Document:

Exhibit 10.7

 

MULTIFAMILY LOAN AND SECURITY AGREEMENT

(NON-RECOURSE)

 

BY AND BETWEEN

 

BR PARK & KINGSTON CHARLOTTE, LLC

 

AND

 

CBRE MULTIFAMILY CAPITAL, INC.

 

DATED AS OF

 

MARCH 16, 2015

 

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	Article 1 - DEFINITIONS; SUMMARY OF MORTGAGE LOAN TERMS	1
	 	 	 
	Section 1.01	Defined Terms	1
	Section 1.02	Schedules, Exhibits, and Attachments Incorporated	1
	 	 	 
	Article 2 - GENERAL MORTGAGE LOAN TERMS	2
	 	 	 
	Section 2.01	Mortgage Loan Origination and Security	2
	(a)	Making of Mortgage Loan	2
	(b)	Security for Mortgage Loan	2
	(c)	Protective Advances	2
	Section 2.02	Payments on Mortgage Loan	2
	(a)	Debt Service Payments	2
	(b)	Capitalization of Accrued But Unpaid Interest	3
	(c)	Late Charges	3
	(d)	Default Rate	4
	(e)	Address for Payments	5
	(f)	Application of Payments	5
	Section 2.03	Lockout/Prepayment	6
	(a)	Prepayment; Prepayment Lockout; Prepayment Premium	6
	(b)	Voluntary Prepayment in Full	6
	(c)	Acceleration of Mortgage Loan	7
	(d)	Application of Collateral	7
	(e)	Casualty and Condemnation	7
	(f)	No Effect on Payment Obligations	8
	(g)	Loss Resulting from Prepayment	8
	 	 	 
	Article 3 - PERSONAL LIABILITY	8
	 	 	 
	Section 3.01	Non-Recourse Mortgage Loan; Exceptions	8
	Section 3.02	Personal Liability of Borrower (Exceptions to Non-Recourse Provision)	9
	(a)	Personal Liability Based on Lender’s Loss	9
	(b)	Full Personal Liability for Mortgage Loan	10
	Section 3.03	Personal Liability for Indemnity Obligations	11
	Section 3.04	Lender’s Right to Forego Rights Against Mortgaged Property	11
	 	 	 
	Article 4 - BORROWER STATUS	11
	 	 	 
	Section 4.01	Representations and Warranties	11
	(a)	Due Organization and Qualification	11
	(b)	Location	12
	(c)	Power and Authority	12
	(d)	Due Authorization	12
	(e)	Valid and Binding Obligations	12
	(f)	Effect of Mortgage Loan on Borrower’s Financial Condition	12
	(g)	Economic Sanctions, Anti-Money Laundering, and Anti-Corruption	13
	(h)	Borrower Single Asset Status	14
	(i)	No Bankruptcies or Judgments	15
	(j)	No Actions or Litigation	15
	(k)	Payment of Taxes, Assessments, and Other Charges	16

 

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	(l)	Not a Foreign Person	16
	(m)	ERISA	16
	(n)	Default Under Other Obligations	17
	(o)	Prohibited Person	17
	(p)	No Contravention	17
	(q)	Lockbox Arrangement	17
	Section 4.02	Covenants	17
	(a)	Maintenance of Existence; Organizational Documents	17
	(b)	Economic Sanctions, Anti-Money Laundering, and Anti-Corruption	18
	(c)	Payment of Taxes, Assessments, and Other Charges	19
	(d)	Borrower Single Asset Status	19
	(e)	ERISA	20
	(f)	Notice of Litigation or Insolvency	20
	(g)	Payment of Costs, Fees, and Expenses	21
	(h)	Restrictions on Distributions	21
	(i)	Lockbox Arrangement	22
	 	 	 
	Article 5 - THE MORTGAGE LOAN	22
	 	 	 
	Section 5.01	Representations and Warranties	22
	(a)	Receipt and Review of Loan Documents	22
	(b)	No Default	22
	(c)	No Defenses	22
	(d)	Loan Document Taxes	22
	Section 5.02	Covenants	23
	(a)	Ratification of Covenants; Estoppels; Certifications	23
	(b)	Further Assurances	23
	(c)	Sale of Mortgage Loan	24
	(d)	Limitations on Further Acts of Borrower	25
	(e)	Financing Statements; Record Searches	25
	(f)	Loan Document Taxes	25
	 	 	 
	Article 6 - PROPERTY USE, PRESERVATION, AND MAINTENANCE	26
	 	 	 
	Section 6.01	Representations and Warranties	26
	(a)	Compliance with Law; Permits and Licenses	26
	(b)	Property Characteristics	26
	(c)	Property Ownership	27
	(d)	Condition of the Mortgaged Property	27
	(e)	Personal Property	27
	Section 6.02	Covenants	27
	(a)	Use of Property	27
	(b)	Property Maintenance	28
	(c)	Property Preservation	29
	(d)	Property Inspections	30
	(e)	Compliance with Laws	31
	Section 6.03	Mortgage Loan Administration Matters Regarding the Property	31
	(a)	Property Management	31
	(b)	Subordination of Fees to Affiliated Property Managers	31
	(c)	Property Condition Assessment	32

 

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	Article 7 - LEASES AND RENTS	32
	 	 	 
	Section 7.01	Representations and Warranties	32
	(a)	Prior Assignment of Rents	32
	(b)	Prepaid Rents	32
	Section 7.02	Covenants	33
	(a)	Leases	33
	(b)	Commercial Leases	33
	(c)	Payment of Rents	34
	(d)	Assignment of Rents	35
	(e)	Further Assignments of Leases and Rents	35
	(f)	Options to Purchase by Tenants	35
	Section 7.03	Mortgage Loan Administration Regarding Leases and Rents	35
	(a)	Material Commercial Lease Requirements	35
	(b)	Residential Lease Form	36
	 	 	 
	Article 8 - BOOKS AND RECORDS; FINANCIAL REPORTING	36
	 	 	 
	Section 8.01	Representations and Warranties	36
	(a)	Financial Information	36
	(b)	No Change in Facts or Circumstances	36
	Section 8.02	Covenants	36
	(a)	Obligation to Maintain Accurate Books and Records	36
	(b)	Items to Furnish to Lender	37
	(c)	Audited Financials	39
	(d)	Delivery of Books and Records	40
	Section 8.03	Mortgage Loan Administration Matters Regarding Books and Records and Financial Reporting	40
	(a)	Lender’s Right to Obtain Audited Books and Records	40
	(b)	Credit Reports; Credit Score	40
	 	 	 
	Article 9 - INSURANCE	41
	 	 	 
	Section 9.01	Representations and Warranties	41
	(a)	Compliance with Insurance Requirements	41
	(b)	Property Condition	41
	Section 9.02	Covenants	41
	(a)	Insurance Requirements	41
	(b)	Delivery of Policies, Renewals, Notices, and Proceeds	42
	Section 9.03	Mortgage Loan Administration Matters Regarding Insurance	42
	(a)	Lender’s Ongoing Insurance Requirements	42
	(b)	Application of Proceeds on Event of Loss	43
	(c)	Payment Obligations Unaffected	45
	(d)	Foreclosure Sale	46
	(e)	Appointment of Lender as Attorney-In-Fact	46
	 	 	 
	Article 10 - CONDEMNATION	46
	 	 	 
	Section 10.01	Representations and Warranties	46
	(a)	Prior Condemnation Action	46
	(b)	Pending Condemnation Actions	46

 

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	Section 10.02	Covenants	46
	(a)	Notice of Condemnation	46
	(b)	Condemnation Proceeds	47
	Section 10.03	Mortgage Loan Administration Matters Regarding Condemnation	47
	(a)	Application of Condemnation Awards	47
	(b)	Payment Obligations Unaffected	47
	(c)	Appointment of Lender as Attorney-In-Fact	47
	(d)	Preservation of Mortgaged Property	47
	 	 	 
	Article 11 - LIENS, TRANSFERS, AND ASSUMPTIONS	48
	 	 	 
	Section 11.01	Representations and Warranties	48
	(a)	No Labor or Materialmen’s Claims	48
	(b)	No Other Interests	48
	Section 11.02	Covenants	48
	(a)	Liens; Encumbrances	48
	(b)	Transfers	49
	(c)	No Other Indebtedness	52
	(d)	No Mezzanine Financing or Preferred Equity	52
	Section 11.03	Mortgage Loan Administration Matters Regarding Liens, Transfers, and Assumptions	52
	(a)	Assumption of Mortgage Loan	52
	(b)	Transfers to Key Principal-Owned Affiliates or Guarantor-Owned Affiliates	54
	(c)	Estate Planning	55
	(d)	Termination or Revocation of Trust	55
	(e)	Death of Key Principal or Guarantor; Transfer Due to Death	56
	(f)	Bankruptcy of Guarantor	57
	(g)	Further Conditions to Transfers and Assumption	58
	 	 	 
	Article 12 - IMPOSITIONS	61
	 	 	 
	Section 12.01	Representations and Warranties	61
	(a)	Payment of Taxes, Assessments, and Other Charges	61
	Section 12.02	Covenants	62
	(a)	Imposition Deposits, Taxes, and Other Charges	62
	Section 12.03	Mortgage Loan Administration Matters Regarding Impositions	62
	(a)	Maintenance of Records by Lender	62
	(b)	Imposition Accounts	62
	(c)	Payment of Impositions; Sufficiency of Imposition Deposits	63
	(d)	Imposition Deposits Upon Event of Default	63
	(e)	Contesting Impositions	63
	(f)	Release to Borrower	64
	 	 	 
	Article 13 - REPLACEMENT RESERVE AND REPAIRS	64
	 	 	 
	Section 13.01	Covenants	64
	(a)	Initial Deposits to Replacement Reserve Account and Repairs Escrow Account	64
	(b)	Monthly Replacement Reserve Deposits	64
	(c)	Payment for Replacements and Repairs	64
	(d)	Assignment of Contracts for Replacements and Repairs	65
	(e)	Indemnification	65
	(f)	Amendments to Loan Documents	65

 

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

 

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	Section 15.07	Severability; Entire Agreement; Amendments	85
	Section 15.08	Construction	85
	Section 15.09	Mortgage Loan Servicing	86
	Section 15.10	Disclosure of Information	86
	Section 15.11	Waiver; Conflict	86
	Section 15.12	No Reliance	86
	Section 15.13	Subrogation	87
	Section 15.14	Counting of Days	87
	Section 15.15	Revival and Reinstatement of Indebtedness	87
	Section 15.16	Time is of the Essence	87
	Section 15.17	Final Agreement	88
	Section 15.18	WAIVER OF TRIAL BY JURY	88

 

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SCHEDULES & EXHIBITS

 

Schedules

	Schedule 1	Definitions Schedule (required)	Form 6101.FR
	Schedule 2	Summary of Loan Terms (required)	Form 6102.FR
	Addenda to Schedule 2	Summary of Loan Terms (Replacement Reserve Deposits – Deposits Partially or Fully Waived)	Form 6102.04
	Schedule 3	Interest Rate Type Provisions (required)	Form 6103.FR
	Schedule 4	Prepayment Premium Schedule (required)	Form 6104.01
	Schedule 5	Required Replacement Schedule (required)	 
	Schedule 6	Required Repair Schedule (required)	 
	Schedule 7	Exceptions to Representations and Warranties Schedule (required)	 

 

Exhibits

	Exhibit A	Modifications to Multifamily Loan and Security Agreement (Replacement Reserve – Deposits Partially or Fully Waived)	Form 6220
	Exhibit B	Modifications to Multifamily Loan and Security Agreement (Waiver of Imposition Deposits)	Form 6228
	Exhibit C	Modifications to Multifamily Loan and Security Agreement (Future Addition of Collateral)	 

 

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MULTIFAMILY LOAN AND SECURITY AGREEMENT

(Non-Recourse)

 

This MULTIFAMILY LOAN AND
SECURITY AGREEMENT (as amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Loan Agreement”)
is made as of the Effective Date (as hereinafter defined) by and between BR PARK & KINGSTON CHARLOTTE, LLC, a Delaware limited
liability company (“Borrower”), and CBRE MULTIFAMILY CAPITAL, INC., a Delaware corporation (“Lender”).

 

RECITALS:

 

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

 

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

 

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

 

AGREEMENTS:

 

Article
1 - DEFINITIONS; SUMMARY OF MORTGAGE

LOAN TERMS

 

Section
1.01         Defined Terms.

 

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

 

Section
1.02         Schedules, Exhibits, and Attachments Incorporated.

 

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

 

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Article
2 - GENERAL MORTGAGE LOAN TERMS

 

Section
2.01         Mortgage Loan Origination and Security.

 

(a)          Making
of Mortgage Loan.

 

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

 

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

 

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

 

(b)          Security
for Mortgage Loan.

 

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

 

(c)          Protective
Advances.

 

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

 

Section
2.02         Payments on Mortgage Loan.

 

(a)          Debt
Service Payments.

 

(1)         Short
Month Interest.

 

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

 

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

 

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

 

(2)         Interest
Accrual and Computation.

 

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

 

(3)         Monthly
Debt Service Payments.

 

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

 

(4)         Payment
at Maturity.

 

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

 

(5)         Interest
Rate Type.

 

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

 

(b)          Capitalization
of Accrued But Unpaid Interest.

 

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

 

(c)          Late
Charges.

 

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

 

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

 

(2)         Borrower
acknowledges and agrees that:

 

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

 

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

 

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

 

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

 

(d)          Default
Rate.

 

(1)         Default
interest shall be paid as follows:

 

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

 

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

 

Absent a demand
by Lender, any such amounts shall be payable by Borrower in the same manner as provided for the payment of Monthly Debt Service
Payments. To the extent permitted by applicable law, interest shall also accrue at the Default Rate on any judgment obtained by
Lender against Borrower in connection with the Mortgage Loan.

 

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(2)         Borrower
acknowledges and agrees that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(e)          Address
for Payments.

 

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

 

(f)          Application
of Payments.

 

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

 

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Section
2.03         Lockout/Prepayment.

 

(a)          Prepayment;
Prepayment Lockout; Prepayment Premium.

 

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

 

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

 

(b)          Voluntary
Prepayment in Full.

 

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

 

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

 

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

 

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

 

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

 

(C)         the
Prepayment Premium; plus

 

(D)         all
other Indebtedness.

 

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

 

(c)          Acceleration
of Mortgage Loan.

 

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

 

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

 

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

 

(3)         the
Prepayment Premium; and

 

(4)         all
other Indebtedness.

 

(d)          Application
of Collateral.

 

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

 

(e)          Casualty
and Condemnation.

 

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

 

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 Article 2
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(f)          No
Effect on Payment Obligations.

 

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

 

(g)          Loss
Resulting from Prepayment.

 

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

 

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

 

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

 

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

 

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

 

Article
3 - PERSONAL LIABILITY

 

Section
3.01         Non-Recourse Mortgage Loan; Exceptions.

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 2
(Park & Kingston Apartments)	Form 6001.NR
08-14
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© 2014 Fannie Mae
 

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)          Full
Personal Liability for Mortgage Loan.

 

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

 

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

 

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

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
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 Article 3
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08-14
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© 2014 Fannie Mae
 

    	 

    

 

Section
3.03         Personal Liability for Indemnity Obligations.

 

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

 

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

 

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

 

Article
4 - BORROWER STATUS

 

Section
4.01         Representations and Warranties.

 

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

 

(a)          Due
Organization and Qualification.

 

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

 

    	Multifamily Loan and Security Agreement
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(b)          Location.

 

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

 

(c)          Power
and Authority.

 

Borrower has the requisite
power and authority:

 

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

 

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

 

(d)          Due
Authorization.

 

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

 

(e)          Valid
and Binding Obligations.

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
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(g)          Economic
Sanctions, Anti-Money Laundering, and Anti-Corruption.

 

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

 

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

 

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

 

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

 

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

 

(3)         Borrower,
Guarantor, and Key Principal are in compliance with all applicable economic sanctions laws administered by OFAC, the United States
Department of State, or the United States Department of Commerce.

 

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(Non-Recourse)
 Article 4
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(h)          Borrower
Single Asset Status.

 

Borrower:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(6)         has
been adequately capitalized in light of its contemplated business operations;

 

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08-14
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(7)         has
not assumed, guaranteed, or pledged its assets to secure the liabilities or obligations of any other Person (except in connection
with the Mortgage Loan or other mortgage loans that have been paid in full or collaterally assigned to Lender, including in connection
with any Consolidation, Extension and Modification Agreement or similar instrument), or held out its credit as being available
to satisfy the obligations of any other Person;

 

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

 

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

 

(i)          No
Bankruptcies or Judgments.

 

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

 

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

 

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

 

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

 

(4)         Insolvent.

 

(j)          No
Actions or Litigation.

 

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

 

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

 

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

 

Borrower confirms that:

 

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

 

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

 

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

 

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

 

(l)          Not
a Foreign Person.

 

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

 

(m)          ERISA.

 

Borrower represents and
warrants that:

 

(1)         Borrower
is not an Employee Benefit Plan;

 

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

 

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

 

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

 

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(n)          Default
Under Other Obligations.

 

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

 

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

 

(o)          Prohibited
Person.

 

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

 

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

 

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

 

(p)          No
Contravention.

 

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

 

(q)          Lockbox
Arrangement.

 

Neither Borrower nor the
direct or indirect owners of Borrower is party to any type of lockbox agreement or other similar cash management arrangement with
any direct or indirect owner of Borrower in connection with the Rents or other income from the Mortgaged Property that has not
been approved by Lender in writing. In the event that Lender has approved any such arrangement, Borrower has, at Lender’s
option, entered into a lockbox agreement or other similar cash management agreement with Lender in form and substance acceptable
to Lender.

 

Section
4.02         Covenants.

 

(a)          Maintenance
of Existence; Organizational Documents.

 

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

 

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

 

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

 

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

 

(B)         otherwise
change the Control of Borrower.

 

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

 

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

 

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

 

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

 

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

 

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

 

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(3)         Borrower,
Guarantor, and Key Principal shall at all times remain in compliance with any applicable economic sanctions laws administered by
OFAC, the United States Department of State, or the United States Department of Commerce.

 

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

 

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

 

(d)          Borrower
Single Asset Status.

 

Until the Indebtedness
is fully paid, Borrower:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(e)          ERISA.

 

Borrower covenants that:

 

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

 

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

 

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

 

(f)          Notice
of Litigation or Insolvency.

 

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

 

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

 

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

 

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

 

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

 

(A)         the
Mortgaged Property;

 

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

 

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

 

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

 

(4)         any
Bankruptcy Event or Guarantor Bankruptcy Event.

 

(h)          Restrictions
on Distributions.

 

Borrower shall not declare
or make any distributions or dividends of any nature to any Person having an ownership interest in Borrower if an Event of Default
has occurred and is continuing.

 

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 Article 4
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(i)          Lockbox
Arrangement.

 

Neither Borrower nor the
direct or indirect owners of Borrower shall enter into any type of lockbox agreement or other similar cash management arrangement
with any direct or indirect owner of Borrower in connection with the Rents or other income from the Mortgaged Property without
the prior written consent of Lender. In the event that Lender issues such consent, Borrower shall, at Lender’s option, be
required to enter into a lockbox agreement or other similar cash management agreement with Lender in form and substance acceptable
to Lender.

 

Article
5 - THE MORTGAGE LOAN

 

Section
5.01         Representations and Warranties.

 

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

 

(a)          Receipt
and Review of Loan Documents.

 

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

 

(b)          No
Default.

 

No default exists under
any of the Loan Documents.

 

(c)          No
Defenses.

 

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

 

(d)          Loan
Document Taxes.

 

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

 

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Section
5.02         Covenants.

 

(a)          Ratification
of Covenants; Estoppels; Certifications.

 

Borrower shall:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)          Further
Assurances.

 

(1)         Other
Documents As Lender May Require.

 

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

 

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 Article 5
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© 2014 Fannie Mae
 

    	 

    

 

(2)         Corrective
Actions.

 

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

 

(c)          Sale
of Mortgage Loan.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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(d)          Limitations
on Further Acts of Borrower.

 

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

 

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

 

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

 

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

 

(e)          Financing
Statements; Record Searches.

 

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

 

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

 

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

 

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

 

(f)          Loan
Document Taxes.

 

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

 

    	Multifamily Loan and Security Agreement
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 Article 5
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08-14
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© 2014 Fannie Mae
 

    	 

    

 

Article
6 - PROPERTY USE, PRESERVATION, AND MAINTENANCE

 

Section
6.01         Representations and Warranties.

 

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

 

(a)          Compliance
with Law; Permits and Licenses.

 

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

 

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

 

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

 

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

 

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

 

(b)          Property
Characteristics.

 

(1)         The
Mortgaged Property contains at least:

 

(A)         the
Property Square Footage;

 

(B)         the
Total Parking Spaces; and

 

(C)         the
Total Residential Units.

 

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

 

(c)          Property
Ownership.

 

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

 

(d)          Condition
of the Mortgaged Property.

 

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

 

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

 

(e)          Personal
Property.

 

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

 

Section
6.02         Covenants

 

(a)          Use
of Property.

 

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

 

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

 

(2)         convert
any individual dwelling units or common areas to commercial use, or convert any common area or commercial use to individual dwelling
units without Lender’s prior written consent;

 

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

 

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

 

(5)         subdivide
the Land; or

 

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

 

(b)          Property
Maintenance.

 

Borrower shall:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)          Property
Preservation.

 

Borrower shall:

 

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

 

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

 

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

 

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

 

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

 

(d)          Property
Inspections.

 

Borrower shall:

 

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

 

(A)         during
normal business hours;

 

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

 

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

 

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

 

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

 

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(e)          Compliance
with Laws.

 

Borrower shall:

 

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

 

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

 

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

 

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

 

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

 

Section
6.03         Mortgage Loan Administration Matters Regarding the Property.

 

(a)          Property
Management.

 

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

 

(b)          Subordination
of Fees to Affiliated Property Managers.

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 6
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08-14
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© 2014 Fannie Mae
 

    	 

    

 

(c)          Property
Condition Assessment.

 

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

 

Article
7 - LEASES AND RENTS

 

Section
7.01         Representations and Warranties.

 

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

 

(a)          Prior
Assignment of Rents.

 

Borrower has not executed
any:

 

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

 

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

 

(b)          Prepaid
Rents.

 

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

 

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 Article 6
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Section
7.02         Covenants.

 

(a)          Leases.

 

Borrower shall:

 

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

 

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

 

(3)         require
that all Residential Leases have initial lease terms of not less than six (6) months and not more than twenty-four (24)
months (notwithstanding the foregoing, Residential Leases with initial terms of less than six (6) months, but not less than one
(1) month, shall be permitted for up to ten percent (10%) of the units at the Mortgaged Property; however, if customary in the
applicable market for properties comparable to the Mortgaged Property, more than ten percent (10%) of the Residential Leases with
terms of less than six (6) months (but in no case less than one (1) month) may be permitted with Lender’s prior
written consent); and

 

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

 

(b)          Commercial
Leases.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)          Payment
of Rents.

 

Borrower shall:

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 7
(Park & Kingston Apartments)	Form 6001.NR
08-14
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© 2014 Fannie Mae
 

    	 

    

 

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

 

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

 

(d)          Assignment
of Rents.

 

Borrower shall not:

 

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

 

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

 

(e)          Further
Assignments of Leases and Rents.

 

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

 

(f)          Options
to Purchase by Tenants.

 

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

 

Section
7.03         Mortgage Loan Administration Regarding Leases and Rents.

 

(a)          Material
Commercial Lease Requirements.

 

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

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
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 Article 7
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(4)         the
tenant agrees to execute such further evidences of attornment as Lender or any purchaser at a Foreclosure Event may from time to
time request; and

 

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

 

(b)          Residential
Lease Form.

 

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

 

Article
8 - BOOKS AND RECORDS; FINANCIAL REPORTING

 

Section
8.01         Representations and Warranties.

 

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

 

(a)          Financial
Information.

 

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

 

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

 

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

 

(b)          No
Change in Facts or Circumstances.

 

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

 

Section
8.02         Covenants.

 

(a)          Obligation
to Maintain Accurate Books and Records.

 

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

 

    	Multifamily Loan and Security Agreement
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 Article 7
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(1)         complete
and accurate books of account and records (including copies of supporting bills and invoices) adequate to reflect correctly the
operation of the Mortgaged Property; and

 

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

 

(b)          Items
to Furnish to Lender.

 

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

 

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

 

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

 

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

 

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

 

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

 

(D)         a
written certification ratifying and affirming that:

 

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

 

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

 

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

 

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(Non-Recourse)
 Article 8
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(iv)        Borrower
has taken no action and has no knowledge of any action that would violate the provisions of Section 11.02(b)(1)(F) regarding liens
encumbering the Mortgaged Property;

 

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

 

(F)         written
confirmation of:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(E)         a
statement that identifies:

 

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

 

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

 

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

 

(c)          Audited
Financials.

 

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

 

    	Multifamily Loan and Security Agreement
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 Article 8
(Park & Kingston Apartments)	Form 6001.NR
08-14
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(d)          Delivery
of Books and Records.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)          Credit
Reports; Credit Score.

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 8
(Park & Kingston Apartments)	Form 6001.NR
08-14
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Article
9 - INSURANCE

 

Section
9.01         Representations and Warranties.

 

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

 

(a)          Compliance
with Insurance Requirements.

 

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

 

(b)          Property
Condition.

 

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

 

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

 

Section
9.02         Covenants.

 

(a)          Insurance
Requirements.

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 9
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(C)         maintain
builder’s risk and public liability insurance, and other insurance in connection with completing the Repairs or Replacements,
as applicable.

 

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

 

Borrower shall:

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
9.03         Mortgage Loan Administration Matters Regarding Insurance

 

(a)          Lender’s
Ongoing Insurance Requirements.

 

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

 

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

 

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 Article 9
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(2)         in
such amounts, with such maximum deductibles and for such periods required by Lender; and

 

(3)         issued
by insurance companies satisfactory to Lender.

 

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

 

(b)          Application
of Proceeds on Event of Loss.

 

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

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
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 Article 9
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08-14
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(ii)         Lender
determines that the combination of insurance proceeds and amounts provided by Borrower will be sufficient funds to complete the
Restoration;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 9
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(D)         Lender
determines that the combination of insurance proceeds and amounts provided by Borrower will be sufficient funds to complete the
Restoration;

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)          Payment
Obligations Unaffected.

 

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

 

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(d)          Foreclosure
Sale.

 

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

 

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

 

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

 

Article
10 - CONDEMNATION

 

Section
10.01         Representations and Warranties.

 

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

 

(a)          Prior
Condemnation Action.

 

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

 

(b)          Pending
Condemnation Actions.

 

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

 

Section
10.02         Covenants.

 

(a)          Notice
of Condemnation.

 

Borrower shall:

 

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

 

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

 

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

 

(b)          Condemnation
Proceeds.

 

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

 

Section
10.03         Mortgage Loan Administration Matters Regarding Condemnation.

 

(a)          Application
of Condemnation Awards.

 

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

 

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

 

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

 

(3)         Borrower.

 

(b)          Payment
Obligations Unaffected.

 

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

 

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

 

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

 

(d)          Preservation
of Mortgaged Property.

 

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

 

    	Multifamily Loan and Security Agreement
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Article
11 - LIENS, TRANSFERS, AND ASSUMPTIONS

 

Section
11.01         Representations and Warranties.

 

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

 

(a)          No
Labor or Materialmen’s Claims.

 

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

 

(b)          No
Other Interests.

 

No Person:

 

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

 

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

 

Section
11.02         Covenants.

 

(a)          Liens;
Encumbrances.

 

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

 

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(1)         Permitted
Encumbrances;

 

(2)         the
creation of:

 

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

 

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

 

(3)         the
lien created by the Loan Documents.

 

(b)          Transfers.

 

(1)         Mortgaged
Property.

 

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

 

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

 

(B)         Leases
permitted pursuant to the Loan Documents;

 

(C)         [reserved];

 

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

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
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(2)         Interests
in Borrower, Key Principal, or Guarantor.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(3)         Name
Change or Entity Conversion.

 

Lender shall
consent to Borrower changing its name, changing its jurisdiction of organization, or converting from one type of legal entity into
another type of legal entity for any lawful purpose, provided that Borrower shall not be permitted to convert to a Delaware Statutory
Trust, and provided further that:

 

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

 

    	Multifamily Loan and Security Agreement
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(B)         such
Transfer is not otherwise prohibited under the provisions of Section 11.02(b)(2);

 

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

 

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

 

(E)         no
later than ten (10) days subsequent to such name change or entity conversion, Borrower shall provide Lender (i) the documentation
filed with the appropriate office in Borrower’s state of formation evidencing such name change or entity conversion, (ii)
copies of the organizational documents of Borrower, including any amendments, filed with the appropriate office in Borrower’s
state of formation reflecting the post-conversion Borrower name, form of organization, and structure, and (iii) if available, new
certificates of good standing or valid formation for Borrower. Notwithstanding the foregoing, Borrower shall be permitted to grant
an easement over the Mortgaged Property to a publicly operated or private franchise utility where (a) such easement is between
Borrower and the utility, (b) the granting of such easement does not affect Borrower’s access to the Mortgaged Property or
the use of any easements or amenities which benefit the Mortgaged Property, (c) the granting of such easement does not result in
the loss of the use of any units, (d) the granting of such easement does not result in an effect on the Mortgaged Property’s
value or marketability, or on the health or safety of the tenants under any Residential Leases, that is adverse in any meaningful
way, and (e) the consideration paid to Borrower (which consideration may be retained by Borrower as provided in the following sentence),
after deducting Borrower’s costs and expenses incurred in connection with the granting of such easement, is less than $250
per individual dwelling unit. Prior to the granting of an easement described in the immediately preceding sentence, Borrower shall
(x) provide Lender with copies of the utility easement, for Lender’s review and approval, which approval shall not be unreasonably
withheld, conditioned or delayed, and, (y) deliver evidence reasonably satisfactory to Lender that conditions in subsections (a)
through (e) have been met. So long as no Event of Default exists, any compensation received from the easement holder shall be paid:
first, to cover the expenses of recording the easement; second, to reimburse or pay Lender’s out of pocket expenses incurred
by Lender in connection with its review of the easement in accordance with this Section 11.02(b)(1)(E); third, if applicable, to
pay the cost to repair or restore any portion of the Mortgaged Property damaged as a result of the exercise of the rights granted
by easement holder, to the extent not paid directly by such easement holder, and fourth, to Borrower for its own account; provided,
that in the event any compensation to be retained by the Borrower in accordance with this provision exceeds $250 per dwelling unit
(after deducting Borrower’s costs and expenses incurred in connection with the granting of such easement), such amounts shall
be deposited in the Replacement Reserve Account.

 

    	Multifamily Loan and Security Agreement
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(c)          No
Other Indebtedness.

 

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

 

(d)          No
Mezzanine Financing or Preferred Equity.

 

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

 

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

 

(a)          Assumption
of Mortgage Loan.

 

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

 

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

 

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

 

(3)         Lender
determines that:

 

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

 

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

 

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

 

(4)         [reserved];

 

(5)         the
proposed new borrower has:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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(c)          Estate
Planning.

 

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

 

(A)         Immediate
Family Members of such Key Principal or Guarantor each of whom must have obtained the legal age of majority;

 

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

 

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

 

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

 

(d)          Termination
or Revocation of Trust.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(B)         Lender
determines that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)          Bankruptcy
of Guarantor.

 

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

 

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

 

(B)         Lender
determines that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)          Further
Conditions to Transfers and Assumption.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

		(h)	Additional Conditionally Permitted Transfers.

 

Notwithstanding
anything in Section 11.02(b) of the Loan Agreement to the contrary and in addition to, and without limiting, any Transfer that
would otherwise be permitted under Section 11.02(b) of the Loan Agreement, the occurrence of the following shall not constitute
an Event of Default under the Loan Agreement and shall be permitted without payment of the Transfer Fee:

 

(1)         a
Transfer of any direct or indirect interest in Borrower held by an entity owned or controlled by any Guarantor or Key Principal
to one or more of such Guarantor's or Key Principal's Affiliates ("Affiliate Transfer") provided that:

 

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

 

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

 

(C)         Lender
determines, in Lender’s discretion, that the proposed Affiliate transferee fully satisfies all of Lender’s then-applicable
borrower, key principal, or guarantor eligibility, credit, management, and other loan underwriting standards, which shall include
an analysis of the previous relationships between Lender and the proposed Affiliate transferee and any Person in Control of it;

 

(D)         Following
the Affiliate Transfer, control and management of the day-to-day operations of Borrower continue to be held by Bluerock Member;

 

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(E)         Borrower
delivers to Lender for each transferee with an interest of 25% or more a certification that (a) he/she has not been convicted of
fraud or a crime involving moral turpitude (or if an entity, then no principal of such entity has been convicted of fraud or a
crime involving moral turpitude), and (b) he/she/it has not been involved in a bankruptcy or reorganization within the ten years
preceding the Notice to Lender;

 

(F)         No
transferee is a Prohibited Person;

 

(G)         Lender
has reviewed and approved the Affiliate Transfer documents and received organizational charts reflecting the structure of Borrower
prior to and after the Affiliate Transfer and copies of the then-current organizational documents of Borrower, including any amendments;

 

(H)         Borrower
provides Lender with at least 10 days prior written notice of the proposed Affiliate Transfer and pays the Review Fee in conjunction
with the delivery of such prior written notice;

 

(I)         Borrower
pays or reimburses Lender, upon demand, for all of Lender's out-of-pocket costs (including reasonable attorneys' fees) incurred
in reviewing the Affiliate Transfer request, to the extent such costs exceed the Review Fee; and

 

(J)         Lender
receives confirmation acceptable to Lender that Section 4.02(d) continues to be satisfied;

 

(2)         As
used in this Section 11.03(h) only "Affiliate" means, as to each Guarantor or Key Principal respectively:

 

(A)         any
entity that directly or indirectly owns, controls or holds with power to vote, twenty percent (20%) or more of the outstanding
voting securities of the Guarantor or Key Principal;

 

(B)         any
entity in which the Guarantor or Key Principal directly or indirectly owns, controls or holds with the power to vote, twenty percent
(20%) or more of the outstanding voting securities of the entity; or

 

(C)         any
entity controlled by or under common control with, or which controls the Guarantor or Key Principal (the term "control"
for these purposes means the ability, whether by the ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to make management decisions on behalf of, or independently to select the managing
partner of, a partnership, or otherwise to have the power independently to remove

and then select a majority of those
individuals exercising managerial authority over an entity, and control shall be conclusively presumed in the case of the ownership
of fifty percent (50%) or more of the equity interests). For purposes hereof, the 23Hundred, LLC, a Delaware limited liability
company (the “Bluerock Member”) and each intervening entity between Bluerock Residential Growth REIT, Inc. (the
“BR REIT”) and Bluerock Member shall be deemed to be controlled by R. Ramin Kamfar through his position as Chairman
of the Board, Chief Executive Officer and President of BR REIT.

 

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Article
12 - IMPOSITIONS

 

Section
12.01         Representations and Warranties.

 

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

 

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

 

Borrower has:

 

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

 

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

 

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

 

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

 

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

 

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Section
12.02         Covenants.

 

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

 

Borrower shall:

 

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

 

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

 

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

 

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

 

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

 

Section
12.03         Mortgage Loan Administration Matters Regarding Impositions.

 

(a)          Maintenance
of Records by Lender.

 

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

 

(b)          Imposition
Accounts.

 

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

 

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

 

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

 

(1)         no
Event of Default exists;

 

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

 

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

 

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

 

(d)          Imposition
Deposits Upon Event of Default.

 

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

 

(e)          Contesting
Impositions.

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)          Release
to Borrower.

 

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

 

Article
13 - REPLACEMENT RESERVE AND REPAIRS

 

Section
13.01         Covenants.

 

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

 

On the Effective Date,
Borrower shall pay to Lender:

 

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

 

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

 

(b)          Monthly
Replacement Reserve Deposits.

 

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

 

(c)          Payment
for Replacements and Repairs.

 

Borrower shall:

 

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

 

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

 

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

 

(d)          Assignment
of Contracts for Replacements and Repairs.

 

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

 

(e)          Indemnification.

 

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

 

(f)          Amendments
to Loan Documents.

 

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

 

(g)          Administrative
Fees and Expenses.

 

Borrower shall pay to Lender:

 

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

 

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

 

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

 

Section
13.02         Mortgage Loan Administration Matters Regarding Reserves.

 

(a)          Accounts,
Deposits, and Disbursements.

 

(1)         Custodial
Accounts.

 

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

 

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

 

(2)         Disbursements
by Lender Only.

 

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

 

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(3)         Adjustment
to Deposits.

 

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

 

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

 

(B)         Transfers.

 

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

 

(4)         Insufficient
Funds.

 

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

 

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(5)         Disbursements
for Replacements and Repairs.

 

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

 

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

 

(6)         Disbursement
Requests.

 

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

 

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

 

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

 

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

 

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

 

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

 

(7)         Conditions
to Disbursement.

 

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

 

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

 

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

 

(C)         either:

 

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

 

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

 

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

 

(8)         Joint
Checks for Periodic Disbursements.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(A)         Borrower
Requested Replacements and Borrower Requested Repairs.

 

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

 

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

 

(ii)         the
costs are commercially reasonable;

 

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

 

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

 

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

 

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(B)         Additional
Lender Replacements and Additional Lender Repairs.

 

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

 

(i)          the
costs are commercially reasonable;

 

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

 

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

 

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

 

(10)        Excess
Costs.

 

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

 

(A)         the
excess cost is commercially reasonable;

 

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

 

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

 

(11)        Final
Disbursements.

 

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

 

(b)          Approvals
of Contracts; Assignment of Claims.

 

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

 

(c)          Delays
and Workmanship.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(e)          No
Lender Obligation.

 

Nothing in this Loan Agreement
shall:

 

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

 

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

 

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

 

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

 

(f)          No
Lender Warranty.

 

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

 

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Article
14 - DEFAULTS/REMEDIES

 

Section
14.01         Events of Default.

 

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

 

(a)          Automatic
Events of Default.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(7)         the
occurrence of a Bankruptcy Event;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
14.02         Remedies.

 

(a)          Acceleration;
Foreclosure.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)          Remedies
Cumulative.

 

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

 

Section
14.03         Additional Lender Rights; Forbearance.

 

(a)          No
Effect Upon Obligations.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)          No
Waiver of Rights or Remedies.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(8)         commence,
appear in, and prosecute, in Lender’s or Borrower’s name, any action or proceeding relating to any condemnation;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)          Borrower
Waivers.

 

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

 

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

 

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

 

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

 

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

 

Section
14.04         Waiver of Marshaling.

 

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

 

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

 

Article
15 - MISCELLANEOUS

 

Section
15.01         Governing Law; Consent to Jurisdiction and Venue.

 

(a)          Governing
Law.

 

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

 

(b)          Venue.

 

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

 

Section
15.02         Notice.

 

(a)          Process
of Serving Notice.

 

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

 

(1)         in
writing and shall be:

 

(A)         delivered,
in person;

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 14
(Park & Kingston Apartments)	Form 6001.NR
08-14
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© 2014 Fannie Mae
 

    	 

    

 

(C)         sent
by overnight courier; or

 

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

 

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

 

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

 

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

 

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

 

(b)          Change
of Address.

 

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

 

(c)          Default
Method of Notice.

 

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

 

(d)          Receipt
of Notices.

 

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

 

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

 

(a)          Binding
Agreement.

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 15
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 83
© 2014 Fannie Mae
 

    	 

    

 

Section
15.04         Counterparts.

 

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

 

Section
15.05         Joint and Several (or Solidary) Liability.

 

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

 

Section
15.06         Relationship of Parties; No Third Party Beneficiary.

 

(a)          Solely
Creditor and Debtor.

 

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

 

(b)          No
Third Party Beneficiaries.

 

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

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 15
(Park & Kingston Apartments)	Form 6001.NR
08-14
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© 2014 Fannie Mae
 

    	 

    

 

Section
15.07         Severability; Entire Agreement; Amendments.

 

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

 

Section
15.08         Construction.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 15
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 85
© 2014 Fannie Mae
 

    	 

    

 

Section
15.09         Mortgage Loan Servicing.

 

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

 

Section
15.10         Disclosure of Information.

 

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

 

Section
15.11         Waiver; Conflict.

 

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

 

Section
15.12         No Reliance.

 

Borrower acknowledges,
represents, and warrants that:

 

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

 

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

 

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

 

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

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 15
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 86
© 2014 Fannie Mae
 

    	 

    

 

Section
15.13         Subrogation.

 

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

 

Section
15.14         Counting of Days.

 

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

 

Section
15.15         Revival and Reinstatement of Indebtedness.

 

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

 

Section
15.16         Time is of the Essence.

 

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

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 15
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 87
© 2014 Fannie Mae
 

    	 

    

 

Section
15.17         Final Agreement.

 

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

 

Section
15.18         WAIVER OF TRIAL BY JURY.

 

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

 

[Remainder of Page Intentionally Blank]

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
 Article 15
(Park & Kingston Apartments)	Form 6001.NR
08-14
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© 2014 Fannie Mae
 

    	 

    

 

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

 

	 	BORROWER:
	 	 
	 	BR PARK & KINGSTON CHARLOTTE, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	23Hundred, LLC,
	 	 	a Delaware limited liability company,
	 	 	its Sole Member
	 	 	 	 
	 	 	By:	/s/ Jordan Ruddy                     (SEAL)
	 	 	Name:	Jordan Ruddy
	 	 	Title:	Authorized Signatory

 

[LENDER SIGNATURE
ON FOLLOWING PAGE]

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
Signature Page
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page S-1
© 2014 Fannie Mae
 

    	 

    

 

	 	LENDER:
	 	 
	 	CBRE MULTIFAMILY CAPITAL, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Marion S. Green                    (SEAL)
	 	Name:	 Marion S. Green
	 	Title:	 Vice President

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
Signature Page
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page S-2
© 2014 Fannie Mae
 

    	 

    

 

SCHEDULE 1

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

Definitions Schedule

(Interest Rate Type – Fixed Rate)

 

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

 

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

 

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

 

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

 

“Affiliate” shall have the
meaning set forth in Section 11.03(h)(2) of the Loan Agreement.

 

“Affiliate Transfer” shall
have the meaning set forth in Section 11.03(h)(1) of the Loan Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 1
© 2014 Fannie Mae
 

    	 

    

 

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

 

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

 

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

 

“Bluerock Member” shall
have the meaning set forth in Section 11.03(h)(2) of the Loan Agreement.

 

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

 

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

 

(a)          any
Person that owns any direct ownership interest in Borrower, Guarantor or Key Principal except that if Guarantor or Key Principal
is a Publicly-Held Corporation or a Public-Held Trust, then only the shareholders or beneficial owners of such Publicly-Held Corporation
or a Public-Held Trust with the power to vote twenty percent (20%) or more of the ownership interests in Guarantor or Key Principal;

 

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

 

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

 

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

 

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

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 2
© 2014 Fannie Mae
 

    	 

    

 

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

 

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

 

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

 

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

 

“BR REIT” shall have the
meaning set forth in Section 11.03(h)(2) of the Loan Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Control” (including with
correlative meanings, such as “Controlling,” “Controlled by” and “under common Control with”)
means, as applied to any entity, the possession, directly or indirectly, of the power to direct or cause the direction of the management
and operations of such entity (including, by way of illustration and not limitation, the power to (1) elect the majority of the
directors of such entity; (2) make management decisions on behalf of or independently select the manager of a limited liability
company or the managing partner of a partnership; (3) independently remove and then select a majority of those individuals exercising
managerial authority over any entity; or (4) limit or otherwise modify the extent of control over the management and operations
of an entity by any Person exercising managerial authority over such entity), whether through the ownership of voting securities
or other ownership interests, by contract or otherwise.

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 3
© 2014 Fannie Mae
 

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 4
© 2014 Fannie Mae
 

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

“Foreclosure Event” means:

 

(a)          foreclosure
under the Security Instrument;

 

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

 

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

 

(d)          in
Louisiana, any dation en paiement.

 

“Governmental Authority”
means any court, board, commission, department or body of any municipal, county, state or federal governmental unit, or any subdivision
of any of them, that has or acquires jurisdiction over Borrower or the Mortgaged Property or the use, operation or improvement
of the Mortgaged Property.

 

“Guarantor” means, individually
and collectively, any guarantor of the Indebtedness or any other obligation of Borrower under any Loan Document.

 

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

 

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

 

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

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 5
© 2014 Fannie Mae
 

    	 

    

 

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

 

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

 

(e)          the
appointment of a receiver, liquidator, custodian, sequestrator, trustee or other similar officer who exercises control over Guarantor
or any substantial part of the assets of Guarantor, as applicable;

 

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

 

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

 

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

 

“Guaranty” means, individually
and collectively, any Payment Guaranty, Non-Recourse Guaranty or other guaranty executed by Guarantor in connection with the Mortgage
Loan.

 

“Immediate Family Members”
means a child, stepchild, grandchild, spouse, sibling, or parent, each of whom is not a Prohibited Person.

 

“Imposition Deposits” has
the meaning set forth in the Security Instrument.

 

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

 

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

 

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

 

“Initial Replacement Reserve Deposit”
has the meaning set forth in the Summary of Loan Terms.

 

“Insolvency Laws” means
the United States Bankruptcy Code, 11 U.S.C. Section 101, et seq., together with any other federal or state law affecting
debtor and creditor rights or relating to the bankruptcy, insolvency, reorganization, arrangement, moratorium, readjustment of
debt, dissolution, liquidation or similar laws, proceedings, or equitable principles affecting the enforcement of creditors’
rights, as amended from time to time.

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 6
© 2014 Fannie Mae
 

    	 

    

 

“Insolvent” means:

 

(a)          that
the sum total of all of a specified Person’s liabilities (whether secured or unsecured, contingent or fixed, or liquidated
or unliquidated) is in excess of the value of such Person’s non-exempt assets, i.e., all of the assets of such Person that
are available to satisfy claims of creditors; or

 

(b)          such
Person’s inability to pay its debts as they become due.

 

“Intended Prepayment Date”
means the date upon which Borrower intends to make a prepayment on the Mortgage Loan, as set forth in the Prepayment Notice.

 

“Interest Accrual Method”
has the meaning set forth in the Summary of Loan Terms.

 

“Interest Only Term” has
the meaning set forth in the Summary of Loan Terms.

 

“Interest Rate” means the
Fixed Rate.

 

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

 

“Internal Revenue Code”
means the Internal Revenue Code of 1986, as amended.

 

“Investor” means any Person
to whom Lender intends to sell, transfer, deliver or assign the Mortgage Loan in the secondary mortgage market.

 

“Key Principal” means, collectively:

 

(a)          the
natural person(s) or entity that Controls Borrower that Lender determines is critical to the successful operation and management
of Borrower and the Mortgaged Property, as identified as such in the Summary of Loan Terms; or

 

(b)          any
natural person or entity who becomes a Key Principal after the date of the Loan Agreement and is identified as such in an assumption
agreement, or another amendment or supplement to the Loan Agreement.

 

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

 

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

 

“Land” means the land described
in Exhibit A to the Security Instrument.

 

“Last Interest Only Payment Date”
has the meaning set forth in the Summary of Loan Terms, if applicable.

 

“Late Charge” means an amount
equal to the delinquent amount then due under the Loan Documents multiplied by five percent (5%).

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 7
© 2014 Fannie Mae
 

    	 

    

 

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

 

“Lender” means the entity
identified as “Lender” in the first paragraph of the Loan Agreement and its transferees, successors and assigns, or
any subsequent holder of the Note.

 

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

 

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

 

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

 

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

 

“Loan Agreement” means the
Multifamily Loan and Security Agreement dated as of the Effective Date executed by and between Borrower and Lender to which this
Definitions Schedule is attached, as the same may be amended, restated, replaced, supplemented or otherwise modified from time
to time.

 

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

 

“Loan Application” means
the application for the Mortgage Loan submitted by Borrower to Lender.

 

“Loan Documents” means the
Note, the Loan Agreement, the Security Instrument, the Environmental Indemnity Agreement, the Guaranty, all guaranties, all indemnity
agreements, all Collateral Agreements, all O&M Plans, and any other documents now or in the future executed by Borrower, Guarantor,
Key Principal, any other guarantor or any other Person in connection with the Mortgage Loan, as such documents may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

“Loan Servicer” means the
entity that from time to time is designated by Lender to collect payments and deposits and receive notices under the Note, the
Loan Agreement, the Security Instrument and any other Loan Document, and otherwise to service the Mortgage Loan for the benefit
of Lender. Unless Borrower receives notice to the contrary, the Loan Servicer shall be the Lender originally named on the Summary
of Loan Terms.

 

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

 

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

 

“Material Commercial Lease”
means any non-Residential Lease, including any master lease (which term “master lease” shall include any master lease
to a single corporate tenant), other than:

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 8
© 2014 Fannie Mae
 

    	 

    

 

(a)          a
non-Residential Lease that comprises less than five percent (5%) of total gross income of the Mortgaged Property on an annualized
basis, so long as the lease is not a cell tower lease, a solar (power) lease or a solar power purchase agreement;

 

(b)          a
cable television lease or broadband network lease with a lessee that is not a Borrower Affiliate, Key Principal or Guarantor;

 

(c)          storage
units leased pursuant to any Residential Lease; or

 

(d)          a
laundry lease, so long as:

 

(1)         the
lessee is not a Borrower Affiliate, Key Principal or Guarantor;

 

(2)         the
rent payable is not below-market (as determined by Lender); and

 

(3)         such
laundry lease is terminable for cause by lessor.

 

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

 

“Maximum Inspection Fee”
has the meaning set forth in the Summary of Loan Terms.

 

“Maximum Repair Cost” shall
be the amount(s) set forth in the Required Repair Schedule, if any.

 

“Maximum Repair Disbursement Interval”
has the meaning set forth in the Summary of Loan Terms.

 

“Maximum Replacement Reserve Disbursement
Interval” has the meaning set forth in the Summary of Loan Terms.

 

“Mezzanine Debt” means a
loan to a direct or indirect owner of Borrower secured by a pledge of such owner’s interest in an entity owning a direct
or indirect interest in Borrower.

 

“Minimum Repairs Disbursement Amount”
has the meaning set forth in the Summary of Loan Terms.

 

“Minimum Replacement Reserve Disbursement
Amount” has the meaning set forth in the Summary of Loan Terms.

 

“Monthly Debt Service Payment”
has the meaning set forth in the Summary of Loan Terms.

 

“Monthly Replacement Reserve Deposit”
has the meaning set forth in the Summary of Loan Terms.

 

“Mortgage Loan” means the
mortgage loan made by Lender to Borrower in the principal amount of the Note made pursuant to the Loan Agreement, evidenced by
the Note and secured by the Loan Documents that are expressly stated to be security for the Mortgage Loan.

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 9
© 2014 Fannie Mae
 

    	 

    

 

“Mortgaged Property” has
the meaning set forth in the Security Instrument.

 

“Multifamily Project” has
the meaning set forth in the Summary of Loan Terms.

 

“Multifamily Project Address”
has the meaning set forth in the Summary of Loan Terms.

 

“Non-Recourse Guaranty”
means, if applicable, that certain Guaranty of Non-Recourse Obligations of even date herewith executed by Guarantor to and for
the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Note” means that certain
Multifamily Note of even date herewith in the original principal amount of the stated Loan Amount made by Borrower in favor of
Lender, and all schedules, riders, allonges and addenda attached thereto, as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.

 

“O&M Plan” has the meaning
set forth in the Environmental Indemnity Agreement.

 

“OFAC” means the United
States Treasury Department, Office of Foreign Assets Control, and any successor thereto.

 

“Payment Date” means the
First Payment Date and the first day of each month thereafter until the Mortgage Loan is fully paid.

 

“Payment Guaranty” means,
if applicable, that certain Guaranty (Payment) of even date herewith executed by Guarantor to and for the benefit of Lender, as
the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Permitted Encumbrance”
has the meaning set forth in the Security Instrument.

 

“Permitted Mezzanine Debt”
means Mezzanine Debt incurred by a direct or indirect owner or owners of Borrower where the exercise of any of the rights and remedies
by the holder or holders of the Mezzanine Debt would not in any circumstance cause (a) a change in Control in Borrower, Key Principal,
or Guarantor, or (b) a Transfer of a direct or indirect Restricted Ownership Interest in Borrower, Key Principal, or Guarantor.

 

“Permitted Preferred Equity”
means Preferred Equity that does not (a) require mandatory dividends, distributions, payments or returns (including at maturity
or in connection with a redemption), or (b) provide the Preferred Equity owner with rights or remedies on account of a failure
to receive any preferred dividends, distributions, payments or returns (or, if such rights are provided, the exercise of such rights
do not violate the Loan Documents or are otherwise exercised with the prior written consent of Lender in accordance with Article
11 (Liens, Transfers and Assumptions) of the Loan Agreement and the payment of all applicable fees and expenses as set forth in
Section 11.03(g) (Further Conditions to Transfers and Assumption)).

 

“Permitted Prepayment Date”
means the last Business Day of a calendar month.

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 10
© 2014 Fannie Mae
 

    	 

    

 

“Person” means an individual,
an estate, a trust, a corporation, a partnership, a limited liability company or any other organization or entity (whether governmental
or private).

 

“Personal Property” means
the Goods, accounts, choses of action, chattel paper, documents, general intangibles (including Software), payment intangibles,
instruments, investment property, letter of credit rights, supporting obligations, computer information, source codes, object codes,
records and data, all telephone numbers or listings, claims (including claims for indemnity or breach of warranty), deposit accounts
and other property or assets of any kind or nature related to the Land or the Improvements, including operating agreements, surveys,
plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements,
and all other intangible property and rights relating to the operation of, or used in connection with, the Land or the Improvements,
including all governmental permits relating to any activities on the Land.

 

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

 

“Preferred Equity” means
a direct or indirect equity ownership interest in, economic interests in, or rights with respect to, Borrower that provide an equity
owner preferred dividend, distribution, payment or return treatment relative to other equity owners.

 

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

 

“Prepayment Notice” means
the written notice that Borrower is required to provide to Lender in accordance with Section 2.03 (Lockout/Prepayment) of
the Loan Agreement in order to make a prepayment on the Mortgage Loan, which shall include, at a minimum, the Intended Prepayment
Date.

 

“Prepayment Premium” means
the amount payable by Borrower in connection with a prepayment of the Mortgage Loan, as provided in Section 2.03 (Lockout/Prepayment)
of the Loan Agreement and calculated in accordance with the Prepayment Premium Schedule.

 

“Prepayment Premium Period End Date”
or “Yield Maintenance Period End Date” has the meaning set forth in the Summary of Loan Terms.

 

“Prepayment Premium Period Term”
or “Yield Maintenance Period Term” has the meaning set forth in the Summary of Loan Terms.

 

“Prepayment Premium Schedule”
means that certain Schedule 4 (Prepayment Premium Schedule) to the Loan Agreement.

 

“Prohibited Person” means:

 

(a)          any
Person with whom Lender or Fannie Mae is prohibited from doing business pursuant to any law, rule, regulation, judicial proceeding
or administrative directive; or

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 11
© 2014 Fannie Mae
 

    	 

    

 

(b)          any
Person identified on the United States Department of Housing and Urban Development’s “Limited Denial of Participation,
HUD Funding Disqualifications and Voluntary Abstentions List,” or on the General Services Administration’s “System
for Award Management (SAM)” exclusion list, each of which may be amended from time to time, and any successor or replacement
thereof; or

 

(c)          any
Person that is determined by Fannie Mae to pose an unacceptable credit risk due to the aggregate amount of debt of such Person
owned or held by Fannie Mae; or

 

(d)          any
Person that has caused any unsatisfactory experience of a material nature with Fannie Mae or Lender, such as a default, fraud,
intentional misrepresentation, litigation, arbitration or other similar act.

 

“Property Jurisdiction”
has the meaning set forth in the Security Instrument.

 

“Property Square Footage”
has the meaning set forth in the Summary of Loan Terms.

 

“Publicly-Held Corporation”
means a corporation, the outstanding voting stock of which is registered under Sections 12(b) or 12(g) of the Securities Exchange
Act of 1934, as amended.

 

“Publicly-Held Trust” means
a real estate investment trust, the outstanding voting shares or beneficial interests of which are registered under Sections 12(b)
or 12(g) of the Securities Exchange Act of 1934, as amended.

 

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

 

“Repair Threshold” has the
meaning set forth in the Summary of Loan Terms.

 

“Repairs” means, individually
and collectively, the Required Repairs, Borrower Requested Repairs, and Additional Lender Repairs.

 

“Repairs Escrow Account”
means the account established by Lender into which the Repairs Escrow Deposit is deposited to fund the Repairs.

 

“Repairs Escrow Account Administrative
Fee” has the meaning set forth in the Summary of Loan Terms.

 

“Repairs Escrow Deposit”
has the meaning set forth in the Summary of Loan Terms.

 

“Replacement Reserve Account”
means the account established by Lender into which the Replacement Reserve Deposits are deposited to fund the Replacements.

 

“Replacement Reserve Account Administration
Fee” has the meaning set forth in the Summary of Loan Terms.

 

“Replacement Reserve Account Interest
Disbursement Frequency” has the meaning set forth in the Summary of Loan Terms.

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 12
© 2014 Fannie Mae
 

    	 

    

 

“Replacement Reserve Deposits”
means the Initial Replacement Reserve Deposit, Monthly Replacement Reserve Deposits and any other deposits to the Replacement Reserve
Account required by the Loan Agreement.

 

“Replacement Threshold”
has the meaning set forth in the Summary of Loan Terms.

 

“Replacements” means, individually
and collectively, the Required Replacements, Borrower Requested Replacements and Additional Lender Replacements.

 

“Required Repair Schedule”
means that certain Schedule 6 (Required Repair Schedule) to the Loan Agreement.

 

“Required Repairs” means
those items listed on the Required Repair Schedule.

 

“Required Replacement Schedule”
means that certain Schedule 5 (Required Replacement Schedule) to the Loan Agreement.

 

“Required Replacements”
means those items listed on the Required Replacement Schedule.

 

“Reserve/Escrow Account Funds”
means, collectively, the funds on deposit in the Reserve/Escrow Accounts.

 

“Reserve/Escrow Accounts”
means, together, the Replacement Reserve Account and the Repairs Escrow Account.

 

“Residential Lease” means
a leasehold interest in an individual dwelling unit and shall not include any master lease.

 

“Restoration” means restoring
and repairing the Mortgaged Property to the equivalent of its physical condition immediately prior to the casualty or to a condition
approved by Lender following a casualty.

 

“Restricted Ownership Interest”
means, with respect to any entity, the following:

 

(a)          if
such entity is a general partnership or a joint venture, fifty percent (50%) or more of all general partnership or joint venture
interests in such entity;

 

(b)          if
such entity is a limited partnership:

 

(1)         the
interest of any general partner; or

 

(2)         fifty
percent (50%) or more of all limited partnership interests in such entity;

 

(c)          if
such entity is a limited liability company or a limited liability partnership:

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 13
© 2014 Fannie Mae
 

    	 

    

 

(1)         the
interest of any managing member or the contractual rights of any non-member manager; or

 

(2)         fifty
percent (50%) or more of all membership or other ownership interests in such entity;

 

(d)          if
such entity is a corporation (other than a Publicly-Held Corporation) with only one class of voting stock, fifty percent (50%)
or more of voting stock in such corporation;

 

(e)          if
such entity is a corporation (other than a Publicly-Held Corporation) with more than one class of voting stock, the amount of shares
of voting stock sufficient to have the power to elect the majority of directors of such corporation; or

 

(f)          if
such entity is a trust (other than a land trust or a Publicly-Held Trust), the power to Control such trust vested in the trustee
of such trust or the ability to remove, appoint or substitute the trustee of such trust (unless the trustee of such trust after
such removal, appointment or substitution is a trustee identified in the trust agreement approved by Lender).

 

“Review Fee” means the non-refundable
fee of Three Thousand Dollars ($3,000) payable to Lender.

 

“Schedule of Interest Rate Type Provisions”
means that certain Schedule 3 (Schedule of Interest Rate Type Provisions) to the Loan Agreement.

 

“Security Instrument” means
that certain multifamily mortgage, deed to secure debt or deed of trust executed and delivered by Borrower as security for the
Mortgage Loan and encumbering the Mortgaged Property, including all riders or schedules attached thereto, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

“Servicing Arrangement”
means any arrangement between Lender and the Loan Servicer for loss sharing or interim advancement of funds.

 

“Summary of Loan Terms”
means that certain Schedule 2 (Summary of Loan Terms) to the Loan Agreement.

 

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

 

“Title Policy” means
the mortgagee’s loan policy of title insurance issued in connection with the Mortgage Loan and insuring the lien of the Security
Instrument as set forth therein, as approved by Lender.

 

“Total Parking Spaces” has
the meaning set forth in the Summary of Loan Terms.

 

“Total Residential Units”
has the meaning set forth in the Summary of Loan Terms.

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 14
© 2014 Fannie Mae
 

    	 

    

 

“Transfer” means:

 

(a)          a
sale, assignment, transfer or other disposition (whether voluntary, involuntary, or by operation of law), other than Residential
Leases, Material Commercial Leases or non-Material Commercial Leases permitted by this Loan Agreement;

 

(b)          a
granting, pledging, creating or attachment of a lien, encumbrance or security interest (whether voluntary, involuntary, or by operation
of law);

 

(c)          an
issuance or other creation of a direct or indirect ownership interest;

 

(d)          a
withdrawal, retirement, removal or involuntary resignation of any owner or manager of a legal entity; or

 

(e)          a
merger, consolidation, dissolution or liquidation of a legal entity.

 

“Transfer Fee” means a fee
equal to one percent (1%) of the unpaid principal balance of the Mortgage Loan payable to Lender.

 

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

 

“UCC Collateral” has the
meaning set forth in the Security Instrument.

 

“Voidable Transfer” means
any fraudulent conveyance, preference or other voidable or recoverable payment of money or transfer of property.

 

“Yield Maintenance Period End Date”
or “Prepayment Premium Period End Date” has the meaning set forth in the Summary of Loan Terms.

 

“Yield Maintenance Period Term”
or “Prepayment Premium Period Term” has the meaning set forth in the Summary of Loan Terms.

 

[BORROWER INITIALS ON FOLLOWING
PAGE]

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 15
© 2014 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED TO SCHEDULE
1

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Schedule 1 to Multifamily Loan and
Security Agreement - Definitions Schedule
(Interest Rate - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6101.FR
08-14
 	Page 16
© 2014 Fannie Mae
 

    	 

    

 

SCHEDULE 2 TO

MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

Summary of Loan Terms

(Interest Rate Type - Fixed Rate)

 

	I.           GENERAL PARTY AND MULTIFAMILY PROJECT INFORMATION
	 
	Borrower	BR PARK & KINGSTON CHARLOTTE, LLC, a Delaware limited liability company
	 	 
	Lender	CBRE MULTIFAMILY CAPITAL, INC., a Delaware corporation
	 	 
	Key Principal	BLUEROCK RESIDENTIAL GROWTH REIT, INC., a Maryland corporation
	 	 
	Guarantor	N/A
	 	 
	Multifamily Project	Park and Kingston Apartments
	 	 
	ADDRESSES
	 
	Borrower’s General Business Address	
        c/o Bluerock Real Estate, LLC

        712 Fifth Avenue, 9th Floor

        New York, New York 10019

	 	 
	Borrower’s Notice Address	
        c/o Bluerock Real Estate, LLC

        712 Fifth Avenue, 9th Floor

        New York, New York 10019

        E-Mail: jruddy@bluerockre.com

	 	 
	Multifamily Project Address	
        125 West Park Avenue

        Charlotte, North Carolina 28203

	 	 
	Multifamily Project County	Mecklenburg County
	 	 
	Key Principal’s General Business Address	
        c/o Bluerock Real Estate, LLC

        712 Fifth Avenue, 9th Floor

        New York, New York 10019

 

    	Schedule 2 to Multifamily Loan and
Security Agreement - Summary of Loan
Terms (Interest Rate Type - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6102.FR
08-13
 	Page 1
© 2013 Fannie Mae
 

    	 

    

 

	Key Principal’s Notice Address	
        c/o Bluerock Real Estate, LLC

        712 Fifth Avenue, 9th Floor

        New York, New York 10019

        E-Mail: jruddy@bluerockre.com

	 	 
	Guarantor’s General Business Address	N/A
	 	 
	Guarantor’s Notice Address	N/A
	 	 
	Lender’s General Business Address	
        2800 Post Oak Boulevard, Suite 2100

        Houston, Texas 77056

	 	 
	Lender’s Notice Address	
        CBRE Multifamily Capital, Inc.

        c/o GEMSA Loan Services, L.P.

        929 Gessner, #1700

        Houston, Texas 77024

        Attn: Chief Legal Officer

         

        With Copy To:

        CBRE Multifamily Capital, Inc.

        2800 Post Oak Boulevard, #2100

        Houston, Texas 77056

        Attn: Chief Legal Officer

	 	 
	Lender’s Payment Address	
        CBRE Multifamily Capital, Inc.

        c/o GEMSA Loan Services, L.P.

        PO Box 973788

        Dallas, Texas 75397-3788

 

	II.          MULTIFAMILY PROJECT INFORMATION
	 
	Property Square Footage	2.104 acres

 

    	Schedule 2 to Multifamily Loan and
Security Agreement - Summary of Loan
Terms (Interest Rate Type - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6102.FR
08-13
 	Page 2
© 2013 Fannie Mae
 

    	 

    

 

	Total Parking Spaces	 
	 	 
	Total Residential Units	153
	 	 
	Affordable Housing Property	 ̈  Yes

        x  No

 

	III.         MORTGAGE LOAN INFORMATION
	 
	Amortization Period	0 months
	 	 
	Amortization Type	
         ̈      Amortizing

        x     Full
        Term Interest Only

         ̈      Partial
        Interest Only

	 	 
	Effective Date	March 16, 2015.
	 	 
	First Payment Date	The first day of May, 2015.
	 	 
	Fixed Rate	3.21%
	 	 
	Interest Accrual Method 	
         ̈      30/360
        (computed on the basis of a three hundred sixty (360) day year consisting of twelve (12) thirty (30) day months).

         

        or

         

        x      Actual/360
        (computed on the basis of a three hundred sixty (360) day year and the actual number of calendar days during the applicable
        month, calculated by multiplying the unpaid principal balance of the Mortgage Loan by the Interest Rate, dividing the product by
        three hundred sixty (360), and multiplying the quotient obtained by the actual number of days elapsed in the applicable month).

	 	 
	Interest Only Term	60 months
	 	 
	Interest Rate	The Fixed Rate

 

    	Schedule 2 to Multifamily Loan and
Security Agreement - Summary of Loan
Terms (Interest Rate Type - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6102.FR
08-13
 	Page 3
© 2013 Fannie Mae
 

    	 

    

 

	Interest Rate Type	Fixed Rate
	 	 
	Loan Amount	$15,250,000.00
	 	 
	Loan Term	60 months
	 	 
	Loan Year	The period beginning on the Effective Date and ending on the last day of March, 2016, and each successive twelve (12) month period thereafter.
	 	 
	Maturity Date	The first day of April, 2020, or any earlier date on which the unpaid principal balance of the Mortgage Loan becomes due and payable by acceleration or otherwise.
	 	 
	Monthly Debt Service Payment	
        (i)          $40,793.75
        for the First Payment Date; and

        (ii)         for
        each Payment Date thereafter until the Mortgage Loan is fully paid:

        (a)       $38,074.17
        if the prior month was a 28-day month;

        (b)       $39,433.96
        if the prior month was a 29-day month;

        (c)       $40,793.75
        if the prior month was a 30-day month; and

        (d)       $42,153.54
        if the prior month was a 31-day month.

	 	 
	Prepayment Lockout Period	0 year(s) from the Effective Date

 

	IV.          YIELD MAINTENANCE/PREPAYMENT PREMIUM INFORMATION
	 
	
        Yield Maintenance Period End Date

         

        or

         

        Prepayment Premium Period End Date
	The last day of September, 2019.

 

    	Schedule 2 to Multifamily Loan and
Security Agreement - Summary of Loan
Terms (Interest Rate Type - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6102.FR
08-13
 	Page 4
© 2013 Fannie Mae
 

    	 

    

 

	
        Yield Maintenance Period Term

        or

        Prepayment Premium Period Term
	54 months

 

	V.        RESERVE INFORMATION
	 
	Completion Period	Within sixty (60) days after the Effective Date or as otherwise shown on the Required Repair Schedule.
	 	 
	Initial Replacement Reserve Deposit	$—0—
	 	 
	Maximum Inspection Fee	$500.00
	 	 
	Maximum Repair Disbursement Interval	One (1) time per calendar month
	 	 
	Maximum Replacement Reserve Disbursement Interval	One (1) time per calendar month
	 	 
	Minimum Repairs Disbursement Amount	$1,000.00
	 	 
	Minimum Replacement Reserve Disbursement Amount	$5,000.00
	 	 
	Monthly Replacement Reserve Deposit	$3,188.00
	 	 
	Repair Threshold	$10,000.00
	 	 
	Repairs Escrow Account Administrative Fee	$500.00, payable one time
	 	 
	Repairs Escrow Deposit	$—0—
	 	 
	Replacement Reserve Account Administration Fee	$250.00, payable annually

 

    	Schedule 2 to Multifamily Loan and
Security Agreement - Summary of Loan
Terms (Interest Rate Type - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6102.FR
08-13
 	Page 5
© 2013 Fannie Mae
 

    	 

    

 

	Replacement Reserve Account Interest Disbursement Frequency	Quarterly
	 	 
	Replacement Threshold	$10,000.00

 

[BORROWER INITIALS ON FOLLOWING PAGE]

 

    	Schedule 2 to Multifamily Loan and
Security Agreement - Summary of Loan
Terms (Interest Rate Type - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6102.FR
08-13
 	Page 6
© 2013 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO SCHEDULE 2

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Schedule 2 to Multifamily Loan and
Security Agreement - Summary of Loan
Terms (Interest Rate Type - Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6102.FR
08-13
 	Page 7
© 2013 Fannie Mae
 

    	 

    

 

Modifications
to Multifamily Loan and Security Agreement

 

ADDENDA TO SCHEDULE 2 – SUMMARY
OF LOAN TERMS

(Replacement Reserve Deposits –
Deposits Partially or Fully Waived)

 

	VI.          REPLACEMENT RESERVE – DEPOSITS PARTIALLY OR FULLY WAIVED
	 
	Reduced Monthly Replacement Reserve Deposit	$—0—	 

 

[BORROWER INITIALS ON FOLLOWING PAGE]

 

    	Modifications to Multifamily Loan and
Security Agreement - Schedule 2 Addenda
- Summary of Loan Terms (Replacement
Reserve - Deposits Partially or Fully
Waived)
Fannie Mae
(Park & Kingston Apartments)	Form 6102.04
04-12
 	Page 1
© 2012 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO ADDENDA TO SCHEDULE 2

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Modifications to Multifamily Loan and
Security Agreement - Schedule 2 Addenda
- Summary of Loan Terms (Replacement
Reserve - Deposits Partially or Fully
Waived)
Fannie Mae
(Park & Kingston Apartments)	Form 6102.04
04-12
 	Page 2
© 2012 Fannie Mae
 

    	 

    

 

SCHEDULE 3 TO

MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

Schedule of Interest Rate Type Provisions

(Fixed Rate)

 

1.           Defined
Terms.

 

Capitalized terms not
otherwise defined in this Schedule have the meanings given to such terms in the Definitions Schedule to the Loan Agreement.

 

2.           Interest
Accrual.

 

Except as otherwise provided
in the Loan Agreement, interest shall accrue at the Interest Rate until fully paid.

 

[BORROWER INITIALS ON FOLLOWING PAGE]

 

    	Schedule 3 to Multifamily Loan and
Security Agreement - Interest Rate Type
Provisions (Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6103.FR
01-11
 	Page 1
© 2011 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO SCHEDULE 3

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Schedule 3 to Multifamily Loan and
Security Agreement - Interest Rate Type
Provisions (Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6103.FR
01-11
 	Page 2
© 2011 Fannie Mae
 

    	 

    

 

SCHEDULE 4 TO

MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

Prepayment Premium Schedule

(Standard Yield Maintenance – Fixed
Rate)

 

1.          Defined
Terms.

 

All capitalized terms
used but not defined in this Prepayment Premium Schedule shall have the meanings assigned to them in the Loan Agreement.

 

2.          Prepayment
Premium.

 

Any Prepayment Premium
payable under Section 2.03 (Lockout/Prepayment) of the Loan Agreement shall be computed as follows:

 

(a)          If
the prepayment is made at any time after the Effective Date and before the Yield Maintenance Period End Date, the Prepayment Premium
shall be the greater of:

 

(1)         one
percent (1%) of the amount of principal being prepaid; or

 

(2)         the
product obtained by multiplying:

 

(A)         the
amount of principal being prepaid,

 

by

 

(B)         the
difference obtained by subtracting from the Fixed Rate on the Mortgage Loan, the Yield Rate (as defined below) on the twenty-fifth (25th)
Business Day preceding (i) the Intended Prepayment Date, or (ii) the date Lender accelerates the Mortgage Loan or otherwise
accepts a prepayment pursuant to Section 2.03(d) (Application of Collateral) of the Loan Agreement,

 

by

 

(C)         the
present value factor calculated using the following formula:

 

	 	1 - (1 + r)-n/12	 
	 	r	 

 

		[r =	Yield Rate

 

		n =	the number of months remaining between (i) either
of the following: (x) in the case of a voluntary prepayment, the last day of the month in which the prepayment is made, or
(y) in any other case, the date on which Lender accelerates the unpaid principal balance of the Mortgage Loan and (ii) the
Yield Maintenance Period End Date.

 

    	Schedule 4 to Multifamily Loan and
Security Agreement (Prepayment Premium
Schedule – Standard Yield Maintenance –
Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6104.01
08-13
 	Page 1
© 2013 Fannie Mae
 

    	 

    

 

For purposes of this clause (2),
the “Yield Rate” means the yield calculated by interpolating the yields for the immediately shorter and longer
term U.S. “Treasury constant maturities” (as reported in the Federal Reserve Statistical Release H.15 Selected Interest
Rates (the “Fed Release”) under the heading “U.S. government securities”) closest to the remaining
term of the Yield Maintenance Period Term, as follows (rounded to three (3) decimal places):

 

 

		a =	the yield for the longer U.S. Treasury constant maturity

		b =	the yield for the shorter U.S. Treasury constant maturity

		x =	the term of the longer U.S. Treasury constant maturity

		y =	the term of the shorter U.S. Treasury constant maturity

		z =	“n” (as defined in the present value factor
calculation above) divided by twelve (12).

 

Notwithstanding any provision
to the contrary, if “z” equals a term reported under the U.S. “Treasury constant maturities” subheading
in the Fed Release, the yield for such term shall be used, and interpolation shall not be necessary. If publication of the Fed
Release is discontinued by the Federal Reserve Board, Lender shall determine the Yield Rate from another source selected by Lender.
Any determination of the Yield Rate by Lender will be binding absent manifest error.]

 

(b)          If
the prepayment is made on or after the Yield Maintenance Period End Date but before the last calendar day of the fourth (4th)
month prior to the month in which the Maturity Date occurs, the Prepayment Premium shall be one percent (1%) of the amount
of principal being prepaid.

 

    	Schedule 4 to Multifamily Loan and
Security Agreement (Prepayment Premium
Schedule – Standard Yield Maintenance –
Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6104.01
08-13
 	Page 2
© 2013 Fannie Mae
 

    	 

    

 

(c)          Notwithstanding
the provisions of Section 2.03 (Lockout/Prepayment) of the Loan Agreement, no Prepayment Premium shall be payable with respect
to any prepayment made on or after the last calendar day of the fourth (4th) month prior to the month in which the Maturity
Date occurs.

 

[BORROWER INITIALS ON FOLLOWING PAGE]

 

    	Schedule 4 to Multifamily Loan and
Security Agreement (Prepayment Premium
Schedule – Standard Yield Maintenance –
Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6104.01
08-13
 	Page 3
© 2013 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO SCHEDULE 4

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Schedule 4 to Multifamily Loan and
Security Agreement (Prepayment Premium
Schedule – Standard Yield Maintenance –
Fixed Rate)
Fannie Mae
(Park & Kingston Apartments)	Form 6104.01
08-13
 	Page 4
© 2013 Fannie Mae
 

    	 

    

 

SCHEDULE 5 TO

MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

Required Replacement Schedule

 

		·	Concrete repairs, crack sealing, striping

		·	Exterior – paint / finish

		·	Common area flooring

		·	Dwelling unit carpet

 

[BORROWER INITIALS ON FOLLOWING PAGE]

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
Schedule 5
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 1
© 2014 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO SCHEDULE 5

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
Schedule 5
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 2
© 2014 Fannie Mae
 

    	 

    

 

SCHEDULE 6 TO

MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

Required Repair Schedule

	Items to be completed:	 	Time-frame for
 Completion	 	Estimated Cost 
of Completion	 	 	Escrow 
%	 	Escrowed 
Amount	 
	1.    Fire Compliance : According to Deputy Fire Marshal Jon P. Leonard, the last fire safety inspection performed at the property by the fire department was on January 8, 2014 and there is one outstanding fire code violation on file related to an improper latching/locking device.  We recommend that management correct this condition as an immediate repair need (anticipated to be minimal cost).  Documentation that the violation has been corrected should be provided to CBRE Multifamily Capital, Inc. for their records.	 	60 days	 	$	    0	 	 	N/A	 	$	    0	 
	2.    ADA Parking Stalls:  Ensure all handicap parking stalls have proper pavement and pole mounted signage	 	60 days	 	$	0	 	 	N/A	 	$	0	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL ESCROW AMOUNT:	 	 	 	 	 	 	 	 	 	$	0	 

 

[BORROWER INITIALS ON FOLLOWING PAGE]

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
Schedule 6
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 1
© 2014 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO SCHEDULE 6

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
Schedule 6
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 2
© 2014 Fannie Mae
 

    	 

    

 

SCHEDULE 7 TO

MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

Exceptions to Representations and Warranties
Schedule

 

NONE.

 

[BORROWER INITIALS
ON FOLLOWING PAGE]

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
Schedule 7
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 1
© 2014 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO SCHEDULE 7

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Multifamily Loan and Security Agreement
(Non-Recourse)
Schedule 7
(Park & Kingston Apartments)	Form 6001.NR
08-14
 	Page 2
© 2014 Fannie Mae
 

    	 

    

 

EXHIBIT A

 

MODIFICATIONS TO MULTIFAMILY LOAN AND
SECURITY AGREEMENT

(Replacement Reserve – Deposits
Partially or Fully Waived)

 

The foregoing Loan
Agreement is hereby modified as follows:

 

1.          Capitalized
terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.

 

2.          The
Definitions Schedule is hereby amended by adding the following new definition in the appropriate alphabetical order:

 

“Reduced Monthly Replacement
Reserve Deposit” has the meaning set forth in the Summary of Loan Terms.

 

3.          Section 13.01(b)
(Monthly Replacement Reserve Deposits) of the Loan Agreement is hereby amended by adding the following provisions to the end thereof:

 

(1)         Partial
or Full Waiver of Monthly Replacement Reserve Deposit.

 

Notwithstanding
the foregoing or anything in this Loan Agreement to the contrary, on the Effective Date, Lender has agreed to partially reduce,
defer or fully waive Borrower’s obligation to make full Monthly Replacement Reserve Deposits. Subject to the provisions of
Section 13.01(b)(2) (Reinstatement of Monthly Replacement Reserve Deposit), Borrower shall deposit the applicable Reduced
Monthly Replacement Reserve Deposit into the Replacement Reserve Account on each Payment Date.

 

(2)         Reinstatement
of Monthly Replacement Reserve Deposit.

 

In the event
that (A) at any time during the Loan Term Lender provides written notice to Borrower that the Mortgaged Property is not being
maintained in accordance with the requirements set forth in the Loan Documents, or (B) an Event of Default has occurred and
is continuing under any of the Loan Documents, then upon the earlier of (i) the date specified by Lender in such written notice
to Borrower or (ii) the first day of the first calendar month after the occurrence of such Event of Default, Borrower shall
commence paying the full Monthly Replacement Reserve Deposits throughout the remaining Loan Term.

 

[BORROWER INITIALS ON FOLLOWING PAGE]

 

    	Modifications to Multifamily Loan and
Security Agreement (Replacement Reserve
– Deposits Partially or Fully Waived)

Fannie Mae
(Park & Kingston Apartments)	Form 6220
08-14
 	Page A-1
© 2014 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO EXHIBIT A

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Modifications to Multifamily Loan and
Security Agreement (Replacement Reserve
– Deposits Partially or Fully Waived)

Fannie Mae
(Park & Kingston Apartments)	Form 6220
08-14
 	Page A-2
© 2014 Fannie Mae
 

    	 

    

 

EXHIBIT B

 

MODIFICATIONS TO MULTIFAMILY LOAN AND
SECURITY AGREEMENT

(Waiver of Imposition Deposits)

 

The foregoing Loan
Agreement is hereby modified as follows:

 

1.          Capitalized
terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.

 

2.          The
Definitions Schedule is hereby amended by adding the following new definitions in the appropriate alphabetical order:

 

“Insurance Impositions”
means the premiums for maintaining all Required Insurance Coverage.

 

“Required Insurance
Coverage” means the insurance coverage required pursuant to Article 9 (Insurance) of the Loan Agreement and under
any other Loan Document.

 

3.          Section 12.02
(Imposition Deposits, Taxes, and Other Charges – Covenants) of the Loan Agreement is hereby amended by adding the following
provisions to the end thereof:

 

(b)          Conditional
Waiver of Collection of Imposition Deposits.

 

(1)         Notwithstanding
anything contained in this Section 12.02 (Imposition Deposits, Taxes, and Other Charges – Covenants) to the contrary,
Lender hereby agrees to waive the collection of Imposition Deposits for Insurance Impositions, provided, that:

 

(A)         Borrower
shall pay such Insurance Impositions directly to the carrier or agent ten (10) days prior to expiration or as necessary to
prevent the Required Insurance Coverage from lapsing due to non-payment of premiums;

 

(B)         Borrower
shall provide Lender with proof of payment acceptable to Lender of all Insurance Impositions within five (5) days after the
date such Insurance Impositions are paid; and

 

(C)         Borrower
shall cause its insurance agent to provide Lender with such certifications regarding the Required Insurance Coverage as Lender
may request from time to time evidencing that the Insurance Impositions have been paid in a timely manner and that all of the Required
Insurance Coverage is in full force and effect.

 

    	Modifications to Multifamily Loan and
Security Agreement (Waiver of Imposition
Deposits)
Fannie Mae
(Park & Kingston Apartments)	Form 6228
04-12
 	Page B-1
© 2012 Fannie Mae
 

    	 

    

 

(2)         Lender
reserves the right to require Borrower to deposit the Imposition Deposits with Lender on each Payment Date for Insurance Impositions
in accordance with this Section 12.02 (Imposition Deposits, Taxes, and Other Charges – Covenants) upon:

 

(A)         Borrower’s
failure to pay Insurance Impositions or to provide Lender with proof of payment of Insurance Impositions as required in this Section 12.02(b)
(Conditional Waiver of Collection of Imposition Deposits);

 

(B)         Borrower’s
failure to maintain insurance coverage in accordance with the requirements of Article 9 (Insurance);

 

(C)         the
occurrence of any Transfer which is not permitted by the Loan Documents, or any Transfer which requires Lender’s consent;
or

 

(D)         the
occurrence of a default under any of the other terms, conditions and covenants set forth in this Loan Agreement or any of the other
Loan Documents.

 

(3)         Except
as specifically provided in this Section 12.02(b) (Conditional Waiver of Collection of Imposition Deposits), the provisions
of Article 9 (Insurance) shall remain in full force and effect.

 

[BORROWER INITIALS ON FOLLOWING PAGE]

 

    	Modifications to Multifamily Loan and
Security Agreement (Waiver of Imposition
Deposits)
Fannie Mae
(Park & Kingston Apartments)	Form 6228
04-12
 	Page B-2
© 2012 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO EXHIBIT B

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Modifications to Multifamily Loan and
Security Agreement (Waiver of Imposition
Deposits)
Fannie Mae
(Park & Kingston Apartments)	Form 6228
04-12
 	Page B-3
© 2012 Fannie Mae
 

    	 

    

 

EXHIBIT C

 

MODIFICATIONS TO MULTIFAMILY LOAN AND
SECURITY AGREEMENT

(Future Addition of Collateral)

 

The foregoing Loan
Agreement is hereby modified as follows:

 

1.          Capitalized
terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.

 

2.          The
Definitions Schedule is hereby amended by adding the following new definitions in the appropriate alphabetical order:

 

“Collateral Addition”
means the addition of Phase II as part of the Mortgaged Property in accordance with the requirements set forth in Article 16 of
this Loan Agreement.

 

“Phase II”
means the real property and improvements commonly known as “Park and Kingston Phase II” which consists of 15 multifamily
units and a vacant (graded and stabilized) but unimproved parcel pursuant to those certain plans entitled “127 W. Park Avenue
Apartments” prepared by Narmour Wright Architecture and dated June 14, 2014, as amended, which real property is more particularly
described on Exhibit B attached to this Loan Agreement.

 

“Reciprocal Easement
Agreement” means that certain Reciprocal Easement Agreement dated March __, 2015 by and between Park Kingston Investors,
LLC, a North Carolina limited liability company, and Borrower, recorded in deed book _______, at page ________ of the Land Records
of Mecklenburg County, North Carolina.

 

3.          The
following Article is hereby added to the Loan Agreement as Article 16:

 

ARTICLE 16 – FUTURE ADDITION OF
COLLATERAL TO THE MORTGAGED PROPERTY

 

Section 16.01         Future
Addition of Collateral.

 

Lender shall
consent to the future addition of Phase II as part of the Mortgaged Property, provided that each of the following conditions has
been satisfied:

 

(a)          Borrower
has provided Lender with not less than thirty (30) days prior written notice of the Collateral Addition, which notice shall be
accompanied by a Review Fee of $5,000, as well as all information required by Lender to make the determinations required by this
Section 16.01;

 

    	Modifications to Multifamily Loan and
Security Agreement (Future Addition of
Collateral)
Fannie Mae
(Park & Kingston Apartments)	 	Page C-1
© 2013 Fannie Mae
 

    	 

    

 

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

 

(c)          no
Transfers prohibited by Article 11 of this Loan Agreement shall have occurred (regardless of whether such Transfer was consented
to by Lender pursuant to Section 11.03(a));

 

(d)          the
Collateral Addition must occur on or prior to January 31, 2016;

 

(e)          the
improvements on Phase II have been completed in a good and workmanlike manner and free and clear of any liens, and a final certificate
of occupancy has been issued for the improvements on Phase II;

 

(f)          [Intentionally
deleted];

 

(g)          Lender
has received a date-down endorsement to the Title Policy in form and content acceptable to Lender, which, among other things, (A)
evidences the addition of Phase II to the Mortgaged Property, (B) evidences the termination of the Reciprocal Easement Agreement,
(C) extends the effective date of the Title Policy to the effective date of the Collateral Addition, and (D) confirms that there
is no change in the priority of the Security Instrument or in the amount of the insurance or coverage under the Title Policy;

 

(h)          Borrower
has executed and delivered to Lender (A) any amendments to this Loan Agreement or any of the other Loan Documents that may be required
by Lender to evidence the Collateral Addition, including, but not limited to, an amendment to Schedule 2 of the Loan Agreement
to evidence the new Property Square Footage, Total Residential Units, and amended legal descriptions of the Mortgaged Property;
and (B) a certification reaffirming the representations and warranties contained in Sections 6.01, 9.01(b), 10.01, 11.01, and 12.01
of this Loan Agreement following the Collateral Addition; and

 

(i)          Borrower
shall have paid to Lender upon demand, all of Lender’s actual out-of-pocket costs and expenses (including reasonable attorneys’
fees) incurred in reviewing the proposed Collateral Addition.

 

[BORROWER INITIALS ON
FOLLOWING PAGE]

 

    	Modifications to Multifamily Loan and
Security Agreement (Future Addition of
Collateral)
Fannie Mae
(Park & Kingston Apartments)	 	Page C-2
© 2013 Fannie Mae
 

    	 

    

 

BORROWER INITIAL PAGE TO BE ATTACHED
TO EXHIBIT C

TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

 

	 	/s/ JR
	 	Borrower Initials

 

    	Modifications to Multifamily Loan and
Security Agreement (Future Addition of
Collateral)
Fannie Mae
(Park & Kingston Apartments)	 	Page C-3
© 2013 Fannie MaeExhibit 10.8

 

MULTIFAMILY NOTE

(Park & Kingston Apartments)

 

	US $15,250,000.00	March 16, 2015

 

FOR VALUE RECEIVED,
the undersigned (“Borrower”) promises to pay to the order of CBRE MULTIFAMILY CAPITAL, INC., a Delaware corporation
(“Lender”), the principal amount of Fifteen Million Two Hundred Fifty Thousand Dollars (US $15,250,000.00)
(the “Mortgage Loan”), together with interest thereon accruing at the Interest Rate on the unpaid principal
balance from the date the Mortgage Loan proceeds are disbursed until fully paid in accordance with the terms hereof and of that
certain Multifamily Loan and Security Agreement dated as of the date hereof, by and between Borrower and Lender (as the same may
be amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”).

 

		1.	Defined Terms.

 

Capitalized terms used
and not specifically defined in this Multifamily Note (this “Note”) have the meanings given to such terms in
the Loan Agreement.

 

		2.	Repayment.

 

Borrower agrees to pay
the principal amount of the Mortgage Loan and interest on the principal amount of the Mortgage Loan from time to time outstanding
at the Interest Rate or such other rate or rates and at the times specified in the Loan Agreement, together with all other amounts
due to Lender under the Loan Documents. The outstanding balance of the Mortgage Loan and all accrued and unpaid interest thereon
shall be due and payable on the Maturity Date, together with all other amounts due to Lender under the Loan Documents.

 

		3.	Security.

 

The Mortgage Loan evidenced
by this Note, together with all other Indebtedness is secured by, among other things, the Security Instrument, the Loan Agreement
and the other Loan Documents. All of the terms, covenants and conditions contained in the Loan Agreement, the Security Instrument
and the other Loan Documents are hereby made part of this Note to the same extent and with the same force as if they were fully
set forth herein. In the event of a conflict or inconsistency between the terms of this Note and the Loan Agreement, the terms
and provisions of the Loan Agreement shall govern.

 

		4.	Acceleration.

 

In accordance with the
Loan Agreement, if an Event of Default has occurred and is continuing, the entire unpaid principal balance of the Mortgage Loan,
any accrued and unpaid interest, including interest accruing at the Default Rate, the Prepayment Premium (if applicable), and all
other amounts payable under this Note, the Loan Agreement and any other Loan Document shall at once become due and payable, at
the option of Lender, without any prior notice to Borrower, unless applicable law requires otherwise (and in such case, after satisfactory
notice has been given).

 

	Multifamily Note – Multistate	Form 6010	Page 1
	 	 	 
	Fannie Mae	06-12	© 2012 Fannie Mae
	 	 	 
	(Park & Kingston Apartments)	 	 

 

    	 

    	 

    

 

 

		5.	Personal Liability.

 

The provisions of Article 3
(Personal Liability) of the Loan Agreement are hereby incorporated by reference into this Note to the same extent and with the
same force as if fully set forth herein.

 

		6.	Governing Law.

 

This Note shall be governed
in accordance with the terms and provisions of Section 15.01 (Governing Law; Consent to Jurisdiction and Venue) of the Loan
Agreement.

 

		7.	Waivers.

 

Presentment, demand for
payment, notice of nonpayment and dishonor, protest and notice of protest, notice of acceleration, notice of intent to demand or
accelerate payment or maturity, presentment for payment, notice of nonpayment, grace and diligence in collecting the Indebtedness
are waived by Borrower, for and on behalf of itself, Guarantor and Key Principal, and all endorsers and guarantors of this Note
and all other third party obligors or others who may become liable for the payment of all or any part of the Indebtedness.

 

		8.	Commercial Purpose.

 

Borrower represents that
the Indebtedness is being incurred by Borrower solely for the purpose of carrying on a business or commercial enterprise or activity,
and not for agricultural, personal, family or household purposes.

 

		9.	Construction; Joint and Several (or Solidary, as
applicable) Liability.

 

(a)             Section 15.08
(Construction) of the Loan Agreement is hereby incorporated herein as if fully set forth in the body of this Note.

 

(b)             If more than one
Person executes this Note as Borrower, the obligations of such Person shall be joint and several (solidary instead for purposes
of Louisiana law).

 

		10.	Notices.

 

All Notices
required or permitted to be given by Lender to Borrower pursuant to this Note shall be given in accordance with Section 15.02
(Notice) of the Loan Agreement.

 

	Multifamily Note – Multistate	Form 6010	Page 2
	 	 	 
	Fannie Mae	06-12	© 2012 Fannie Mae
	 	 	 
	(Park & Kingston Apartments)	 	 

 

    	 

    	 

    

  

		11.	Time is of the Essence.

 

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

 

		12.	Loan Charges Savings Clause.

 

Borrower agrees to pay
an effective rate of interest equal to the sum of the Interest Rate and any additional rate of interest resulting from any other
charges of interest or in the nature of interest paid or to be paid in connection with the Mortgage Loan and any other fees or
amounts to be paid by Borrower pursuant to any of the other Loan Documents. Neither this Note, the Loan Agreement nor any of the
other Loan Documents shall be construed to create a contract for the use, forbearance or detention of money requiring payment of
interest at a rate greater than the maximum interest rate permitted to be charged under applicable law. It is expressly stipulated
and agreed to be the intent of Borrower and Lender at all times to comply with all applicable laws governing the maximum rate or
amount of interest payable on the Indebtedness evidenced by this Note and the other Loan Documents. If any applicable law limiting
the amount of interest or other charges permitted to be collected from Borrower is interpreted so that any interest or other charge
or amount provided for in any Loan Document, whether considered separately or together with other charges or amounts provided for
in any other Loan Document, or otherwise charged, taken, reserved or received in connection with the Mortgage Loan, or on acceleration
of the maturity of the Mortgage Loan or as a result of any prepayment by Borrower or otherwise, violates that law, and Borrower
is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate any such
violation. Amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the
unpaid principal balance of the Mortgage Loan without the payment of any prepayment premium (or, if the Mortgage Loan has been
or would thereby be paid in full, shall be refunded to Borrower), and the provisions of the Loan Agreement and any other Loan Documents
immediately shall be deemed reformed and the amounts thereafter collectible under the Loan Agreement and any other Loan Documents
reduced, without the necessity of the execution of any new documents, so as to comply with any applicable law, but so as to permit
the recovery of the fullest amount otherwise payable under the Loan Documents. For the purpose of determining whether any applicable
law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness
that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, and
any amount paid or agreed to be paid to Lender for the use, forbearance or detention of the Indebtedness, shall be deemed to be
allocated and spread ratably over the stated term of the Mortgage Loan. Unless otherwise required by applicable law, such allocation
and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of
the Mortgage Loan.

 

	Multifamily Note – Multistate	Form 6010	Page 3
	 	 	 
	Fannie Mae	06-12	© 2012 Fannie Mae
	 	 	 
	(Park & Kingston Apartments)	 	 

 

    	 

    	 

    

 

		13.	WAIVER OF TRIAL BY JURY.

 

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

 

		14.	Receipt of Loan Documents.

 

Borrower acknowledges receipt
of a copy of each of the Loan Documents.

 

		15.	Incorporation of Schedules.

 

The schedules, if any,
attached to this Note are incorporated fully into this Note by this reference and each constitutes a substantive part of this Note.

 

ATTACHED SCHEDULE.
The following Schedule is attached to this Note:

 

	 ̈	Schedule 1	Modifications to Note

 

[Remainder of Page Intentionally Blank]

 

	Multifamily Note – Multistate	Form 6010	Page 4
	 	 	 
	Fannie Mae	06-12	© 2012 Fannie Mae
	 	 	 
	(Park & Kingston Apartments)	 	 

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
Borrower has signed and delivered this Note under seal (where applicable) or has caused this Note to be signed and delivered under
seal (where applicable) by its duly authorized representative. Where applicable law so provides, Borrower intends that this Note
shall be deemed to be signed and delivered as a sealed instrument.

 

	 	BORROWER:
	 	 
	 	BR PARK & KINGSTON CHARLOTTE, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By: 	23Hundred, LLC,
	 	 	a Delaware limited liability company,
	 	 	its Sole Member
	 	 	 	 	 
	 	 	By: 	/s/ Jordan Ruddy 	(SEAL)
	 	 	Name:	Jordan Ruddy
	 	 	Title:	Authorized Signatory
	 	 

 

[ENDORSEMENT ON FOLLOWING PAGE]

 

    	 

    	 

    

 

	 	PAY TO THE ORDER OF ___________________ ____________________, WITHOUT RECOURSE.
	 	 
	 	CBRE MULTIFAMILY CAPITAL, INC.,
	 	a Delaware corporation
	 	 
	 	 	 	 
	 	By: 	/s/ Marion S. Green	(SEAL)
	 	Name: Marion S. Green
	 	Title:  Vice President

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