
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. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 17

	24.	State-Specific Provisions. N/A 

  

	25.	Attached Riders. The following Riders are attached to this Note: 

  

	 	x	Rider to Multifamily Note – Seniors Housing 

  

	 	x	Rider to Multifamily Note – Cross-Collateralized Transaction 

  

	 	x	Rider to Multifamily Note – Legal Non-Conforming Property 

  

	 	x	Rider to Multifamily Note – Recycled Borrower and/or Recycled SPE Equity Owner 

  

	26.	Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Note: 

  

					
	x	  	Exhibit A	  	Modifications to Multifamily Note

 IN WITNESS WHEREOF, and in consideration of the Lender’s agreement to lend Borrower the principal amount set forth above,
Borrower has signed and delivered this Note under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 18

 
			
	SNR 27 ALEXIS GARDENS OWNER LLC, a Delaware limited liability company
		
	By:	 	 /s/ Justine Cheng

		 	Justine Cheng
		 	Authorized Person

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 19

			
	PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION, WITHOUT RECOURSE.
	
	WALKER & DUNLOP, LLC, a Delaware limited liability company
		
	By:	 	 /s/ Nancy Sexton

		 	Nancy Sexton
		 	Vice President

 Freddie Mac Loan No. 504193775 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page 20

 RIDER TO MULTIFAMILY NOTE 

SENIORS HOUSING 

(Revised 3-1-2014) 
 The following changes
are made to the Note which precedes this Rider: 
  

	A.	Sections 9(c)(xvi) and (xvii) are deleted and replaced with the following: 

  

	 	(xvi)	Borrower fails to cause the renewal, continuation, extension or maintenance of all Licenses required to legally operate the Mortgaged Property as a seniors housing Facility. 

 

	 	(xvii)	Borrower fails upon an Event of Default to cooperate, or Borrower otherwise intentional interferes with, hinders or delays Lender (or its nominee or designee), in connection with the timely and orderly transfer of any
and all Licenses. 

  

			
	 Rider to Multifamily Note
 Seniors
Housing
	  	

 RIDER TO MULTIFAMILY NOTE 

CROSS-COLLATERALIZED TRANSACTION 

(Revised 3-1-2014) 
 The following changes
are made to the Note which precedes this Rider: 
  

	A.	Section 5 is deleted and replaced with the following: 

  

	 	5.	Security. The Indebtedness is secured by, among other things, the Security Instrument and the Related Security Instruments and reference is made to the Security Instrument, the Related Security Instruments, the
Cross-Collateralization Agreement, the Loan Agreement, and the Related Loan Agreements for other rights with respect to the collateral for the Indebtedness. 

  

					
	 Rider to Multifamily Note

Cross-Collateralized Transaction
	  	[Modified]	  	

 RIDER TO MULTIFAMILY NOTE 

LEGAL NON-CONFORMING PROPERTY 

(Revised 3-1-2014) 
 The following changes
are made to the Note which precedes this Rider: 
  

	A.	Section 9(c)(x) is deleted and replaced with the following: 

  

	 	(x)	A casualty occurs affecting the Mortgaged Property and which results in loss or damage to Lender because of either of the following: 

 

	 	(A)	(1) the Mortgaged Property is legally non-conforming under the applicable zoning laws, ordinances and/or regulations in the Property Jurisdiction (“Zoning Code”), (2) the affected Improvements
cannot be rebuilt to their pre-casualty condition under the terms of the Zoning Code, and (3) the Hazard Insurance proceeds available to Lender under the terms of the Loan Agreement are insufficient to repay the Indebtedness in full.

  

	 	(B)	Borrower fails to commence and diligently pursue completion of any Restoration within the time frame required by the Zoning Code and any permits issued pursuant to the Zoning Code which are necessary to allow the
Restoration to the pre-casualty condition described in Section 9(c)(x)(A)(2). 

  

			
	 Rider to Multifamily Note
 Legal
Non-Conforming Property
	  	

 RIDER TO MULTIFAMILY NOTE 

RECYCLED BORROWER AND/OR RECYCLED SPE EQUITY OWNER 

(Revised 3-1-2014) 
 The following changes
are made to the Note which precedes this Rider: 
  

	A.	Section 9(c)(ix) is restated as follows: 

  

	 	(ix)	Any of the Underwriting Representations or Separateness Representations set forth in Sections 5.40(a) and (b) of the Loan Agreement are false or misleading in any material respect. 

  

			
	 Rider to Multifamily Note
 Recycled
Borrower and/or Recycled SPE Equity Owner
	  	

 EXHIBIT A 

MODIFICATIONS TO MULTIFAMILY NOTE 
 The following
modifications are made to the text of the Note that precedes this Exhibit. 
  

	A.	Sponsor Specific Modifications 

  

	1.	Section 9(a) is amended to read in its entirety as follows: 

  

	 	(a)	Except as otherwise provided in this Section 9, Borrower will have no personal liability under this Note, the Loan Agreement or any other Loan Document for the repayment of the Indebtedness or for the performance
of or compliance with any other obligations of Borrower under the Loan Documents and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and
remedies with respect to the Mortgaged Property and to any other collateral held by Lender as security for the Indebtedness. This limitation on Borrower’s liability will not limit or impair Lender’s enforcement of its rights against any
Guarantor of the Indebtedness or any Guarantor of any other obligations of Borrower pursuant to the terms of the Guaranty. 

  

	2.	Section 9(c)(i) is amended to read in its entirety as follows: 

  

	 	(i)	Borrower fails to pay to Lender upon promptly following demand after during the continuance of an Event of Default all Rents and security deposits
collected by Borrower to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence. However, Borrower will not be
personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or
similar judicial proceeding. 

  

	3.	The lead-in paragraph to Section 9(c)(iv) is amended to read in its entirety as follows: 

  

	 	(iv)	Borrower fails to pay when due in accordance with the terms of the Loan Agreement the amount of any item below marked “Deferred” provided net proceeds of operations after payment of debt service and
reserves are sufficient to pay such amounts and Lender permits such amounts to be applied for such purpose; provided further, however, that if no item is marked “Deferred”, this Section 9(c)(iv) will be of no
force or effect. 

  

	4.	A new subsection (xx) is hereby added at the end of Section 9(c) to read as follows: 

  

	 	(xx)	There was an unintentional written material misrepresentation by Borrower or any officer, director, partner, member or employee of Borrower in connection with the application for or creation of the Indebtedness or any
request for any action or consent by Lender. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
	  	Page A-1

	5.	Section 9(d)(iii) is amended to read in its entirety as follows: 

  

	 	(iii)	Borrower will be personally liable for any out-of-pocket costs and expenses incurred by Lender in connection with the collection of any amount for which Borrower is personally liable under this
Section 9, including Attorneys’ Fees and Costs and the costs of conducting any independent audit of Borrower’s books and records to determine the amount for which Borrower has personal liability. 

 

	6.	Section 9(f)(iv) is amended to read in its entirety as follows: 

  

	 	(iv)	There was fraud or an intentional written material misrepresentation by Borrower or any officer, director, partner, member, or employee of Borrower, in either case in connection with the
application for or creation of the Indebtedness or there is fraud in connection with any request for any action or consent by Lender; provided that the presumption will be that any written material misrepresentation is intentional, and the
burden of proof will be on Borrower to show that there was no intent. 

  

	7.	The lead-in paragraph to Section 9(g) is amended to read in its entirety as follows: 

  

	 	(g)	For purposes of Sections 9(f) and (h), the term “Related Party” will include all of the following (provided Related Party shall not include any direct or indirect holder of any interest of
less than 15% in a public company): 

  

	8.	Section 10(b) is amended to read in its entirety as follows: 

  

	 	(b)	Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under
this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment
under this Note. Upon payment of the principal due under this Note in full when permitted or required hereunder, Lender shall execute instruments prepared by Borrower and reasonably satisfactory to Lender which, at Borrower’s election and
at Borrower’s sole cost and expense, either: (i) release and discharge all Liens on the applicable Borrower and all collateral securing payment of such amounts, including all balances in any collateral accounts; or (ii) assign such
Liens (and the Loan Documents) to a new lender designated by Borrower. Any release or assignment provided by Lender pursuant to this Section shall be without recourse, representation or warranty of any kind. 

 

	9.	Section 11(b) is amended to read in its entirety as follows: 

  

	 	(b)	 Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments
pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion
of the unpaid principal balance of this Note constitutes a prepayment under this Note. Upon payment of the principal due under this Note in full when permitted or required hereunder, Lender shall execute instruments prepared by
Borrower 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
		Page A-2

	 	
and reasonably satisfactory to Lender which, at Borrower’s election and at Borrower’s sole cost and expense, either: (i) release and discharge all Liens on the
applicable Borrower and all collateral securing payment of such amounts, including all balances in any collateral accounts; or (ii) assign such Liens (and the Loan Documents) to a new lender designated by Borrower. Any release or assignment
provided by Lender pursuant to this Section shall be without recourse, representation or warranty of any kind. 

  

	10.	Section 13 is amended to read in its entirety as follows: 

  

	 	13.	Costs and Expenses. To the fullest extent allowed by applicable law, Borrower must pay all expenses and costs, including Attorneys’ Fees and Costs incurred by Lender as a result of any default under
this Note Event of Default or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts
and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding. Borrower acknowledges and agrees that, in connection with each request by
Borrower under this Note or any Loan Document, Borrower must pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies (if applicable), regardless of whether the matter is
approved, denied or withdrawn. 

  

	11.	Section 18 is amended to read in its entirety as follows: 

  

	 	18.	Counting of Days. Any reference in this Note to a period of “days” means calendar days, not Business Days, except where otherwise specifically provided. Unless otherwise specifically required in
any Loan Document, where a performance deadline falls on a holiday or a weekend, such deadline will be extended to the following Business Day. 

 

	12	Section 22 is amended to read in its entirety as follows: 

  

	 	22.	Consent to Jurisdiction and Venue. Each of Lender and Borrower agrees that any controversy arising under or in relation to this Note may be litigated in the Property Jurisdiction. The state and federal
courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that will arise under or in relation to this Note. Each of Lender and Borrower irrevocably consents to service,
jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence, or otherwise. However, nothing in this Note is intended to limit any right that
Lender any party may have to bring any suit, action, or proceeding relating to matters arising under this Note in any court of any other jurisdiction. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
		Page A-3

	13.	Section 23 is amended to read in its entirety as follows: 

  

	 	23.	WAIVER OF TRIAL BY JURY. TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, BORROWER AND LENDER EACH (a) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR
THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER 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. 

  

	B.	Transaction Specific Modifications 

  

	 	1.	Section 9(c) is modified to include the following new subsection: 

  

	 	(xxi)	the avoidance, in whole or in part, of the transfer creating the lien of the any Security Instrument, or a court order providing an alternative remedy to that avoidance, because of the occurrence on or
before the date that the any Security Instrument was recorded of a fraudulent transfer or a preference under federal bankruptcy, state insolvency, or similar creditors’ rights laws. 

  

			
	 Multifamily Note
 Fixed Rate
Defeasance
		Page A-4ex10-1.htm

Exhibit 10.1

 

THIS SUBSCRIPTION AGREEMENT RELATES TO AN OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATIONS UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT").

 

NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT") RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "1933 ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATIONS UNDER THE 1933 ACT. PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITIONS HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.

 

SUBSCRIPTION AGREEMENT / DEBT SETTLEMENT

(Non-US Subscriber)

 

TO: DSG TAG Systems Inc. (the “Company")

 

Purchase of Common Shares and Series A Convertible Preferred Shares

 

WHEREAS:

A. The Company is indebted to the Westergaard Holdings Ltd. (the "Subscriber") as a result of debts due under various- loans advanced by the Subscriber (the aggregate amount defined herein as the Indebtedness"):

	
B.  

	
The Subscriber wishes to subscribe for:

	
(i)  

	
Series A Convertible Preferred Shares (the 'Series A Shares") in the capital stock of the Company at a deemed price of US$125 per Series A Share. in settlement of the principal portion of the Indebtedness: and

	
(ii)  

	
Shares of common stock (the “Common Shares") in the capital stock of the Company at a deemed price of US$0.25 per Common Share, in settlement of the outstanding accrued interest portion of the Indebtedness,

(collectively, the "Subscription Proceeds");

C. In lieu of receiving cash in payment of the Subscription Proceeds, the Company is willing to apply the indebtedness in payment thereof.

NOW THEREFORE THIS AGREEMENT WITNESSES that, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Subscription

1.1 On the basis of the representations and warranties and subject to the terms and conditions set forth herein the Subscriber hereby irrevocably subscribes for and agrees to purchase Series A Shares and Common Shares. (the subscription and agreement to purchase being the "Subscription"), as follows:

	
·  

	
Series A Shares at a deemed price of US$125 per share in settlement of the Principal Amount of the indebtedness; and

 

	
·  

	
Common Shares (Interest Shares") at g deemed price of US$0.25 per share in settlement of the   Interest Amount Of the. Indebtedness.

1.2 For purposes of this Agreement:

	
(a)  

	
"Principal Amount" means the outstanding principal amount of the Indebtedness as of the date hereof (being US$5,100,543.52) together with all such additional amounts paid by the Subscriber to and until the date of closing the RTO referred to in section 3.1 toward the reasonable costs (i) incurred in discharging the receiver currently in place with respect to the Company; and (ii) incurred in negotiating and settling the terms of this Agreement and transactions involving the Company and Pubco:

 

 

  

  

  

 

	
(b)  

	
"Interest Amount" means the aggregate amount of accrued and unpaid interest owing on the Principal Amount (being US$2,502.168.23 as of September 19, 2014) together with a per diem amount of US$3.513.08 to and until the Closing Date;

	
(c)  

	
"Indebtedness" means the total of the Principal Amount and Interest Amount at any time;

	
(d)  

	
"Closing Date" means the date of execution of this Agreement.

1.3 On the basis of the representations and warranties and subject to the terms and conditions set forth herein, the Company hereby, irrevocably agrees to sell the Series A Shares and Common Shares to the Subscriber in settlement of the Indebtedness as of the Closing Date.

1.4 Subject to the terms hereof the Subscription will be effective upon its acceptance by the Company.

2. Settlement of Indebtedness:

2.1 The Company and the Subscriber acknowledge that:

	
(a)  

	
the balance due from the Company to the Subscriber as of the date hereof pursuant to the Indebtedness is an aggregate amount of US$7,602,711.75; and

	
(b)   

	
the Company and the Subscriber agree to apply the entire amount of the Indebtedness on the Closing Date in payment of the Subscription Proceeds and, on the Closing Date, upon delivery of a signed copy of this Subscription Agreement to the Subscriber together With certificates evidencing the Series A Shares and Common Shares registered as provided in this Subscription Agreement (the "Share Certificates"), the Indebtedness shall be fully paid (and the date of repayment shall he the date that the Share Certificates are issued) subject to the conditions hereof and the rights provided for in the Series A Shares.

3. Exchange and Redemption of the Series A Shares

3.1 Within 60 days from the date of this Agreement the Company shall enter into an agreement for a reverse take-ever transaction (the "RTO") with a company whose shares of common stock are quoted for trading on the over-the-counter market in the United States ("Pubco"), pursuant to which all of the issued and outstanding common shares of the Company shall be exchanged for Shares of common stock of Pubco ("Pubco Shares"), with the shareholders of the Company then holding a majority of the issued and outstanding Pubco Shares, prior to any concurrent financing. Concurrently with the closing of the RTO the Subscriber shall exchange the Interest Shares for Pubco Shares on the basis that the actual price per Pubco Share is not more than US$1.25. The Series A Shares, the interest Shares, together with the Pubco Shares, are collectively referred to herein as the "Securities.”

3.2 Within 60 days of the closing of the RTO, the Company and/or Pubco Shall have completed a financing for gross proceeds of at least US$5,000,000. On the closing of such financing, at least US$2,500,000 shall be

paid to the Subscriber for the redemption of 2,000,000 of the Series A Shares held by the Subscriber at the deemed redemption price of USSI.25 per share.

  

2

  

3.3 Within 150 days of the closing of the R.TO, the Company and/or Pubco shall have completed a second financing for gross proceeds of at least US$5,000.000. On the closing of such financing, the balance of the Series A Shares held by the Subscriber will be redeemed at a redemption price of $1.25 per share.

3.4 Until such time as all Series A Shares have, been redeemed by the company the Subscriber may convert any or all of its remaining Series A Shares and accrued interest into Pubco Shares at US$1.25 per share.

3.5 The Series A Shares will accrue interest at the simple rate of 5.0% per annum.

3.6. In the event that the Company intends to redeem any Series A Shares, it shall provide the Subscriber with 30 days written notice of such intention, during which time the Subscriber may convert some or all of its Series A Shares in accordance with section 3.4 above.

3.7 Should all the Series A Shares not be redeemed in accordance with the above provisions, the Subscriber may declare the outstanding balance due under the remaining Series A Shares immediately due and payable, and all outstanding Series A Shares shall be deemed cancelled. With the remaining Principal Amount of the Indebtedness reinstated and due and owing.

4. Acknowledgements of Subscriber

4.1 The Subscriber acknowledges and agrees that:

	
(a)  

	
none of the Securities have been or will be registered under the 1933 Act, or under any state

	
  

	
securities or "blue sky" laws of any state of the United States, and, unless so registered, may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S under the 1933 Act ("Regulation S"), except in accordance with the provisions or Regulation S, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to the registration requirements of the 1933 Act and in each ease only in accordance with applicable securities laws;

	
(b)  

	
the Company has not undertaken, and will have no obligation, to register any of the Securities under the 1933 Act or any other securities legislation;

	
(c)  

	
the Subscriber has been advised to consult the Subscribers own legal, tax and other advisors with respect to the merits and risks of an investment in the Securities and with respect to applicable resale restrictions, and it is solely responsible (and the Company is not in any way responsible) for compliance with;

	
(i)  

	
any applicable laws of the jurisdiction in which the Subscriber is resident in connection with the distribution of the Securities hereunder, and

	
(ii)  

	
applicable resale restrictions;

	
(d)  

	
none of the Series A Shares are listed on any stock exchange or automated dealer quotation system and no representation has been made to the Subscriber that any of the Series A Shares will become listed on any stock exchange or automated dealer quotation system:

	
(e)  

	
none of the Securities may be offered or sold by the Subscriber to a U.S. Person (as defined in Section 5.2, below, or for the account or benefit of a U.S. Person (other than a distributor) prior to the end of the Distribution Compliance Period (as defined herein);

	
(f)  

	
neither the US Securities and Exchange Commission (“SEC”) nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of the Securities:

 

  

3

  

	
(g)  

	
no documents in connection with the sale of the Securities hereunder have been reviewed by the SEC or any state securities administrators;

	
(h)  

	
the Subscriber is purchasing the Securities pursuant to an exemption from the registration and the prospectus requirements of applicable securities legislation on the basis that the Subscriber is not a resident of United States and, as a consequence:

	
(i)  

	
is restricted from using most of the civil remedies available under U.S. and Canadian securities legislation,

	
(ii)  

	
may not receive information that would otherwise be required to be provided under U.S. or Canadian securities legislation, and

	
(iii)  

	
the Company is relieved from certain obligations that would otherwise apply under U.S.

	
  

	
and Canadian securities legislation:

	
(i)  

	
the statutory and regulatory basis for the exemption claimed for the offer and sale of the

	
  

	
securities, although in technical compliance with Regulation S. would not be available if the   offering is part of a plan or scheme to evade the registration provisions of 1933 Act; and

	
(j)  

	
this Subscription Agreement is not enforceable by the Subscriber unless it has been accepted by the Company.

 

5. Representations, Warranties and Covenants of the Subscriber

5.1 The Subscriber hereby represents and warrants to and covenants with the Company (which representations warranties and covenants shall survive the Closing) that:

	
(a)  

	
the Subscriber is not a U.S. Person;

	
(b)  

	
the Subscriber is not acquiring the Securities- for the account or benefit of, directly or indirectly,

	
  

	
any U.S. Person;

	
(c)  

	
the Subscriber is resident in the jurisdiction set out on the signature page of this Subscription Agreement and the sale of the Securities to the Subscriber as contemplated in this Subscription Agreement complies with or is exempt from the applicable securities legislation of the jurisdiction of residence of the Subscriber;

	
(d)  

	
the Subscriber has the legal capacity and competence to enter into and execute this Subscription

	
  

	
Agreement and to take all actions required pursuant hereto and, if the Subscriber is a corporation, it is duly incorporated and validly subsisting under the laws of its jurisdiction of incorporation and all necessary approvals by its directors, shareholders and others have been obtained to authorize execution and performance of this Subscription Agreement on behalf of the Subscriber;

	
(e)  

	
if the Subscriber is a corporation or other entity, the entering into of this Subscription Agreement

	
  

	
and the transactions contemplated hereby do not and will not result in the violation of any of the terms and provisions of any law applicable to, or the constating documents of, the Subscriber or of any agreement, written or oral, to which the Subscriber may be a party or by which the Subscriber is or may be bound;

	
(f)  

	
the Subscriber is acquiring the Securities as principal for its own account for investment purposes only and not for the account of any other person and not for distribution, assignment or resale to others, and no other person has a direct or indirect beneficial interest in such Securities, and it has not subdivided its interest in the Securities with any other person;

  

4

  

	
(g)  

	
the Subscriber is outside the United States when receiving and executing this Subscription Agreement;

	
(h)  

	
the Subscriber is aware that an investment in the Company and Pubco is speculative and involve certain risks, including the possible loss of the entire investment;

	
(i)  

	
the Subscriber (i) has adequate net worth and means of providing for its current financial needs

	
  

	
and possible personal contingencies, (ii) has no need for liquidity in this investment, and (iii) is able to bear the economic risks of an investment in the Securities for an indefinite period of time;

	
(j)  

	
the Subscriber is not an underwriter of or dealer in, the common shares of the Company, nor is

	
  

	
the Subscriber participating, pursuant to a contractual agreement or otherwise, in the distribution of any of the Securities;

	
(k)  

	
the Subscriber understands and agrees that none of the Securities have been or will be registered

	
  

	
under the 1933 Act or under any state securities or "blue sky" laws of any state of the United States and, unless so registered, may not be offered or sold in the United States or directly or indirectly to U.S. Persons, except in accordance With the provisions of Regulation S ("Regulation “S” promulgated under the 1933 Act, pursuant to an effective registration statement under the 1933 Act, or pursuant to an exemption from, or in a transaction not subject to the registration requirements of the 1933 Act and in each case only in accordance with applicable state securities laws;

	
(l)  

	
the Subscriber understands and agrees that offers and sales of any of the Securities prior to the expiration of a restricted period after the data of original issuance of the Securities (such period hereinafter referred to as the “Distribution Compliance Period") shall only be made in compliance with the safe harbor provisions set forth in Regulation S. pursuant to the registration provisions or the 1933 Act or an exemption therefrom, and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration provisions of the 1933 Act or an exemption therefrom and in each Case only in accordance with applicable state securities laws;

	
(m)  

	
the Subscriber has not acquired the Securities as a result of, and it covenants that it will not itself  engage in, any "directed selling efforts" (as defined in Regulation S) in the United States in respect of any of the Securities which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Securities; provided, however, that the Subscriber may sell or otherwise dispose of any of the Securities pursuant to registration of any of the Securities pursuant to the 1933 Act and any applicable state securities laws or under an exemption from such registration requirements and as otherwise provided herein;

	
(n)  

	
the Subscriber agrees not. to engage in any hedging transactions involving any of the Securities unless such transactions are in compliance with the provisions of the 1933 Act and in each case only in accordance with applicable state securities laws;

	
(o)  

	
the Subscriber will indemnify the Company against, and will hold the Company and, where applicable, its respective directors, officers, employees, agents, advisors and Shareholders harmless from, any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation whether commenced or threatened) arising out of or based upon any representation or warranty of the Subscriber contained herein Or in any document furnished by the Subscriber to the Company in connection herewith being untrue in any material respect or any breath or failure by the Subscriber to comply with any covenant or agreement made, by the Subscriber to the Company in connection therewith;

 

 

  

5

  

 

	
(p)  

	
the Subscriber is not aware orally advertisement of any of the Securities and is not acquiring the Securities as a result of any form of general solicitation or general advertising including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; and

	
(q)  

	
no person has made to the Subscriber any written or oral representations:

	
(i)  

	
that any person will resell or repurchase any of the Securities,

	
(ii)  

	
that any person will refund the purchase price of any of the Securities,

	
(iii)  

	
as to the future price or value of any of the Securities, or

	
(iv)  

	
that any of the Securities will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the Securities on any stock exchange or automated dealer quotation system, except that the shares of common stock of Pubco shall be quoted on the Over-The-Counter Bulletin Board operated by FINRA.

5.2 In this Subscription Agreement the term "U.S. Person- shall have the meaning ascribed thereto in Regulation S.

6. Representations anti Warranties will be Relied Upon by the Company

6.1 The Subscriber acknowledges that the representations and warranties contained herein are made by it with the intention that such representations and warranties may be relied upon by the Company and its legal counsel in determining the Subscriber's eligibility to purchase the Securities under applicable securities legislation. The Subscriber further agrees that by accepting delivery of the certificates representing the Securities, it will be representing and warranting that the representations and warranties contained herein are true and correct as at the Closing Date with the same force and effect as if they had been made by the Subscriber on the date of this Subscription Agreement and that they will survive the purchase by the Subscriber of the Securities and will continue in fall force and effect notwithstanding any subsequent disposition by the Subscriber thereof.

7. Resale Restrictions

7.1 The Subscriber acknowledges that any resale of any of the Securities will be subject to resale restrictions contained in the securities legislation applicable to each Subscriber or proposed transferee. The Subscriber acknowledges that the Securities have not been registered under the 1933 Act or the securities laws of any State of the United States and that none Of the Securities may be offered or sold in the United States unless registered in accordance with United States federal securities laws and all applicable state securities laws or exemptions from such registration requirements are available.

7.2 The Subscriber acknowledges that restrictions on the transfer sale or other subsequent disposition of the Securities by the Subscriber may be imposed by securities laws in addition to any restrictions referred to in Section 7.1 above, and, in particular, the Subscriber acknowledges and agrees that none of the Securities may be offered or sold to a U.S. Person or for the account or benefit of a U.S. Person (other than a distributor) prior to the end of the Distribution Compliance Period.

  

6

  

8. Legending of Subject Securities

8.1 The Subscriber hereby acknowledges that that upon the issuance thereof, and until such time as the same is no longer required under the applicable securities laws and regulations, the certificates representing any of the Securities will bear a legend in substantially the following form:

“THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933. AS AMENDED (THE "1933 ACT"). ACCORDINGLY, NONE OF THE SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED. NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR, DIRECTLY OR, INDIRECTLY TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.”

8.2 The Subscriber hereby acknowledges and agrees to the Company making a notation on its records or giving instructions to the registrar and transfer agent of the Company in order to implement the restrictions on transfer set forth and described in this Subscription Agreement.

9. Costs

9.1 The Subscriber acknowledges and agrees that all costs and expenses incurred by the Subscriber (including any fees and disbursements of any special counsel retained by the Subscriber) relating to the purchase of the Securities shall be borne by the Company.

10. Governing Law

10.1 This Subscription Agreement is governed by the laws of the State of Nevada and the laws applicable therein.

11 Survival

11.1 This Subscription Agreement, including without limitation the representations, warranties and covenants contained herein, shall survive and continue in full force and effect and be binding upon the parties hereto notwithstanding the completion of the purchase of the Securities by the Subscriber pursuant hereto.

12. Assignment

12.1 This Subscription Agreement is not transferable or assignable.

13.  Severability

13.1 The invalidity or unenforceability of any particular provision of this Subscription Agreement shall not affect or limit the validity or enforceability of the remaining previsions of this Subscription Agreement.

14. Notices

14.1 All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication.

  

7

  

15. Counterparts and Electronic Means

5.1 This Subscription Agreement may be executed in any number of counterparts, each of which, when so executed and delivered, shall constitute an original and all of which together shall constitute one instrument. Delivery of an executed copy of this Subscription Agreement by electronic Facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Subscription Agreement as of the date hereinafter set forth.

16. Delivery Instructions

16.1 The Subscriber hereby directs the Company to deliver the Share Certificates issued pursuant to this

Subscription Agreement to:

Address:  12757 – 54 Avenue, Surrey, BC, V3X 1C3

16.2 The Subscriber hereby directs the Company to cause the Series A Shares and Common Shares issued pursuant to this Subscription Agreement to be registered on the books of the Company as follows:

Name:  Westergaard Holding Ltd.

Address:  12757 – 54 Avenue, Surrey, BC, V3X 1C3

16.3 The undersigned hereby acknowledges that it will deliver to the Company all such additional completed forms in respect of the Subscriber's purchase or the Securities as may be required for filing with the appropriate securities commissions and regulatory authorities.

IN WITNESS WHEREOF the Subscriber has duly executed this Subscription Agreement as of the date of acceptance by the Company.

	  	
WESTERGAARD HOLDINGS LTD

	  	  
	 	 
	  	
Per: /s/ Keith Westergaard               

	  	
Name: Keith Westergaard

	  	
Title: President

	  	  
	  	
Address: 12757 – 54 Avenue

	  	
Surrey, BC

	  	
V3X 1C3

 

  

8

  

ACCEPTANCE

The above mentioned Subscription Agreement in respect of the Series A Shares and Common Shares is hereby accepted by DSG TAG Systems Inc.

DATED at Surrey, BC as of the 26th day of September, 2014.

DSG TAG SYSTEMS INC.

 

Per: /s/ Robert Silzer            

Robert Silzer

President and Chief Executive Officer

  

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}]]