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Exhibit 10.32  

	    
	    
	    
	LOAN AGREEMENT
	
    
	
Dated as of September 23, 2004
	

by and among
	

ARC III, L.L.C.,

as Borrower
	

and
	

CITIGROUP GLOBAL MARKETS REALTY CORP.
	

as Lender and as Collateral Agent
	
    
	

    
	

    

   TABLE OF CONTENTS  

	 
	 	 
	 	Page

	ARTICLE I. CERTAIN DEFINITIONS	 	1
	Section 1.1.	 	Definitions	 	1
	
ARTICLE II. GENERAL TERMS	
 	

23
	Section 2.1.	 	The Loan	 	23
	Section 2.2.	 	Use of Proceeds	 	23
	Section 2.3.	 	Security for the Loan	 	23
	Section 2.4.	 	Borrower's Note	 	24
	Section 2.5.	 	Principal and Interest	 	24
	Section 2.6.	 	Voluntary Prepayment	 	26
	Section 2.7.	 	Mandatory Prepayment; Capital Events; Certain Transfers	 	26
	Section 2.8.	 	Application of Payments After Event of Default	 	27
	Section 2.9.	 	Method and Place of Payment	 	28
	Section 2.10.	 	Taxes	 	28
	Section 2.11.	 	Release of Collateral	 	30
	Section 2.12.	 	Central Cash Management	 	30
	Section 2.13.	 	Reserve Accounts	 	35
	Section 2.14.	 	Additional Provisions Relating to the Pledged Accounts	 	39
	Section 2.15.	 	Security Agreement	 	39
	Section 2.16.	 	Mortgage Recording Taxes	 	41
	
ARTICLE III. CONDITIONS PRECEDENT	
 	

42
	Section 3.1.	 	Conditions Precedent to Closing	 	42
	Section 3.2.	 	Advance Procedure	 	43
	Section 3.3.	 	Conditions Precedent to Advances	 	43
	Section 3.4.	 	Execution and Delivery of Agreement	 	46
	
ARTICLE IV. REPRESENTATIONS AND WARRANTIES	
 	

46
	Section 4.1.	 	Representations and Warranties as to Borrower	 	46
	Section 4.2.	 	Representations and Warranties as to the Mortgaged Property	 	50
	Section 4.3.	 	Survival of Representations	 	53
	
ARTICLE V. AFFIRMATIVE COVENANTS	
 	

53
	Section 5.1.	 	Affirmative Covenants	 	53
	
ARTICLE VI. NEGATIVE COVENANTS	
 	

77
	Section 6.1.	 	Negative Covenants	 	77
	
ARTICLE VII. EVENT OF DEFAULT	
 	

79
	Section 7.1.	 	Event of Default	 	79
	Section 7.2.	 	Remedies	 	81
	Section 7.3.	 	Remedies Cumulative	 	81
	Section 7.4.	 	Default Administration Fee	 	81
	Section 7.5.	 	Curative Advances	 	82
	
ARTICLE VIII. SINGLE-PURPOSE, BANKRUPTCY-REMOTE REPRESENTATIONS, WARRANTIES AND COVENANTS	
 	

82
	Section 8.1.	 	Applicable to Borrower	 	82
	 	 	 	 	 

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ARTICLE IX. MISCELLANEOUS	
 	

86
	Section 9.1.	 	Survival	 	86
	Section 9.2.	 	Lender's Discretion	 	86
	Section 9.3.	 	Governing Law	 	86
	Section 9.4.	 	Modification, Waiver in Writing	 	87
	Section 9.5.	 	Delay Not a Waiver	 	87
	Section 9.6.	 	Notices	 	87
	Section 9.7.	 	TRIAL BY JURY	 	88
	Section 9.8.	 	Headings	 	88
	Section 9.9.	 	Assignment	 	88
	Section 9.10.	 	Severability	 	89
	Section 9.11.	 	Preferences	 	89
	Section 9.12.	 	Waiver of Notice	 	89
	Section 9.13.	 	Failure to Consent	 	89
	Section 9.14.	 	Schedules Incorporated	 	89
	Section 9.15.	 	Offsets, Counterclaims and Defenses	 	89
	Section 9.16.	 	No Joint Venture or Partnership	 	89
	Section 9.17.	 	Waiver of Marshalling of Assets Defense	 	89
	Section 9.18.	 	Waiver of Counterclaim	 	90
	Section 9.19.	 	Conflict; Construction of Documents	 	90
	Section 9.20.	 	Brokers and Financial Advisors	 	90
	Section 9.21.	 	Counterparts	 	90
	Section 9.22.	 	Estoppel Certificates	 	90
	Section 9.23.	 	Payment of Expenses	 	90
	Section 9.24.	 	Non-Recourse	 	91
	
ARTICLE X. THE COLLATERAL AGENT	
 	

93
	Section 10.1.	 	Appointment, Powers and Immunities	 	93
	Section 10.2.	 	Reliance by Collateral Agent	 	93
	Section 10.3.	 	Defaults	 	93
	Section 10.4.	 	Rights as a Lender	 	94
	Section 10.5.	 	Indemnification	 	94
	Section 10.6.	 	Non-Reliance on Collateral Agent and Other Lenders	 	94
	Section 10.7.	 	Failure to Act	 	94
	Section 10.8.	 	Resignation of Collateral Agent	 	95
	Section 10.9.	 	Agency Fee	 	95
	Section 10.10.	 	Consents under Loan Documents	 	95
	Section 10.11.	 	Notices, Reports and Other Communications	 	95
	

SCHEDULES	
 	

 
	1 — Mortgaged Properties as of Closing Date	 	 
	2 — Owned Properties as of Closing Date	 	 
	3 — Addresses for Notices	 	 
	4 — Work Reserve Funding Conditions for Deferred Maintenance Escrow Account	 	 
	5 — Organizational Chart	 	 
	6 — Form of Quarterly Statement	 	 
	7 — Form of Monthly Property Statement	 	 
	8 — Form of Standard Lease as of the Closing Date	 	 
	9 — Mortgaged Properties without Appraisals or Property Condition Assessments	 	 
	10 — Exceptions to Representations and Warranties	 	 

ii

 
 

LOAN AGREEMENT    
    

        THIS LOAN AGREEMENT, made as of September 23, 2004, is between ARC III, L.L.C., a Delaware limited liability company, having an address at 600 Grant Street, Suite
900, Denver, Colorado 80203 ("Borrower") and CITIGROUP GLOBAL MARKETS REALTY CORP., a New York corporation, having an address at 388 Greenwich Street,
11th Floor, New York, New York 10013, in its capacities as a lender and as collateral agent for the Secured Parties (as hereinafter defined) (together with its successors and assigns,
whether one or more, as lender, "Lender", and together with any successor collateral agent appointed pursuant to Article X,
"Collateral Agent"). 

RECITALS  

        WHEREAS, Borrower owns as of the Closing Date the real properties referenced on Schedules 1 and 2 attached hereto and from time to time after the Closing Date,
subject to the terms and conditions of this Agreement, may either sell real properties or, with the prior consent of the Lender, acquire additional real properties; 

        WHEREAS,
Borrower desires from time to time to obtain from Lender loan advances (each, an "Advance" and collectively, the
"Loan") in an aggregate amount at any time outstanding up to the Loan Amount (as hereinafter defined), secured by certain of such real properties, which
real properties when pledged as security for the Loan (including on the Closing Date) shall be referred to herein as the Mortgaged Properties (as hereinafter defined); 

        WHEREAS,
the proceeds of the Advances will be applied by the Borrower and its Affiliates to refinance existing debt, to finance a portion of the acquisition cost of real property, to
make required deposits to the Reserve Accounts (as hereinafter defined), to pay fees and expenses required hereunder and for other general purposes of the Borrower and its Affiliates; 

        WHEREAS,
Lender is unwilling to make the Loan unless Borrower executes and delivers this Agreement, the Note and the Loan Documents (each as hereinafter defined) to which it is a party
which shall establish the terms and conditions of, and provide security for, the Loan; and 

        WHEREAS,
Borrower has agreed to establish certain accounts and to grant to Collateral Agent, a security interest therein upon the terms and conditions of the security agreement set forth
in Section 2.15. 

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

ARTICLE I.

CERTAIN DEFINITIONS  

        Section 1.1.    Definitions.    For all purposes of this Agreement: (1) the capitalized terms defined in
this Article 1 have the meanings assigned to them in this Article 1 and include the plural as well as the singular; (2) all
accounting terms have the meanings assigned to them in accordance with GAAP (as hereinafter defined); (3) the words "herein", "hereof", and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular Article, Section, or other subdivision; and (4) the following terms have the following meanings: 

        "Account Collateral" has the meaning set forth in Section 2.15(a) hereof. 

        "Accounts" means all accounts (as defined in the relevant UCC), now owned or hereafter acquired by Borrower, and arising out of or in
connection with, the operation of the Mortgaged Property and all other accounts described in the Management Agreement and all present and future accounts receivable, inventory accounts, chattel paper,
notes, insurance policies, Instruments, Documents or other rights to payment and all forms of obligations owing at any time to Borrower thereunder, whether now existing or hereafter created or
otherwise acquired by or on behalf of Borrower, and all Proceeds thereof and all liens, security interests, guaranties, remedies, privileges and other rights 

 

pertaining
thereto, and all rights and remedies of any kind forming the subject matter of any of the foregoing. 

        "Advance" has the meaning provided in the Recitals hereto. 

        "Advance Date" means the Closing Date and any other Business Day on which Lender makes an Advance to Borrower in accordance with the
procedure set forth in Article III. 

        "Advance Fee" means an amount equal to 0.5% of the principal amount of each Advance, payable on each related Advance Date. 

        "Affiliate" of any specified Person means any other Person (i) controlling or controlled by or under common control with such
specified Person; (ii) directly or indirectly owning or holding ten percent (10%) or more of any equity interest in the first Person; or (iii) ten percent (10%) or more of whose equity
interests are directly or indirectly owned or held by the first Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting securities or other beneficial interests, by contract or otherwise; and the terms "controlling"
and "controlled" have the meanings correlative to the foregoing. 

        "Aggregate Remaining Swap Payment" means, as of any date of calculation, the product of (1) the Estimated Monthly Swap Payment and
(2) the number of full calendar months remaining through March, 2006 (e.g. during September 2004, such number equals 18; during October 2004, such number equals 17, etc.). 

        "Agreement" means this Loan Agreement, together with the Schedules and Exhibits hereto, as the same may from time to time hereafter be
modified, supplemented or amended. 

        "Appraisal" means each appraisal with respect to an individual Mortgaged Property prepared by an Appraiser in accordance with the Uniform
Standards of Professional Appraisal Practice of the Appraisal Foundation, in compliance with the requirements of Title 11 of the Financial Institution Reform, Recovery and Enforcement Act and
utilizing customary valuation methods such as the income, sales/market or cost approaches. 

        "Appraiser" means a nationally recognized MAI appraiser selected by Borrower and reasonably approved by Lender. 

        "Approved Capital Expenditures" has the meaning set forth in Section 2.13(a)(iii)
hereof. 

        "Assignment of Rents and Leases" means, with respect to the Mortgaged Property, an Assignment of Rents and Leases (and, if there are more
than one, each and every one of them), dated as of the
applicable Advance Date, granted by Borrower to Collateral Agent with respect to the Leases, as same may thereafter from time to time be supplemented, amended, modified or extended. 

        "Assumed Loan Debt Service" means the product of the Market Constant and the Principal Indebtedness. 

        "Basic Carrying Costs" means the following costs with respect to the Mortgaged Property: (i) Impositions and (ii) insurance
premiums for policies of insurance required to be maintained by Borrower pursuant to this Agreement or the other Loan Documents. 

        "Borrower" has the meaning provided in the first paragraph of this Agreement. 

        "Borrower Release Price Contribution" means, with respect to a Capital Event of an individual Mortgaged Property, the amount required to
be deposited into the Collection Account if the Release Price for such individual Mortgaged Property shall be greater than the Capital Event Proceeds received in connection with such Capital Event,
which amount shall be equal to the difference between such Release Price and such Capital Event Proceeds. 

2

 

        "Business Day" means any day other than a Saturday, a Sunday or a day on which commercial banks in the State of New York are authorized or
obligated by law, governmental decree or executive order to be closed. When used with respect to an Interest Determination Date, "Business Day" shall
mean any day other than a Saturday, a Sunday or a day on which banks in London, England are closed for interbank or foreign exchange transactions. 

        "Capital Event" means any transfer, sale, assignment, conveyance, liquidation, disposition (other than a Taking) or refinancing of all or
any portion of a Mortgaged Property or any interest therein and "Capital Events" shall have a meaning correlative to the foregoing;  provided, that the
granting of an easement that benefits any Mortgaged Property shall not constitute a Capital Event for purposes of this Agreement. 

        "Capital Event Proceeds" means any cash proceeds of a Capital Event received by Borrower net of any cash prorations, adjustments and
credits with respect to such Capital Event and net of reasonable third-party expenses paid in connection with such Capital Event. 

        "Capital Improvement Costs" means costs incurred or to be incurred in connection with replacements and capital repairs made to the
Mortgaged Property which would be capitalized in accordance with GAAP. 

        "CERCLA" has the meaning set forth in Section 5.1(d)(i) hereof. 

        "Chattel Paper" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under all "chattel
paper" as defined in the UCC (whether tangible chattel paper or electronic chattel paper). 

        "Closing Date" means the date on which this Agreement shall become effective pursuant to Section 3.1, such date being the date of
this Agreement. 

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

        "Collateral" means, collectively, the Land, Improvements, Leases, Rents, Personalty, and all Proceeds, and (to the full extent assignable)
Permits, which is or hereafter may become subject to a Lien in favor of Collateral Agent for the benefit of the Secured Parties (whether pursuant to the Mortgages, any other Loan Document or
otherwise), all whether now owned or hereafter acquired and all other property which is or hereafter may become subject to a Lien in favor of Collateral Agent for the benefit of the Secured Parties
and including all property of any kind described as part of the Mortgaged Property under any of the Mortgages. 

        "Collateral Security Instrument" means any right, document or instrument, other than the Mortgages, given as security for the Loan,
including, without limitation, the Contract Assignment and the Pledge Agreement. 

        "Collection Account" has the meaning set forth in Section 2.12(a) hereof. 

        "Collection Account Agreement" means the Collection Account Agreement, dated as of the applicable date and executed by Borrower,
Collateral Agent and the Collection Account Bank, relating to the Collection Account and the Reserve Accounts and any other accounts maintained with the Collection Account Bank. 

        "Collection Account Bank" means LaSalle Bank National Association, or any successor financial institution appointed by Lender. 

        "Collection Period" means, with respect to any Payment Date, the period commencing on and including the eleventh (11th) day in the month
preceding the month in which such Payment Date 

3

 

occurs
through and including the tenth (10th) day in the month in which such Payment Date occurs; provided,  however, that in the case of the first Payment Date,
the "Collection Period" shall commence on the
Closing Date. 

        "Commitment" means the Commitment dated August 12, 2004 entered into by Affordable Residential Communities LP, and Citigroup Global
Markets Realty Corp. with respect to the Loan. 

        "Condemnation Proceeds" means, in the event of a Taking with respect to the Mortgaged Property, the proceeds in respect of such Taking
less any reasonable third party out-of-pocket expenses incurred in prosecuting the claim for and otherwise collecting such proceeds. 

        "Contest" has the meaning set forth in Section 9.24(D)(1) hereof. 

        "Contingent Obligation" means, as used in the definition of Other Borrowings, without duplication, any obligation of Borrower guaranteeing
any indebtedness, leases, dividends or other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly. Without limiting the generality of the foregoing, the term "Contingent
Obligation" shall include any obligation of Borrower: 

          (i)  to
purchase any such primary obligation or any property constituting direct or indirect security therefor; 

         (ii)  to
advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the
primary obligor; 

        (iii)  to
purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation; or 

        (iv)  otherwise
to assure or hold harmless the holder of such primary obligation against loss in respect thereof. 

The
amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming Borrower is required to perform thereunder) as determined by Lender in good faith. 

        "Contract Assignment" means, with respect to the Mortgaged Property, the Assignment of Contracts, Licenses, Permits, Agreements,
Warranties and Approvals, dated as of the applicable Advance Date and executed by Borrower. 

        "Contracts" means the Management Agreement and all other agreements to which Borrower is a party or which are assigned to Borrower by the
Manager in the Management Agreement and which are executed in connection with the construction, operation and management of the Mortgaged Property (including, without limitation, agreements for the
sale, lease or exchange of goods or other property and/or the performance of services by it, in each case whether now in existence or hereafter arising or acquired) as any such agreements have been or
may be from time to time amended, supplemented or otherwise modified. 

        "Debt Service Coverage Ratio" means, as of any date of calculation with respect to the Mortgaged Property, the quotient expressed to two
decimal places of the Underwritten Net Cash Flow divided by the Assumed Loan Debt Service. 

        "Debt Service Coverage Test" means as of any date of calculation, a test which shall be satisfied if the Underwritten Net Cash Flow is at
least equal to the product of 1.20 (for purposes of funding Advances and the calculation of the Release Price) or 1.55 (for purposes of funding Reserve Accounts) and, in each of the foregoing cases,
the Assumed Loan Debt Service; provided, that at any time the 

4

 

Diversity
Test is not satisfied, the Debt Service Coverage Test shall be satisfied for any of the foregoing purposes and for purposes of  Section 2.7(b) of this Agreement only if the Underwritten Net Cash
Flow is at least equal to the product of 2.25 and the Assumed Loan Debt
Service. 

        "Debt Service Reserve Account" has the meaning set forth in Section 2.13(c). 

        "Deed of Trust Trustee" means the trustee under any Mortgage that constitutes a "deed of trust" under applicable law. 

        "Default" means the occurrence of any event which, but for the giving of notice or the passage of time, or both, would be an Event of
Default. 

        "Default Administration Fee" means an amount equal to the product of (x) 1% and (y) the Principal Indebtedness as of the
date the Default Administration Fee becomes payable; provided, that any Exit Fee paid by the Borrower shall be credited against the Borrower's
obligation to pay the Default Administration Fee. 

        "Default Rate" means the per annum interest rate equal to the lesser of (a) 5.0% per annum in excess of the rate otherwise
applicable hereunder and (b) the maximum rate allowable by applicable law. 

        "Deferred Maintenance Escrow Account" has the meaning set forth in Section 2.13(a). 

        "Deposit Account" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under all
"deposit accounts" as defined in the UCC. 

        "Disclosure Certificate" has the meaning set forth in Section 5.1(w) hereof. 

        "Disclosure Documents" has the meaning set forth in Section 5.1(w) hereof. 

        "Diversity Test" means as of any date of calculation, a test which shall be satisfied so long as (x) the Underwritten Net Cash Flow
of the Mortgaged Property with the single largest Underwritten Net Cash Flow does not exceed 35% of the aggregate Underwritten Net Cash Flow of all the Mortgaged Properties, (y) the
Underwritten Net Cash Flow of the Mortgaged Properties with the three largest Underwritten Net Cash Flows does not exceed 65% of the aggregate Underwritten Net Cash Flow of all the Mortgaged
Properties and (z) the aggregate Underwritten Net Cash Flow of the Mortgaged Properties located in the single largest market concentration (where market concentration is defined to mean a five
mile radius around any Mortgaged Property) does not exceed 50% of the aggregate Underwritten Net Cash Flow of all the Mortgaged Properties (i.e. if any of clause (x), (y) or
(z) is not satisfied, the Diversity Test is not satisfied). 

        "Documents" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under all "documents"
as defined in the UCC (whether negotiable or non-negotiable) or other receipts covering, evidencing or representing goods. 

        "EO13224" has the meaning set forth in Section 4.1(v) hereof. 

        "Eligible Account" means a separate and identifiable account from all other funds held by the holding institution, which account is either
(i) an account maintained with a federal or state chartered depository institution or trust company that (A) satisfies the Rating Criteria and (B) insures the deposits made to
such account through the Federal Deposit Insurance Corporation, or (ii) a segregated trust account maintained with the corporate trust department of a federal or state chartered depository
institution or trust company subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulations Section 9.10(b) which, in either case, has
corporate trust powers, acting in its fiduciary capacity and in either case having combined capital and surplus of at least $100,000,000 or otherwise acceptable to the Lender. An Eligible Account
shall not be evidenced by a certificate of deposit, passbook, other instrument or any other physical indicia of ownership. Following 

5

 

a
downgrade below the Rating Criteria, withdrawal, qualification or suspension of such institution's rating, each account must at Lender's request promptly (and in any case within not more than thirty
(30) calendar days) be moved to a qualifying institution or to one or more segregated trust accounts in the trust department of such institution, if permitted. 

        "Engineer" means an Independent Engineer selected by Borrower and reasonably approved by Lender. 

        "Environmental Auditor" means an Independent environmental auditor selected by Borrower and reasonably approved by Lender. 

        "Environmental Claim" means any notice, notification, request for information, claim, administrative, regulatory or judicial action, suit,
judgment, demand or other written communication (whether written or oral) by any Person or Governmental Authority alleging or asserting liability with respect to Borrower or any Mortgaged Property
(whether for damages, contribution, indemnification, cost recovery, compensation, injunctive relief, investigatory, response, remedial or cleanup costs, damages to natural resources, personal
injuries, fines or penalties) arising out of, based on or resulting from (i) the presence, Use or Release into the environment of any Hazardous Substance at any location (whether or not owned,
managed or operated by Borrower) that affects Borrower or any Mortgaged Property, (ii) any fact, circumstance, condition or occurrence forming the basis of any violation, or alleged
violation, of any Environmental Law or (iii) any alleged injury or threat of injury to human health, safety or the environment. 

        "Environmental Indemnity Agreement" means the Environmental Indemnity Agreement dated as of the Closing Date, from Borrower and the
Guarantor, collectively, as indemnitor, to Lender, as indemnitee, as the same may be amended, modified or supplemented from time to time. 

        "Environmental Laws" means any and all present and future federal, state or local laws, statutes, ordinances, rules or regulations, or any
judicial interpretation thereof, any judicial or administrative orders, decrees or judgments thereunder issued by a Governmental Authority, and any permits, approvals, licenses, registrations, filings
and authorizations, in each case as now or hereafter in effect, relating to the environment, human health or safety, or the Release or threatened Release of Hazardous Substances or otherwise relating
to the Use of Hazardous Substances. 

        "Environmental Reports" means each and every "Phase I Environmental Site Assessment" (and, if applicable, "Phase II Environment Site
Assessment") as referred to in the ASTM Standards on Environmental Site Assessments for Commercial Real Estate, E 1527-2000 and an asbestos survey, with respect to each Mortgaged Property,
prepared by one or more Environmental Auditors and delivered to Lender and any amendments or supplements thereto delivered to Lender. 

        "Equipment" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under (i) all
"equipment" as defined in the UCC, and (ii) all of the following (regardless of how classified under the UCC): all building materials, construction materials, personal property constituting
furniture, fittings, appliances, apparatus, leasehold improvements, machinery, devices, interior improvements, appurtenances, equipment, plant, furnishings, fixtures, computers, electronic data
processing equipment, telecommunications equipment and other fixed assets now owned or hereafter acquired by Borrower, and all Proceeds of (i) and (ii) as well as all additions to,
substitutions for, replacements of or accessions to any of the items recited as aforesaid and all attachments, components, parts (including spare parts) and accessories, whether installed thereon or
affixed thereto, all regardless of whether the same are located on any Mortgaged Property or are located elsewhere (including, without limitation, in warehouses or other storage facilities or in the
possession of or on the premises of a bailee, vendor or manufacturer) for purposes of manufacture, storage, fabrication or transportation and all extensions and replacements to, and proceeds of, any
of the foregoing. 

6

 

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated
thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and, as of the relevant date, any subsequent provisions of ERISA, amendatory thereof, supplemental
thereto or substituted therefor. 

        "ERISA Affiliate" means any corporation or trade or business that is a member of any group of organizations (i) described in
Section 414(b) or (c) of the Code of which Borrower is a member and (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which Borrower is a member. 

        "Estimated Monthly Swap Payment" means, as of any date of calculation, an amount equal to one-twelfth (1/12th)
of the product of (i) 2.055% minus the lesser of (a) 1.50% and (b) the then current LIBOR and (ii) the notional amount of the Interest Rate Swap. 

        "Event of Default" has the meaning set forth in Section 7.1 hereof. 

        "Exit Fee" means 0.50% of the outstanding Principal Indebtedness prepaid or repaid at any time (including the Maturity Date);  provided, however, that notwithstanding the foregoing, in the event the initial Lender or an Affiliate
of the initial Lender provides the funds for a refinancing, then the Exit Fee shall be credited to the origination fee payable to the Lender in connection therewith, unless the refinancing occurs in
connection with a conveyance of the Mortgaged Property to a newly-formed joint venture entity in which the Guarantor maintains an ownership interest in which case the Exit Fee shall be waived. 

        "Expense Deposit" means $75,000. 

        "Fiscal Year" means the 12-month period ending on December 31st of each year (or, in the case of the first fiscal year,
such shorter period from the Closing Date through such date) or such other fiscal year of Borrower as Borrower may select from time to time with the prior consent of Lender. 

        "Fitch" means Fitch, Inc. and its successors. 

        "Foreign Lender" has the meaning set forth in Section 2.10(b) hereof. 

        "Fund" has the meaning set forth in the definition of "Permitted Investments". 

        "Funding Losses" has the meaning set forth in Section 2.5(e) hereof. 

        "Funding Party" means any bank or other entity, if any, which is indirectly or directly funding Lender with respect to the Loan, in whole
or in part, including, without limitation, any direct assignee of the Loan (but excluding any investors in any securities issued in connection with a Secondary Market Transaction with respect to the
Loan). 

        "GAAP" means generally accepted accounting principles in the United States of America as of the date of the applicable financial report,
consistently applied. 

        "General Intangibles" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under
(i) all "general intangibles" as defined in the relevant UCC, now owned or hereafter acquired by Borrower and (ii) all of the following (regardless of how characterized): all agreements,
covenants, restrictions or encumbrances affecting the Mortgaged Property or any part thereof. 

        "Governmental Authority" means any nation or government, any state, county, municipality or other political subdivision thereof or any
governmental body, agency, authority, department or commission (including, without limitation, any taxing authority) or any instrumentality or officer of any of the foregoing (including, without
limitation, any court or tribunal) exercising executive, legislative, judicial, 

7

 

regulatory
or administrative functions of or pertaining to government and any corporation, partnership or other entity directly or indirectly owned or controlled by the foregoing. 

        "Gross Revenue" means, for any period, the total dollar amount of all income and receipts received by, or for the account of, Borrower in
the ordinary course of business with respect to the Mortgaged Property, but excluding Loss Proceeds (other than the proceeds of business interruption insurance or the proceeds of a temporary Taking in
lieu of Rents which shall be included in Gross Revenue). 

        "Guarantor" means Affordable Residential Communities LP, a Delaware limited partnership. 

        "Guaranty of Nonrecourse Obligations" means, with respect to the Loan, the Guaranty of Nonrecourse Obligations guaranteeing the exceptions
to the nonrecourse provisions of the Loan Documents for which liability is retained as described in Section 9.24 hereof from the Guarantor to
Lender. 

        "Hazardous Substance" means, collectively, (i) any petroleum or petroleum products or waste oils, explosives, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), lead in drinking water, lead-based paint and
radon, (ii) any chemicals or other materials or substances which are now or hereafter become defined as or included in the definitions of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", "contaminants", "pollutants" or words of similar import under any Environmental Law and
(iii) any other chemical or any other hazardous material or substance, exposure to which is now or hereafter prohibited, limited or regulated under any Environmental Law. 

        "Hedge Agreement" means that certain ISDA Master Agreement, dated as of February 19, 2004, between Hedge Bank and Guarantor, as
amended by Amendment Agreement No. 1, dated as of September    , 2004, between Hedge Bank and Guarantor. 

        "Hedge Bank" means Citigroup Financial Products Inc. 

        "Homesites" means, with respect to each Mortgaged Property, the manufactured housing sites located thereon which are capable of being
leased to a Person to accommodate a manufactured or mobile home, the number of each of which is set forth on Schedules 1 and 2 attached hereto, as such number may be updated from time to time with the
mutual written agreement of Lender and Borrower. Such schedule shall include a breakdown of manufactured housing sites that are capable of accommodating single and double wide manufactured homes, to
the extent such information is reasonably available to the Borrower. 

        "Immediate Repairs" has the meaning set forth in Section 2.13(a)(ii) hereof. 

        "Impositions" means all taxes (including, without limitation, all real estate, ad valorem, sales (including those imposed on lease
rentals), use, single business, gross receipts, value added, intangible transaction privilege, privilege or license or similar taxes), assessments (including, without limitation, all assessments for
public improvements or benefits, whether or not commenced or completed within the term of the Loan), ground rents, water, sewer or other rents and charges, excises, levies, governmental fees
(including, without limitation, license, permit, inspection, authorization and similar fees), and all other governmental charges, in each case whether general or special, ordinary or extraordinary,
foreseen or unforeseen, in respect of each Mortgaged Property (including all interest and penalties thereon), accruing during or in respect of the term hereof and which may be assessed against or
imposed on or in respect of or be a Lien upon (1) Borrower (including, without limitation, all income, franchise, single business or other taxes imposed on Borrower for the privilege of doing
business in the jurisdiction in which each Mortgaged Property, or any other collateral delivered or pledged to Lender in connection with the Loan, is located) or Lender, or (2) any Mortgaged
Property, or any other collateral delivered or pledged to Lender in connection with the Loan, or any part thereof or any 

8

 

Rents
therefrom or any estate, right, title or interest therein, or (3) any occupancy, operation, use or possession of, or sales from, or activity conducted on, or in connection with any
Mortgaged Property or the leasing or use of any Mortgaged Property or any part thereof, or the acquisition or financing of the acquisition of any Mortgaged Property by Borrower. 

        "Improvements" means all buildings, structures, fixtures and improvements now or hereafter owned by Borrower of every nature whatsoever
situated on any Land constituting part of the Mortgaged Property (including, without limitation, all gas and electric fixtures, radiators, heaters, engines and machinery, boilers, ranges, elevators
and motors, plumbing and heating fixtures, carpeting and other floor coverings, water heaters, awnings and storm sashes, and cleaning apparatus which are or shall be affixed to the Land or said
buildings, structures or improvements and including any additions, enlargements, extensions, modifications, repairs or replacements thereto). 

        "Indebtedness" means the Principal Indebtedness, together with all other obligations and liabilities due or to become due to a Secured
Party pursuant hereto, under the Note or in accordance with any of the other Loan Documents, and all other amounts, sums and expenses paid by or payable to a Secured Party hereunder or pursuant to the
Note or any of the other Loan Documents or the Hedge Agreement. 

        "Indemnified Parties" has the meaning set forth in Section 5.1(i). 

        "Independent" means, when used with respect to any Person, a Person that (i) does not have any direct financial interest or any
material indirect financial interest in Borrower or in any Affiliate of Borrower, (ii) is not connected with Borrower or any Affiliate of Borrower as an officer, employee, trustee, partner,
director or person performing similar functions, and (iii) is not a member of the immediate family of any Person described in clauses (i) or (ii). 

        "Independent Manager" has the meaning set forth in Section 8.1(ee). 

        "Index Maturity" has the meaning set forth in the definition of LIBOR. 

        "Instruments" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under all
"instruments" as defined in the UCC. 

        "Insurance Escrow Account" has the meaning set forth in Section 2.13(b). 

        "Insurance Premiums" has the meaning set forth in Section 5.1(x)(iii). 

        "Insurance Proceeds" means, in the event of a casualty with respect to the Mortgaged Property, the proceeds received under any insurance
policy applicable thereto. 

        "Insurance Requirements" means all material terms of any insurance policy required pursuant to this Agreement or any of the Mortgages and
all material regulations, rules and other requirements of the National Board of Fire Underwriters or such other body exercising similar functions applicable to or affecting the Mortgaged Property or
any part thereof or any use or condition thereof. 

        "Insured Casualty" has the meaning set forth in Section 5.1(x)(iv)(B). 

        "Intellectual Property" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under the
trademark licenses, trademarks, rights in intellectual property, trade names, service marks and copyrights, copyright licenses, patents, patent licenses or the license to use intellectual property
such as computer software owned or licensed by Borrower or other proprietary business information relating to Borrower's policies, procedures, manuals and trade secrets. 

        "Interest Accrual Period" means, in connection with the calculation of interest accrued with respect to any Payment Date, the period
commencing on and including the eleventh (11th) day in the month preceding the month in which such Payment Date occurs through and including the tenth (10th) day in 

9

 

the
month in which such Payment Date occurs; provided, however, that the first Interest Accrual Period
for each Advance shall commence on the related Advance Date. 

        "Interest Determination Date" means, in connection with the calculation of interest to accrue for any Interest Accrual Period, the second
Business Day preceding the fifteenth (15th) day of the month in which such Interest Accrual Period commences; provided,  however, that the first Interest
Determination Date for the Loan shall be the second Business Day preceding the Closing Date. 

        "Interested Parties" has the meaning set forth in Section 5.1(w) hereof. 

        "Inventory" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under all "inventory"
as defined in the UCC and shall include all Documents representing the same. 

        "Investment Property" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under all
"investment property" as defined in the UCC. 

        "IRS" has the meaning provided in Section 2.10(b) hereof. 

        "Land" means the parcels of real estate described on Exhibit A attached to the
Mortgages and made a part hereof. 

        "Leases" means all leases, subleases, lettings, occupancy agreements, tenancies and licenses by Borrower as landlord of the Mortgaged
Property or any part thereof now or hereafter entered into, and all amendments, extensions, renewals and guarantees thereof, and all security therefor. 

        "Leasing Commissions" means leasing commissions incurred by Borrower in connection with leasing any Mortgaged Property or any portion
thereof (including renewals of existing Leases). 

        "Legal Requirements" means all governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities (including, without limitation, any of the foregoing relating to zoning, parking or land use, any and all Environmental Laws and the Americans with Disabilities Act) affecting
Borrower or any Mortgaged Property or any part thereof or the construction, use, alteration or operation thereof, or any part thereof (whether now or hereafter enacted and in force), and all permits,
licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, at any time in force affecting the Mortgaged
Property or any part thereof or any utility services or septic systems or other infrastructure serving any portion of the Mortgaged Property (including, without limitation, any which may
(i) require repairs, modifications or alterations in or to the Mortgaged Property or any part thereof or any utility services or septic systems or other infrastructure serving any portion of
the Mortgaged Property, or (ii) in any way limit the use and enjoyment thereof). 

        "Lender" has the meaning provided in the first paragraph of this Agreement. 

        "Lender's Terms" has the meaning provided in Section 5.1(v). 

        "Letter of Credit Rights" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under all
"letter of credit rights" as defined in the UCC. 

        "LIBOR" means the rate per annum calculated as set forth below: 

          (i)  On
each Interest Determination Date, LIBOR will be determined on the basis of the offered rate for deposits of not less than U.S. $1,000,000 for a period of one month
(the "Index Maturity"), commencing on such Interest Determination Date, which appears on Dow Jones Market Service (formerly Telerate) Page 3750 as of
11:00 a.m., London time (or such other page as may replace the Dow Jones Market Service (formerly Telerate) Page on that service for the purposes of displaying London interbank offered rates of
major banks). If no such offered rate 

10

 

appears,
LIBOR with respect to the relevant Interest Accrual Period will be determined as described in (ii) below. 

         (ii)  With
respect to an Interest Determination Date on which no such offered rate appears on Dow Jones Market Service (formerly Telerate) Page 3750 as described in
(i) above, LIBOR shall be the arithmetic mean, expressed as a percentage, of the offered rates for deposits in U.S. dollars for the Index Maturity which appears on the Reuters Screen LIBO Page
as of 11:00 a.m., London time, on such date. If, in turn, such rate is not displayed on the Reuters Screen LIBO Page at such time, then
LIBOR for such date will be obtained from the preceding Business Day for which the Reuters Screen LIBO Page displayed a rate for the Index Maturity. 

        (iii)  If
on any Interest Determination Date, Lender is required but unable to determine LIBOR in the manner provided in paragraphs (i) and (ii) above, LIBOR
for the next Interest Accrual Period shall be the rate at which U.S. dollar deposits approximately equal to the principal amount of the Loan having a 30-day term are offered by the
principal London office of a leading "money center" bank active in the London interbank market for U.S. dollar deposits, as determined by Lender in its sole discretion, in immediately available funds
in the London interbank market on the Determination Date. LIBOR for any Interest Accrual Period shall be adjusted from time to time, by increasing the rate thereof to compensate Lender and any Funding
Party for any aggregate reserve requirements (including, without limitation, all basic, supplemental, marginal and other reserve requirements and taking into account any transitional adjustments or
other scheduled changes in reserve requirements during any Interest Accrual Period) which are required to be maintained by Lender or such Funding Party with respect to "Eurocurrency liabilities" (as
presently defined in Regulation D of the Board of Governors of the Federal Reserve System) of the same term under Regulation D, or any other regulations of a Governmental Authority
having jurisdiction over Lender or such Funding Party of similar effect. Notwithstanding the foregoing, if the interest rate for Lender or any Funding Party shall be increased in respect of reserve
requirements as provided in the immediately preceding sentence, Lender or such Funding Party shall promptly notify Borrower in writing upon becoming aware that Borrower may be required to make the
foregoing compensation to Lender or such Funding Party. Lender or any Funding Party that gives notice as provided herein shall promptly withdraw such notice (by notice to Borrower) whenever Lender or
such Funding Party is no longer required to maintain such reserves or the circumstances giving rise to such notice shall otherwise cease. Notwithstanding the foregoing, Borrower shall not be required
to pay any increased amounts required by the third sentence of this definition to the extent that Lender or the relevant Funding Party shall be compensated or reimbursed hereunder for such amounts.
The establishment of the LIBOR on each Interest Determination Date by Lender and Lender's calculation of the rate of interest applicable to the Note shall (in the absence of manifest error) be final
and binding. 

All
percentages resulting from any calculations of LIBOR referred to in this Agreement will be carried out to five decimal places and all U.S. dollar amounts used in or resulting from such
calculations will be rounded upwards to the nearest cent. 

        "Lien" means any mortgage, deed of trust, lien (statutory or other), pledge, hypothecation, assignment, security interest, or any other
encumbrance or charge on or affecting Borrower or any Mortgaged Property or any portion thereof, or any interest therein (including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as any of the foregoing, and mechanic's, materialmen's and other similar liens and encumbrances). 

        "Lien Claims" has the meaning set forth in Section 5.1(b)(1). 

        "Loan" means the loan made by Lender to Borrower pursuant to the terms of this Agreement. 

11

   
        "Loan Amount" means an amount up to $85,000,000. 

        "Loan Documents" means this Agreement, the Note, the Contract Assignment, the Management Agreement, the Manager's Subordination, the
Mortgages, the Assignments of Rents and Leases, the Pledge Agreement, the Environmental Indemnity Agreement, the Guaranty of Non-Recourse Obligations, the Hedge Agreement and all other
agreements, instruments, certificates and documents delivered by or on behalf of Borrower or an Affiliate of Borrower to evidence or secure the Loan as same may be amended or modified from time to
time. 

        "Local Collection Account" and "Local Collection Account Bank" have the meanings set forth
in Section 2.12(a). 

        "Local Collection Account Agreement" means with respect to the Local Collection Account, the lockbox agreement, dated as of the applicable
date and executed by Borrower, Collateral Agent and the Local Collection Account Bank. 

        "Loss Proceeds" means Condemnation Proceeds and/or Insurance Proceeds. 

        "Loss Proceeds Account" has the meaning set forth in Section 2.12(f) hereof. 

        "Losses" has the meaning set forth in Section 5.1(j). 

        "Management Agreement" means with respect to any Mortgaged Property, the property management agreement entered into between Borrower and
the Manager, in such form as may be reasonably approved by Lender, as such agreement may be amended, modified or supplemented in accordance with the terms and conditions hereof from time to time, and
any management agreement which may hereafter be entered into with respect to any Mortgaged Property in accordance with the terms and conditions hereof, as the same may be amended, modified or
supplemented in accordance with the terms and conditions hereof from time to time. 

        "Manager" means ARC Management Services, Inc., a Delaware corporation, the current manager of the Mortgaged Property under the
current Management Agreement, or such other Person as may hereafter be charged with management of any Mortgaged Property pursuant to a Management Agreement entered into in accordance with the terms
and conditions hereof. 

        "Manager's Subordination" means, with respect to each Mortgaged Property, initially the Manager's Consent and Subordination of Management
Agreement, executed by the Manager, Borrower and Lender, dated as of the Closing Date, and in the event a successor or assignee Manager is engaged at any Mortgaged Property, a subordination agreement
executed by Manager, Borrower and Lender in form and substance satisfactory to Lender, whereby, among other things, the Management Agreement is subordinated to the Indebtedness and to the Lien of the
Mortgages so long as the Loan remains outstanding. 

        "Market Constant" means the highest of (a) the current annual interest rate on the Loan adjusted to reflect amortization on a
thirty (30) year schedule, (b) 7.50% and (c) the Treasury Rate plus 150 basis points adjusted to reflect amortization on a thirty (30) year schedule. 

        "Master Homesite Lease Agreement" means, with respect to the Borrower, the Master Homesite Lease Agreement, dated as of September
    , 2004, by and between ARC Housing, LLC (or with respect to any Mortgaged Property located in Texas, ARC Housing TX LP, a Delaware limited partnership) and the Borrower. 

        "Master Lease Deposits" means the security deposits under all of the Master Homesite Lease Agreements. 

        "Master Lease Deposit Account" has the meaning set forth in Section 2.12(a)(i). 

12

 

        "Material Adverse Effect" means a material adverse effect upon (i) the business operations, properties, assets or condition
(financial or otherwise) of Borrower, (ii) the ability of Borrower to perform, or of any Secured Party to enforce, any of the Loan Documents or (iii) the aggregate value of the Mortgaged
Property. 

        "Maturity Date" means the earlier of (a) the Payment Date in September, 2005 or (b) such earlier date on which the entire
Loan is required to be paid in full, by acceleration or otherwise under this Agreement or any of the other Loan Documents. 

        "Maximum LTV" means either (x) if the Hedge Agreement is not outstanding, the test that shall be satisfied if the outstanding
Principal Indebtedness is equal to or less than 65% (for purposes of funding Advances, the calculation of the Release Price and Section 2.7(b) of
this Agreement) or 50% (for purposes of funding Reserve Accounts) of the market value of the Mortgaged Property as determined by the Lender or (y) if the Hedge Agreement is outstanding, the
test that shall be satisfied if the market value of the Mortgaged Property as determined by the Lender is equal to or greater than the quotient of (i) the sum of (a) the outstanding
Principal Indebtedness plus (b) the Aggregate Remaining Swap Payment divided by (ii) 0.65 (i.e. 65%) (for purposes of funding Advances, the calculation of the Release Price and  Section 2.7(b) of this Agreement) or 0.50 (i.e. 50%) (for purposes of funding Reserve Accounts);  provided, that at any time Diversity Test is not satisfied, then each of the foregoing references to 65% shall
be deemed modified to read 50%.
 

        "Maximum Rate" has the meaning set forth in Section 2.5(i) hereof. 

        "Member" means ARC Real Estate Holdings, LLC, a Delaware limited liability company. 

        "Moody's" means Moody's Investors Services, Inc. and its successors. 

        "Money" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under (i) all
"money" as defined in the UCC and (ii) all moneys, cash, or other items of legal tender generated from the use or operation of the Mortgaged Property. 

        "Monthly Property Statement" has the meaning set forth in Section 5.1(r)(v). 

        "Monthly Statement" has the meaning provided in Section 2.12(d). 

        "Mortgage" means, with respect to the Mortgaged Property, a first priority Mortgage or Deed of Trust (as applicable), Assignment of Leases
and Rents, Security Agreement and Fixture Filing, dated as of the applicable Advance Date (and, if there are more than one, each and every one of them), granted by Borrower to or for the benefit of
Collateral Agent or Deed of Trust Trustee for the benefit of Collateral Agent, respectively, with respect to the Mortgaged Property as security for the Loan, as same may thereafter from time to time
be supplemented, amended, modified or extended by one or more agreements supplemental thereto. 

        "Mortgaged Property" means, at any time, individually or collectively, as applicable, the Land, the Improvements, the Personalty, the
Leases and the Rents, and all rights, titles, interests and estates
appurtenant thereto, encumbered by, and more particularly described in, each of the Mortgages. The Mortgaged Property as of the Closing Date is set forth on Schedule 1 attached hereto. On each
Advance Date after the Closing Date, the Borrower and the Lender shall mutually agree on an updated Schedule 1 reflecting the then current Mortgaged Property. 

        "Multiemployer Plan" means a multiemployer plan defined as such in Section 3(37) of ERISA and which is covered by Title IV of ERISA
(i) to which contributions have been, or were required to have been made by Borrower or any ERISA Affiliate within the past six years or (ii) with respect to which Borrower could
reasonably be expected to incur liability. 

        "Net Proceeds" means either (x) the purchase price (at foreclosure or otherwise) actually received by Collateral Agent from a third
party purchaser with respect to any Mortgaged Property, as a result of 

13

 

the
exercise by Collateral Agent of its rights, powers, privileges and other remedies after the occurrence of an Event of Default or (y) in the event that Collateral Agent (or its nominee) is
the purchaser at foreclosure of any Mortgaged Property, the higher of (i) the amount of Collateral Agent's credit bid or (ii) such amount as shall be determined in accordance with
applicable law, and in either case minus all reasonable third party, out of pocket costs and expenses (including, without limitation, all attorneys' fees and disbursements and any brokerage fees, if
applicable) incurred by Collateral Agent (and its nominee, if applicable) in connection with the exercise of such remedies; provided,  however, that such
costs and expenses shall not be deducted to the extent such amounts previously have been added to the Indebtedness in accordance with
the terms of the Loan Documents or applicable law. 

        "Note" means one or more promissory notes made by Borrower to Lender pursuant to this Agreement, as such note may be modified, amended,
supplemented, restated or extended, and any replacement notes therefor. 

        "O&M Program" has the meaning set forth in Section 5.1(d)(iv) hereof. 

        "OFAC" has the meaning set forth in Section 4.1(v) hereof. 

        "Officer's Certificate" means a certificate delivered to Lender by Borrower which is signed by an authorized officer of Borrower. 

        "Operating Budget" means, with respect to any Fiscal Year, the operating budget for the Mortgaged Property reflecting Borrower's
projections of Gross Revenues and Property Expenses for the Mortgaged Property for such Fiscal Year and on an annual and monthly basis and submitted by Borrower to Lender in accordance with the
provisions of Section 5.1(r)(viii), which Operating Budget shall include, as a component thereof, a Working Capital Budget. 

        "Operating Expense Account" has the meaning provided in Section 2.13(c). 

        "Operating Expenses" means, for any period of calculation, all expenditures incurred and required to be expensed under GAAP during such
period in connection with the ownership, operation, maintenance, repair and/or leasing of the Mortgaged Property, including without limitation (or duplication) Property Expenses. Notwithstanding the
foregoing, Operating Expenses shall not include (a) Capital Improvement Costs, (b) any extraordinary items (unless Lender and Borrower approve of the inclusion of such items as Operating
Expenses), (c) depreciation, amortization and other non-cash charges or (d) any payments of principal or interest on the Indebtedness or otherwise payable to the holder of
the Indebtedness. Operating Expenses shall be calculated on the accrual basis of accounting. 

        "Operating Revenues" means, for any period, all regular ongoing income during such period from the operation of the Mortgaged Property
that, in accordance with GAAP, is included in annual financial statements as revenue. Notwithstanding the foregoing, Operating Revenues shall not include (a) any Loss Proceeds (other than
business interruption proceeds or Condemnation Proceeds in connection with a temporary Taking and, in either case, only to the extent allocable to such period or other applicable reporting period),
(b) any proceeds resulting from the sale, exchange, transfer, financing or refinancing of the Mortgaged Property, (c) any Rent attributable to a Lease more than one month prior to the
date on which the actual payment of Rent is required to be made thereunder, (d) any interest income from any source, (e) any proceeds paid to the Collection Account by the interest rate
cap counterparty in connection with the interest rate cap entered into pursuant hereto, or (f) any other extraordinary items as reasonably determined by Lender. Operating Revenues shall be
calculated on the accrual basis of accounting. 

        "Organizational Agreements" means the Fifth Amended and Restated Limited Liability Company Agreement of Borrower, dated as of September
    , 2004, as amended or restated from time to time. 

14

 

        "Other Borrowings" means, with respect to Borrower, without duplication (but not including the Indebtedness) (i) all indebtedness
of Borrower for borrowed money or for the deferred purchase price of property or services, (ii) all indebtedness of Borrower evidenced by a note, bond, debenture or similar instrument,
(iii) the face amount of all letters of credit issued for the account of Borrower and, without duplication, all unreimbursed amounts drawn thereunder, and obligations evidenced by bankers'
acceptances, (iv) all indebtedness of Borrower secured by a Lien on any property owned by
Borrower (whether or not such indebtedness has been assumed), (v) all Contingent Obligations of Borrower, (vi) liabilities and obligations for the payment of money relating to a
capitalized lease obligation or sale/leaseback obligation, (vii) liabilities and obligations representing the balance deferred and unpaid of the purchase price of any property or services,
except those incurred in the ordinary course of Borrower's business that would constitute ordinarily a trade payable to trade creditors, and (viii) all payment obligations of Borrower under any
interest rate protection agreement (including, without limitation, any interest rate swaps, caps, floors, collars or similar agreements) and similar agreements. 

        "Owned Property" means any real property owned by the Borrower from time to time other than the Mortgaged Property. The Owned Property as
of the Closing Date is set forth on Schedule 2 attached hereto. On each Advance Date after the Closing Date, the Borrower and the Lender shall mutually agree on an updated Schedule 2
reflecting the then current Owned Property. 

        "Payment Date" has the meaning provided in Section 2.5(a). 

        "Payment Date Statement" has the meaning provided in Section 2.12(d). 

        "Payment Intangibles" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under all
"payment intangibles" as defined in the UCC. 

        "PBGC" means the Pension Benefit Guaranty Corporation established under ERISA, or any successor thereto. 

        "Permits" means all licenses, permits, variances and certificates required by Legal Requirements to be obtained by Borrower and used in
connection with the ownership, operation, use or occupancy of the Mortgaged Property (including, without limitation, certificates of occupancy, building permits, business licenses, state health
department licenses, licenses to conduct business and all such other permits, licenses and rights, obtained from any Governmental Authority or private Person concerning ownership, operation, use or
occupancy of the Mortgaged Property). 

        "Permitted Encumbrances" means, with respect to the Mortgaged Property, collectively, (i) the Lien created by the related
Mortgages, or any other Loan Documents of record encumbering each Mortgaged Property, (ii) all Liens and other matters disclosed on the Title Insurance Policy concerning each Mortgaged
Property, (iii) Liens, if any, for Impositions imposed by any Governmental Authority not yet delinquent or being contested in good faith and by appropriate proceedings in accordance with  Section 5.1(b)(ii)
 hereof and the related Mortgages, (iv) mechanic's or materialmen's Liens, if any, being contested in good faith and by
appropriate proceedings in accordance with Section 5.1(b)(ii) hereof and the related Mortgages, provided that no foreclosure has been commenced
by the lien claimant, (v) rights of existing and future tenants and residents as tenants only pursuant to Leases, (vi) Liens for public utilities and (vii) claims against
Homesites incurred by tenants or other occupants of the Mortgaged Property which claims, to the extent they affect the Mortgaged Property, are contested in good faith and by appropriate proceedings in
accordance with Section 5.1(b)(ii) hereof, which Liens and encumbrances referred to in clauses (i)-(vii) above do not materially and
adversely affect (1) the ability of Borrower to pay in full the Principal Indebtedness and interest thereon in a timely manner or (2) the use of any Mortgaged Property for the use
currently being made thereof or the operation of any Mortgaged Property as currently being operated. 

15

 

        "Permitted Investments" means any one or more of the following obligations or securities acquired at a purchase price of not greater than
par: 

          (i)   obligations
of, or obligations fully guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality thereof
provided such obligations are backed by the full faith and credit of the United States of America; 

         (ii)   obligations
of the following United States of America government sponsored agencies, provided such obligations are backed by the full faith and credit of
the United States of America: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System (consolidated systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt
obligations), the Federal National Mortgage Association (debt obligations), the Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt obligations); 

        (iii)   federal
funds, unsecured certificates of deposit, time deposits, bankers' acceptances and repurchase agreements with maturities of not more than
365 days of any bank, the short-term obligations of which are rated in the highest short-term rating category by the Rating Agencies; 

        (iv)   certificates
of deposit, time deposits, demand deposits or banker's acceptances issued by any depository institution or trust company incorporated under
the laws of the United States or of any state thereof and subject to supervision and examination by federal and/or state banking authorities, the
short-term obligations of which are rated in the highest short-term rating category by the Rating Agencies, which investments are fully insured by the Federal Deposit Insurance
Corp.; 

         (v)   debt
obligations with maturities of not more than 365 days and rated by the Rating Agencies in its highest long-term unsecured rating
category; 

        (vi)   commercial
paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof) with maturities of not more than 270 days and that is rated by the Rating Agencies in their highest
short-term unsecured debt rating; and 

       (vii)   any
other demand, money market or time deposit, demand obligation or any other obligation, security or investment, which Lender shall have approved in
writing; 

provided, however, that (A) the investments described in clauses (i) through
(vii) above must have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B) if such investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, (C) such investments must not be subject to liquidation prior to their
maturity or have an "r" highlighter affixed to its rating by S&P, and (D) such investments must not be subject to liquidation prior to their maturity; and  provided, further, that, in the judgment of Lender, such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) earning a passive return in the nature of interest and that no instrument or security shall be a Permitted Investment if such instrument or
security evidences (x) a right to receive only interest payments or (y) the right to receive principal and interest payments derived from an underlying investment at a yield to maturity
in excess of 120% of the yield to maturity at par of such underlying investment. 

        "Permitted Transfer" means any conveyance, assignment, sale or other disposition (and not a mortgaging, encumbrance, pledging,
hypothecation, or granting of a security interest) (directly or indirectly) of not more than 49% of the voting and beneficial ownership interests in any legal entity comprising Borrower or the Member
following which Affordable Residential Communities LP (i) owns (directly or indirectly) 51% or more of such voting and beneficial ownership interests in the Borrower and (ii) controls
the operations and management of the Borrower. 

16

 

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

        "Personalty" means all right, title and interest of Borrower in and to all Equipment, Inventory, Accounts, General Intangibles,
Instruments, Investment Property, Receivables, Pledged Accounts, Deposit Accounts, Contracts and Intellectual Property and all other personal property as defined in the relevant UCC, now owned or
hereafter acquired by Borrower and now or hereafter affixed to, placed upon, used in connection with, arising from or otherwise related to the Mortgaged Property or which may be used in or relating to
the planning, development, financing or operation of such Mortgaged Property, including, without limitation, furniture, furnishings, equipment, machinery, money, insurance proceeds, accounts, contract
rights, trademarks, goodwill, chattel paper, documents, trade names, licenses and/or franchise agreements, rights of Borrower under leases of fixtures or other personal property or equipment,
inventory, all refundable, returnable or reimbursable fees, deposits or other funds or evidences of credit or indebtedness deposited by or on behalf of Borrower with any governmental authorities,
boards, corporations, providers of utility services, public or private, including specifically, but without limitation, all refundable, returnable or reimbursable tap fees, utility deposits,
commitment fees and development costs. 

        "Plan" means an employee benefit or other plan, other than a Multiemployer Plan, that is covered by Title IV of ERISA or
Section 302 of ERISA or Section 412 of the Code, and (i) was established or maintained by Borrower or any ERISA Affiliate during the five year period ended prior to the date of
this Agreement or to which Borrower or any ERISA Affiliate makes, is obligated to make or has, within the five year period ended prior to the date of this Agreement, been required to make
contributions or (ii) with respect to which Borrower could reasonably be expected to incur liability. 

        "Pledge Agreement" means, with respect to Borrower, the Pledge Agreement from each of the members of the Borrower to Collateral Agent,
dated as of the Closing Date, as same may thereafter from time to time be supplemented, amended, modified or extended by one or more agreements supplemental thereto. 

        "Pledged Accounts" means the Local Collection Account(s), the Collection Account, the Reserve Accounts, the Loss Proceeds Account, the
Security Deposit Account, the Master Lease Deposit Account, any additional accounts now or hereafter maintained by or on behalf of Borrower hereunder and any sub-accounts of any of the
foregoing and any successor accounts to any of the foregoing. 

        "Policies" has the meaning provided in Section 5.1(x)(iii). 

        "Pre-existing Condition" has the meaning set forth in  Section 5.1(x)(iii)(B) hereof. 

        "Prepaid Rent Account" has the meaning provided in Section 2.13(d). 

        "Principal Indebtedness" means the principal amount of the Loan outstanding as adjusted by each increase (including the Advances and other
advances made by Lender to protect the Collateral), or decrease in such principal amount of the Loan outstanding, whether as a result of prepayment or otherwise, from time to time. 

        "Proceeds" shall have the meaning given in the UCC and, in any event, shall include, without limitation, all of Borrower's right, title
and interest in and to proceeds, product, offspring, rents, profits or receipts, in whatever form, arising from the Collateral. 

        "Prohibited Person" has the meaning set forth in Section 4.1(v) hereof. 

17

 

        "Property Condition Assessment" means a report with respect to any Mortgaged Property prepared by an Engineer or another Person acceptable
to the Lender and delivered to Lender in connection with the Loan and any amendments or supplements thereto delivered to Lender. 

        "Property Expenses" means, with respect to the Mortgaged Property, the following costs and expenses but only, in the case of costs and
expenses in respect of goods and services, to the extent that they (x) are paid to Persons who are generally in the business of providing such goods and services, (y) are customary for
the types of goods or services provided in the geographical area in which such goods or services are provided and (z) do not constitute Capital Improvement Costs: 

          (i)   Impositions;

         (ii)   insurance
premiums for policies of insurance required to be maintained by Borrower pursuant to this Agreement or the other Loan Documents or otherwise
maintained by Borrower or an Affiliate of Borrower on behalf of Borrower in the ordinary course of business with respect to the Mortgaged Property; 

        (iii)   the
cost of all electricity, oil, gas, water, steam, heat, ventilation, air conditioning and any other energy, utility or similar item and overtime
services with respect to the Mortgaged Property; 

        (iv)   payments
required under service contracts for any services or items used at the Mortgaged Property or otherwise used in the operation of the Mortgaged
Property (including, without limitation, service contracts for heating, ventilation and air conditioning systems, elevators, landscape maintenance, pest extermination, security, furniture, trash
removal, answering service and credit checks); 

         (v)   wages,
benefits, payroll taxes, uniforms, the cost of cleaning supplies and all related expenses for on-site personnel directly involved in the
day-to-day operation of the Mortgaged Property (including, without limitation, full time, part time, or seasonal employees, allocated between a number of properties and general
repair, maintenance and security employees), whether hired by Borrower, Manager or any other Person; 

        (vi)   costs
required in connection with the enforcement of any Lease (including, without limitation, reasonable attorneys' fees, charges for lock changes and
storage and moving expenses for furniture, fixtures and equipment); 

       (vii)   advertising
and rent-up expenses (including, without limitation, leasing services, tenant rent concessions, promotions for existing and
prospective tenants, banners and signs); 

      (viii)   out-of-pocket
cleaning, maintenance and repair expenses; 

        (ix)   any
expense the total cost of which is passed through to tenants pursuant to executed Leases; 

         (x)   legal,
accounting, auditing and other professional fees and expenses incurred in connection with the ownership, leasing and operation of the Mortgaged
Property (including, without limitation, collection costs and expenses); 

        (xi)   permits,
licenses and registration fees and costs; 

       (xii)   any
expense necessary in order to prevent a breach under a Lease; 

      (xiii)   any
expense necessary in order to prevent or cure a violation of any Legal Requirement (including Environmental Law), regulation, code or ordinance; 

      (xiv)   costs
and expenses of any appraisals, valuations, surveys, inspections, zoning reports, environmental assessments or market studies; 

18

 

       (xv)   costs
and expenses of security and security systems provided to and/or installed and maintained with respect to the Mortgaged Property; 

      (xvi)   costs
of title, UCC, litigation and other searches and costs of maintaining the Lien of the Mortgages thereon and the security interest in any related
Collateral; 

     (xvii)   fees
and expenses of property managers contracted with by Borrower to perform management, administrative, payroll or other services in connection with
the operation of the Mortgaged Property (including, without limitation, the fees and expenses owed to Manager under any Management Agreement which the Lender has approved in accordance with this
Agreement); 

    (xviii)   any
other costs and expenses contemplated by the Operating Budget and customarily incurred in connection with operating properties similar in type and
character to the Mortgaged Property; and 

      (xix)   any
other category of property expense that is customary for a property of the type and size as the Mortgaged Property and is reasonably approved by
Lender. 

        "Proposed Terms" means, with respect to any Refinancing Loan, to the extent applicable, the interest rate, amount, term, application and
financing fees, lock box requirements, recourse guarantees, indemnity requirements and prepayment penalties and prohibitions, closing and funding conditions, reserve requirements, closing date and any
other non-customary terms in a transaction of such type. 

        "Quarterly Statement" has the meaning provided in Section 2.12(e). 

        "Rating Agencies" means at least two of Fitch, Moody's and S&P. 

        "Rating Criteria" with respect to any Person, means that (i) the short-term unsecured debt obligations of such Person
are rated at least "A-1" by S&P, "P-1" by Moody's and "F-1" by Fitch, if deposits are held by such Person for a period of less than one month, or (ii) the
long-term unsecured debt obligations of such Person are rated at least "AA-" by S&P, "Aa3" by Moody's and "AA-" by Fitch, if deposits are held by such Person for a
period of one month or more. 

        "Real Estate Taxes Escrow Account" has the meaning provided in Section 2.13(b). 

        "Receivables" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under (i) any
Accounts, Chattel Paper, Instruments, Payment Intangibles, Letter of Credit Rights, Documents, insurance policies, drafts, bills of exchange, trade acceptances, notes or other indebtedness owing to
Borrower from whatever source arising, (ii) to the extent not otherwise included above, (a) all income, Rents, issues, profits, revenues, deposits and other benefits from the Mortgaged
Property and (b) all receivables and other obligations now existing or hereafter arising, or created out of the sale, lease, sublease, license, concession or other grant of the right of the use
and occupancy of property or rendering of services by Borrower or any operator or manager of the Mortgaged Property or other commercial space located at the Mortgaged Property or acquired from others
(including, without limiting the generality of the foregoing, from rental of space, halls, stores, and offices, and deposits securing reservations of such space, exhibit or sales space of every kind,
license, lease, sublease and concession fees and rentals, wholesale and retail sales of merchandise, service charges, vending machine sales and proceeds, if any, from business interruption or other
loss of income insurance, (iii) all of the books and records (whether in tangible, electronic or other form) now or hereafter maintained by or on behalf of Borrower in connection with the
operation of the Mortgaged Property or in connection with any of the foregoing and (iv) all Supporting Obligations and all liens and security interests securing any of the foregoing and all
other rights, privileges and remedies relating to any of the foregoing. 

        "Refinancing Loan" has the meaning set forth in Section 5.1(v). 

19

 

        "Release" means any active or passive release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment (including, without limitation, the movement of Hazardous Substances through ambient air, soil, surface water, ground water, wetlands, land
or subsurface strata). 

        "Release Price" means, with respect to a Capital Event of any individual Mortgaged Property, the amount that when applied to pay the
Principal Indebtedness causes the Maximum LTV to be satisfied following such Capital Event and the Debt Service Coverage Ratio following such Capital Event to satisfy the Debt Service Coverage Test. 

        "Remedial Work" has the meaning set forth in Section 5.1(d)(i). 

        "Rents" means all income, rents (including base rent), issues, profits, revenues (including all oil and gas or other mineral royalties and
bonuses), deposits (other than utility and security deposits) and other benefits from the Mortgaged Property. 

        "Replacement Reserve Account" has the meaning set forth in Section 2.13(a). 

        "Replacement Reserve Deposit Amount" means an amount equal to one-twelfth (1/12th) of the product of $50.00 and
the number of Homesites at the Mortgaged Property; provided, that, notwithstanding the foregoing, in the event the Lender determines in its reasonable
discretion that an increase in such amount is necessary to maintain proper operation of the Mortgaged Properties, then upon not less than thirty (30) days prior written notice to the Borrower,
the Lender may increase the aforementioned amount based upon its reassessment of the amount necessary for Capital Improvement Costs from time to time. 

        "Reserve Account(s)" means the Deferred Maintenance Escrow Account, the Replacement Reserve Account, the Real Estate Taxes Escrow Account,
the Insurance Escrow Account, the Operating Expense Account, Working Capital Reserve Account, the Debt Service Reserve Account and the Prepaid Rent Account, collectively, and any successor accounts to
any of the foregoing. 

        "Restoration" has the meaning set forth in Section 5.1(x)(iii)(B). 

        "S&P" shall mean Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc and its successors. 

        "Secondary Market Transaction" has the meaning set forth in Section 5.1(w). 

        "Secured Party" means the Collateral Agent, the Lenders and the Hedge Bank. 

        "Security Deposit Account" has the meaning set forth in Section 2.12(a)(i). 

        "Servicing Fee" means the monthly fee payable to the Lender's servicer on each Payment Date in an amount equal to $1,250.00. 

        "Single Member" has the meaning set forth in Section 8.1(ee). 

        "Supporting Obligations" means all of Borrower's right, title and interest, whether now owned or hereafter acquired, in, to and under
(i) all "supporting obligations" as defined in the UCC and (ii) any other guarantee, letter of credit, secondary obligation, right or privilege that supports or pertains to any of the
Mortgaged Property. 

        "Survey" means a certified ALTA/ACSM survey of each Mortgaged Property prepared by a registered Independent surveyor, containing the form
of survey or certification provided to Borrower by Lender and in form and content reasonably satisfactory to Lender and the company issuing the Title Insurance Policy for each Mortgaged Property. 

        "Taking" means a taking or voluntary conveyance during the term hereof of all or part of any Mortgaged Property, or any interest therein
or right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority affecting the Mortgaged Property or
any portion thereof whether or not the same shall have actually been commenced. 

20

   
        "Tax Liabilities" has the meaning set forth in Section 2.10(a) hereof. 

        "Title Insurance Policy" means a mortgagee's title insurance policy or policies (i) issued by one or more title companies
reasonably satisfactory to Lender which policy or policies shall (unless Lender otherwise requires or consents) be in form ALTA 1992, where available (with waiver of arbitration provisions), naming
Collateral Agent as the insured party, (ii) insuring the Mortgages as being a first and prior lien upon the Mortgaged Property, (iii) showing no encumbrances against any Mortgaged
Property (whether junior or superior to the Mortgages) which are not reasonably acceptable to Collateral Agent other than Permitted Encumbrances, (iv) in an amount reasonably satisfactory to
Collateral Agent (it being understood and agreed that because multiple Mortgaged Properties secure the Loan, a reasonable requirement shall be deemed to include requiring title insurance for a
Mortgaged Property in (x) the amount that would satisfy the Maximum LTV for such Mortgaged Property on a stand-alone basis if a tie-in endorsement is available in the State where
such Mortgaged Property is located or (y) an amount equal to 65% of the appraised value of a Mortgaged Property (or if the appraised value for such Mortgaged Property is not available, then 65%
of the purchase price paid by Borrower for such Mortgaged Property) if a tie-in endorsement is not available in the State where such Mortgaged Property is located or such Mortgaged
Property cannot be tied together with other Mortgaged Properties for any reason or (z) an amount equal to 100% of the appraised value of a Mortgaged Property (or if the appraised value for such
Mortgaged Property is not available, then 100% of the purchase price paid by Borrower for such Mortgaged Property) if a tie-in endorsement is available in the State where such Mortgaged
Property is located solely with other Mortgaged Properties located in such State, and (v) otherwise in form and content reasonably acceptable to Collateral Agent. Such Title Insurance Policy
shall include the following endorsements or affirmative coverages in form and substance reasonably acceptable to Collateral Agent, to the extent available in the jurisdiction in which the Land is
located: variable rate endorsement; survey endorsement; comprehensive endorsement; zoning (ALTA 3.1 with parking added) endorsement; first loss, last dollar and tie-in endorsement; access
coverage; separate tax parcel coverage; contiguity (if applicable) coverage; and such other endorsements as Lender shall reasonably require with respect to a particular Mortgaged Property in order to
provide insurance against specific risks identified by Lender in connection with the Mortgaged Property. 

        "Transaction" means the transactions contemplated by the Loan Documents. 

        "Transaction Costs" means all costs and expenses paid or payable by Borrower relating to the Transaction (including, without limitation,
appraisal fees, legal fees and accounting fees and the costs and expenses described in Section 9.23). 

        "Transfer" means the conveyance, assignment, sale, mortgaging, encumbrance (other than a Permitted Encumbrance), pledging, hypothecation,
granting of a security interest in, granting of options with respect to, or other disposition of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or
not for consideration or of record) all or any portion of any direct or indirect (irrespective of the number of tiers of ownership) legal or beneficial interest (a) in all or any portion of the
Mortgaged Property; or (b) any stock, partnership interests, membership interests or other ownership interests in Borrower or the Member or the constituent entities directly or indirectly
(irrespective of the number of tiers of ownership) owning any such stock, partnership interests, membership interests or other ownership interests. A Transfer shall also include, without limitation to
the foregoing, the following: an installment sales agreement wherein Borrower agrees to sell the Mortgaged Property or any part thereof or any interest therein for a price to be paid in installments;
an agreement by Borrower leasing all or a substantial part of the Mortgaged Property to one or more Persons pursuant to a single or related transactions, or a sale, assignment or other transfer of, or
the grant of a security interest in, Borrower's right, title and interest in and to any Leases or any Rent; execution or consent by Borrower of any instrument subjecting the Mortgaged Property to a 

21

 

condominium
regime or transferring ownership to a cooperative corporation; and any change of control of Borrower or the Member. 

        "Treasury Rate" means, on the date on which such rate is calculated, the yield on the ten year "on the run" U.S. Treasury issue (primary
issue) with such yield being based on the bid price for such issue as reasonably determined by Lender. 

        "UCC" means with respect to any Collateral, the Uniform Commercial Code as in effect from time to time in the State of New York;  provided, that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection or priority of the
security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or priority. Wherever
this agreement refers to terms as defined in the UCC, if such term is defined in more than one Article of the UCC, the definition in Article 9 of the UCC shall control. 

        "UCC Searches" has the meaning set forth in Section 3.1(v) hereof. 

        "Underwritten Net Cash Flow" means, as of any date of calculation with respect to the Mortgaged Property, (i) the Operating
Revenues calculated based upon the base rent portion of the Rents during the most recent three month period for which such information was furnished to Lender pursuant to  Section 5.1(r)(iv)(v)
hereof, annualized, plus (ii) any utility and other income during the most recent twelve month period for which such
information was furnished to Lender pursuant to Section 5.1(r)(v) hereof, minus (iii) the Operating Expenses with respect to the Mortgaged
Property during the most recent twelve month period for which such information was furnished to Lender pursuant to  Section 5.1(r)(v) hereof, each as determined by Lender and after Lender makes
adjustments, if necessary, for 

        (1)   expenses
for management fees equal to the greater of actual management fees or 5.00% of Operating Revenues for such period, 

        (2)   a
minimum vacancy allowance equal to 5.00%, 

        (3)   an
annual minimum capital expenditure reserve equal to the product of $50.00 multiplied by the total number of Homesites at the Mortgaged Property, 

        (4)   exclusion
of rental income and expenses from manufactured homes owned by Borrower, 

        (5)   exclusion
of any other revenue items reasonably deemed nonrecurring by Lender, and 

        (6)   inclusion
of increases in future operating costs as determined by Lender, in its sole discretion, so that, assuming current occupancy, the annualized underwritten
Operating Expenses fully reflect the operating costs expected to be incurred over the next twelve month period. 

        "Use" means, with respect to any Hazardous Substance, the generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation of such Hazardous Substance in connection with or affecting Borrower or the Mortgaged Property. 

        "Welfare Plan" means an employee welfare benefit plan as defined in Section 3(1) of ERISA established or maintained by Borrower or
any ERISA Affiliate or with respect to which Borrower or any ERISA Affiliate has an obligation to make contributions and covers any current or former employee of Borrower or any ERISA Affiliate. 

        "Working Capital Budget" means, with respect to any Fiscal Year, the component of the Operating Budget for such fiscal year submitted by
Borrower to Lender in accordance with the provisions of 

22

 

 Section 5.1(r)(viii) which sets forth, for each calendar month or other applicable time period, the amount of the working capital reserve budgeted for such time period
and changed thereto over the course of such budget period (such working capital reserve amount for any given time period is herein referred to as the "Working Capital Reserve
Amount"). 

        "Working Capital Reserve Account" has the meaning set forth in Section 2.13(c)
hereof. 

        "Working Capital Reserve Amount" has the meaning set forth in the definition of Working Capital Budget. 

ARTICLE II.

GENERAL TERMS  

        Section 2.1.    The Loan.    

        (a)    Subject
to the terms and conditions of this Agreement, on each Advance Date, Lender shall lend to Borrower an Advance on account of the Loan Amount. The proceeds of the
Loan shall be used solely for the purposes identified in Section 2.2 hereof. On each Advance Date, upon the satisfaction of the applicable
conditions set forth in Article III, Lender shall wire transfer in immediately available funds to an account designated by Borrower the amount of the related Advance less the sum of
(i) the applicable Advance Fee, (ii) if the Maximum LTV or the Debt Service Coverage Tests are not satisfied on the applicable Advance Date, the deposits to the Deferred Maintenance
Escrow Account, the Real Estate Taxes Escrow Account and the Insurance Escrow Account required to be funded from the proceeds of the related Advance pursuant to  Section 2.13, (iii) the
out-of-pocket expenses incurred by Lender in connection with the origination and funding
of the Advance in excess of the Expense Deposit (including, without limitation, the reasonable fees and expenses of Lender's counsel). The Borrower may borrow, repay and reborrow, subject to the terms
and conditions of this Agreement. The Borrower may not receive: 

          (i)  more
than one Advance during any calendar month; 

         (ii)  an
Advance in an amount less than $5,000,000; 

        (iii)  an
Advance if a Default or an Event of Default has occurred and is continuing; or 

        (iv)  an
Advance that would cause the Maximum LTV or the Debt Service Coverage Test not to be satisfied. 

        (b)    The
Loan shall constitute one general obligation of Borrower to Lender and shall be secured by the security interest in and Liens granted upon all of the Collateral, and
by all other security interests and Liens at any time or times hereafter granted by Borrower to Collateral Agent for the benefit of the Secured Parties. 

        Section 2.2.    Use of Proceeds.    Proceeds of the Loan shall be used only for the following purposes:
(a) to finance a portion of the acquisition cost of real property or refinance existing debt, (b) to pay to Lender the Advance Fee, (c) to make the required deposits to the
Deferred Maintenance Escrow Account, the Real Estate Taxes Escrow Account and the Insurance Escrow Account, (d) to pay Transaction Costs (including the reasonable
out-of-pocket expenses incurred by Lender in connection with the origination and funding of the Loan) and (e) to pay reasonable fees, expenses and disbursements of
Lender's and Borrower's counsel. Any proceeds of the Loan in excess of the amounts applied in accordance with Sections 2.1(a) and  2.2(a)-(e) may be used by
the Borrower for its general purposes (including to make a distribution to the Member). 

        Section 2.3.    Security for the Loan.    The Note and Borrower's obligations hereunder and under all other
Loan Documents shall be secured by (a) Liens upon the Mortgaged Property pursuant to the Mortgages, (b) the Contract Assignment, (c) the Manager's Subordination, (d) the
Assignment of Rents 

23

 

and
Leases, (e) the Pledge Agreement, (f) all other security interests and Liens granted in this Agreement and in the other Loan Documents. 

        Section 2.4.    Borrower's Note.    Borrower's obligation to pay the principal of and interest on the Loan and
all other amounts due under the Loan Documents shall be evidenced initially by the Note, duly executed and delivered by Borrower on the Closing Date. The Note shall be payable as to principal,
interest and all other amounts due under the Loan Documents, as specified in this Agreement, with a final maturity on the Maturity Date. Lender shall have the right to have the Note subdivided, by
exchange for promissory notes of lesser denominations in the form of the initial Note, upon written request to Borrower and, in such event, Borrower shall promptly execute additional or replacement
Notes, at the Lender's sole expense with respect to Borrower's reasonable out-of-pocket costs in the event and to the extent Borrower incurs costs in connection therewith other
than in connection with the execution of such additional or replacement Notes. At no time shall the aggregate original principal amount of the Note (or of such replacement Notes) exceed the Loan
Amount. 

        Section 2.5.    Principal and Interest.    

        (a)    Borrower
shall pay to Lender interest on the Principal Indebtedness of the Loan from the Closing Date through the end of the Interest Accrual Period following or during
which the Loan is paid in full at the interest rate provided in this Section 2.5. Interest on the Loan shall accrue on the Principal Indebtedness
commencing on the Closing Date and shall be payable in arrears on the eleventh (11th) day of each and every month thereafter until such time as the Loan shall be repaid in full, unless, in any such
case, such day is not a Business Day, in which event such interest shall be payable on the first Business Day immediately prior to such date (such date for any particular month, the
"Payment Date"). Lender or its servicer shall calculate LIBOR on each Interest Determination Date for the related Interest Accrual Period and promptly
communicate to Borrower such rate for such period. The entire outstanding Principal Indebtedness of the Loan and the Note, together with all accrued but unpaid interest thereon and all other amounts
due under the Loan Documents (including, without limitation, the Exit Fee), shall be due and payable by Borrower to Lender on the Maturity Date. Interest shall be computed on the basis of a
360 day year and the actual number of days elapsed during any month or other accrual period. 

        (b)    For
the initial Interest Accrual Period, the Principal Indebtedness shall bear interest at a rate per annum equal to 4.78250%. For each Interest Accrual Period
thereafter, the Principal Indebtedness shall bear interest at a rate per annum equal to the sum of LIBOR determined as of the Interest Determination Date for such Interest Accrual Period plus 2.95%. 

        (c)    While
an Event of Default has occurred and is continuing, Borrower shall pay to Lender interest at the Default Rate on any amount owing to Lender not paid when due until
such amount is paid in full. 

        (d)    If
any payment of principal, interest or other sums shall not be made to Lender on the date the same is due hereunder or under any of the other Loan Documents, then
Borrower shall pay to Lender, in addition to all sums otherwise due and payable, a late fee in an amount equal to five percent (5.0%) of such principal, interest or other sums due hereunder (other
than the entire principal balance of the Loan due upon acceleration of the Loan or on the Maturity Date, as to which the Default Administration Fee shall apply) or under any other Loan Document (or,
in the case of a partial payment, the unpaid portion thereof), such late charge to be immediately due and payable without demand by Lender. 

        (e)    Borrower
hereby agrees to pay to Lender any amount necessary to compensate Lender and any Funding Party for any losses or costs (including, without limitation, the costs
of breaking any "LIBOR" contract, if applicable, or funding losses determined on the basis of Lender's or such Funding Party's reinvestment rate and the interest rate on the Loan) (collectively,
"Funding Losses") sustained 

24

 

by
Lender or any Funding Party: (i) if the Note, or any portion thereof, is repaid for any reason whatsoever on any date other than a Payment Date (including, without limitation, from
condemnation or insurance proceeds); or (ii) as a consequence of (x) any increased cost of funds that Lender or any Funding Party may sustain in maintaining the borrowing evidenced
hereby or (y) the reduction of any amounts received or receivable from Borrower, in either case under clause (i) or (ii), due to the introduction of, or any change in, any law or
applicable regulation or treaty adopted after the date hereof (including the administration or interpretation thereof), whether or not having the force of law, or due to the compliance by Lender or
the Funding Party, as the case may be, with any directive, whether or not having the force of law, or request from any central bank or domestic or foreign governmental authority, agency or
instrumentality having jurisdiction made as of the date hereof. Notwithstanding anything in this paragraph to the contrary, Funding Losses shall not include Tax Liabilities which are not payable by
Borrower pursuant to Section 2.10. 

        (f)    If
Lender or any Funding Party shall have determined that the applicability of any law, rule, regulation or guideline adopted pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations and Supervisory Practices entitled "International Convergence of Capital Measurement and Capital Standards", or the adoption of
any other law, rule, regulation or guideline (including but not limited to any United States law, rule, regulation or guideline) regarding capital adequacy, or any change becoming effective in any of
the foregoing or in the enforcement or interpretation or administration of any of the foregoing by any court or any domestic or foreign governmental authority, central bank or comparable agency
charged with the enforcement or interpretation or administration thereof, or compliance by Lender or its holding company or a Funding Party or its holding company, as the case may be, with any request
or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency made after the date hereof, has or would have the effect of
reducing the rate of return on the capital of Lender or its holding company, or of the Funding Party's or its holding company, as the case may be, then, upon demand by Lender and provided that such
payments are being demanded from and made by other borrowers of similarly situated loans, Borrower shall pay to Lender, from time to time, such additional amount or amounts as will compensate Lender
or such Funding Party for any such reduction suffered. 

        (g)    Any
amount payable by Borrower under Sections 2.5(e) or (f) shall be paid to Lender within ten (10) Business Days after receipt by Borrower of a
certificate signed by an officer of Lender setting forth the amount due and the basis for the determination of such amount in reasonable detail and the computations made by Lender to determine the
amount due, which statement shall be conclusive and binding upon Borrower, absent manifest error. Failure on the part of Lender to demand payment from Borrower for any such amount attributable to any
particular period shall not constitute a waiver of Lender's right to demand payment of such amount for any subsequent or prior period; except that Borrower shall not be liable to any Funding Party or
to Lender in respect of any reduction described in Sections 2.5(d) or (e) with respect to any period more than three (3) months before Borrower receives the certificate required by the
previous sentence. Lender shall use reasonable efforts to deliver to
Borrower prompt notice of any event described in Sections 2.5(e) or (f) above and of the amount to be paid as a result thereof, provided, however, any failure by Lender to so notify Borrower
shall not affect its obligation to make the payments to be made under this Section as a result thereof. All amounts which may become due and payable by Borrower in accordance with the provisions of
this Section shall constitute additional interest under the Loan and shall be secured by the Mortgages and the other Loan Documents. 

        (h)    If
Lender or any Funding Party requests compensation for any losses or costs to be reimbursed pursuant to any one or more of the provisions of Sections 2.5(e) or (f),
then, upon request of Borrower, Lender or such Funding Party shall use reasonable efforts in a manner consistent with such institution's practice in connection with loans similar in size and type as
the Loan to eliminate, 

25

 

mitigate
or reduce amounts that would otherwise be payable by Borrower under the foregoing provisions, provided that such action would not be otherwise prejudicial to Lender or such Funding Party,
including, without limitation, by designating another of Lender's or such Funding Party's offices, branches or affiliates as the lending office, branch or affiliate; Borrower hereby agreeing to pay
all reasonably incurred costs and expenses incurred by Lender or any Funding Party in connection with any such action. 

        (i)    Notwithstanding
any provision to the contrary contained in this Agreement or the other Loan Documents, Borrower shall not be required to pay, and Lender shall not be
permitted to collect, any amount of interest in excess of the maximum amount of interest permitted by law ("Excess Interest"). If any Excess Interest is
provided for or determined by a court of competent jurisdiction to have been provided for in this Agreement or in any of the other Loan Documents, then in such event: (1) the provisions of this
paragraph shall govern and control; (2) Borrower shall not be obligated to pay any Excess Interest; (3) any Excess Interest that Lender may have received hereunder shall be, at Lender's
option, (a) applied as a credit against either or both of the Principal Indebtedness of the Loan or accrued and unpaid interest thereunder (not to exceed the maximum amount permitted by law),
(b) refunded to the payor thereof, or (c) any combination of the foregoing; (4) the interest rate(s) provided for herein shall be automatically reduced to the maximum lawful rate
allowed from time to time under applicable law (the "Maximum Rate"), and this Agreement and the other Loan Documents shall be deemed to have been and
shall be, reformed and modified to reflect such reduction; and (5) Borrower shall not have any action against Lender for any damages arising out of the payment or collection of any Excess
Interest. Notwithstanding the foregoing, if for any period of time interest on any Indebtedness is calculated at the Maximum Rate rather than the applicable rate under this Agreement, and thereafter
such applicable rate becomes less than the Maximum Rate, the rate of interest payable on such Indebtedness shall, to the extent permitted by law, remain at the Maximum Rate until Lender shall have
received or accrued the amount of interest which Lender would have received or accrued during such period on Indebtedness had the rate of interest not been limited to the Maximum Rate during such
period. If the Default Rate shall be finally determined to be unlawful, then the Maximum Rate shall be applicable during any time when the Default Rate would have been applicable hereunder, provided
however that if the Maximum Rate is greater than the applicable interest rate, then the foregoing provisions of this paragraph shall apply. 

        Section 2.6.    Voluntary Prepayment.    

        (a)    Borrower
may voluntarily prepay the Loan in whole or in part on any Business Day; provided,  however, that, any such prepayment shall be accompanied by an amount
representing (1) all accrued interest on the portion of the Loan being
prepaid, (2) with respect to any prepayment made on a Business Day other than a Payment Date, all accrued interest on the portion of the Loan being prepaid through the end of the Interest
Accrual Period during which the prepayment occurs and (3) all other amounts then due under the Loan Documents (including, without limitation, the Exit Fee). 

        (b)    In
the event of any such voluntary prepayment, Borrower shall give Lender written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay,
which notice shall be given at least fifteen (15) days' prior to the date upon which prepayment is to be made and shall specify the Payment Date on which such prepayment is to be made and the
amount of such prepayment (which shall not be less than $1,000,000). If any such notice is given, the amount specified in such notice shall be due and payable on the Payment Date specified therein
(unless such notice is revoked by Borrower prior to the date specified therein in which event Borrower shall immediately reimburse Lender for any reasonable out-of-pocket costs
incurred in connection with the giving of such notice and its revocation). 

        Section 2.7.    Mandatory Prepayment; Capital Events; Certain Transfers.    

        (a)    Borrower
may effect a Capital Event with respect to an individual Mortgaged Property on any Business Day as provided in  Section 2.7(c) below or as to all of the Mortgaged Property on the 

26

 

condition
that with respect to any Capital Event as to all of the Mortgaged Property the Capital Event Proceeds (and, if necessary, any contributions from the principals of Borrower necessary to make
the payments required hereunder) are deposited in the Collection Account and applied on the date of deposit in the Collection Account to repay the Indebtedness in full (including (1) all
accrued interest on the Principal Indebtedness through the end of the Interest Accrual Period during which such deposit occurs, (2) the Exit Fee and (3) other amounts then due under the
Loan Documents). 

        (b)    At
any time while the Hedge Agreement is outstanding, if the Lender notifies the Borrower in writing that the applicable Maximum LTV is not satisfied, then the Borrower,
in its sole discretion, shall either (i) pledge an Owned Property (or properties) acceptable to Lender as additional/substitute Collateral or (ii) make a prepayment of the Principal
Indebtedness in the amount necessary to cause the Maximum LTV to be satisfied, in each case within twenty-five Business Days of receipt of such notice. At any time while the Loan is
outstanding, if the Lender notifies the Borrower in writing that the Diversity Test is not satisfied, other than in connection with a Capital Event, then the Borrower, in its sole discretion, shall
either (1) pledge an Owned Property (or properties) acceptable to Lender as additional/substitute Collateral or (2) make a prepayment of the Principal Indebtedness in the
amount necessary to cause the Maximum LTV and the Debt Service Coverage Test to be satisfied, in each case within twenty-five Business Days of receipt of such notice.. The Lender shall
specify in the written notice delivered pursuant to the preceding two sentences the amount of the prepayment necessary to cause the Maximum LTV and/or the Debt Service Coverage Test to be satisfied. 

        (c)    So
long as no Event of Default shall have occurred and be continuing, Borrower may effect a Capital Event with respect to one or more individual Mortgaged Property(ies)
or Owned Property(ies); provided, however, that (1) any such Capital Event of a Mortgaged
Property shall be a sale or transfer to an Independent third party in an arm's-length transaction (including without limitation any joint venture in which Borrower or any Affiliate of Borrower has an
equity interest) or to an Affiliate of Borrower in connection with a refinancing transaction, and (2) each Capital Event of a Mortgaged Property shall be consummated in accordance with the
following procedure: 

        (A)  Borrower
shall have given the Lender at least fifteen (15) Business Days' prior written notice of the Capital Event, the identity of the purchaser and the
anticipated Capital Event Proceeds; and 

        (B)  Borrower
shall make or cause to be made the deposits to the Collection Account referred to in Sections 2.11(a) and  2.12(a)(iii). 

        (d)    Upon
payment or prepayment of the Loan in full, Borrower shall pay to Lender, in addition to the amounts specified in  Section 2.6, Section 2.7 and
 Section 2.12, as applicable, all other amounts then due and payable to Lender pursuant to the Loan Documents. 

        Section 2.8.    Application of Payments After Event of Default.    After an Event of Default, Borrower
irrevocably waives the right to direct the application of any and all payments at any time hereafter received by Lender from or on behalf of Borrower, and Borrower irrevocably agrees that Lender shall
have the continuing exclusive right to apply any and all such payments and any and all proceeds and recoveries from the Pledged Accounts, the Mortgaged Property or Borrower after the occurrence and
during the continuance of an Event of Default, in Lender's sole discretion, to the Indebtedness and other amounts then outstanding under this Agreement and the other Loan Documents in such order and
manner as Lender may determine in its sole and absolute discretion, including, without limitation, reasonable out-of-pocket costs and expenses of Lender and Collateral Agent
reimbursable pursuant to the terms of this Agreement arising as a result of such repayment, any accrued and unpaid interest then payable with respect to the Loan or the portion thereof being repaid,
the Principal Indebtedness, any accrued and unpaid Exit Fee in respect of any such Principal Indebtedness or the portion thereof being repaid, any other sums then due and payable to or for the benefit
of the Secured Parties 

27

 

pursuant
to this Agreement or any other Loan Document(s), or to Property Expenses and Capital Improvement Costs for the Mortgaged Property, or to fund Reserve Accounts. 

        Section 2.9.    Method and Place of Payment.    Except as otherwise specifically provided herein, all payments
and prepayments under this Agreement and the Note shall be made to Lender not later than 12:00 p.m., Eastern time, on the date when due and shall be made in lawful money of the United States of
America by wire transfer in federal or other immediately available funds to its account at such bank(s) as Lender may from time to time designate. Any funds received by Lender after such time shall,
for all purposes hereof, be deemed to have been paid on the next succeeding Business Day. Lender shall notify Borrower in writing of any changes in the account to which payments are to be made. All
payments made by Borrower hereunder, or by Borrower under the other Loan Documents, shall be made irrespective of, and without any deduction for, any defenses, set-offs or counterclaims. 

        Section 2.10.    Taxes.    

        (a)    All
payments made by or on behalf of Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (the "Tax Liabilities"), excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the
Lender as a result of a present or former connection between such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof
or therein including being a citizen or resident or national of, or carrying on a business or maintaining a permanent establishment in such jurisdiction (other than any such connection arising solely
from such Lender's having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement if, at the time such Lender first became a party to this Agreement,
the applicable Governmental Authority would not have imposed such taxes but instead such taxes are a result of a change in relevant tax law including, but not limited to a change in the generally
accepted
interpretation of existing tax law). If Borrower shall be required by law to deduct any such Tax Liabilities (or amounts in estimation or reimbursement for the same) from or in respect of any sum
payable hereunder to Lender, then the sum payable hereunder shall be increased (such increase, "additional amounts") as may be necessary so that, after making all required deductions, Lender receives
an amount equal to the sum it would have received had no such deductions been made. 

        (b)    If
Lender is not a "United States person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign
Lender") Lender shall deliver to Borrower, prior to receipt of any payment subject to withholding under the Code (or upon accepting an assignment of an interest herein), two
duly signed completed copies of either Internal Revenue Service ("IRS") Form W-8BEN or any successor thereto (relating to Foreign
Lender and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to Foreign Lender by Borrower pursuant to this Agreement) or IRS
Form W-8ECI or any successor thereto (relating to all payments to be made to Foreign Lender by Borrower pursuant to this Agreement) or such other evidence satisfactory to Borrower
and Borrower that Foreign Lender is entitled to an exemption from, or reduction of, U.S. withholding tax, including any exemption pursuant to Section 881(c) of the Code. If the
form W-8BEN or W-8ECI provided by Lender at the time such Lender first becomes a party to this Agreement indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from Tax Liabilities reimbursable by Borrower to Lender under  Section 2.10(a) hereof, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive additional
amounts from Borrower pursuant to Section 2.10(a). Thereafter and from time to time, Foreign Lender shall (i) promptly submit to Borrower such additional duly completed and signed copies
of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to Borrower and Borrower of any available exemption from or 

28

 

reduction
of, United States withholding taxes in respect of all payments to be made to Foreign Lender by Borrower pursuant to this Agreement, (ii) promptly notify Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or reduction, and (iii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of
such Lender, and as may be reasonably necessary (including the redesignation of its lending office) to avoid any requirement of applicable laws that Borrower make any deduction or withholding for
taxes from amounts payable to such Foreign Lender. Notwithstanding any other provision of this paragraph, a Foreign Lender shall not be required to deliver any form pursuant to this paragraph that
such Foreign Lender is not legally able to deliver. 

        (c)    If
a Lender transfers its rights and obligations under this Agreement from its lending office to another lending office, withholding tax (which shall be set forth in the
IRS form or forms described in this Section 2.10 provided by such Lender to Borrower upon such transfer, taking into account the transfer) imposed on the Lender after the transfer in excess of
the rate imposed prior to such transfer shall be deemed to be for purposes of this Agreement excluded from Tax Liabilities reimbursable by Borrower to Lender for periods after the transfer. This  Section 2.10(c)
 shall not apply with respect to a change in lending office required for the particular right or obligation as a result of any
change in, or the adoption or phase-in of, any law, rule or regulation applicable to such Lender and occurring after the date of this Agreement and the applicable Lender is unable, using
commercially
reasonable efforts, to change such lending office to another lending office that is subject to a lower withholding tax rate. 

        (d)    If
any Lender voluntarily changes its residence or place of business or takes any other similar action, and the effect of such change or action, as of the date thereof,
would be to increase the Tax Liabilities of such Lender, the Borrower shall not be obligated to pay any additional amounts in respect of such increase. 

        (e)    If
and to the extent that a Foreign Lender sells a participating interest to a participant which, pursuant to  Section 9.9(a), seeks to obtain the benefits of Section 2.10, then such Foreign
Lender shall promptly deliver to Borrower (i) two
duly signed completed copies of the forms or statements required to be provided by such Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such
Lender acts for its own account that is not subject to U.S. withholding tax, and (ii) two duly signed completed copies of IRS Form W-8IMY (or any successor thereto), together
with any information such Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Code, to establish that such Lender is not acting for its
own account with respect to a portion of any such sums payable to such Lender. Notwithstanding any other provision of this paragraph, a Foreign Lender shall not be required to deliver any form
pursuant to this paragraph that such Foreign Lender is not legally able to deliver. 

        (f)    For
any period with respect to which a Lender has failed to comply with the requirements of Section 2.10(b), (e) or (h) (other than to the extent
such failure is due to a change in law, rule or regulation occurring subsequent to the date on which a form originally was required to be provided), Borrower shall not be required to pay additional
amounts to the Lender pursuant to this Section 2.10 with respect to Tax Liabilities imposed as a result of such failure. 

        (g)    Borrower
may, without reduction, withhold any Tax Liabilities required to be deducted and withheld from any payment under any of the Loan Documents with respect to which
Borrower is not required to pay additional amounts under this Section 2.10. 

        (h)    Upon
Borrower's request, if the Lender is a "United States person" within the meaning of Section 7701(a)(30) of the Code, Lender shall, if and to the extent
required by law, execute and deliver to Borrower an IRS Form W-9. 

29

 

        Section 2.11.    Release of Collateral.    

        (a)    Notwithstanding
any other provision of this Agreement or any other Loan Document, upon the occurrence of a Capital Event with respect to the Mortgaged Property as
described in Section 2.7 hereof, Collateral Agent shall, simultaneously with such Capital Event release of record the Lien of the Mortgages and
UCC-1 financing statements and any other Liens in favor of Collateral Agent for the benefit of the Secured Parties relating to the Mortgaged Property or the portion thereof affected by
such Capital Event; provided, however, that (i) Collateral Agent shall not be required to release
its Lien unless any Proceeds of such Capital Event are paid to Lender in full satisfaction of the Indebtedness (including any Exit Fees and other amounts due Lender) or to the Collection Account as
required hereunder and (ii) with respect to a Capital Event consummated in accordance with this Agreement which does not result in a full satisfaction of the Indebtedness, if the related
Mortgaged Property is located in a state that imposes mortgage recording taxes, then Collateral Agent shall, in lieu of such release, to the extent necessary to facilitate future savings of mortgage
tax, assign at Borrower's expense, such Liens to the new lender(s), provided that any such assignments shall be without recourse, representation, or warranty of any kind, except that Collateral Agent
shall represent and warrant (1) the then outstanding amount of the Principal Indebtedness and (2) that such Liens have not been previously assigned by Collateral Agent. 

        (b)    In
the event Borrower satisfies the outstanding Indebtedness in full, Collateral Agent shall withdraw and hold uninvested for Borrower in an Eligible Account at a
financial institution selected by Lender from the Business Day immediately preceding the date upon which the release of funds is to be made to Borrower and release on the date on which the outstanding
Indebtedness is repaid in full any and all amounts then on deposit in the Reserve Accounts and/or the Collection Account to Borrower. Upon repayment of the Loan and all other amounts due hereunder and
under the Loan Documents in full in accordance with the terms hereof and thereof, Collateral Agent shall, promptly after such payment, release or cause to be released all Liens with respect to all
Collateral (including, without limitation, terminating the tenant direction letters delivered pursuant to Section 2.12(a)) or, to the extent
necessary to facilitate future savings of mortgage tax in states that impose mortgage taxes, assign at Borrower's expense, such Liens to Borrower's new lender(s), provided that any such assignments
shall be without recourse, representation, or warranty of any kind, except that Lender shall represent and warrant (1) the then outstanding amount of the Principal Indebtedness and
(2) that such Liens have not been previously assigned by Collateral Agent. 

        Section 2.12.    Central Cash Management.    

        (a)    Local Collection Accounts; Collection Account; Deposits to and Withdrawals from the Collection Account.    

          (i)  On
or before the Closing Date, Lender shall (1) establish on behalf of the Borrower and maintain with the Collection Account Bank a collection account (the
"Collection Account"), which shall be an Eligible Account with a separate and unique identification number in the name of Collateral Agent, as secured
party, or, at Collateral Agent's option, in the name of Borrower for the benefit of Collateral Agent for the benefit of the Secured Parties, as secured party, and (2) cause the Collection
Account Bank to deliver to Collateral Agent the Collection Account Agreement in form and substance reasonably acceptable to Collateral Agent acknowledging Collateral Agent's security interest in and
sole dominion and control over the Collection Account. On or before each Advance Date, Borrower may (x) establish and maintain with one or more financial institutions acceptable to Collateral
Agent in its sole reasonable discretion (individually each, and collectively, the "Local Collection Account Bank"), one or more local collection
accounts for the Mortgaged Property being financed with the proceeds of the Advance (individually each, and collectively, the "Local Collection
Account") and one or more accounts for security deposits (other than Master Lease Deposits) for the Mortgaged Property being financed with the proceeds 

30

 

of
the Advance (individually each, and collectively, the "Security Deposit Account"), each of which shall be an Eligible Account with a separate and
unique identification number and entitled in the same name as the Collection Account and (y) cause each Local Collection Account Bank to deliver to Collateral Agent a Local Collection Account
Agreement in form and substance reasonably acceptable to Collateral Agent acknowledging Collateral Agent's security interest in and sole dominion and control over each Local Collection Account and
Security Deposit Account; provided that Borrower may deposit, hold and administer security deposits (other than Master Lease Deposits) from that portion
of the Mortgaged Property, if any, located in North Carolina in a Security Deposit Account maintained with Bank of America, N.A. or other financial institution with a North Carolina branch reasonably
acceptable to Collateral Agent, which, it is understood, may not execute a Local Collection Account Agreement, although Borrower shall make commercially reasonable efforts to obtain such financial
institution's execution and delivery of a Local Collection Account Agreement. On each Advance Date, Borrower shall deposit in the Security Deposit Account the current security deposits for the related
Mortgaged Property being financed with the proceeds of the Advance. On or before the Closing Date, Collateral Agent shall establish on behalf of Borrower and maintain with the Collection Account Bank
a separate account for Master Lease Deposits (the "Master Lease Deposit Account"), which shall be an Eligible Account and shall have the same title as the Collection Account, for the benefit of
Collateral Agent for the benefit of the Secured Parties until the Loan is paid in full. On each Advance Date Borrower shall deposit in the Master Lease Deposit Account an estimate of Master Lease
Deposits for the related Mortgaged Property being financed with the proceeds of the Advance as of such Advance Date. Subject to  Section 2.12(a)(ii), Borrower shall 

        (A)  deposit
or cause the Manager to deposit in the Security Deposit Account (or into the Master Lease Deposit Account, with respect to Master Lease Deposits) not less than
one time during each calendar month all security deposits in the form of Money received from the tenants, since the date of the previous deposit (or in the case of the initial deposit, since the
related Advance Date), 

        (B)  deposit
or cause the Manager to deposit in the Collection Account or Local Collection Account, all Rents and Money received from Accounts or under Leases and derived
from the Mortgaged Property and all Proceeds thereof, in each case on each Business Day following the collection and receipt
thereof during the first seven (7) Business Days of each calendar month and not less than once during each calendar week of such month commencing after such seventh (7th) day, and 

        (C)  sweep
or cause to be swept by each Local Collection Account Bank all Money on deposit in the Local Collection Account in excess of $10,000 (which the Local Collection
Account Bank shall be entitled to use to offset any returned items) to the Collection Account on each Business Day. 

Borrower
shall not have any right to withdraw Money from the Local Collection Account, the Security Deposit Account, the Master Lease Deposit Account or the Collection Account, which shall be under
the sole dominion and control, and the "control" within the meaning of Sections 9-104 and 9-106 of the UCC, of Collateral Agent;  provided, that notwithstanding the foregoing, so long as an Event of
Default has not occurred and is not continuing (or if an Event of Default has
occurred and is continuing but Borrower is required to return the security deposit in accordance with applicable Legal Requirements), Borrower may instruct the Local Collection Account Bank to
withdraw from the Security Deposit Account security deposits (other than Master Lease Deposits) in order to satisfy Borrower's obligations to return the same to tenants entitled to them under and in
accordance with the Leases. Any disbursement of Master Lease Deposits shall in each case be subject to Collateral Agent's prior approval and direction,  provided that Collateral Agent shall authorize,
upon Borrower's request made not more frequently than on a monthly basis, 

31

 

disbursements
reflecting any reduction in Master Lease Deposits to which the tenant under the applicable Master Homesite Lease Documentation is entitled. In the event of a Lease default or other
occurrence whereby Borrower, as landlord, shall become entitled to retain any security deposits or apply the same to amounts owed under the applicable Lease, any such security deposits so retained
and/or applied by Borrower shall, upon such retention or application, be transferred from the Security Deposit Account to the Local Collection Account or the Collection Account and treated in the same
manner as Rents; provided, that in the event of a default under a Master Homesite Lease Agreement entitling the landlord to retain Master Lease
Deposits, the Master Lease Deposits shall not be transferred to the Collection Account and treated as Rents but instead shall continue to be held in the Master Lease Deposit Account as additional
collateral for the Indebtedness. Any such Rents, Money or Proceeds held by Borrower or the Manager prior to deposit into the Local Collection Account shall be held in trust for the benefit of
Collateral Agent. Borrower shall be responsible for the payment of all costs and expenses in connection with establishing and maintaining the Collection Account, the Local Collection Account, the
Security Deposit Account, the Master Lease Deposit Account and the Reserve Accounts (including, without limitation, Collection Account Bank's and Local Collection Account Bank's fees and charges) and
shall reimburse Collateral Agent upon demand for any such costs or expenses incurred by Collateral Agent. 

         (ii)  In
the event that any Event of Default has occurred and is continuing, 

        (A)  upon
request of Lender, Borrower shall deliver to each tenant under a Lease an irrevocable direction letter in a form approved by Lender requiring the tenant to pay all
Rents and other Money
under Leases, and any Money received from Accounts or otherwise derived from the Mortgaged Property and Proceeds thereof owed to Borrower directly to the Collection Account or (if Lender elects) a
Local Collection Account and shall deliver an irrevocable direction letter in such form to each tenant under a new Lease entered into thereafter prior to the commencement of such Lease, 

        (B)  upon
request of Lender, all Rents and Money received from Accounts or under Leases and derived from the Mortgaged Property and all Proceeds thereof shall be payable to
Collateral Agent or as otherwise directed by Collateral Agent, 

        (C)  if
a tenant under a Lease forwards any Rents, Money or Proceeds to Borrower or Manager rather than directly to the Collection Account or applicable Local Collection
Account, Borrower shall (i) if the Lender has made the request referred to in Section 2.12(a)(ii)(A) above, deliver an additional
irrevocable direction letter to the tenant and make other commercially reasonable efforts to cause the tenant to thereafter forward such Rents, Money or Proceeds directly to the Collection Account or
(if Lender elects) a Local Collection Account, and (ii) immediately deposit or cause the Manager to deposit in the Collection Account any such Rents, Money or Proceeds received by Borrower or
Manager, 

        (D)  Borrower
shall not have any right to make or direct any withdrawals from the Collection Account or the Reserve Account without the prior written consent of Lender (it
being understood and agreed that Borrower may continue to make withdrawals from the Security Deposit Account as described above), and 

        (E)  any
and all funds on deposit in the Collection Account and the Reserve Accounts may be allocated by Lender in its sole discretion for the payment of the Indebtedness
pursuant to Section 2.8 of this Agreement or to the Operating Expense Account, the Working Capital Reserve Account or the Debt Service Reserve
Account. 

        (iii)  Borrower
shall deposit in the Collection Account: (a) as and when required by Sections 5.1(x) and  (y), Loss Proceeds received by Borrower and (b)
simultaneously with the consummation of any Capital Event, the Capital Event Proceeds resulting from
such Capital Event and, if the related Capital Event Proceeds are less than the related Release Price, any Borrower Release Price Contribution necessary in connection with such Capital Event in order
to pay the Release Price for a Capital Event of an individual Mortgaged Property or group of Mortgaged Properties. 

32

   
        (b)    Distribution of Cash.    So long as an Event of Default has not occurred and is not continuing (and
thereafter
at Lender's sole option and discretion), Collateral Agent shall apply funds on deposit in the Collection Account on each Payment Date, to the extent of the amounts set forth in the related Payment
Date Statement delivered by Lender or its servicer, as follows: 

          (i)   first, if the Maximum LTV or the Debt Service Coverage Test is not satisfied on the applicable Payment
Date, to the Real Estate Taxes Escrow Account and the Insurance Escrow Account, in that order, in the respective amounts required to be deposited therein as described in  Section 2.13(b);

         (ii)   second, to the payment to Lender of (i) the interest then due and payable on the Note with respect
to the related Interest Accrual Period, (ii) the Exit Fee and the Extension Fee, if any, then due and payable and (iii) the Principal Indebtedness in an amount equal to the sum of
(1) if a Capital Event of an individual Mortgaged Property(ies) occurred during the related Collection Period, the related Release Price plus (2) any Loss Proceeds to which the Lender is
then entitled pursuant to this Agreement; 

        (iii)   third, to the payment to Lender's servicer of the Servicing Fee and any expenses then due and payable to
Lender or its servicer(s) pursuant to this Agreement or the other Loan Documents; 

        (iv)   fourth, if the Maximum LTV or the Debt Service Coverage Test is not satisfied on the applicable Payment
Date, to the Replacement Reserve Account in the amount required to be deposited therein as described in Section 2.13(a); 

         (v)   fifth, to the payment of any outstanding indemnification payment to which an Indemnified Party is then
entitled pursuant to Sections 5.1(i) and 5.1(j), and any other amounts then due and payable to Lender
pursuant to this Agreement and the other Loan Documents which are not paid from applications under clause (iii) above; 

        (vi)   sixth, to the Prepaid Rent Account in the amount required to be deposited therein as described in  Section 2.13(d); 

       (vii)   seventh, if no Event of Default exists, to Borrower in an amount equal to remaining available funds, if
any; provided, that if any Event of Default exists, no disbursement shall be made under this clause  sixth; and 

      (viii)   eighth, if any Event of Default exists, then to the extent Lender has not made other application of such
remaining available funds in Lender's discretion as provided hereunder, all remaining available funds shall be allocated as determined by Lender in Lender's sole and absolute discretion (and
re-allocated from time to time as Lender may elect) and retained in the Debt Service Reserve Account, the Working Capital Reserve Account and/or the Operating Expense Account or, at
Lender's option, in other Lender-controlled accounts. 

        (c)    Permitted Investments.    So long as no Event of Default has occurred and is continuing, Borrower shall direct
Collateral Agent in writing to invest and reinvest any balance in the Collection Account, from time to time in Permitted Investments; provided,  however,
that 

          (i)   the
maturity of the Permitted Investments on deposit therein shall be at the discretion of Borrower, but in any event no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn therefrom pursuant to Section 2.12(a) or  2.12(b) of this Agreement,

         (ii)   after
an Event of Default has occurred and for so long as such Event of Default is continuing Borrower shall not have any right to direct investment of
the balance in the Collection Account, 

33

 

        (iii)   all
such Permitted Investments shall be held in the name of Collateral Agent or Lender's servicer and shall be credited to the Collection Account, and 

        (iv)   if
no written investment direction is provided to Lender by Borrower, Lender may at Lender's option invest any balance in the Collection Account in such
Permitted Investments as may be selected by Lender. 

Secured
Parties shall have no liability for any loss in investments of funds in the Collection Account that are invested in Permitted Investments and no such loss shall affect Borrower's obligation to
fund, or liability for funding, the Collection Account. All interest paid or other earnings on the Permitted Investments of funds deposited into the Collection Account made hereunder shall be
deposited into the Collection Account. Borrower shall include all earnings on the Collection Account as income of Borrower for federal and applicable state tax purposes. 

        (d)    Monthly and Payment Date Statements.    With respect to each Collection Period, Lender or its servicer shall
prepare and deliver, or shall cause to be prepared and delivered, to Borrower and Lender a statement no later than ten (10) Business Days after the end of such Collection Period setting forth
the aggregate deposits to and withdrawals from the Collection Account and each Reserve Account and the opening and closing balances in such accounts (collectively, the "Monthly
Statement"). With respect to each Payment Date and the related Collection Period and Interest Accrual Period, Lender or its servicer shall prepare and deliver, or shall cause
to be prepared and delivered to Borrower and Lender, a statement (each, a "Payment Date Statement") no later than the Business Day prior to such Payment
Date with respect to each of the items below, setting forth the following: 

          (i)   the
aggregate deposits to the Collection Account during the related Collection Period for each type of deposit under this Agreement and the opening and
closing balances in the Collection Account; 

         (ii)   the
amount of interest then due and payable on the Note with respect to the Interest Accrual Period (including the applicable number of days and interest
rate which were applied in determining such amount); 

        (iii)   the
amount of the Exit Fee, the Extension Fee or the Prepayment Fee, if any, then due and payable; 

        (iv)   the
amount of any expenses payable to Lender and any outstanding indemnification payment to which an Indemnified Party is then entitled under this
Agreement; 

         (v)   the
following information with respect to the Principal Indebtedness in a format reasonably acceptable to Lender: (1) the Principal Indebtedness as
of the preceding Payment Date, (2) any principal payable to Lender pursuant to Sections 2.6, 2.7
or 2.12 on such Payment Date, and (3) the Principal Indebtedness on the current Payment Date (taking into account such payments); and 

        (vi)   the
amount withdrawn from or remitted to each account of the Reserve Account in accordance with Sections
2.12 and 2.13 and the amount remitted to Borrower. 

        (e)    Intentionally Omitted.    

        (f)    Loss Proceeds.    In the event of a casualty or Taking with respect to the Mortgaged Property, unless pursuant
to Section 5.1(x) of this Agreement, the Loss Proceeds are to be made available to Borrower for Restoration, all of Borrower's interest in Loss
Proceeds shall be paid directly to the Collection Account. If the Loss Proceeds are to be made available for Restoration pursuant to this Agreement, such Loss Proceeds shall be held by Collateral
Agent in a segregated interest-bearing Eligible Account in the name of Collateral Agent on behalf of the Secured Parties and under the sole dominion and control of Lender to be opened (if not
previously opened and maintained by the 

34

 

Collection
Account Bank under the Collection Account Agreement by the Lender) by Lender at a financial institution selected by Lender (the "Loss Proceeds
Account"). Funds on deposit in the Loss Proceeds Account shall be invested in Permitted Investments in the same manner and subject to the same restrictions as set forth in  Section 2.12(c)
 with respect to the Collection Account (except that the maturity shall be not later than as necessary to satisfy any schedule of
distributions for Restoration required or approved by Lender). If any Loss Proceeds are received by Borrower, such Loss Proceeds shall be received in trust for Collateral Agent on behalf of the
Secured Parties, shall be segregated from other funds of Borrower, and shall be forthwith paid to Lender to the extent necessary to comply with this Agreement. 

        Section 2.13.    Reserve Accounts.    

        (a)    Deferred Maintenance Escrow Account and Replacement Reserve Account.    

          (i)   On
or before the Closing Date, Collateral Agent shall establish on behalf of the Borrower and maintain with the Collection Account Bank two separate
accounts for deferred maintenance and replacement reserves, each of which shall be an Eligible Account and shall have the same title as the Collection Account, for the benefit of Collateral Agent on
behalf of the Secured Parties until the Loan is paid in full. The two accounts shall be designated the "Deferred Maintenance Escrow Account" (the "Deferred Maintenance Escrow
Account") and the "Replacement Reserve Account" (the "Replacement Reserve Account"). On each Advance Date, if the Maximum LTV or
the Debt Service Coverage Test is not satisfied, Lender shall deposit out of the proceeds of such Advance in the Deferred Maintenance Escrow Account 125% of the amount of the immediate repairs
referenced in the Property Condition Assessments and Environmental Reports delivered with respect to the Mortgaged Property being financed with the proceeds of the related Advance to the extent such
repairs have not been completed prior to the Advance Date. On each Payment Date, commencing with the October 2004 Payment Date, if the Maximum LTV or the Debt Service Coverage Test is not
satisfied, Borrower shall deposit from the Collection Account (or if the funds for such deposit are not available pursuant to Section 2.12(b),
shall make an additional deposit of Borrower's funds sourced from equity capital contributions) to the Replacement Reserve Account, of an amount equal to the Replacement Reserve Deposit Amount. 

         (ii)   Any
and all Moneys remitted to the Deferred Maintenance Escrow Account, together with any Permitted Investments in which such Moneys are or will be
invested or reinvested during the term of this Agreement, shall be held in the Deferred Maintenance Escrow Account to be withdrawn by Collateral Agent upon written request of Borrower made not more
than one time during each calendar quarter in an amount not less than $10,000, and applied to pay directly or reimburse Borrower for the immediate repairs referenced in the Property Condition
Assessments and Environmental Reports delivered with respect to the applicable Mortgaged Property (the "Immediate Repairs") upon satisfaction of the
disbursement conditions listed on Schedule 6 hereof. Borrower shall complete such Immediate Repairs and shall provide to Lender such
documentation, and other evidence of compliance with law as Lender may reasonably require. The funds contained in the Deferred Maintenance Escrow Account shall be utilized by Borrower solely for
performance of the Immediate Repairs in accordance with the Property Condition Assessments and Environmental Reports, and shall not be used by Borrower for purposes for which any other Reserve Account
is established. Upon written application of Borrower (which may be done by electronic mail or e-mail), Borrower shall be entitled to obtain disbursements by Collateral Agent from the
Deferred Maintenance Escrow Account to pay costs incurred by Borrower for such Immediate Repairs, provided that (a) no Event of Default has occurred and is continuing, (b) Borrower shall
provide to Collateral Agent (including by electronic mail or e-mail) such documentation and certifications as Collateral Agent may reasonably request to substantiate the requirement for
and entitlement to such disbursement, (c) Borrower shall provide to Collateral Agent (including by electronic mail or e-mail) with all invoices, receipts, lien waivers and other 

35

 

documentation
of lawful and workmanlike progress or completion, lien-free status, and availability of sufficient funds, all as may be reasonably requested by Collateral Agent, and
(d) Borrower shall provide Collateral Agent such evidence as may be reasonably satisfactory to Lender that after payment of any draw for Immediate Repairs, the funds remaining in the Deferred
Maintenance Escrow Account shall be sufficient to pay for the remainder of such Immediate Repairs. In the event Borrower completes the repairs for which funds were reserved in the Deferred Maintenance
Escrow Account to the reasonable satisfaction of Lender and excess funds remain on deposit or in the event the related Mortgaged Property is the subject of a Capital Event, Collateral Agent shall
disburse any and all amounts then remaining on deposit in the Deferred Maintenance Escrow Account which had been reserved for repairs to the Collection Account. 

        (iii)   Subject
to the provisions of Section 2.13(a)(i), any and all Moneys remitted to the Replacement
Reserve Account, together with any Permitted Investments in which such Moneys are or will be invested or reinvested during the term of this Agreement, shall be held in the Replacement Reserve Account
to be withdrawn by Collateral Agent upon written request of Borrower made not more than once each month in an amount not less than $10,000, and applied to reimburse Borrower for Capital Improvement
Costs (other than those for Immediate Repairs) reasonably approved by Lender for disbursements from the Replacement Reserve ("Approved Capital
Expenditures") upon satisfaction of the disbursement conditions listed on Schedule 6 hereof, provided that funds in the
Replacement Reserve Account shall not be used by Borrower for purposes for which any other Reserve Account is established. 

        (b)    Real Estate Taxes Escrow Account and Insurance Escrow Account.    On or before the Closing Date, Collateral
Agent shall on behalf of the Borrower establish and maintain with the Collection Account
Bank two separate accounts for Basic Carrying Costs, each of which shall be an Eligible Account and shall have the same title as the Collection Account for the benefit of Collateral Agent on behalf of
the Secured Parties until the Loan is paid in full. The two accounts shall be designated the "Real Estate Taxes Escrow Account" (the "Real Estate Taxes Escrow
Account") and the "Insurance Escrow Account" (the "Insurance Escrow Account"). On each Advance Date, if the Maximum LTV or the
Debt Service Coverage Test is not satisfied, the Lender shall deposit out of the proceeds of the related Advance in the Real Estate Taxes Escrow Account and in the Insurance Escrow Account the amount
necessary to meet the first bill with credit for existing monthly escrow payments made prior to the applicable due date. With respect to each Payment Date, if the Maximum LTV or the Debt Service
Coverage Test is not satisfied, Borrower shall deposit from the Collection Account (or, if the funds for such deposit are not available pursuant to  Section 2.12(b), shall make an additional deposit
of Borrower's funds sourced from equity capital contributions), 

        (1)   an
amount equal to (1/12th) one-twelfth of the annual real estate taxes and any other Impositions that if not paid in a timely manner will result in a Lien
on a Mortgaged Property in the Real Estate Taxes Escrow Account, 

        (2)   an
amount equal to one-twelfth (1/12th) of the annual insurance premiums for policies of insurance required to be maintained by Borrower with respect to the
Mortgaged Property pursuant to this Agreement, and any additional insurance required under any of the other Loan Documents, in the Insurance Escrow Account. 

Any
and all Moneys remitted to the Real Estate Taxes Escrow Account or Insurance Escrow Account (which shall not bear interest for the benefit of Borrower) shall be held in the Real Estate Taxes
Escrow Account or Insurance Escrow Account to be withdrawn from the Real Estate Taxes Escrow Account or Insurance Escrow Account, as applicable, by Collateral Agent upon written request of Borrower
delivered to Collateral Agent and Lender's servicer together with documentation and other evidence (including invoices and in the case of a reimbursement of Borrower, evidence that the related costs
have been paid) with respect to the respective Basic Carrying Costs towards which such funds are 

36

 

to
be applied, and applied to pay directly (or reimburse Borrower, in the case of insurance premiums only) for (x) any Impositions (in the case of the Real Estate Taxes Escrow Account) or
(y) any insurance premiums for policies of insurance required to be maintained by Borrower with respect to the Mortgaged Property pursuant to this Agreement, and any additional insurance
required under any of the other Loan Documents (in the case of the Insurance Escrow Account). Borrower shall provide Lender or its servicer with bills and other documents necessary for payment of
Impositions and insurance premiums at least ten (10) Business Days prior to the due dates therefor. In the event the amount on deposit in the Real Estate Taxes Escrow Account or the Insurance
Escrow Account exceeds the amount due for Impositions by more than one-twelfth (1/12th) of the annual real estate taxes (in the case of the Real Estate Taxes Escrow Account) or the amount
due for insurance premiums (in the case of the Insurance Escrow Account), respectively, Lender or its servicer shall in its sole discretion credit such excess against future payment obligations to the
Real Estate Taxes Escrow Account or the Insurance Escrow Account, as applicable. 

        (c)    Operating Expense Account, Working Capital Reserve Account and the Debt Service Reserve Account.    On or
before the Closing Date, Collateral Agent shall on behalf of the Borrower establish and maintain with the Collection Account Bank three accounts for the remittance of funds by Lender or its servicer
in its sole discretion after an Event of Default has occurred and is continuing, each of which shall be an Eligible Account and shall have the same title as the Collection Account for the benefit of
Lender until the Loan is paid in full. The three accounts shall be designated the "Operating Expense Account" (the "Operating Expense Account"), the
"Working Capital Reserve Account" (the "Working Capital Reserve Account") and the "Debt Service Reserve Account" (the "Debt
Service Reserve Account"). On any Business Day after the occurrence and during the continuance of an Event of Default, Lender or its servicer may in its sole discretion deposit
into the Operating Expense Account, the Working Capital Reserve Account or the Debt Service Reserve Account any funds then on deposit in the Local Collection Account or the Collection Account. Any and
all Moneys remitted to the Operating Expense Account, the Working Capital Reserve Account or the Debt Service Reserve Account shall, until otherwise applied by Collateral Agent from time to time at
Lender's sole discretion during the existence of any Event of Default, be held in the Operating Expense Account, the Working Capital Reserve Account or the Debt Service Reserve Account, as applicable,
and applied, if Lender elects in its sole discretion to make such funds available for such application, 

        (x)    with
respect to the Operating Expense Account only, to pay Property Expenses provided for in the Operating Budget approved by Lender, or for other Property Expenses
approved by Lender, 

        (y)    with
respect to the Working Capital Reserve Account only, as a working capital reserve up to the then applicable Working Capital Reserve Amount, as the same adjusts from
time to time under the then applicable Working Capital Budget, or in such greater or lesser amount as Lender may determine from time to time, with disbursements from time to time at Lender's option
from the Working Capital Reserve Account to the Operating Expense Account as working capital needs arise which may not be satisfied from the funds on hand in the Operating Expense Account, all at the
sole election of Lender, and 

        (z)    with
respect to the Debt Service Reserve Account only, applied to pay the Indebtedness at the sole election of Lender; 

provided, that (1) notwithstanding the foregoing, Lender may at any time, in its sole discretion, elect to apply the funds on deposit in the
Operating Expense Account and/or the Working Capital Reserve Account to pay the Indebtedness (including without limitation any Prepayment Fee, Exit Fee and other amounts due Lender in connection with
such prepayment) while any Event of Default exists, and (2) in the event Lender accepts in writing a proposed cure of the Event of Default which precipitated the deposits to the Operating
Expense Account, the Working Capital Reserve Account and the Debt 

37

 

Service
Reserve Account and no other Event of Default exists, then the funds on deposit in the Operating Expense Account, the Working Capital Reserve Account and the Debt Service Reserve Account shall
be released to Borrower. 

        (d)    Prepaid Rent Account.    On or before the Closing Date, Lender shall on behalf of the Borrower establish and
maintain with the Collection Account Bank an account for the remittance of prepaid Rent designated the Prepaid Rent Account (the "Prepaid Rent Account")
which shall be an Eligible Account and shall have the same title as Collection Account for the benefit of the Collateral Agent on behalf of the Secured Parties until the Loan is paid in full. On each
Advance Date, the Lender shall deposit out of the proceeds of the related Advance in the Prepaid Rent Account an estimate of prepaid Rent held by Borrower with respect to the Mortgaged Property being
financed with the proceeds of the related Advance. On each Payment Date, if the most recent Monthly Property Statement indicates that prepaid Rent for such month exceeds 5% of the previous month's
total base Rent, the Collateral Agent shall cause an amount equal to the amount of such prepaid Rent to be deposited in the Prepaid Rent Account;  provided, however, that on each Payment Date, the amount on deposit in the Prepaid Rent Account shall be
adjusted to reflect the foregoing such that on each Payment Date, the amount in the Prepaid Rent Account shall equal exactly the amount of prepaid Rent due for such month, if any. 

        (e)    Investment of Funds.    All or a portion of any Moneys in the Reserve Accounts (other than the Real Estate Tax
Escrow Account, the Insurance Escrow Account, the Operating Expense Account, the Working Capital Reserve Account and the Debt Service Reserve Account, none of which shall bear interest for the benefit
of Borrower) shall be invested and reinvested, so long as an Event of Default has not occurred and is not continuing, by Collateral Agent in accordance with written instructions delivered by Borrower,
or after an Event of Default has occurred and is continuing, by Lender, in one or more Permitted Investments. If no written investment direction is provided to Collateral Agent by Borrower, Collateral
Agent may at its option invest such Moneys in a Permitted Investment selected by Lender. All interest paid or other earnings on the Permitted Investments of funds deposited into the Reserve Accounts
made hereunder shall be deposited into the Reserve Accounts (other than with respect to the Real Estate Taxes Escrow Account and the Insurance Escrow Account for which Lender and its servicer shall
not have any obligation to deposit such interest or earnings into such accounts). Collateral Agent shall have no liability for any loss in investments of funds in any Reserve Account that are invested
in Permitted Investments and no such loss shall affect Borrower's obligation to fund, or liability for funding, the Reserve Accounts. Unless and until title to the funds therein shall have vested in
any Person other than Borrower, Borrower shall include all such income or gain on any account of the Reserve Account as income of Borrower for federal and applicable state tax purposes. 

        (f)    Event of Default.    After an Event of Default has occurred and is continuing, Borrower shall not be permitted
to make any withdrawal(s) from any Pledged Accounts and Collateral Agent on behalf of the Secured Parties may liquidate any Permitted Investments of the amount on deposit in such account, withdraw and
use such amount on deposit in the Pledged Accounts to make payments on account of the Indebtedness or otherwise as provided in Section 2.8.
Without in any way limiting the foregoing or Lender's rights and remedies upon an Event of Default, and subject to Lender's direction otherwise from time to time, in whole or in part, in Lender's sole
and absolute discretion, after and during the continuance of an Event of Default Lender may direct the Collection Account Bank or the Local Collection Account Bank to disburse to Lender or allocate
all available funds on deposit in the Pledged Accounts to: (a) any debt service or other Indebtedness due under this Loan Agreement or the other Loan Documents; (b) any Reserve Account
established under this Loan Agreement; (c) otherwise as a reserve for Property Expenses, Capital Improvement Costs, Impositions and other expenditures relating to the use, management, operation
or leasing of the Mortgaged Property; and/or (d) any costs and expenses incurred by Lender in connection with such Event of Default, or expended by Lender to protect or preserve the value of
the Mortgaged Property. 

38

 

        Section 2.14.    Additional Provisions Relating to the Pledged Accounts.    

        (a)    Borrower
covenants and agrees that: (i) all securities or other property underlying any financial assets credited to any Pledged Account shall be registered in
the name of Collateral Agent on behalf of the Secured Parties, indorsed to Collateral Agent or indorsed in blank or credited to another securities account maintained in the name of Collateral Agent
and in no case will any financial asset credited to any Pledged Account be registered in the name of Borrower, payable to the order of Borrower or specially indorsed to Borrower except to the extent
the foregoing have been specially indorsed to Collateral Agent or in blank; and (ii) all Permitted Investments and all other property delivered to Collateral Agent pursuant to this Agreement
will be promptly credited to one of the Pledged Accounts. 

        (b)    Borrower
hereby agrees that each item of property (whether investment property, financial asset, security, instrument, cash or otherwise) credited to any Pledged Account
shall be treated as a "financial asset" within the meaning of Section 8-102(a)(9) of the UCC. 

        (c)    Borrower
acknowledges and agrees that the Collection Account Bank and Local Collection Account Bank shall comply with all "entitlement orders" (i.e. an order directing
transfer or redemption of any financial asset relating to a Pledged Account, and any "entitlement order" as defined in Section 8-102(a)(8) of the UCC) and instructions (including
any "instruction" within the meaning of Section 9-104 of the UCC) originated by Collateral Agent without further action or consent by Borrower, Manager or any other Person. 

        (d)    Regardless
of any provision in any other agreement, for purposes of the UCC, with respect to each Pledged Account, New York shall be deemed to be the bank's jurisdiction
(within the meaning of Section 9-304 of the UCC) and the securities intermediary's jurisdiction (within the meaning of Section 8-110 of the UCC). The Pledged
Accounts shall be governed by the laws of the State of New York. 

        (e)    Except
for the claims and interest of Collateral Agent and of Borrower in the Pledged Accounts, Borrower represents and warrants that it does not know of any Lien on or
claim to, or interest in, any Pledged Account or in any "financial asset" (as defined in Section 8-102(a) of the UCC) credited thereto. If any Person asserts any Lien, encumbrance
or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Pledged Accounts or in any financial asset carried therein, Borrower will
promptly notify Collateral Agent thereof and shall indemnify, defend and hold Collateral Agent and each of the Indemnified Parties harmless from and against any such Lien, encumbrance or claim. 

        Section 2.15.    Security Agreement.    

        (a)    Pledge of Pledged Accounts.    To secure the full and punctual payment and performance of all of the
Indebtedness, Borrower hereby assigns, conveys, pledges and transfers to Collateral Agent, as secured party, and grants Collateral Agent a first and continuing security interest in and to, the
following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (collectively, the "Account
Collateral"): 

          (i)  all
of Borrower's right, title and interest in the Pledged Accounts and all Money and Permitted Investments, if any, from time to time deposited or held in the Pledged
Accounts or purchased with funds or assets on deposit in the Pledged Accounts; 

         (ii)  all
of Borrower's right, title and interest in interest, dividends, Money, Instruments and other property from time to time received, receivable or otherwise payable in
respect of, or in exchange for, any of the foregoing until such time as such items are disbursed from the Pledged Accounts; and 

39

 

        (iii)  to
the extent not covered by clause (i) or (ii) above, all
Proceeds of any or all of the foregoing until such time as such items are disbursed from the Pledged Accounts. 

        Collateral
Agent and Collection Account Bank and Local Collection Account Bank, each as agent for Lender, shall have with respect to the foregoing collateral, in addition to the rights
and remedies herein set forth, all of the rights and remedies available to a secured party under the UCC, as if such rights and remedies were fully set forth herein. 

        (b)    Covenants; Sole Dominion and Control.    So long as any portion of the Indebtedness is outstanding, Borrower
shall not open any account other than the Local Collection Account for the deposit of Rents or Money received from Accounts or under Leases and derived from the Mortgaged Property and all Proceeds to
pay amounts owing hereunder, other than any account for amounts required by law to be segregated by Borrower. Borrower shall not have any right to withdraw Money from the Pledged Accounts. Borrower
acknowledges and agrees that the Pledged Accounts are and shall at all times continue to be subject to and under the sole dominion and control, and the "control" within the meaning of Sections
9-104 and 9-106 of the UCC, of Collateral Agent. Notwithstanding anything set forth herein to the contrary, neither Borrower nor Manager nor any other person or entity, through
or under Borrower, shall have any control over the use of, or any right to withdraw any amount from, any Pledged Accounts, and Borrower acknowledges that the Collection Account Bank and the Local
Collection Account Bank shall comply with all instructions originated by Collateral Agent with respect to the Pledged Accounts without the further consent of Borrower or Manager. The Account
Collateral shall be subject to such applicable laws, and such applicable regulations of the Board of Governors of the Federal Reserve System and of any other banking authority or Governmental
Authority, as may now or hereafter be in effect, and to the rules, regulations and procedures of the financial institution where the Account Collateral is maintained relating to demand deposit
accounts generally from time to time in effect. 

        (c)    Financing Statements; Further Assurances.    Borrower hereby irrevocably authorizes Collateral Agent at any
time and from time to time to file any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Collateral Agent may
determine, in its sole discretion, are necessary or advisable to perfect the security interests granted to Collateral Agent in connection herewith. Such financing statements may describe the
collateral in the same manner as described in any security agreement or pledge agreement entered into by the parties in connection herewith or may contain an indication or description of collateral
that describes such property in any other manner as Collateral Agent may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the
collateral granted to Collateral Agent in connection herewith, including, without limitation, describing such property as "all assets" or "all personal property" of Borrower whether now owned or
hereafter acquired. From time to time, at the expense of Borrower, Borrower shall promptly execute and deliver all further instruments, and take all further action, that Collateral Agent may
reasonably request, in order to continue the perfection and protection of the pledge and security interest granted or purported to be granted hereby. 

        (d)    Transfers and Other Liens.    Borrower shall not sell or otherwise dispose of any of the Account Collateral
other than pursuant to the terms of this Agreement and the other Loan Documents, or create or permit to exist any Lien upon or with respect to all or any of the Account Collateral, except for the Lien
granted to Collateral Agent under or as contemplated by this Agreement. 

        (e)    No Waiver.    Every right and remedy granted to Collateral Agent under this Agreement or by law may be
exercised by Collateral Agent at any time and from time to time, and as often as Collateral Agent may deem it expedient. Any and all of Collateral Agent's rights with respect to the pledge of and
security interest in the Account Collateral granted hereunder shall continue unimpaired, and to the 

40

 

extent
permitted by law, Borrower shall be and remain obligated in accordance with the terms hereof, notwithstanding (i) any proceeding of Borrower under the United States Bankruptcy Code or
any bankruptcy, insolvency or reorganization laws or statutes of any state, (ii) the release or substitution of Account Collateral at any time, or of any rights or interests therein or
(iii) any delay, extension of time, renewal, compromise or other indulgence granted by Lender in the event of any Default with respect to the Account Collateral or otherwise hereunder. No delay
or extension of time by Lender in exercising any power of sale, option or other right or remedy hereunder, and no notice or demand which may be given to or made upon Borrower by Lender, shall
constitute a waiver thereof, or limit, impair or prejudice Lender's right, without notice or demand, to take any action against Borrower or to exercise any other power of sale, option or any other
right or remedy. 

        (f)    Collateral Agent Appointed Attorney-In-Fact.    Borrower hereby irrevocably constitutes
and appoints Collateral Agent as Borrower's true and lawful attorney-in-fact, with full power of substitution, at any time after the occurrence and during the continuation of
an Event of Default, to execute, acknowledge and deliver any instruments and to exercise and enforce every right, power, remedy, option and privilege of Borrower with respect to the Account
Collateral, and do in the name, place and stead of Borrower, all such acts, things and deeds for and on behalf of and in the name of Borrower with respect to the Account Collateral, which Borrower
could or might do or which Collateral Agent may deem necessary or desirable to more fully vest in Collateral Agent the rights and remedies provided for herein with respect to the Account Collateral
and to accomplish the purposes of this Agreement. The foregoing powers of attorney are irrevocable and coupled with an interest and shall terminate upon repayment of the Indebtedness in full. 

        (g)    Continuing Security Interest; Termination.    This Section 2.15 shall create a continuing pledge of and
security interest in the Account Collateral and shall remain in full force and effect until payment in full by Borrower of the Indebtedness. Upon payment in full by Borrower of the Indebtedness,
Collateral Agent shall return to Borrower such of the Account Collateral as shall not have been applied pursuant to the terms hereof, and shall execute such instruments and documents as may be
reasonably requested by Borrower to evidence such termination and the release of the pledge and lien hereof. 

        Section 2.16.    Mortgage Recording Taxes.    The Lien to be created by the Mortgages is intended to encumber
the Mortgaged Property to the full extent of the Loan Amount; provided, that, notwithstanding the foregoing, with respect to any Mortgaged Property
located in a state that imposes mortgage recording taxes where the imposition of a lower amount would allow tax savings to the Borrower, the Lien to be created by the related Mortgage is intended to
encumber the Mortgaged Property in an amount acceptable to the Collateral Agent which amount shall in no event be less than 110% of the value of the Mortgaged Property as determined by the Appraisals
(or if the appraised value for such Mortgaged Property is not available, then the purchase price) paid by Borrower for such Mortgaged Property. On each Advance Date, Borrower shall have paid all
state, county and municipal recording and all other taxes imposed upon the execution and recordation of the Mortgages, if any. 

41

 

ARTICLE III.

CONDITIONS PRECEDENT  

        Section 3.1.    Conditions Precedent to Closing.    The obligation of the Lender to close the Loan is subject
to the satisfaction by Borrower (and Guarantor, where applicable) or waiver by Lender in writing of the following conditions no later than the Closing Date: 

        (a)    Loan Agreement.    Borrower and Lender shall have executed and delivered this Agreement. 

        (b)    Note.    Borrower shall have executed and delivered to Lender the Note. 

        (c)    Environmental Indemnity Agreement; Pledge Agreement; Guaranty of Non-Recourse Obligations; Hedge
Agreement.    Borrower and Guarantor shall have executed and delivered the Environmental Indemnity Agreement to Lender. Each of the members of Borrower shall have
executed and delivered the Pledge Agreement to Lender. Guarantor shall have executed and delivered the Guaranty of Non-Recourse Obligations. Borrower shall have delivered to the Agent
evidence that all right, title and interest in the Hedge Agreement shall have been assigned from the Guarantor to the Borrower. 

        (d)    Opinions of Counsel.    Lender shall have received from counsel to Borrower, the Member and the Guarantor,
legal opinions in form and substance acceptable to Lender, with respect to corporate matters. Such legal opinions shall be addressed to each Secured Party and its successors and assigns, dated the
Closing Date, and in form and substance reasonably satisfactory to Lender and its counsel. 

        (e)    Organizational Documents.    Lender shall have received with respect to each of Borrower, the Member and the
Guarantor its certificate of formation, certificate of limited partnership or certificate of incorporation, as applicable, as amended, modified or supplemented to the Closing Date, as filed with the
Secretary of State in the jurisdiction of organization and in effect on the Closing Date and certified to be true, correct and complete by the appropriate Secretary of State as of a date not more than
thirty (30) days prior to the Closing Date, together with a good standing certificate from such Secretary of State dated not more than thirty (30) days prior to the Closing Date and, for
Borrower and the Member to the extent required by applicable law, a good standing certificate from the Secretaries of State (or the equivalent thereof) of each other State in which Borrower or the
Member is required to be qualified to transact business, each dated not more than thirty (30) days prior to the Closing Date. 

        (f)    Certified Resolutions, etc.    Lender shall have received a certificate of each of Borrower, Member and the
Guarantor dated the Closing Date, certifying (i) the names and true signatures of its incumbent officers authorized to sign the Loan Documents to which Borrower, the Member or the Guarantor is
a party, (ii) the Organizational Agreement of each of Borrower, the Member and Guarantor, in each case as in effect on the Closing Date, (iii) the resolutions of each of Borrower, the
Member and the Guarantor, approving and authorizing the execution, delivery and performance of the Loan Documents to which it is a party, and (iv) that there have been no changes in any
Organizational Agreement since the date of execution or preparation thereof. 

        (g)    Additional Matters.    Lender shall have received such other certificates, opinions, documents and instruments
relating to the Loan as may have been reasonably requested by Lender. All corporate and other organizational proceedings, all other documents (including, without limitation, all documents referred to
herein and not appearing as exhibits hereto) and all legal matters in connection with the Loan shall be reasonably satisfactory in form and substance to Lender in its sole and absolute discretion. 

        (h)    Transaction Costs.    Borrower shall have paid all Transaction Costs for which bills have been submitted in
accordance with the provisions of Section 8.23. 

42

 

        (i)    No Default or Event of Default.    No event which would constitute either a Default or Event of Default under
this Agreement or the other Loan Documents shall have occurred and be continuing on the Closing Date. 

        (j)    No Injunction.    No law or regulation shall have been adopted, no order, judgment or decree of any
Governmental Authority shall have been issued, and no litigation shall be pending or threatened, which in the good faith judgment of Lender would enjoin, prohibit or restrain, or impose or result in
the
imposition of any material adverse condition upon, the making or repayment of the Loan or the consummation of the Transaction. 

        (k)    Representations and Warranties.    The representations and warranties in  Section 4.1of this Agreement shall be true and
correct in all material respects. 

        Section 3.2.    Advance Procedure.    

        (a)    Request for Advance.    Not less than ten (10) Business Days prior to a proposed Advance Date after the
Closing Date, Borrower shall deliver to Lender in writing (with copies to Lender's servicer, if applicable) a written request for an Advance in a form reasonably acceptable to Lender which contains
the proposed Advance Date, lists the Owned Properties which the Borrower proposes to convert into Mortgaged Properties and/or any other real properties which the Borrower proposes to acquire as
Mortgaged Properties or Owned Properties and sets forth any exceptions to the representations and warranties contained in Section 4.2 of this
Agreement. 

        (b)    Lender's Response.    Within two (2) Business Days after the satisfaction by the Borrower of the
conditions precedent set forth in Section 3.3 below and in Section 2.1(a) above, the
Lender shall fund the Advance on the related Advance Date; provided, that the Lender shall not have any obligation to fund an Advance the proceeds of
which are to be applied to acquire a real property which is to be added as a Mortgaged Property or an Owned Property after the Closing Date if such real property is not acceptable to the Lender in its
sole discretion (and in such event the Borrower shall not acquire such real property). 

        Section 3.3.    Conditions Precedent to Advances.    Advances shall be made on an Advance Date provided that
all of the following conditions shall have been satisfied (or waived in accordance with Section 8.4) (i.e. each condition precedent set forth
below in this Section 3.3 with respect to a Mortgaged Property shall apply solely to the real property being converted from an Owned Property to
a Mortgaged Property or being acquired as a Mortgaged Property on the related Advance Date): 

        (a)    Representations and Warranties.    The representations and warranties herein and in the other Loan Documents
shall be true and correct in all material respects. 

        (b)    Transaction Costs.    Borrower shall have paid all Transaction Costs for which bills have been submitted in
accordance with the provisions of Section 8.23. 

        (c)    No Default or Event of Default.    No event which would constitute either a Default or Event of Default under
this Agreement or the other Loan Documents shall have occurred and be continuing on the Advance Date. 

        (d)    No Injunction.    No law or regulation shall have been adopted, no order, judgment or decree of any
Governmental Authority shall have been issued, and no litigation shall be pending or threatened, which in the good faith judgment of Lender would enjoin, prohibit or restrain, or impose or result in
the imposition of any material adverse condition upon, the making or repayment of the Loan or the consummation of the Transaction. 

        (e)    Survey; Appraisal.    Lender shall have received the Survey and the Appraisal with respect to each Mortgaged
Property (except Appraisals with respect to the Mortgaged Properties set forth on Schedule 9), which shall be in form and substance satisfactory to Lender in its sole and absolute 

43

 

discretion.
Notwithstanding the foregoing, Lender shall have the right at any time prior to the Maturity Date to require Borrower to obtain an appraisal with respect to any of the Mortgaged Properties
set forth on Schedule 9. 

        (f)    Property Condition Assessment.    Except with respect to the Mortgaged Properties set forth on
Schedule 9 (for which Lender shall have received a copy of Borrower's internal site inspection/due diligence report), Lender shall have received the Property Condition Assessment with respect
to each Mortgaged Property prepared by the Engineer or another Person acceptable to the Lender, which Property Condition Assessment shall be acceptable to Lender in its sole and absolute discretion. 

        (g)    Environmental Matters.    Lender shall have received an Environmental Report prepared by an Environmental
Auditor with respect to the Mortgaged Property, which Environmental Report shall be acceptable to Lender in its sole and absolute discretion. 

        (h)    Financial Information.    Lender shall have received financial information relating to the Guarantor, Borrower
and the Mortgaged Property satisfactory to Lender in its sole and absolute discretion. Such information shall include, without limitation, the following, to the extent reasonably available: 

          (i)   operating
statements for the current year (including actual to date information, an annual budget and trailing twelve month data in hard copy and on
diskette) and for not less than the three preceding years; 

         (ii)   a
copy of the standard lease form, if any; 

        (iii)   current
property rent roll data on a tenant by tenant basis in hard copy including the name of each tenant and the associated Homesite, security deposit,
amount due at the beginning of the month, charges in the current month (including Homesite rent, water/sewer, gas/electric, trash, mobile home rent, notes and other charges), payments made during the
month, amount due at the end of the month, total Homesites at the Mortgaged Property and total occupied Homesites at the Mortgaged Property (with the occupancy level expressed as a percentage); 

        (iv)   the
tax bills for 2003 and the historical tax records for 2002; 

         (v)   the
most recent annual financial statements and unaudited quarterly financial statements; and 

        (vi)   such
other financial information as is customarily required by institutional lenders for loans similar in size and type as the Loan. 

The
annual financial statements relating to the Guarantor shall be either (x) audited by a "Big Four" accounting firm or another firm of certified public accountants reasonably acceptable to
Lender or (y) prepared in accordance with agreed upon procedures reasonably acceptable to Lender to be performed by a "Big Four" accounting firm or another firm of certified public accountants
reasonably acceptable to Lender to create similar information. 

        (i)    Pro-Forma Financial Statement; Operating Budget.    Lender shall have received (i) the
initial pro-forma financial statement and Operating Budget for the Mortgaged Property for the following twelve months (including on an annual and monthly basis a break-down of
projected Gross Revenues, Property Expenses, Capital Improvement Costs, replacement reserve costs and average occupancy level (expressed as a percentage)) and (ii) a financial statement that
forecasts projected revenues and operating expenses for not less than three years (including the assumptions used in such forecast). 

        (j)    Site Inspection.    Borrower shall have provided to Lender the opportunity to perform, or cause to be performed
on its behalf, an on-site due diligence review of the Mortgaged Property, which inspection is satisfactory to Lender in its sole discretion. 

44

 

        (k)    Mortgaged Property Documents.    

        (i)    Mortgages; Assignments of Rents and Leases.    Borrower shall have executed and delivered to Lender the
Mortgages and the Assignments of Rents and Leases with respect to the Mortgaged Property and such Mortgages and Assignments of Rents and Leases shall have been filed of record in the appropriate
filing office in the jurisdiction in which the Mortgaged Property is located or irrevocably delivered to a title agent for such recordation. 

        (ii)    Financing Statements.    Borrower shall have delivered to Lender all financing statements required by Lender
pursuant hereto and such financing statements shall have been filed of record in the appropriate filing offices in each of the appropriate jurisdictions or irrevocably delivered to a title agent for
such recordation. 

        (iii)    Management Agreement and Manager's Subordination.    Lender shall have received the executed Management
Agreement for the Mortgaged Property and the Manager shall have executed and delivered the Manager's Subordination to Lender. 

        (iv)    Contract Assignment.    With respect to the Mortgaged Property, Borrower shall have executed and delivered to
Lender a Contract Assignment with respect to the Mortgaged Property. 

        (l)    Opinions of Counsel.    Lender shall have received from counsel to Borrower reasonably acceptable to Lender in
each state in which any Mortgaged Property is located its legal opinion in form and substance satisfactory to Lender, as to (i) the enforceability of the Mortgages, Assignments of Rents and
Leases and any other Loan Documents governed by the law of such jurisdiction, (ii) perfection of Liens and security interests and (iii) other matters referred to therein with respect to
each Mortgaged Property. The legal opinions will be addressed to each Secured Party and its successors and assigns, dated the applicable Advance Date, and in form and substance reasonably satisfactory
to Lender and its counsel. 

        (m)    Insurance.    Lender shall have received certificates of insurance demonstrating insurance coverage in respect
of each Mortgaged Property of types, in amounts, with insurers and otherwise in compliance with the terms, provisions and conditions set forth in this Agreement. Such certificates shall indicate that
Lender is a named additional insured and shall contain a loss payee endorsement in favor of Lender with respect to the property policies required to be maintained under this Agreement. 

        (n)    Title Insurance Policy.    Lender shall have received countersigned pro forma title policies or marked binders
constituting the unconditional commitment (in form and substance reasonably satisfactory to Lender) to issue the Title Insurance Policy covering the Mortgaged Property with an aggregate amount
at least equal to the outstanding Principal Indebtedness, together with modifications to the commitments from all prior Advance Dates reflecting the then current Principal Indebtedness. 

        (o)    Lien Search Reports.    Lender shall have received satisfactory reports of UCC (collectively, the
"UCC Searches"), tax lien, judgment and litigation searches and title updates conducted by the companies issuing the Title Insurance Policy with respect
to the Collateral, Guarantor, Borrower and the Member, such searches to be conducted in each of the locations required by Lender. 

        (p)    Consents, Licenses, Approvals, etc.    Lender shall have received copies of all consents, licenses and
approvals, if any, required in connection with the execution, delivery and performance by Borrower, Member and Guarantor and the validity and enforceability, of the Loan Documents, and such consents,
licenses and approvals shall be in full force and effect. 

        (q)    Additional Real Estate Matters.    Lender shall have received such other real estate related certificates and
documentation relating to the Mortgaged Property as Lender may have reasonably 

45

 

requested.
Such documentation shall include the following as requested by Lender and to the extent reasonably available: 

          (i)   certificates
of occupancy issued by the appropriate Governmental Authorities of the jurisdiction in which each Mortgaged Property is located reflecting,
and consistent with, the use of each Mortgaged Property as of the Closing Date; 

         (ii)   letters
from the appropriate local Governmental Authorities of the jurisdiction in which each Mortgaged Property is located, certifying that each
Mortgaged Property is in compliance with all applicable zoning laws, rules and regulations, a zoning endorsement to the applicable Title Insurance Policy with respect to each Mortgaged Property and/or
an acceptable zoning letter from Zoning Information Services Inc.; 

        (iii)   copies
of the Leases in effect at each Mortgaged Property as Lender may request (in addition to the copies delivered above); and 

        (iv)   a
certified copy of the purchase and sale agreement (with exhibits), if any, for the Mortgaged Property. 

        (r)    Closing Statement.    Lender and Borrower shall have agreed upon a detailed closing statement in a form
reasonably acceptable to Lender, which includes a complete description of Borrower's sources and uses of funds on the Closing Date. 

        (s)    Maximum LTV; Debt Service Coverage Test.    Lender shall have determined that each of the Maximum LTV and the
Debt Service Coverage Test is satisfied as of the Advance Date. 

        (t)    Advance Fee.    Lender shall have received its Advance Fee, which may be retained by Lender from the proceeds
of the Advance. 

        Section 3.4.    Execution and Delivery of Agreement.    The execution and delivery of this Agreement by each
party to this Agreement shall be deemed to constitute the satisfaction or waiver of the conditions set forth in Section 3.1;  provided, that any such
deemed satisfaction or waiver shall be solely for the purposes of  Section 3.1 and shall not be deemed or construed to constitute a waiver of any other provision of this Agreement or of any
provisions of any of
the other Loan Documents, including, without limitation, any undelivered items undertaking or agreement or other post-closing agreement or undertaking entered into by Borrower and/or
Guarantor. 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES  

        Section 4.1.    Representations and Warranties as to Borrower.    Borrower represents and warrants that, as of
the Closing Date and each Advance Date: 

        (a)    Organization.    Borrower (i) is a duly organized and validly existing limited liability company in good
standing under the laws of the State of Delaware, (ii) has the requisite power and authority to own its properties (including, without limitation, the Mortgaged Property) and to carry on its
business as now being conducted and is qualified to do business in the jurisdiction in which the Mortgaged Property is located, and (iii) has the requisite power to execute and deliver, and
perform its obligations under, this Agreement, the Note and all of the other Loan Documents to which it is a party. 

        (b)    Authorization; No Conflict; Consents and Approvals.    The execution and delivery by Borrower of this
Agreement, the Note and each of the other Loan Documents, Borrower's performance of its obligations hereunder and under the other Loan Documents and the creation of the security interests and liens
provided for in this Agreement and the other Loan Documents to which it is a party (i) have been duly authorized by all requisite action on the part of Borrower, (ii) will not violate
any provision of any Legal Requirements, any order of any court or other Governmental Authority, the 

46

 

Organizational
Agreement or any indenture or agreement or other instrument to which Borrower is a party or by which Borrower is bound, and (iii) will not be in conflict with, result in a breach
of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any Lien of any nature whatsoever upon the Mortgaged Property pursuant to, any
such indenture or agreement or material instrument other than the Loan Documents. Other than those obtained or filed on or prior to the Closing Date, Borrower is not required to obtain any consent,
approval or authorization from, or to file any declaration or statement with, any Governmental Authority or other agency in connection with or as a condition to the execution, delivery or performance
of this Agreement, the Note or the other Loan Documents executed and delivered by Borrower. 

        (c)    Enforceability.    This Agreement, the Note and each other Loan Document executed by Borrower in connection
with the Loan (including, without limitation, any Collateral Security Instrument), is the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms,
subject to bankruptcy, insolvency, and other limitations on creditors' rights generally and to equitable principles. This Agreement, the Note and such other Loan Documents are not subject to any right
of rescission, set-off, counterclaim or defense by Borrower (including the defense of usury), and Borrower has not asserted any right of rescission, set-off, counterclaim or
defense with respect thereto. 

        (d)    Litigation.    There are no actions, suits or proceedings at law or in equity by or before any Governmental
Authority or other agency now pending and served or, to the best knowledge of Borrower, threatened against Borrower, Guarantor or any Collateral, which actions, suits or proceedings, if determined
against Borrower, Guarantor or such Collateral, are reasonably likely to result in a Material Adverse Effect. 

        (e)    Agreements.    Borrower is not in default in the performance, observance or fulfillment of any of the material
obligations, covenants or conditions contained in any agreement or instrument to which it is a party or by which Borrower or any Collateral is bound which default is reasonably likely to have a
Material Adverse Effect. Neither Borrower nor Guarantor is a party to any agreement or instrument or subject to any restriction which restricts such Person's ability to conduct its business in the
ordinary course or that is reasonably likely to have a Material Adverse Effect. 

        (f)    No Bankruptcy Filing.    Neither Borrower nor Guarantor is contemplating either the filing of a petition by it
under any state or federal bankruptcy or insolvency laws or the liquidation of all or a material
portion of its assets or property. To the best knowledge of Borrower, no Person is contemplating the filing of any such petition against Borrower. 

        (g)    Solvency.    Giving effect to the transactions contemplated hereby, the fair market value of Borrower's assets
exceeds and will, immediately following the making of the Loan, exceed Borrower's total liabilities (including, without limitation, subordinated, unliquidated, disputed and contingent liabilities).
The fair market value of Borrower's assets is and will, immediately following the making of the Loan, be greater than Borrower's probable liabilities (including the maximum amount of its contingent
liabilities on its debts as such debts become absolute and matured). Borrower's assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it will, incur debts and liabilities (including, without limitation, contingent
liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amounts to be payable on or in respect of obligations of Borrower). 

        (h)    Other Debt.    Borrower has not borrowed or received other debt financing whether unsecured or secured by the
Mortgaged Property or any part thereof which is outstanding as of the Closing Date. As of the Closing Date, Borrower has no Other Borrowings other than trade debt expressly permitted under
Article VIII of this Agreement. 

47

   
        (i)    Full and Accurate Disclosure.    No statement of fact made by or on behalf of Borrower in this Agreement or
in
any of the other Loan Documents contains any untrue statement of material fact or omits to state any material fact necessary to make statements contained herein or therein not misleading. To the best
knowledge of Borrower, no financial statements or any other document, certificate or written statement furnished to Lender by Borrower or Guarantor, or by any third party on behalf of Borrower or
Guarantor, for use in connection with the Loan contains any untrue representation, warranty or statement of a material fact, and none omits or will omit to state a material fact necessary in order to
make the statements contained herein or therein not misleading. To the best knowledge of Borrower, there is no fact that has not been disclosed to Lender that is reasonably likely to result in a
Material Adverse Effect. 

        (j)    Financial Information.    All financial statements and other data concerning Borrower, Guarantor and the
Mortgaged Property that has been delivered by or on behalf of Borrower or Guarantor to Lender is true, complete and correct in all material respects and, except as disclosed on Schedule 4
attached hereto, has been prepared in accordance with GAAP. Since the delivery of such data, except as otherwise disclosed in writing to Lender, there has been no change in the financial position of
Borrower, Guarantor or the Mortgaged Property, or in the results of operations of Borrower or Guarantor, which change results or is reasonably likely to result in a Material Adverse Effect. Neither
Borrower nor Guarantor has incurred any obligation or liability, contingent or otherwise, not reflected in such financial data, which is likely to have a Material Adverse Effect upon its business
operations or the Mortgaged Property. 

        (k)    Investment Company Act; Public Utility Holding Company Act.    Borrower is not (i) an "investment
company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of either a "holding company" or a "subsidiary company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, or (iii) subject to
any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money in accordance with this Agreement. 

        (l)    Compliance.    Borrower is in compliance with all applicable Legal Requirements, except for noncompliance that
is not reasonably likely to have a Material Adverse Effect. Borrower is not in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority except for defaults
or violations which are not reasonably likely to have a Material Adverse Effect. 

        (m)    Use of Proceeds; Margin Regulations.    Borrower will use the proceeds of the Loan for the purposes described
in Section 2.2. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any "margin stock" within the meaning
of Regulation U of the Board of Governors of the
Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any purposes prohibited by Legal
Requirements. 

        (n)    Organizational Chart.    The organizational chart set forth as Schedule 5 accurately sets forth the
direct and indirect ownership structure of Borrower. 

        (o)    No Defaults.    No Default or Event of Default exists under or with respect to any Loan Document. 

        (p)    Plans and Welfare Plans.    The assets of Borrower are not treated as "plan assets" under regulations currently
promulgated under ERISA. Neither Borrower nor any ERISA Affiliate sponsors, maintains, contributes to or is required to contribute to any Plan or Multiemployer Plan nor has the Borrower or any ERISA
Affiliate sponsored, maintained, contributed to or been required to contribute to any Plan or Multiemployer Plan within the past six years. There are no pending issues or claims before the Internal
Revenue Service, the United States Department of Labor or any court of 

48

 

competent
jurisdiction related to any Plan or Welfare Plan. No event has occurred, and there exists no condition or set of circumstances, in connection with any Plan or Welfare Plan under which
Borrower or, to the best knowledge of Borrower, any ERISA Affiliate, directly or indirectly (through an indemnification agreement or otherwise), is reasonably likely to be subject to any material risk
of liability under Section 409 or 502(i) of ERISA or Section 4975 of the Code. No Welfare Plan provides or will provide benefits, including, without limitation, death or medical
benefits (whether or not insured) with respect to any current or former employee of Borrower, or, to the best knowledge of Borrower, any ERISA Affiliate beyond his or her retirement or other
termination of service other than (i) coverage mandated by applicable law, (ii) death or disability benefits that have been fully provided for by fully paid up insurance or
(iii) severance benefits. 

        (q)    Additional Borrower UCC Information.    Borrower's organizational identification number is:
84-1429521 and the full legal name of Borrower is as set forth on the signature pages hereof and Borrower has not done in the last five (5) years, and does not do, business under
any other name (including any trade-name or fictitious business name). 

        (r)    Not Foreign Person.    Borrower is not a "foreign person" within the meaning of § 1445(f)(3) of the
Code. 

        (s)    Labor Matters.    Borrower is not a party to any collective bargaining agreements. 

        (t)    Pre-Closing Date Activities.    Borrower has not conducted any business or other activity on or
prior to the Closing Date, other than in connection with the acquisition, management and ownership of the Mortgaged Property and the Owned Property. 

        (u)    No Bankruptcies or Criminal Proceedings Involving Borrower or Related Parties.    No bankruptcy, insolvency,
reorganization or comparable proceedings have ever been instituted by or against Borrower, any Affiliate of Borrower, any Guarantor or any individual or entity owning, with his, her or its family
members, 20% or more of the direct, or indirect beneficial ownership interests in Borrower (each such Guarantor, individual, or entity being herein referred to as a "Principal"), and no such
proceeding is now pending or contemplated. None of Borrower, any Principal, or to Borrower's knowledge, any other individual or entity directly or indirectly owning or controlling, or the family
members of which own or control, any direct or indirect beneficial ownership interest in Borrower or in the Manager or asset manager for the Mortgaged Property, have been charged, indicted or
convicted, or are currently under the threat of charge, indictment or conviction, for any felony or crime punishable by imprisonment. 

        (v)    No Prohibited Persons.    Neither Borrower, Member, Guarantor nor any of their respective officers, directors,
shareholders, partners, members or Affiliates (including the indirect holders of equity interests in Borrower) is or will be an entity or person: (i) that is listed in the Annex to, or is
otherwise subject to the provisions of Executive Order 13224 issued on September 24, 2001 ("EO13224"); (ii) whose name appears on the
United States Treasury Department's Office of Foreign Assets Control ("OFAC") most current list of "Specifically Designated National and Blocked
Persons" (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf)(the "OFAC
List"); (iii) who commits, threatens to commit or supports "terrorism", as that term is defined in EO 13224; or (iv) who is otherwise affiliated with any entity
or person listed above (any and all parties or persons described in clauses (i) through (iv) above are herein referred to as a "Prohibited
Person"). To the best knowledge of the Borrower, no tenant at the Property currently is identified on the OFAC List or otherwise qualifies as a Prohibited Person and no tenant
at the Property is owned by or an Affiliate of a Prohibited Person. Borrower and Manager have implemented and will continue to follow procedures to ensure that no tenant at the Property is a
Prohibited Person or owned by or an Affiliate of a Prohibited Person. 

49

 

        Section 4.2.    Representations and Warranties as to the Mortgaged Property.    Borrower hereby represents and
warrants to Lender that, as to each Mortgaged Property and the Mortgages, as of each Advance Date: 

        (a)    Title to the Mortgaged Property.    Borrower owns good, marketable and insurable fee simple title to each
Mortgaged Property (other than Personalty), free and clear of all Liens, other than the Permitted Encumbrances. Borrower owns the Personalty free and clear of any and all Liens, other than Permitted
Encumbrances. There are no outstanding options to purchase or rights of first refusal or restrictions on transferability affecting any Mortgaged Property or any portion thereof or interest therein. 

        (b)    Utilities and Public Access.    Except as set forth on Schedule 10, (i) each Mortgaged Property
has adequate rights of access to public ways and is served by public water, electric, sewer, sanitary sewer and storm drain facilities; (ii) all public utilities necessary to the continued use
and enjoyment of each Mortgaged Property as presently used and enjoyed are located in the public right-of-way abutting the premises, and all such utilities are connected so as
to serve each Mortgaged Property without passing over other property except for land or easement areas of or available to the utility company providing such utility service; and (iii) all roads
necessary for the full utilization of each Mortgaged Property for its current purpose have been completed and dedicated to public use and accepted by all Governmental Authorities or are the subject of
access easements for the benefit of each Mortgaged Property. 

        (c)    Condemnation.    No Taking has been commenced or, to the best of Borrower's knowledge, is contemplated with
respect to all or any portion of any Mortgaged Property or for the relocation of roadways providing access to any Mortgaged Property. 

        (d)    Compliance.    Each Mortgaged Property and the current use thereof is in compliance with all applicable Legal
Requirements (including, without limitation, building, parking, subdivision, land use, health, fire, safety and zoning ordinances and codes) and all applicable Insurance Requirements, except for
noncompliance which cannot reasonably be expected to result in a Material Adverse Effect. Each Mortgaged Property is zoned for its current use, which zoning designation is unconditional, in full force
and effect, and is beyond all applicable appeal periods. In the event that all or any part of the Improvements located on any Mortgaged Property are destroyed or damaged, said Improvements can be
legally reconstructed to their condition prior to such damage or destruction, and thereafter exist for the same use without violating any zoning or other ordinances applicable thereto and without the
necessity of obtaining any variances or special permits, other than customary demolition, building and other construction related permits. No legal proceedings are pending or, to the knowledge of
Borrower, threatened with respect to the zoning of the Mortgaged Property. Neither the zoning nor any other right to construct, use or operate the Mortgaged Property is in any way dependent upon or
related to any real estate other than the Mortgaged Property. No tract map, parcel map, condominium plan, condominium declaration, or plat of subdivision will be recorded by Borrower with respect to
the Mortgaged Property without Lender's prior written consent. 

        (e)    Environmental Compliance.    Except for matters set forth in the Environmental Reports delivered to Lender in
connection with the Loan (true, correct and complete copies of which have been provided to Lender by Borrower): 

          (i)  Borrower
and each Mortgaged Property is in full compliance with all applicable Environmental Laws (which compliance includes, but is not limited to, the possession by
Borrower or the Manager of all environmental, health and safety permits, licenses and other governmental authorizations required in connection with the ownership and operation of the Mortgaged
Property under all Environmental Laws), except for noncompliance which cannot reasonably be expected to result in a Material Adverse Effect. 

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         (ii)  There
is no material Environmental Claim pending or, to the actual knowledge of Borrower, threatened, and no penalties arising under Environmental Laws have been
assessed against Borrower, the Manager or any Mortgaged Property, or, to the actual knowledge of Borrower, against any Person whose liability for any Environmental Claim Borrower or the Manager has or
may have retained or assumed either contractually or by operation of law, and no material investigation or review is pending or, to the actual knowledge of Borrower, threatened by any Governmental
Authority, citizens group, employee or other Person with respect to any alleged failure by Borrower or the Manager or any Mortgaged Property to have any environmental, health or safety permit, license
or other authorization required under, or to otherwise comply with, any Environmental Law or with respect to any alleged liability of Borrower or the Manager for any Use or Release of any Hazardous
Substances. 

        (iii)  There
are no present and, to the best knowledge of the Borrower, there have been no past material Releases of any Hazardous Substances that are reasonably likely to
form the basis of any Environmental Claim against Borrower, the Manager, any Mortgaged Property or against any Person whose liability for any Environmental Claim Borrower or the Manager has or may
have retained or assumed either contractually or by operation of law (other than Hazardous Substances being used in amounts that are customary for properties such as the Mortgaged Property and for
purposes that are typical for properties such as the Mortgaged Property and in all cases are utilized in compliance with Environmental Law in all material respects). 

        (iv)  Without
limiting the generality of the foregoing, to the best knowledge of the Borrower, there is not present at, on, in or under any Mortgaged Property, any Hazardous
Substances (including, without limitation, PCB-containing equipment, asbestos or asbestos containing materials, underground storage tanks or surface impoundments for Hazardous Substances,
lead in drinking water or lead based paint) (other than Hazardous Substances being used in amounts that are customary for properties such as the Mortgaged Property and for purposes that are typical
for properties such as the Mortgaged Property and in all cases are utilized in compliance with Environmental Law in all material respects) or any fungus, mold, mildew or biological agent the presence
of which is reasonably likely to materially adversely affect the value or utility of such Mortgaged Property. 

         (v)  No
liens are presently recorded with the appropriate land records under or pursuant to any Environmental Law with respect to the Mortgaged Property and no Governmental
Authority has been taking or, to the actual knowledge of Borrower, is in the process of taking any action that could subject the Mortgaged Property to Liens under any Environmental Law. 

        (vi)  There
have been no environmental investigations, studies, audits, reviews or other analyses conducted by or that are in the possession of Borrower in relation to any
Mortgaged Property which have not been made available to Lender. 

        (f)    Mortgage and Other Liens.    Each Mortgage creates a valid and enforceable first priority Lien on the
applicable Mortgaged Property described therein, as security for the repayment of the Indebtedness, subject only to the Permitted Encumbrances applicable to such Mortgaged Property. This Agreement
creates a valid and enforceable first priority Lien on all Account Collateral. Each Collateral Security Instrument establishes and creates a valid, subsisting and enforceable Lien on and a security
interest in, or claim to, the rights and property described therein. All property covered by any Collateral Security Instrument in which a security interest can be perfected by the filing of a
financing statement is subject to a UCC financing statement filed and/or recorded, as appropriate (or irrevocably delivered to an agent for such recordation or filing) in all places necessary to
perfect a valid first priority Lien with respect to the rights and property that are the subject of such Collateral Security Instrument to the extent governed by the UCC. 

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        (g)    Assessments.    There are no pending or, to the best knowledge of Borrower, proposed special or other
assessments for public improvements or otherwise affecting any Mortgaged Property, nor are there any contemplated improvements to any Mortgaged Property that may result in such special or other
assessments. 

        (h)    No Joint Assessment; Separate Lots.    Borrower has not suffered, permitted or initiated the joint assessment
of the Mortgaged Property (i) with any other real property constituting a separate tax lot, and (ii) with any portion of the Mortgaged Property which may be deemed to constitute personal
property, or any other procedure whereby the lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to the Mortgaged Property as a single lien. The
Mortgaged Property is comprised of one or more parcels, each of which constitutes a separate tax lot and none of which constitutes a portion of any other tax lot. 

        (i)    No Prior Assignment.    Lender is the collateral assignee of Borrower's interest under the Leases. There are no
prior assignments of the Leases or any portion of the Rent due and payable or to become due and payable which are presently outstanding. 

        (j)    Permits; Certificate of Occupancy.    Borrower has obtained all Permits necessary to the use and operation of
each Mortgaged Property, except where the failure to obtain such Permits is not reasonably likely to result in a Material Adverse Effect. The use being made of each Mortgaged Property is in conformity
with the certificate of occupancy and/or such Permits for such Mortgaged
Property and any other restrictions, covenants or conditions affecting such Mortgaged Property, except for nonconformity which is not reasonably likely to result in a Material Adverse Effect. 

        (k)    Flood Zone.    Except as shown on the Survey, no Mortgaged Property or any portion thereof is located in a
flood hazard area as defined by the Federal Insurance Administration. 

        (l)    Physical Condition.    Except as set forth in the Property Condition Assessment, to the best knowledge of
Borrower, each Mortgaged Property is free of structural defects and all Improvements, including the building systems contained therein are in good working order subject to ordinary wear and tear. 

        (m)    Security Deposits.    Borrower and the Manager are in compliance in all material respects with all Legal
Requirements relating to all security deposits with respect to each Mortgaged Property. 

        (n)    Intellectual Property.    All material Intellectual Property that Borrower owns or has pending, or under which
it is licensed, are in good standing and uncontested. There is no right under any Intellectual Property necessary to the business of Borrower as presently conducted or as Borrower contemplates
conducting its business. Borrower has not infringed, is not infringing, and has not received notice of infringement with respect to asserted Intellectual Property of others. There is no infringement
by others of material Intellectual Property of Borrower. 

        (o)    No Encroachments.    Except as shown on the Survey, to the best knowledge of Borrower, (i) all of the
Improvements which were included in determining the appraised value of each Mortgaged Property lie wholly within the boundaries and building restriction lines of each Mortgaged Property,
(ii) no improvements on adjoining properties encroach upon any Mortgaged Property, (iii) no Improvements encroach upon any easements or other encumbrances affecting the Mortgaged
Property, and (iv) all of the Improvements comply with all material requirements of any applicable zoning and subdivision laws and ordinances. 

        (p)    Management Agreement.    The Management Agreement is in full force and effect. There is no default, breach or
violation existing thereunder by Borrower or, to the best knowledge of Borrower, any other party thereto and no event (other than payments due but not yet delinquent) which, with the passage of time
or with notice and the expiration of any grace or cure period, would constitute a default, breach or violation by Borrower or, to the best knowledge of Borrower, any other party 

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thereunder
or entitle Borrower or, to the best knowledge of Borrower, any other party thereto to terminate any such agreement. 

        (q)    Leases.    No Mortgaged Property is subject to any Leases other than the Leases described in the rent rolls
delivered to Lender in connection with the making of the Advance. No person has any possessory interest in any Mortgaged Property or right to occupy the same except under and pursuant to the
provisions of the Leases. The current Leases are in full force and effect and, except as set forth on the rent rolls delivered to Lender in connection with the making of the Advance, there are no
monetary or other material defaults thereunder by either party and no conditions which with the passage of time and/or notice would constitute monetary or other material defaults thereunder. Except as
disclosed to Lender in connection with the making of an Advance, no portion of the Mortgaged Property is leased to or occupied by any Affiliate of Borrower. Except as disclosed to Lender in connection
with the making of an Advance, all Leases at each Mortgaged Property consist solely of Leases of Homesites and related common areas, and not of other portions of the Mortgaged Property. Except as
disclosed to Lender in connection with the making of an Advance on an Owned Property, Borrower does not own any manufactured homes or mobile homes, whether or not located at the Mortgaged Property. No
material termination payments or fees are due in the event Borrower cancels or terminates any commercial Leases to which it is a party. 

        Section 4.3.    Survival of Representations.    Borrower agrees that (i) all of the representations and
warranties of Borrower set forth in Section 4.1 and 4.2 and in the other Loan Documents delivered
on the Closing Date are made as of each Advance Date, and (ii) all representations and warranties made by Borrower shall survive the delivery of the Note and making of the Loan and continue for
so long as any amount remains owing to Lender under this Agreement, the Note or any of the other Loan Documents; provided, however, that the representations set forth in  Section 4.2(e) shall
survive for five (5) years following repayment of the Indebtedness. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on
Lender's behalf. 

ARTICLE V.

AFFIRMATIVE COVENANTS  

        Section 5.1.    Affirmative Covenants.    Borrower covenants and agrees that, from the date hereof and until
payment in full of the Indebtedness: 

        (a)    Existence; Compliance with Legal Requirements: Insurance.    Borrower shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its existence as a limited liability company, and any rights, licenses, Permits and franchises necessary for the conduct of its business
and will comply with all Legal Requirements and Insurance Requirements applicable to it and to each Mortgaged Property in all material respects. Borrower shall at all times maintain, preserve and
protect all franchises and trade names and preserve all the remainder of its property necessary for the continued conduct of its business and keep the Mortgaged Property in good repair, working order
and condition, except for reasonable wear and use (and except for casualty losses as to which other
provisions hereof shall govern), and from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements thereto. 

        (b)    Basic Carrying Costs and Other Claims; Contest.    

          (i)  Subject
to Borrower's contest rights set forth in Section 5.1(b)(ii) below, Borrower will pay when due
(A) all Basic Carrying Costs with respect to Borrower and the Mortgaged Property; (B) all claims (including claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of the Mortgaged Property or its other properties or assets (hereinafter referred to as the "Lien
Claims"); and 

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(C) all
federal, state and local income taxes, sales taxes, excise taxes and all other taxes and assessments of Borrower on its business, income or assets; in each instance before any penalty
or fine is incurred with respect thereto. Borrower's obligation to pay Basic Carrying Costs pursuant to this Agreement shall include, to the extent permitted by applicable law, Impositions resulting
from future changes in law which impose upon Lender an obligation to pay any property taxes on the Mortgaged Property or other Impositions. 

         (ii)  Borrower
shall not be required to pay, discharge or remove any Imposition or Lien Claim so long as Borrower contests in good faith such Imposition or Lien Claim or the
validity, applicability or amount thereof by an appropriate legal proceeding which operates to prevent the collection of such amounts and the sale of the applicable Mortgaged Property or any portion
thereof, so long as: 

        (A)  the
Indebtedness shall not have been accelerated, if an Event of Default shall have occurred and be continuing; 

        (B)  prior
to the date on which such Imposition or Lien Claim would otherwise have become delinquent, Borrower shall have given Lender prior written notice of its intent to
contest said Imposition or Lien Claim and deposited with Lender (or with a court of competent jurisdiction or other appropriate body approved by Lender) such additional amounts as are necessary to
keep on deposit at all times, an amount equal to at least one hundred twenty five percent (125%) (or such higher amount as may be required by applicable law) of the total of (x) the balance of
such Imposition or Lien Claim then remaining unpaid, and (y) all interest, penalties, costs and charges accrued or accumulated thereon, together with such other security as may be required in
the proceeding, or as may be required by Lender, to insure the payment of any such Imposition or Lien Claim and all interest and penalties thereon;  provided, that notwithstanding the foregoing, with
respect to Impositions or Lien Claims in an amount not in excess of $100,000, Borrower shall not be
required to deposit such amounts with the Lender, so long as Borrower demonstrates to the reasonable satisfaction of the Lender that Borrower has otherwise reserved such funds or such funds are
otherwise available to the Borrower; 

        (C)  no
risk of sale, forfeiture or loss of any interest in the Mortgaged Property or any part thereof arises, in Lender's judgment, during the pendency of such contest; 

        (D)  such
contest does not, in Lender's determination, have a Material Adverse Effect; 

        (E)  such
contest is based on bona fide, material, and reasonable claims or defenses; 

        (F)  such
proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower is subject and shall not constitute
a default thereunder and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances; and 

        (G)  Borrower
shall have obtained such endorsements to the Title Insurance Policy with respect to such Imposition or Lien Claim as Lender may require (or escrowed with a
title insurance company funds sufficient to obtain such endorsements pursuant to escrow arrangements reasonably satisfactory to Lender). 

Any
such contest shall be prosecuted with due diligence, and Borrower shall promptly pay the amount of such Imposition or Lien Claim as finally determined, together with all interest and penalties
payable in connection therewith. Lender shall have full power and authority, but no obligation, to apply any amount deposited with Lender under this subsection to the payment of any unpaid Imposition
or Lien Claim to prevent the sale or forfeiture of the Mortgaged Property for non-payment thereof, if Lender reasonably believes that such sale or forfeiture is threatened. 

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Any
surplus retained by Lender after payment of the Imposition or Lien Claim for which a deposit was made shall be promptly repaid to Borrower unless an Event of Default shall have occurred, in which
case said surplus may be retained by Lender to be applied as Lender, in its sole and absolute discretion, may elect. 

        (c)    Litigation.    Borrower shall give prompt written notice to Lender of any material litigation or governmental
proceedings pending or threatened (in writing) against Borrower, or the Mortgaged Property, other than personal injury litigation which is covered by insurance, eviction matters with respect to
tenants or occupants (in which no counterclaims for material damages or liabilities are made against Borrower), and matters related to enforcement of building or zoning codes (as long as the Mortgaged
Property is in material compliance with such building and zoning codes). 

        (d)    Environmental Remediation.    

          (i)  If
any investigation, site monitoring, cleanup, removal, restoration or other remedial work of any kind or nature is required pursuant to an order or directive of any
Governmental Authority or under any applicable Environmental Law, because of or in connection with the current or future presence, suspected presence, Release or suspected Release of a Hazardous
Substance on, under or from any Mortgaged Property or any portion thereof (collectively, the "Remedial Work"), Borrower shall promptly commence and
diligently prosecute to completion all such Remedial Work, and shall conduct such Remedial Work in accordance with the National Contingency Plan promulgated under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. ("CERCLA"), if applicable, and in accordance with other applicable
Environmental Laws. In all events, such Remedial Work shall be commenced within such period of time as required under any applicable Environmental Law. If any fungus, mold, mildew or other biological
agent is present at any Mortgaged Property in a manner or at a level that is reasonably likely to materially adversely affect the value or utility of such Mortgaged Property or that poses a
significant health risk, the Borrower shall promptly commence and diligently prosecute to completion the remediation of such condition to the reasonable satisfaction of the Lender or its servicer. 

         (ii)  If
requested by Lender, all Remedial Work under clause (i) above shall be performed by contractors, and, if the
work is reasonably anticipated to cost in excess of $75,000, under the supervision of a consulting Engineer, each approved in advance by Lender which approval shall not be unreasonably withheld or
delayed. Borrower shall pay all costs and expenses reasonably incurred in connection with such Remedial Work. If Borrower does not timely commence and diligently prosecute to completion the Remedial
Work, Lender may (but shall not be obligated to), upon 10 days prior written notice to Borrower of its intention to do so, cause such Remedial Work to be performed. Borrower shall pay or
reimburse Lender on demand for all expenses (including reasonable attorneys' fees and disbursements, but excluding internal overhead, administrative and similar costs of Lender) reasonably relating to
or incurred by Lender in connection with monitoring, reviewing or performing any Remedial Work in accordance herewith. 

        (iii)  Borrower
shall not commence any Remedial Work under clause (i) above, nor enter into any settlement agreement,
consent decree or other compromise relating to any Hazardous Substances or Environmental Laws without providing notice to Lender as provided in  Section 5.1(f). Notwithstanding the foregoing, if the
presence or threatened presence of Hazardous Substances on, under, about or emanating from
the Mortgaged Property poses an immediate threat to the health, safety or welfare of any Person or the environment, or is of such a nature that an immediate response is necessary or required under
applicable Environmental Law, Borrower may complete all necessary Remedial Work. In such events, Borrower shall notify Lender as soon as practicable and, in any event, within three (3) Business
Days, of any action taken. 

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        (iv)  In
the event the Environmental Report recommends the development of an operation and maintenance program for any recognized environmental condition at a Mortgaged
Property (including, without limitation, underground storage tanks asbestos and asbestos containing materials, lead-based paints and lead in water supplies)
("O & M Program"), Borrower shall develop an O & M Program, as approved by Lender, in Lender's sole discretion, and shall, during the term
of the Loan, including any extension or renewal thereof, comply in all respects with the terms and conditions of the O & M Program. 

        (e)    Environmental Matters: Inspection.    

          (i)  Borrower
shall not knowingly permit any Hazardous Substances to be present on or under or to emanate from the Mortgaged Property, or migrate from adjoining property
onto or into the Mortgaged Property, except under conditions permitted by applicable Environmental Laws and, in the event that such Hazardous Substances are present on, under or emanate from the
Mortgaged Property, or migrate onto or into the Mortgaged Property, Borrower shall cause the removal or remediation of such Hazardous Substances, in accordance with this Agreement and as required by
Environmental Laws (including, where applicable, the National Contingency Plan promulgated pursuant to the CERCLA), either on its own behalf or by causing a tenant or other party legally responsible
therefor to perform such removal and remediation. Borrower shall use commercially reasonable efforts to prevent, and to seek the remediation of, any migration of Hazardous Substances onto or into the
Mortgaged Property from any adjoining property. 

         (ii)  Upon
reasonable prior written notice, Lender shall have the right, except as otherwise provided under Leases, at all reasonable times during normal business hours to
enter upon and inspect environmental conditions with respect to all or any portion of any Mortgaged Property, provided that such inspections shall not unreasonably interfere with the operation or the
tenants, residents or occupants of any Mortgaged Property. If Lender has reasonable grounds to suspect that Remedial Work may be required, Lender shall notify Borrower and, thereafter, may select a
consulting Engineer to conduct and prepare reports of such inspections (with notice to Borrower prior to the commencement of such inspection). Borrower shall be given a reasonable opportunity to
review any reports, data and other documents or materials reviewed or prepared by the Engineer, and to submit comments and suggested revisions or rebuttals to same. The inspection rights granted to
Lender in this Section 5.1(e) shall be in addition to, and not in limitation of, any other inspection rights granted to Lender in this Agreement,
and shall expressly include the right (if Lender reasonably suspects that Remedial Work may be required) to conduct soil borings, establish ground water monitoring wells and conduct other customary
environmental tests, assessments and audits. 

        (iii)  Borrower
agrees to bear and shall pay or reimburse Lender on demand for all sums advanced and reasonable expenses incurred (including reasonable attorneys' fees and
disbursements, but excluding internal overhead, administrative and similar costs of Lender) reasonably relating to, or incurred by Lender in connection with, the inspections and reports described in
this Section 5.1(e) (to the extent such inspections and reports relate to any Mortgaged Property) in the following situations: 

        (x)   If
Lender has reasonable grounds to believe, at the time any such inspection is ordered, that there exists an occurrence or condition that could lead to a material
Environmental Claim with respect to such Mortgaged Property; 

        (y)   If
any such inspection reveals an occurrence or condition that is reasonably likely to lead to a material Environmental Claim with respect to such Mortgaged Property; or 

        (z)   If
an Event of Default with respect to such Mortgaged Property exists at the time any such inspection is ordered, and such Event of Default relates to any
representation, 

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covenant
or other obligation pertaining to Hazardous Substances, Environmental Laws or any other environmental matter. 

        (f)    Environmental Notices.    Borrower shall promptly provide notice to Lender of: 

          (i)  a
material Environmental Claim asserted by any Governmental Authority with respect to any Hazardous Substance on, in, under or emanating from any Mortgaged Property; 

         (ii)  any
proceeding, investigation or inquiry commenced or threatened in writing by any Governmental Authority, against Borrower, any Affiliate of Borrower or with respect
to any Mortgaged Property concerning the presence, suspected presence, Release or threatened Release of Hazardous Substances from or onto, in or under any property not owned by Borrower (including,
without limitation, proceedings under the CERCLA; 

        (iii)  a
material Environmental Claims asserted or threatened against Borrower, against any other party occupying any Mortgaged Property or any portion thereof which become
known to Borrower or against any Mortgaged Property; 

        (iv)  the
discovery by Borrower of a material occurrence or condition giving rise to an obligation of the Borrower to the Lender hereunder on any Mortgaged Property or on any
real property adjoining or in the vicinity of any Mortgaged Property; 

         (v)  the
commencement or completion of any Remedial Work; and 

        (vi)  any
of the foregoing clauses (i) – (v) as to which a tenant notifies Borrower under a Lease with respect to such tenant. 

        (g)    Copies of Notices.    Borrower shall transmit to Lender copies of any citations, orders, notices or other
written communications received from any Person and any notices, reports or other written communications submitted to any Governmental Authority with respect to the matters described in
Section 5.1(f). 

        (h)    Environmental Claims.    Lender may join and participate in, as a party if Lender so determines, any legal or
administrative proceeding or action concerning the Mortgaged Property or any portion thereof under any Environmental Law, if, in Lender's reasonable judgment, the interests of Lender shall not be
adequately protected by Borrower; provided, however, that Lender shall not participate in day-to-day decision making with respect to environmental compliance. Borrower shall
pay or reimburse Lender on demand for all reasonable sums advanced and reasonable expenses incurred (including reasonable attorneys' fees and disbursements, but excluding internal overhead,
administrative and similar costs of Lender) by Lender in connection with any such action or proceeding. 

        (i)    Environmental Indemnification.    Borrower shall indemnify, reimburse, defend, and hold harmless Lender, and
each of its respective parents, subsidiaries, Affiliates, shareholders, directors, officers, employees, representatives, agents, successors, assigns and attorneys (collectively, the "Indemnified
Parties") for, from, and against all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, costs and expenses (including, without limitation, interest, penalties,
reasonable attorneys' fees, disbursements and expenses, and reasonable consultants' fees, disbursements and expenses (but excluding internal overhead, administrative, lost opportunity and similar
costs of Lender)), asserted against, resulting to, imposed on, or incurred by any Indemnified Party, directly or indirectly, in connection with any of the following (except to the extent same are
directly and solely caused by the gross negligence or willful misconduct of any Indemnified Party): 

          (i)  events,
circumstances, or conditions which form the reasonable basis for an Environmental Claim; 

         (ii)  any
pollution or threat to human health or the environment that is related in any way to Borrower's or any previous owner's or operator's management, use, control,
ownership or 

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operation
of any Mortgaged Property (including, without limitation, all on-site and off-site activities involving Hazardous Substances), and whether occurring, existing or
arising prior to or from and after the date hereof, and whether or not the pollution or threat to human health or the environment is described in the Environmental Reports; 

        (iii)  any
Environmental Claim against any Person whose liability for such Environmental Claim Borrower has or may have assumed or retained either contractually or by
operation of law; or 

        (iv)  the
breach of any representation, warranty or covenant set forth in Section 4.2(e) and  Sections 5.1(d) through 5.1(i)
, inclusive. 

        The
provisions of and undertakings and indemnification set forth in this Section 5.1(i) shall survive the satisfaction and payment
of the Indebtedness and termination of this Agreement. 

        (j)    General Indemnity.    

          (i)  Borrower
shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties for, from and against any and all claims,
suits, liabilities (including, without limitation, strict liabilities), administrative and judicial actions and proceedings, obligations, debts, damages, losses, costs, expenses, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement, and litigation costs, of whatever kind or nature and whether or not incurred in connection with any judicial or administrative
proceedings (including, but not limited to, reasonable attorneys' fees and other reasonable costs of defense) (the "Losses") imposed upon or incurred by or asserted against any Indemnified Parties
(except as to any Indemnified Party to the extent same are directly and solely caused by the gross negligence or willful misconduct of such Indemnified Party) and directly or indirectly arising out of
or in any way relating to any one or more of the following: 

        (A)  ownership
of the Note or any of the other Loan Documents or otherwise related to the Mortgaged Property or any interest therein or receipt of any Rents or Accounts; 

        (B)  any
untrue statement of any material fact contained in any information concerning Borrower, the Mortgaged Property or the Loan or the omission to state therein a
material fact required to be stated in such information or necessary in order to make the statements in such information or in light of the circumstances under which they were made not misleading; 

        (C)  any
and all lawful action that may be taken and is taken by the Lender in connection with the enforcement of the provisions of this Agreement, the Note or any of the
other Loan Documents, whether or not suit is filed in connection with same, or in connection with Borrower or any Affiliate of Borrower becoming a party to a voluntary or involuntary federal or state
bankruptcy, insolvency or similar proceeding; 

        (D)  any
accident, injury to or death of persons or loss of or damage to property occurring in, on or about any Mortgaged Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; 

        (E)  any
use, nonuse or condition in, on or about the Mortgaged Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; 

        (F)  any
failure on the part of Borrower to perform or be in compliance with any of the terms of this Agreement or any of the other Loan Documents; 

        (G)  performance
of any labor or services or the furnishing of any materials or other property in respect of the Mortgaged Property or any part thereof pursuant to provisions
of this Agreement; 

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        (H)  the
failure of Borrower to file timely with the Internal Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds from Real
Estate, Broker and Barter Exchange Transactions, which may be required in connection with this Agreement; 

        (I)   any
failure of the Mortgaged Property to be in compliance with any Legal Requirement; 

        (J)   the
enforcement by any Indemnified Party of the provisions of this Section 5.1(j); and 

        (K)  any
and all claims and demands whatsoever which may be asserted against Lender by reason of any alleged obligations or undertakings on its part to perform or discharge
any of the terms, covenants, or agreements contained in any Lease. 

Any
amounts payable to an Indemnified Party by reason of the application of this Section 5.1(j)(i) shall become due and payable ten
(10) days after written demand and shall bear interest at the Default Rate from the tenth (10th) day after demand until paid. 

         (ii)  Borrower
shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses imposed
upon or incurred by or asserted
against any of the Indemnified Parties and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of this Agreement, the Note or any of the other Loan
Documents. 

        (iii)  Borrower
shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses
(including, without limitation, reasonable attorneys' fees and costs) that the Indemnified Parties may incur, directly or indirectly, as a result of a default under Borrower's covenants with respect
to ERISA and employee benefits plans contained herein, including, without limitation, any costs or expenses incurred in the investigation, defense, and settlement of Losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA that may be required, in the Lender's reasonable discretion). 

        (iv)  Promptly
after receipt by an Indemnified Party under this Section 5.1(j) of notice of the making of any claim or
the commencement of any action, such Indemnified Party shall, if a claim in respect thereof is to be made by such Indemnified Party against Borrower under this  Section 5.1(j), notify Borrower in
writing, but the omission so to notify Borrower will not relieve Borrower from any liability which it may have
to any Indemnified Party under this Section 5.1(j) or otherwise. In case any such claim is made or action is brought against any Indemnified
Party and such Indemnified Party seeks or intends to seek indemnity from Borrower, Borrower will be entitled to participate in, and, to the extent that it may wish, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party; and, upon receipt of notice from Borrower to such Indemnified Party of its election so to assume the defense of such claim or action and only
upon approval by the Indemnified Party of such counsel (such approval not to be unreasonably withheld or delayed), Borrower will not be liable to such Indemnified Party under this  Section 5.1(j)
for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof.
Notwithstanding the preceding sentence, each Indemnified Party will be entitled to employ counsel separate from such counsel for Borrower and from any other party in such action if such Indemnified
Party reasonably determines that a conflict of interest exists which makes representation by counsel chosen by Borrower not advisable. In such event, Borrower shall pay the reasonable fees and
disbursements of such separate counsel. Borrower shall not, without the prior written consent of an Indemnified Party, which consent shall not be unreasonably withheld or delayed, settle or compromise
or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of 

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which
indemnification may be sought hereunder (whether or not such Indemnified Party is an actual or potential party to such claim or action) unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out of such claim, action, suit or proceeding. Each Indemnified Party shall not enter into a settlement of or consent to the
entry of any judgment with respect to any action, claim, suit or proceeding as to which an Indemnified Party would be entitled to indemnification hereunder without the prior written consent of
Borrower, which consent shall not be unreasonably withheld or delayed. 

The
provisions of and undertakings and indemnification set forth in this Section 5.1(j) shall survive the satisfaction and payment of the
Indebtedness and termination of this Agreement. 

        (k)    Access to Mortgaged Property.    Borrower shall permit agents, representatives and employees of Lender to
inspect each Mortgaged Property or any part thereof at such reasonable times as may be requested by Lender upon reasonable advance written notice (except during an Event of Default), subject, however,
to the rights of Borrower and of the tenants of the Mortgaged Property. 

        (l)    Notice of Default.    Borrower shall promptly advise Lender in writing of any change in Borrower's condition,
financial or otherwise, that is reasonably likely to have a Material Adverse Effect, or of the occurrence of any Default or Event of Default. 

        (m)    Cooperate in Legal Proceedings.    Except with respect to any claim by Borrower, the Member or the Guarantor
against Lender, Borrower shall reasonably cooperate with Lender with respect to any proceedings before any Governmental Authority that are reasonably likely to in any way materially affect the rights
of Lender hereunder or any rights obtained by Lender under any of the Loan Documents and, in connection therewith, shall not prohibit Lender, at its election, from participating in any such
proceedings. 

        (n)    Perform Loan Documents.    Borrower shall observe, perform and satisfy all the terms, provisions, covenants and
conditions required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it, under the Loan Documents. 

        (o)    Insurance Benefits.    Borrower shall reasonably cooperate with Lender in obtaining for Lender the benefits of
any Insurance Proceeds lawfully or equitably payable to Borrower or Lender in connection with any Mortgaged Property. Lender shall be reimbursed for any expenses reasonably incurred in connection
therewith (including reasonable attorneys' fees and disbursements, but excluding internal overhead, administrative and similar costs of Lender) out of such Insurance Proceeds, all as more specifically
provided in this Agreement. 

        (p)    Further Assurances.    Borrower shall, at Borrower's sole cost and expense: 

          (i)  upon
Lender's reasonable request therefor given from time to time, pay for (a) reports of UCC, tax lien, judgment and litigation searches with respect to
Borrower, and (b) searches of title to the Mortgaged Property, each such search to be conducted by search firms designated by Lender in each of the locations designated by Lender; 

         (ii)  furnish
to Lender all instruments, documents, certificates, title and other insurance reports and agreements, and each and every other document, certificate, agreement
and instrument required to be furnished pursuant to the terms of the Loan Documents; 

        (iii)  execute
and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary, to evidence, preserve and/or
protect the Collateral at any time securing or intended to secure the Note, as Lender may reasonably require (including, without limitation, tenant estoppel certificates, an amended or replacement
Mortgages, UCC financing statements or Collateral Security Instruments); and 

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        (iv)  do
and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the intents and purposes of
this Agreement and the other Loan Documents, as Lender shall reasonably require from time to time. 

        (q)    Management of Mortgaged Property.    

          (i)  Each
Mortgaged Property shall be managed at all times by the current Manager or another manager reasonably satisfactory to Lender, pursuant to a Management Agreement.
Any such Manager may be an Affiliate of Borrower, provided that: (a) the terms and conditions of such Manager's engagement are at arm's length, reasonable, competitive and customary in the
applicable marketplace; and (b) Lender has approved such Manager and such terms, which approval shall not be unreasonably withheld or delayed. The Management Agreement, dated as of the date
hereof, between the Borrower and the Manager is deemed approved by Lender in all respects. Borrower shall cause the Manager of the Mortgaged Property to agree that such Manager's Management Agreement
is subject and subordinate in all respects to the Indebtedness and to the Lien of the Mortgages. A Management Agreement may be terminated or assigned (1) by Borrower at any time in accordance
with the provisions of such Management Agreement so long as a successor or assignee Manager as specified below shall have been appointed and approved and such successor Manager has (i) entered
into (or assumed) a Management Agreement in form and substance approved by Lender, which approval shall not be unreasonably denied, conditioned or delayed, and (ii) has executed and delivered a
Manager's Subordination to Lender, and (2) by Lender upon thirty (30) days' prior written notice to Borrower and the Manager (a) upon the occurrence and continuation of an Event
of Default or (b) if the Manager commits any act which would permit termination under the Management Agreement (subject to any applicable notice, grace and cure periods provided in the
Management Agreement) or (c) if a change of majority control occurs with respect to the Manager. Notwithstanding the foregoing, any successor manager selected hereunder by Lender or Borrower to
manage the Mortgaged Property shall be a reputable management company having substantial experience in the management of real property of a similar type, size and quality in the state in which the
Mortgaged Property is located. Borrower may from time to time appoint a successor manager to manage the Mortgaged Property with Lender's prior written consent, such consent not to be unreasonably
withheld. Borrower acknowledges and agrees that any consent or approval requested of Lender under this Section may be conditioned by Lender, at Lender's discretion, upon Borrower first obtaining a
Rating Confirmation with respect to such change in management, and Lender shall not be deemed to be acting unreasonably in requiring such a Rating Confirmation. Borrower further covenants and agrees
that any manager of Mortgaged Property shall at all times while any Indebtedness is outstanding maintain worker's compensation insurance as required by Governmental Authorities. 

         (ii)  Borrower
further covenants and agrees that each Mortgaged Property shall be operated pursuant to the Management Agreement and that Borrower shall: (w) promptly
perform and/or observe all of the material covenants and agreements required to be performed and observed by it under the Management Agreement and do all things reasonably necessary to preserve and to
keep unimpaired its material rights thereunder; (x) promptly notify Lender of any material default under the Management Agreement of which it is aware; (y) promptly deliver to Lender a
copy of each financial statement, business plan, capital expenditures plan, notice and report received by it under the Management Agreement, including, but not limited to, financial statements; and
(z) promptly enforce the performance and observance of the covenants and agreements required to be performed and/or observed by the Manager under the Management Agreement. 

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        (r)    Financial Reporting.    

          (i)  Borrower
shall keep and maintain or shall cause to be kept and maintained on a Fiscal Year basis in accordance with GAAP consistently applied, books, records and
accounts reflecting in reasonable detail all of the financial affairs of Borrower and all items of income and expense in connection with the operation of the Mortgaged Property and ownership of the
Mortgaged Property and in connection with any services, equipment or furnishings provided in connection with the operation of the Mortgaged Property, whether such income or expense may be realized by
Borrower or by any other Person whatsoever. Lender shall have the right from time to time at all times during normal business hours upon reasonable prior written notice to Borrower to examine such
books, records and accounts at the office of Borrower or other Person maintaining such books, records and accounts and to make such copies or extracts thereof as Lender shall desire. During the
continuation of an Event of Default (including, without limitation, an Event of Default resulting from the failure of Borrower to deliver any of the financial information required to be delivered
pursuant to this Section 5.1(r)), Borrower shall pay any reasonable costs and expenses incurred by Lender to examine Borrower's accounting
records, as Lender shall reasonably determine to be necessary or appropriate in the protection of Lender's interest. 

         (ii)  Borrower
shall furnish to Lender annually, within ninety (90) days following the end of each Fiscal Year, a complete copy of Borrower's and Guarantor's financial
statements, each audited by a "Big Four" accounting firm or such other Independent certified public accountant acceptable to Lender in accordance with GAAP consistently applied covering Borrower's and
Guarantor's respective financial position and results of operations, for such Fiscal Year and containing a statement of revenues and expenses, a statement of assets and liabilities and a statement of
Borrower's or Guarantor's (as applicable) equity, all of which shall be in form and substance reasonably acceptable to Lender. Any audit requirements of the Borrower pursuant to this Agreement may be
satisfied by delivery of the audited consolidated financial statements of the Guarantor, provided that such financial statements of the Guarantor contain (i) a separate income and expense
statement for the Borrower and (ii) a separate balance sheet, including a statement of Borrower's equity. Lender shall have the right from time to time to review and consult with respect to the
auditing procedures used in the preparation of such annual financial statements. Together with Borrower's and Guarantors' annual financial statements, Borrower shall furnish, and cause Guarantor to
furnish, to Lender an Officer's Certificate certifying as of the date thereof (x) that the annual financial statements present fairly in all material respects the results of operations and
financial condition of Borrower or Guarantor, as applicable, all in accordance with GAAP consistently applied, and (y) whether there exists an Event of Default or Default, and if such Event of
Default or Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy same. 

        (iii)   Borrower
shall furnish to Lender, within forty-five (45) days following the end of each Fiscal Year quarter true, complete and correct
quarterly unaudited financial statements (including
statements of cash flow) prepared in accordance with GAAP with respect to Borrower and Guarantor for the portion of the Fiscal Year then ended. 

        (iv)   No
later than thirty (30) days following the end of each of the months of December, March, June, and September, beginning with the month ending at
March 31, 2004, Borrower shall prepare and deliver to Lender and its servicer a statement (each a "Quarterly Statement") in substantially the
form of Schedule 6 hereto, setting forth with respect to the Mortgaged Property, 

        (A)  a
rent roll dated as of the last day of such quarter identifying the name of each tenant and the associated Homesite, security deposit, amount due at the beginning of
the month, charges in the current month (including Homesite rent, water/sewer, gas/electric, trash, mobile home rent, notes amount and other charges), payments made during the month, 

62

 

amount
due at the end of the month, total Homesites at the Mortgaged Property and total occupied Homesites at the Mortgaged Property, with the occupancy level expressed as a percentage; 

        (B)  quarterly
and year-to-date operating statements, each of which shall include an itemization of budgeted and actual (not pro forma) capital
expenditures during the applicable period, and which shall be prepared for each individual Mortgaged Property and, on a consolidated basis, for all the Mortgaged Property; and 

        (C)  a
quarterly and year-to-date comparison of the budgeted income and expenses with the actual income and expenses for such quarter and year to
date, together with if requested by Lender, a detailed explanation of any variances between budgeted and actual amounts that are in excess of five percent (5%) for each line item therein. 

         (v)   Within
thirty (30) days after the end of each calendar month (and as to rent rolls requested by Lender on an interim basis, within thirty
(30) days after Lender's request therefor), Borrower shall provide to Lender and its servicer a statement (each a "Monthly Property Statement")
in substantially the form of Schedule 7 hereto, setting forth with respect to the Mortgaged Property 

        (A)  a
certified rent roll, for each individual Mortgaged Property containing the information referred to in  Section 5.1(r)(iv)(A), 

        (B)  a
certification of all prepaid Rent that has been collected for each individual Mortgaged Property more than one (1) month in advance of its due date, 

        (C)  monthly
operating financial statements for the last twelve (12) months, including a comparison on a year-to-date basis to budget and prior
year, for each individual Mortgaged Property and, on a consolidated basis, for Borrower, and 

        (D)  a
monthly occupancy report which includes data quantifying the total number of Homesites, beginning occupancy, monthly move-in and move-out data
for residents, rentals and change of occupancy, ending monthly occupancy, ending monthly occupancy percentage, budgeted occupancy percentage, total rentals, rentals as a percentage of Homesites, total
occupied rentals, rental occupancy percentage, total repossessions and repossessions as a percentage of total Homesites. 

        (vi)   Borrower
shall furnish to Lender, within fifteen (15) Business Days after request, such further information with respect to the operation of the
Mortgaged Property and the financial affairs of Borrower as may be reasonably requested by Lender, including all business plans prepared for Borrower. 

       (vii)   Borrower
shall furnish to Lender, within fifteen (15) Business Days after request, such further information regarding any Plan or Multiemployer
Plan and any reports or other information required to be filed under ERISA as may be reasonably requested by Lender in writing. 

      (viii)   At
least thirty (30) days prior to the end of each of Borrower's Fiscal Years, Borrower shall submit or cause to be submitted to Lender for its
approval, such approval not to be unreasonably withheld or delayed, an Operating Budget for Property Expenses, Capital Improvement Costs, Leasing Commissions, and replacement reserve costs for the
next Fiscal Year for the Mortgaged Property. Such Operating Budget may allow for a ten percent (10%) line item variance. Until so approved by Lender for the subsequent Fiscal Year in accordance with
the procedure set forth in Section 5.1(r)(ix) below, the Operating Budget approved by Lender for the preceding Fiscal Year shall remain in effect
for purposes of Section 2.12; provided, that for so long as such prior Operating Budget remains
in effect, amounts set forth in the prior Operating Budget 

63

 

with
respect to Property Expenses shall be deemed increased with respect to actual increases in Basic Carrying Costs and non-discretionary utility expenditures and shall be deemed
increased by three percent (3%) with regard to discretionary items. Promptly following the occurrence and during the continuance of an Event of Default, the Borrower shall submit or cause to be
submitted to Lender a Working Capital Budget for the remainder of the Fiscal Year during which such Event of Default occurs and by not later than the end of each of Borrower's Fiscal Years with
respect to the subsequent Fiscal Year. 

        (ix)   Borrower
shall submit any proposed Operating Budget in writing sent by recognized overnight delivery service or by registered or certified mail (and
simultaneously shall contact the Lender by telephone and by electronic mail) in accordance with the terms of this Agreement (the "First Notice"),
requesting Lender's approval of such Operating Budget. Lender shall use reasonable efforts to deliver to Borrower its written approval or disapproval of the proposed Operating Budget within ten
(10) Business Days after Lender shall have received the First Notice. Unless Lender shall have approved the Operating Budget contained in the First Notice, Lender's approval shall be deemed to
be withheld. If Borrower does not receive Lender's response at the end of such ten (10) Business Days period, Borrower may resubmit its written request to Lender (the
"Second Notice"). The Second Notice shall make reference to the First Notice and shall bear the following legend in capital letters: 

"LENDER'S
FAILURE TO RESPOND TO THIS REQUEST FOR APPROVAL WITHIN TEN (10) BUSINESS DAYS FOLLOWING RECEIPT SHALL BE DEEMED TO CONSTITUTE LENDER'S CONSENT TO THE OPERATING BUDGET DESCRIBED
HEREIN." 

If
Lender does not approve or disapprove the proposed Operating Budget within ten (10) Business Days after Lender shall have received Borrower's Second Notice, Lender shall be deemed to have
approved the proposed Operating Budget. 

         (x)   Together
with the financial statements, rent rolls, operating statements and other documents and information provided to Lender by or on behalf of Borrower
under this Section, Borrower also shall deliver to Lender a certification in form and substance reasonably satisfactory to Lender, executed on behalf of Borrower by its chief executive officer or
chief financial officer (or by the individual Guarantor if the Guarantor is an individual) stating that, to such officer's or individual's knowledge, such financial statements, rent rolls, operating
statements and other documents and information are true and complete in all material respects. 

        (xi)   For
purposes of this Section 5.1(r), all of the financial reporting requirements may be satisfied
by the Borrower posting the required deliveries on a secure website reasonably satisfactory to the Lender and sending to the Lender and its servicer each month an electronic mail communication
notifying the Lender and its servicer of the linkage to such website; provided that notwithstanding the foregoing, in the event the Lender includes the Loan in a Secondary Market Transaction in which
Securities are issued or otherwise changes the identity of its servicer to a Person other than the initial servicer identified to the Borrower as of the Closing Date, then the Lender may require that
such deliveries be made to Lender and its servicer in hard copy and on diskette or through electronic mail (including Microsoft Excel format), in form and substance reasonably acceptable to Lender. 

64

 

        (s)    Operation of Mortgaged Property.    Borrower shall cause the operation of each Mortgaged Property to be
conducted at all times in a manner consistent with at least the level of operation of such Mortgaged Property as of the Closing Date, including, without limitation, the following: 

          (i)  to
maintain or cause to be maintained the standard of each Mortgaged Property at all times at a level not lower than that maintained by prudent managers of similar
facilities or land in the region where the Mortgaged Property is located; 

         (ii)  to
operate or cause to be operated each Mortgaged Property in a prudent manner in compliance in all material respects with applicable Legal Requirements and Insurance
Requirements relating thereto and maintain or cause to be maintained all material licenses, Permits and any other agreements necessary for the continued use and operation of each Mortgaged Property;
and 

        (iii)  to
maintain or cause to be maintained sufficient Inventory and Equipment of types and quantities at each Mortgaged Property to enable Borrower to operate each
Mortgaged Property and to comply in all material respects with all Leases affecting each Mortgaged Property. 

        (t)    Material Agreements.    Except for Leases and any Management Agreement complying with the Loan Documents,
Borrower shall not enter into or become obligated under any material agreement pertaining to the Mortgaged Property, including without limitation brokerage agreements, unless the same may be
terminated without cause and without payment of a penalty or premium, on not more than thirty (30) days' prior written notice. Borrower will (A) comply with the requirements of all
present and future applicable laws, rules, regulations and orders of any governmental authority in all jurisdictions in which it is now doing business or may hereafter be doing business,
(B) maintain all material licenses and permits now held or hereafter acquired by Borrower, and (C) perform, observe, comply and fulfill all of its obligations, covenants and conditions
contained in any material agreement pertaining to the Mortgaged Property. 

        (u)    ERISA.    Borrower shall deliver to Lender as soon as possible, and in any event within ten days after Borrower
knows or has reason to believe that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists, an Officer's Certificate setting forth
details respecting such event or condition and the action, if any, that Borrower or its ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed
with or given to PBGC by Borrower or an ERISA Affiliate with respect to such event or condition): 

          (i)   any
reportable event, as defined in Section 4043(b) of ERISA and the regulations issued thereunder, with respect to a Plan, as to which PBGC has
not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code or Section 302 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, shall be a
reportable event regardless of the issuance of any waivers in accordance with Section 412(d) of the Code); and any request for a waiver under Section 412(d) of the Code for any Plan; 

         (ii)   the
distribution under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or any action taken by Borrower or an ERISA Affiliate
to terminate any Plan; 

        (iii)   the
institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
Plan, or the receipt by Borrower or any ERISA Affiliate of Borrower of a notice from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan; 

65

 

        (iv)   the
complete or partial withdrawal from a Multiemployer Plan by Borrower or any ERISA Affiliate of Borrower that results in material liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default) or the receipt by Borrower or any ERISA Affiliate of Borrower of
notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA; 

         (v)   the
institution of a proceeding by a fiduciary of any Multiemployer Plan against Borrower or any ERISA Affiliate of Borrower to enforce Section 515
of ERISA, which proceeding is not dismissed within thirty (30) days; 

        (vi)   the
adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss
of tax-exempt status of the trust of which such Plan is a part if Borrower or an ERISA Affiliate of Borrower fails to timely provide security to the Plan in accordance with the provisions
of said Sections; and 

       (vii)   the
imposition of a lien or a security interest in connection with a Plan. 

        (v)     Refinancing Loan.     If Borrower or any other Person in which Borrower or its
members or partners have a direct or indirect beneficial ownership interest proposes to obtain a first mortgage loan to be secured by the Mortgaged Properties from any Person (other than the initial
Lender) and to cause the proceeds of such loan to be used to pay or prepay the Loan in whole or in part (including, without limitation, on the Maturity Date or otherwise pursuant to  Section 2.6(a)
or 2.7(a)) (any such transaction, a "Refinancing
Loan"), Borrower shall provide to the initial Lender in writing the Proposed Terms
(including by delivering to the initial Lender actual copies of all current term sheets which have been obtained, except Borrower may redact or withhold the name of the proposed lender on such
Refinancing Loan to the extent Borrower or such Person is subject to a confidentiality agreement). The initial Lender shall have five (5) Business Days from its receipt in writing of such
proposal to offer to Borrower a Refinancing Loan on terms specified by the initial Lender in writing (the "Lender's Terms"). If prior to the expiration
of such five (5) Business Day period, the initial Lender shall offer to Borrower or such Affiliate a transaction with the same material terms as the Proposed Terms provided to the initial
Lender and the same material conditions precedent to closing as those set forth in the Commitment, Borrower or such Affiliate shall accept, and enter into, the transaction offered by the initial
Lender and shall not accept, or enter into, such Refinancing Loan. If the initial Lender declines to offer a transaction on the same terms as the Proposed Terms and Borrower or such Affiliate
subsequently either proposes to obtain a Refinancing Loan with material business terms at closing economically less favorable to Borrower or such Affiliate than those previously disclosed to Lender,
then Borrower or such Affiliate shall provide the initial Lender with a further opportunity to make the Refinancing Loan on the modified terms in accordance with the timing provisions set forth above. 

        (w)    Secondary Market Transaction.    Borrower acknowledges that Lender and its successors and assigns may
(i) sell the Loan to one or more investors as a whole loan, (ii) participate the Loan to one or more investors, (iii) deposit the Loan with a trust, which trust may sell
certificates to investors evidencing an ownership interest in the trust assets, or (iv) otherwise sell the Loan or interests therein to investors (the transactions referred to in  clauses (i)
through (iv) above are hereinafter each referred to as a "Secondary
Market Transaction"). Borrower shall cooperate with Lender in attempting to effect or effecting any such Secondary Market Transaction and shall cooperate in attempting to
implement or implementing all requirements imposed by any Rating Agency involved in any Secondary Market Transaction, including but not limited to, 

          (i)   providing
Lender an estoppel certificate and such information, legal opinions and documents (including updated non-consolidation opinions)
relating to Borrower, the Guarantor, the Member, the Mortgaged Property and any tenants of the Mortgaged Property as Lender or the Rating Agencies or other Interested Parties (as defined below), may
reasonably request in 

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connection
with such Secondary Market Transaction, including, without limitation, updated financial information, appraisals, market studies, environmental reviews (Phase I's and, if appropriate, Phase
II's), Mortgaged Property condition reports and other due diligence investigations together with appropriate verification of such updated information and reports through letters of auditors and
consultants, as of the closing date of the Secondary Market Transaction, 

         (ii)   amending
the Loan Documents and Organizational Agreement of Borrower, updating and/or restating officer's certificates, title insurance and other closing
items, and providing updated representations and warranties in Loan Documents and such additional representations and warranties as may be required by Lender or the Rating Agencies, provided such
amendment or update (1) shall not change any of the financial terms of the Loan or result in a material increase in the Borrower's obligations or a material decrease in the Borrower's rights
and (2) with respect to any amendment of an Organizational Agreement, must have been required by the Rating Agencies, 

        (iii)   participating
in bank, investors and Rating Agencies' meetings if requested by Lender, 

        (iv)   upon
Lender's request, amending the Loan Documents (and updating and/or restating officer's certificates, title insurance and other closing items in
connection therewith) to divide the Loan into a first and a second mortgage loan, or into a one or more loans secured by mortgages and by ownership interests in Borrower in whatever proportion Lender
determines, which separated loans may have different interest rates and amortization schedules (but with aggregated financial terms which are equivalent to that of the Loan prior to such separation,
including, so long as an Event of Default has not occurred and is not continuing, a ratable allocation of prepayments among the Loan components) and thereafter to engage in separate Secondary Market
Transactions with respect to all or any part of the indebtedness and loan documentation, and 

         (v)   reviewing
the offering documents relating to any Secondary Market Transaction to ensure that all information concerning Borrower, the Guarantor, the
Mortgaged Property, and the Loan is correct, and certifying to the accuracy thereof. 

Lender
shall be permitted to share all such information with the investment banking firms, Rating Agencies, accounting firms, law firms and other third-party advisory firms and trustees, purchasers,
transferees, assignees, trustees, servicers and actual or potential investors involved with the Loan and the Loan Documents or the applicable Secondary Market Transaction (collectively,
"Interested Parties"). Lender and all of the aforesaid Interested Parties shall be entitled to rely on the information supplied by, or on behalf of,
Borrower. Lender may publicize the existence of the Loan in connection with its marketing for a Secondary Market Transaction or otherwise as part of its business development. Borrower shall provide
such reasonable access to the Mortgaged Property and personnel of the Manager and of Borrower's constituent members and the business and operations of all of the foregoing as Lender or other
Interested Parties may request in connection with any such Secondary Market Transaction. Borrower understands that any such information may be incorporated into any offering circular, prospectus,
prospectus supplement, private placement memorandum or other offering documents for any Secondary Market Transaction. Without limiting the foregoing, Borrower and Guarantor shall provide in connection
with each of (i) a preliminary and a final private placement memorandum or (ii) a preliminary and final prospectus or prospectus supplement, as applicable (the documents referred to in
the foregoing clauses (i) and (ii), collectively, the "Disclosure Documents"), an agreement certifying that Borrower and Guarantor have examined
such Disclosure Documents specified by Lender and that each such Disclosure Document, as it relates to Borrower, Guarantor, any Affiliates, the Mortgaged Property and Manager, does not contain any
untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading (a
"Disclosure Certificate"). Borrower and 

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Guarantor
shall indemnify, defend, protect and hold harmless Lender, its Affiliates, directors, employees, agents and each Person, if any, who controls Lender or any such Affiliate within the meaning
of Section 15 of the Securities Act of 1933 or Section 20 of the Securities Exchange Act of 1934, and any other placement agent or underwriter with respect to any Securitization or
Secondary Market Transaction from and against any losses, claims, damages, liabilities, costs and expenses (including, without limitation, reasonable attorneys' fees and disbursements) that arise out
of or are based upon any untrue statement of any material fact contained in any Disclosure Certificate or other information or documents furnished by Borrower, Guarantor or their Affiliates or in any
representation or warranty of any Borrower contained herein or in the other Loan Documents or arise out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated in such information or necessary in order to make the statements in such information not materially misleading. In any Secondary Market Transaction, Lender may transfer its obligations
under this Loan Agreement and under the other Loan Documents (or may transfer the portion thereof corresponding to the transferred portion of the Indebtedness), and thereafter Lender shall be relieved
of any obligations hereunder and under the other Loan Documents arising after the date of said transfer with respect to the transferred interest. Each transferee investor shall become a "Lender"
hereunder. The holders from time to time of the Loan and/or any other interest of the "Lender" under this Loan Agreement and the other Loan Documents may from time to time enter into one or more
co-lender or similar agreements in their discretion. Borrower acknowledges and agrees that such agreements, as the same may from time to time be amended, modified or restated, may govern
the exercise of the powers and discretionary authority of the Lender hereunder and under the other Loan Documents, but Borrower shall be entitled to rely upon any actions taken by Lender or the
designated servicer(s) or agent(s) for Lender, whether or not within the scope of its power and authority under such other agreements. Lender shall be responsible for the payment of all
out-of-pocket expenses incurred by the Lender and the Borrower in connection with any Secondary Market Transaction. 

        (x)    Insurance.    

          (i)  Borrower,
at its sole cost and expense, shall keep the Improvements and Equipment insured (including, but not limited to, any period of renovation, alteration and/or
construction) during the term of the Loan with the coverage and in the amounts required under this Agreement for the mutual benefit of Borrower and Lender against loss or damage by fire, lightning,
wind and such other perils as are customarily included in a standard "all-risk" or "special cause of loss" form and against loss or damage by other risks and hazards covered by a standard
extended coverage insurance policy (including, without limitation, fire, lightning, hail, hurricane, windstorm, tidal wave, explosion, acts of terrorism certified under the Terrorism Risk Insurance
Act of 2002, riot and civil commotion, vandalism, malicious mischief, strike, water damage, sprinkler leakage, collapse, burglary, theft, mold and microbial matter coverage arising as a result of
covered perils under the standard "all risk" policy and such other coverages as may be reasonably required by Lender on the special form (formerly known as an all risk form)). Such insurance shall be
in an amount (i) equal to at least the greater of then full replacement cost of the Improvements and Equipment (exclusive of the cost of foundations and footings), without deduction for
physical depreciation and the outstanding Principal Indebtedness, and (ii) such that the insurer would not deem Borrower a co-insurer under said policies. The policies of insurance
carried in accordance with this Section 5.1(x) shall be paid not less than ten (10) days in advance of the due date thereof and shall
contain the "Replacement Cost Endorsement" with a waiver of depreciation. If terrorism coverage is excluded on an "all-risk" basis, then Borrower shall obtain coverage for terrorism and
similar acts in the stand alone terrorism market. Notwithstanding the foregoing, the terrorism coverage may exclude non-certified Terrorism Risk Insurance Act of 2002 coverage (i.e. the
actions of domestic actors). 

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         (ii)  Borrower,
at its sole cost and expense, for the mutual benefit of Borrower and Lender, shall also obtain and maintain or cause to be obtained and maintained during the
entire term of the Loan the following policies of insurance: 

        (A)  flood
insurance, if any part of the Mortgaged Property is located in an area identified by the Federal Emergency Management Agency as an area having special flood
hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994 (and any amendment or successor act thereto) in an amount at least equal to the maximum limit of coverage available with respect to the Improvements and Equipment under said Act; 

        (B)  Comprehensive
General Liability insurance, including a broad form comprehensive general liability endorsement and coverage for broad form property damage, contractual
damages, personal injuries (including death resulting therefrom) and a liquor liability endorsement if liquor is sold on the Mortgaged Property, containing minimum limits of liability of
$1 million for both injury to or death of a person and for property damage per occurrence and $3 million in the aggregate for the Mortgaged
Property, and such other liability insurance reasonably requested by Lender; in addition, at least $25 million excess and/or umbrella liability insurance shall be obtained and maintained for
any and all claims, including all legal liability imposed upon Borrower and all court costs and attorneys' fees incurred in connection with the ownership, operation and maintenance of the Mortgaged
Property; 

        (C)  business
interruption insurance (including rental value) in an annual aggregate amount equal to the estimated income from the Leases of each Mortgaged Property
(including, without limitation, the loss of all Rents and additional Rents payable by all of the lessees under the Leases (whether or not such Leases are terminable in the event of a fire or
casualty)), such insurance to cover losses for a period of twelve (12) months after the date of the fire or casualty in question, plus an extended period of indemnity commencing at the time
repairs are completed for a period of not less than 30 days and to be increased or decreased, as applicable, from time to time during the term of the Loan if, and when, the gross revenues from
the Leases of the Mortgaged Property materially increase or decrease, as applicable (including, without limitation, increases from new Leases and renewal Leases entered into in accordance with the
terms of this Agreement), to reflect all increased Rent and increased additional Rent payable by all of the lessees under such renewal Leases and all Rent and additional Rent payable by all of the
lessees under such new Leases; 

        (D)  all
risk physical loss and damage coverage with respect to heating and air conditioning equipment, located in, on, or about the Improvements, except the coverage
required under this clause (ii)(D) shall not be required to be maintained as a separate policy and may be included as part of the coverages provided under clause (i); 

        (E)  worker's
compensation insurance coverage (in amounts not less than the statutory minimums for all persons employed by Borrower or its tenants at the Mortgaged Property
and in compliance with all other requirements of applicable local, state and federal law) and "Employers Liability" insurance in amounts not less than required by statute; 

        (F)  during
any period of repair or restoration, builder's "all risk" insurance in an amount equal to not less than the full insurable value of the Mortgaged Property against
such risks (including, without limitation, fire and extended coverage and collapse of the Improvements to agreed limits) as Lender may request, in form and substance acceptable to Lender; 

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        (G)  if
reasonably required by Lender with respect to any zoning matter that is reasonably likely to materially adversely affect the value of any Mortgaged Property,
ordinance or law coverage to compensate for the cost of demolition, increased cost of construction, and loss to any undamaged portions of the Improvements, if the current use of the Mortgaged Property
or the Improvements themselves are or become "nonconforming" pursuant to the applicable zoning regulations, unless full
rebuildability following casualty is otherwise permitted under such zoning regulations notwithstanding such nonconformity; 

        (H)  if
required by Lender as a result of any Mortgaged Property being located in an area with a high degree of seismic activity, earthquake damage insurance in an amount and
form acceptable to Lender; 

        (I)   such
other insurance as may from time to time be reasonably required by Lender in order to protect its interests with respect to the Loan and the Mortgaged Property and
to conform such requirements to then current standards for a Secondary Market Transaction. 

        (iii)  All
policies of insurance (the "Policies") required pursuant to this Section 5.1(x): 

        (A)  shall
be issued by an insurer approved by Lender which has a claims paying ability rating of not less than "AA" (or the equivalent) by Rating Agencies satisfactory to
Lender (one of which shall be S&P) and A:XIII or better as to claims paying ability by AM Best, provided, that notwithstanding the foregoing,
(1) in the event American Modern Insurance shall be the insurer providing the standard all-risk insurance policy, then such insurer shall not be required to satisfy such claims
paying ability rating by the Rating Agencies, so long as the Borrower delivers to the Lender evidence reasonably satisfactory to the Lender that the insurer has purchased reinsurance with respect to
not less than 70% of such policy from a reinsurer with a claims paying ability rating by the Rating Agencies of not less than "A" (or the equivalent) by Rating Agencies satisfactory to the Lender (one
of which shall be S&P) and shall only be required to maintain a claims paying ability rating by AM Best of A:VIII or better and (2) the insurer providing the worker's compensation insurance
coverage shall only be required to maintain a claims paying ability rating of not less than "A" (or the equivalent) by Rating Agencies satisfactory to the Lender (one of which shall be S&P), 

        (B)  shall
name Lender as an additional insured and contain a standard noncontributory mortgagee clause and a Lender's Loss Payable Endorsement, or their equivalents, naming
Lender (and/or such other party as may be designated by Lender) as the party to which all payments made by such insurance company shall be paid, 

        (C)  shall
be maintained throughout the term of the Loan without cost to Lender, 

        (D)  shall
contain such provisions as Lender deems reasonably necessary or desirable to protect its interest (including, without limitation, endorsements providing that
neither Borrower, Lender nor any other party shall be a co-insurer under said Policies and that Lender shall receive at least thirty (30) days prior written notice of any
modification, reduction or cancellation), 

        (E)  shall
contain a waiver of subrogation against Lender, 

        (F)  shall
be for a term of not less than one year, 

        (G)  shall
provide for claims to be made on an occurrence basis, 

        (H)  shall
contain an agreed value clause updated annually (if the amount of coverage under such policy is based upon the replacement cost of the Mortgaged Property), 

        (I)   shall
designate Lender as "mortgagee and loss payee" (except general public liability and excess liability, as to which Lender shall be named as additional insured), 

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        (J)   shall
be issued by an insurer licensed in the state in which the Mortgaged Property is located, 

        (K)  shall
provide that Lender may, but shall not be obligated to, make premium payments to prevent any cancellation, endorsement, alteration or reissuance, and such payments
shall be accepted by the insurer to prevent same, and 

        (L)  shall
be reasonably satisfactory in form and substance to Lender and reasonably approved by Lender as to amounts, form, risk coverage, deductibles, loss payees and
insureds to the extent not otherwise specified in this Section 5.1(x). All property damage insurance policies (except for flood and earthquake policies) must automatically reinstate after each
loss. 

Copies
of said Policies, certified as true and correct by Borrower, or insurance certificates thereof, shall be delivered to Lender. Not later than ten (10) days prior to the expiration date of
each of the Policies, Borrower shall deliver to Lender satisfactory evidence of the renewal of each Policy. The insurance coverage required under this  Section 5.1(x) may be effected under a blanket
policy or policies covering the Mortgaged Property and other property and assets not constituting
a part of the Collateral; provided that any such blanket policy shall provide at least the same amount and form of protection as would a separate policy insuring the Mortgaged Property individually,
which amount shall not be less than the amount required pursuant to this Section 5.1(x) and which shall in any case comply in all other respects
with the requirements of this Section 5.1(x). Upon demand therefor, Borrower shall reimburse Lender for all of Lender's or its designee's
reasonable costs and expenses incurred in obtaining any or
all of the Policies or otherwise causing the compliance with the terms and provisions of this Section 5.1(x), including (without limitation)
obtaining updated flood hazard certificates and replacement of any so-called "forced placed" insurance coverages to the extent Borrower was required to obtain and maintain any such Policy
or Policies hereunder and failed to do so. Borrower shall pay the premiums for such Policies (the "Insurance Premiums") as the same become due and
payable and shall furnish to Lender evidence of the renewal of each of the Policies with receipts for the payment of the Insurance Premiums or other evidence of such payment reasonably satisfactory to
Lender (provided, however, that Borrower is not required to furnish such evidence of payment to Lender in the event that such Insurance Premiums have been paid by Lender). If Borrower does not furnish
such evidence and receipts at least ten (10) days prior to the expiration of any expiring Policy, then Lender may procure, but shall not be obligated to procure, such insurance and pay the
Insurance Premiums therefor, and Borrower agrees to reimburse Lender for the cost of such Insurance Premiums promptly on demand. Within thirty (30) days after request by Lender, Borrower shall
obtain such increases in the amounts of coverage required hereunder as may be reasonably requested by Lender, based on then industry-standard amounts of coverage then being obtained by prudent owners
of properties similar to the Mortgaged Property in the same applicable market region as the Mortgaged Property. Borrower shall give Lender prompt written notice if Borrower receives from any insurer
any written notification or threat of any actions or proceedings regarding the non-compliance or non-conformity of the Mortgaged Property with any insurance requirements. 

        (iv)  If
the Mortgaged Property shall be damaged or destroyed, in whole or in part, by fire or other casualty, Borrower shall give prompt notice thereof to Lender. 

        (A)  In
case of loss covered by Policies, Lender may either (a) jointly with a Borrower settle and adjust any claim and agree with the insurance company or companies
on the amount to be paid on the loss or (b) allow Borrower to agree with the insurance company or companies on the amount to be paid upon the loss;  provided, that Borrower may settle and adjust
losses without participation by Lender aggregating not in excess of 1% of the Principal Indebtedness,
agree with the insurance company or companies on the amount to be paid upon the loss and collect and receipt for any such Insurance Proceeds; provided,  further, that if 

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(x) at
the time of the settlement of such claim an Event of Default has occurred and is continuing or (y) Lender and Borrower are unable to agree upon a joint settlement or
(z) Lender disapproves of Borrower's proposed settlement with the insurance company, then Lender shall settle and adjust such claim without the consent of Borrower, and for such purpose is
hereby irrevocably appointed as Borrower's attorney-in-fact, coupled with an interest. In any such case Lender shall and is hereby authorized to collect and receipt for any
such Insurance Proceeds subject to and to the extent provided for in this Agreement. The reasonable out-of-pocket expenses incurred by Lender in the adjustment and collection
of Insurance Proceeds shall become part of the Indebtedness and be secured by the Mortgages and shall be reimbursed by Borrower to Lender upon demand therefor. 

        (B)  In
the event of any insured damage to or destruction of the Mortgaged Property or any part thereof (herein called an "Insured
Casualty") where 

        (1)   the
aggregate amount of the loss, as reasonably determined by an Independent insurance adjuster, is less than ten percent (10%) of the amount with respect to the
affected Mortgaged Property that would have satisfied the Maximum LTV and the Debt Service Coverage Test with respect to such Mortgaged Property immediately prior to the Insured Casualty on a
stand-alone basis, 

        (2)   in
the reasonable judgment of Lender, the Mortgaged Property can be restored, replaced and/or rebuilt (collectively, the
"Restoration") by not later than the first to occur of (a) twelve (12) months after the date of casualty and (b) the expiration of
the business interruption insurance and, in any case, not later than six (6) months prior to the Maturity Date to an economic unit substantially in the condition it was in immediately prior to
the Insured Casualty and in compliance with all zoning, building and other applicable Legal Requirements (the "Pre-Existing Condition") not
less materially valuable (including an assessment of the impact of the termination of any Leases due to such Insured Casualty) and not less useful than the same was prior to the Insured Casualty, 

        (3)   Lender
reasonably determines that the rental income of the Mortgaged Property, after the Restoration thereof to the Pre-Existing Condition, will be
sufficient to meet all Operating Expenses, payments for reserves and payments of principal and interest under the Loan and satisfy the Debt Service Coverage Test, and 

        (4)   tenant
leases requiring payment of annual rent equal to at least seventy-five percent (75%) of the gross revenues from the Mortgaged Property during the
twelve (12) month period immediately preceding the date of such fire or other casualty remain in full force and effect during and after the Restoration of the Mortgaged Property (subject to the
rent abatement provisions thereof applicable as a result of the casualty, so long as such abatement will end, and full rental payments shall resume, upon substantial completion of the Restoration), 

or
if Lender otherwise elects to allow a Borrower to restore the Mortgaged Property, then, if no Event of Default shall have occurred and be continuing, the Insurance Proceeds (after reimbursement of
any reasonable out-of-pocket expenses incurred by Lender in connection with the collection of any applicable Insurance Proceeds) shall be made available to reimburse Borrower
for the cost of restoring, repairing, replacing or rebuilding the Mortgaged Property or part thereof subject to the Insured Casualty, as provided for below. Borrower hereby covenants and agrees to
commence and diligently to prosecute such Restoration of the affected Mortgaged Property as nearly as possible to the Pre-Existing Condition. Borrower shall pay all
out-of-pocket costs (and if required by Lender, Borrower shall deposit the total thereof with Lender in advance) of such Restoration in excess of the Insurance Proceeds made
available pursuant to the terms hereof. 

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        (C)  Except
as provided above, the Insurance Proceeds collected upon any Insured Casualty shall, at the option of Lender in its sole discretion, be applied to the payment of
the Indebtedness or applied to the cost of Restoration of the affected Mortgaged Property or part thereof subject to the Insured Casualty, in the manner set forth below. 

        (D)  Regardless
of whether Insurance Proceeds, if any, are sufficient or are made available to Borrower for the Restoration of any portion of the affected Mortgaged Property,
Borrower covenants to complete such restoration of the affected Mortgaged Property to be of at least comparable value as prior to such damage or destruction, all to be effected in accordance with
Legal Requirements and plans and specifications approved in advance by Lender, such approval not to be unreasonably withheld or delayed. 

        (E)  In
the event Borrower is entitled to reimbursement out of Insurance Proceeds, such proceeds shall be held by Lender in the Loss Proceeds Account and disbursed from time
to time as the Restoration progresses upon Lender being furnished with (1) evidence reasonably satisfactory to it (which evidence may include inspection(s) of the work performed) that the
Restoration covered by the disbursement has been completed in accordance with plans and specifications approved by Lender, (2) evidence reasonably satisfactory to it of the estimated cost of
completion of the Restoration, (3) funds, or, at Lender's option, assurances reasonably satisfactory to Lender that such funds are available and sufficient in addition to the Insurance Proceeds
to complete the proposed Restoration, and (4) such architect's certificates, waivers of lien, contractor's sworn statements, title insurance endorsements, bonds and other evidences of cost,
payment and performance of the foregoing Restoration as Lender may reasonably require and approve. Lender may, in any event, require that all plans and specifications for such Restoration be submitted
to and reasonably approved by Lender prior to commencement of work. Lender may retain a construction consultant to inspect such work and review Borrower's request for payments and Borrower shall, on
demand by Lender, reimburse Lender for the reasonable fees and disbursements of such consultant. No payment made prior to the final completion of the Restoration shall exceed ninety percent (90%) of
the hard construction costs value of the work performed from time to time (except for restoration work on a trade by trade basis or on an hourly basis for professional services in which event, payment
may be made in full upon the completion of such work). Any funds other than Insurance Proceeds shall be disbursed prior to disbursement of such proceeds;
and, at all times, the undisbursed balance of such Insurance Proceeds remaining in the Loss Proceeds Account, together with funds deposited therein to pay the costs of the Restoration by or on behalf
of Borrower, shall be at least sufficient in the reasonable judgment of Lender to pay for the cost of completion of the Restoration free and clear of all liens or claims for lien, except for Permitted
Encumbrances. Any surplus which may remain out of Insurance Proceeds held by Lender after payment of such costs of restoration, repair, replacement or rebuilding shall, at the option of Lender in its
sole discretion, be applied to the payment of the Indebtedness or be paid to Borrower so long as no Event of Default has occurred and is continuing. 

        (F)  Borrower
shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss, with any insurance required under this Agreement that would
be considered "co-insurance" or adversely affect the ability to collect under a policy of insurance required hereunder. 

        (y)    Condemnation.    

          (i)  Borrower
shall promptly give Lender written notice of the actual or threatened commencement of any proceeding for a Taking and shall deliver to Lender copies of any and
all papers served in connection with such proceedings. Lender is hereby irrevocably appointed as Borrower's attorney-in-fact, coupled with an interest, with exclusive power to
collect, receive and 

73

 

retain
any Condemnation Proceeds for said Taking. With respect to any compromise or settlement in connection with such proceeding, Lender shall jointly with Borrower compromise and reach settlement
unless at the time of such Taking an Event of Default has occurred and is continuing and the Indebtedness has been accelerated, in which event Lender shall compromise and reach settlement without the
consent of Borrower. Notwithstanding the foregoing provisions of this Section 5.1(y), Borrower is authorized to negotiate, compromise and settle,
without participation by Lender, Condemnation Proceeds of up to 1% of the Principal Indebtedness in connection with any Taking. Notwithstanding any Taking, Borrower shall continue to pay the
Indebtedness at the time and in the manner provided for in this Agreement and the other Loan Documents and the Indebtedness shall not be reduced except in accordance herewith. 

         (ii)  Borrower
shall cause the Condemnation Proceeds to be paid directly to Lender. Lender may, in its sole discretion, apply any such Condemnation Proceeds to the reduction
or discharge of the Indebtedness (whether or not then due and payable). 

        (iii)  With
respect to a Taking in part, which shall mean any Taking which does not render the affected Mortgaged Property physically or economically unsuitable in the
reasonable judgment of Lender for the use to which it was devoted prior to the Taking, Borrower shall cause the Condemnation Proceeds to
be paid to Lender as described above, and if Lender does not elect to apply the same to the Indebtedness as provided in Section 5.1(y)(ii) above,
Lender shall deposit such Condemnation Proceeds in the Loss Proceeds Account and the same shall be made available for application to the cost of Restoration of the affected Mortgaged Property and
disbursed from time to time as the Restoration progresses upon Lender being furnished with (1) evidence reasonably satisfactory to it (which evidence may include inspection(s) of the work
performed) that the Restoration covered by the disbursement has been completed in accordance with plans and specifications approved by Lender, (2) evidence reasonably satisfactory to it of the
estimated cost of completion of the Restoration, (3) funds, or, at Lender's option, assurances satisfactory to Lender that such funds are available and sufficient in addition to the
Condemnation Proceeds to complete the proposed Restoration, and (4) such architect's certificates, waivers of lien, contractor's sworn statements, title insurance endorsements, bonds and other
evidences of cost, payment and performance of the foregoing repair, restoration, replacement or rebuilding as Lender may reasonably require and approve. 

        (iv)  Regardless
of whether Condemnation Proceeds are made available for such purpose, Borrower hereby covenants to complete the Restoration of the affected Mortgaged
Property as nearly as possible to the Pre-Existing Condition and to be of at least comparable value and, to the extent commercially practicable, of substantially the same character as
prior to the Taking, all to be effected in accordance with applicable law and plans and specifications reasonably approved in advance by Lender. Borrower shall pay all costs (and if required by
Lender, Borrower shall deposit the total thereof with Lender in advance) of such Restoration in excess of the Condemnation Proceeds made available pursuant to the terms hereof. Lender may, in any
event, require that all plans and specifications for such Restoration be submitted to and reasonably approved by Lender prior to commencement of work. Lender may retain a construction consultant to
inspect such work and review any request by Borrower for payments and Borrower shall, on demand by Lender, reimburse Lender for the reasonable fees and disbursements of such consultant. No payment
made prior to the final completion of the Restoration shall exceed ninety percent (90%) of the hard construction costs value of the construction work performed from time to time (except for
restoration work on a trade by trade basis or on an hourly basis for professional services in which event, payment may be made in full upon the completion of such work); funds other than Condemnation
Proceeds shall be disbursed prior to disbursement of such proceeds; and at all times, the undisbursed balance of such proceeds remaining in the hands of Lender, together with funds deposited for that
purpose or irrevocably committed to the repayment of Lender by or on behalf of Borrower for that purpose, shall be at least sufficient in the reasonable judgment of Lender to pay for the cost of
completion of the restoration, repair, replacement or rebuilding, free and clear of all liens or claims for lien. Any surplus which may remain out of Condemnation Proceeds held by Lender after payment
of such costs of restoration, repair, replacement or rebuilding shall, at the option of Lender in its sole discretion, be applied to the payment of the Indebtedness or be paid to Borrower so long as
no Event of Default has occurred and is continuing. 

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         (v)  If
the affected Mortgaged Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of any such Condemnation Proceeds to which it is entitled
hereunder, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to have reserved in any foreclosure decree a right to receive said
award or payment, or a portion thereof sufficient to pay the Indebtedness. In no case shall any such application reduce or postpone any payments otherwise required pursuant to this Agreement, other
than the final payment on the Note. 

        (z)    Leases and Rents.    

          (i)  Borrower
absolutely and unconditionally assigns to Lender, Borrower's right, title and interest in all current and future Leases and Rents as collateral for the Loan,
it being intended by Borrower that this assignment constitutes a present, absolute assignment and not an assignment for additional security only. Such assignment to Lender shall not be construed to
bind Lender to the performance of any of the covenants, conditions or provisions contained in any such Lease or otherwise impose any obligation upon Lender. Borrower shall execute and deliver to
Lender such additional instruments, in form and substance reasonably satisfactory to Lender, as may hereafter be reasonably requested in writing by Lender to further evidence and confirm such
assignment. Nevertheless, subject to the terms of this Section 5.1(z), Lender grants to Borrower a license to lease, maintain, operate and manage
the Mortgaged Property and to collect, use and apply the Rents in accordance with the terms hereof and otherwise act as the landlord under the Leases, which license shall be deemed automatically
revoked upon the occurrence and during the continuance of an Event of Default under this Agreement. Any portion of the Rents held by Borrower shall be held in trust for the benefit of Lender for use
in the payment of the Indebtedness. Upon the occurrence of an Event of Default and during the continuance thereof, the license granted to Borrower herein shall automatically be revoked, and Lender
shall immediately be entitled to possession of all Rents, whether or not Lender enters upon or takes control of the Mortgaged Property. Lender is hereby granted and assigned by Borrower the right, at
its option, upon revocation of the license granted herein, to enter upon the Mortgaged Property in person, by agent or by court-appointed receiver to collect the Rents. Any Rents collected after the
revocation of the license shall be applied toward payment of the Indebtedness as set forth in Section 2.8 hereof. 

         (ii)  All
Leases entered into by Borrower shall provide for rental rates comparable to then-existing local market rates and terms and conditions commercially
reasonable and consistent with then-prevailing local market terms and conditions for similar type properties, and in no event shall Borrower, absent Lender's prior written consent, which
consent shall not be unreasonably withheld or delayed, enter into any Leases (a) other than leases of Homesites to owners and occupants of residential manufactured homes or mobile homes having
lease terms not in excess of two years, and (b) with any Affiliates of Borrower, except as indicated in Schedule 4 attached hereto.
Borrower shall furnish Lender with (1) detailed term sheets in advance in the case of any Leases, modifications, amendments or renewals for which Lender's consent is required and (2) in
the case of any other Leases, executed copies of such Leases upon written request. All renewals or amendments or modifications of Leases that do not satisfy the requirements of the first sentence of
this Section 5.1(z)(ii) shall be subject to the prior approval of Lender, which approval shall not be unreasonably withheld or delayed. All
Leases entered into after the Closing Date with new tenants (i.e. not renewals of existing tenants as of the Closing Date) shall be written on the standard lease form for new tenants previously
approved by Lender which form as of the Closing Date is set forth on Schedule 10 attached hereto; provided that notwithstanding the foregoing,
the Borrower may modify any standard lease form without such approval to the extent necessary to conform such form to any applicable Legal Requirements (and, upon reasonable request of the Lender, the
Borrower shall notify the Lender in writing with respect to any such modification). 

75

 

The
Borrower shall not materially change the standard lease form without Lender's prior written consent, which consent shall not be unreasonably withheld or delayed, or except as necessary to comply
with applicable Legal Requirements. Borrower, 

        (A)  shall
observe and perform all of the material obligations imposed upon the lessor under the Leases and shall not do or permit to be done anything to materially impair
the value of the Leases as security for the Indebtedness; 

        (B)  shall
not execute any other assignment of lessor's interest in any of the Leases or Rents; 

        (C)  shall
enforce all of the material terms, covenants and conditions contained in the Leases upon the part of the lessee thereunder to be observed or performed and shall
effect a termination or diminution of the obligations of tenants under leases, only in a manner that a prudent owner of a similar property to the Mortgaged Property would enforce such terms covenants
and conditions or effect such termination or diminution in the ordinary course of business; 

        (D)  except
as otherwise set forth in the Monthly Statement submitted to Lender, shall not collect any of the Rents more than one (1) month in advance; and 

        (E)  shall
not convey or transfer or suffer or permit a conveyance or transfer of the Mortgaged Property or of any interest therein so as to effect a merger of the estates
and rights of, or a termination or diminution of the obligations of, lessees thereunder. 

        (iii)  Borrower
shall deposit security deposits of lessees which are turned over to or for the benefit of Borrower or otherwise collected by or on behalf of Borrower, into
the Security Deposit Account and shall not commingle such funds with any other funds of Borrower. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits
under any applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall, if permitted pursuant to Legal Requirements, name
Lender as payee or mortgagee thereunder (or at Lender's option, be fully assignable to Lender) and shall, in all respects, comply with any applicable Legal Requirements and otherwise be reasonably
satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower's compliance with the foregoing. Upon the occurrence and during the
continuance of any Event of Default, Borrower shall, upon Lender's request, if permitted by any applicable Legal Requirements, turn over to Lender the security deposits (and any interest theretofore
earned thereon) with respect to all or any portion of the Mortgaged Property, to be held by Lender subject to the terms of the Leases. 

        (aa)    Maintenance of Mortgaged Property.    Borrower shall cause the Mortgaged Property to be maintained in a good
and safe condition and repair, subject to wear and tear and damage caused by casualty or condemnation. The Improvements and the Equipment shall not be removed, demolished or altered (except for
(1) normal replacement of the Equipment, (2) Improvements contemplated in an approved Operating Budget or pursuant to Leases in effect from time to time, (3) removals, demolition
or alterations that do not cost more than 1% of the Principal Indebtedness or (4) an emergency which the Borrower shall have notified the Lender of in writing, including the action taken to
remediate) without the consent of Lender which consent shall not be unreasonably withheld or delayed. Except with respect to an Insured Casualty which shall be governed by the terms and conditions
provided herein, Borrower shall, or shall cause any tenants obligated under their respective Leases to, promptly repair, replace or rebuild any part of the Mortgaged Property that becomes damaged,
worn or dilapidated. Borrower shall complete and pay for any structure at any time in the process of construction or repair on the Land. Borrower shall not initiate, join in, or consent to any change
in any private restrictive covenant, zoning law or other public or private restriction, limiting or defining the 

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uses
which may be made of any Mortgaged Property or any part thereof without the written consent of Lender which consent shall not be unreasonably withheld or delayed. If under applicable zoning
provisions the use of all or any portion of the Mortgaged Property is or shall become a nonconforming use, Borrower will not cause or permit such nonconforming use to be discontinued or abandoned if
such discontinuance of abandonment would cause such nonconforming use to no longer be permitted without the express written consent of Lender which consent shall not be unreasonably withheld or
delayed. Borrower shall not (i) change the use of any of the Land or Improvements in any material respect, (ii) permit or suffer to occur any waste on or to any Mortgaged Property or to
any portion thereof or (iii) take any steps whatsoever to convert any Mortgaged Property, or any portion thereof, to a condominium or cooperative form of management. 

        (bb)    SWAP Payments.    Borrower covenants and agrees to deliver to Lender evidence of each payment made by
Guarantor under the Hedge Agreement within two days thereof; provided however, that notwithstanding anything to the contrary contained herein, in no
event shall Borrower's failure to comply with this clause (bb) constitute an Event of Default hereunder. 

        (cc)    Prohibited Persons.    Borrower covenants and agrees to deliver (from time to time) to Lender any
certification or other evidence as may be requested by Lender in its sole and absolute discretion, confirming that: (i) neither Borrower, Member, Guarantor nor their respective officers,
directors, partners, members or majority-owned Affiliates is a Prohibited Person; and (ii) neither Borrower, Member, Guarantor nor their respective officers, directors, partners, members or
majority-owned Affiliates has engaged in any business, transaction or dealings with a Person known to Borrower to be a Prohibited Person, including, but not limited to, the making or receiving of any
contribution of funds, goods, or services, to or for the benefit of a Person known to Borrower to be a Prohibited Person. 

        (dd)    Reserved.    

ARTICLE VI.

NEGATIVE COVENANTS  

        Section 6.1.    Negative Covenants.    Borrower covenants and agrees that, until payment in full of the
Indebtedness, it will not do, directly or indirectly, any of the following unless Lender consents thereto in writing: 

        (a)    Liens on the Mortgaged Property.    Incur, create, assume, become or be liable in any manner with respect to,
or permit to exist, except as permitted by Section 5.1(b) above, any Lien with respect to any Mortgaged Property or any portion thereof, except:
(i) Liens in favor of Collateral Agent on behalf of the Secured Parties and (ii) the Permitted Encumbrances. 

        (b)    Ownership and Transfer.    Except as expressly permitted by or pursuant to this Agreement or the other Loan
Documents, own any property of any kind other than the Mortgaged Property and the Owned Property, or Transfer any Mortgaged Property or Owned Property or any portion thereof. 

        (c)    Other Borrowings.    Incur, create, assume, become or be liable in any manner with respect to Other Borrowings. 

        (d)    Dissolution; Merger or Consolidation.    Dissolve, terminate, liquidate, merge with or consolidate into another
Person. 

        (e)    Change In Business.    Make any material change in the scope or nature of its business objectives, purposes or
operations, or undertake or participate in activities other than the continuance of its present business. 

        (f)    Debt Cancellation.    Cancel or otherwise forgive or release any material claim or debt owed to Borrower by any
Person, except for adequate consideration or in the ordinary course of Borrower's business. 

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        (g)    Affiliate Transactions.    Except for fees payable to Manager under the Management Agreement, (i) pay
any management, consulting, director or similar fees to any Affiliate of Borrower or to any director or manager (other than any customary fees of the Independent Director/Manager), officer or employee
of Borrower, (ii) directly or indirectly enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any
Affiliate of Borrower or with any director, officer or employee of any Affiliate of Borrower, except transactions in the ordinary course of and pursuant to the reasonable requirements of the business
of Borrower and upon fair and reasonable terms which are no less favorable to Borrower than would be obtained in a comparable arm's length transaction with a Person that is not an Affiliate of
Borrower, or (iii) make any payment or permit any payment to be made to any Affiliate of Borrower when or as to any time when any Event of Default shall exist. 

        (h)    Creation of Easements.    Except as expressly permitted by or pursuant to the Mortgages or this Agreement,
create, or permit any Mortgaged Property or any part thereof to become subject to, any easement, license or restrictive covenant, other than a Permitted Encumbrance,  provided, that the consent of Lender
shall not be unreasonably withheld or delayed to the extent that any such easement, license or restrictive covenant
is reasonably necessary for the continued use, enjoyment, access to or operation of the applicable Mortgaged Property. 

        (i)    Misapplication of Funds.    Distribute any Rents or Moneys received from Accounts in violation of the
provisions of Section 2.12, or fail to pledge any security deposit to Lender, or misappropriate any security deposit or portion thereof. 

        (j)    Certain Restrictions.    Amend, modify or waive any of its rights under the Master Homesite Lease Agreement. 

        (k)    Assignment of Licenses and Permits.    Assign or transfer any of its interest in any Permits pertaining to any
Mortgaged Property, or assign, transfer or remove or permit any other Person to assign, transfer or remove any records pertaining to any Mortgaged Property. 

        (l)    Place of Organization.    Change its jurisdiction of organization, creation or formation, as applicable,
without giving Lender at least fifteen (15) days' prior written notice thereof and promptly providing Lender such information as Lender may reasonably request in connection therewith. 

        (m)    Leases.    Enter into, amend or cancel Leases, except as permitted by this Agreement. 

        (n)    Management Agreement.    Except in accordance with this Agreement, (i) terminate or cancel the
Management Agreement, (ii) consent to either the reduction of the term of or the assignment of the Management Agreement, (iii) increase or consent to the increase of the amount of any
charges under the Management Agreement, or (iv) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and remedies under, the Management Agreement in any
material respect. 

        (o)    Plans and Welfare Plans.    Knowingly engage in or permit any transaction in connection with which Borrower or
any ERISA Affiliate could be subject to either a material civil penalty or tax assessed pursuant to Section 502(i) or 502(1) of ERISA or Section 4975 of the Code, permit any
Welfare Plan to provide benefits, including without limitation, medical benefits (whether or not insured), with respect to any current or former employee of Borrower beyond his or her retirement or
other termination of service other than (i) coverage mandated by applicable law, (ii) death or disability benefits that have been fully provided for by paid up insurance or otherwise or
(iii) severance benefits (unless such coverage is provided after notification of and with the reasonable approval of Lender or pursuant to an employment or severance agreement entered into in
the ordinary course of business consistent with past practice), permit the assets of Borrower to become "plan assets", whether by operation of law or under regulations promulgated under ERISA or
adopt, amend (except as may be required by applicable law) or materially increase the amount of any benefit or amount payable under, 

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or
permit any ERISA Affiliate to adopt, amend (except as may be required by applicable law) or materially increase the amount of any benefit or amount payable under, any Plan or Welfare Plan, except
for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits expense to Borrower or any ERISA
Affiliate. 

        (p)    Transfer of Ownership Interests.    Permit any Transfer of a direct or indirect ownership interest or voting
right in Borrower (other than a Permitted Transfer). 

        (q)    Equipment and Inventory.    Except pursuant to the Management Agreement, permit any Equipment owned by Borrower
to be removed at any time from any Mortgaged Property unless the removed item is consumed or sold in the usual and customary course of business, removed temporarily for maintenance and repair or, if
removed permanently, replaced by an article of equivalent suitability and not materially less value, owned by Borrower free and clear of any Lien (other than Permitted Encumbrances). 

        (r)    Management Fees.    Pay Borrower or any Affiliate of Borrower any management fees with respect to the Mortgaged
Property except for management fees paid to Manager under the Management Agreement. 

        (s)    Prohibited Persons.    With respect to Borrower, Member, Guarantor and any of their respective officers,
directors, partners, members or majority-owned Affiliates: (i) conduct any business, or engage in any transaction or dealing, with any Person known to Borrower to be a Prohibited Person,
including, but not limited to, the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person; or (ii) engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in EO13224. 

        (t)    Hedge Agreement.    Amend, modify, cancel or terminate the Hedge Agreement. 

ARTICLE VII.

EVENT OF DEFAULT  

        Section 7.1.    Event of Default.    The occurrence of one or more of the following events shall be an
"Event of Default" hereunder: 

        (a)    if
on any Payment Date Borrower fails to pay any accrued and unpaid interest on the Loan or scheduled deposits into the Reserve Accounts when due and payable in
accordance with the provisions hereof, or any Release Price then due and payable in accordance with the provisions hereof; 

        (b)    if
Borrower fails (1) to pay the outstanding Indebtedness on the Maturity Date or (2) to deposit into the Collection Account, the amount required pursuant
to Sections 2.7(a)(i) or (3) to make the payment of the Principal Indebtedness required pursuant to  Section 2.7(b); 

        (c)    if
Borrower fails to pay or deposit any other amount payable or required to be deposited pursuant to this Agreement or any other Loan Document when due and payable in
accordance with the provisions hereof or thereof, as the case may be, and such failure continues for ten (10) days after Lender delivers written notice thereof to Borrower (other than the
failure of the Lender to transfer available funds from the Collection Account to a Reserve Account pursuant to Section 2.12(b)); 

        (d)    if
any representation or warranty made herein or in any other Loan Document, or in any report, certificate, financial statement or other Instrument, agreement or
document furnished by Borrower, Member or Guarantor in connection with this Agreement, the Note or any other Loan Document shall be false or materially misleading as of the date such representation or
warranty was made (or if such representation or warranty relates to an earlier date, then as of such earlier date); 

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        (e)    if
Borrower or the Guarantor makes an assignment for the benefit of creditors; 

        (f)    if
a receiver, liquidator or trustee shall be appointed for Borrower or the Guarantor or if Borrower or the Guarantor shall be adjudicated a bankrupt or insolvent, or if
any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in by,
Borrower or the Guarantor, or if any proceeding for the dissolution or liquidation of Borrower or the Guarantor shall be instituted; provided,  however,
that if such appointment, adjudication, petition or proceeding was involuntary and not consented to by Borrower or the Guarantor, upon the same
not being discharged, stayed or dismissed within ninety (90) days, or if Borrower or the Guarantor shall generally not be paying its debts as they become due; 

        (g)    if
Borrower attempts to delegate its obligations or assign its rights under this Agreement, any of the other Loan Documents or any interest herein or therein, or if any
Transfer of any Mortgaged Property or any interest therein occurs, or any direct or indirect Transfer of any direct or indirect ownership interest in Borrower occurs, other than in accordance with or
as permitted under this Agreement; 

        (h)    if
any breach or failure to perform any of the covenants in Article VI hereof shall occur, which breach or failure to perform, in the case of  Section 6.1(o) or (q)
 only, shall remain uncured for a period of thirty (30) days after
the occurrence of such breach or failure to perform or if any material breach or failure to perform any of the covenants in Article VIII hereof shall occur; 

        (i)    if
either (x) an "Event of Default" as defined or described in the Hedge Agreement shall occur or (y) an Event of Default as defined or described in the
Note or any other Loan Document occurs, whether as to Borrower or the Mortgaged Property or any portion thereof; 

        (j)    Reserved;

        (k)    if
Borrower fails to maintain any insurance required to be maintained pursuant to Section 5.1(x) hereof; and 

        (l)    if
Borrower shall fail to perform any of the terms, covenants or conditions of this Agreement, the Note, the Mortgages or the other Loan Documents, other than as
specifically otherwise referred to above in this definition of "Event of Default," for ten (10) days after notice to Borrower from Lender or its successors or assigns, in the case of any
Default which can be cured by the payment of a sum of money, or for thirty (30) days after notice from Lender or its successors or assigns, in the case of any other Default (unless a longer
notice period is otherwise provided herein or in such other Loan Document); provided, however, that if
such non-monetary Default is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and such Borrower shall have commenced to cure such Default within
such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for an additional thirty
(30) days; then, upon the occurrence of any such Event of Default and at any time thereafter, Lender, Collateral Agent or its respective successors or assigns, may, in addition to any other
rights or remedies available to it pursuant to this Agreement and the other Loan Documents, or at law or in equity, take such action, without further notice or demand, as Lender or Collateral Agent or
its successors or assigns, deems advisable to protect and enforce its rights against Borrower and in and to all or any portion of the Collateral and may enforce or avail itself of any or all rights or
remedies provided in the Loan Documents against Borrower and/or the Collateral (including, without limitation, all rights or remedies available at law or in equity). In addition to and without
limiting the foregoing, upon the occurrence of any Event of Default described in any of Sections 7.1(e), (f), or (g), the unpaid principal amount of and accrued interest and fees on the Loan and all
other Indebtedness shall automatically become immediately due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other requirements of any
kind, all of which are hereby expressly 

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waived
by Borrower. Upon and at any time after the occurrence of any other Event of Default, at the option of Lender or Collateral Agent, which may be exercised without notice or demand to anyone, all
or any portion of the Loan and other Indebtedness shall immediately become due and payable. 

        Section 7.2.    Remedies.    

        (a)    Upon
the occurrence of an Event of Default, all or any one or more of the rights, powers, other remedies available to Lender or Collateral Agent against Borrower under
this Agreement or any of the other Loan Documents executed by or with respect to Borrower, or at law or in equity may be exercised by Lender or Collateral Agent at any time and from time to time,
whether or not all or any portion of the Indebtedness shall be declared due and payable, and whether or not Lender or Collateral Agent shall have commenced any foreclosure proceeding or other action
for the enforcement of its rights and remedies under any of the Loan Documents with respect to all or any portion of the Collateral. Any such actions taken by Lender or Collateral Agent shall be
cumulative and concurrent and may be pursued independently, singly, successively, together or otherwise, at such time and in such order as Lender or Collateral Agent may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or otherwise affecting the other rights and remedies of Lender or Collateral Agent permitted by law, equity or contract or as set
forth herein or in the other Loan Documents. 

        (b)    In
the event of the foreclosure or other action by Lender or Collateral Agent to enforce Collateral Agent's remedies in connection with all or any portion of the
Collateral, Collateral Agent shall apply all Net Proceeds received to repay the Indebtedness in accordance with Section 2.8, the Indebtedness
shall be reduced to the extent of such Net Proceeds and the remaining portion of the Indebtedness shall remain outstanding and secured by the Loan Documents, it being understood and agreed by Borrower
that Borrower is liable for the repayment of all the Indebtedness. 

        (c)    Upon
and during the continuation of an Event of Default, Lender shall have the right, but not the obligation, with respect to any and all bankruptcy proceedings that are
now or hereafter commenced in connection with the Mortgaged Property, to (i) vote to accept or reject any plans of reorganization, (ii) vote in any election of a trustee,
(iii) elect the treatment of secured claims as specified in Section 1111(b) of the Bankruptcy Code, and (iv) make any other
decisions requested of holders of claims or interests that Borrower would have had the right to do in such bankruptcy proceedings in the absence of an Event of Default. 

        Section 7.3.    Remedies Cumulative.    The rights, powers and remedies of Lender and Collateral Agent under
this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender or Collateral Agent may have against Borrower pursuant to this Agreement or the other Loan
Documents executed by or with respect to Borrower, or existing at law or in equity or otherwise. Lender's and Collateral Agent's rights, powers and remedies may be pursued singly, concurrently or
otherwise, at such time and in such order as Lender or Collateral Agent may determine in Lender's and Collateral Agent's sole discretion. No delay or omission to exercise any remedy, right or power
accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as
often as may be deemed expedient. A waiver of any Default or Event of Default shall not be construed to be a waiver of any subsequent Default or Event of Default or to impair any remedy, right or
power consequent thereon. Notwithstanding any other provision of this Agreement, Lender and Collateral Agent reserve the right to seek a deficiency judgment or preserve a deficiency claim, in
connection with the foreclosure of any Mortgage on the Mortgaged Property, to the extent necessary to foreclose on other parts of the Collateral. 

        Section 7.4.    Default Administration Fee.    At any time after the occurrence of an Event of Default and the
acceleration of the Indebtedness, as reimbursement and compensation for the additional internal expenditures, administrative expenses, fees and other costs associated with actions to be taken in
connection with such Event of Default, and regardless of whether Lender or Collateral Agent shall 

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have
commenced the exercise of any remedies pursuant to Section 7.2, the Default Administration Fee shall be payable by Borrower to Lender upon
demand. 

        Section 7.5.    Curative Advances.    If any Event of Default (including any Event of Default under the Hedge
Agreement) occurs and is not cured by Borrower after notice from Lender (or Hedge Bank) or Collateral Agent, then Lender may expend such sums as either shall reasonably deem appropriate to cure or
attempt to cure such Event of Default. Borrower shall immediately repay all such sums so advanced, which sums shall immediately become part of the Indebtedness, bear interest at the Default Rate from
the date advanced until the date repaid, and be secured by all Collateral. 

ARTICLE VIII.

SINGLE-PURPOSE, BANKRUPTCY-REMOTE REPRESENTATIONS,

WARRANTIES AND COVENANTS  

        Section 8.1.    Applicable to Borrower.    Borrower hereby acknowledges that, as a condition of Lender's
agreements and performance of its obligations hereunder, Lender is relying on the status of Borrower as a legal entity separate and apart from any Affiliate or other entity and has required that
Borrower maintain such status, and Lender hereby acknowledges such reliance and requirement. Accordingly, Borrower hereby represents, warrants and covenants as of the Closing Date and until such time
as the Loan is paid in full, that absent express advance written waiver from Lender, which may be withheld the Lender's sole discretion, Borrower: 

        (a)    is
organized solely for purpose of owning and operating the Mortgaged Property and the Owned Property; 

        (b)    does
not own and will not own any assets other than the Mortgaged Property and the Owned Property (including incidental personal property necessary for the operation
thereof and proceeds therefrom); 

        (c)    is
not engaged and will not engage in any business, directly or indirectly, other than the ownership, management and operation of the Mortgaged Property and the Owned
Property; 

        (d)    will
not enter into any contract or agreement with any partner, member, shareholder, trustee, beneficiary, principal, joint venturer or Affiliate of Borrower except in
the ordinary course of its business pursuant to written agreements upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an
arms-length basis with third parties other than such Affiliate; 

        (e)    will
not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) the Loan, and (ii) trade
payables incurred in the ordinary course of business with trade creditors in connection with owning, operating and maintaining the Mortgaged Property and the Owned Property, in such amounts as are
normal and reasonable under the circumstances, provided such debt is not evidenced by a promissory note or other security instrument and, with respect to the Mortgaged Property, is not at any time in
an aggregate amount in excess of two percent (2%) of the Principal Indebtedness, and further provided that all such trade debts are paid within sixty (60) days after the same are incurred
(excluding therefrom any equipment financing paid within sixty (60) days after the same are incurred and trade payables being disputed or contested in good faith by the Borrower and in the same
manner and with the same deposits as Lien Claims set forth in Section 5.1(b)(ii) of this Agreement;) 

        (f)    will
not make any loan or advances to any Person (including any of its Affiliates), or pledge its assets for the benefit of any other Person, or seek or obtain credit or
incur any obligation to any third party based upon the assets of any other Person, or induce any third party to rely on the creditworthiness of any other Person;  provided, however, that notwithstanding anything to the contrary 

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contained
herein, any lien on the Mortgaged Property in favor of Hedge Bank shall not be deemed to violate this Section 8.1 or any other
provision of this Loan Agreement; 

        (g)    as
of the Closing Date reasonably expects to remain, solvent, and has maintained, and as of the Closing Date reasonably expects to maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; 

        (h)    will
not acquire obligations or securities of any Person; 

        (i)    will
not fail to correct any known misunderstanding or misrepresentation regarding its separate identity; 

        (j)    will
do all things necessary to preserve its existence; 

        (k)    shall
continuously maintain its existence and good standing and be qualified to do business in all states necessary to carry on its business, including the state in
which the Mortgaged Property is located; 

        (l)    will
conduct and operate its business solely in its own name, with all oral and written communications from Borrower, including, without limitation, correspondence,
invoices, purchase orders, billing statements, applications and business forms, made solely in the name of Borrower; 

        (m)    will
accurately maintain books, records, bank accounts, accounting records, financial statements and other entity documents separate from those of its partners, members,
shareholders, trustees, beneficiaries, principals, Affiliates, and any other Person, with such accounting records and financial statements having been prepared and kept in accordance with reasonable
accounting practices applied on a consistent basis, and such financial statements of Borrower shall be prepared in a manner that indicates (through appropriate footnotes if necessary) the existence of
Borrower and its assets and liabilities separate and apart from any other Person; moreover, Borrower shall indicate in its financial statements that the assets of Borrower are not available to satisfy
the claims of creditors of any Affiliate of Borrower and that the assets of any Affiliate of Borrower are not available to satisfy the claims of creditors of Borrower and, except with appropriate
designation as set forth above, Borrower shall not authorize its assets or liabilities to be listed on the financial statement of any other Person; 

        (n)    will
hold itself out to the public as, a legal entity separate and distinct from any other Person (including any of its partners, members, shareholders, trustees,
beneficiaries, principals and Affiliates, and any Affiliates of any of the same), and not as a department or division of any Person; 

        (o)    will
file such tax returns with respect to itself as may be required under applicable law and has prepared and will prepare separate tax returns and financial
statements, or if part of a consolidated group, is shown as a separate member of such group; 

        (p)    shall
pay its own liabilities, indebtedness, and obligations of any kind, as the same shall become due, from its own separate assets, rather than from those of other
Persons, and Borrower shall not consent to any Person operating the Mortgaged Property to incur expenses as agent or on behalf of Borrower, unless such Person agrees, prior to incurring such expense,
to clearly indicate that such expenses are the sole responsibility of, and any payment will come from, Borrower; 

        (q)    will
not enter into any transaction of merger or consolidation, or acquire by purchase or otherwise all or substantially all of the business or assets of, or any stock
or beneficial ownership of, any Person; 

        (r)    will
not commingle or permit to be commingled its funds or other assets with those of any other Person; and has held and will hold title to all of its real and personal
property in its own name and not in the name of any other Person; 

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        (s)    ill
maintain its assets in such a manner that it is not costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person; 

        (t)    will
not hold itself out to be responsible for the debts or obligations of any other Person and, except for the Loan Documents to which other Persons are party, shall
not consent to any other Person holding itself out as being responsible for the debts or obligations of Borrower; 

        (u)    will
not assume, guarantee or otherwise become liable on or in connection with any obligation of any other Person and, except for the Loan Documents to which other
Persons are party, shall not consent to any other Person guaranteeing, assuming or otherwise becoming liable for any obligation of Borrower; 

        (v)    except
for funds deposited into the Local Collection Account, the Collection Account or the Reserve Accounts in accordance with the Loan Documents, shall not hold title
to its assets other than in its name; 

        (w)    Reserved;

        (x)    will
pay its own liabilities and expenses, out of its own funds and shall not consent to any other Person paying Borrower's obligations except to the extent that timely
reimbursement is made for the same; 

        (y)    will
hold regular meetings, as appropriate to conduct its business and has observed at all times and will observe all limited liability company formalities and record
keeping; 

        (z)    will
allocate to Borrower reasonably and on the basis of fair market value determined on an arms-length basis all general overhead and administrative
expenses, including all costs associated with common employees and shared office space, any such allocation shall be specifically
and reasonably documented and substantiated, any such allocation of expenses to Borrower shall be paid solely by Borrower from Borrower's own funds, and Borrower shall at all times use separate
stationary, letterhead, invoices and checks; 

        (aa)    will
not identify its members or partners, Independent Manager (as defined below) or any other member or partner of any Affiliate of Borrower, or any other Person, as a
division or part of it; 

        (bb)    will
pay the salaries of its own employees and has maintained and will maintain a sufficient number of employees in light of its contemplated business operations; 

        (cc)    currently
maintains, and will continue to maintain, its own cash, cash positions and bank accounts separate from any other Person; 

        (dd)    shall
not (i) liquidate or dissolve, in whole or in part; (ii) consolidate, merge or enter into any form of consolidation with or into any other Person,
nor convey, transfer or lease its assets substantially as an entirety to any Person (other than in accordance with Section 2.7(a) hereof) nor
permit any Person to consolidate, merge or enter into any form of consolidation with or into itself, nor convey, transfer or lease its assets substantially as an entirety to any Person;
(iii) engage in any business other than the ownership and operation of the Mortgaged Property and Owned Property; or (iv) amend any provisions of its organizational documents containing
provisions similar to those contained in this Article VIII; 

        (ee)    is
a limited liability company duly formed and existing under the laws of the State of Delaware with one (1) equity member (the "Single
Member") in addition to the Independent Manager, whose limited liability company agreement (the "Borrower Organizational
Documents") contains each of the representations, covenants and warranties set forth in this Article VIII and requires Borrower to at all times cause there to be at
least one (1) duly appointed independent director or independent manager, as applicable, who is a natural person and also a non-economic member of Borrower (each, an
"Independent Manager") whose affirmative vote will be required in order for a voluntary filing for 

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protection
under the Bankruptcy Code or similar action by Borrower and who is not at the time of such individual's initial appointment as Independent Manager, shall not be during such individual's
tenure as Independent Manager, and may not have been at any time during the preceding five years, (i) a shareholder, member or partner of, or an officer, manager, director, except in his or her
capacity as Independent Manager of Borrower, paid consultant or employee of, customer of or supplier to or a member of the immediate family of Borrower (except in his or her capacity as Independent
Manager of Borrower) or any of its shareholders, members, partners, subsidiaries or affiliates or (ii) any person or other entity controlling or under common control with any such shareholder,
member, partner, officer, manager, director, employee, supplier or customer or any member of the immediate family of any of them; provided,  however, that
the foregoing limitations on the use of persons who are Affiliates of Borrower as Independent Manager shall not apply to Borrower's use of
natural persons employed by CT Corporation or any reputable, national service similar to CT Corporation and reasonably approved by Lender to fill the position of Independent Manager required
hereunder, notwithstanding that such persons may also act as independent directors of such Affiliates of Borrower, so long as such Independent Manager does not derive more than 5% of his/her annual
income from serving as manager of Affiliates of Borrower. As used herein, the term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a person or entity, whether through ownership of voting securities, by contract or otherwise; 

        (ff)    will
comply with the separateness provisions of the Borrower Organizational Documents since such Borrower Organizational Documents were executed and delivered, and with
the laws of the state of its formation relating to limited liability companies or limited partnerships; 

        (gg)    the
Borrower Organizational Documents provide and shall at all times continue to provide that upon the occurrence of any event that causes the Single Member to cease to
be a member of Borrower, the Independent Manager shall, without action of any person and simultaneously with the Single Member ceasing to be a member of Borrower, automatically continue as a member of
such Borrower and shall continue Borrower without dissolution; 

        (hh)    Borrower
shall cause reputable Delaware counsel acceptable to Lender (the "Delaware Law Firm") to deliver to Lender an
opinion letter reasonably satisfactory to Lender, whereby the Delaware Law Firm opines (which opinion may be subject to standard assumptions, qualifications, limitations and exceptions acceptable to
Lender), among other requirements of Lender, that: (1) the unanimous consent of the Single Member and the Independent Manager is required in order for the Borrower to file a voluntary
bankruptcy petition; (2) the provision in Borrower Organizational Documents that requires
unanimous consent as a condition to filing a voluntary bankruptcy petition is enforceable against the Single Member; (3) the bankruptcy, dissolution, liquidation or death of the Single Member
will not cause the Borrower to be dissolved; (4) no creditor of the Single Member shall have the right to obtain possession of, or otherwise exercise legal or equitable remedies with respect
to, the Borrower's property; and (5) Delaware law, not federal law, governs the determination of what persons or entities have the authority to file a voluntary bankruptcy petition on
behalf of the Borrower; 

        (ii)    the
Borrower Organizational Documents provide and shall at all times continue to provide that Borrower shall not cause, permit, or empower the Single Member, manager,
or any other person to consolidate or merge Borrower into any other entity, or, without the affirmative vote and express written authorization of all members of Borrower and the Independent Manager,
to institute proceedings to have Borrower adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against Borrower or file a petition seeking or
consent to, reorganization or relief with respect to Borrower under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of Borrower or a substantial part of Borrower's property, or make any assignment for the benefit of creditors of Borrower, or admit in writing
Borrower's inability to pay its debts generally as they become due, or take action in furtherance of any such action; and 

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        (jj)    the Borrower Organizational Documents provide and shall at all times continue to provide (i) that Borrower shall at all times maintain an arms-length
relationship with any Affiliates of Borrower, (ii) that Borrower shall at all times maintain independent management over its daily business affairs, free from any control exercised by any
Affiliate of Borrower, and (iii) that to the extent that control of Borrower is exercised by any manager, and the same individual acts as manager or similar control person with respect to any
Affiliate of Borrower, such individual will act in accordance with the separateness requirements of the Loan Documents and Borrower Organizational Documents, including, without limitation
(A) an express requirement under the Borrower Organizational Documents that the manager of Borrower make all decisions regarding the business of Borrower independent of, and not dictated by,
any Affiliate of the Borrower, and (B) the provisions of the Loan Documents and the Borrower Organizational Documents relating to transactions with Affiliates of Borrower and conflicts of
interest. 

ARTICLE IX.

MISCELLANEOUS  

        Section 9.1.    Survival.    This Agreement and all covenants, agreements, representations and warranties made
herein and in the certificates delivered pursuant hereto shall survive the execution and delivery of this Agreement, the making the Loan hereunder and the execution and delivery by Borrower to Lender
of the Loan Documents, and shall continue in full force and effect so long as any portion of the Indebtedness is outstanding and unpaid. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and assigns of such party. All covenants, promises and agreements in this Agreement contained, by or on behalf of Borrower, shall
inure to the benefit of the respective successors and assigns of Lender. Nothing in this Agreement or in any other Loan Document, express or implied, shall give to any Person other than the parties
and the holder of the Note and the other Loan Documents, and their legal representatives, successors and assigns, any benefit or any legal or equitable right, remedy or claim hereunder. 

        Section 9.2.    Lender's Discretion.    Whenever pursuant to this Agreement, Lender exercises any right given
to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory
or not satisfactory shall (except as is otherwise specifically herein provided) be in the sole discretion of Lender and shall be final and conclusive. 

        Section 9.3.    Governing Law.    

        (a)    This
Agreement was negotiated in New York and made by Lender and accepted by Borrower in the State of New York, and the proceeds of the Note delivered pursuant hereto
were disbursed from New York, which State the parties agree has a substantial relationship to the parties and to the underlying transaction embodied hereby, and in all respects (including, without
limitation, matters of construction, validity, performance, and maximum permissible rates of interest), this Agreement and the obligations arising hereunder shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made and performed in such State and any applicable law of the United States of America, except that at all times the
provisions for the creation, perfection and enforcement of the liens and security interests created pursuant to each Mortgage and Assignment of Rents and Leases shall be governed by the laws of each
State where the related Mortgaged Property is located, except that the security interests in Account Collateral shall be governed by the laws of the State of New York or the State where the Account
Collateral is held, at the option of Lender. 

        (b)    Borrower
hereby consents to the jurisdiction of any federal court or state court in New York, New York or within the county and state in which any Mortgaged Property is
located and irrevocably agrees that, subject to Lender's election, any legal suit, action or proceeding against Lender or Borrower arising out of or relating to this Agreement or the other Loan
Documents may be instituted 

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and
litigated in such courts. Borrower hereby (i) irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue
of any such suit, action or proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum, and (ii) irrevocably
submits to the jurisdiction of any such court in any such suit, action or proceeding. Borrower does hereby designate and appoint Corporation Service Company, as its authorized agent to accept and
acknowledge on its behalf service of any and all process which may be served in any such suit, action or proceeding in any federal or state court in New York, New York, and agrees that service of
process upon said agent at said address (or at such other office in New York, New York as may be designated by Borrower from time to time in accordance with the terms hereof) with a copy to Borrower
at its principal executive offices, and written notice of said service of Borrower mailed or delivered to Borrower in the manner provided herein shall be deemed in every respect effective service of
process upon Borrower, in any such suit, action or proceeding in the State of New York. Borrower (i) shall give prompt notice to Lender of any change in address of its authorized agent
hereunder, (ii) may at any time and from time to time designate a substitute authorized agent with an office in New York, New York (which office shall be designated as the address for service
of process), and (iii) shall promptly designate such a substitute if its authorized agent ceases to have an office in New York, New York or is dissolved without leaving a successor. 

        Section 9.4.    Modification, Waiver in Writing.    No modification, amendment, extension, discharge,
termination or waiver of any provision of this Agreement or any other Loan Document, or consent or waiver referred to in any Loan Document or consent to any departure by Borrower therefrom, shall in
any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance,
and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to or demand on Borrower shall entitle Borrower to any other or future notice or demand in the same,
similar or other circumstances. 

        Section 9.5.    Delay Not a Waiver.    Neither any failure nor any delay on the part of Lender in insisting
upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under any other Loan Document, or any other instrument given as
security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy
or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under this Agreement, the Note or any other Loan Document, Lender shall not be
deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement, the Note or the other Loan Documents, or to declare a default for failure to
effect prompt payment of any such other amount. 

        Section 9.6.    Notices.    All notices, consents, approvals and requests required or permitted hereunder or
under any other Loan Document shall be given in writing and shall be effective for all purposes if delivered or sent by: (a) hand delivery, (b) certified or registered United States
mail, postage prepaid, (c) nationally recognized overnight delivery service, (d) by facsimile transmission, addressed if to Lender or to Borrower at its applicable address set forth on
Schedule 5 hereto, or at such other address and Person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the other parties hereto in the
manner provided for in this Section 9.6, or (e) other than with respect to an amendment or modification, an electronic medium. A notice shall be deemed to have been given: in the case of
hand delivery, at the time of delivery; in the case of registered or certified mail, when delivered or three Business Days after mailing; in the case of overnight delivery and facsimile transmission,
on the Business Day after the same was sent; or in the case of electronic medium, when confirmed by e-mail. A party receiving a notice which does not comply with the technical requirements
for notice under this Section 9.6 may elect to waive any 

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deficiencies
and treat the notice as having been properly given. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof. 

        Section 9.7.    TRIAL BY JURY.    BORROWER, TO THE FULLEST EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY ANY PARTY HERETO WITH RESPECT TO THIS AGREEMENT, THE NOTE OR THE OTHER LOAN DOCUMENTS. 

        Section 9.8.    Headings.    The Article and Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 

        Section 9.9.    Assignment.    

        (a)    Borrower
may not sell, assign or transfer any interest in the Loan Documents, or any portion of the foregoing (including, without limitation, Borrower's rights, title,
interests, remedies, powers and duties hereunder and thereunder) without Lender's prior written consent. Lender shall have the right to assign or participate this Agreement and/or its interest in any
of the other Loan Documents and the obligations hereunder to any Person. In the event of an assignment by Lender, (a) the assignee shall have, to the extent of such assignment, the same rights,
benefits and obligations as it would have if it were an original "Lender" hereunder; (b) the assignee shall be deemed for all purposes to be a "Lender" hereunder; and (c) upon any such
substitution of Lender, a replacement or addition "Lender signature page" shall be executed by the new Lender and attached to this Agreement and thereupon become a part of this Agreement. After the
effectiveness of any assignment, the new Lender shall provide notice to Borrower of the identity, address and other pertinent information pertaining to the new Lender. Notwithstanding anything in this
Agreement to the contrary, after an assignment by Lender, the "Lender" (prior to such assignment) shall continue to have the benefits of any rights or indemnifications and shall continue to have the
obligations contained herein which Lender had during the period such party was a "Lender" hereunder. Borrower agrees that each participant shall be entitled to the benefits of Section 2.10 with
respect to its participation in this Agreement or any other Loan Document from time to time as if such participant were a Lender; provided that, in the
case of Section 2.10, such participant shall have complied with the requirements of said Section, and provided,  further, that no participant shall be
entitled to receive any greater amount pursuant to Section 2.10 than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such participant had no such transfer occurred. 

        (b)    Lender
may from time to time elect to enter into a servicing agreement with a servicer, pursuant to which the servicer shall be appointed to service and administer the
Loan and the Account Collateral in accordance with the terms hereof and to exercise any and all other rights of Lender with respect to the Loan as set forth in such servicing agreement. Lender shall
promptly notify Borrower if Lender shall elect to appoint or change the servicer, and all notices and other communications from Borrower to Lender shall be delivered to the servicer with a copy
concurrently delivered to the Lender, and any notice, direction or other communication from the servicer to Borrower shall have the same force and effect as a notice, direction or communication from
Lender. The servicer shall be entitled to be reimbursed for any cost, expense or liability which is incurred by the servicer pursuant to such servicing and administrative duties and which would
otherwise be reimbursable to Lender under this Agreement or any other Loan Document in the same manner and to the same extent as if Lender incurred such cost, expense or liability in the first place.
The parties hereto acknowledge and agree that the servicer shall be a third party beneficiary to this Agreement and the other Loan Documents. 

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        Section 9.10.    Severability.    Wherever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of
such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 

        Section 9.11.    Preferences.    Lender shall have no obligation to marshal any assets in favor of Borrower or
any other party or against or in payment of any or all of the obligations of Borrower pursuant to this Agreement, the Note or any other Loan Document. Lender shall have the continuing and exclusive
right to apply or reverse and reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder, provided that such application or reapplication is performed by Lender
in accordance with the terms of this Agreement or any other applicable Loan Document. To the extent Borrower makes a payment or payments to Lender for Borrower's benefit, which payment or proceeds or
any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been received by Lender. 

        Section 9.12.    Waiver of Notice.    Borrower shall not be entitled to any notices of any nature whatsoever
from Lender except with respect to matters for which this Agreement or another Loan Document specifically and expressly provides for the giving of notice by Lender to Borrower and except with respect
to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the right to receive any notice from Lender
with respect to any matter for which this Agreement or the other Loan Documents does not specifically and expressly provide for the giving of notice by Lender to Borrower. 

        Section 9.13.    Failure to Consent.    If Borrower shall seek the approval by or consent of Lender hereunder
or under the Note, or any of the other Loan Documents, and Lender shall fail or refuse to give such consent or approval, then Borrower shall not be entitled to any damages for any withholding or delay
of such approval or consent by Lender, it being intended that Borrower's sole remedy shall be to bring an action for an injunction or specific performance. 

        Section 9.14.    Schedules Incorporated.    The information set forth on the cover, heading and recitals
hereof, and the Schedules attached hereto, are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof. 

        Section 9.15.    Offsets, Counterclaims and Defenses.    Any assignee of any of Lender's interest in and to
this Agreement and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to this Agreement and the other Loan Documents which
Borrower may otherwise have against any assignor or this Agreement and the other Loan Documents. No such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or
proceeding brought by any such assignee upon this Agreement or upon any other Loan Document. Any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower. 

        Section 9.16.    No Joint Venture or Partnership.    Borrower and Lender intend that the relationship created
hereunder be solely that of borrower and lender. Nothing herein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between
Borrower and Lender nor to grant Lender any interest in the Collateral other than that of secured party, mortgagee or lender. 

        Section 9.17.    Waiver of Marshalling of Assets Defense.    To the fullest extent Borrower may legally do so,
Borrower waives all rights to a marshalling of the assets of Borrower, and others with interests 

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in
Borrower, and of the Collateral, or to a sale in inverse order of alienation in the event of foreclosure of the interests hereby created, and agrees not to assert any right under any laws
pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or
affect the right of Lender under the Loan Documents to a sale of any Collateral for the collection of the Indebtedness without any prior or different resort for collection, or the right of Lender to
the payment of the Indebtedness out of the Net Proceeds of the Collateral in preference to every other claimant whatsoever. 

        Section 9.18.    Waiver of Counterclaim.    To the extent permitted by applicable law, Borrower hereby waives
the right to assert a counterclaim, other than compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents. 

        Section 9.19.    Conflict; Construction of Documents.    In the event of any conflict between the provisions of
this Agreement and the provisions of any of the other Loan Documents, the provisions of this Agreement shall prevail. The parties hereto acknowledge that they were represented by counsel in connection
with the negotiation and drafting of the Loan Documents and that the Loan Documents shall not be subject to the principle of construing their meaning against the party that drafted same. 

        Section 9.20.    Brokers and Financial Advisors.    Borrower hereby represents that it has dealt with no
financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement. Borrower hereby agrees to indemnify and hold Lender
harmless from and against any and all claims, liabilities, costs and expenses of any kind in any way relating to or arising from a claim by any Person that such Person acted on behalf of Borrower in
connection with the transactions contemplated herein. The provisions of this Section 9.20 shall survive the expiration and termination of this
Agreement and the repayment of the Indebtedness. 

        Section 9.21.    Counterparts.    This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. 

        Section 9.22.    Estoppel Certificates.    Borrower and Lender hereby agree at any time and from time to time
upon not less than fifteen (15) days prior written notice by Borrower or Lender to execute, acknowledge and deliver to the party specified in such notice, a statement, in writing, certifying
that this Agreement is unmodified and in full force and effect (or if there have been modifications, that the same, as modified, is in full force and effect and stating the modifications hereto), and
stating whether or not, to the knowledge of such certifying party, any Default or Event of Default has occurred and is then continuing, and, if so, specifying each such Default or Event of Default;  provided, however, that it shall be a condition precedent to Lender's obligation to deliver the
statement pursuant to this Section 8.22, that Lender shall have received, together with Borrower's request for such statement, an Officer's
Certificate stating that, to the knowledge of Borrower, no Default or Event of Default exists as of the date of such certificate (or specifying such Default or Event of Default). 

        Section 9.23.    Payment of Expenses.    Borrower shall pay all Transaction Costs (excluding any Tax
Liabilities which are not payable by the Borrower pursuant to Section 2.10), which shall include, without limitation, (a) reasonable
out-of-pocket costs and expenses of Lender in connection with (i) the negotiation, preparation, execution and delivery of the Loan Documents and the documents and
instruments referred to therein; (ii) the creation, perfection or protection of Lender's Liens in the Collateral (including, without limitation, fees and expenses for title and lien searches or
amended or replacement Mortgages, UCC financing statements or Collateral Security Instruments, title insurance premiums and filing and recording fees, third party due diligence expenses for the
Mortgaged Property plus travel expenses, accounting firm fees, costs of the Appraisals, Environmental Reports (and an environmental consultant), and the Property Condition Assessments and costs and
fees incurred in connection with arranging, setting up, servicing and maintaining the Account Collateral); (iii) the 

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administration
of the Loan Documents and the Loan and response to any requests for Lender consent or approval of any matter; (iv) the negotiation, preparation, execution and delivery of any
amendment, waiver, restructuring or consent relating to any of the Loan Documents, and (v) the preservation of rights under and enforcement of the Loan Documents and the documents and
instruments referred to therein, including any communications or discussions relating to any action that Borrower shall from time to time request Lender to take, as well as any restructuring or
rescheduling of the Indebtedness, (b) the reasonable fees, expenses and other charges of counsel to Lender or its servicer in connection with all of the foregoing, and (c) Lender's
reasonable out-of-pocket travel expenses in connection with site visits to the Mortgaged Property; provided, that so long as an
Event of Default has not occurred and is not continuing, the Borrower shall not be obligated to pay for Lender's travel expenses in connection with more than one site visit to each individual
Mortgaged Property during any twelve consecutive month period and Lender shall use reasonable efforts to minimize the Transaction Costs paid by Borrower in connection with such site visits. 

        Section 9.24.    Non-Recourse.    Anything contained herein, in the Note or in any other Loan
Document to the contrary notwithstanding, but subject in all respect to provisos (A) through (E) below, no recourse shall be had for the payment of the principal or interest on the Loan
or for any other Indebtedness, obligation or liability hereunder or under any other Loan Document or for any claim based hereon or thereon or otherwise in respect hereof or thereof against
(i) any Affiliate of Borrower other than Borrower), (ii) any Person owning, directly or indirectly, any legal or beneficial interest in
Borrower or any Affiliate of Borrower (other than Borrower) or (iii) any partner, member, principal, officer, controlling person, beneficiary, trustee, advisor, shareholder, employee, agent,
Affiliate or director of any Persons described in clauses (i) through (iii) above (other than Borrower), and it is understood that neither the Note nor any other Indebtedness, obligation
or liability under or with respect to this Agreement and any other Loan Document may be enforced against any Person described in clauses (i) through  (iii)
above (other than Borrower); provided, however,
that the foregoing provisions of this paragraph shall not: 

        (A)  prevent
recourse to Borrower, the assets of Borrower, the Mortgaged Property or any other instrument or document which is pledged by Borrower to Lender pursuant to the
Loan Documents, including all Collateral; 

        (B)  have
any applicability whatsoever to the collateral pledged pursuant to the Pledge Agreement or limit the liability of the parties under the Guaranty of
Non-Recourse Obligations; or 

        (C)  constitute
a waiver, release or discharge of any indebtedness or obligation evidenced by the Note or secured by the Loan Documents, and the same shall continue until
paid or discharged in full; 

        (D)  prevent
recourse to Borrower and Guarantor, jointly and severally, and their respective assets for repayment of the Indebtedness, and the Indebtedness shall be fully
recourse not only to Borrower but also to Guarantor, in the event: 

        (1)   Borrower
or any Affiliate contests or in any way interferes with, directly or indirectly (collectively, a "Contest"), any
foreclosure action or sale commenced by Lender or with any other enforcement of Lender's rights, powers or remedies under any of the Loan Documents or under any document evidencing, securing or
otherwise relating to any of the Collateral (whether by making any motion, bringing any counterclaim, claiming any defense, seeking any injunction or other restraint, commencing any action seeking to
consolidate any such foreclosure or other enforcement with any other action, or otherwise) (except this clause (1) shall not apply if Borrower or such Affiliate successfully asserts a Contest
and obtains a favorable court order for the Borrower as to same); 

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        (2)   any
Mortgaged Property becomes an asset in a voluntary bankruptcy or insolvency proceeding or any petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be filed (x) by Borrower or (y) against Borrower with the consent or acquiescence of Borrower or the Guarantor or their
respective Affiliates; 

        (3)   of
any Transfer in violation of the terms of the Loan Documents; 

        (4)   Borrower
or the General Partner or the Guarantor makes an assignment for the benefit of creditors or admits, in writing or in any legal proceeding, its insolvency or
inability to pay its debts as they become due; or 

        (E)  prevent
recourse to Borrower and Guarantor, jointly and severally, and their respective assets, and Borrower and Guarantor shall be fully and personally liable, for any
loss, costs, liability, damage or expense (including, without limitation, attorneys' fees and disbursements) suffered or incurred by Lender or any Indemnified Party related to or arising from any of
the following acts committed by or on behalf of Borrower, Guarantor or any of their respective Affiliates: 

        (1)   any
fraud, misappropriation or misapplication of funds (including Loss Proceeds or Rents) in contravention of the Loan Documents, or intentional misrepresentation
contained in any Loan Documents or report furnished pursuant to any Loan Document; 

        (2)   additional
financing obtained by Borrower (whether secured or unsecured) in violation of the terms of the Loan Documents; 

        (3)   actual
material physical waste to the Mortgaged Property or material damage to the Mortgaged Property resulting from gross negligence or willful misconduct; 

        (4)   of
any breach of Article VIII hereof; 

        (5)   of
any breach of any representation, warranty or covenant in this Agreement or the Environmental Indemnity Agreement, concerning Environmental Laws and Hazardous
Substances; 

        (6)   any
security deposits received by Borrower or Manager from tenants not being properly applied, returned to tenants when due or delivered to Lender, a receiver or a
purchaser of the Mortgaged Property in the event of a foreclosure sale upon such Person taking possession of the Mortgaged Property; 

        (7)   any
Legal Requirement mandating the forfeiture by Borrower of the Collateral or any portion thereof because of the conduct or purported conduct of criminal activity by
Borrower or any Affiliate in connection therewith; 

        (8)   all
costs and expenses, including reasonable attorneys' fees and expenses, incurred in enforcing any obligation or liability or in collecting any amount due under this  Section 9.24(D) or this
Section 9.24(E), the Environmental Indemnity and the Guaranty of
Non-Recourse Obligations, which, as to Borrower, is a recourse obligation of Borrower as described in this Section 9.24(D) or this  Section 9.24(E), the Environmental Indemnity and the Guaranty of Non-Recourse Obligations, or, as to Guarantor, is a recourse
obligation of Guarantor under the Guaranty of Non-Recourse Obligations or the Environmental Indemnity; 

        (9)   the
failure to pay Impositions assessed against the Mortgaged Property to the extent there was sufficient funds available to pay and Lender allows Borrower to apply the
same, or the failure to maintain insurance as required under the Loan Documents, or the failure to pay any deductible amount in respect of any insurance maintained in 

92

 

respect
of the Mortgaged Property, or the failure to pay and discharge any mechanic's or materialman's Liens against the Mortgaged Property to the extent there was sufficient funds available to pay
and discharge and Lender allows Borrower to apply the same; or 

        (10) any
Rents or Proceeds received or collected by Borrower, any Affiliate of Borrower or Manager and not deposited into the Local Collection Account or the Collection
Account in accordance with Section 2.12. 

ARTICLE X.

THE COLLATERAL AGENT  

        Section 10.1.    Appointment, Powers and Immunities.    Each Secured Party hereby irrevocably appoints and
authorizes Collateral Agent to act as its Collateral Agent hereunder and under the other Loan Documents with such powers as are specifically delegated to Collateral Agent by the terms of this
Agreement and of the other Loan Documents, together with such other powers as are reasonably incidental thereto. Collateral Agent (which term as used in this sentence and in  Section 10.5 and the
first sentence of Section 10.6 hereof shall include reference to its
Affiliates and its own and its Affiliates' officers, directors, employees and agents): (a) shall have no duties or responsibilities to the Secured Parties except those expressly set forth in
this Agreement and in the other Loan Documents, and shall not by reason of this Agreement or any other Loan Document be a trustee for any Lender; (b) shall not be responsible to the Secured
Parties for any recitals, statements, representations or warranties contained in this Agreement or in any other Loan Document, or in any certificate or other document referred to or provided for in,
or received by any of them under, this Agreement or any other Loan Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or any other document referred to or provided for herein or therein or for any failure by Borrower, or any other Person to perform any of their obligations
hereunder or thereunder; (c) shall not be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Loan Document; and (d) shall not be
responsible to the Secured Parties for any action taken or omitted to be taken by it hereunder or under any other Loan Document or under any other document or instrument referred to or provided for
herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. Collateral Agent may employ agents and attorneys-in-fact
and shall not be responsible to the Secured Parties for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in good faith. 

        Section 10.2.    Reliance by Collateral Agent.    Collateral Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation, any thereof by telephone, facsimile transmission, telex, electronic mail, or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by
Collateral Agent in good faith. As to any matters not expressly provided for by this Agreement or any other Loan Document, Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with the instructions given by all of the Secured Parties, and such instructions of such Secured Parties and any action taken or failure
to act pursuant thereto shall be binding on all of the Secured Parties. 

        Section 10.3.    Defaults.    Collateral Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless Collateral Agent has received written notice from a Secured Party or Borrower specifying such Default and stating that such notice is a "Notice of
Default". In the event that Collateral Agent receives such a notice of the occurrence of a Default or Event of Default, Collateral Agent shall give prompt notice thereof to the Secured Parties.
Collateral Agent shall (subject to Section 10.7 hereof) take such action with respect to such Default or Event of Default as shall be directed by
all Secured Parties, provided that, unless and until Collateral Agent 

93

 

shall
have received such directions, Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interest of the Secured Parties except to the extent that this Agreement expressly requires that such action be taken, or not be taken, only with the consent or upon
the authorization of all of the Lenders. 

        Section 10.4.    Rights as a Lender.    With respect to the Loan made by it, Collateral Agent in its capacity
as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as Collateral Agent, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include Collateral Agent in its individual capacity. Collateral Agent and its affiliates may (without having to account therefor to any Lender) lend
money to, make investments in and generally engage in any kind of business with Borrower or any of their Affiliates as if it were not acting as Collateral Agent, and Collateral Agent and its
Affiliates
may accept fees and other consideration from Borrower or such Affiliate for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. 

        Section 10.5.    Indemnification.    The Lenders agree to indemnify Collateral Agent (to the extent not
reimbursed by Borrower, but without limiting the obligations of Borrower under the Loan Documents) ratably in accordance with their respective interests in the Loan, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against
Collateral Agent (including by any Lender) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any other Loan Document or any other
documents contemplated by or referred to herein or therein or the Transaction (including, without limitation, the costs and expenses that Borrower is obligated to pay under the Loan Documents, but
excluding, unless a Default or Event of Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified. 

        Section 10.6.    Non-Reliance on Collateral Agent and Other Lenders.    Each Secured Party agrees
and acknowledges that it has, independently and without reliance on Collateral Agent or any other Secured Party, and based on such documents and information as it has deemed appropriate, made its own
credit analysis of Borrower and its own decision to enter into this Agreement and that it will, independently and without reliance upon Collateral Agent or any other Secured Party, and based on such
documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or under any other Loan
Document. Collateral Agent shall not be required to keep itself informed as to the performance or observance by Borrower of this Agreement or any of the other Loan Documents or to inspect the
properties or books of Borrower or any of their Affiliates. Except for notices, reports and other documents and information expressly required to be furnished to the Secured Parties by Collateral
Agent hereunder, Collateral Agent shall not have any duty or responsibility to provide any Secured Party with any credit or other information concerning the affairs, financial condition or business of
Borrower or any of their Affiliates that may come into the possession of Collateral Agent or any of its Affiliates. 

        Section 10.7.    Failure to Act.    Except for action expressly required of Collateral Agent hereunder and
under the other Loan Documents, Collateral Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its
satisfaction from the Lenders of their indemnification obligations under Section 10.5 hereof against any and all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. 

94

 

        Section 10.8.    Resignation of Collateral Agent.    Subject to the appointment and acceptance of a successor
Collateral Agent as provided below, Collateral Agent may resign upon giving notice thereof to the
Secured Parties; provided, however, that such resignation shall not be effective until such time as the successor Collateral Agent is in place and shall deliver written notice of such appointment to
Borrower. Upon any such resignation, the Lenders shall have the right to appoint a successor Collateral Agent. If no successor Collateral Agent shall have been so appointed by the Lenders and shall
have accepted such appointment within 30 days after the retiring Collateral Agent's giving of notice of resignation, then the retiring Collateral Agent may, on behalf of the Lenders appoint a
successor Collateral Agent, that shall be a sophisticated financial institution. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall be discharged
from its duties and obligations hereunder. After any retiring Collateral Agent's resignation hereunder as Collateral Agent, the provisions of this Article 10 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it was acting as Collateral Agent. 

        Section 10.9.    Agency Fee.    Each Lender will pay to Collateral Agent an agency fee as may be agreed upon
between such Lender and Collateral Agent. Borrower shall not be liable for the payment of such fee. 

        Section 10.10.    Consents under Loan Documents.    Collateral Agent may consent to any modification,
supplement or waiver under any of the Loan Documents (other than the Hedge Agreement), provided that, without the prior consent of each Lender, Collateral Agent shall not release any Collateral or
otherwise terminate any Lien under any Loan Document providing for collateral security, or agree to additional obligations being secured by such collateral security (unless the Lien for such
additional obligations shall be junior to the Lien in favor of the Indebtedness), except that no such consent shall be required, and Collateral Agent is hereby authorized, to release any Lien covering
Collateral that is the subject of a disposition permitted hereunder. 

        Section 10.11.    Notices, Reports and Other Communications.    Collateral Agent shall provide, at its expense,
copies of each notice, report, document, correspondence or other written communication delivered to Collateral Agent by Borrower or any Affiliate of Borrower pursuant to any Loan Document, to each
Secured Party identified in such notice, report, document, correspondence or other written communication or reasonably determined by Collateral Agent to be entitled thereto or affected thereby, as
soon as practicable after Collateral Agent's receipt thereof. 

95

   
        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written. 

	 	 	LENDER:
	

 	
 	

CITIGROUP GLOBAL MARKETS REALTY CORP.,

a New York corporation
	

 	
 	

By:	
 	

/s/  DAVID VADON      
 Name: David Vadon

Title: Authorized Agent
	

 	
 	
BORROWER:
	

 	
 	

ARC III, L.L.C.,

a Delaware limited liability company
	

 	
 	

By:	
 	

/s/  SCOTT L. GESELL      
 Name: Scott L. Gesell

Title: Vice President
	

 	
 	
HEDGE BANK (solely for purposes of Article X of this Agreement):
	

 	
 	

CITIGROUP FINANCIAL PRODUCTS INC.,

a Delaware corporation
	

 	
 	

By:	
 	

/s/  SCOTT L. FLOOD      
 Name: Scott L. Flood

Title: Authorized Signatory
	

 	
 	
COLLATERAL AGENT:
	

 	
 	

CITIGROUP GLOBAL MARKETS REALTY CORP.,

a New York corporation
	

 	
 	

By:	
 	

/s/  DAVID VADON      
 Name: David Vadon

Title: Authorized Agent

S-1

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Exhibit 10.6    
    

FIRST REGIONAL BANCORP
  Form of STOCK OPTION AGREEMENT

1999 STOCK OPTION PLAN
  Non-Qualified Stock Option  

        THIS AGREEMENT, dated as of the            day of            ,
            , by and between First Regional Bancorp, a California corporation (the
"Corporation"), and                        ("Optionee"); 

        WHEREAS,
pursuant to the Corporation's 1999 Stock Option Plan (the "Plan"), the Board of Directors has authorized the grant to Optionee of a Stock Option to purchase all or any part of
                        
(                        ) authorized but unissued shares of the Corporation's no par value Common Stock at the price
of                        ($            ) per share, such Stock Option
to be
for the term and upon the terms and conditions hereinafter stated; 

        NOW,
THEREFORE, it is hereby agreed: 

        1.    Grant of Stock Option.    Pursuant to said action of the Board of Directors, the Corporation hereby grants to
Optionee the option to purchase, upon and subject to the terms and conditions of the Plan, which is incorporated in full herein by this reference, all or any part
of                        
(                        )
Option Shares of the Corporation's Common Stock at the price of                        
($            ) per share. The Stock Option granted hereunder is not intended to qualify as an Incentive Stock Option
within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended. 

        2.    Exercisability.    This Stock Option shall be exercisable as
to                        Option Shares on
                        ; as
to                        Option Shares
on                        ; as
to                        Option Shares
on                        ; as
to                        Option Shares
on                        ; as to
                        Option Shares
on                        ; and as
to                        Option Shares
on                        . This Stock Option shall remain exercisable as to all of such Option Shares until
                        , at which time it shall expire in its entirety, unless this Stock Option has expired or terminated
earlier in accordance with the provisions hereof or of the Plan. Option Shares as to
which this Stock Option become exercisable may be purchased at any time prior to expiration of this Stock Option. 

        3.    Exercise of Stock Option.    This Stock Option may be exercised by written notice delivered to the Corporation
stating the number of Option Shares with respect to which this Stock Option is being
exercised, together with cash (or bank, cashier's or certified check) equal to the full amount of the purchase price of such Option Shares. Not less than ten (10) Option Shares may be purchased
at any one time unless the number purchased is the total number which remains to be purchased under this Stock Option and in no event may the Stock Option be exercised with respect to fractional
shares. Upon exercise, Optionee shall make appropriate arrangements and shall be responsible for the withholding of all federal and state income taxes then due, if any. 

        4.    Cessation of Affiliation.    Except as provided in Paragraph 5 hereof, if, for any reason other than
Optionee's disability or death, Optionee ceases to be employed by or affiliated with the Corporation or a Subsidiary, this Stock Option shall expire three (3) months thereafter or on the date
specified in Paragraph 2 hereof, whichever is earlier. During such period after cessation of employment or affiliation, this Stock Option shall be exercisable only as to those increments, if
any, which had become exercisable as of the date on which the Optionee ceased to be employed by or affiliated with the Corporation or Subsidiary, and any Stock Options or increments which had not
become exercisable as of such date shall expire and terminate automatically on such date. 

        5.    Termination for Cause.    If Optionee's employment by or affiliation with the Corporation or a Subsidiary is
terminated for cause, this Stock Option shall automatically expire unless reinstated by the Board of Directors within thirty (30) days of such termination by giving written notice of such
reinstatement to Optionee. In the event of such reinstatement, Optionee may exercise this Stock Option only to such extent, for such time, and upon such terms and conditions as if Optionee had 

ceased
to be employed by or affiliated with the Corporation or a Subsidiary upon the date of such termination for a reason other than cause, disability or death. Termination for cause shall include,
but shall not be limited to, termination for malfeasance or gross misfeasance in the performance of duties or conviction of illegal activity in connection therewith, or any conduct detrimental to the
interests of the Corporation or a Subsidiary, and, in any event, the determination of the Board of Directors with respect thereto shall be final and conclusive. 

        6.    Disability or Death of Optionee.    If Optionee becomes disabled or dies while employed by or affiliated with
the Corporation or a Subsidiary, or during the three-month period referred to in Paragraph 4 hereof, this Stock Option shall automatically expire and terminate one (1) year after the
date of Optionee's disability or death or on the day specified in Paragraph 2 hereof, whichever is earlier. After Optionee's disability or death but before such expiration, the person or
persons to whom Optionee's rights under this Stock Option shall have passed by order of a court of competent jurisdiction or by will or the applicable laws of descent and distribution, or the
executor, administrator or conservator of Optionee's estate, subject to the provisions of Paragraph 12 hereof, shall have the right to exercise this Stock Option to the extent that increments,
if any, had become exercisable as of the date on which Optionee ceased to be employed by or affiliated with the Corporation or a Subsidiary. For purposes hereof, "disability" shall have the same
meaning as set forth in the Plan. 

        7.    Nontransferability.    This Stock Option shall not be transferable except by will or by the laws of descent and
distribution, and shall be exercisable during Optionee's lifetime only by Optionee. 

        8.    Employment.    This Agreement shall not obligate the Corporation or a Subsidiary to employ Optionee for any
period, nor shall it interfere in any way with the right of the Corporation or a Subsidiary to increase or reduce Optionee's compensation. 

        9.    Privileges of Stock Ownership.    Optionee shall have no rights as a stockholder with respect to the Option
Shares unless and until said Option Shares are issued to Optionee as provided in the Plan. Except as provided in the Plan, no adjustment will be made for dividends or other rights in respect of which
the record date is prior to the date such stock certificates are issued. 

        10.    Modification and Termination by Board of Directors.    The rights of Optionee are subject to modification and
termination upon the occurrence of certain events as provided in the Plan. Upon adoption by the requisite holders of the Corporation's outstanding shares of Common Stock of any plan of dissolution,
liquidation, reorganization, merger, consolidation or sale of all or substantially all of the assets of the Corporation to another corporation which would, upon consummation, result in termination of
this Stock Option in accordance with the Plan, this Stock Option shall become immediately exercisable as to all unexercised Option Shares notwithstanding the incremental exercise provisions of
Paragraph 2 of this Agreement, for a period then specified by the Board of Directors, but in any event not less than thirty (30) days, on the condition that the terminating event
described in the Plan is consummated. If such terminating event is not consummated, this Stock Option shall be exercisable in accordance with the terms of the Agreement, excepting this
Paragraph 10. 

        11.    Notification of Sale.    Optionee agrees that Optionee, or any person acquiring Option Shares upon exercise of
this Stock Option, will notify the Corporation in writing not more than five (5) days after any sale or other disposition of such Shares. 

        12.    Approvals.    This Stock Option may not be exercised unless and until all applicable requirements of all
regulatory agencies having jurisdiction with respect thereto, and of the securities exchanges upon which securities of the Corporation are listed, if any, have been complied with. 

        13.    Notices.    All notices to the Corporation provided for in this Agreement shall be addressed to it in care of
its Chief Executive Officer, Chief Financial Officer or Secretary at its main office and all notices to Optionee shall be addressed to Optionee's address on file with the Corporation or a Subsidiary,
or to such other address as either may designate to the other in writing, all in compliance with the notice provisions set forth in the Plan. 

        14.    Incorporation of Plan.    All of the provisions of the Plan are incorporated herein by reference as if set
forth in full in this Agreement. In the event of any conflict between the terms of the Plan and any provision contained herein, the terms of the Plan shall be controlling and the conflicting
provisions contained herein shall be disregarded. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. 

	 	 	FIRST REGIONAL BANCORP
	

 	
 	

By:	

	

 	
 	

OPTIONEE
	

 	
 	

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Exhibit 10.6

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