Document:

Exhibit 10.1

 

2019 Share Incentive Awards Arrangement

 

This 2019 share incentive awards arrangement (the “2019
Share Incentive Awards Arrangement”) was created in order to provide employees of Bigo Inc. with share-based incentive
awards of YY Inc. (the “Company”).

 

The maximum aggregate number of Class A common shares which
may be issued pursuant to the 2019 Share Incentive Awards Arrangement shall be 65,922,045 Class A common shares of the Company,
par value $0.00001 per share.

 

In the event of any dividend, share split, combination or exchange
of common shares of the Company, amalgamation, arrangement or consolidation, spin-off, recapitalization or other distribution (other
than normal cash dividends) of Company assets to its shareholders, or any other change affecting the shares of common shares or
the share price of a common share, the board of directors of the Company shall make such proportionate adjustments, if any, as
the board of directors of the Company in its discretion may deem appropriate to reflect such change with respect to (a) the aggregate
number and type of shares that may be issued under the 2019 Share Incentive Awards Arrangement; (b) the terms and conditions of
any outstanding awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and
(c) the grant or exercise price per share for any outstanding awards under the 2019 Share Incentive Awards Arrangement.

 

To the extent that an award terminates, expires, or lapses for
any reason, any common shares subject to the award shall again be available for the grant of an award pursuant to the 2019 Share
Incentive Awards Arrangement. To the extent permitted by applicable laws, common shares issued in assumption of, or in substitution
for, any outstanding awards of any entity acquired in any form or combination by the Company or any parent or subsidiary of the
Company shall not be counted against common shares available for grant pursuant to the 2019 Share Incentive Awards Arrangement.
Common shares delivered by participants or withheld by the Company upon the exercise of any award under the 2019 Share Incentive
Awards Arrangement, in payment of the exercise price thereof or tax withholding thereon, may again be optioned, granted or awarded
hereunder. If any restricted shares are forfeited by the participants or repurchased by the Company, such common shares may again
be optioned, granted or awarded hereunder.a101loanagreement2019092

                                                                         EXHIBIT 10.1   Freddie Mac Loan Number: 499673646  Property Name: Tapestry Park at Montclair                MULTIFAMILY LOAN AND SECURITY AGREEMENT                                 (Revised 4-10-2019)                                    SUMMARY    The following information is incorporated into and deemed part of this Multifamily Loan and  Security Agreement.   A.    Parties to Agreement; Date; Loan Amount.  Borrower:       SIR TAPESTRY PARK, LLC, a Delaware limited liability company                  BERKELEY POINT CAPITAL LLC, d/b/a NEWMARK KNIGHT  Lender:                  FRANK, a Delaware limited liability company  Date:           as of September 26, 2019   Loan Amount:    $48,750,000.00    B. Summary of Loan Terms.     1. Property Manager:        [   X  ] STEADFAST MANAGEMENT COMPANY, INC., a California corporation, or             another residential rental property manager which is approved by Lender in              writing.        [     ]  Not applicable.      2. SPE Equity Owner:        [     ]  _______, a single member Delaware limited liability company       [     ]  __________ corporation       [   X  ] Not applicable. Borrower will not be required to maintain an SPE Equity Owner             in its organizational structure during the term of the Loan and all references to              SPE Equity Owner in this Loan Agreement and in the Note will be of no force or              effect.      3. Repair and Reserve Fund Information: [subject to the provisions of Article IV]                               Item                        Collect Deferred N/A        a. Imposition Reserves: (use an “X” to mark each item as 

 

                       Item                        Collect Deferred N/A     “Collect”, “Deferred”, or “N/A” as appropriate)     Property Insurance premiums or premiums for other X      Insurance required by Lender under Section 6.10     Taxes and payments in lieu of taxes             X      Water/sewer charges that could become a Lien on the  X      Mortgaged Property     Ground Rents                                                    X     Assessments/other charges that could become a Lien on  X      the Mortgaged Property, including home owner     association dues                              Item                             Yes      No  b. Repairs and Repair Reserve:       Are Repairs required?                                          X     If Yes, is a Reserve required?                              Is radon testing required?                                     X     Are Green Improvements required?                               X     If Yes, is a Reserve required?                              If Yes to Repairs and/or Green Improvements, is a Letter of       Credit required?                               Item                             Yes      No  c. Replacement Reserve:                                        Is a Replacement Reserve required?                    X      If Yes, are reserves Funded?                          X      If Yes, are reserves Deferred?                                 X      d. Rental Achievement Reserve:                                 Is a Rental Achievement Reserve required?                      X     If Yes, are reserves in the form of cash?                   If Yes, are reserves in the form of a Letter of Credit?          e. Rate Cap Agreement Reserve:                                 Is a Cap Agreement required?                                   X     If Yes, is a Rate Cap Agreement Reserve required?           If Yes, are reserves in the form of cash?                                                                                                 

 

       f. Other Reserve(s) required?                             X                                                                            g. Lease Up Transaction                                               Is this a Lease Up Transaction?                        X            If Yes, are reserves in the form of cash?                          If Yes, are reserves in the form of a Letter of Credit?        4.  Purpose of Loan: [see Section 5.24]         [   X  ] Refinance Loan: The Loan is a Refinance Loan.           [     ]  Acquisition Loan – Mortgaged Property: The Mortgaged Property was or will be            purchased from _________________________________ (“Property Seller”).            [     ]  Acquisition Loan – Membership Interests: The Membership Interests were or will be            purchased from _________________________________ (“Membership Interests            Seller”).            [     ]  Supplemental Loan: The Loan is a Supplemental Loan.                  [     ]  Cross-Collateralized/Cross-Defaulted Loan Pool: The Loan is part of a cross-           collateralized/cross-defaulted pool of loans described as follows: (check all that are            applicable)            [     ]  being simultaneously made to Borrower and/or Borrower’s Affiliates            [     ]  made previously to Borrower and/or Borrower’s Affiliates                  5. Moisture Management Plan: [see Section 6.06]                 [     ]  MMP is required for the Mortgaged Property.             [   X  ] MMP is not required for the Mortgaged Property.      6.  Minimum Occupancy: [See Section 6.09(e)] 85%       7.  Insurance – Borrower Proof of Loss: [see Section 6.10(k)]        “Borrower Proof of Loss Threshold” means $200,000.00.         “Borrower Proof of Loss Maximum” means $800,000.00.      8.  O&M Program: [see Section 6.12]         [    X ] None     9.  Transfer Information: [see Article VII]           “X” if                           Type of Transfer      applicable                                                                                   

 

              Transfer to Previously Underwritten Person [see Section 7.03(a)(iii)]                   Prior Borrower Principal:                Previously Underwritten Person:                   Co-Owner Transfer [see Section 7.03(a)(iv)]                Required Co-Owner:                Required Co-Owner Interest in the Mortgaged Property:                 TIC Roll-up Transfer [see Section 7.03(a)(v)]                Consolidation Borrower Manager:                 Preferred Equity Control Take-Over Transfer [see Section 7.03(b)(ii)]                Preferred Equity Investor:                 Buy-Sell Transfer [see Section 7.03(b)(iii)]                Buy-Sell Equity Investor:    10.  Required Equity Owner Requirements: [see Section 7.03(c)(ii)]          “X” if                        Required Equity Owner     applicable                 Name of Required Equity Owner:                Required Equity Ownership Interest:    11. Notice Requirements: [see Section 11.03]         If to Lender:       Berkeley Point Capital LLC, d/b/a Newmark Knight Frank                           225 Franklin Street, Suite #1800                           Boston, Massachusetts 02110                          Attention: Director Loan Servicing       If to Borrower:    SIR Tapestry Park, LLC                          c/o Steadfast Companies                          18100 Von Karman Avenue, Suite 500                          Irvine, California 92612                          Attention: Ana Marie del Rio, General Counsel       Courtesy Copy to:                           Attention:    12. Supplemental Financing: [see Section 11.11(b)(v)]       “Maximum Combined LTV” is 75.0%.                                                                                       

 

13. Senior Instrument:        [   X  ] Not applicable. This Agreement relates to a first lien on the Mortgaged Property. The           defined term “Senior Instrument” is not applicable.          [     ]  This Agreement relates to a Supplemental Loan. “Senior Instrument” means each of           the following:     14.   State Specific Provision.          [    X ]  Not applicable.          [     ] The applicable State specific provision is set forth in the State Specific Provisions Rider         attached to this Agreement.                15. Reserved.    16. Reserved.                                                                                                                            C.    Exhibits                                                                                                                             

 

X       Exhibit A     Description of the Land (required)   X       Exhibit B     Modifications to Multifamily Loan and Security Agreement    X       Exhibit C     Repair Schedule of Work   X       Exhibit D     Repair Disbursement Request (required)   X       Exhibit E     Work Commenced at Mortgaged Property   X       Exhibit F     Capital Replacements (required)   X       Exhibit G     Description of Ground Lease   X       Exhibit H     Organizational Chart of Borrower as of the Date of this Loan                        Agreement (required)  N X       Exhibit I     Designated Entities for Transfers and Guarantor(s) (required)           Exhibit J     Description of Release Parcel           Exhibit K     Reserved           Exhibit L     Reserved      Exhibit M          Reserved      Exhibit N          Reserved   X       Exhibit O     Borrower’s Certificate of Property Improvement Alterations                        Completion (required)                                                                               

 

                                                                                   D.  Attached Riders                                Name of Rider                          Date Revised   Rider to Multifamily Loan and Security Agreement – Trade Names  3-1-2014   Rider to Multifamily Loan and Security Agreement - Month to Month Leases  5-1-2015   Rider to Multifamily Loan and Security Agreement - Corporate Leases  4-19-2018   Rider  to  Multifamily  Loan  and  Security  Agreement  -  Termite  or  Wood 3-1-2014  Damaging Insect Control   Rider to Multifamily Loan and Security Agreement - Recycled Borrower  4-19-2018   Rider to Multifamily Loan and Security Agreement – Cooperation with Rating 1-27-2015  Agencies and Investors   Rider to Multifamily Loan and Security Agreement – Replacement Reserve – 7-1-2014  Immediate Deposits                                                                                                                             

 

                                 TABLE OF CONTENTS        ARTICLE I        DEFINED TERMS; CONSTRUCTION   1.01  Defined Terms   1.02  Construction      ARTICLE II       LOAN   2.01  Loan Terms   2.02  Prepayment Premium   2.03  Exculpation   2.04  Application of Payments   2.05  Usury Savings   2.06  Floating Rate Mortgage – Third-Party Cap Agreement      ARTICLE III      LOAN SECURITY AND GUARANTY   3.01  Security Instrument   3.02  Reserve Funds   3.03  Uniform Commercial Code Security Agreement   3.04  Cap Agreement and Cap Collateral Assignment   3.05  Guaranty   3.06  Reserved   3.07  Reserved   3.08  Reserved   3.09  Reserved      ARTICLE IV       RESERVE FUNDS AND REQUIREMENTS   4.01  Reserves Generally   4.02  Reserves for Taxes, Insurance and Other Charges   4.03  Repairs; Repair Reserve Fund   4.04  Replacement Reserve Fund   4.05  Rental Achievement Provisions   4.06  Debt Service Reserve   4.07  Rate Cap Agreement Reserve Fund   4.08  through 4.20 are Reserved      ARTICLE V        REPRESENTATIONS AND WARRANTIES   5.01  Review of Documents   5.02  Condition of Mortgaged Property   5.03  No Condemnation   5.04  Actions; Suits; Proceedings   5.05  Environmental   5.06  Commencement of Work; No Labor or Materialmen’s Claims  5.07   Compliance with Applicable Laws and Regulations  5.08   Access; Utilities; Tax Parcels  5.09   Licenses and Permits    Multifamily Loan and Security Agreement                                Page viii   

 

   5.10  No Other Interests  5.11  Term of Leases  5.12  No Prior Assignment; Prepayment of Rents  5.13  Illegal Activity  5.14  Taxes Paid  5.15  Title Exceptions  5.16  No Change in Facts or Circumstances  5.17  Financial Statements  5.18  ERISA – Borrower Status  5.19  No Fraudulent Transfer or Preference  5.20  No Insolvency or Judgment  5.21  Working Capital  5.22  Cap Collateral  5.23  Ground Lease  5.24  Purpose of Loan  5.25  Through 5.39 are Reserved  5.40  Recycled SPE Borrower  5.41  Recycled SPE Equity Owner  5.42  through 5.50 are Reserved  5.51  Survival  5.52  through 5.57 are Reserved  5.58  Prohibited Parties Lists  5.59  AML Laws  5.60  Internal Controls   5.61  Crowdfunding  5.62  through 5.70 are Reserved    ARTICLE VI       BORROWER COVENANTS  6.01  Compliance with Laws  6.02  Compliance with Organizational Documents  6.03  Use of Mortgaged Property  6.04  Non-Residential Leases  6.05  Prepayment of Rents  6.06  Inspection  6.07  Books and Records; Financial Reporting  6.08  Taxes; Operating Expenses; Ground Rents  6.09  Preservation, Management and Maintenance of Mortgaged Property  6.10  Insurance  6.11  Condemnation  6.12  Environmental Hazards  6.13  Single Purpose Entity Requirements  6.14  Repairs and Capital Replacements  6.15  Residential Leases Affecting the Mortgaged Property  6.16  Litigation; Government Proceedings  6.17  Further Assurances and Estoppel Certificates; Lender’s Expenses  6.18  Cap Collateral    Multifamily Loan and Security Agreement                                 Page ix   

 

     6.19  Ground Lease   6.20  ERISA Requirements   6.21  through 6.52 are Reserved   6.53  Economic Sanctions Laws; AML Laws   6.54  Crowdfunding   6.55  through 6.62 are Reserved      ARTICLE VII      TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS                    IN BORROWER  7.01   Prohibited Transfers  7.02   Permitted Transfers  7.03   Conditionally Permitted Transfers  7.04   Preapproved Intrafamily Transfers  7.05   Lender’s Consent to Prohibited Transfers  7.06   SPE Equity Owner Requirement Following Transfer  7.07   Additional Transfer Requirements - External Cap Agreement  7.08   Reserved  7.09   Reserved  7.10   Easement, Restrictive Covenant or Other Encumbrance    ARTICLE VIII      ACTIONS OR EVENTS RELATING TO GUARANTOR  8.01   Guarantor Bankruptcy  8.02   Guarantor Status Event  8.03   Death of a Guarantor Not in Borrower’s Ownership Structure    ARTICLE IX        EVENTS OF DEFAULT AND REMEDIES  9.01   Events of Default   9.02   Protection of Lender’s Security; Security Instrument Secures Future Advances  9.03   Remedies  9.04   Forbearance  9.05   Waiver of Marshalling    ARTICLE X         RELEASE; INDEMNITY  10.01  Release   10.02  Indemnity  10.03  Reserved    ARTICLE XI        MISCELLANEOUS PROVISIONS  11.01  Waiver of Statute of Limitations, Offsets and Counterclaims  11.02  Governing Law; Consent to Jurisdiction and Venue  11.03  Notice  11.04  Successors and Assigns Bound  11.05  Joint and Several (and Solidary) Liability  11.06  Relationship of Parties; No Third-Party Beneficiary  11.07  Severability; Amendments  11.08  Disclosure of Information     Multifamily Loan and Security Agreement                                  Page  x  

 

   11.09  Determinations by Lender  11.10  Sale of Note; Change in Servicer; Loan Servicing  11.11  Supplemental Financing  11.12  Defeasance  11.13  Lender’s Rights to Sell or Securitize  11.14  Cooperation with Rating Agencies and Investors  11.15  Letter of Credit Requirements  11.16  through 11.18 are Reserved  11.19  Reserved  11.20  Time is of the Essence   11.21  Electronic Signatures  11.22  Reserved  11.23  Subrogation  11.24  Reserved    ARTICLE XII       DEFINITIONS    ARTICLE XIII     INCORPORATION OF ATTACHED RIDERS   ARTICLE XIV       INCORPORATION OF ATTACHED EXHIBITS    ARTICLE XV        RESERVED         Multifamily Loan and Security Agreement                                 Page xi   

 

                  MULTIFAMILY LOAN AND SECURITY AGREEMENT      THIS MULTIFAMILY LOAN AND SECURITY AGREEMENT (“Loan Agreement”) is dated   as of the 26th day of September, 2019 and is made by and between SIR TAPESTRY PARK,   LLC, a Delaware limited liability company (“Borrower”), and BERKELEY POINT   CAPITAL LLC, d/b/a NEWMARK KNIGHT FRANK, a Delaware limited liability company   (together with its successors and assigns, “Lender”).                                       RECITAL    Lender has agreed to make and Borrower has agreed to accept a loan in the original principal  amount of $48,750,000.00 (“Loan”). Lender is willing to make the Loan to Borrower upon the  terms and subject to the conditions set forth in this Loan Agreement.                                     AGREEMENT    NOW, THEREFORE, in consideration of these promises, the mutual covenants contained in this  Loan Agreement and other good and valuable consideration, the receipt and sufficiency of which  are acknowledged, the parties agree as follows:    ARTICLE I          DEFINED TERMS; CONSTRUCTION.    1.01   Defined Terms. Each defined term in this Loan Agreement will have the meaning        ascribed to that term in Article XII unless otherwise defined in this Loan Agreement.    1.02  Construction.           (a)   The captions and headings of the Articles and Sections of this Loan Agreement              are for convenience only and will be disregarded in construing this Loan              Agreement.                 (b)    Any reference in this Loan Agreement to an “Exhibit,” an “Article” or a “Section”              will, unless otherwise explicitly provided, be construed as referring, respectively,              to an Exhibit attached to this Loan Agreement or to an Article or Section of this              Loan Agreement.                 (c)    All Exhibits and Riders attached to or referred to in this Loan Agreement are              incorporated by reference in this Loan Agreement.                 (d)    Any reference in this Loan Agreement to a statute or regulation will be construed              as referring to that statute or regulation as amended from time to time.                 (e)   Use of the singular in this Loan Agreement includes the plural and use of the              plural includes the singular.              Multifamily Loan and Security Agreement                                  Page 1  

 

         (f)   As used in this Loan Agreement, the term “including” means “including, but not              limited to” and the term “includes” means “includes without limitation.”                 (g)   The use of one gender includes the other gender, as the context may require.                 (h)   Unless the context requires otherwise, (i) any definition of or reference to any              agreement, instrument or other document in this Loan Agreement will be              construed as referring to such agreement, instrument or other document as from              time to time amended, supplemented or otherwise modified (subject to any              restrictions on such amendments, supplements or modifications set forth in this              Loan Agreement), and (ii) any reference in this Loan Agreement to any Person              will be construed to include such Person’s successors and assigns.                (i)  Any reference in this Loan Agreement to “Lender’s requirements,” “as required              by Lender,” or similar references will be construed, after Securitization, to mean              Lender’s requirements or standards as determined in accordance with Lender’s              and Loan Servicer’s obligations under the terms of the Securitization documents.                (j)  Any reference in this Loan Agreement to “Lender’s consent,” will be construed to              mean Lender’s written consent.    ARTICLE II       LOAN.     2.01  Loan Terms. The Loan will be evidenced by the Note and will bear interest and be paid        in accordance with the payment terms set forth in the Note.    2.02  Prepayment Premium. Borrower will be required to pay a prepayment premium in        connection with certain prepayments of the Indebtedness, including a payment made after        Lender’s exercise of any right of acceleration of the Indebtedness, as provided in the        Note.    2.03  Exculpation. Borrower’s personal liability for payment of the Indebtedness and for        performance of the other obligations to be performed by it under this Loan Agreement is        limited in the manner, and to the extent, provided in the Note.    2.04  Application of Payments. If at any time Lender receives, from Borrower or otherwise,        any amount applicable to the Indebtedness which is less than all amounts due and payable        at such time, then Lender may apply that payment to amounts then due and payable in        any manner and in any order determined by Lender (unless otherwise required by        applicable law), in Lender’s sole and absolute discretion. Neither Lender’s acceptance of        an amount that is less than all amounts then due and payable, nor Lender’s application of        such payment in the manner authorized, will constitute or be deemed to constitute either a        waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the        application of any such amount to the Indebtedness, Borrower’s obligations under this        Loan Agreement, the Note and all other Loan Documents will remain unchanged.      Multifamily Loan and Security Agreement                                  Page 2  

 

     2.05  Usury Savings. If any applicable law limiting the amount of interest or other charges         permitted to be collected from Borrower is interpreted so that any charge provided for in         any Loan Document, whether considered separately or together with other charges levied         in connection with any other Loan Document, violates that law, and Borrower is entitled         to the benefit of that law, that charge is reduced to the extent necessary to eliminate that         violation. The amounts, if any, previously paid to Lender in excess of the permitted         amounts will be applied by Lender to reduce the principal amount of the Indebtedness.         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 which constitutes interest, as well as all other charges levied in connection         with the Indebtedness which constitute interest, will be deemed to be allocated and spread         ratably over the stated term of the Note. Unless otherwise required by applicable law,         such allocation and spreading will be effected in such a manner that the rate of interest so        computed is uniform throughout the stated term of the Note.    2.06   Floating Rate Mortgage – Third-Party Cap Agreement. If (a) the Note does not        provide for interest to accrue at a floating or variable interest rate (other than during any        Extension Period, if applicable), and (b) a third-party Cap Agreement is not required,        then this Section 2.06 and Section 3.04 will be of no force or effect.          (a)    So long as there is no Event of Default, Lender or Loan Servicer will remit to              Borrower each Cap Payment received by Lender or Loan Servicer with respect to              any month for which Borrower has paid in full the monthly installment of              principal and interest or interest only, as applicable, due under the Note.              Alternatively, at Lender’s option, so long as there is no Event of Default, Lender               may apply a Cap Payment received by Lender or Loan Servicer with respect to               any month to the applicable monthly payment of accrued interest due under the               Note if Borrower has paid in full the remaining portion of such monthly payment               of principal and interest or interest only, as applicable.            (b)   Neither the existence of a Cap Agreement nor anything in this Loan Agreement               will relieve Borrower of its primary obligation to timely pay in full all amounts               due under the Note and otherwise due on account of the Indebtedness.      ARTICLE III       LOAN SECURITY AND GUARANTY.      3.01  Security Instrument. Borrower will execute the Security Instrument dated of even date        with this Loan Agreement. The Security Instrument will be recorded in the applicable         land records in the Property Jurisdiction.      3.02  Reserve Funds.            (a)   Security Interest. To secure Borrower’s obligations under this Loan Agreement               and to further secure Borrower’s obligations under the Note and the other Loan               Documents, Borrower conveys, pledges, transfers and grants to Lender a security               interest pursuant to the Uniform Commercial Code of the Property Jurisdiction or     Multifamily Loan and Security Agreement                                  Page 3  

 

               any other applicable law in and to all money in the Reserve Funds, as the same             may increase or decrease from time to time, all interest and dividends thereon and             all proceeds thereof.                     (b)    Supplemental Loan. If this Loan Agreement is entered into in connection with a              Supplemental Loan and if the same Person is or becomes both Senior Lender and              Supplemental Lender, then:               (i)   Borrower assigns and grants to Supplemental Lender a security interest in                    the Reserve Funds established in connection with the Senior Indebtedness                    as additional security for all of Borrower’s obligations under the                    Supplemental Note.               (ii)   In addition, Borrower assigns and grants to Senior Lender a security                    interest in the Reserve Funds established in connection with the                    Supplemental Indebtedness as additional security for all of Borrower’s                    obligations under the Senior Note.               (iii)  It is the intention of Borrower that all amounts deposited by Borrower in                    connection with either the Senior Loan Documents, the Supplemental                    Loan Documents, or both, constitute collateral for the Supplemental                    Indebtedness secured by the Supplemental Instrument and the Senior                    Indebtedness secured by the Senior Instrument, with the application of                    such amounts to such Senior Indebtedness or Supplemental Indebtedness                    to be at the discretion of Senior Lender and Supplemental Lender.    3.03  Uniform Commercial Code Security Agreement. This Loan Agreement is also a        security agreement under the Uniform Commercial Code for any of the Mortgaged        Property which, under applicable law, may be subjected to a security interest under the        Uniform Commercial Code, for the purpose of securing Borrower’s obligations under this        Loan Agreement and to further secure Borrower’s obligations under the Note, Security        Instrument and other Loan Documents, whether such Mortgaged Property is owned now        or acquired in the future, and all products and cash and non-cash proceeds thereof        (collectively, “UCC Collateral”), and by this Loan Agreement, Borrower grants to        Lender a security interest in the UCC Collateral.    3.04  Cap Agreement and Cap Collateral Assignment. Reserved.    3.05  Guaranty. Borrower will cause each Guarantor (if any) to execute a Guaranty of all or a        portion of Borrower’s obligations under the Loan Documents effective as of the date of        this Loan Agreement.    3.06  Reserved.    3.07  Reserved.      Multifamily Loan and Security Agreement                                  Page 4  

 

   3.08  Reserved.    3.09  Reserved.    ARTICLE IV        RESERVE FUNDS AND REQUIREMENTS.    4.01  Reserves Generally.          (a)   Establishment of Reserve Funds; Investment of Deposits. Unless otherwise              provided in Section 4.03 and/or Section 4.04, each Reserve Fund will be              established on the date of this Loan Agreement and each of the following will              apply:                (i)  All Reserve Funds will be deposited in an Eligible Account at an Eligible                    Institution or invested in “permitted investments” as then defined and                    required by the Rating Agencies.                            (ii)  Lender will not be obligated to open additional accounts or deposit                    Reserve Funds in additional institutions when the amount of any Reserve                    Fund exceeds the maximum amount of the federal deposit insurance or                    guaranty. Borrower acknowledges and agrees that it will not have the right                    to direct Lender as to any specific investment of monies in any Reserve                    Fund. Lender will not be responsible for any losses resulting from                    investment of monies in any Reserve Fund or for obtaining any specific                    level or percentage of earnings on such investment.          (b)   Interest on Reserve Funds; Trust Funds. Unless applicable law requires, Lender              will not be required to pay Borrower any interest, earnings or profits on the              Reserve Funds. Any amounts deposited with Lender under this Article IV will not              be trust funds, nor will they operate to reduce the Indebtedness, unless applied by              Lender for that purpose pursuant to the terms of this Loan Agreement.          (c)   Use of Reserve Funds. Each Reserve Fund will, except as otherwise provided in              this Loan Agreement, be used for the sole purpose of paying, or reimbursing              Borrower for payment of, the item(s) for which the applicable Reserve Fund was              established. Borrower acknowledges and agrees that, except as specified in this              Loan Agreement, monies in one Reserve Fund will not be used to pay, or              reimburse Borrower for, matters for which another Reserve Fund has been              established.          (d)   Termination of Reserve Funds. Upon the payment in full of the Indebtedness,              Lender will pay to Borrower all funds remaining in any Reserve Funds.          (e)   Reserved.            Multifamily Loan and Security Agreement                                  Page 5  

 

   4.02  Reserves for Taxes, Insurance and Other Charges.          (a)   Deposits to Imposition Reserve Deposits. Borrower will deposit with Lender on              the day monthly installments of principal or interest, or both, are due under the             Note (or on another day designated in writing by Lender), until the Indebtedness             is paid in full, an additional amount sufficient to accumulate with Lender the             entire sum required to pay, when due, the items marked “Collect” in Part 3,             Summary of Loan Terms. Except as provided in Section 4.02(e), Lender will not             require Borrower to make Imposition Reserve Deposits with respect to the items             marked “Deferred” in Part 3, Summary of Loan Terms.                           The amounts deposited pursuant to this Section 4.02(a) are collectively referred to              in this Loan Agreement as the “Imposition Reserve Deposits.” The obligations              of Borrower for which the Imposition Reserve Deposits are required are              collectively referred to in this Loan Agreement as “Impositions.” The amount of              the Imposition Reserve Deposits must be sufficient 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. Lender will maintain records              indicating how much of the monthly Imposition Reserve Deposits and how much              of the aggregate Imposition Reserve Deposits held by Lender are held for the              purpose of paying Taxes, Insurance premiums, Ground Rent (if applicable) and              each other Imposition.          (b)   Disbursement of Imposition Reserve Deposits. Lender will apply the Imposition              Reserve Deposits to pay Impositions so long as no Event of Default has occurred              and is continuing. Lender will pay all Impositions from the Imposition Reserve              Deposits held by Lender upon Lender’s receipt of a bill or invoice for an             Imposition. If Borrower holds a ground lessee interest in the Mortgaged Property             and Imposition Reserve Deposits are collected for Ground Rent, then Lender will              pay the monthly or other periodic installments of Ground Rent from the             Imposition Reserve Deposits, whether or not Lender receives a bill or invoice for             such installments. Lender will have no obligation to pay any Imposition to the             extent it exceeds the amount of the Imposition Reserve Deposits then held by             Lender. Lender may pay an Imposition according to any bill, statement or             estimate from the appropriate public office, Ground Lessor (if applicable) or             insurance company without inquiring into the accuracy of the bill, statement or             estimate or into the validity of the Imposition.                     (c)    Excess or Deficiency of Imposition Reserve Deposits. If at any time the amount              of the Imposition Reserve Deposits held by Lender for payment of a specific              Imposition exceeds the amount reasonably deemed necessary by Lender, the              excess will be credited against future installments of Imposition Reserve              Deposits. If at any time the amount of the Imposition Reserve Deposits held by              Lender for payment of a specific Imposition is less than the amount reasonably              estimated by Lender to be necessary, Borrower will pay to Lender the amount of              the deficiency within 15 days after Notice from Lender.    Multifamily Loan and Security Agreement                                  Page 6  

 

           (d)   Delivery of Invoices. Borrower will promptly deliver to Lender a copy of all              notices of, and invoices for, Impositions.                (e)   Deferral of Collection of Any Imposition Reserve Deposits; Delivery of Receipts.              If Lender does not collect an Imposition Reserve Deposit with respect to an              Imposition either marked “Deferred” in Part 3, Summary of Loan Terms or              pursuant to a separate written deferral by Lender, then on or before the earlier of              the date each such Imposition is due, or the date this Loan Agreement requires              each such Imposition to be paid, Borrower will provide Lender with proof of              payment of each such Imposition. Upon Notice to Borrower, Lender may revoke              its deferral and require Borrower to deposit with Lender any or all of the              Imposition Reserve Deposits listed in Part 3, Summary of Loan Terms, regardless              of whether any such item is marked “Deferred” (i) if Borrower does not timely              pay any of the Impositions, (ii) if Borrower fails to provide timely proof to Lender              of such payment, (iii) at any time during the existence of an Event of Default or              (iv) upon placement of a Supplemental Loan in accordance with Section 11.11.                (f)  through (i) are Reserved.          4.03  Repairs; Repair Reserve Fund. Reserved.    4.04  Replacement Reserve Fund. Reserved.    4.05  Rental Achievement Provisions. Reserved.    4.06  Debt Service Reserve. Reserved.    4.07  Rate Cap Agreement Reserve Fund. Reserved.    4.08  through 4.20 are Reserved.    ARTICLE V         REPRESENTATIONS AND WARRANTIES.    Borrower represents and warrants to Lender as follows as of the date of this Loan Agreement:     5.01  Review of Documents. Borrower has reviewed:  (a) the Note, (b) the Security        Instrument, (c) the Commitment Letter, and (d) all other Loan Documents.    5.02  Condition of Mortgaged Property. Except as Borrower may have disclosed to Lender        in writing in connection with the issuance of the Commitment Letter, the Mortgaged        Property has not been damaged by fire, water, wind or other cause of loss, or any        previous damage to the Mortgaged Property has been fully restored.      Multifamily Loan and Security Agreement                                  Page 7  

 

   5.03  No Condemnation. No part of the Mortgaged Property has been taken in Condemnation        or other like proceeding, and, to the best of Borrower’s knowledge after due inquiry and        investigation, no such proceeding is pending or threatened for the partial or total        Condemnation or other taking of the Mortgaged Property.    5.04  Actions; Suits; Proceedings.          (a)  There are no judicial, administrative, mediation or arbitration actions, suits or             proceedings pending or, to the best of Borrower’s knowledge, threatened in             writing against or affecting Borrower (and, if Borrower is a limited partnership,             any of its general partners or if Borrower is a limited liability company, any             member of Borrower) or the Mortgaged Property which, if adversely determined,              would have a Material Adverse Effect.          (b)   Reserved.    5.05  Environmental. Except as previously disclosed by Borrower to Lender in writing (which        written disclosure may be in certain environmental assessments and other written reports       accepted by Lender in connection with the funding of the Indebtedness and dated prior to       the date of this Loan Agreement), each of the following is true:                     (a)    Borrower has not at any time engaged in, caused or permitted any Prohibited             Activities or Conditions on the Mortgaged Property.                     (b)    To the best of Borrower’s knowledge after due inquiry and investigation, no             Prohibited Activities or Conditions exist or have existed on the Mortgaged             Property.                     (c)   The Mortgaged Property does not now contain any underground storage tanks,             and, to the best of Borrower’s knowledge after due inquiry and investigation, the             Mortgaged Property has not contained any underground storage tanks in the past.             If there is an underground storage tank located on the Mortgaged Property that             has been previously disclosed by Borrower to Lender in writing, that tank              complies with all requirements of Hazardous Materials Laws.          (d)   To the best of Borrower’s knowledge after due inquiry and investigation,             Borrower has complied with all Hazardous Materials Laws, including all             requirements for notification regarding releases of Hazardous Materials. Without             limiting the generality of the foregoing, all Environmental Permits required for             the operation of the Mortgaged Property in accordance with Hazardous Materials             Laws now in effect have been obtained and all such Environmental Permits are in             full force and effect.                     (e)    To the best of Borrower’s knowledge after due inquiry and investigation, no event             has occurred with respect to the Mortgaged Property that constitutes, or with the    Multifamily Loan and Security Agreement                                  Page 8  

 

               passage of time or the giving of notice, or both, would constitute noncompliance              with the terms of any Environmental Permit.          (f)   There are no actions, suits, claims or proceedings pending or, to the best of              Borrower’s knowledge after due inquiry and investigation, threatened in writing              that involve the Mortgaged Property and allege, arise out of, or relate to any              Prohibited Activity or Condition.          (g)   Borrower has received no actual or constructive notice of any written complaint,              order, notice of violation or other communication from any Governmental              Authority with regard to air emissions, water discharges, noise emissions or              Hazardous Materials, or any other environmental, health or safety matters              affecting the Mortgaged Property or any property that is adjacent to the              Mortgaged Property.    5.06  Commencement of Work; No Labor or Materialmen’s Claims. Except as set forth on        Exhibit E, prior to the recordation of the Security Instrument, no work of any kind has        been or will be commenced or performed upon the Mortgaged Property, and no materials        or equipment have been or will be delivered to or upon the Mortgaged Property, for        which the contractor, subcontractor or vendor continues to have any rights including the        existence of or right to assert or file a mechanic’s or materialmen’s Lien. If any such        work of any kind has been commenced or performed upon the Mortgaged Property, or if        any such materials or equipment have been ordered or delivered to or upon the        Mortgaged Property, then prior to the execution of the Security Instrument, Borrower has        satisfied each of the following conditions:          (a)   Borrower has fully disclosed in writing to both the Lender and the title company              issuing the Title Policy that work has been commenced or performed on the              Mortgaged Property, or materials or equipment have been ordered or delivered to              or upon the Mortgaged Property.          (b)   Borrower has obtained and delivered to Lender and the title company issuing the              Title Policy Lien waivers from all contractors, subcontractors, suppliers or any              other applicable party, pertaining to all work commenced or performed on the             Mortgaged Property, or materials or equipment ordered or delivered to or upon             the Mortgaged Property.                     Borrower represents and warrants that all parties furnishing labor and materials for which       a Lien or claim of Lien may be filed against the Mortgaged Property have been paid in       full and, except for such Liens or claims insured against by the Title Policy (which       Borrower has disclosed pursuant to Section 5.06(a) and which are identified on Exhibit        E), there are no mechanics’, laborers’ or materialmen’s Liens or claims outstanding for        work, labor or materials affecting the Mortgaged Property, whether prior to, equal with or        subordinate to the Lien of the Security Instrument.          5.07  Compliance with Applicable Laws and Regulations.    Multifamily Loan and Security Agreement                                  Page 9  

 

              (a)   To the best of Borrower’s knowledge after due inquiry and investigation, each of              the following is true:                (i)    All Improvements and the use of the Mortgaged Property comply with all                    applicable statutes, rules and regulations, including all applicable statutes,                    rules and regulations pertaining to requirements for equal opportunity,                     anti-discrimination, fair housing, environmental protection, zoning and                     land use (“legal, non-conforming” status with respect to uses or structures                     will be considered to comply with zoning and land use requirements for                     the purposes of this representation).                  (ii)  The Improvements comply with applicable health, fire, and building                     codes.                  (iii)  There is no evidence of any illegal activities relating to controlled                     substances on the Mortgaged Property.            (b)   Reserved.                  (c)   Reserved.      5.08  Access; Utilities; Tax Parcels. The Mortgaged Property (a) has ingress and egress via a         publicly dedicated right of way or via an irrevocable easement permitting ingress and         egress, (b) is served by public utilities and services generally available in the surrounding         community or otherwise appropriate for the use in which the Mortgaged Property is         currently being utilized, and (c) constitutes one or more separate tax parcels.      5.09  Licenses and Permits.            (a)  Borrower and any operator of the Mortgaged Property, if applicable, and to the               best of Borrower’s knowledge, any commercial tenant of the Mortgaged Property               is in possession of all material licenses, permits and authorizations required for               use of the Mortgaged Property, which are valid and in full force and effect as of               the date of this Loan Agreement.            (b)   through (i) are Reserved.     5.10   No Other Interests. To the best of Borrower’s knowledge after due inquiry and         investigation, no Person has (a) any possessory interest in the Mortgaged Property or         right to occupy the Mortgaged Property except under and pursuant to the provisions of         existing Leases by and between tenants and Borrower (a form of residential lease having         been previously provided to Lender together with the material terms of any and all Non-        Residential Leases at the Mortgaged Property), or (b) an option to purchase the         Mortgaged Property or an interest in the Mortgaged Property, except as has been         disclosed to and approved in writing by Lender.     Multifamily Loan and Security Agreement                                 Page 10  

 

       5.11  Term of Leases. All Leases for residential units with respect to the Mortgaged Property         satisfy each of the following conditions:            (a)   They are on forms that are customary for similar multifamily properties in the               Property Jurisdiction.                  (b)   They are for initial terms of at least 6 months and not more than 2 years (unless               otherwise approved in writing by Lender).                  (c)  They do not include any Corporate Leases (unless otherwise approved in writing               by Lender).          (d)   They do not include options to purchase.      5.12  No Prior Assignment; Prepayment of Rents. Borrower has (a) not executed any prior         assignment of Rents (other than an assignment of Rents securing any prior indebtedness         that is being assigned to Lender, or that is being paid off and discharged with the         proceeds of the Loan evidenced by the Note or, if this Loan Agreement is entered into in         connection with a Supplemental Loan, other than an assignment of Rents securing any         Senior Indebtedness), and (b) not performed any acts and has not executed, and will not         execute, any instrument which would prevent Lender from exercising its rights under any         Loan Document. At the time of execution of this Loan Agreement, unless otherwise         approved by Lender in writing, there has been no prepayment of any Rents for more than        2 months prior to the due dates of such Rents other than the last month’s rent, if collected         at the time a tenant enters into a Lease.      5.13  Illegal Activity. No portion of the Mortgaged Property has been or will be purchased         with the proceeds of any illegal activity.      5.14  Taxes Paid. Borrower has filed all federal, state, county and municipal tax returns         required to have been filed by Borrower, and has paid all Taxes which have become due         pursuant to such returns or to any notice of assessment received by Borrower, and         Borrower has no knowledge of any basis for additional assessment with respect to such         Taxes. To the best of Borrower’s knowledge after due inquiry and investigation, there are         not presently pending any special assessments against the Mortgaged Property or any part         of the Mortgaged Property.      5.15  Title Exceptions. To the best of Borrower’s knowledge after due inquiry and         investigation, none of the items shown in the schedule of exceptions to coverage in the         Title Policy will have a Material Adverse Effect on the (a) ability of Borrower to pay the        Loan in full, (b) ability of Borrower to use all or any part of the Mortgaged Property in        the manner in which the Mortgaged Property is being used on the Closing Date, except as        set forth in Section 6.03, (c) operation of the Mortgaged Property, or (d) value of the        Mortgaged Property.    5.16  No Change in Facts or Circumstances.    Multifamily Loan and Security Agreement                                 Page 11  

 

           (a)   All information in the application for the Loan submitted to Lender, including all              financial statements for the Mortgaged Property, Borrower, and any Borrower              Principal, and all Rent Schedules, reports, certificates, and any other documents             submitted in connection with the application (collectively, “Loan Application”)             is complete and accurate in all material respects as of the date such information             was submitted to Lender.              (b)    There has been no change in any fact or circumstance since the Loan Application             was submitted to Lender that would make any information submitted as part of             the Loan Application materially incomplete or inaccurate.                     (c)    The organizational structure of Borrower is as set forth in Exhibit H.          5.17  Financial  Statements.  The  financial  statements  of  Borrower  and  each  Borrower        Principal  furnished  to  Lender  as  part  of  the  Loan  Application  reflect  in  each  case  a        positive net worth as of the date of the applicable financial statement.    5.18  ERISA – Borrower Status. Borrower represents as follows:          (a)   Borrower is not an “investment company,” or a company under the Control of an              “investment company,” as such terms are defined in the Investment Company Act              of 1940, as amended.                (b)   Borrower is not an “employee benefit plan,” as defined in Section 3(3) of ERISA,              which is subject to Title I of ERISA or a “plan” to which Section 4975 of the Tax              Code applies, and the assets of Borrower do not constitute “plan assets” of one or              more such plans within the meaning of 29 C.F.R. Section 2510.3-101, as modified              by Section 3(42) of ERISA.          (c)   Borrower is not a “governmental plan” within the meaning of Section 3(32) of              ERISA, and is not subject to state statutes regulating investments or fiduciary              obligations with respect to governmental plans.    5.19  No Fraudulent Transfer or Preference. No Borrower or Borrower Principal (a) has        made, or is making in connection with and as security for the Loan, a transfer of an        interest in the property of Borrower or Borrower Principal to or for the benefit of Lender        or otherwise as security for any of the obligations under the Loan Documents which is or       could constitute a voidable preference under federal bankruptcy, state insolvency or       similar applicable creditors’ rights laws, or (b) has made, or is making in connection with       the Loan, a transfer (including any transfer to or for the benefit of an insider under an       employment contract) of an interest of Borrower or any Borrower Principal in property       which is or could constitute a voidable preference under federal bankruptcy, state       insolvency or similar applicable creditors’ rights laws, or (c) has incurred, or is incurring       in connection with the Loan, any obligation (including any obligation to or for the benefit       of an insider under an employment contract) which is or could constitute a fraudulent    Multifamily Loan and Security Agreement                                 Page 12  

 

         transfer under federal bankruptcy, state insolvency, or similar applicable creditors’ rights        laws.    5.20  No Insolvency or Judgment.          (a)   No Pending Proceedings or Judgments. No Borrower or Borrower Principal is (i)              the subject of or a party to (other than as a creditor) any completed or pending              Bankruptcy, or (ii) the subject of any judgment unsatisfied of record or docketed              in any court located in the United States.                (b)   Insolvency. Borrower is not presently insolvent, and the Loan will not render              Borrower insolvent. As used in this Section, the term “insolvent” means that the              total of all of a Person’s liabilities (whether secured or unsecured, contingent or              fixed, or liquidated or unliquidated) is in excess of the value of all of the assets of              the Person that are available to satisfy claims of creditors.    5.21  Working Capital. After the Loan is made, Borrower intends to have sufficient working        capital, including 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  (other  than  any  balloon  payment  due  upon  the        maturity of the Loan). Lender acknowledges that no members or partners of Borrower or        any Borrower Principal will be obligated to contribute equity to Borrower for purposes of        providing  working  capital  to  maintain  the  Mortgaged  Property  or  to  pay  Borrower’s        outstanding  debts  except  as  may  otherwise  be  required  under  their  organizational        documents.    5.22  Cap Collateral. Reserved.    5.23  Ground Lease. Reserved.    5.24  Purpose of Loan. The purpose of the Loan is as indicated by the checked boxes in Part        B.4, Summary of Loan Terms.          (a)   Refinance Loan: If “Refinance Loan” is checked in Part B.4, Summary of Loan              Terms, then Borrower has fully disclosed to Lender the intended use of any cash              received by Borrower from Lender in connection with the refinancing, if              applicable.                (b)   Acquisition Loan – Mortgaged Property: If “Acquisition Loan – Mortgaged              Property” is checked in Part B.4, Summary of Loan Terms, then Borrower has              fully disclosed to Lender all the consideration given or received or to be given or              received in connection with the acquisition of the Mortgaged Property. The              Mortgaged Property was or will be purchased from the Property Seller set forth in              Part B.4, Summary of Loan Terms. No Borrower or Borrower Principal has or              had, directly or indirectly (through a family member or otherwise), any interest in              the Property Seller and the acquisition of the Mortgaged Property is an arm’s-   Multifamily Loan and Security Agreement                                 Page 13  

 

                 length transaction. To the best of Borrower’s knowledge after due inquiry and               investigation, the purchase price of the Mortgaged Property represents the fair               market value of the Mortgaged Property and Property Seller is not or will not be               insolvent subsequent to the sale of the Mortgaged Property.                   (c)   Acquisition Loan – Membership Interests: If “Acquisition Loan – Membership               Interests” is checked in Part B.4, Summary of Loan Terms, then Borrower has              fully disclosed to Lender all the consideration given or received or to be given or              received in connection with the acquisition of 100% of the Membership Interests.              The Membership Interests were or will be purchased from Membership Interests              Seller set forth in Part B.4, Summary of Loan Terms. No Borrower Principal has              or had, directly or indirectly (through a family member or otherwise), any interest              in the Membership Interests Seller and the acquisition of the Membership              Interests is an arm’s-length transaction. To the best of Borrower’s knowledge              after due inquiry and investigation, the purchase price of the Membership              Interests represents the fair market value of the Membership Interests and              Membership Interests Seller is not or will not be insolvent subsequent to the sale              of the Membership Interests.                 (d)    Supplemental Loan: If “Supplemental Loan” is checked in Part B.4, Summary of               Loan Terms, then and, except to the extent specifically required or approved by               Lender, there has been no change in the ownership of either the Mortgaged               Property or Borrower Principals since the date of the Senior Note. Borrower has               fully disclosed to Lender the intended use of any cash received by Borrower from              Lender in connection with the Supplemental Loan, if applicable.                (e)   Cross-Collateralized/Cross-Defaulted Loan Pool:  If “Cross-Collateralized/Cross-              Defaulted Loan Pool” is checked in Part B.4, Summary of Loan Terms, then the               Loan is part of a cross-collateralized/cross-defaulted pool of loans and Borrower               has fully disclosed to Lender the intended use of any cash received by Borrower              from Lender in connection with the Loan and the other loans comprising the               cross-collateralized/cross-defaulted loan pool, if applicable.                 5.25  through 5.39 are Reserved.    5.40   Recycled SPE Borrower. Reserved.    5.41   Recycled SPE Equity Owner. Reserved.      5.42  through 5.50 are Reserved.      5.51  Survival. The representations and warranties set forth in this Loan Agreement will         survive until the Indebtedness is paid in full; however, the representations and warranties         set forth in Section 5.05 will survive beyond repayment of the entire Indebtedness, to the         extent provided in Section 10.02(i).        Multifamily Loan and Security Agreement                                 Page 14  

 

   5.52  through 5.57 are Reserved.    5.58  Prohibited Parties Lists.          (a)   Borrower is not identified and to the best of Borrower’s knowledge after due              inquiry and investigation, no Borrower Principal nor any Non-U.S. Equity Holder              is identified on the OFAC Lists.                (b)   Borrower is not listed and to the best of Borrower’s knowledge after due inquiry              and investigation, no Borrower Principal is listed on the FHFA SCP List.    5.59  AML Laws.           (a)   Borrower has not been convicted of a violation of the AML Laws or been the              subject of a final enforcement action relating to the AML Laws.                (b)   To the best of Borrower’s knowledge after due inquiry and investigation, no              Borrower Principal nor Non-U.S. Equity Holder has been convicted of a violation              of the AML Laws or been the subject of a final enforcement action relating to the              AML Laws.                (c)  Borrower has not received any notice that it is the subject of any pending              proceedings for any violation of the AML Laws and to the best of Borrower’s              knowledge it is not the subject of any pending proceedings for any violation of the              AML Laws.                (d)   To the best of Borrower’s knowledge after due inquiry and investigation no              Borrower Principal nor Non-U.S. Equity Holder is the subject of any pending              proceedings for any violation of the AML Laws.     5.60  Internal Controls. Borrower has in place and to the best of Borrower’s knowledge after        due inquiry and investigation, Borrower has determined that each Borrower Principal has        in place, practices and procedures for the admission of investors which prevent the        admission of:          (a)  Any investor that is in violation of any criminal or civil law or regulation intended              to prevent money laundering or the funding of terrorist or illegal drug trafficking              activities. Notwithstanding the foregoing, Lender acknowledges and agrees that if              Borrower or any Borrower Principal is a Public Company, unless such Borrower              or Borrower Principal exercises control over the purchase and sale of its publicly              traded equity securities to a particular investor (other than as a placement agent),              Borrower or such Borrower Principal will not be deemed to make this              representation with respect to direct or indirect ownership in such Public              Company.            Multifamily Loan and Security Agreement                                 Page 15  

 

           (b)   Any Person that will have a 25% or more ownership interest in the aggregate in               Borrower (whether directly or indirectly) that is on the Prohibited Parties Lists.                  (c)   Any Non-U.S. Equity Holder that is on the OFAC Lists.      5.61  Crowdfunding. Except as has been disclosed in writing to and approved in writing by         Lender, no direct or indirect ownership (or other economic) interest of 25% or more in         the aggregate in Borrower or any Borrower Principal has been marketed or sold to         investors through any form of Crowdfunding.    5.62  through 5.70 are Reserved.    ARTICLE VI         BORROWER COVENANTS.    6.01   Compliance with Laws. Borrower will comply with all laws, ordinances, rules,        regulations and requirements of any Governmental Authority having jurisdiction over the        Mortgaged Property and all licenses and permits and all recorded covenants and        agreements relating to or affecting the Mortgaged Property, including all laws,        ordinances, regulations, requirements and covenants pertaining to health and safety,        construction of improvements on the Mortgaged Property, Repairs, Capital        Replacements, fair housing, disability accommodation, zoning and land use, applicable         building codes, special use permits and environmental regulations, Leases and the         maintenance and disposition of tenant security deposits. Borrower will take appropriate         measures to prevent, and will not engage in or knowingly permit, any illegal activities at         the Mortgaged Property, including those that could endanger tenants or visitors, result in         damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or         otherwise materially impair the Lien created by the Security Instrument or Lender’s         interest in the Mortgaged Property. Borrower will at all times maintain records sufficient         to demonstrate compliance with the provisions of this Section 6.01.      6.02  Compliance with Organizational Documents. Borrower will at all times comply with         all laws, regulations and requirements of any Governmental Authority relating to         Borrower’s formation, continued existence and good standing in its state of formation         and, if different, in the Property Jurisdiction. Borrower will at all times comply with its         organizational documents, including its partnership agreement (if Borrower is a         partnership), its by-laws (if Borrower is a corporation or housing cooperative corporation         or association) or its operating agreement (if Borrower is a limited liability company or         tenancy-in-common). If Borrower is a housing cooperative corporation or association,         Borrower will at all times maintain its status as a “cooperative housing corporation” as         such term is defined in Section 216(b) of the Internal Revenue Code of 1986, as         amended, or any successor statute thereto.      6.03  Use of Mortgaged Property.            (a)   Unless required by applicable law, without the prior consent of Lender, Borrower               will not take any of the following actions:     Multifamily Loan and Security Agreement                                 Page 16  

 

                          (i)  Allow changes in the use for which all or any part of the Mortgaged                    Property is being used at the time this Loan Agreement is executed.                              (ii)  Convert any individual dwelling units or common areas to commercial                     use.                              (iii)  Initiate a change in the zoning classification of the Mortgaged Property or                     acquiesce to a change in the zoning classification of the Mortgaged                     Property.                              (iv)  Establish any condominium or cooperative regime with respect to the                     Mortgaged Property beyond any which may be in existence on the date of                     this Loan Agreement.                              (v)   Combine all or any part of the Mortgaged Property with all or any part of                     a tax parcel which is not part of the Mortgaged Property.                              (vi)  Subdivide or otherwise split any tax parcel constituting all or any part of                     the Mortgaged Property.                              (vii)  Add to or change any location at which any of the Mortgaged Property is                    stored, held or located unless Borrower (A) gives Notice to Lender within                    30 days after the occurrence of such addition or change, (B) executes and                    delivers to Lender any modifications of or supplements to this Loan                    Agreement that Lender may require, and (C) authorizes the filing of any                    financing statement which may be filed in connection with this Loan                    Agreement, as Lender may require.                            (viii)  Convert, in whole or in part, any non-residential income producing units                    to non-income producing units.                      (b)    Reserved.                (c)   Notwithstanding anything contained in this Section 6.03 to the contrary, if              Borrower is a housing cooperative corporation or association, Lender              acknowledges and consents to Borrower’s use of the Mortgaged Property as a              housing cooperative.          6.04   Non-Residential Leases.          (a)   Prohibited New Non-Residential Leases or Modified Non-Residential Leases.               Except as set forth in Section 6.04(b), Borrower will not enter into any New Non-              Residential Lease, enter into any Modified Non-Residential Lease or terminate               any Non-Residential Lease (including any Non-Residential Lease in existence on               the date of this Loan Agreement) without the prior consent of Lender.     Multifamily Loan and Security Agreement                                 Page 17  

 

                 (b)   New Non-Residential Leases or Modified Non-Residential Leases for which              Lender’s Consent is Not Required. Lender’s consent will not be required for              Borrower to enter into a Modified Non-Residential Lease or a New Non-            Residential Lease if the Modified Non-Residential Lease or New Non-Residential             Lease satisfies each of the following requirements:                           (i)   The tenant under the New Non-Residential Lease or Modified Non-                   Residential Lease is not an Affiliate of Borrower or any Guarantor.               (ii)   The terms of the New Non-Residential Lease or Modified Non-Residential                    Lease are at least as favorable to Borrower as those customary in the                    applicable market at the time Borrower enters into the New Non-                   Residential Lease or Modified Non-Residential Lease.                          (iii)  The Rents paid to Borrower pursuant to the New Non-Residential Lease or                    Modified Non-Residential Lease are not less than 90% of the rents paid to                    Borrower pursuant to the Non-Residential Lease, if any, for that portion of                    the Mortgaged Property that was in effect prior to the New Non-                   Residential Lease or Modified Non-Residential Lease.                          (iv)  The term of the New Non-Residential Lease or Modified Non-Residential                    Lease, including any option to extend, is 10 years or less.                          (v)    Any New Non-Residential Lease must provide that the space may not be                    used or operated, in whole or in part, for any of the following:                                 (A)  The operation of a so-called “head shop” or other business devoted                         to the sale of articles or merchandise normally used or associated                         with illegal or unlawful activities such as, but not limited to, the                         sale of paraphernalia used in connection with marijuana or                         controlled drugs or substances.                                      (B)   A gun shop, shooting gallery or firearms range.                                      (C)   A so-called massage parlor or any business which sells, rents or                          permits the viewing of so-called “adult” or pornographic materials                          such as, but not limited to, adult magazines, books, movies,                          photographs, sexual aids, sexual articles and sex paraphernalia.                      (D)  Any use involving the sale or distribution of any flammable                          liquids, gases or other Hazardous Materials.                                        (E)   An off-track betting parlor or arcade.                        Multifamily Loan and Security Agreement                                 Page 18  

 

                     (F)   A liquor store or other establishment whose primary business is the                          sale of alcoholic beverages for off-site consumption.                      (G)  A burlesque or strip club.                      (H)   Any illegal activity.                (vi)  The aggregate of the income derived from the space leased pursuant to the                    New Non-Residential Lease accounts for less than 20% of the gross                    income of the Mortgaged Property on the date that Borrower enters into                    the New Non-Residential Lease.                (vii)  Such New Non-Residential Lease is not an oil or gas lease, pipeline                    agreement or other instrument related to the production or sale of oil or                    natural gas.                            (viii)  Any New Non-Residential Lease must satisfy the condition of Section                    6.04(d).                     (c)    Executed Copies of Non-Residential Leases. Borrower will, without request by              Lender, deliver a fully executed copy of each Non-Residential Lease to Lender              promptly after such Non-Residential Lease is signed.                (d)   Subordination and Attornment Requirements. All Non-Residential Leases entered              into after the date of this Loan Agreement, regardless of whether Lender’s              consent or approval is required, will specifically include the following provisions:                (i)   The tenant will attorn to Lender and any purchaser at a foreclosure sale,                    such attornment to be self-executing and effective upon acquisition of title                    to the Mortgaged Property by any purchaser at a foreclosure sale or by                    Lender in any manner.                (ii)  The tenant agrees to execute such further evidences of attornment as                    Lender or any purchaser at a foreclosure sale may from time to time                    request.                (iii)  The tenant will, upon receipt of a written request from Lender following                    the occurrence of and during the continuance of an Event of Default, pay                    all Rents payable under the Lease to Lender.                (iv)  Reserved.                (v)   Reserved.      Multifamily Loan and Security Agreement                                 Page 19  

 

   6.05  Prepayment of Rents. Borrower will not receive or accept Rent under any Lease        (whether a residential Lease or a Non-Residential Lease) for more than 2 months in        advance.    6.06  Inspection.           (a)   Right of Entry. Subject to the rights of tenants under Leases, Borrower will permit              Lender, its agents, representatives and designees and any interested Governmental              Authority to make or cause to be made entries upon and inspections of the              Mortgaged Property to inspect, among other things:  (i) Repairs, (ii) Capital              Replacements, (iii) Restorations, (iv) Property Improvement Alterations, and (v)              any other Improvements, both in process and upon completion (including             environmental inspections and tests performed by professional inspection             engineers) during normal business hours, or at any other reasonable time, upon             reasonable Notice to Borrower if the inspection is to include occupied residential             units (which Notice need not be in writing). During normal business hours, or at             any other reasonable time, Borrower will also permit Lender to examine all books             and records and contracts and bills pertaining to the foregoing. Notice to             Borrower will not be required in the case of an emergency, as determined in             Lender’s Discretion, or when an Event of Default has occurred and is continuing.                     (b)    Inspection of Mold. If Lender determines that Mold has or may have developed as              a result of a water intrusion event or leak, Lender, at Lender’s Discretion, may              require that a professional inspector inspect the Mortgaged Property to confirm              whether Mold has developed and, if so, thereafter as frequently as Lender              determines is necessary until any issue with Mold and its cause(s) are resolved to              Lender’s satisfaction. Such inspection will be limited to a visual and olfactory              inspection of the area that has experienced the Mold, water intrusion event or              leak. Borrower will be responsible for the cost of each such professional              inspection and any remediation deemed to be necessary as a result of the              professional inspection. After any issue with Mold is remedied to Lender’s              satisfaction, Lender will not require a professional inspection any more frequently              than once every 3 years unless Lender otherwise becomes aware of Mold as a              result of a subsequent water intrusion event or leak.          (c)  Certification in Lieu of Inspection. If Lender or Loan Servicer determines not to              conduct an annual inspection of the Mortgaged Property, and in lieu thereof              Lender requests a certification, Borrower will provide to Lender a factually              correct certification, each year that the annual inspection is waived, to the             following effect:                                 Borrower has not received any written complaint, notice, letter or                   other written communication from any tenant, Property Manager                   or governmental authority regarding mold, fungus, microbial                    contamination or pathogenic organisms (“Mold”) or any activity,                    condition, event or omission that causes or facilitates the growth of    Multifamily Loan and Security Agreement                                 Page 20  

 

                     Mold on or in any part of the Mortgaged Property or, if Borrower                   has received any such written complaint, notice, letter or other                    written communication, that Borrower has investigated and                    determined that no Mold activity, condition or event exists or                    alternatively has fully and properly remediated such activity,                   condition, event or omission in compliance with the Moisture                    Management Plan for the Mortgaged Property.                If Borrower is unwilling or unable to provide such certification, Lender may              require a professional inspection of the Mortgaged Property at Borrower’s              expense.    6.07  Books and Records; Financial Reporting.          (a)  Delivery of Books and Records.                       (i)  Borrower will keep and maintain at all times at the Mortgaged Property,                    Borrower’s main business office, or the Property Manager’s office, and                    upon Lender’s request will make available at the Mortgaged Property (or,                    at Borrower’s option, at the Property Manager’s office), 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 copies of all written contracts, Leases, and other                    instruments which affect the Mortgaged Property. The books, records,                    contracts, Leases and other instruments will be subject to examination and                    inspection by Lender at any reasonable time (“Books and Records”).                (ii)  Borrower will keep the Books and Records in accordance with one of the                    following accounting methods, consistently applied, and Borrower will                    promptly provide Lender Notice of any change in Borrower’s accounting                    methods:                                  (A)  Generally accepted accounting principles (GAAP).                                       (B)  Tax method of accounting, if under the tax method of accounting,                          the accrual basis is used for interest expense, real estate taxes and                         insurance expense, and the cash basis is used for all other items,                         including income, prepaid rent, utilities and payroll expense.                         Financial statements may exclude depreciation and amortization.                                       (C)  Such other method that is acceptable to Lender.      Multifamily Loan and Security Agreement                                 Page 21  

 

         (b)   Delivery of Statement of Income and Expenses; Rent Schedule and Other              Statements. Borrower will furnish to Lender each of the following:                     (i)   Within 25 days after the end of each calendar quarter prior to                    Securitization and within 35 days after each calendar quarter after                    Securitization, each of the following:                      (A)  A Rent Schedule dated no earlier than the date that is 5 days prior                          to the end of such quarter.                      (B)  A statement of income and expenses for Borrower that is either of                          the following:                                             (1)    For the 12-month period ending on the last day of such                                quarter.                           (2)    If at the end of such quarter Borrower or any Affiliate of                                Borrower has owned the Mortgaged Property for less than                                12 months, for the period commencing with the acquisition                                of the Mortgaged Property by Borrower or its Affiliate, and                                ending on the last day of such quarter.                                             (C)  When requested by Lender, a balance sheet showing all assets and                          liabilities of Borrower as of the end of that fiscal quarter.                (ii)  Within 90 days after the end of each fiscal year of Borrower, all of the                    following:                      (A)  An annual statement of income and expenses for Borrower for that                          fiscal year.                                        (B)  A balance sheet showing all assets and liabilities of Borrower as of                          the end of that fiscal year.                                        (C)  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.                                  (iii)  Within 30 days after the date of filing, copies of all tax returns filed by                    Borrower.                  Multifamily Loan and Security Agreement                                 Page 22  

 

         (c)   Additional Reporting Requirements Upon Request. Borrower will furnish to              Lender each of the following:                (i)  Upon Lender’s request, in Lender’s sole and absolute discretion prior to a                    Securitization, and thereafter upon Lender’s request in Lender’s                    Discretion, a monthly Rent Schedule and a monthly statement of income                    and expenses for Borrower, in each case within 25 days after the end of                    each month.                            (ii)  Upon Lender’s request in Lender’s sole and absolute discretion prior to a                    Securitization, and thereafter upon Lender’s request in Lender’s                    Discretion, within 10 days after such a request from Lender, an                    organizational chart that identifies all of the following:                                  (A)  Persons that directly or indirectly Control Borrower and any                          Designated Entity for Transfers and the interest held by each.                                        (B)  Persons with a collective equity interest (whether direct or indirect)                          of 25% or more in Borrower if not already identified pursuant to                          Section 6.07(c)(ii)(A).                                         (C)  All Non-U.S. Equity Holders.                                        If any Designated Entity for Transfers is a Public Company, the                    organizational chart will not be required to show the ownership of such                    Public Company.                             (iii)  Upon Lender’s request in Lender’s Discretion, such other financial                    information or property management information (including information                    on tenants under Leases to the extent such information is available to                    Borrower, copies of bank account statements from financial institutions                    where funds owned or controlled by Borrower are maintained, and an                    accounting of security deposits) as may be required by Lender from time                    to time, in each case within 30 days after such request.                            (iv)  Upon Lender’s request in Lender’s Discretion, a monthly property                    management report for the Mortgaged Property, showing the number of                    inquiries made and rental applications received from tenants or                    prospective tenants and deposits received from tenants and any other                    information requested by Lender within 30 days after such request.                    However, Lender will not require the foregoing more frequently than                    quarterly except when there has been an Event of Default and such Event                    of Default is continuing, in which case Lender may require Borrower to                    furnish the foregoing more frequently.      Multifamily Loan and Security Agreement                                 Page 23  

 

         (d)   Form of Statements; Audited Financials. A natural person having authority to              bind Borrower (or the SPE Equity Owner or Guarantor, as applicable), acting in              his or her capacity as a manager, general partner or an officer of Borrower, SPE             Equity Owner, or Guarantor and not in his or her individual capacity, will certify              each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c)              and 6.07(f) to be complete and accurate. Each of the statements, schedules and              reports required by Sections 6.07(b), 6.07(c) and 6.07(f) will be in such form and              contain such detail as Lender may reasonably require. Lender also may require              that any of the statements, schedules or reports listed in Sections 6.07(b), 6.07(c)              and 6.07(f) be audited at Borrower’s expense by independent certified public             accountants acceptable to Lender, at any time when an Event of Default has             occurred and is continuing or at any time that Lender, in its reasonable judgment,             determines that audited financial statements are required for an accurate             assessment of the financial condition of Borrower or of the Mortgaged Property.                     (e)   Failure to Timely Provide Financial Statements or Additional Reporting. If              Borrower fails to provide in a timely manner the statements, schedules and reports             required by Sections 6.07(b), 6.07(c) and 6.07(f), Lender will give Notice to             Borrower specifying the statements, schedules and reports required by Sections             6.07(b), 6.07(c) and 6.07(f) that Borrower has failed to provide. If Borrower has             not provided the required statements, schedules and reports within 10 Business             Days following such Notice, then (i) Borrower will pay a late fee of $500 for each             late statement, schedule or report, plus an additional $500 per month that any such             statement, schedule or report continues to be late, and (ii) Lender will have the             right to have Borrower’s books and records audited, at Borrower’s expense, by             independent certified public accountants selected by Lender in order to obtain             such statements, schedules and reports, and all related costs and expenses of             Lender will become immediately due and payable and will become an additional             part of the Indebtedness as provided in Section 9.02. Notice to Borrower of             Lender’s exercise of its rights to require an audit will not be required in the case             of an emergency, as determined in Lender’s Discretion, or when an Event of             Default has occurred and is continuing.              (f)   Delivery of Guarantor and SPE Equity Owner Financial Statements. Borrower              will cause Guarantor and/or SPE Equity Owner to deliver each of the following to              Lender within 10 Business Days following Lender’s request:                      (i)  Guarantor’s or SPE Equity Owner’s (as applicable) balance sheet and                   profit and loss statement (or if such party is a natural person, such party’s                    personal financial statements) as of the end of (A) the quarter that ended at                    least 30 days prior to the due date of the requested items, and/or (B) the                    fiscal year that ended at least 90 days prior to the due date of the requested                    items.                      (ii)  Other Guarantor or SPE Equity Owner (as applicable) financial statements                    as Lender may reasonably require.    Multifamily Loan and Security Agreement                                 Page 24  

 

                       (iii)  Written updates on the status of all litigation proceedings that Guarantor                    or SPE Equity Owner (as applicable) disclosed or should have disclosed to                    Lender as of the Closing Date.                       (iv)  If an Event of Default has occurred and is continuing, copies of                    Guarantor’s or SPE Equity Owner’s (as applicable) most recent filed state                    and federal tax returns, including any current tax return extensions.            (g)   Reporting Upon Event of Default. If an Event of Default has occurred and is              continuing, Borrower will deliver to Lender upon written demand all books and             records relating to the Mortgaged Property or its operation.                     (h)    Credit Reports. Borrower authorizes Lender to obtain a credit report on Borrower              at any time.          (i)  through (m) are Reserved.          6.08  Taxes; Operating Expenses; Ground Rents.          (a)   Payment of Taxes and Ground Rent. Subject to the provisions of Sections 6.08(c)              and (d), Borrower will pay or cause to be paid (i) all Taxes when due and before              the addition of any interest, fine, penalty or cost for nonpayment, and (ii) if             Borrower’s interest in the Mortgaged Property is as a Ground Lessee, then the             monthly or other periodic installments of Ground Rent before the last date upon             which each such installment may be made without penalty or interest charges             being added.                     (b)    Payment of Operating Expenses. Subject to the provisions of Section 6.08(c),              Borrower will (i) pay the expenses of operating, managing, maintaining and              repairing the Mortgaged Property (including utilities, Repairs and Capital              Replacements) before the last date upon which each such payment may be made              without any penalty or interest charge being added, and (ii) pay Insurance              premiums prior to the expiration date of each policy of Insurance, unless             applicable law specifies some lesser period.                     (c)    Payment of Impositions and Reserve Funds. If Lender is collecting Imposition              Reserve Deposits pursuant to Article IV, then so long as no Event of Default              exists, Borrower will not be obligated to pay any Imposition for which Imposition              Reserve Deposits are being collected, whether Taxes, Insurance premiums,              Ground Rent (if applicable) or any other individual Impositions, but only to the              extent that sufficient Imposition Reserve Deposits are held by Lender for the              purpose of paying that specific Imposition and Borrower has timely delivered to              Lender any bills or premium notices that it has received with respect to that              specific Imposition (other than Ground Rent). Lender will have no liability to              Borrower for failing to pay any Impositions to the extent that:  (i) any Event of    Multifamily Loan and Security Agreement                                 Page 25  

 

               Default has occurred and is continuing, (ii) insufficient Imposition Reserve              Deposits are held by Lender at the time an Imposition becomes due and payable,              or (iii) Borrower has failed to provide Lender with bills and premium notices as             provided in this Section 6.08(c).                     (d)    Right to Contest. Borrower, at its own expense, may contest by appropriate legal              proceedings, conducted diligently and in good faith, the amount or validity of any              Imposition other than Insurance premiums and Ground Rent (if applicable), if:  (i)              Borrower notifies Lender of the commencement or expected commencement of              such proceedings, (ii) the Mortgaged Property is not in danger of being sold or              forfeited, (iii) if Borrower has not already paid the Imposition, Borrower deposits              with Lender reserves sufficient to pay the contested Imposition, if requested by              Lender, and (iv) Borrower furnishes whatever additional security is required in              the proceedings or is reasonably requested by Lender, which may include the              delivery to Lender of reserves established by Borrower to pay the contested              Imposition.    6.09  Preservation, Management and Maintenance of Mortgaged Property.          (a)  Maintenance of Mortgaged Property; No Waste. Borrower will keep the              Mortgaged Property in good repair, including the replacement of Personalty and              Fixtures with items of equal or better function and quality. Borrower will not              commit waste or permit impairment or deterioration of the Mortgaged Property.          (b)   Abandonment of Mortgaged Property. Borrower will not abandon the Mortgaged              Property.          (c)  Preservation of Mortgaged Property.                       (i)  Borrower will 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 such other condition as Lender may approve in                    writing, whether or not Insurance proceeds or Condemnation awards are                    available to cover any costs of such Restoration or repair; provided,                    however, that Borrower will not be obligated to perform such Restoration                    or repair if (A) no Event of Default has occurred and is continuing, and                    (B) Lender has elected to apply any available Insurance proceeds and/or                    Condemnation awards to the payment of Indebtedness pursuant to Section                    6.10(l) or Section 6.11(d).                (ii)  Borrower will give Notice to Lender of and, unless otherwise directed in                    writing by Lender, will appear in and defend any action or proceeding                   purporting to affect the Mortgaged Property, Lender’s security or Lender’s                    rights under this Loan Agreement.      Multifamily Loan and Security Agreement                                 Page 26  

 

         (d)   Property Management. Borrower will provide for professional management of the              Mortgaged Property by the Property Manager at all times under a property              management agreement approved by Lender in writing. Borrower will not              surrender, terminate, cancel, modify, renew or extend its property management              agreement, or enter into any other agreement relating to the management or              operation of the Mortgaged Property with Property Manager or any other Person,              or consent to (i) the assignment by the Property Manager of its interest under such              property management agreement or (ii) the transfer of a controlling interest in the              Property Manager if the Property Manager is an Affiliate of Borrower, in each              case without the consent of Lender, which consent will not be unreasonably              withheld.                      (i)  If at any time Lender consents to the appointment of a new Property                    Manager, such new Property Manager and Borrower will, as a condition                    of Lender’s consent, execute an Assignment of Management Agreement in                    a form acceptable to Lender.                            (ii)  If any such replacement Property Manager is an Affiliate of Borrower, and                    if a nonconsolidation opinion was delivered on the Closing Date,                    Borrower will deliver to Lender an updated nonconsolidation opinion in                    form and substance satisfactory to Lender with regard to nonconsolidation.                (iii)  Reserved.                      (e)  Alteration of Mortgaged Property. Borrower will not (and will not permit any              tenant or other Person to) remove, demolish or alter the Mortgaged Property or              any part of the Mortgaged Property, including any removal, demolition or              alteration occurring in connection with a rehabilitation of all or part of the             Mortgaged Property, except that each of the following is permitted:                            (i)    Repairs or Capital Replacements in accordance with the terms and                   conditions of this Loan Agreement.                            (ii)   Any repairs or replacements made in connection with the replacement of                   tangible Personalty.                            (iii)  If Borrower is a cooperative housing corporation or association, repairs or                   replacements to the extent permitted with respect to individual dwelling                   units under the form of a proprietary lease or occupancy agreement.                            (iv)   Any repairs or replacements in connection with making an individual unit                   ready for a new occupant or pursuant to Sections 6.09(a) and (c).                            (v)    Property Improvement Alterations, provided that each of the following                   conditions is satisfied:                  Multifamily Loan and Security Agreement                                 Page 27  

 

                     (A)  At least 30 days prior to the commencement of any Property                          Improvement Alterations, Borrower must submit to Lender a                          Property Improvement Notice. The Property Improvement Notice                          must include all of the following information:                            (1)   The expected start date and completion date of the Property                               Improvement Alterations.                                       (2)    A description of the anticipated Property Improvement                               Alterations to be made.                                       (3)    The projected budget of the Property Improvement                               Alterations and the source of funding.                                       If any changes to Property Improvement Alterations as described                         in the Property Improvement Notice are made that extend beyond                         the overall scope and intent of the Property Improvement                         Alterations set forth in the Property Improvement Notice (e.g.,                         renovations changed to renovate common areas but Property                         Improvement Notice only described renovations to the residential                         unit bathrooms), then Borrower must submit a new Property                         Improvement Notice to Lender in accordance with this Section                         6.09(e)(v)(A).                                 (B)   The Property Improvement Alterations may not be commenced                         within 12 months prior to the Maturity Date without prior consent                         of the Lender and must be completed at least 6 months prior to the                         Maturity Date.                                 (C)   Neither the performance nor completion of the Property                         Improvement Alterations may result in any of the following:                                       (1)    An adverse effect on any Major Building System.                                       (2)    A change in residential unit configurations on a permanent                               basis.                                       (3)    An increase or decrease in the total number of residential                               units.                                       (4)    The demolition of any existing Improvements.                                                  (5)    A permanent obstruction of tenants’ access to units or a                               temporary obstruction of tenants’ access to units without a                               reasonable alternative access provided during the period of                               renovation which causes the obstruction.    Multifamily Loan and Security Agreement                                 Page 28  

 

                                               (D)   Reserved.                                                  (E)   The Leases used to calculate Minimum Occupancy for use in                          Section 6.09(e)(v)(I) must meet all of the following conditions:                            (1)  The Leases are with tenants that are not Affiliates of                                Borrower or Guarantor (except as otherwise expressly                                agreed by Lender in writing).                                                    (2)   The Leases are on arms’ length terms and conditions.                                                    (3)   The Leases otherwise satisfy the requirements of the Loan                                Documents.                                                (F)   The Property Improvement Alterations must be completed in                          accordance with Section 6.14 and any reference to Repairs in                          Sections 6.06 and 6.14 will be deemed to include Property                          Improvement Alterations.                       (G)   Upon completion of the applicable Property Improvement                          Alterations, Borrower must provide all of the following to the                          Lender:                            (1)   Borrower’s Certificate of Property Improvement                                Alterations Completion, in the form attached as Exhibit O                                (“Certificate of Completion”).                             (2)   Any other certificates or approval, acceptance or                                compliance required by Lender, including certificates of                                occupancy, from any Governmental Authority having                                jurisdiction over the Mortgaged Property and the Property                                Improvement Alterations and professional engineers                                certifications.                                        (H)  Borrower must deliver to Lender within 10 days of Lender’s                          request a written status update on the Property Improvement                          Alterations.                                        (I)   While Property Improvement Alterations that result in individual                          residential units not being available for leasing are ongoing, if a                          Rent Schedule shows that the occupancy of the Mortgaged                          Property has decreased to less than the Minimum Occupancy,                          Borrower must take each of the following actions:                         Multifamily Loan and Security Agreement                                 Page 29  

 

                           (1)   Complete all pending Property Improvement Alterations to                                such individual residential units in a timely manner until                                the Mortgaged Property satisfies the Minimum Occupancy                                requirement.                             (2)   Suspend any additional Property Improvement Alterations                                which would cause residential units to be unavailable for                               leasing until the Mortgaged Property satisfies the Minimum                               Occupancy requirement.                                 (J)    If Borrower has commenced Property Improvement Alterations on                          the Mortgaged Property, then Borrower will deliver to Lender,                          upon Lender’s request, and in a timely manner, the Certificate of                          Completion together with such additional information as Lender                          may request.                                        (K)  If on the date of this Loan Agreement the Loan amount is                          $25,000,000 or more, or if the Mortgage is part of a crossed pool                          of Loans with an aggregate balance of $25,000,000 or more, then                          at no time during the term of the Loan may any outstanding                          amounts expended by Borrower for services and/or materials in                          connection with Property Improvement Alterations that are then                          due and payable exceed 10% of the original principal loan amount.                     (vi)  Reserved.                          (vii)  Reserved.                          (viii)  Reserved.              (f)   Establishment of MMP. If indicated in Part B.5, Summary of Loan Terms,              Borrower will have or will establish and will adhere to the MMP. If Borrower is             required to have an MMP, Borrower will keep all MMP documentation at the             Mortgaged Property or at the Property Manager’s office and available for review              by Lender or the Loan Servicer during any annual assessment or other inspection              of the Mortgaged Property that is required by Lender. At a minimum, the MMP              must contain a provision for:  (i) staff training, (ii) information to be provided to              tenants, (iii) documentation of the plan, (iv) the appropriate protocol for incident              response and remediation, and (v) routine, scheduled inspections of common              space and unit interiors.          (g)   No Reduction of Housing Cooperative Charges. If Borrower is a housing              cooperative corporation or association, until the Indebtedness is paid in full,              Borrower will not reduce the maintenance fees, charges or assessments payable              by shareholders or residents under proprietary leases or occupancy agreements              below a level which is sufficient to pay all expenses of Borrower, including all    Multifamily Loan and Security Agreement                                 Page 30  

 

                 operating and other expenses for the Mortgaged Property and all payments due               pursuant to the terms of the Note and any Loan Documents.          (h)    through (l) are reserved.                (m)   Mechanic’s, Materialmen’s and Judgment Liens. If a mechanic’s, materialmen’s               or judgment Lien is filed against the Mortgaged Property, Borrower must cause               the Lien to be released of record, bonded off, or otherwise remedied to Lender’s              satisfaction within 60 days after the date of creation of the Lien. However, if              Borrower is diligently prosecuting such release or other remedy and advises              Lender that such release or remedy cannot be consummated within such 60-day              period, Borrower will have an additional period (not exceeding 120 days from the              date of creation of the Lien or such earlier time as may be required by applicable              law in which the lienor must act to enforce the Lien) within which to obtain such              release of record or consummate such other remedy.          6.10   Insurance. At all times during the term of this Loan Agreement, Borrower will maintain        at its sole cost and expense, for the mutual benefit of Borrower and Lender, all of the        Insurance specified in this Section 6.10, as required by Lender and applicable law, and in        such amounts and with such maximum deductibles as Lender may require, as those        requirements may change:         (a)   Property Insurance. Borrower will keep the Improvements insured at all times               against relevant physical hazards that may cause damage to the Mortgaged               Property as Lender may require (“Property Insurance”). Required Property               Insurance coverage may include any or all of the following:                  (i)  All Risks of Physical Loss. Insurance against loss or damage from fire,                     wind, hail, and other related perils within the scope of a “Causes of Loss –                     Special Form” or “All Risk” policy, in an amount not less than the                     Replacement Cost of the Mortgaged Property.                (ii)  Ordinance and Law. If any part of the Mortgaged Property is legal non-                    conforming under current building, zoning or land use laws or ordinances,                     then “Ordinance and Law Coverage” in the amount required by Lender.                (iii)  Flood.  If any of the Improvements are located in an area identified by the                     Federal Emergency Management Agency (or any successor to that                     agency) as a “Special Flood Hazard Area,” flood Insurance in the amount                     required by Lender.                (iv)  Windstorm. If windstorm and/or windstorm related perils and/or “named                     storm” (collectively, “Windstorm Coverage”), are excluded from the                    “Causes of Loss – Special Form” policy required under Section 6.10(a)(i),                    then separate coverage for such risks, either through an endorsement or a                    separate policy. Windstorm Coverage will be written in an amount not less                    than the Replacement Cost of the Mortgaged Property.     Multifamily Loan and Security Agreement                                 Page 31  

 

               (v)   Boiler and Machinery/Equipment Breakdown. If the Mortgaged Property                    contains a central heating, ventilation and cooling system (“HVAC                    System”) where steam boilers and/or other pressurized systems are in                    operation and are regulated by the Property Jurisdiction, Insurance                    providing coverage in the amount required by Lender.              (vi)  Builder’s Risk. During any period of construction or Restoration, builder’s                    risk Insurance (including fire and other perils within the scope of a policy                    known as “Causes of Loss – Special Form” or “All Risk” policy) in an                    amount not less than the sum of the related contractual arrangements.              (vii)  Other. Insurance for other physical perils applicable to the Mortgaged                    Property as may be required by Lender including earthquake, sinkhole,                    mine subsidence, avalanche, mudslides, and volcanic eruption. If Lender                    reasonably requires any updated reports or other documentation to                    determine whether additional Insurance is necessary or prudent, Borrower                    will pay for the updated reports or other documentation at its sole cost and                    expense.               (viii) Reserved.                (ix)  Reserved.               (x)   Reserved.         (b)  Business  Income/Rental  Value.  Business  income/rental  value Insurance  for  all              relevant perils to be covered in the amount required by Lender, but in no case less              than  the  effective  gross  income  attributable  to  the  Mortgaged  Property  for  the              preceding 12 months, as determined by Lender in Lender’s Discretion.          (c)   Commercial General Liability Insurance. Commercial general liability Insurance              against legal liability claims for personal and bodily injury, property damage and              contractual liability in such amounts and with such maximum deductibles as              Lender may require, but not less than $1,000,000 per occurrence and $2,000,000              in the general aggregate on a per-location basis, plus excess and/or umbrella              liability coverage in such amounts as Lender may require.              (d)    Terrorism Insurance. Insurance required under Section 6.10(a), Section 6.10(b),              and Section 6.10(c) will provide coverage for acts of terrorism. Terrorism              coverage may be provided through one or more separate policies, which will be              on terms (including amounts) consistent with those required under             Section 6.10(a)(i) and (ii) and Section 6.10(b). If Insurance against acts of             terrorism is not available at commercially reasonable rates and if the related             hazards are not at the time commonly insured against for properties similar to the             Mortgaged Property and located in or around the region in which the Mortgaged             Property is located, then Lender may opt to temporarily suspend, cap or otherwise             limit the requirement to have such terrorism insurance for a period not to exceed    Multifamily Loan and Security Agreement                                 Page 32  

 

               one year, unless such suspension or cap is renewed by Lender for additional one              year increments.                (e)   Payment of Premiums. All Property Insurance premiums and premiums for other              Insurance required under this Section 6.10 will be paid in the manner provided in              Article IV, unless Lender has designated in writing another method of payment.          (f)  Policy Requirements. The following requirements apply with respect to all              Insurance required by this Section 6.10:                      (i)  All Insurance policies will be in a form approved by Lender.                (ii)  All Insurance policies will be issued by Insurance companies authorized to                    do business in the Property Jurisdiction and/or acting as eligible surplus                   insurers in the Property Jurisdiction, which have a general policyholder’s                   rating satisfactory to Lender.                          (iii)  All Property Insurance policies will contain a standard mortgagee or                   mortgage holder’s clause and a loss payable clause, in favor of, and in a                   form approved by, Lender.                          (iv)  If any Insurance policy contains a coinsurance clause, the coinsurance                   clause will be offset by an agreed amount endorsement in an amount not                   less than the Replacement Cost.                           (v)    All commercial general liability and excess/umbrella liability policies will                   name Lender, its successors and/or assigns, as additional insured.                          (vi)   Professional liability policies will not include Lender, its successors and/or                   assigns, as additional insured.                          (vii)  All Insurance policies (with the exception of commercial general liability                   Insurance policies) will provide that the insurer will notify Lender in                   writing of cancelation of policies at least 10 days before the cancelation of                   the policy by the insurer for nonpayment of the premium or nonrenewal                   and at least 30 days before cancelation by the insurer for any other reason.                    (g)    Evidence of Insurance; Insurance Policy Renewals. Borrower will deliver to              Lender a legible copy of each Insurance policy, and Borrower will promptly              deliver to Lender a copy of all renewal and other notices received by Borrower             with respect to the policies. Borrower will ensure that the Mortgaged Property is             continuously covered by the required Insurance. Prior to the expiration date of             each Insurance policy, Borrower will deliver to Lender evidence acceptable to             Lender in Lender’s Discretion that each policy has been renewed. If the evidence             of a renewal does not include a legible copy of the renewal policy, Borrower will             deliver a legible copy of such renewal no later than the earlier of the following:          Multifamily Loan and Security Agreement                                 Page 33  

 

               (i)   60 days after the expiration date of the original policy.                            (ii)  The date of any Notice of an insured loss given to Lender under                    Section 6.10(i).          (h)  Compliance With Insurance Requirements. Borrower will comply with all              Insurance requirements and will not permit any condition to exist on the              Mortgaged Property that would invalidate any part of any Insurance coverage              required under this Loan Agreement.          (i)  Obligations Upon Casualty; Proof of Loss.                 (i)  If an insured loss occurs, then Borrower will give immediate written                    notice to the Insurance carrier and to Lender.                 (ii)  Borrower authorizes and appoints Lender as attorney in fact for Borrower                    to make proof of loss, to adjust and compromise any claims under policies                    of Property Insurance, to appear in and prosecute any action arising from                    such Property Insurance policies, to collect and receive the proceeds of                    Property Insurance, to hold the proceeds of Property Insurance, and to                    deduct from such proceeds Lender’s expenses incurred in the collection of                    such proceeds. This power of attorney is coupled with an interest and                    therefore is irrevocable. However, nothing contained in this Section 6.10                    will require Lender to incur any expense or take any action.                       (j)  Lender’s Options Following a Casualty. Subject to Sections 6.10(k) and (l),              Lender may, at Lender’s option, take one of the following actions:                (i)   Require a “repair or replacement” settlement, in which case the proceeds                    will be used to reimburse Borrower for the cost of restoring and repairing                    the Mortgaged Property to the equivalent of its original condition or to a                    condition approved by Lender (“Restoration”). If Lender determines to                    require a repair or replacement settlement and to apply Insurance proceeds                    to Restoration, Lender will apply the proceeds in accordance with                    Lender’s then-current policies relating to the Restoration of casualty                    damage on similar multifamily properties. If Lender, in Lender’s                    Discretion, retains a professional inspection engineer or other qualified                    third-party to inspect any Restoration items, Lender may charge Borrower                    an amount sufficient to pay all reasonable costs and expenses charged by                    such third-party inspector.               (ii)  Require an “actual cash value” settlement in which case the proceeds may                    be applied to the payment of the Indebtedness, whether or not then due.           (k)   Borrower’s Options Following a Casualty. Subject to Section 6.10(l), Borrower              may take the following actions:     Multifamily Loan and Security Agreement                                 Page 34  

 

               (i)  If a casualty results in damage to the Mortgaged Property for which the                    cost of Repairs will be less than the Borrower Proof of Loss Threshold,                    Borrower will have the sole right to make proof of loss, adjust and                    compromise the claim and collect and receive any proceeds directly                    without the approval or prior consent of Lender so long as the Insurance                    proceeds are used solely for the Restoration of the Mortgaged Property.                (ii)  If a casualty results in damage to the Mortgaged Property for which the                    cost of Repairs will be more than the Borrower Proof of Loss Threshold,                   but less than the Borrower Proof of Loss Maximum, Borrower is                   authorized to make proof of loss and adjust and compromise the claim                   without the prior consent of Lender, and Lender will hold the applicable                   Insurance proceeds to be used to reimburse Borrower for the cost of                   Restoration of the Mortgaged Property and will not apply such proceeds to                   the payment of the Indebtedness.                                (iii)  If a casualty results in damage to the Mortgaged Property for which the                    cost of Repairs will be more than the Borrower Proof of Loss Maximum,                    Borrower must obtain the consent of Lender prior to making any proof of                    loss or adjusting or compromising the claim, and Lender will hold the                    applicable Insurance proceeds to be used to reimburse Borrower for the                    cost of Restoration of the Mortgaged Property and will not apply such                    proceeds to the payment of the Indebtedness.          (l)  Lender’s Right to Apply Insurance Proceeds to Indebtedness. Lender will have              the right to apply Insurance proceeds to the payment of the Indebtedness if Lender              determines, in Lender’s Discretion, that any of the following conditions exist:                (i)  An Event of Default (or any 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.                (ii)  There will not be sufficient funds from Insurance proceeds, anticipated                    contributions of Borrower of its own funds or other sources acceptable to                    Lender to complete the Restoration.                (iii)  The rental income from the Mortgaged Property after completion of the                   Restoration will not be sufficient to meet all operating costs and other                   expenses, deposits to Reserve Funds and Loan repayment obligations                   relating to the Mortgaged Property.                           (iv)   The Restoration will be completed less than (A) 6 months prior to the                   Maturity Date if re-leasing will be completed prior to the Maturity Date,                   or (B) 12 months prior to the Maturity Date if re-leasing will not be                    completed prior to the Maturity Date.                 Multifamily Loan and Security Agreement                                 Page 35  

 

               (v)   The Restoration will not be completed within one year after the date of the                    loss or casualty.                (vi)  The casualty involved an actual or constructive loss of more than 30% of                    the fair market value of the Mortgaged Property, and rendered                    untenantable more than 30% of the residential units of the Mortgaged                    Property.                (vii)  After completion of the Restoration the fair market value of the                    Mortgaged Property is expected to be less than the fair market value of the                    Mortgaged Property immediately prior to such casualty (assuming the                    affected portion of the Mortgaged Property is re-let within a reasonable                    period after the date of such casualty).                (viii)  Leases covering less than 35% of the residential units of the Mortgaged                    Property will remain in full force and effect during and after the                    completion of Restoration.           (m)  Lender’s Succession to Insurance Policies. If the Mortgaged Property is sold at a              foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will              automatically succeed to all rights of Borrower in and to any Insurance policies              and unearned Insurance premiums and in and to the proceeds resulting from any              damage to the Mortgaged Property prior to such sale or acquisition.          (n)   Payment of Installments After Application of Insurance Proceeds. Unless Lender              otherwise agrees in writing, any application of any Insurance proceeds to the              Indebtedness will not extend or postpone the due date of any monthly installments             referred to in the Note, Article IV of this Loan Agreement or change the amount             of such installments.                     (o)    Assignment of Insurance Proceeds. Borrower agrees to execute such further              evidence of assignment of any Insurance proceeds as Lender may require.                (p)   Borrower Acknowledgment of Lender’s Right to Change Insurance              Requirements. Borrower acknowledges and agrees that Lender’s Insurance              requirements may change from time to time throughout the term of the              Indebtedness to include coverage for the kind of risks customarily insured against              and in such minimum coverage amounts and maximum deductibles as are              generally required by institutional lenders for properties comparable to the              Mortgaged Property.          6.11  Condemnation.           (a)   Rights Generally. Borrower will promptly notify Lender in writing of any action              or proceeding or notice relating to any proposed or actual condemnation or other              taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property,    Multifamily Loan and Security Agreement                                 Page 36  

 

               whether direct or indirect (“Condemnation”). Borrower will appear in and              prosecute or defend any action or proceeding relating to any Condemnation unless              otherwise directed by Lender in writing. Borrower authorizes and appoints Lender              as attorney in fact for Borrower to commence, appear in and prosecute, in              Lender’s or Borrower’s name, any action or proceeding relating to any              Condemnation and to settle or compromise any claim in connection with any              Condemnation, after consultation with Borrower and consistent with              commercially reasonable standards of a prudent lender. This power of attorney is              coupled with an interest and therefore is irrevocable. However, nothing contained              in this Section 6.11(a) will require Lender to incur any expense or take any action.              Borrower transfers and assigns to Lender all right, title and interest of Borrower in              and to any award or payment with respect to (i) any Condemnation, or any              conveyance in lieu of Condemnation, and (ii) any damage to the Mortgaged              Property caused by governmental action that does not result in a Condemnation.          (b)   Application of Award. Lender may hold such awards or proceeds and apply such              awards or proceeds, after the deduction of Lender’s expenses incurred in the              collection of such amounts (including Attorneys’ Fees and Costs) at Lender’s              option, to the Restoration or repair of the Mortgaged Property or to the payment              of the Indebtedness, with the balance, if any, to Borrower. Unless Lender              otherwise agrees in writing, any application of any awards or proceeds to the              Indebtedness will not extend or postpone the due date of any monthly installments             referred to in the Note or Article IV of this Loan Agreement, or change the             amount of such installments. Borrower agrees to execute such further evidence of             assignment of any Condemnation awards or proceeds as Lender may require.                     (c)    Borrower’s Right to Condemnation Proceeds. Notwithstanding any provision to              the contrary in this Section 6.11, but subject to Section 6.11(e), in the event of a              partial Condemnation of the Mortgaged Property, as long as no Event of Default,              or any 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, in the event              of a partial Condemnation resulting in proceeds or awards in the amount of less              than $100,000, Borrower will have the sole right to make proof of loss, adjust and              compromise the claim and collect and receive any proceeds directly without the              approval or prior consent of Lender so long as the proceeds or awards are used              solely for the Restoration of the Mortgaged Property.          (d)   Right to Apply Condemnation Proceeds to Indebtedness. In the event of a partial              Condemnation of the Mortgaged Property resulting in proceeds or awards in the              amount of $100,000 or more and subject to Section 6.11(e), Lender will have the              right to apply Condemnation proceeds to the payment of the Indebtedness if              Lender determines, in Lender’s Discretion, that any of the following conditions              exist:      Multifamily Loan and Security Agreement                                 Page 37  

 

               (i)  An Event of Default (or any 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.                            (ii)  There will not be sufficient funds from Condemnation proceeds,                    anticipated contributions of Borrower of its own funds or other sources                    acceptable to Lender to complete the Restoration.                            (iii)  The rental income from the Mortgaged Property after completion of the                   Restoration will not be sufficient to meet all operating costs and other                   expenses, deposits to Reserve Funds and Loan repayment obligations                   relating to the Mortgaged Property.                           (iv)  The Restoration will not be completed at least one year before the                   Maturity Date (or 6 months before the Maturity Date if re-leasing of the                   Mortgaged Property will be completed within such 6-month period).                            (v)   The Restoration will not be completed within one year after the date of the                    Condemnation.                (vi)  The Condemnation involved an actual or constructive loss of more than                    15% of the fair market value of the Mortgaged Property, and rendered                    untenantable more than 25% of the residential units of the Mortgaged                   Property.                           (vii)  After Restoration the fair market value of the Mortgaged Property is                   expected to be less than the fair market value of the Mortgaged Property                   immediately prior to the Condemnation (assuming the affected portion of                   the Mortgaged Property is re-let within a reasonable period after the date                    of the Condemnation).                (viii)  Leases covering less than 35% of residential units of the Mortgaged                    Property will remain in full force and effect during and after the                    completion of Restoration.                      (e)   Right to Apply Condemnation Proceeds in Connection with a Partial Release.              Notwithstanding anything to the contrary set forth in this Loan Agreement,              including this Section 6.11, for so long as the Loan or any portion of the Loan is              included in a Securitization in which the Note is assigned to a REMIC trust, then              each of the following will apply:               (i)  If any portion of the Mortgaged Property is released from the Lien of the                    Loan in connection with a Condemnation and if the ratio of (A) the unpaid                    principal balance of the Loan to (B) the value of the Mortgaged Property                    (with the value of the Mortgaged Property first being reduced by the                    outstanding principal balance of any Senior Indebtedness or any                    indebtedness secured by the Mortgaged Property that is at the same level   Multifamily Loan and Security Agreement                                 Page 38  

 

                     of priority with the Indebtedness and taking into account only the related                    land and buildings and not any personal property or going-concern value),                    as determined by Lender in its sole and absolute discretion based on a                    commercially reasonable valuation method permitted in connection with a                    Securitization, is greater than 125% immediately after such Condemnation                    and before any Restoration or repair of the Mortgaged Property (but taking                    into account any planned Restoration or repair of the Mortgaged Property                    as if such planned Restoration or repair were completed), then Lender will                    apply any net proceeds or awards from such Condemnation, in full, to the                    payment of the principal of the Indebtedness whether or not then due and                    payable, unless Lender has received an opinion of counsel (acceptable to                    Lender if such opinion is provided by Borrower) that a different                    application of the net proceeds or awards will not cause such                    Securitization to fail to meet applicable federal income tax qualification                    requirements or subject such Securitization to any tax, and the net                    proceeds or awards are applied in the manner specified in such opinion.               (ii)  If (A) neither Borrower nor Lender has the right to receive any or all net                    proceeds or awards as a result of the provisions of any agreement affecting                    the Mortgaged Property (including any Ground Lease (if applicable),                    condominium document, or reciprocal easement agreement) and, therefore                    cannot apply the net proceeds or awards to the payment of the principal of                    the Indebtedness as set forth above, or (B) Borrower receives any or all of                    the proceeds or awards described in Section 6.11(e)(ii)(A) and fails to                    apply the proceeds in accordance with Section 6.11(e)(i), then Borrower                    will prepay the Indebtedness in an amount which Lender, in its sole and                    absolute discretion, deems necessary to ensure that the Securitization will                    not fail to meet applicable federal income tax qualification requirements or                    be subject to any tax as a result of the Condemnation, unless Lender has                    received an opinion of counsel (acceptable to Lender if such opinion is                    provided by Borrower) that a different application of the net proceeds or                    awards will not cause such Securitization to fail to meet applicable federal                    income tax qualification requirements or subject such Securitization to any                    tax, and the net proceeds or awards are applied in the manner specified in                   such opinion.          (f)  Succession to Condemnation Proceeds. If the Mortgaged Property is sold at a              foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will              automatically succeed to all rights of Borrower in and to any Condemnation              proceeds and awards prior to such sale or acquisition.    6.12  Environmental Hazards.          (a)  Prohibited Activities and Conditions. Except for matters described in this Section              6.12, Borrower will not cause or permit Prohibited Activities or Conditions.              Borrower will comply with all Hazardous Materials Laws applicable to the              Mortgaged Property. Without limiting the generality of the previous sentence,   Multifamily Loan and Security Agreement                                 Page 39  

 

               Borrower will:  (i) obtain and maintain all Environmental Permits required by              Hazardous Materials Laws and comply with all conditions of such Environmental              Permits, (ii) cooperate with any inquiry by any Governmental Authority, and (iii)              subject to Section 6.12(g), comply with any governmental or judicial order that             arises from any alleged Prohibited Activity or Condition.                      (b)   Employees, Tenants and Contractors. Borrower will take all commercially              reasonable actions (including the inclusion of appropriate provisions in any              Leases executed after the date of this Loan Agreement) to prevent its employees,             agents and contractors, and all tenants and other occupants from causing or             permitting any Prohibited Activities or Conditions. Borrower will not lease or              allow the sublease or use of all or any portion of the Mortgaged Property to any              tenant or subtenant for nonresidential use by any user that, in the ordinary course              of its business, would cause or permit any Prohibited Activity or Condition.          (c)   O&M Programs. As required by Lender, Borrower will also have established a              written operations and maintenance program with respect to certain Hazardous              Materials. Each such operations and maintenance program and any additional or              revised operations and maintenance programs established for the Mortgaged              Property pursuant to this Section 6.12 must be approved by Lender and will be              referred to in this Loan Agreement as an “O&M Program.” Borrower will              comply in a timely manner with, and cause all employees, agents, and contractors              of Borrower and any other Persons present on the Mortgaged Property to comply              with each O&M Program. Borrower will pay all costs of performance of              Borrower’s obligations under any O&M Program, and Lender’s out of pocket              costs incurred in connection with the monitoring and review of each O&M              Program must be paid by Borrower upon demand by Lender. Any such out-of-             pocket costs of Lender that Borrower fails to pay promptly will become an              additional part of the Indebtedness as provided in Section 9.02.          (d)   Notice to Lender. Borrower will promptly give Notice to Lender upon the              occurrence of any of the following events:                (i)   Borrower’s discovery of any Prohibited Activity or Condition.                           (ii)   Borrower’s receipt of or knowledge of any written complaint, order, notice                   of violation or other communication from any tenant, Property Manager,                   Governmental Authority or other Person with regard to present or future                   alleged Prohibited Activities or Conditions, or any other environmental,                   health or safety matters affecting the Mortgaged Property.                           (iii)  Borrower’s breach of any of its obligations under this Section 6.12.                           Any such Notice given by Borrower will not relieve Borrower of, or result in a             waiver of, any obligation under this Loan Agreement, the Note or any other Loan             Document.    Multifamily Loan and Security Agreement                                 Page 40  

 

           (e)   Environmental Inspections, Tests and Audits. Borrower will pay promptly the              costs of any environmental inspections, tests or audits, a purpose of which is to             identify the extent or cause of or potential for a Prohibited Activity or Condition             (“Environmental Inspections”), required by Lender in connection with any             foreclosure or deed in lieu of foreclosure, or as a condition of Lender’s consent to             any Transfer under Article VII, or required by Lender following a reasonable             determination by Lender that Prohibited Activities or Conditions may exist. Any             such costs incurred by Lender (including Attorneys’ Fees and Costs and the costs             of technical consultants whether incurred in connection with any judicial or             administrative process or otherwise) that Borrower fails to pay promptly will             become an additional part of the Indebtedness as provided in Section 9.02. As             long as:  (i) no Event of Default has occurred and is continuing, (ii) Borrower has             actually paid for or reimbursed Lender for all costs of any such Environmental             Inspections performed or required by Lender, and (iii) Lender is not prohibited by             law, contract or otherwise from doing so, Lender will make available to             Borrower, without representation of any kind, copies of Environmental              Inspections prepared by third parties and delivered to Lender. Lender reserves the              right, and Borrower expressly authorizes Lender, to make available to any party,              including any prospective bidder at a foreclosure sale of the Mortgaged Property,              the results of any Environmental Inspections made by or for Lender with respect              to the Mortgaged Property. Borrower consents to Lender notifying any party              (either as part of a notice of sale or otherwise) of the results of any Environmental             Inspections made by or for Lender. Borrower acknowledges that Lender cannot             control or otherwise ensure the truthfulness or accuracy of the results of any             Environmental Inspections and that the release of such results to prospective             bidders at a foreclosure sale of the Mortgaged Property may have a material and             adverse effect upon the amount that a party may bid at such sale. Borrower agrees             that Lender will have no liability whatsoever as a result of delivering the results of              any Environmental Inspections made by or for Lender to any third-party, and              Borrower releases and forever discharges Lender from any and all claims,              damages or causes of action arising out of, connected with or incidental to the              results of the delivery of any Environmental Inspections made by or for Lender.          (f)  Remedial Work. If any investigation, site monitoring, containment, clean-up,              Restoration or other remedial work (“Remedial Work”) is necessary to comply              with any Hazardous Materials Law or order of any Governmental Authority that              has or acquires jurisdiction over the Mortgaged Property or the use, operation or              improvement of the Mortgaged Property, or is otherwise required by Lender as a              consequence of any Prohibited Activity or Condition or to prevent the occurrence             of a Prohibited Activity or Condition, Borrower will, by the earlier of (i) the              applicable deadline required by Hazardous Materials Law, or (ii) 30 days after              Notice from Lender demanding such action, begin performing the Remedial              Work, and thereafter diligently prosecute it to completion, and must in any event              complete the work by the time required by applicable Hazardous Materials Law.              If Borrower fails to begin on a timely basis or diligently prosecute any required    Multifamily Loan and Security Agreement                                 Page 41  

 

                 Remedial Work, Lender may, at its option, cause the Remedial Work to be               completed, in which case Borrower will reimburse Lender on demand for the cost               of doing so. Any reimbursement due from Borrower to Lender will become part               of the Indebtedness as provided in Section 9.02.                  (g)   Borrower Contest of Order. Notwithstanding Section 6.12(f), Borrower may               contest the order of any Governmental Authority in good faith through               appropriate proceedings, provided that (i) Borrower has demonstrated to Lender’s               satisfaction that any delay in completing Remedial Work pending the outcome of               such proceedings would not result in damage to the Mortgaged Property or to               persons who use or occupy the Improvements, or otherwise impair Lender’s               interest under this Loan Agreement, and (ii) if any delay in completing the               Remedial Work results or may result in a Lien against the Mortgaged Property,               Borrower must promptly furnish to Lender a bond or other security satisfactory to               Lender in an amount not less than 150% of the applicable claim.    6.13   Single Purpose Entity Requirements.          (a)   Single Purpose Entity Requirements. Until the Indebtedness is paid in full, each               Borrower and any SPE Equity Owner will remain a “Single Purpose Entity,”               which means at all times since its formation and thereafter it will satisfy each of               the following conditions:                  (i)  It will not engage in any business or activity, other than the ownership,                     operation and maintenance of the Mortgaged Property and activities                     incidental thereto.                  (ii)  It will not acquire, own, hold, lease, operate, manage, maintain, develop or                     improve any assets other than the Mortgaged Property and such Personalty                     as may be necessary for the operation of the Mortgaged Property and will                     conduct and operate its business as presently conducted and operated.                  (iii)  It will preserve its existence as an entity duly organized, validly existing                     and in good standing (if applicable) under the laws of the jurisdiction of its                     formation or organization and will do all things necessary to observe                     organizational formalities.                  (iv)  It will not merge or consolidate with any other Person.                  (v)   It will not take any action to dissolve, wind-up, terminate or liquidate in                     whole or in part; to sell, transfer or otherwise dispose of all or                     substantially all of its assets; to change its legal structure; transfer or                     permit the direct or indirect transfer of any partnership, membership or                     other equity interests, as applicable, other than Transfers permitted under                     this Loan Agreement; issue additional partnership, membership or other                     equity interests, as applicable, or seek to accomplish any of the foregoing.     Multifamily Loan and Security Agreement                                 Page 42  

 

                 (vi)  It will not, without the prior unanimous written consent of all of                    Borrower’s partners, members, or shareholders, as applicable, and, if                    applicable, the prior unanimous written consent of 100% of the members                    of the board of directors or of the board of Managers of Borrower or the                    SPE Equity Owner, take any of the following actions:                      (A)  File any insolvency, or reorganization case or proceeding, to                          institute proceedings to have Borrower or any SPE Equity Owner                          be adjudicated bankrupt or insolvent.                      (B)  Institute proceedings under any applicable insolvency law.                                        (C)  Seek any relief under any law relating to relief from debts or the                          protection of debtors.                      (D)  Consent to the filing or institution of a Bankruptcy against                          Borrower or any SPE Equity Owner.                      (E)   File a petition seeking, or consent to, reorganization or relief with                          respect to Borrower or any SPE Equity Owner under any                          applicable federal or state law relating to bankruptcy or insolvency.                      (F)   Seek or consent to the appointment of a receiver, liquidator,                          assignee, trustee, sequestrator, custodian, or any similar official for                          Borrower or a substantial part of its property or for any SPE Equity                          Owner or a substantial part of its property.                                        (G)  Make any assignment for the benefit of creditors of Borrower or                          any SPE Equity Owner.                      (H)  Admit in writing Borrower’s or any SPE Equity Owner’s inability                          to pay its debts generally as they become due.                      (I)  Take action in furtherance of any of the foregoing.                (vii)  It will not amend or restate its organizational documents if such change                    would cause the provisions set forth in those organizational documents not                    to comply with the requirements set forth in this Section 6.13.                (viii)  It will not own any subsidiary or make any investment in, any other                    Person.                (ix)  It will not commingle its assets with the assets of any other Person and                    will hold all of its assets in its own name.      Multifamily Loan and Security Agreement                                 Page 43  

 

               (x)   It will not incur any debt, secured or unsecured, direct or contingent                    (including guaranteeing any obligation), other than the following:                      (A)  The Indebtedness and any further indebtedness as described in                          Section 11.11 with regard to Supplemental Instruments.                      (B)  Customary unsecured trade payables incurred in the ordinary                          course of owning and operating the Mortgaged Property provided                          the same are not evidenced by a promissory note, do not exceed, in                          the aggregate, at any time a maximum amount of 2% of the                          original principal amount of the Indebtedness and are paid within                          60 days of the date incurred.                      (C)  through (I) are reserved.                                  (xi)  It will maintain its records, books of account, bank accounts, financial                    statements, accounting records and other entity documents separate and                    apart from those of any other Person and will not list its assets as assets on                    the financial statement of any other Person; provided, however, that                    Borrower’s assets may be included in a consolidated financial statement of                    its Affiliate provided that (A) appropriate notation will be made on such                    consolidated financial statements to indicate the separateness of Borrower                    from such Affiliate and to indicate that Borrower’s assets and credit are                    not available to satisfy the debts and other obligations of such Affiliate or                    any other Person, and (B) such assets will also be listed on Borrower’s                    own separate balance sheet.                (xii)  Except for capital contributions or capital distributions permitted under the                    terms and conditions of its organizational documents, it will only enter                    into any contract or agreement with any general partner, member,                    shareholder, principal or Affiliate of Borrower or any Guarantor, or any                    general partner, member, principal or Affiliate thereof, upon terms and                    conditions that are commercially reasonable and substantially similar to                    those that would be available on an arm’s-length basis with third parties.                           (xiii)  It will not maintain its assets in such a manner that will be costly or                    difficult to segregate, ascertain or identify its individual assets from those                    of any other Person.                (xiv)  It will not assume or guaranty (excluding any guaranty that has been                    executed and delivered in connection with the Note) the debts or                    obligations of any other Person, hold itself out to be responsible for the                    debts of another Person, pledge its assets to secure the obligations of any                    other Person or otherwise pledge its assets for the benefit of any other                    Person, or hold out its credit as being available to satisfy the obligations of                    any other Person.    Multifamily Loan and Security Agreement                                 Page 44  

 

                 (xv)  It will not make or permit to remain outstanding any loans or advances to                    any other Person except for those investments permitted under the Loan                    Documents and will not buy or hold evidence of indebtedness issued by                    any other Person (other than cash or investment-grade securities).                (xvi)  It will file its own tax returns separate from those of any other Person,                    unless Borrower (A) is treated as a “disregarded entity” for tax purposes                    and is not required to file tax returns under applicable law or (B) is                    required by applicable law to file consolidated tax returns, and will pay                    any taxes required to be paid under applicable law.                (xvii)  It will hold itself out to the public as a legal entity separate and distinct                    from any other Person and conduct its business solely in its own name,                    will correct any known misunderstanding regarding its separate identity                    and will not identify itself or any of its Affiliates as a division or                    department of any other Person.                (xviii)  It will maintain adequate capital for the normal obligations reasonably                    foreseeable in a business of its size and character and in light of its                    contemplated business operations and will pay its debts and liabilities                    from its own assets as the same become due; provided, however, that                    nothing in this Section 6.13(a)(xviii) will require any member or partner of                    Borrower or any Borrower Principal to make any equity contribution to                    Borrower.                (xix)  It will allocate fairly and reasonably shared expenses with Affiliates                    (including shared office space) and use separate stationery, invoices and                    checks bearing its own name.                (xx)  It will pay (or cause the Property Manager to pay on behalf of Borrower                    from Borrower’s funds) its own liabilities (including salaries of its own                    employees) from its own funds; provided, however, that nothing in this                    Section 6.13(a)(xx) will require any member or partner of Borrower or any                    Borrower Principal to make any equity contribution to Borrower.                            (xxi)  It will not acquire obligations or securities of its partners, members,                    shareholders, or Affiliates, as applicable.                (xxii)  Except as contemplated or permitted by the property management                    agreement with respect to the Property Manager, it will not permit any                    Affiliate or constituent party independent access to its bank accounts.                (xxiii)  It will maintain a sufficient number of employees (if any) in light of its                    contemplated business operations and pay the salaries of its own                    employees, if any, only from its own funds; provided, however, that    Multifamily Loan and Security Agreement                                 Page 45  

 

                     nothing in this Section 6.13(a)(xxiii) will require any member or partner of                    Borrower or any Borrower Principal to make any equity contribution to                    Borrower.                (xxiv)  If such entity is a single member limited liability company, such entity                    will satisfy each of the following conditions:                      (A)  Be formed and organized under Delaware law.                                        (B)  Have either one springing member that is a corporation or two                          springing members who are natural persons. If there is more than                          one springing member, only one springing member will be the sole                         member of Borrower or SPE Equity Owner (as applicable) at any                         one time, and the second springing member will become the sole                         member only upon the first springing member ceasing to be a                         member.                                      (C)   Otherwise comply with all Rating Agencies’ criteria for single                         member limited liability companies (including the delivery of                         Delaware single member limited liability company opinions                         acceptable in all respects to Lender).                                      (D)   At all times Borrower or SPE Equity Owner (as applicable) will                          have one and only one member.                (xxv)  If such entity is a single member limited liability company that is board-                   managed, such entity will have a board of Managers separate from that of                    Guarantor and any other Person and will cause its board of Managers to                    keep minutes of board meetings and actions and observe all other                    Delaware limited liability company required formalities.                (xxvi)  If an SPE Equity Owner is required pursuant to this Loan Agreement, if                    Borrower is (A) a limited liability company with more than one member,                   then Borrower has and will have at least one member that is an SPE                   Equity Owner that has satisfied and will satisfy the requirements of                   Section 6.13(b) and such member is its managing member, or (B) a limited                   partnership, then all of its general partners are SPE Equity Owners that                   have satisfied and will satisfy the requirements set forth in Section                   6.13(b).                           (xxvii) Reserved.                          (xxviii) Reserved.                    (b)    SPE Equity Owner Requirements. The SPE Equity Owner, if applicable, will at              all times since its formation and thereafter comply in its own right (subject to the    Multifamily Loan and Security Agreement                                 Page 46  

 

               modifications set forth below), and will cause Borrower to comply, with each of              the requirements of a Single Purpose Entity. Upon the withdrawal or the              disassociation of an SPE Equity Owner from Borrower, Borrower will              immediately appoint a new SPE Equity Owner, whose organizational documents              are substantially similar to those of the withdrawn or disassociated SPE Equity             Owner, and deliver a new nonconsolidation opinion to Lender in form and             substance satisfactory to Lender with regard to nonconsolidation by a bankruptcy             court of the assets of each of Borrower and SPE Equity Owner with those of its             Affiliates.                    (i)   With respect to Section 6.13(a)(i), the SPE Equity Owner will not engage                    in any business or activity other than being the managing member or                    general partner, as the case may be, of Borrower and owning at least 0.5%                    equity interest in Borrower.                (ii)  With respect to Section 6.13(a)(ii), the SPE Equity Owner has not and will                    not acquire or own any assets other than its equity interest in Borrower                    and personal property related thereto.                            (iii)  With respect to Section 6.13(a)(viii), the SPE Equity Owner will not own                    any subsidiary or make any investment in any other Person, except for                    Borrower.                (iv)  With respect to Section 6.13(a)(x), the SPE Equity Owner has not and will                    not incur any debt, secured or unsecured, direct or contingent (including                    guaranteeing any obligation), other than (A) customary unsecured                    payables incurred in the ordinary course of owning Borrower provided the                    same are not evidenced by a promissory note, do not exceed, in the                    aggregate, at any time a maximum amount of $10,000 and are paid within                    60 days of the date incurred, and (B) in its capacity as general partner of                    Borrower (if applicable).                (v)   With respect to Section 6.13(a)(xiv), the SPE Equity Owner will not                    assume or guaranty the debts or obligations of any other Person, hold itself                    out to be responsible for the debts of another Person, pledge its assets to                    secure the obligations of any other Person or otherwise pledge its assets                    for the benefit of any other Person, or hold out its credit as being available                    to satisfy the obligations of any other Person, except for in its capacity as                    general partner of Borrower (if applicable).          (c)   Effect of Transfer on Single Purpose Entity Requirements. Notwithstanding              anything to the contrary in this Loan Agreement, no Transfer will be permitted              under Article VII unless the provisions of this Section 6.13 are satisfied at all              times.            Multifamily Loan and Security Agreement                                 Page 47  

 

   6.14  Repairs and Capital Replacements.          (a)   Completion of Repairs. Borrower will commence any Repairs as soon as              practicable after the date of this Loan Agreement and will diligently proceed with              and complete such Repairs on or before the Completion Date. All Repairs and              Capital Replacements will be completed in a good and workmanlike manner, with              suitable materials, and in accordance with good building practices and all              applicable laws, ordinances, rules, regulations, building setback lines and              restrictions applicable to the Mortgaged Property. Borrower agrees to cause the              replacement of any material or work that is defective, unworkmanlike or that does              not comply with the requirements of this Loan Agreement, as determined by              Lender.          (b)   Purchases. Without the prior consent of Lender, no materials, machinery,              equipment, fixtures or any other part of the Repairs or Capital Replacements will              be purchased or installed under conditional sale contracts or lease agreements, or              any other arrangement wherein title to such Repairs or Capital Replacements is              retained or subjected to a purchase money security interest, or the right is reserved              or accrues to anyone to remove or repossess any such Repairs or Capital              Replacements, or to consider them as personal property.          (c)  Lien Protection. Borrower will promptly pay or cause to be paid, when due, all              costs, charges and expenses incurred in connection with the construction and             completion of the Repairs or Capital Replacements, and will keep the Mortgaged              Property free and clear of any and all Liens other than the Lien of the Security              Instrument and any other Lien to which Lender has consented.          (d)   Adverse Claims. Borrower will promptly advise Lender in writing of any              litigation, Liens or claims affecting the Mortgaged Property and of all complaints              and charges made by any Governmental Authority that may delay or adversely              affect the Repairs or Capital Replacements.    6.15  Residential Leases Affecting the Mortgaged Property.          (a)   Borrower will, promptly upon Lender’s request, deliver to Lender an executed              copy of each residential Lease then in effect.                 (b)   All Leases for residential units will satisfy the following conditions:                      (i)   They will be on forms that are customary for similar multifamily                    properties in the Property Jurisdiction.                (ii)  They will be for initial terms of at least 6 months and not more than 2                   years (unless otherwise approved in writing by Lender).                 Multifamily Loan and Security Agreement                                 Page 48  

 

                 (iii)  They will not include any Corporate Leases (unless otherwise approved in                    writing by Lender).                            (iv)  They will not include options to purchase.                      (c)    If Borrower is a cooperative housing corporation or association, notwithstanding              anything to the contrary contained in this Loan Agreement, so long as Borrower              remains a cooperative housing corporation or association and is not in breach of              any covenant of this Loan Agreement, Lender consents to each of the following:                (i)   The execution of Leases for terms in excess of 2 years to a tenant                    shareholder of Borrower, so long as such Leases, including proprietary                    Leases, are and will remain subordinate to the Lien of the Security                    Instrument.                (ii)   The surrender or termination of such Leases where the surrendered or                    terminated Lease is immediately replaced or where Borrower makes its                    best efforts to secure such immediate replacement by a newly-executed                    Lease of the same apartment to a tenant shareholder of Borrower.                    However, no consent is given by Lender to any execution, surrender,                    termination or assignment of a Lease under terms that would waive or                    reduce the obligation of the resulting tenant shareholder under such Lease                    to pay cooperative assessments in full when due or the obligation of the                    former tenant shareholder to pay any unpaid portion of such assessments.          (d)    Reserved.    6.16   Litigation; Government Proceedings. Borrower will give prompt Notice to Lender of        any litigation or governmental proceedings pending or, to the best of Borrower’s        knowledge, threatened in writing against Borrower or any Borrower Principal which        might have a Material Adverse Effect. As and when requested by Lender, Borrower will        provide Lender with written updates on the status of all litigation or governmental        proceedings affecting Borrower or any Borrower Principal.    6.17  Further Assurances and Estoppel Certificates; Lender’s Expenses. Within 10 days        after a request from Lender, in Lender’s Discretion, Borrower will take each of the        following actions:          (a)    Deliver to Lender a written statement, signed and acknowledged by Borrower,              certifying to Lender or any Person designated by Lender, as of the date of such              statement:  (i) 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), (ii) the unpaid              principal balance of the Note, (iii) the date to which interest under the Note has              been paid, (iv) that Borrower is not in default in paying the Indebtedness or in              performing or observing any of the covenants or agreements contained in this     Multifamily Loan and Security Agreement                                 Page 49  

 

                 Loan Agreement or any of the other Loan Documents (or, if Borrower is in               default, describing such default in reasonable detail), (v) whether there are any               then-existing setoffs or defenses known to Borrower against the enforcement of               any right or remedy of Lender under the Loan Documents, and (vi) any additional               facts requested by Lender.                  (b)   Execute, acknowledge and/or deliver, at its sole cost and expense, all further acts,               deeds, conveyances, assignments, estoppel certificates, financing statements or               amendments, transfers and assurances as Lender may 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 Loan               Documents or in connection with Lender’s consent rights under Article VII.                  Borrower acknowledges and agrees that, in connection with each request by Borrower         under this Loan Agreement or any Loan Document, Borrower will pay all reasonable         Attorneys’ Fees and Costs and expenses incurred by Lender and Loan Servicer, including         any fees charged by the Rating Agencies, if applicable, regardless of whether the matter        is approved, denied or withdrawn. Any amounts payable by Borrower under this Loan        Agreement will be deemed a part of the Indebtedness, will be secured by the Security        Instrument and will bear interest at the Default Rate if not fully paid within 10 days of        written demand for payment.    6.18   Cap Collateral. Reserved.    6.19   Ground Lease. Reserved.    6.20  ERISA Requirements.          (a)   Borrower will not engage in any transaction which would cause an obligation, or               action taken or to be taken under this Loan Agreement (or the exercise by Lender               of any of its rights under the Note, this Loan Agreement or any of the other Loan               Documents) to be a non-exempt prohibited transaction under ERISA or Section               4975 of the Tax Code.                  (b)   Borrower will deliver to Lender such certifications or other evidence from time to               time throughout the term of this Loan Agreement, as requested by Lender in               Lender’s Discretion, confirming each of the following:                        (i)  Borrower is not an “employee benefit plan” as defined in Section 3(3) of                    ERISA, which is subject to Title I of ERISA, a “plan” to which Section                     4975 of the Tax Code applies, or an entity whose underlying assets                     constitute “plan assets” of one or more of such plans.                              (ii)  Borrower is not a “governmental plan” within the meaning of Section                     3(32) of ERISA.                    Multifamily Loan and Security Agreement                                 Page 50  

 

               (iii)  Borrower is not subject to state statutes regulating investments or fiduciary                    obligations with respect to governmental plans.                            (iv)  One or more of the following circumstances is true:                            (A)  Equity interests in Borrower are publicly offered securities within                          the meaning of 29 C.F.R. Section 2510.3-101(b)(2), as amended                          from time to time or any successor provision.                                        (B)  Less than 25% of each outstanding class of equity interests in                          Borrower are held by “benefit plan investors” within the meaning                          of Section 3(42) of ERISA, as amended from time to time or any                          successor provision.                                        (C)  Borrower qualifies as either an “operating company” or a “real                          estate operating company” within the meaning of 29 C.F.R.                          Section 2510.3-101(c) or (e), as either may be amended from time                          to time or any successor provisions, or is an investment company                          registered under the Investment Company Act of 1940.                            (v)   Reserved                6.21 through 6.52 are Reserved.    6.53  Economic Sanctions Laws; AML Laws.          (a)   Borrower will comply with the Economic Sanctions Laws and AML Laws, as              applicable, and Borrower will take reasonable measures to ensure that each              Borrower Principal will comply with the Economic Sanctions Laws and AML             Laws, as applicable.                     (b)    Borrower and each Borrower Principal will have in place practices and             procedures for the admission of investors which are designed to prevent the              admission of:                      (i)  Any Non-U.S. Equity Holder, or any investor that would have a 25% or                    more ownership interest in Borrower (whether directly or indirectly), and                    that has been convicted of a violation of the AML Laws, or been the                    subject of a final enforcement action relating to the AML Laws.                            (ii)  Any Person with a 25% or more ownership interest in Borrower (whether                    directly or indirectly) that is on the Prohibited Parties Lists.                      (iii)  Any Non-U.S. Equity Holder that is on the OFAC Lists.                  Multifamily Loan and Security Agreement                                 Page 51  

 

   6.54  Crowdfunding. Borrower and each Borrower Principal will not permit direct or indirect        ownership (or other economic) interests of 25% or more in Borrower or any Borrower        Principal that have been marketed or sold to investors through any form of        Crowdfunding.    6.55  through 6.62 are Reserved.    ARTICLE VII       TRANSFERS OF THE MORTGAGED PROPERTY OR                    INTERESTS IN BORROWER.    7.01  Prohibited Transfers. Subject to Section 7.02 and 7.03, as applicable, the occurrence of        any of the following Transfers will constitute a Prohibited Transfer:                  (a)   A Transfer of all or any part of the Mortgaged Property or any interest in the              Mortgaged Property, whether voluntary, involuntary or by operation of law,              including (i) the grant, creation or existence of any Lien on the Mortgaged              Property, even if such Lien does not have priority over the Lien of the Security             Instrument, and (ii) the partial release of income producing or non-income             producing property.                          (b)    A Transfer or series of Transfers of any legal or equitable interest of any             Guarantor which owns a direct or indirect interest in Borrower that result(s) in             such Guarantor no longer owning any direct or indirect interest in Borrower.              (c)    The Transfer of any Controlling Interest in Borrower or any Designated Entity for             Transfers.                (d)    A Transfer or series of Transfers of any legal or equitable interest that result(s) in             a Required Equity Owner no longer owning the Required Equity Ownership             Interest.              (e)   The occurrence of a Status Event with respect to Borrower.              (f)   The grant, creation or existence of any Lien on Ownership Interest, whether             voluntary, involuntary or by operation of law, and whether or not such Lien on             Ownership Interest has priority over the Lien of the Security Instrument, if the             foreclosure of such Lien or the exercise of other remedies would result in a             Prohibited Transfer.                (g)    The termination or revocation of a Trust if the Trust is Borrower, Guarantor or a             Designated Entity for Transfers.              (h)    through (k) are Reserved.              (l)   A Transfer that requires Lender’s prior consent under this Loan Agreement or a             Conditionally Permitted Transfer that requires that certain conditions be satisfied,    Multifamily Loan and Security Agreement                                 Page 52  

 

               if such prior consent was not obtained or such conditions were not satisfied, as              applicable.                  (m)  through (q) are Reserved.    7.02  Permitted Transfers. Notwithstanding any provision of Section 7.01 to the contrary, the        following Transfers are Permitted Transfers:          (a)  Permitted Transfers of the Mortgaged Property.                            (i)  A Prohibited Transfer of the Mortgaged Property for which Borrower has                    obtained Lender’s written consent.                                  (ii)  The grant of a leasehold interest in an individual dwelling unit for a term                    of 2 years or less (or longer if approved by Lender in writing) not                    containing an option to purchase.                                  (iii)  The creation of any New Non-Residential Lease, or the modification or                    termination of any Non-Residential Lease, in each case, for which                    Borrower satisfies the requirements of Section 6.04.                                  (iv)  A Condemnation with respect to which Borrower satisfies the                    requirements of Section 6.11.                                  (v)   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 Liens created by the                    Loan Documents or consented to by Lender in writing).                                  (vi)  The creation of a mechanic’s, materialmen’s, or judgment Lien with                    respect to which Borrower satisfies the requirements of Section 6.09(m).                                   (vii)  An  easement,  restrictive  covenant  or  other  encumbrance  with  respect  to                    which Borrower satisfies the requirements of Section 7.10.                                  (viii)  A Lien of a Supplemental Instrument with respect to which Borrower                    satisfies the requirements of Section 11.11.                 (ix)  A Defeasance with respect to which Borrower satisfies the requirements of                    Section 11.12.                      (b)  Permitted Transfers of Ownership Interests                             (i)  A Transfer of any legal or equitable interests in an entity that is not                    Borrower or a Designated Entity for Transfers so long as such Transfer                    does not result in a Prohibited Transfer under Section 7.01(b) or 7.01(d).    Multifamily Loan and Security Agreement                                 Page 53  

 

                                   (ii)  A Transfer of any legal or equitable Non-Controlling Interest in Borrower                    or any Designated Entity for Transfers so long as such Transfer does not                    result in a Prohibited Transfer under Section 7.01(b) or 7.01(d).                                   (iii)  A Prohibited Transfer of any legal or equitable interests in Borrower or a                    Designated Entity for Transfers for which Borrower has obtained Lender’s                    written consent.                            (iv)  A Conditionally Permitted Transfer pursuant to Section 7.03, upon the                    satisfaction of all applicable conditions.                            (v)   The Transfer by a Person of all or part of the Controlling Interest in                    Borrower or a Designated Entity for Transfers if such interests are first                    converted to a Non-Controlling Interest and the transferor retains Control                    of the Borrower or Designated Entity for Transfers, as applicable, so long                    as such Transfer does not result in a Prohibited Transfer under Section                    7.01(b) or 7.01(d).                                   (vi)  If Borrower is a housing cooperative or association, the Transfer of the                    shares in the housing cooperative or association or the assignment of the                    occupancy agreements or Leases relating to tenant shareholders.                            (c) through (r) are Reserved.    7.03  Conditionally Permitted Transfers. Notwithstanding any provision of Section 7.01 to        the contrary, the occurrence of any of the following Transfers will not constitute a        Prohibited Transfer if Borrower has complied with all applicable conditions specified in        this Section 7.03 and in Section 7.04 (each a “Conditionally Permitted Transfer”).                (a)  Conditionally Permitted Transfers - Category I (Transfer Processing Fee              transactions)                                  (i)  Affiliate Transfer. An “Affiliate Transfer” is a Transfer of any                    Controlling Interest in Borrower or a Designated Entity for Transfers to an                    Affiliate of the transferor.                        (ii)  Intrafamily Transfer. An “Intrafamily Transfer” is a Transfer of any                   Controlling Interest in Borrower or a Designated Entity for Transfers to an                   entity or revocable Trust that is Controlled by the transferor for the benefit                   of Immediate Family Members.                                 (iii)  Transfer to Previously Underwritten Person.                          (A)   A “Transfer to Previously Underwritten Person” is a Transfer                         of a Controlling Interest in Borrower or a Designated Entity for    Multifamily Loan and Security Agreement                                 Page 54  

 

                           Transfers to a Previously Underwritten Person due to the                         retirement, death, or legal incapacity of a Prior Borrower Principal.                         If the name of Previously Underwritten Person is not completed in                         the Summary of Loan Terms then this Section 7.03(a)(iii) is not                          applicable.                                        (B)  In place of the Notice required in Section 7.04(a), Borrower                         provides Lender with Notice of such Transfer together with copies                         of all documents effecting such Transfer not more than 60 days                         after the retirement, death, or legal incapacity of Prior Borrower                         Principal.                                      (C)    If Prior Borrower Principal or its Affiliate was a Guarantor, one of                         the following must occur:                                       (1)    Lender determines that at the time of the Transfer any or all                                the remaining Guarantors will meet the requirements for a                                Replacement Guarantor, including the Replacement                                Guarantor Net Worth and Liquidity Requirements, or                                                     (2)   Previously Underwritten Person or an Affiliate becomes a                                Replacement Guarantor and executes and delivers a                                Replacement Guaranty within 60 days after the retirement,                                death, or legal incapacity of Prior Borrower Principal.                                               (D)  Previously Underwritten Person certifies in writing to Lender that,                          since the date of this Loan Agreement, except as disclosed to and                          approved by Lender in writing, Previously Underwritten Person                          has not been:                            (1)   Subject to a claim in any litigation or other proceeding                                (even if settled) relating to fraud, breach of fiduciary duty,                                breach of trust or other similar claim, or money laundering,                                terrorist financing, terrorism or similar claim.                                                    (2)   To the best of Previously Underwritten Person’s                                knowledge, investigated by any Governmental Authority in                                connection with any matter set forth in Section                                7.03(a)(iii)(D)(1).                                                    (3)   The subject of a complaint or indictment charging a felony.                                                    (4)   Involved in any pending or current criminal litigation.                                                    (5)  The subject of a Bankruptcy.                              Multifamily Loan and Security Agreement                                 Page 55  

 

                           (6)   Suspended, barred or otherwise restricted by any                                department or agency of the federal government.                                              (E)   Previously Underwritten Person certifies in writing to Lender that                          its net worth and liquidity are substantially the same as or better                          than the net worth and liquidity of Previously Underwritten Person                          as of the date of this Loan Agreement.                                               (F)   Section 7.04(i) will not be applicable (solely with respect to the                          Prior Borrower Principal).               (iv)  Co-Owner Transfer.                            (A)  A “Co-Owner Transfer” is a Transfer of interests in the                          Mortgaged Property by any co-owner of the Mortgaged Property to                          any other co-owner of the Mortgaged Property.                                        (B)  Lender receives and approves the documents transferring interest                          in the Mortgaged Property to the transferee(s).                                        (C)  If Borrower is a tenancy-in-common, each of the co-owners                          remaining after the Co-Owner Transfer executes an amendment to                          the Tenancy in Common Agreement reasonably acceptable to                          Lender.                                        (D)  Each co-owner remaining after the Co-Owner Transfer reaffirms in                          writing, in a form reasonably acceptable to Lender, its obligations                          under the Note, Loan Agreement, Security Instrument, and any                          other Loan Document and acknowledges and confirms that the                          Note, Loan Agreement, Security Instrument, and all other Loan                          Documents are in full force and effect.                                        (E)   Each Guarantor reaffirms in writing, in a form reasonably                          acceptable to Lender, its obligations under any Guaranty and                          acknowledges and confirms that the Guaranty remains in full force                          and effect.                                         (F)   Borrower delivers to Lender either (1) an endorsement to the Title                          Policy along with a title update, or (2) a new title insurance policy,                          in either case with an effective date no earlier than the date of                          recordation of the deed transferring the interest in the Mortgaged                          Property to the transferee. An endorsement to the Title Policy that                          evidences the recordation of the deed transferring the interest in the                          Mortgaged Property to the transferee but which does not change                          the effective date of the Title Policy will not be sufficient.      Multifamily Loan and Security Agreement                                 Page 56  

 

                     (G)  Following the Co-Owner Transfer, Required Co-Owner must                          continue to maintain the Required Co-Owner Interest as described                          in the Part B.9, Summary of Loan Terms.                                  (v)  TIC Roll-up Transfer.                             (A)  A “TIC Roll-up Transfer” is the termination of the existing                          Tenancy in Common Agreement and the Transfer of all the                          interests of each Co-Owner Borrower in the Mortgaged Property to                          a single entity (“Consolidation Borrower”).                                         (B)  Immediately after the TIC Roll-up Transfer, the proportional                          beneficial ownership interest in the Consolidation Borrower must                          be the same as the ultimate beneficial ownership of each Co-                         Owner Borrower in the Mortgaged Property immediately prior to                          the TIC Roll-up Transfer. By way of example, an owner of a 10%                          membership interest in a Co-Owner Borrower that owns 50% of                          the Mortgaged Property must become a 5% member of the                          Consolidation Borrower.                                        (C)  If the Consolidation Borrower was formed more than 90 days prior                          to the date of the TIC Roll-up Transfer, the Consolidation                          Borrower must comply with all of Lender’s then-current                          requirements relating to recycled entities.                                        (D)  Following the TIC Roll-up Transfer, the Consolidation Borrower                          must be directly or indirectly Controlled by the Consolidation                          Borrower Manager identified in Part B.9, Summary of Loan                          Terms.                      (E)   All consents, agreements and other documents relating to the                          termination of the Tenancy in Common Agreement, the transfer of                          interests in the Mortgaged Property to Consolidation Borrower,                          and/or otherwise related to the TIC Roll-up Transfer are                          reasonably satisfactory to Lender.                                        (F)   The Consolidation Borrower executes an Assumption Agreement                          that, among other things, requires the Consolidation Borrower to                          assume and perform all obligations of each Co-Owner Borrower                          set forth in the Loan Documents. Each Co-Owner Borrower will                          remain liable and Consolidation Borrower will become liable                          under the Loan Documents for events or circumstances occurring                          or existing on or before the date of the TIC Roll-up Transfer.                                        (G)   The Assumption Agreement is recorded in the land records and                          Consolidation Borrower delivers either (1) an endorsement to the    Multifamily Loan and Security Agreement                                 Page 57  

 

                           Title Policy along with a title update, or (2) a new title insurance                          policy in a form acceptable to Lender, in either case with an                          effective date no earlier than the date of recordation of the                          Assumption Agreement. An endorsement to the existing Title                          Policy that evidences the recordation of the deed transferring the                          interest in the Mortgaged Property to the Consolidation Borrower                         but which does not change the effective date of the Title Policy                         will not be sufficient.                    (H)   Each Guarantor reaffirms in writing, in a form reasonably                         acceptable to Lender, its obligations under any existing Guaranty                         and acknowledges and confirms that the Guaranty remains in full                         force and effect.                    (I)   The Consolidation Borrower files such financing statements as                         reasonably required by Lender.                    (J)    The TIC Roll-up Transfer is completed in accordance with the                         terms of this Section 7.03(a)(v) at least one year prior to the                         Maturity Date.                    (vi)  through (xv) are Reserved.              (b)   Conditionally Permitted Transfers - Category II (Special Transfer Processing Fee              transactions)                            (i)  Transfer Due to Death.                        (A)   “Transfer Due to Death” is (1) a Transfer to a Beneficiary of a                          Controlling Interest in Borrower or a Designated Entity for                          Transfers by devise, descent, or operation of law, due to the death                          of a natural person, and if applicable, (2) the subsequent Transfer                          by such Beneficiary to another Beneficiary of the deceased natural                          person (“Second Beneficiary”).                                         (B)  In place of the Notice required in Section 7.04(a), Borrower                         provides Lender with Notice of the death not more than 60 days                         after the death (“Notice of Death”).                                        (C)  Within 30 days after the Notice of Death, Borrower notifies Lender                          (1) of the proposed Transfer date, (2) of  the identity of the                          Beneficiary, and (3) whether the Beneficiary will subsequently                          Transfer the Controlling Interest to a Second Beneficiary and the                          identity of the Second Beneficiary, if applicable (“Settlement                          Notice”).                        Multifamily Loan and Security Agreement                                 Page 58  

 

                     (D)  In place of the Transfer Processing Fee due under Section 7.04(b),                          Borrower pays Lender the Special Transfer Processing Fee when                          Borrower delivers the Settlement Notice.                                        (E)   Contemporaneously with providing the Settlement Notice to                          Lender, Borrower provides evidence reasonably satisfactory to                          Lender that the eligibility, organization, credit and experience in                          the management of similar properties of Beneficiary or Second                          Beneficiary, as applicable, are appropriate to the overall structure                          and documentation of the Loan.                                        (F)   If the Transfer Due to Death results from the death of any                          Guarantor, each surviving Guarantor executes such documents and                          agreements as Lender reasonably requires to ratify its Guaranty                          within 30 days after the Notice of Death.                                        (G)  If the Transfer Due to Death results from the death of any                          Guarantor, unless Lender determines that any or all the surviving                          Guarantors meet the requirements for a Replacement Guarantor,                          including the Replacement Guarantor Net Worth and Liquidity                          Requirements, one of the following occurs:                                              (1)   Within 30 days after the Settlement Notice, Borrower                                causes a Replacement Guarantor to execute and deliver to                                Lender a Replacement Guaranty.                                                    (2)   The estate of the deceased Guarantor ratifies the Guaranty                                in writing within 30 days after the Settlement Notice, and                                within 6 months after the death of the deceased Guarantor,                                Borrower causes a Replacement Guarantor to execute and                                deliver to Lender a Replacement Guaranty.                      (H)  Section 7.04(i) and (j) will not be applicable (solely with respect to                          any deceased Guarantor).               (ii)  Preferred Equity Control Take-Over Transfer.                            (A)  A “Preferred Equity Control Take-Over Transfer” is a Transfer                          of the Manager’s right to Control the Borrower to Preferred Equity                          Investor or an Affiliate of Preferred Equity Investor pursuant to the                          operating agreement, joint venture agreement, or similar agreement                          governing a preferred equity contribution. If the name of Preferred                          Equity Investor is not specified in the Summary of Loan Terms                          then this Transfer provision is not applicable. The Preferred Equity                          Control Take-Over Transfer cannot include the Transfer of the                          Manager’s ownership interests to Preferred Equity Investor.                       Multifamily Loan and Security Agreement                                 Page 59  

 

                     (B)  In place of the Transfer Processing Fee required by Section                          7.04(b), Borrower pays Lender the Special Transfer Processing Fee                          when Borrower delivers the Notice of the Transfer.                                        (C)  Notwithstanding Section 7.04(c), if there is an Event of Default                          and the Preferred Equity Control Take-Over Transfer would cure                          the Event of Default, then the Preferred Equity Control Take-Over                         Transfer will be permitted if it occurs within 60 days after all                         applicable conditions have been met to Lender’s satisfaction.                                      (D)    Preferred Equity Investor or an Affiliate of Preferred Equity                         Investor becomes a Replacement Guarantor and executes and                         delivers a Replacement Guaranty.                                 (E)    Preferred Equity Investor certifies in writing to Lender that since                          the date of this Loan Agreement, except as disclosed to and                          approved by Lender, Preferred Equity Investor (or the Affiliate of                          Preferred Equity Investor, if applicable) has not been:                                                      (1)   Subject to a claim in any litigation or other proceeding                                (even if settled) relating to fraud, breach of fiduciary duty,                                breach of trust or other similar claim, or money laundering,                                terrorist financing, terrorism or similar claim.                                                    (2)   To the best of Preferred Equity Investor’s knowledge,                                investigated by any Governmental Authority in connection                                with any matter set forth in Section 7.03(b)(ii)(E)(1).                                                    (3)   The subject of a complaint or indictment charging a felony.                                                    (4)   Involved in any pending or current criminal litigation.                                                    (5)  The subject of a Bankruptcy.                                                         (6)   Suspended, barred or otherwise restricted by any                                department or agency of the federal government.                                        (F)   Preferred Equity Investor certifies in writing to Lender that its net                          worth and liquidity (or the net worth and liquidity of the Affiliate                          of Preferred Equity Investor) are substantially the same as or better                          than the net worth and liquidity of Preferred Equity Investor as of                          the date of this Loan Agreement.                       (G)  Section 7.04(i) will not be applicable.                (iii)  Buy-Sell Transfer.    Multifamily Loan and Security Agreement                                 Page 60  

 

                       (A)  A “Buy-Sell Transfer” is a Transfer of the Manager’s right to                          directly or indirectly Control the Borrower and/or the Manager’s                          direct or indirect ownership interest in the Borrower to the Buy-                         Sell Equity Investor or an Affiliate of Buy-Sell Equity Investor                          pursuant to a buy-sell agreement, operating agreement, partnership                          agreement, joint venture agreement, or similar agreement. If the                          name of the Buy-Sell Equity Investor is not specified in the                          Summary of Loan Terms then this provision is not applicable.                                        (B)  In place of the Transfer Processing Fee required by Section                          7.04(b), Borrower pays Lender the Special Transfer Processing Fee                          when Borrower delivers the Notice.                                        (C)  Notwithstanding Section 7.04(c), if there is an Event of Default                          and the Buy-Sell Transfer would cure the Event of Default, then                          the Buy-Sell Transfer will be permitted if it occurs within 60 days                          after all applicable conditions have been met to Lender’s                          satisfaction.                                        (D)  Buy-Sell Equity Investor or its Affiliate becomes a Replacement                          Guarantor and executes and delivers a Replacement Guaranty.                      (E)   Buy-Sell Equity Investor certifies in writing to Lender that since                          the date of this Loan Agreement, except as disclosed to and                          approved by Lender, Buy-Sell Equity Investor (or the Affiliate of                          Buy-Sell Equity Investor, if applicable) has not been:                                                      (1)   Subject to a claim in any litigation or other proceeding                                (even if settled) relating to fraud, breach of fiduciary duty,                                breach of trust or other similar claim, or money laundering,                                terrorist financing, terrorism or similar claim.                                                    (2)   To the best of Buy-Sell Equity Investor’s knowledge,                                investigated by any Governmental Authority in connection                                with any matter set forth in Section 7.03(b)(iii)(E)(1).                                                    (3)   The subject of a complaint or indictment charging a felony.                                                    (4)   Involved in any pending or current criminal litigation.                                                    (5)  The subject of a Bankruptcy.                                                         (6)   Suspended, barred or otherwise restricted by any                                department or agency of the federal government.                        Multifamily Loan and Security Agreement                                 Page 61  

 

                     (F)   Buy-Sell Equity Investor certifies in writing to Lender that its net                          worth and liquidity (or the net worth and liquidity of the Affiliate                          of Buy-Sell Equity Investor, if applicable) are substantially the                          same as or better than the net worth and liquidity of Buy-Sell                          Equity Investor as of the date of this Loan Agreement.                                         (G)  Section 7.04(i) will not be applicable.                      (iv)  through (viii) are Reserved.                (c)  Conditionally Permitted Transfers - Category III (Transfer Processing Fee plus              Conditional Transfer Fee transactions)                       If the Loan is in a Securitization, for purposes of this Section 7.03(c) only, the              term “Lender in Lender’s Discretion” may include the determination of the              approved directing certificateholder, if any, in such Securitization.                        (i)  Manager Transfer.                            (A)  A “Manager Transfer” is a voluntary or involuntary Transfer by a                          Manager (“Departing Manager”) to one or more Existing                          Owners.                                        (B)  Lender in Lender’s Discretion has determined that the eligibility,                          organization, credit, and experience in the management of similar                          properties of the Existing Owner are appropriate to the overall                          structure and documentation of the Loan.                                        (C)  If the Departing Manager or its Affiliate is a Guarantor, Existing                          Owner or an Affiliate of Existing Owner becomes a Replacement                          Guarantor and executes and delivers a Replacement Guaranty.                      (D)  Section 7.04(i) will not be applicable.                                        (E)   Notwithstanding Section 7.04(q), Borrower pays to Lender the                          Conditional Transfer Fee at the time of the Manager Transfer.                (ii)  Required Equity Owner Transfer.                            (A)  A “Required Equity Owner Transfer” is a Transfer by a                          Required Equity Owner (“Departing Equity Owner”) of part or                          all of the Required Equity Ownership Interest.                                        (B)  Lender in Lender’s Discretion has determined that it is not                          necessary for the Departing Equity Owner to maintain the                          Required Equity Ownership Interest.    Multifamily Loan and Security Agreement                                 Page 62  

 

                                         (C)  If the Required Equity Owner Transfer takes place in connection                         with another Transfer, then notwithstanding Section 7.04(b),                         Lender will not collect a Transfer Processing Fee if a Transfer                         Processing Fee or Special Transfer Processing Fee was collected                          by Lender in connection with the other Transfer.                       (D)  Section 7.04(r) will not be applicable.                       (E)   Notwithstanding Section 7.04(q), Borrower pays to Lender the                          Conditional Transfer Fee at the time of the Required Equity Owner                          Transfer.                              (iii)  Release of Guarantor Transfer.                             (A)  A “Release of Guarantor Transfer” is a Transfer that occurs                          when Lender in Lender’s Discretion agrees in writing to release a                          Guarantor (“Released Guarantor”) of a portion of Released                          Guarantor’s liability under the Guaranty.                                          (B)  After the Release of Guarantor Transfer, there must be one or more                          remaining Guarantor(s), which individually or together meet the                          Replacement Guarantor Net Worth and Liquidity Requirements                          and are otherwise acceptable to Lender.                                        (C)   If Lender consents to a Release of Guarantor Transfer, then one of                          the following will apply:                                  (i)  If Borrower delivers to Lender a Clean Site Assessment,                                then Lender will release Released Guarantor from all of                                Released Guarantor’s obligations except Released                               Guarantor’s obligation to guaranty Borrower’s liability                               under Section 6.12 or Section 10.02(b) with respect to any                               loss, liability, damage, claim, cost or expense which                               directly or indirectly arises from or relates to any                               Prohibited Activities or Conditions existing prior to the                               date of the Transfer.                                                  (ii)   If Borrower does not deliver a Clean Site Assessment as                               described in Section 7.03(B)(iii), then Lender will release                               Released Guarantor from all of Released Guarantor’s                               obligations except for Released Guarantor’s obligation to                               guaranty Borrower’s liability under Section 6.12 or Section                               10.02(b).                       Multifamily Loan and Security Agreement                                 Page 63  

 

                     (D)  If the Release of Guarantor Transfer takes place in connection with                          another Transfer, notwithstanding Section 7.04(b), Lender will not                          collect a Transfer Processing Fee if a Transfer Processing Fee or                          Special Transfer Processing Fee was collected by Lender in                          connection with the other Transfer.                                         (E)   Notwithstanding Section 7.04(q), Borrower pays to Lender the                          Conditional Transfer Fee at the time of the Release of Guarantor                          Transfer unless the Release of Guarantor Transfer takes place in                          connection with another Conditionally Permitted Transfer or a                          Transfer to which Lender has consented pursuant to Section 7.05.                                  (iv)  through (viii) are Reserved.          (d)   Reserved.    7.04  Conditions for Conditionally Permitted Transfers. The following conditions will        apply to all Conditionally Permitted Transfers unless otherwise noted in Section 7.03.          (a)   Borrower provides Lender with Notice at least 30 days prior to the proposed              Conditionally Permitted Transfer.                       (b)   Borrower pays a Transfer Processing Fee to Lender at the time Borrower provides              Lender with the Notice of such Transfer.                (c)   At the time of the Conditionally Permitted Transfer, no Event of Default has              occurred and is continuing and no event or condition has occurred and is              continuing that, with the giving of Notice or the passage of time, or both, would              become an Event of Default.                (d)   Borrower delivers to Lender organizational charts, in form and detail acceptable              to Lender, reflecting the structure of Borrower prior to and after the Conditionally              Permitted Transfer. If required by Lender, the Loan Agreement is amended to              revise Exhibit H to reflect the post-Conditionally Permitted Transfer              organizational chart.                      (e)   Borrower delivers to Lender either (i) copies of the then-current organizational              documents of Borrower and any other entity in which interests will be transferred,              including any proposed amendments to be made in connection with the              Conditionally Permitted Transfer or (ii) a certification that the organizational              documents have not been modified since the date of this Loan Agreement.                (f)   Borrower certifies in writing to Lender that as of the date of the Conditionally              Permitted Transfer no Borrower Principal:                (i)  Is on any Prohibited Parties Lists.    Multifamily Loan and Security Agreement                                 Page 64  

 

                             (ii)  Has been convicted of a violation of the AML Laws.                            (iii)  Has been the subject of a final enforcement action relating to the AML                    Laws.                 (g)   Borrower certifies in writing to Lender that as of the date of the Conditionally              Permitted Transfer either there will not be any Non-U.S. Equity Holders, or no              Non-U.S. Equity Holder:                      (i)  Is on the OFAC Lists.                (ii)  Has been convicted of a violation of the AML Laws.                            (iii)  Has been the subject of a final enforcement action relating to the AML                    Laws.                 (h)   Following the Conditionally Permitted Transfer, one of the following is true:                       (i)  The Property Manager, if applicable, continues to be responsible for the                    management of the Mortgaged Property, and such Conditionally Permitted                    Transfer will not result in a change in the day-to-day operations of the                    Mortgaged Property.                             (ii)  The requirements of Section 6.09(d) regarding the appointment of a new                    Property Manager have been or will be satisfied.                      (i)   Following the Conditionally Permitted Transfer, Control and management of the              operations of Borrower continue to be held by the Person exercising such Control              and management immediately prior to the Conditionally Permitted Transfer.                (j)   Unless a Replacement Guarantor is applicable, Guarantor continues to own a              direct or indirect interest in Borrower if Guarantor owned a direct or indirect              interest in Borrower prior to the Conditionally Permitted Transfer.                (k)   Reserved.                (l)   If any transferee or any Replacement Guarantor is an entity, Borrower provides to              Lender satisfactory evidence that the term of existence of such entity (exclusive of              any unexercised extension options or rights) does not expire prior to the Maturity              Date.                (m)  If there is a Replacement Guaranty or a modification of any Loan Document,              Borrower delivers to Lender customary legal opinions, as Lender reasonably              deems necessary, in form and substance satisfactory to Lender.            Multifamily Loan and Security Agreement                                 Page 65  

 

           (n)   Borrower and Guarantor execute such documents and agreements as Lender               reasonably requires to evidence the Transfer and to ratify their obligations under               the Loan Documents.            (o)   If a nonconsolidation opinion was delivered on the Closing Date and if, after               giving effect to the Conditionally Permitted Transfer and all prior Transfers, 50%               or more in the aggregate of direct or indirect interests in Borrower are owned by              any Person and its Affiliates that owned less than a 50% direct or indirect interest              in Borrower as of the Closing Date, Borrower delivers to Lender an opinion of               counsel for Borrower, in form and substance satisfactory to Lender, regarding               nonconsolidation.                  (p)   Borrower pays or reimburses Lender, upon demand, for all costs and expenses,               including all Attorneys’ Fees and Costs incurred by Lender in connection with               such Conditionally Permitted Transfer.          (q)   Lender will not be entitled to collect a Transfer Fee or Conditional Transfer Fee.                   (r)   Upon completion of any Conditionally Permitted Transfer, Required Equity               Owner must own the Required Equity Ownership Interest.                  (s)   Upon completion of any Conditionally Permitted Transfer, Borrower must be in              compliance with Section 7.06 and 7.07 of this Loan Agreement, if applicable.                 (t)   through (v) are Reserved.    7.05   Lender’s Consent to Prohibited Transfers.                (a)   Conditions for Lender’s Consent. With respect to a Transfer that would otherwise               constitute an Event of Default under this Article VII, Lender will consent, without               any adjustment to the rate at which the Indebtedness bears interest or to any other               economic terms of the Indebtedness set forth in the Note, if, prior to such               Transfer, each of the following requirements is satisfied:                  (i)  Borrower has provided Lender with Notice at least 45 days prior to the                     proposed Transfer and has paid the Transfer Processing Fee at the time of                     such Notice.                              (ii)  At least 30 days prior to the proposed Transfer, Borrower has submitted to                     Lender all information required by Lender to make the determinations                     required by this Section 7.05.                  (iii)  As of the date of the Transfer, no Event of Default has occurred and is                     continuing and no event or condition has occurred and is continuing that,                     with the giving of Notice or the passage of time, or both, would become an                     Event of Default unless such Transfer would cure the Event of Default.       Multifamily Loan and Security Agreement                                 Page 66  

 

               (iv)  Lender in Lender’s Discretion has determined that the transferee’s                    organization, credit and experience in the management of similar                    properties meet Lender’s standards and are appropriate to the overall                    structure and documentation of the Loan.                 (v)   Lender in Lender’s Discretion has determined that the proposed                    Guarantor’s credit meets Lender’s standards.                             (vi)  Lender in Lender’s Discretion has determined that the Mortgaged Property                    at the time of the proposed Transfer will be managed by a Property                    Manager meeting the requirements of Section 6.09(d).                (vii)  Lender in Lender’s Discretion has determined that the Mortgaged                    Property, at the time of the proposed Transfer, will meet all of Lender’s                    standards as to its physical condition, occupancy, net operating income,                    and the accumulation of reserves (or appropriate reserves acceptable to                    Lender are established).                            (viii)  Reserved.                (ix)  Lender has determined that none of the transferee, any proposed Borrower                    Principal of the transferee or any Non-U.S. Equity Holder of the transferee                    is presently listed on the OFAC Lists and neither the transferee or any                    proposed Borrower Principal of the transferee is listed on the FHFA SCP                    List.                                  (x)   Lender has determined that neither the transferee nor any proposed                    Borrower Principal has been convicted of a violation of the AML Laws or                    has been the subject of a final enforcement action relating to the AML                    Laws.                      (xi)  If any Supplemental Instrument is outstanding, Borrower has obtained the                    consent of each Supplemental Lender, if different from Lender.                (xii)  Borrower and Guarantor execute such additional documents as Lender                    may require to evidence the Transfer.                (xiii)  In the case of a Transfer of all or any part of the Mortgaged Property                    (either through deed or the Transfer of membership or partnership                    interests), each of the following conditions is satisfied:                                  (A)  The transferee executes the Assumption Agreement.                                         (B)  Lender may, in Lender’s Discretion, by Notice to Borrower and the                          proposed transferee(s), (1) modify or render void any or all the                          negotiated modifications to the Loan Documents and/or (2)    Multifamily Loan and Security Agreement                                 Page 67  

 

                           reinstate Imposition Reserve Deposits that were waived or deferred                          for the transferor as a condition to Lender’s consent to the                         proposed Transfer.                                      (C)   If required by Lender, one or more Replacement Guarantor(s)                          satisfying the Replacement Guarantor Net Worth and Liquidity                          Requirements, executes and delivers to Lender a Replacement                          Guaranty.                                        (D)  The transferee executes such additional documentation (including                          financing statements, as applicable) as Lender may require.                        (E)   In the case of the Transfer of the Property by deed, the transferee                          delivers either (1) an endorsement to the Title Policy along with a                          title update or (2) a new title insurance policy, in either case with                          an effective date no earlier than the date of recordation of the deed                          transferring the interest in the Mortgaged Property. An                          endorsement to the Title Policy that evidences the recordation of                          the deed transferring the interest in the Mortgaged Property to the                          transferee but which does not change the effective date of the Title                          Policy will not be sufficient.                                     (xiv)  In the case of a Transfer of any Controlling Interest in Borrower or                    Designated Entity for Transfers, each of the following conditions is                    satisfied:                                  (A)  Borrower and Guarantor execute such documents and agreements                          as Lender requires to evidence the Transfer and to ratify their                         obligations under the Loan Documents.                                        (B)   Lender may, in Lender’s Discretion, by Notice to Borrower and the                          proposed transferee(s) (1) modify or render void any or all the                          negotiated modifications to the Loan Documents and/or (2)                         reinstate Imposition Reserve Deposits that were waived or deferred                         for the transferor as a condition to Lender’s consent to the                         proposed Transfer.                                      (C)   If required by Lender, one or more Replacement Guarantor(s)                         satisfying the Replacement Guarantor Net Worth and Liquidity                         Requirements, executes and delivers to Lender a Replacement                         Guaranty.                                      (D)   The transferee executes such additional documentation (including                          financing statements, as applicable) as Lender may require.                   Multifamily Loan and Security Agreement                                 Page 68  

 

               (xv)  Lender has received such legal opinions as Lender deems necessary,                    including a nonconsolidation opinion (if a nonconsolidation opinion was                    delivered on the Closing Date and if required by Lender), an opinion that                    the assignment and assumption of the Loan Documents has been duly                    authorized, executed, and delivered, and that the assumption documents                    and the Loan Documents are enforceable as the obligations of Borrower,                    transferee, and Guarantor, as applicable.                (xvi)  Borrower pays to Lender all costs, including the cost of all title searches,                    title insurance and recording costs, and all Attorneys’ Fees and Costs                    incurred in reviewing the Transfer request and any fees charged by the                    Rating Agencies, if applicable.                (xvii)  At the time of the Transfer, Borrower pays the Transfer Fee to Lender.                      (xviii)  Upon completion of any Transfer pursuant to this Section 7.05, Borrower                    must be in compliance with Section 7.06 and Section 7.07 of this Loan                    Agreement, if applicable.                 (xix)  through (xxvi) Reserved.                      (b)   Continuing Liability of Borrower. If Borrower requests a release of its liability              under the Loan Documents in connection with a Transfer of all of Borrower’s              interest in the Mortgaged Property, and Lender approves the Transfer pursuant to              Section 7.05(a), then one of the following will apply:                      (i)  If Borrower delivers to Lender a Clean Site Assessment, then Lender will                    release Borrower from all of Borrower’s obligations under the Loan                    Documents except for any liability under Section 6.12 or Section 10.02(b)                    with respect to any loss, liability, damage, claim, cost or expense which                    directly or indirectly arises from or relates to any Prohibited Activities or                    Conditions existing prior to the date of the Transfer.                            (ii)  If Borrower does not deliver a Clean Site Assessment as described in                    Section 7.05(b)(i), then Lender will release Borrower from all of                    Borrower’s obligations under the Loan Documents except for liability                    under Section 6.12 or Section 10.02(b).                      (c)  Continuing Liability of Guarantor. If Guarantor requests a release of its liability              under the Guaranty in connection with a Transfer which is permitted,              conditionally permitted, or approved by Lender pursuant to this Article VII, and              Borrower has provided a Replacement Guarantor in compliance with the terms of              this Loan Agreement, then one of the following will apply:                      (i)  If Borrower delivers to Lender a Clean Site Assessment, then Lender will                    release Guarantor from all of Guarantor’s obligations except Guarantor’s    Multifamily Loan and Security Agreement                                 Page 69  

 

                       guaranty of Borrower’s liability under Section 6.12 or Section 10.02(b)                     with respect to any loss, liability, damage, claim, cost or expense which                     directly or indirectly arises from or relates to any Prohibited Activities or                     Conditions existing prior to the date of the Transfer.                              (ii)  If Borrower does not deliver a Clean Site Assessment as described in                     Section 7.05(c)(i), then Lender will release Guarantor from all of                     Guarantor’s obligations except for Guarantor’s guaranty of Borrower’s                     liability under Section 6.12 or Section 10.02(b).                  7.06  SPE Equity Owner Requirement Following Transfer. Following any Transfer,         Borrower must satisfy any applicable conditions regarding an SPE Equity Owner set         forth in Section 6.13(a)(xxvi) of this Loan Agreement.      7.07  Additional Transfer Requirements - External Cap Agreement.             (a)   Continuation of Cap Agreement. If a Transfer of all or part of the Mortgaged               Property permitted by this Loan Agreement occurs, Borrower will ensure that any               third-party Cap Agreement is transferred to the applicable transferee or, if the Cap               Agreement is not transferable, Borrower will replace the third-party Cap               Agreement in accordance with Lender’s then-current requirements.             (b)   Establishment or Modification of Rate Cap Agreement Reserve Fund                        (i)   If the third-party Cap Agreement which will be in place immediately                     following the Transfer is scheduled to expire prior to the Maturity Date,                     Lender may require Borrower to establish a Rate Cap Agreement Reserve                     Fund.                               (ii)  If Borrower has previously established a Rate Cap Agreement Reserve                    Fund, then Lender will determine whether the balance of any existing Rate                    Cap Agreement Reserve Fund is sufficient under then-current market                    conditions to purchase a Replacement Cap Agreement, and may then take                    any of the following actions:                            (A)   Lender may require Borrower to make an additional deposit into                           the Rate Cap Agreement Reserve Fund.                                          (B)  If funding of the Rate Cap Agreement Reserve Fund has been                           deferred, Lender may require Borrower to begin making monthly                           deposits into the Rate Cap Agreement Reserve Fund.                                          (C)   Lender may require Borrower to increase the amount of monthly                           deposits to the Rate Cap Agreement Reserve Fund.    7.08   Reserved.     Multifamily Loan and Security Agreement                                 Page 70  

 

     7.09  Reserved.    7.10  Easement, Restrictive Covenant or Other Encumbrance. The grant of an easement,        restrictive covenant or other encumbrance (other than a mechanic’s, materialman’s or        judgment Lien, or any Lien securing indebtedness) will be a Permitted Transfer if each of        the following conditions is satisfied:                (a)   Borrower provides Lender with at least 30 days prior Notice of the proposed              Transfer.                (b)   Prior to the Transfer, Lender determines, in Lender’s Discretion, that the              easement, restrictive covenant or other encumbrance will not materially affect the              operation or value of the Mortgaged Property or Lender’s interest in the              Mortgaged Property.                (c)   Borrower pays or reimburses Lender, upon demand, for all costs and expenses,              including all Attorneys’ Fees and Costs, incurred by Lender in connection with              reviewing Borrower’s request for Lender’s review of such grant of easement,              restrictive covenant, or other encumbrance; provided, however, that Lender will              not be entitled to collect a Transfer Processing Fee, a Special Transfer Processing              Fee, a Transfer Fee, or a Conditional Transfer Fee.                (d)   If the Note is held by a REMIC trust, Lender may obtain an opinion of counsel, at              Borrower’s expense, which meets each of the following requirements:                            (i)   The counsel providing the opinion is acceptable to Lender.                            (ii)   The opinion is addressed to Lender.                            (iii)   The opinion is in form and substance satisfactory to Lender in its sole and                    absolute discretion.                            (iv)   The opinion confirms each of the following:                                  (A)  The grant of such easement, restrictive covenant or other                          encumbrance has been effected in accordance with the                          requirements of Treasury Regulation Section 1.860G-2(a)(8) (as                          such regulation may be modified, amended or replaced from time                          to time).                                        (B)  The qualification and status of the REMIC trust as a REMIC will                          not be adversely affected or impaired because of such grant.                                        (C)   That there will be no imposition of a tax under applicable REMIC                          provisions because of such grant.    Multifamily Loan and Security Agreement                                 Page 71  

 

        ARTICLE VIII     ACTIONS OR EVENTS RELATING TO GUARANTOR.    8.01  Guarantor Bankruptcy. If there is a Bankruptcy with respect to a Guarantor, then the        following requirements must be satisfied:                (a)   Borrower or Guarantor must provide Notice of such Bankruptcy to Lender at least              30 days prior to the filing of a voluntary Bankruptcy or within 30 days after the              commencement of an involuntary Bankruptcy.                (b)    Within 90 days after filing a voluntary Bankruptcy or commencement of an              involuntary Bankruptcy, if such action is not dismissed, then Borrower must               cause a Replacement Guarantor to execute and deliver to Lender a Replacement              Guaranty, together with such customary legal opinions as Lender deems              necessary.                 (c)   Borrower must pay or reimburse Lender, upon demand, for all costs and              expenses, including all Attorneys’ Fees and Costs, incurred by Lender in              connection with the replacement of Guarantor.                (d)    Borrower must pay the Special Transfer Processing Fee to Lender in connection              with the replacement of Guarantor at the time of the delivery of the Replacement              Guaranty.          8.02  Guarantor Status Event.  If there is a Status Event with respect to a Guarantor, the        following requirements must be satisfied:                 (a)   Borrower or Guarantor must provide Notice of such Status Event and pay the              Special Transfer Processing Fee to Lender within 30 days after a Status Event.                (b)    Within 30 days after a Status Event, Borrower must cause a Replacement              Guarantor to execute and deliver to Lender a Replacement Guaranty, together              with such customary legal opinions as Lender deems necessary.                (c)   Borrower must pay or reimburse Lender, upon demand, for all costs and expenses              including all Attorneys’ Fees and Costs, incurred by Lender in connection with              the Status Event.           8.03  Death of a Guarantor Not in Borrower’s Ownership Structure.  If there is a death of        a Guarantor Not in Borrower’s Ownership Structure, the following requirements must be         satisfied:            (a)   Borrower must provide Notice to Lender within 60 days after the death of any               Guarantor Not in Borrower’s Ownership Structure along with the Special Transfer               Processing Fee.              Multifamily Loan and Security Agreement                                 Page 72  

 

         (b)   Each surviving Guarantor must execute such documents and agreements as              Lender requires in Lender’s Discretion to ratify its Guaranty within 30 days after              the Notice required under Section 8.03(a).                            (c)   Unless Lender determines that any or all the surviving Guarantors meet the              requirements for a Replacement Guarantor, including the Replacement Guarantor              Net Worth and Liquidity Requirements, one of the following must occur:                                (i)   Within 30 days after the Notice required under Section 8.03(a), Borrower                   causes a Replacement Guarantor to execute and deliver to Lender a                   Replacement Guaranty.                          (ii)   The estate of the deceased Guarantor ratifies the Guaranty in writing                   within 30 days after the Notice required under Section 8.03(a), and within                    6 months after the death of the applicable Guarantor, Borrower causes a                    Replacement Guarantor to execute and deliver to Lender a Replacement                    Guaranty.         (d)   Borrower must pay or reimburse Lender, upon demand, for all costs and expenses              including all Attorneys’ Fees and Costs, incurred by Lender in connection with              the replacement of the Guarantor.           ARTICLE IX        EVENTS OF DEFAULT AND REMEDIES.    9.01  Events of Default. The occurrence of any one or more of the following will constitute an        Event of Default under this Loan Agreement:          (a)   Borrower fails to pay or deposit when due any amount required by the Note, this              Loan Agreement or any other Loan Document.          (b)   Borrower fails to maintain the Insurance coverage required by Section 6.10.          (c)   Borrower or any SPE Equity Owner fails to comply with the provisions of Section              6.13 or if any of the assumptions contained in any nonconsolidation opinions              delivered to Lender at any time is or becomes untrue in any material respect.          (d)   Borrower or any SPE Equity Owner, any of its officers, directors, trustees, general              partners or managers or any Guarantor commits fraud or a material              misrepresentation or material omission in connection with:  (i) the application for              or creation of the Indebtedness, (ii) any financial statement, Rent Schedule, or              other report or information provided to Lender during the term of the              Indebtedness, or (iii) any request for Lender’s consent to any proposed action,              including a request for disbursement of funds under this Loan Agreement.                (e)   Borrower fails to comply with the Condemnation provisions of Section 6.11.      Multifamily Loan and Security Agreement                                 Page 73  

 

         (f)   A Transfer occurs that violates the provisions of Article VII, whether or not any              actual impairment of Lender’s security results from such Transfer.          (g)   A forfeiture action or proceeding, whether civil or criminal, is commenced which              could result in a forfeiture of the Mortgaged Property or otherwise materially              impair the Lien created by the Security Instrument or Lender’s interest in the              Mortgaged Property.          (h)   Borrower fails to perform any of its obligations under this Loan Agreement (other             than those specified in Section 9.01), as and when required, which failure             continues for a period of 30 days after Notice of such failure by Lender to             Borrower. However, if Borrower’s failure to perform its obligations as described             in this Section 9.01(h) is of the nature that it cannot be cured within the 30 day             cure period after such Notice from Lender but reasonably could be cured within             90 days, then Borrower will have additional time as determined by Lender in             Lender’s Discretion, not to exceed an additional 60 days, in which to cure such             default, provided that Borrower has diligently commenced to cure such default             during the initial 30 day cure period and diligently pursues the cure of such             default. However, no such Notice or cure periods will apply in the case of any             such failure which could, in Lender’s judgment, absent immediate exercise by             Lender of a right or remedy under this Loan Agreement, result in harm to Lender,             danger to tenants or third parties, or impairment of the Note, the Security             Instrument or this Loan Agreement or any other security given under any other             Loan Document.                     (i)   Borrower fails to perform any of its obligations as and when required under any             Loan Document other than this Loan Agreement which failure continues beyond             the applicable cure period, if any, specified in that Loan Document.                     (j)   The holder of any other debt instrument secured by a mortgage, deed of trust or             deed to secure debt on the Mortgaged Property exercises any right to declare all             amounts due under that debt instrument immediately due and payable.                     (k)    Any of the following occurs:                           (i)   Borrower or any SPE Equity Owner commences a Bankruptcy.                           (ii)   Any party other than Lender commences a Bankruptcy against Borrower                   or any SPE Equity Owner which (A) results in the entry of an order for                   relief or any such adjudication or appointment, or (B) has not been                   dismissed, discharged or bonded for a period of 90 days.                           (iii)  Any action or legal proceeding is commenced against Borrower or any                   SPE Equity Owner seeking issuance of a warrant of attachment, execution,                   distraint or similar process against all or any substantial part of its assets                   which results in the entry of any order by a court of competent jurisdiction    Multifamily Loan and Security Agreement                                 Page 74  

 

                     for any such relief which is not vacated, dismissed, stayed, or bonded                    pending appeal within 90 days from the entry thereof.                (iv)  Borrower or any SPE Equity Owner takes any action in furtherance of, or                    indicating its consent to, approval of, or acquiescence in, any of the acts                    set forth in Section 9.01(k)(i), (ii) or (iii).           (l)  Borrower or any SPE Equity Owner has made any representation or warranty in              Article V or any other Section of this Loan Agreement that is false or misleading              in any material respect.          (m)  If the Loan is secured by an interest under a Ground Lease, Borrower fails to              comply with the provisions of Section 6.19.                (n)   If the Loan is a Supplemental Loan, any Event of Default occurs under (i) the              Senior Note, the Senior Instrument or any other Senior Loan Document, or (ii)              any loan document related to another loan in connection with the Mortgaged              Property, regardless of whether Borrower has obtained Supplemental Lender’s              approval of the placement of such Lien on the Mortgaged Property. In addition, if              the Loan is a Supplemental Loan, as Borrower under both the Supplemental              Instrument and the Senior Instrument, Borrower acknowledges and agrees that if              there is an Event of Default under the Supplemental Note, the Supplemental              Instrument or any other Supplemental Loan Document, such Event of Default will              be an Event of Default under the terms of the Senior Instrument and will entitle              Senior Lender to invoke any and all remedies permitted to Senior Lender by              applicable law, the Senior Note, the Senior Instrument or any of the other Senior              Loan Documents.          (o)   If the Mortgaged Property is subject to any covenants, conditions and/or              restrictions, land use restriction agreements or similar agreements, Borrower fails              to perform any of its obligations under any such agreement as and when required,              and such failure continues beyond any applicable cure period.          (p)   Any of the following occurs:                      (i)  A Bankruptcy or other similar action is commenced by or against any                    Guarantor, unless the conditions set forth in Section 8.01 are satisfied.                            (ii)  A Status Event occurs with respect to any Guarantor that is an entity,                    unless the conditions set forth in Section 8.02 are satisfied.                              (iii)  A natural person who is a Guarantor dies, unless the conditions set forth in                    Section 7.03(b) or Section 8.03, as applicable, are satisfied.                  Multifamily Loan and Security Agreement                                 Page 75  

 

               (iv)  A Guarantor that is an entity whose term of existence expires prior to the                    Maturity Date fails to comply with each of the requirements set forth in                    Section 22 of the Guaranty.                (v)   Guarantor fails to comply with the provisions of the Section of the                    Guaranty entitled “Material Adverse Change” or “Minimum Net                    Worth/Liquidity Requirements” as applicable.          (q)   If the Loan Documents require a Cap Agreement, Borrower fails to provide              Lender with a Replacement Cap Agreement prior to the expiration of the then-             existing Cap Agreement.                (r)  through (zzz) are Reserved.          9.02  Protection of Lender’s Security; Security Instrument Secures Future Advances.                (a)   If Borrower fails to perform any of its obligations under this Loan Agreement or              any other Loan Document, or if any action or proceeding is commenced which              purports to affect the Mortgaged Property, Lender’s security or Lender’s rights              under this Loan Agreement, including eminent domain, insolvency, code              enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials              Laws, fraudulent conveyance or reorganizations or proceedings involving a              bankrupt or decedent, then Lender, in Lender’s Discretion, may make such              appearances, file such documents, disburse such sums and take such actions as              Lender reasonably deems necessary to perform such obligations of Borrower and              to protect Lender’s interest, including:  (i) payment of Attorneys’ Fees and Costs,              (ii) payment of fees and out-of-pocket expenses of accountants, inspectors and              consultants, (iii) entry upon the Mortgaged Property to make Repairs or secure the              Mortgaged Property, (iv) procurement of the Insurance required by Section 6.10,              (v) payment of amounts which Borrower has failed to pay under Section 6.08, (vi)              performance of Borrower’s obligations under Section 6.09, and (vii) advances              made by Lender to pay, satisfy or discharge any obligation of Borrower for the              payment of money that is secured by a Prior Lien.          (b)   Any amounts disbursed by Lender under this Section 9.02, or under any other              provision of this Loan Agreement that treats such disbursement as being made              under this Section 9.02, will be secured by the Security Instrument, will be added              to, and become part of, the principal component of the Indebtedness, will be              immediately due and payable and will bear interest from the date of disbursement              until paid at the Default Rate.          (c)   Nothing in this Section 9.02 will require Lender to incur any expense or take any              action.    9.03  Remedies.            Multifamily Loan and Security Agreement                                 Page 76  

 

           (a)  Upon an Event of Default, Lender may exercise any or all of its rights and               remedies provided under the Loan Documents and Borrower will pay all costs               associated therewith, including Attorneys’ Fees and Costs.            (b)   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 or equity, and each will be cumulative and may be              exercised concurrently, independently or successively, in any order. Lender’s              exercise of any particular right or remedy will not in any way prevent Lender              from exercising any other right or remedy available to Lender. Lender may              exercise any such remedies from time to time and as often as Lender chooses.          (c)   Lender will have all remedies available to Lender under Revised Article 9 of the              Uniform Commercial Code of the Property Jurisdiction, the Loan Documents and              under applicable law.                (d)    Lender may also retain (i) all money in the Reserve Funds, including interest, and              (ii) any Cap Payment, and in Lender’s sole and absolute discretion, may apply              such amounts, without restriction and without any specific order of priority, to the              payment of any and all Indebtedness.                (e)    If a claim or adjudication is made that Lender has acted unreasonably or              unreasonably delayed acting in any case where, by law or under this Loan              Agreement or the other Loan Documents, Lender has an obligation to act              reasonably or promptly, then Lender will not be liable for any monetary damages,              and Borrower’s sole remedy will be limited to commencing an action seeking              injunctive relief or declaratory judgment. Any action or proceeding to determine              whether Lender has acted reasonably will be determined by an action seeking              declaratory judgment.          (f)    Reserved.    9.04   Forbearance.                (a)    Lender may (but will 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, any Guarantor or other third-party obligor, to take any of              the following actions:                (i)   Extend the time for payment of all or any part of the Indebtedness.                (ii)   Reduce the payments due under this Loan Agreement, the Note or any                    other Loan Document.                            (iii)  Release anyone liable for the payment of any amounts under this Loan                    Agreement, the Note or any other Loan Document.     Multifamily Loan and Security Agreement                                 Page 77  

 

                    (iv)  Accept a renewal of the Note.                              (v)   Modify the terms and time of payment of the Indebtedness.                              (vi)  Join in any extension or subordination agreement.                (vii)  Release any portion of the Mortgaged Property.                            (viii)  Take or release other or additional security.                            (ix)  Modify the rate of interest or period of amortization of the Note or change                     the amount of the monthly installments payable under the Note.                            (x)    Otherwise modify this Loan Agreement, the Note or any other Loan                    Document.          (b)    Any forbearance by Lender in exercising any right or remedy under the Note, this              Loan Agreement or any other Loan Document or otherwise afforded by              applicable law, will not be a waiver of or preclude the exercise of any other right              or remedy, or the subsequent exercise of any 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, will 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 will not constitute an election by Lender of remedies that preclude              the exercise of any other right available to Lender. Lender’s receipt of any awards              or proceeds under Sections 6.10 and 6.11 will not operate to cure or waive any              Event of Default.    9.05   Waiver of Marshalling. Notwithstanding the existence of any other security interests in        the Mortgaged Property held by Lender or by any other party, Lender will have the right        to determine the order in which any or all of the Mortgaged Property will be subjected to        the remedies provided in this Loan Agreement or any other Loan Document or applicable        law. Lender will have the right to determine the order in which any or all portions of the        Indebtedness are 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 the Security Instrument        waives any and all right to require the marshalling 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.    ARTICLE X          RELEASE; INDEMNITY.       Multifamily Loan and Security Agreement                                 Page 78  

 

   10.01  Release. Borrower covenants and agrees that, in performing any of its duties under this        Loan Agreement, none of Lender, Loan Servicer or any of their respective agents or        employees will be liable for any losses, claims, damages, liabilities and expenses that        may be incurred by any of them as a result of such performance, except that no party will        be released from liability for any losses, claims, damages, liabilities or expenses arising        out of the willful misconduct or gross negligence of such party.    10.02  Indemnity.                (a)   General Indemnity. Borrower agrees to indemnify, hold harmless and defend              Lender, including any custodian, trustee and other fiduciaries who hold or have              held a full or partial interest in the Loan for the benefit of third parties, any prior             owner or holder of the Note, the Loan Servicer, any prior Loan Servicer, the             officers, directors, shareholders, partners, employees and trustees of each of the             foregoing, and the heirs, legal representatives, successors and assigns of each of             the foregoing (collectively, “Indemnitees”) against any and all losses, claims,             damages, liabilities and expenses including Attorneys’ Fees and Costs, which may             be imposed or incurred by any of them directly or indirectly arising out of, or in             any way relating to, or as a result of:  (i) any failure of the Mortgaged Property to             comply with the laws, regulations, ordinance, code or decree of any             Governmental Authority, including those pertaining to the Americans with             Disabilities Act, zoning, occupancy and subdivision of real property, (ii) any             obligation of Borrower under any Lease, and (iii) any accident, injury or death to             any natural person on the Mortgaged Property or any damage to personal property             located on the Mortgaged Property, except that no such party will be indemnified             from liability for any losses, claims, damages, liabilities or expenses arising out of             the willful misconduct or gross negligence of such party.                     (b)    Environmental Indemnity. Borrower agrees to indemnify, hold harmless and              defend Indemnitees from and against all proceedings, claims, damages, penalties              and costs (whether initiated or sought by Governmental Authorities or private              parties), including Attorneys’ Fees and Costs and remediation costs, whether              incurred in connection with any judicial or administrative process or otherwise,              arising directly or indirectly from any of the following:                (i)   Any breach of any representation or warranty of Borrower in Section 5.05.                (ii)  Any failure by Borrower to perform any of its obligations under Section                    6.12.                (iii)  The existence or alleged existence of any Prohibited Activity or                    Condition.                (iv)  The presence or alleged presence of Hazardous Materials on or under the                    Mortgaged Property or in any of the Improvements.      Multifamily Loan and Security Agreement                                 Page 79  

 

               (v)   The actual or alleged violation of any Hazardous Materials Law.          (c)   Indemnification Regarding ERISA Covenants. BORROWER WILL              INDEMNIFY LENDER AND DEFEND AND HOLD LENDER HARMLESS              FROM AND AGAINST ALL CIVIL PENALTIES, EXCISE TAXES, OR              OTHER LOSS, COST, DAMAGE AND EXPENSE (INCLUDING              REASONABLE ATTORNEYS’ FEES AND COSTS INCURRED IN THE              INVESTIGATION, DEFENSE AND SETTLEMENT OF CLAIMS AND             LOSSES INCURRED IN CORRECTING ANY PROHIBITED             TRANSACTION OR IN THE SALE OF A PROHIBITED LOAN, AND IN             OBTAINING ANY INDIVIDUAL PROHIBITED TRANSACTION             EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN             LENDER’S SOLE AND ABSOLUTE DISCRETION) THAT LENDER             MAY INCUR, DIRECTLY OR INDIRECTLY, AS A RESULT OF             DEFAULT UNDER SECTION 6.20. THIS INDEMNITY WILL SURVIVE             ANY TERMINATION, SATISFACTION OR FORECLOSURE OF THE             SECURITY INSTRUMENT.                     (d)    Securitization Indemnification.                      (i)  Borrower agrees to indemnify, hold harmless and defend the Indemnified                    Parties from and against any and all proceedings, losses, claims, damages,                    liabilities, penalties, costs and expenses (whether initiated or sought by                    Governmental Authorities or private parties), including Attorneys’ Fees                    and Costs, which may be incurred by any Indemnified Party (either                    directly or indirectly), which arise out of, are in any way related to, or are                    as a result of a claim that the Borrower Information contains an untrue                    statement of any material fact or the Borrower Information omits to state a                    material fact necessary in order to make the statements therein, in light of                    the circumstances under which they are made, not misleading                    (collectively, the “Securitization Indemnification”).                (ii)  Borrower will not be liable under the Securitization Indemnification if the                    claim is based on Borrower Information that Lender has materially                    misstated or materially misrepresented in the Disclosure Document.                            (iii)  For purposes of this Section 10.02(d) only:                      (A)   “Borrower Information” includes any information provided at                          any time to Lender or Loan Servicer by Borrower, any SPE Equity                          Owner, any Guarantor, any Property Manager or any                          Indemnification Affiliate of the foregoing with respect to any of                          the following:                            (1)   Any Person listed in Section 10.02(d)(iii)(A).      Multifamily Loan and Security Agreement                                 Page 80  

 

                           (2)   The Loan.                            (3)   The Mortgaged Property.                            Borrower Information includes: (I) representations and warranties                          made in the Loan Documents, (II) financial statements of                          Borrower, any SPE Equity Owner, any Designated Entity for                          Transfers or any Guarantor, and (III) operating statements and rent                          rolls with respect to the Mortgaged Property. Borrower                          Information does not include any information provided directly to                          Lender or Loan Servicer by a third-party such as an appraiser or an                          environmental consultant.                                        (B)   “Indemnification Affiliate” of any Person means:                           (1)    Any other individual or entity that is, directly or indirectly,                                one of the following:                                  (I)  In Control of the applicable Person.                                                                (II)  Under the Control of the applicable Person.                                                                (III)  Under common Control with the applicable Person.                                                          (2)   Any individual that is a director or officer of the applicable                                Person.                                                    (3)  Any individual that is a director or officer of any entity                                described in clause (1) of this definition.                      The term “Lender” includes its officers and directors.                                        (C)  An “Issuer Person” includes all the following:                            (1)   Any Person that has filed the registration statement, if any,                                relating to the Securitization, and any Affiliate of such                                Person.                                                    (2)   Any Person acting as issuer, depositor, sponsor and/or in a                                similar capacity with respect to the Securitization, and any                                Affiliate of such Person.                      (D)  The “Issuer Group” includes all the following:                            (1)  Each director and officer of any Issuer Person.      Multifamily Loan and Security Agreement                                 Page 81  

 

                           (2)   Each entity that Controls any Issuer Person within the                                meaning of Section 15 of the Securities Act or Section 20                                of the Securities Exchange Act.                      (E)   The “Underwriter Group” includes all the following:                            (1)   Each entity which is acting as an underwriter, manager,                                placement agent, initial purchaser or in a similar capacity                                with respect to the Securitization.                                                    (2)   Each entity that Controls any such entity described in                                Section 10.02(d)(iii)(E)(1) within the meaning of Section                                15 of the Securities Act or Section 20 of the Securities                                Exchange Act and is acting as an underwriter, manager,                                placement agent, initial purchaser or in a similar capacity                                with respect to the Securitization.                            (3)   The directors and officers of the entities described in                                Section 10.02(d)(iii)(E)(1) and Section 10.02(d)(iii)(E)(2).                      (F)  “Indemnified Party” or “Indemnified Parties” means one or                          more of Lender, Issuer Person, Issuer Group, and Underwriter                          Group.                (e)   Economic Sanctions and AML Laws Indemnity. Borrower agrees to indemnify,              hold harmless and defend Indemnitees from and against all proceedings, claims,              damages, penalties and costs (whether initiated or sought by Governmental             Authorities or private parties), including Attorneys’ Fees and Costs and             remediation costs, whether incurred in connection with any judicial or             administrative process or otherwise, arising directly or indirectly from any failure             of Borrower or any Borrower Principal to comply with the Economic Sanctions             Laws or AML Laws (“Economic Sanctions and AML Laws Indemnity”).                     (f)   Selection and Direction of Counsel. Counsel selected by Borrower to defend              Indemnitees will be subject to the approval of those Indemnitees. In any              circumstances in which the indemnity under this Article X applies, Lender may              employ its own legal counsel and consultants to prosecute, defend or negotiate              any claim or legal or administrative proceeding and Lender, with the prior written              consent of Borrower (which will not be unreasonably withheld, delayed or              conditioned) may settle or compromise any action or legal or administrative              proceeding. However, unless an Event of Default has occurred and is continuing,              or the interests of Borrower and Lender are in conflict, as determined by Lender              in Lender’s Discretion, Lender will permit Borrower to undertake the actions              referenced in this Article X so long as Lender approves such action, which              approval will not be unreasonably withheld or delayed. Borrower will reimburse              Lender upon demand for all costs and expenses incurred by Lender, including all    Multifamily Loan and Security Agreement                                 Page 82  

 

               costs of settlements entered into in good faith, consultants’ fees and Attorneys’              Fees and Costs.          (g)   Settlement or Compromise of Claims. Borrower will not, without the prior written              consent of those Indemnitees who are named as parties to a claim or legal or              administrative proceeding (“Claim”), settle or compromise the Claim if the             settlement (i) results in the entry of any judgment that does not include as an             unconditional term the delivery by the claimant or plaintiff to Lender of a written             release of those Indemnitees, satisfactory in form and substance to Lender or (ii)             may materially and adversely affect Lender, as determined by Lender in Lender’s             Discretion.                     (h)    Effect of Changes to Loan on Indemnification Obligations. Borrower’s obligation              to indemnify the Indemnitees will not be limited or impaired by any of the              following, or by any failure of Borrower or any Guarantor to receive notice of or              consideration for any of the following:                (i)   Any amendment or modification of any Loan Document.                (ii)  Any extensions of time for performance required by any Loan Document.                (iii)  Any provision in any of the Loan Documents limiting Lender’s recourse                    to property securing the Indebtedness, or limiting the personal liability of                    Borrower or any other party for payment of all or any part of the                    Indebtedness.                (iv)  The accuracy or inaccuracy of any representations and warranties made by                    Borrower under this Loan Agreement or any other Loan Document.                (v)   The release of Borrower or any other Person, by Lender or by operation of                    law, from performance of any obligation under any Loan Document.                           (vi)   The release or substitution in whole or in part of any security for the                    Indebtedness.                (vii)  Lender’s failure to properly perfect any Lien or security interest given as                   security for the Indebtedness.                     (i)   Payments by Borrower. Borrower will, at its own cost and expense, do all of the              following:                (i)  Pay or satisfy any judgment or decree that may be entered against any                    Indemnitee or Indemnitees in any legal or administrative proceeding                    incident to any matters against which Indemnitees are entitled to be                    indemnified under this Article X.      Multifamily Loan and Security Agreement                                 Page 83  

 

               (ii)  Reimburse Indemnitees for any expenses paid or incurred in connection                    with any matters against which Indemnitees are entitled to be indemnified                    under this Article X.                (iii)  Reimburse Indemnitees for any and all expenses, including Attorneys’                    Fees and Costs, paid or incurred in connection with the enforcement by                    Indemnitees of their rights under this Article X, or in monitoring and                    participating in any legal or administrative proceeding.          (j)  Other Obligations. The provisions of this Article X will be in addition to any and              all other obligations and liabilities that Borrower may have under applicable law              or under other Loan Documents, and each Indemnitee will be entitled to              indemnification under this Article X without regard to whether Lender or that              Indemnitee has exercised any rights against the Mortgaged Property or any other              security, pursued any rights against any Guarantor, or pursued any other rights              available under the Loan Documents or applicable law. If Borrower consists of              more than one Person, the obligation of those Persons to indemnify the              Indemnitees under this Article X will be joint and several. The obligation of              Borrower to indemnify the Indemnitees under this Article X will survive any              repayment or discharge of the Indebtedness, any foreclosure proceeding, any              foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release              of record of the Lien of the Security Instrument. Notwithstanding the foregoing, if              Lender has never been a mortgagee-in-possession of, or held title to, the              Mortgaged Property, Borrower will have no obligation to indemnify the              Indemnitees under this Article X after the date of the release of record of the Lien              of the Security Instrument by payment in full at the Maturity Date or by voluntary              prepayment in full.          (k)   Reserved.          10.03  Reserved.    ARTICLE XI        MISCELLANEOUS PROVISIONS.    11.01  Waiver of Statute of Limitations, Offsets and Counterclaims. Borrower waives the        right to assert any statute of limitations as a bar to the enforcement of this Loan        Agreement or the Lien of the Security Instrument or to any action brought to enforce any        Loan Document. Borrower waives the right to assert a counterclaim, other than a        compulsory counterclaim, in any action or proceeding brought against it by Lender or        otherwise to offset any obligations to make the payments required by the Loan        Documents. No failure by Lender to perform any of its obligations under the Loan        Documents will be a valid defense to, or result in any offset against, any payments that        Borrower is obligated to make under any of the Loan Documents.    11.02  Governing Law; Consent to Jurisdiction and Venue.       Multifamily Loan and Security Agreement                                 Page 84  

 

           (a)   This Loan Agreement, and any Loan Document which does not itself expressly               identify the law which is to apply to it, will be governed by the laws of the               Property Jurisdiction.            (b)   Borrower agrees that any controversy arising under or in relation to the Note, the               Security Instrument, this Loan Agreement or any other Loan Document may be               litigated in the Property Jurisdiction. The state and federal courts and authorities               with jurisdiction in the Property Jurisdiction will have jurisdiction over all               controversies that may arise under or in relation to the Note, any security for the               Indebtedness 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. However, nothing in this Section 11.02 is intended to limit              Lender’s right to bring any suit, action or proceeding relating to matters under this              Loan Agreement in any court of any other jurisdiction.    11.03  Notice.           (a)    All Notices under or concerning this Loan Agreement will be in writing. Each              Notice will be deemed given on the earliest to occur of:  (i) the date when the              Notice is received by the addressee, (ii) the first Business Day after the Notice is              delivered to a recognized overnight courier service, with arrangements made for              payment of charges for next Business Day delivery, or (iii) the third Business Day              after the Notice is deposited in the United States mail with postage prepaid,              certified mail, return receipt requested. Addresses for Notice are set forth in Part              B.11, Summary of Loan Terms.                Lender will endeavor to provide a courtesy copy of any Notice given to Borrower              by Lender to the Person at the address set forth in Part B.11, Summary of Loan              Terms. However, the failure to provide such courtesy copy will not affect the              validity or sufficiency of any Notice to Borrower, will not affect Lender’s rights              and remedies under this Loan Agreement or any other Loan Document, and will              not subject Lender to any claims by or liability to Borrower or any other Person.              No Person listed below will be a third-party beneficiary of any of the Loan              Documents.          (b)    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 party in              accordance with this Section 11.03. Each party agrees that it will not refuse or              reject delivery of any Notice given in accordance with this Section 11.03, that it              will acknowledge, in writing, the receipt of any Notice upon request by the other              party and that any Notice rejected or refused by it will be deemed for purposes of              this Section 11.03 to have been received by the rejecting party on the date so              refused or rejected, as conclusively established by the records of the U.S. Postal              Service or the courier service.       Multifamily Loan and Security Agreement                                 Page 85  

 

           (c)   Any Notice under the Note and any other Loan Document that does not specify               how Notices are to be given will be given in accordance with this Section 11.03.            (d)   Reserved.            11.04  Successors and Assigns Bound. This Loan Agreement will bind the respective        successors and assigns of Borrower and Lender, and the rights granted by this Loan        Agreement will inure to Lender’s successors and assigns.    11.05  Joint and Several (and Solidary) Liability. If more than one Person signs this Loan        Agreement as Borrower, the obligations of such Persons will be joint and several. For a         Mortgaged Property located in Louisiana, if more than one Person signs this Loan         Agreement as Borrower, the obligations of such Persons will be joint and several and         solidary, and wherever the phrase “joint and several” appears in this Loan Agreement, the        phrase is amended to read “joint, several, and solidary.”    11.06  Relationship of Parties; No Third-Party Beneficiary.                (a)    The relationship between Lender and Borrower will be solely that of creditor and              debtor, respectively, and nothing contained in this Loan Agreement will create              any other relationship between Lender and Borrower. Nothing contained in this              Loan Agreement will 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 creditor of any party to this Loan Agreement and no other Person will be a              third-party beneficiary of this Loan Agreement or any other Loan Document.               Without limiting the generality of the preceding sentence:  (i) any arrangement               (“Servicing Arrangement”) between Lender and any Loan Servicer for loss               sharing or interim advancement of funds will constitute a contractual obligation of               such Loan Servicer that is independent of the obligation of Borrower for the               payment of the Indebtedness, (ii) Borrower will not be a third-party beneficiary of               any Servicing Arrangement, and (iii) no payment by the Loan Servicer under any               Servicing Arrangement will reduce the amount of the Indebtedness.      11.07  Severability; Amendments.             (a)   The invalidity or unenforceability of any provision of this Loan Agreement will               not affect the validity or enforceability of any other provision, and all other               provisions will remain in full force and effect. This Loan Agreement contains the               entire agreement among the parties as to the rights granted and the obligations               assumed in this Loan Agreement.                  (b)   This Loan Agreement may not be amended or modified except by a writing               signed by the party against whom enforcement is sought.              Multifamily Loan and Security Agreement                                 Page 86  

 

   11.08  Disclosure of Information.           (a)   Borrower acknowledges that Lender may provide to third parties with an existing              or prospective interest in the servicing, enforcement, evaluation, performance,              ownership, purchase, participation or Securitization of the Loan, including any of              the Rating Agencies, any entity maintaining databases on the underwriting and              performance of commercial mortgage loans, as well as governmental regulatory              agencies having regulatory authority over Lender, any and all information which              Lender now has or may hereafter acquire relating to the Loan, the Mortgaged              Property, Borrower, any SPE Equity Owner or any Guarantor, as Lender              determines necessary or desirable and that such information may be included in              disclosure documents in connection with a Securitization or syndication of              participation interests, including a prospectus, prospectus supplement, offering              memorandum, private placement memorandum or similar document (each, a              “Disclosure Document”) and also may be included in any filing with the              Securities and Exchange Commission pursuant to the Securities Act or the              Securities Exchange Act. To the fullest extent permitted under applicable law,              Borrower irrevocably waives all rights, if any, to prohibit such disclosure,              including any right of privacy.          (b)   Borrower agrees that Lender may publicly use, at Lender’s discretion, the name of              the Mortgaged Property, photographs of the Mortgaged Property, and basic              transaction information (for example, the number of units in the Mortgaged              Property and the Loan Amount) relating to the Loan.    11.09  Determinations by Lender. Unless otherwise provided in this Loan Agreement, in any        instance where the consent or approval of Lender may be given or is required, or where        any determination, judgment or decision is to be rendered by Lender under this Loan        Agreement, the granting, withholding or denial of such consent or approval and the        rendering of such determination, judgment or decision will be made or exercised by        Lender (or its designated representative) at its sole and exclusive option and in its sole        and absolute discretion.    11.10  Sale of Note; Change in Servicer; Loan Servicing. The Note or a partial interest in the        Note (together with this Loan Agreement and the other Loan Documents) may be sold        one or more times without prior Notice to Borrower. A sale may result in a change of the        Loan Servicer. There also may be one or more changes of the Loan Servicer unrelated to        a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given        Notice of the change. All actions regarding the servicing of the Loan evidenced by the        Note, 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 Notice from Lender will govern.      Multifamily Loan and Security Agreement                                 Page 87  

 

   11.11  Supplemental Financing.                (a)   This Section will apply only if at the time of any application referred to in Section              11.11(b), Freddie Mac has in effect a product described in its Multifamily              Seller/Servicer Guide under which it purchases supplemental mortgages on              multifamily properties that meet specified criteria (“Supplemental Mortgage              Product”). For purposes of this Section 11.11 only, the term “Freddie Mac” will              include any affiliate or subsidiary of Freddie Mac.                (b)   After the first anniversary of the date of this Loan Agreement, or, if there are any              Supplemental Loans affecting the Mortgaged Property, after the first anniversary              of the date of the Supplemental Note for the most recently-incurred Supplemental              Loan, Freddie Mac will consider an application from an originating lender that is              generally approved by Freddie Mac to sell mortgages to Freddie Mac under the              Supplemental Mortgage Product (“Approved Seller/Servicer”) for the purchase              by Freddie Mac of a proposed indebtedness of Borrower to the Approved              Seller/Servicer to be secured by one or more Supplemental Instruments on the              Mortgaged Property. Freddie Mac will purchase each Supplemental Loan secured              by the Mortgaged Property if each of the following conditions is satisfied:                (i)   At the time of the proposed Supplemental Loan, no Event of Default may                    have occurred and be continuing and no event or condition may have                    occurred and be continuing that, with the giving of Notice or the passage                    of time, or both, would become an Event of Default.                            (ii)  Borrower and the Mortgaged Property must be acceptable to Freddie Mac                    under its Supplemental Mortgage Product.                (iii)  New loan documents must be entered into to reflect each Supplemental                    Loan, such documents to be acceptable to Freddie Mac in its discretion.                (iv)  No Supplemental Loan may cause the combined debt service coverage                    ratio of the Mortgaged Property after the making of that Supplemental                    Loan to be less than the Minimum DSCR. As used in this Section, the                    term “combined debt service coverage ratio” means, with respect to the                    Mortgaged Property, the ratio of:                      (A)  the annual net operating income from the operations of the                          Mortgaged Property at the time of the proposed Supplemental                          Loan,                                        to                                        (B)  the aggregate of the annual principal and interest payable on all of                          the following:      Multifamily Loan and Security Agreement                                 Page 88  

 

                           (1)   the Indebtedness under this Loan Agreement (using a 30-                               year amortization schedule),                                                    (2)   any “Indebtedness” as defined in any security instruments                                recorded against the Mortgaged Property (using a 30-year                                amortization schedule for any Supplemental Loans), and                                                    (3)   the proposed “Indebtedness” for any Supplemental Loan                                (using a 30-year amortization schedule).                                              As used in this Section 11.11, “annual principal and interest” with respect                    to a floating rate loan will be calculated by Freddie Mac using an interest                    rate equal to one of the following:                      (X)  If the loan has an internal interest rate cap, the Capped Interest                          Rate.                      (Y)  If the loan has an external interest rate cap, the Original Strike Rate                          plus the Margin.                                        (Z)   If the loan has no interest rate cap, the greater of (I) 7%, or (II) the                          then-current Index Rate plus the Margin plus 300 basis points.                                        The annual net operating income of the Mortgaged Property will be as                    determined by Freddie Mac in its discretion considering factors such as                    income in place at the time of the proposed Supplemental Loan and                    income during the preceding 12 months, and actual, historical and                    anticipated operating expenses. Freddie Mac will determine the combined                    debt service coverage ratio of the Mortgaged Property based on its                    underwriting. Borrower will provide Freddie Mac such financial                    statements and other information Freddie Mac may require to make these                    determinations.                (v)   No Supplemental Loan may cause the combined loan to value ratio of the                    Mortgaged Property after the making of that Supplemental Loan to exceed                    the Maximum Combined LTV, as determined by Freddie Mac. As used in                    this Section, “combined loan to value ratio” means, with respect to the                    Mortgaged Property, the ratio, expressed as a percentage, of:                      (A)  the aggregate outstanding principal balances of all of the                          following:                            (1)   the Indebtedness under this Loan Agreement,                                                    (2)   any “Indebtedness” as defined in any security instruments                                recorded against the Mortgaged Property, and    Multifamily Loan and Security Agreement                                 Page 89  

 

                                                     (3)   the proposed “Indebtedness” for any Supplemental Loan,                                              to                                        (B)  the value of the Mortgaged Property.                                      Freddie Mac will determine the combined loan to value ratio of the                    Mortgaged Property based on its underwriting. Borrower will provide                   Freddie Mac such financial statements and other information Freddie Mac                   may require to make these determinations. In addition, Freddie Mac, at                   Borrower’s expense, may obtain MAI appraisals of the Mortgaged                   Property in order to assist Freddie Mac in making the determinations                   under this Section 11.11. If Freddie Mac requires an appraisal, then the                   value of the Mortgaged Property that will be used to determine whether                   the Maximum Combined LTV has been met will be the lesser of the                    appraised value set forth in such appraisal or the value of the Mortgaged                    Property as determined by Freddie Mac.                                  (vi)  Borrower’s organizational documents are amended to permit Borrower to                    incur additional debt in the form of Supplemental Loans (Lender will                    consent to such amendment(s)).                (vii)  One or more Persons acceptable to Freddie Mac executes and delivers to                    the Approved Seller/Servicer a Guaranty in a form acceptable to Freddie                    Mac with respect to the exceptions to non-recourse liability described in                    Freddie Mac’s form promissory note, unless Freddie Mac has elected to                    waive its requirement for a Guaranty.                (viii)  The loan term of each Supplemental Loan will be coterminous with the                    Senior Indebtedness or longer than the Senior Indebtedness, in Freddie                    Mac’s discretion.                            (ix)  The Prepayment Premium Period of each Supplemental Loan will be                    coterminous with the Prepayment Premium Period or the combined                    Lockout Period and Defeasance Period, as applicable, of the Senior                   Indebtedness.                           (x)    The interest rate of each Supplemental Loan will be determined by                   Freddie Mac in its discretion.                          (xi)   Lender enters into an intercreditor agreement (“Intercreditor                    Agreement”) acceptable to Freddie Mac and to Lender for each                   Supplemental Loan.                  Multifamily Loan and Security Agreement                                 Page 90  

 

               (xii)  Borrower’s payment of fees and other expenses charged by Lender,                    Freddie Mac, the Approved Seller/Servicer, and the Rating Agencies                    (including reasonable Attorneys’ Fees and Costs) in connection with                    reviewing and originating each Supplemental Loan.                            (xiii)  Commencing on the date that the first Supplemental Loan is originated                    and continuing for so long as any Supplemental Loan is outstanding, the                    first lien Senior Lender will begin collection of any deferred Monthly                    Deposit or Revised Monthly Deposit for Capital Replacements in                    accordance with Section 4.04(e) (if applicable) as well as Imposition                    Reserve Deposits for any of the following Impositions marked ‘Deferred’                    in Section Part 3, Summary of Loan Terms:                                  (A)   Property Insurance premiums or premiums for other Insurance                          required by Lender under Section 6.10; provided, however, the                         first lien Senior Lender will not begin collection of any deferred                         Property Insurance premiums payable with respect to insurance                         coverage requirements under Section 6.10 that are otherwise                         satisfied by a blanket or master policy of insurance covering the                         Mortgaged Property.                                 (B)   Taxes and payments in lieu of taxes                                 (C)   Ground Rents                                Such deposits will be credited to the payment of any such required                   Imposition Reserve Deposits under any Supplemental Loan.                           (xiv)  If any covenants, conditions and restrictions affecting the Mortgaged                   Property provide for a lien for any assessments or other unpaid amounts,                   Borrower will provide satisfactory evidence that such lien will be                   subordinate to the lien of the Supplemental Instrument.                          (xv)   All other requirements of the Supplemental Mortgage Product must be                   met, unless Freddie Mac has elected to waive one or more of its                   requirements.                           (xvi)  Reserved.                           (xvii)  Reserved.                          (xviii)  Reserved.                     (c)   No later than 5 Business Days after Lender’s receipt of a written request from             Borrower, Lender will provide the following information to an Approved             Seller/Servicer:    Multifamily Loan and Security Agreement                                 Page 91  

 

                       (i)  The then-current outstanding principal balance of the Senior Indebtedness.                (ii)  Payment history of the Senior Indebtedness.                (iii)  Whether any Reserve Funds are being collected on the Senior                    Indebtedness and the amount of each such Reserve Fund deposit as of the                    date of the request.                (iv)  Whether any Repairs, Capital Replacements or improvements or rental                    achievement or burn-off guaranty requirements are existing or outstanding                    under the terms of the Senior Indebtedness.                (v)   A copy of the most recent inspection report for the Mortgaged Property.                (vi)  Whether any modifications or amendments have been made to the Loan                    Documents for the Senior Indebtedness since origination of the Senior                    Indebtedness and, if applicable, a copy of such modifications and                    amendments.                (vii)  Whether to Lender’s knowledge any Event of Default exists under the                    Senior Indebtedness.                Lender will only be obligated to provide this information in connection with              Borrower’s request for a Supplemental Loan from an Approved Seller/Servicer.              Notwithstanding anything in this Section 11.11 to the contrary, if Freddie Mac is              the owner of the Note, this Section 11.11(c) is not applicable.          (d)   Lender will have no obligation to consent to any mortgage or Lien on the              Mortgaged Property that secures any indebtedness other than the Indebtedness,              except as set forth in this Loan Agreement.          (e)   If a Supplemental Loan is made to Borrower, Borrower agrees that the terms of              the Intercreditor Agreement will govern with respect to any distributions of              excess proceeds by Lender to the Supplemental Lender, and Borrower agrees that              Lender may distribute any excess proceeds received by Lender pursuant to the              Loan Documents to Supplemental Lender pursuant to the Intercreditor              Agreement.    11.12  Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-       off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if        the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides        for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and        (c), Borrower will have the right to defease the Loan in whole (“Defeasance”) and obtain        the release of the Mortgaged Property from the Lien of the Security Instrument upon the        satisfaction of each of the following conditions:    Multifamily Loan and Security Agreement                                 Page 92  

 

           (a)   Borrower will not have the right to obtain Defeasance at any of the following              times:                      (i)  If the Loan is not assigned to a REMIC trust.                            (ii)  During the Lockout Period.                            (iii)  After the expiration of the Defeasance Period.                            (iv)  After Lender has accelerated the maturity of the unpaid principal balance                    of, accrued interest on, and other amounts payable under, the Note                    pursuant to Section 11 of the Note.                      (b)   Borrower will give Lender Notice (“Defeasance Notice”) specifying a Business              Day (“Defeasance Closing Date”) on which Borrower desires to close the              Defeasance. The Defeasance Closing Date specified by Borrower may not be              more than 60 calendar days, nor less than 30 calendar days, after the date on              which Lender receives the Defeasance Notice. Lender will acknowledge receipt              of the Defeasance Notice and will notify Borrower of the identity of the              accommodation borrower (“Successor Borrower”).              (c)    The Defeasance Notice must be accompanied by a $10,000 non-refundable fee             (“Defeasance Fee”) for Lender’s processing of the Defeasance. If Lender does              not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance              pursuant to that Defeasance Notice will terminate.                (d)   (i)   If Borrower timely pays the Defeasance Fee, but Borrower fails to perform                    its other obligations under this Section 11.12, Lender will have the right to                    retain the Defeasance Fee as liquidated damages for Borrower’s default                    and, except as provided in Section 11.12(d)(ii), Borrower will be released                    from all further obligations under this Section 11.12. Borrower                    acknowledges that Lender will incur financing costs in arranging and                    preparing for the release of the Mortgaged Property from the Lien of the                    Security Instrument in reliance on the executed Defeasance Notice.                    Borrower agrees that the Defeasance Fee represents a fair and reasonable                    estimate, taking into account all circumstances existing on the date of this                    Loan Agreement, of the damages Lender will incur by reason of                   Borrower’s default.                    (ii)   If the Defeasance is not consummated on the Defeasance Closing Date for                    any reason, Borrower agrees to reimburse Lender for all third-party costs                    and expenses (other than financing costs covered by Section 11.12(d)(i))                    incurred by Lender in reliance on the executed Defeasance Notice, within                    5 Business Days after Borrower receives a written demand for payment,    Multifamily Loan and Security Agreement                                 Page 93  

 

                     accompanied by a statement, in reasonable detail, of Lender’s third-party                   costs and expenses.                          (iii)  All payments required to be made by Borrower to Lender pursuant to this                   Section 11.12 will be made by wire transfer of immediately available                    funds to the account(s) designated by Lender in its acknowledgement of                    the Defeasance Notice.                      (e)   No Event of Default has occurred and is continuing.              (f)   Borrower will deliver each of the following documents to Lender, in form and              substance satisfactory to Lender, on or prior to the Defeasance Closing Date,              unless Lender has issued a written waiver of its right to receive any such              document:                            (i)  One or more opinions of counsel for Borrower confirming each of the                   following:                                      (A)   Lender has a valid and perfected first Lien and first priority                          security interest in the Defeasance Collateral and the proceeds of                          the Defeasance Collateral.                                        (B)  The Pledge Agreement is duly authorized, executed, delivered and                          enforceable against Borrower in accordance with its terms.                                        (C)  If, as of the Defeasance Closing Date, the Note is held by a                          REMIC trust, then each of the following is correct:                                                    (1)   The Defeasance has been effected in accordance with the                                requirements of Treasury Regulation Section 1.860G-                               2(a)(8) (as such regulation may be modified, amended or                                replaced from time to time).                                                    (2)   The qualification and status of the REMIC trust as a                                REMIC will not be adversely affected or impaired as a                                result of the Defeasance.                                                    (3)   That there will be no imposition of a tax under applicable                                REMIC provisions as a result of the Defeasance.                                        (D)  The Defeasance will not result in a “sale or exchange” of the Note                          within the meaning of Section 1001(c) of the Tax Code and the                          temporary and final regulations promulgated thereunder.                                  (ii)  A written certificate from an independent certified public accounting firm                    (reasonably acceptable to Lender), confirming that the Defeasance    Multifamily Loan and Security Agreement                                 Page 94  

 

                     Collateral will generate cash sufficient to make all Scheduled Debt                    Payments as they fall due under the Note, including full payment due on                    the Note on the Maturity Date.                            (iii)  Lender’s form of a pledge and security agreement (“Pledge Agreement”)                   and financing statements which pledge and create a first priority security                   interest in the Defeasance Collateral in favor of Lender.                          (iv)  Lender’s form of a transfer and assumption agreement (“Transfer and                   Assumption Agreement”), pursuant to which Borrower and any                   Guarantor (in each case, subject to satisfaction of all requirements under                    this Loan Agreement) will be relieved from liability in connection with the                    Loan to the extent described in Sections 7.05(b) and 7.05(c), respectively,                    and Successor Borrower will assume all remaining obligations.                            (v)   Forms of all documents necessary to release the Mortgaged Property from                    the Liens created by the Security Instrument and related UCC financing                   statements (collectively, “Release Instruments”), each in appropriate                   form required by the Property Jurisdiction.                          (vi)   Any other opinions, certificates, documents or instruments that Lender                   may reasonably request.                    (g)    Borrower will deliver to Lender, on or prior to the Defeasance Closing Date, each             of the following:                          (i)   The Defeasance Collateral, which meets all of the following requirements:                                      (A)   It is owned by Borrower, free and clear of all Liens and claims of                          third-parties.                                        (B)  It is in an amount sufficient to provide for (1) redemption                          payments to occur prior, but as close as possible, to all successive                          Installment Due Dates occurring under the Note after the                          Defeasance Closing Date, and (2) delivery of redemption proceeds                          at least equal to the amount of principal and interest due on the                          Note on each Installment Due Date including full payment due on                         the Note on the Maturity Date (“Scheduled Debt Payments”).                                      (C)   All redemption payments received from the Defeasance Collateral                         will be paid directly to Lender to be applied on account of the                         Scheduled Debt Payments occurring after the Defeasance Closing                         Date.                       Multifamily Loan and Security Agreement                                 Page 95  

 

                       (D)  The pledge of the Defeasance Collateral will be effected through                           the book-entry facilities of a qualified securities intermediary                           designated by Lender in conformity with all applicable laws.                                    (ii)  All accrued and unpaid interest and all other sums due under the Note, this                     Loan Agreement and under the other Loan Documents, including all                     amounts due under Section 11.12(i), up to the Defeasance Closing Date.                        (h)   Reserved.                  (i)  Borrower will pay all reasonable costs and expenses incurred by Lender in               connection with the Defeasance in full on or prior to the Defeasance Closing               Date, which payment is required prior to Lender’s issuance of the Release               Instruments and whether or not Defeasance is completed. Such expenses include               all fees, costs and expenses incurred by Lender and its agents in connection with               the Defeasance (including Attorneys’ Fees and Costs for the review and               preparation of the Pledge Agreement and of the other materials described in this              Loan Agreement and any related documentation, Rating Agencies’ fees, or other              costs related to the Defeasance).                            Lender reserves the right to require that Borrower post a deposit to cover costs              which Lender reasonably anticipates that Lender will incur in connection with the              Defeasance.                      (j)   No Transfer Fee or Conditional Transfer Fee will be payable to Lender upon a              Defeasance made in accordance with this Section 11.12.                (k)    Reserved.          11.13  Lender’s Rights to Sell or Securitize. Borrower acknowledges that Lender, and each        successor to Lender’s interest, may (without prior Notice to Borrower or Borrower’s        prior consent), sell or grant participations in the Loan (or any part of the Loan), sell or        subcontract the servicing rights related to the Loan, securitize the Loan or place the Loan        in a trust. Borrower agrees to cooperate with all reasonable requests of Lender in        connection with any of the foregoing including taking the following actions:           (a)   Executing any financing statements or other documents deemed necessary by              Lender or its transferee to create, perfect or preserve the rights and interest to be              acquired by such transferee.                (b)    Delivering revised organizational documents, counsel opinions, and executed              amendments to the Loan Documents satisfactory to the Rating Agencies.                (c)   Providing updated financial information with appropriate verification through              auditors’ letters, if required by Lender. (If Lender requires that Borrower’s              updated financial information be accompanied by appropriate verification through     Multifamily Loan and Security Agreement                                 Page 96  

 

                 auditors’ letters, then Lender will reimburse Borrower for the costs which               Borrower reasonably incurs in connection with obtaining such auditors’ letters.)                  (d)   Providing updated information on all litigation proceedings affecting Borrower or               any Borrower Principal as required in Section 6.16.                (e)   Reviewing information contained in any Disclosure Document and providing a              mortgagor estoppel certificate, written confirmation of Borrower’s              indemnification obligations under this Loan Agreement, and such other              information about Borrower, any SPE Equity Owner, any Guarantor, any Property              Manager or the Mortgaged Property as Lender may require for Lender’s offering              materials.          Notwithstanding anything set forth above in this Section 11.13, Borrower will not be        required to execute any document that changes the interest rate, the stated maturity date        or the amortization of principal set forth in the Note, or that modifies or amends any        essential economic terms of the Loan.    11.14  Cooperation with Rating Agencies and Investors. Borrower covenants and agrees that        if Lender decides to include the Loan as an asset of a Secondary Market Transaction,        Borrower will do all of the following:            (a)    At Lender’s request, meet with representatives of the Rating Agencies and/or              investors to discuss the business and operations of the Mortgaged Property.                  (b)   Permit Lender or its representatives to provide related information to the Rating               Agencies and/or investors.                  (c)   Cooperate with the reasonable requests of the Rating Agencies and/or investors in               connection with all of the foregoing.      11.15  Letter of Credit Requirements.             (a)   Any Letter of Credit required under this Loan Agreement must satisfy the               following conditions:                  (i)   It must be a clean, irrevocable, unconditional standby letter of credit.                        (ii)  It must name Lender as the sole beneficiary and permit Lender to assign                     the Letter of Credit without further consent from Issuer.                        (iii)  It must have an initial term of not less than 12 months.                              (iv)  It must be in the form required by Lender.                    Multifamily Loan and Security Agreement                                 Page 97  

 

               (v)   It must provide that it may be drawn on by Lender or Loan Servicer, in                    whole or in part, by presentation to Issuer of a sight draft without any                    other restrictions on the right to draw.                            (vi)  It must be issued by an Issuer meeting Lender’s requirements, which                    Issuer (i) must be an Eligible Institution, and (ii) may not, unless Lender                    agrees in writing, be an affiliate of Borrower or Lender.                            (vii)  It must be obtained on behalf of Borrower by a Person other than                    Borrower’s general partners or managing members if Borrower is a                    general or limited partnership or limited liability company. Neither                    Borrower nor the general partners or managing members, if applicable,                    may have any liability or other obligations under any reimbursement                    agreement with respect to the Letter of Credit.                             (viii)  It may not be secured by a lien on all or any part of the Mortgaged                    Property or related Personalty.                            (ix)  When delivered to Lender, it must be accompanied by an opinion                    acceptable to Lender in Lender’s Discretion issued by counsel to the                    Issuer that includes opinions as to Issuer’s power and authority to issue the                    Letter of Credit and the enforceability of the Letter of Credit against Issuer                    and an updated nonconsolidation opinion with regard to any such Letter of                    Credit in form and substance satisfactory to Lender.          (b)   If at any time the Issuer of a Letter of Credit held by Lender ceases to be an              Eligible Institution, Lender will have the right to immediately draw down the              Letter of Credit in full and hold the Proceeds in an escrow account in accordance              with the terms of this Loan Agreement.                (c)  Each Letter of Credit held by Lender pursuant to this Loan Agreement provides              additional collateral for the Indebtedness in addition to the lien of the Security              Instrument.    11.16  Reserved.    11.17  Reserved.     11.18  Reserved.    11.19  Reserved.     11.20  Time is of the Essence. Time is of the essence with respect to each covenant of this Loan        Agreement.      Multifamily Loan and Security Agreement                                 Page 98  

 

     11.21  Electronic Signatures. With respect to any E-Signed Document, the following         provisions apply:          (a)  Borrower represents and warrants that the intention of the natural Person signing               on behalf of Borrower or Borrower Principal on each E-Signed Document was to               attribute its respective signature to such E-Signed Document, and that the E-              Signature represents the signer’s signature to the E-Signed document.                         (b)   Borrower understands and agrees that the E-Signatures on all E-Signed               Documents are legally binding.                         (c)   Borrower waives all rights to repudiate the authenticity or validity of any E-              Signature on any E-Signed Document to the extent such repudiation is based in               whole or in part on the fact that such signature is not in an original handwritten               form.                        (d)   Borrower agrees that the law governing E-Signatures will be the federal               Electronic Signatures in Global and National Commerce Act of 2000 (15 U.S.               Code, Chapter 96) (E-SIGN) and/or the Uniform Electronic Transactions Act of               1999 as promulgated by the U.S. Uniform Law Commission for consideration and               enactment by the states (UETA), and that under no circumstances will E-              Signatures be governed by the Uniform Computer Information Transactions Act               (UCITA).      11.22  Reserved.      11.23  Subrogation. If, and to the extent that, the proceeds of the Loan, or subsequent         advances under Section 9.02, are used to pay, satisfy or discharge a Prior Lien, such         Loan proceeds or advances will be deemed to have been advanced by Lender at         Borrower’s request, and Lender will 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 the Prior Lien, whether or not the Prior Lien is released.    11.24  Reserved.    ARTICLE XII        DEFINITIONS.    The following terms, when used in this Loan Agreement (including when used in the recitals),  will have the following meanings:    “Affiliate” of any Person means any other individual or entity that is, directly or indirectly, one   of the following:                  (i)  In Control of the applicable Person.                        (ii)  Under the Control of the applicable Person.             Multifamily Loan and Security Agreement                                 Page 99  

 

               (iii)  Under common Control with the applicable Person.          “Affiliate Transfer” is defined in Section 7.03(a)(i).    “AML Laws” means applicable federal anti-money laundering laws and regulations including  18 U.S.C. §§ 1956 and 1957, as amended.    “Approved Seller/Servicer” is defined in Section 11.11(b).    “Assignment of Management Agreement” means the Assignment of Management Agreement  and Subordination of Management Fees, dated the same date as this Loan Agreement, among  Borrower, Lender and Property Manager, including all schedules, riders, allonges and addenda,  as such Assignment of Management Agreement may be amended from time to time, and any  future Assignment of Management Agreement and Subordination of Management Fees executed  in accordance with Section 6.09(d).    “Assumption Agreement” means Lender’s then-standard assumption agreement that, among  other things, requires the transferee to perform all obligations of Borrower set forth in the Note,  the Security Instrument, this Loan Agreement and any other Loan Document.    “Attorneys’ Fees and Costs” means all of the following:          (i)  Fees and out of pocket costs of Lender’s and Loan Servicer’s attorneys, as              applicable, including costs of Lender’s and Loan Servicer’s in-house counsel,              support staff costs, costs of preparing for litigation, computerized research,              telephone and facsimile transmission expenses, mileage, deposition costs,              postage, duplicating, process service, videotaping and similar costs and expenses.                (ii)  Costs and fees of expert witnesses, including appraisers.                (iii)  Investigatory fees.                (iv)  Costs for any opinion required by Lender pursuant to the terms of the Loan              Documents.          “Bankruptcy” means any of the following whether voluntary or involuntary, other than a case or  proceeding initiated by Lender:         (i)  Any case under the Bankruptcy Code or any similar federal or state law for the             relief of debtors.         (ii)   Any proceeding for the reorganization, recapitalization or adjustment or             marshalling of a debtor’s assets or liabilities.        (iii)  Any receivership or assignment for the benefit of creditors.    Multifamily Loan and Security Agreement                                Page 100  

 

         (iv)  Any liquidation, dissolution, winding up, or similar proceeding, whether or not              involving bankruptcy or insolvency.         (v)   Any case or proceeding similar to those set forth in (i) through (iv) of this              definition.         (vi)  Any other proceeding of any type or nature in which substantially all claims of              creditors are determined and any payment or distribution is or may be made on              account of such claims.   “Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq.,  as amended from time to time.    “Beneficiary” means an Immediate Family Member (or an entity Controlled by an Immediate  Family Member) who acquires an interest by devise, descent or operation of law due to the death  of a natural person.    “Books and Records” is defined in Section 6.07(a).    “Borrower” means all Persons identified as “Borrower” in the first paragraph of this Loan  Agreement, together with their successors and assigns.    “Borrower Information” is defined in Section 10.02(d).    “Borrower Principal” means any of the following:          (i)  Any general partner of Borrower (if Borrower is a partnership).                (ii)  Any manager, managing member, non-member manager, or member of the board              of managers of Borrower (if Borrower is a limited liability company).                (iii)  Any settlor (grantor) of a living or revocable Trust (if Borrower is a living or              revocable Trust).                 (iv)  Any trustee of a Trust (if Borrower is a Trust).                 (v)   Any Person (limited partner, member or shareholder) with a collective direct or              indirect equity interest in Borrower equal to or greater than 25%, including any              equitable ownership interest or any beneficial interest in an Illinois land trust, an              irrevocable trust, or a Delaware Statutory Trust.                (vi)  Any master tenant operating all or a substantial portion of the Mortgaged Property              pursuant to a master lease structure, such as a Delaware Statutory Trust structure.                (vii)  Any Guarantor of all or any portion of the Loan or of any obligations of Borrower              under the Loan Documents.            Multifamily Loan and Security Agreement                                Page 101  

 

         (viii)  Any person or entity that Lender determines should be a Borrower Principal,              including any person or entity that may take Control of Borrower in accordance              with the terms of this Loan Agreement, such as pursuant to a Buy-Sell Transfer.            “Borrower Proof of Loss Threshold” is the amount set forth in Part B.7, Summary of Loan  Terms.     “Borrower Proof of Loss Maximum” is the amount set forth in Part B.7, Summary of Loan  Terms.     “Buy-Sell Equity Investor” is the Person specified as such in the Summary of Loan Terms.    “Buy-Sell Transfer” is defined in Section 7.03(b)(iii).     “Business Day” means any day other than a Saturday, a Sunday, or any other day on which  Lender or the national banking associations are not open for business.    “Cap Agreement” means any interest rate cap agreement, interest rate swap agreement or other  interest rate-hedging contract or agreement, in a form acceptable to Lender, obtained by  Borrower from a Cap Provider as a requirement of any Loan Document or as a condition of  Lender’s making the Loan.    “Cap Collateral” means all of the following:          (i)   The Cap Agreement.          (ii)  The Cap Payments.          (iii)  All rights of Borrower under any Cap Agreement and all rights of Borrower to all              Cap Payments, including contract rights and general intangibles, whether existing              now or arising after the date of this Loan Agreement.          (iv)  All rights, liens and security interests or guaranties granted by a Cap Provider or              any other Person to secure or guaranty payment of any Cap Payments whether              existing now or granted after the date of this Loan Agreement.          (v)   All documents, writings, books, files, records and other documents arising from              or relating to any of the foregoing, whether existing now or created after the date              of this Loan Agreement.          (vi)  All cash and non-cash proceeds and products of (ii) through (v) of this definition.    “Cap Payment(s)” means any and all monies payable pursuant to any Cap Agreement by a Cap  Provider.      Multifamily Loan and Security Agreement                                Page 102  

 

   “Cap Provider” means the third-party financial institution approved by Lender that is the  counterparty under any Cap Agreement or Replacement Cap Agreement.    “Capital Replacement” means the replacement of those items listed on Exhibit F.    “Capped Interest Rate” is defined in the Note, if applicable.    “Claim” is defined in Section 10.02(f).    “Clean Site Assessment” means a current Site Assessment which (i) is dated within 90 days  prior to the date of the proposed Transfer, and (ii) evidences no presence of Hazardous Materials  on the Mortgaged Property and no other Prohibited Activities or Conditions with respect to the  Mortgaged Property.     “Closing Date” means the date on which Lender disburses the proceeds of the Loan to or for the  account of Borrower.    “Commitment Letter” means the fully executed commitment letter or early rate lock  application between Lender and Borrower issued in connection with the Loan, as such document  may have been modified, amended or extended.    “Completion Date” means, with respect to any Repair, the date specified for that Repair in the  Repair Schedule of Work (Exhibit C), as such date may be extended by Lender in writing.    “Condemnation” is defined in Section 6.11(a).    “Co-Owner Transfer” is defined in Section 7.03(a)(iv).    “Conditional Transfer Fee” means a fee of $25,000 that is paid (i) in addition to and not in lieu  of the Transfer Processing Fee or Special Transfer Processing Fee, as applicable, and (ii) when  certain Conditionally Permitted Transfers – Category III are completed.    “Conditionally Permitted Transfer” means a Transfer that will not cause an Event of Default  under this Loan Agreement if certain conditions in this Loan Agreement are satisfied. The  Conditionally Permitted Transfers are set forth in Section 7.03.    “Conditionally Permitted Transfer - Category I” includes the Transfers set forth in 7.03(a) for  which Borrower must pay the Transfer Processing Fee.    “Conditionally Permitted Transfer -  Category II” includes the Transfers set forth in 7.03(b)  for which Borrower must pay the Special Transfer Processing Fee.    “Conditionally Permitted Transfer - Category III” includes the Transfers set forth in 7.03(c)  for which Borrower must pay the Transfer Processing Fee and the Conditional Transfer Fee.     “Consolidation Borrower” is defined in Section 7.03(a)(v).    Multifamily Loan and Security Agreement                                Page 103  

 

     “Consolidation Borrower Manager” is the Person specified as such in Part B.9, Summary of  Loan Terms.    “Control” means to possess, directly or indirectly, the power to manage an entity, including the  authority to legally bind the entity.     “Controlling Interest” means an interest held by a Person that gives such person the legal right  to Control an entity, including the interest held by any of the following:          (i)  Any general partner in a partnership.                (ii)  Any manager (whether a member manager, nonmember manager, or a manager              on a board of managers) in a limited liability company.                (iii)  Any director on a board of directors for a corporation that is not a Public              Company.                (iv)  Any trustee of a Trust.                (v)   The settlor of a revocable Trust.                (vi)  Any Person with a position and/or decision rights that are similar to those listed in              (i) through (v).           Neither of the following alone will be deemed sufficient to constitute a Controlling Interest: (i)  the ownership of the majority of the equitable or legal interests in such entity or (ii) the right to  vote on “major decisions” for such entity.     “Corporate Lease” means a Lease for one or more residential units under which one entity will  rent all such units from Borrower and will have the right to sublease such units to individual  subtenants.    “Crowdfunding” means the practice of funding a project or venture by raising capital by either  of the following methods:          (i)  Via general solicitation (i.e., marketing directed to the public at large, whether via              the internet or otherwise) that (A) names Freddie Mac, or (B) names or contains              any information about the Mortgaged Property.                (ii)   From unaccredited investors in a public offering (e.g., under the related              exemptions of Title III or Title IV of the Jumpstart Our Business Startups (JOBS)              Act).    “Cut-off Date” is defined in the Note, if applicable.      Multifamily Loan and Security Agreement                                Page 104  

 

     “Default Rate” is defined in the Note.    “Defeasance” is defined in Section 11.12.    “Defeasance Closing Date” is defined in Section 11.12(b).    “Defeasance Collateral” means:  (i) a Freddie Mac Debt Security, (ii) a Fannie Mae Debt  Security, (iii) U.S. Treasury Obligations, or (iv) FHLB Obligations.    “Defeasance Fee” is defined in Section 11.12(c).    “Defeasance Notice” is defined in Section 11.12(b).    “Defeasance Period” is defined in the Note, if applicable.    “Departing Equity Owner” is defined in Section 7.03(c)(ii).     “Departing Manager” is defined in Section 7.03(c)(i).     “Designated Entity for Transfers” means each entity so identified in Exhibit I, and that entity’s   successors and permitted assigns.      “Disclosure Document” is defined in Section 11.08.      “E-Signature” means any form of signature provided on behalf of Borrower or a Borrower   Principal other than an original handwritten signature, including any type of image created in any   manner (whether electronically or otherwise) which image could reasonably be interpreted as an   indication of the signer’s intent to sign the document.      “E-Signed Document” means any document received by Servicer or Lender in connection with   the underwriting, origination, transfer, Securitization, or servicing of the Loan, or the correction   or amendment of any such document, to which an E-Signature is affixed, attached, or otherwise   logically associated.      “Economic Sanctions Laws” means the foreign assets control regulations, 31 C.F.R. Chapter V,   as amended, and any amending federal legislation or executive order relating thereto, as   administered by OFAC.      “Economic Sanctions and AML Laws Indemnity” is defined in Section 10.02(e).      “Eligible Account” means an identifiable account which is separate from all other funds held by   the holding institution that is either (i) an account or accounts maintained with the corporate trust   department of a federal or state-chartered depository institution or trust company which complies   with the definition of Eligible Institution, or (ii) a segregated trust account or accounts   maintained with the corporate trust department of a federal or state chartered depository   institution or trust company acting in its fiduciary capacity which, in the case of a state chartered     Multifamily Loan and Security Agreement                                Page 105  

 

     depository institution or trust company is subject to regulations substantially similar to 12 C.F.R.   §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject   to supervision or examination by federal and state authority. An Eligible Account will not be   evidenced by a certificate of deposit, passbook or other instrument.    “Eligible Institution” means a federal or state chartered depository institution or trust company   insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations   or commercial paper of which are rated at least A-1 by Standard & Poor’s Ratings Services, a   division of The McGraw-Hill Companies, Inc., P-1 by Moody’s Investors Service, Inc. and F-3   by Fitch, Inc. in the case of accounts in which funds are held for 30 days or less or, in the case of   letters of credit or accounts in which funds are held for more than 30 days, the long term   unsecured debt obligations of which are rated at least “A” by Fitch, Inc. and Standard & Poor’s   Ratings Services, a division of The McGraw-Hill Companies, Inc., and “A2” by Moody’s   Investors Service, Inc. If at any time an Eligible Institution does not meet the required rating, the   Loan Servicer must move the Eligible Account within 30 days of such event to an appropriately   rated Eligible Institution.      “Environmental Inspections” is defined in Section 6.12(e).      “Environmental Permit” means any permit, license, or other authorization issued under any   Hazardous Materials Law with respect to any activities or businesses conducted on or in relation   to the Mortgaged Property.      “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.      “Event of Default” means the occurrence of any event listed in Section 9.01.      “Existing Owner” means any Person that owned a direct or indirect interest in Borrower or had   a Controlling Interest in Borrower on the date of this Loan Agreement and whose name appears   in the organizational chart attached as Exhibit H to this Loan Agreement.      “Extension Period” is defined in the Note, if applicable.      “Fannie Mae Debt Security” means any non-callable bond, debenture, note, or other similar   debt obligation issued by the Federal National Mortgage Association.      “FHFA” means the Federal Housing Finance Agency.      “FHFA SCP List” means the Suspended Counterparty List maintained by the FHFA which is   currently published at   https://www.fhfa.gov/SupervisionRegulation/LegalDocuments/suspendedcounterpartyprogram.      “FHLB Obligations” mean direct, non-callable and non-redeemable securities issued, or fully   insured as to payment, by the Federal Home Loan Bank.        Multifamily Loan and Security Agreement                                Page 106  

 

     “Fixtures” means all property owned by Borrower which is attached to the Land or the   Improvements so as to constitute a fixture under applicable law, including: machinery,   equipment, engines, boilers, incinerators and installed building materials; systems and equipment   for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light;   antennas, cable, wiring and conduits used in connection with radio, television, security, fire   prevention or fire detection or otherwise used to carry electronic signals; telephone systems and   equipment; elevators and related machinery and equipment; fire detection, prevention and   extinguishing systems and apparatus; security and access control systems and apparatus;   plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers,   garbage disposers, washers, dryers and other appliances; light fixtures, awnings, storm windows   and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors; cabinets,   paneling, rugs and floor and wall coverings; fences, trees and plants; swimming pools; and   exercise equipment.      “Freddie Mac” means the Federal Home Loan Mortgage Corporation.      “Freddie Mac Debt Security” means any non-callable bond, debenture, note, or other similar   debt obligation issued by Freddie Mac.      “Freddie Mac Web Site” means the web site of Freddie Mac, located at www.freddiemac.com.      “GAAP” means generally accepted accounting principles.      “Governmental Authority” means any board, commission, department, agency or body of any   municipal, county, state or federal governmental unit, or any subdivision of any of them, that has   or acquires jurisdiction over the Mortgaged Property, or the use, operation or improvement of the   Mortgaged Property, or over Borrower.      “Guarantor” means the Person(s) required by Lender to guaranty all or a portion of Borrower’s   obligations under the Loan Documents, as set forth in the Guaranty. The required Guarantors as   of the date of this Loan Agreement are set forth in Exhibit I.      “Guaranty” means the Guaranty executed by Guarantor and/or any Replacement Guaranty or   supplemental guaranty executed pursuant to the terms of this Loan Agreement.      “Guarantor Not in Borrower’s Ownership Structure” means a Guarantor who does not (i)   Control Borrower or a Designated Entity for Transfers and/or (ii) have a direct or indirect   ownership interest in Borrower.    “Hazardous Materials” means petroleum and petroleum products and compounds containing   them, including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive   materials; polychlorinated biphenyls (PCBs) and compounds containing them; lead and lead-  based paint; asbestos or asbestos containing materials in any form that is or could become   friable; underground or above-ground storage tanks, whether empty or containing any substance;   any substance the presence of which on the Mortgaged Property is prohibited by any   Governmental Authority; any substance that requires special handling and any other material or     Multifamily Loan and Security Agreement                                Page 107  

 

   substance now or in the future that (i) is defined as a “hazardous substance,” “hazardous  material,” “hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” or “pollutant”  by or within the meaning of any Hazardous Materials Law, or (ii) is regulated in any way by or  within the meaning of any Hazardous Materials Law.    “Hazardous Materials Law” and “Hazardous Materials Laws” means any and all federal,  state and local laws, ordinances, regulations and standards, rules, policies and other  governmental requirements, administrative rulings and court judgments and decrees in effect  now or in the future, including all amendments, that relate to Hazardous Materials or the  protection of human health or the environment and apply to Borrower or to the Mortgaged  Property. Hazardous Materials Laws include the Comprehensive Environmental Response,  Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation and  Recovery Act of 1976, 42 U.S.C. Section 6901, et seq., the Toxic Substance Control Act, 15  U.S.C. Section 2601, et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the  Hazardous Materials Transportation Act, 49 U.S.C. Section 5101 et seq., and their state analogs.    “HVAC System” is defined in Section 6.10(a)(v).    “Immediate Family Members” means a Person’s spouse, parent, child (including stepchild),  grandchild (including step-grandchild), sibling, or domestic partner.    “Imposition Reserve Deposits” is defined in Section 4.02(a).    “Impositions” is defined in Section 4.02(a).    “Improvements” means the buildings, structures and improvements now constructed or at any  time in the future constructed or placed upon the Land, including any future alterations,  replacements and additions.    “Indebtedness” means the principal of, interest at the fixed or variable rate set forth in the Note  on, and all other amounts due at any time under, the Note, this Loan Agreement or any other  Loan Document, including prepayment premiums, late charges, default interest, and advances as  provided in Section 9.02 to protect the security of the Security Instrument.    “Indemnification Affiliate” is defined in Section 10.02(d).    “Indemnified Party/ies” is defined in Section 10.02(d).    “Indemnitees” is defined in Section 10.02(a).    “Index Rate” is defined in the Note, if applicable.    “Installment Due Date” is defined in the Note.    “Insurance” means Property Insurance, liability insurance and all other insurance that Lender  requires Borrower to maintain pursuant to this Loan Agreement.    Multifamily Loan and Security Agreement                                Page 108  

 

     “Intercreditor Agreement” is defined in Section 11.11(b).    “Intrafamily Transfer” is defined in Section 7.03(a)(ii).     “Issuer” means the issuer of any Letter of Credit.      “Issuer Group” is defined in Section 10.02(d).    “Issuer Person” is defined in Section 10.02(d).    “Land” means the land described in Exhibit A.    “Leases” means all present and future leases, subleases, licenses, concessions or grants or other  possessory interests now or hereafter in force, whether oral or written, covering or affecting the  Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or  occupancy agreements if Borrower is a cooperative housing corporation), and all modifications,  extensions or renewals.    “Lender” means the entity identified as “Lender” in the first paragraph of this Loan Agreement,  or any subsequent holder of the Note.    “Lender’s Discretion” means Lender’s reasonable discretion unless otherwise set forth in this  Loan Agreement.    “Letter of Credit” means any letter of credit required under the terms of this Loan Agreement or  any other Loan Document.    “Lien” means any mortgage, deed of trust, deed to secure debt, security interest or other lien or  encumbrance on the Mortgaged Property.    “Lien on Ownership Interest” means any security interest or other lien or encumbrance on any  direct or indirect ownership interest in Borrower.    “Loan” is defined on Page 1 of this Loan Agreement.    “Loan Agreement” means this Multifamily Loan and Security Agreement.    “Loan Application” is defined in Section 5.16(a).    “Loan Documents” means the Note, the Security Instrument, this Loan Agreement, all  guaranties, all indemnity agreements, all collateral agreements, UCC filings, O&M Programs,  the MMP and any other documents now or in the future executed by Borrower, any Guarantor or  any other Person in connection with the Loan evidenced by the Note, as such documents may be  amended from time to time.      Multifamily Loan and Security Agreement                                Page 109  

 

     “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 Security Instrument, this Loan   Agreement and any other Loan Document, and otherwise to service the Loan evidenced by the   Note for the benefit of Lender.       “Lockout Period,” if applicable, is defined in the Note.    “Major Building System” means one that is integral to the Improvements, providing basic   services to the tenants and other occupants of the Improvements including:                  (i)  Electrical (electrical lines or power upgrades, excluding fixture replacement).                  (ii)  HVAC (central and unit systems, excluding replacement of in kind unit systems).                  (iii)  Plumbing (supply and waste lines, excluding fixture replacement).                  (iv)  Structural (foundation, framing, and all building support elements).      “Manager” or “Managers” means a Person who is named or designated as (i) a non-member   manager, manager, managing member, or manager on a board of managers or otherwise acts in   the capacity of a manager or managing member pursuant to the limited liability company   agreement or similar instrument under which the limited liability company is formed or operated,   or (ii) a general partner of a general or limited partnership pursuant to a partnership agreement or   similar agreement under which the partnership is formed or operated.      “Manager Transfer” is defined in Section 7.03(c)(i).      “Margin” is defined in the Note, if applicable.      “Material Adverse Effect” means a significant detrimental effect on:  (i) the Mortgaged   Property, (ii) the business, prospects, profits, operations or condition (financial or otherwise) of   Borrower, (iii) the enforceability, validity, perfection or priority of the Lien of any Loan   Document, or (iv) the ability of Borrower to perform any obligations under any Loan Document.      “Maturity Date” means the Scheduled Maturity Date, as defined in the Note.      “Maximum Combined LTV means the percentage set forth in Part B.12, Summary of Loan   Terms.      “Membership Interests” are all or substantially all the ownership interests in the Membership   Interests Seller.      “Membership Interests Seller” is defined in Part B.4, Summary of Loan Terms.         Multifamily Loan and Security Agreement                                Page 110  

 

   “Minimum DSCR” means, with respect to a Supplemental Loan, (i) if the Senior Indebtedness  bears interest at a fixed rate, 1.25:1, or (ii) if the Senior Indebtedness bears interest at a floating  rate, 1.10:1.    “Minimum Occupancy” means the percentage of units at the Mortgaged Property set forth in  Part B.6, Summary of Loan Terms with leases that comply with Section 5.11, Section  6.09(e)(v)(E), and Section 6.15.    “MMP” means a moisture management plan to control water intrusion and prevent the  development of Mold or moisture at the Mortgaged Property throughout the term of this Loan  Agreement. The requirements for an MMP are set forth in Part B.5, Summary of Loan Terms.     “Modified Non-Residential Lease” means an extension or modification of any Non-Residential  Lease, which Non-Residential Lease was in existence as of the date of this Loan Agreement.    “Mold” means mold, fungus, microbial contamination or pathogenic organisms.    “Mortgaged Property” means all of Borrower’s present and future right, title and interest in and  to all of the following:          (i)  The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease,              the Ground Lease and the Leasehold Estate.          (ii)  The Improvements.          (iii)  The Fixtures.          (iv)  The Personalty.          (v)   All current and future rights, including air rights, development rights, zoning              rights and other similar rights or interests, easements, tenements, rights of way,              strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses              and appurtenances related to or benefiting the Land or the Improvements, or both,              and all rights-of-way, streets, alleys and roads which may have been or may in the              future be vacated.          (vi)  All proceeds paid or to be paid by any insurer of the Land, the Improvements, the              Fixtures, the Personalty or any other part of the Mortgaged Property, whether or              not Borrower obtained the Insurance pursuant to Lender’s requirement.          (vii)  All awards, payments and other compensation made or to be made by any              municipal, state or federal authority with respect to the Land or the Leasehold              Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other              part of the Mortgaged Property, including any awards or settlements resulting              from Condemnation proceedings or the total or partial taking of the Land, the              Improvements, the Fixtures, the Personalty or any other part of the Mortgaged    Multifamily Loan and Security Agreement                                Page 111  

 

               Property under the power of eminent domain or otherwise and including any              conveyance in lieu thereof.          (viii)  All contracts, options and other agreements for the sale of the Land, or the              Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or              any other part of the Mortgaged Property entered into by Borrower now or in the              future, including cash or securities deposited to secure performance by parties of              their obligations.          (ix)  All proceeds from the conversion, voluntary or involuntary, of any of the items             described in items (i) through (viii) of this definition, into cash or liquidated             claims, and the right to collect such proceeds.                     (x)    All Rents and Leases.                     (xi)  All earnings, royalties, accounts receivable, issues and profits from the Land, the             Improvements or any other part of the Mortgaged Property, and all undisbursed             proceeds of the Loan.                     (xii)   All Imposition Reserve Deposits.                     (xiii)  All refunds or rebates of Impositions by any Governmental Authority or insurance             company (other than refunds applicable to periods before the real property tax             year in which this Loan Agreement is dated).                     (xiv)  All tenant security deposits which have not been forfeited by any tenant under any             Lease and any bond or other security in lieu of such deposits.                (xv)  All names under or by which any of the Mortgaged Property may be operated or              known, and all trademarks, trade names and goodwill relating to any of the              Mortgaged Property.          (xvi)  If required by the terms of Section 4.05 or elsewhere in this Loan Agreement, all              rights under any Letter of Credit and the Proceeds, as such Proceeds may increase              or decrease from time to time.          (xvii)   If the Note provides for interest to accrue at a floating or variable rate and there is              a Cap Agreement, the Cap Collateral.          (xviii)  through (xxv) are Reserved.          “New Non-Residential Lease” is any Non-Residential Lease not in existence as of the date of  this Loan Agreement.    “Non-Controlling Interest” is an ownership interest in Borrower or in a Designated Entity for  Transfers that is not a Controlling Interest, including (i) any limited partnership interest in a    Multifamily Loan and Security Agreement                                Page 112  

 

     partnership, (ii) any non-managing interest in a limited liability company, or (iii) beneficial   interests in a Trust that is not a revocable Trust.      “Non-Residential Lease” is a Lease of a portion of the Mortgaged Property to be used for non-  residential purposes.      “Non-U.S. Equity Holder” means any Person with a collective equity interest (whether direct or   indirect) of 10% or more in Borrower, and which is either (a) an individual who is not a citizen   of the United States, or (b) an entity formed outside the United States.      “Note” means the Multifamily Note or Notes (including any Amended and Restated Note(s),   Consolidated, Amended and Restated Note(s), or Extended and Restated Note(s)) executed by   Borrower in favor of Lender and dated as of the date of this Loan Agreement, including all   schedules, riders, allonges and addenda, as such Multifamily Note(s) may be amended, modified   and/or restated from time to time.      “Notice” or “Notices” means all notices, demands and other communication required under the   Loan Documents, provided in accordance with the requirements of Section 11.03.      “Notice of Death” is defined in Section 7.03(b)(i).      “O&M Program” is defined in Section 6.12(c) and if applicable, consists of the O&M Programs   set forth in Part B.8, Summary of Loan Terms.     “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.     “OFAC Lists” means either one of the following:          (i)   The OFAC Specially Designated Nationals and Blocked Persons List.                (ii)   The OFAC Consolidated Sanctions List.      “Permitted Transfer” means a Transfer that will not cause an Event of Default under this Loan   Agreement. The Permitted Transfers are set forth in Section 7.02.      “Person” means any natural person, sole proprietorship, corporation, general partnership, limited   partnership, limited liability company, limited liability partnership, limited liability limited   partnership, joint venture, association, joint stock company, bank, trust, estate, unincorporated   organization, any federal, state, county or municipal government (or any agency or political   subdivision thereof), endowment fund or any other form of entity.      “Personalty” means all of the following:           (i)   Accounts (including deposit accounts) of Borrower related to the Mortgaged              Property.       Multifamily Loan and Security Agreement                                Page 113  

 

         (ii)  Equipment and inventory owned by Borrower, which are used now or in the              future in connection with the ownership, management or operation of the Land or              Improvements or are located on the Land or Improvements, including furniture,              furnishings, machinery, building materials, goods, supplies, tools, books, records              (whether in written or electronic form) and computer equipment (hardware and              software).          (iii)  Other tangible personal property owned by Borrower which is used now or in the              future in connection with the ownership, management or operation of the Land or              Improvements or is located on the Land or in the Improvements, including ranges,              stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers,             dryers and other appliances (other than Fixtures).                     (iv)   Any operating agreements relating to the Land or the Improvements.                     (v)    Any surveys, plans and specifications and contracts for architectural, engineering             and construction services relating to the Land or the Improvements.                     (vi)  All other intangible property, general intangibles 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 and including             subsidy or similar payments received from any sources, including a Governmental             Authority.                     (vii)  Any rights of Borrower in or under any Letter of Credit.                “Pledge Agreement” is defined in Section 11.12(f)(iii).    “Preferred Equity Control Take-over” is defined in Section 7.03(b)(ii).    “Preferred Equity Investor” is the Person specified as such in Part B.9, Summary of Loan  Terms.     “Prepayment Premium Period” is defined in the Note.    “Previously Underwritten Person” is the Person specified as such in Part B.9, Summary of  Loan Terms.    “Prior Borrower Principal” is the Person specified as such in Part B.9, Summary of Loan  Terms.    “Prior Lien” means a pre-existing mortgage, deed of trust or other Lien encumbering the  Mortgaged Property.    “Proceeds” means the cash obtained by a draw on a Letter of Credit.      Multifamily Loan and Security Agreement                                Page 114  

 

   “Prohibited Activity or Condition” means each of the following:          (i)  The presence, use, generation, release, treatment, processing, storage (including              storage in above-ground and underground storage tanks), handling or disposal of              any Hazardous Materials on or under the Mortgaged Property.          (ii)  The transportation of any Hazardous Materials to, from or across the Mortgaged              Property.          (iii)  Any occurrence or condition on the Mortgaged Property, which occurrence or              condition is or may be in violation of Hazardous Materials Laws.          (iv)  Any violation of or noncompliance with the terms of any Environmental Permit              with respect to the Mortgaged Property.          (v)   Any violation or noncompliance with the terms of any O&M Program.    However, the term “Prohibited Activity or Condition” expressly excludes lawful conditions  permitted by an O&M Program or the safe and lawful use and storage of quantities of:  (i) pre- packaged supplies, cleaning materials and petroleum products customarily used in the operation  and maintenance of comparable multifamily properties, (ii) cleaning materials, personal  grooming items and other items sold in pre-packaged containers for consumer use and used by  tenants and occupants of residential units in the Mortgaged Property, and (iii) petroleum products  used in the operation and maintenance of motor vehicles from time to time located on the  Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled,  transported and disposed of in compliance with Hazardous Materials Laws.    “Prohibited Parties List” means any one or more of the (i) OFAC Lists or (ii) FHFA SCP List.     “Prohibited Transfer” means a Transfer that will constitute an Event of Default under this Loan  Agreement. The Prohibited Transfers are set forth in Section 7.01.    “Property Improvement Alterations” means alterations to the Improvements existing at or  upon the Mortgaged Property as of the date of this Loan Agreement, which are being made to  renovate or upgrade the Mortgaged Property and are not otherwise permitted under Section  6.09(e). Repairs, Capital Replacements, Restoration or other work required to be performed at  the Mortgaged Property pursuant to Sections 6.10 or 6.11 will not constitute Property  Improvement Alterations.    “Property Improvement Notice” means a Notice to Lender that Borrower intends to begin the  Property Improvement Alterations identified in the Property Improvement Notice.    “Property Insurance” is defined in Section 6.10(a).    “Property Jurisdiction” means the jurisdiction in which the Land is located.      Multifamily Loan and Security Agreement                                Page 115  

 

     “Property Manager” means the Person identified as such in Part B.1, Summary of Loan Terms.      “Property Seller” is defined in Section 5.24.      “Public Company” means (i) a company whose shares are traded on a United States public   exchange or a United States over-the-counter exchange with no control over who purchases its   shares after the initial public offering, or (ii) a pension fund that is controlled by a United States   municipal, county, state, or federal governmental unit or any subsidiary thereof.     “Rate Cap Agreement Reserve Fund” means the account established pursuant to Section 4.07,  if applicable, to pay for the cost of a Replacement Cap Agreement.     “Rating Agencies” means Fitch, Inc., Moody’s Investors Service, Inc., or Standard & Poor’s   Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor entity of the   foregoing, or any other nationally recognized statistical rating organization.      “Released Guarantor” is defined in Section 7.03(c)(iii).      “Release of Guarantor Transfer” is defined in Section 7.03(c)(iii).      “Release Instruments” is defined in Section 11.12(f).      “Remedial Work” is defined in Section 6.12(f).    “Rent(s)” means all rents (whether from residential or non-residential space), revenues and other   income of the Land or the Improvements, parking fees, laundry and vending machine income   and fees and charges for food, health care and other services provided at the Mortgaged Property,   whether now due, past due or to become due, and deposits forfeited by tenants, and, if Borrower   is a cooperative housing corporation or association, maintenance fees, charges or assessments   payable by shareholders or residents under proprietary leases or occupancy agreements, whether  now due, past due or to become due.    “Rent Schedule” means a written 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.      “Repairs” means the repairs to be made to the Mortgaged Property, as described on the Repair  Schedule of Work (Exhibit C) or as otherwise required by Lender in accordance with this Loan   Agreement.      “Replacement Cap Agreement” means any Cap Agreement satisfying the provisions of this   Loan Agreement, using documentation approved by Lender, and purchased by Borrower to   replace any initial Cap Agreement or subsequent Cap Agreement.        Multifamily Loan and Security Agreement                                Page 116  

 

   “Replacement Cost” means the estimated replacement cost of the Improvements, Fixtures, and  Personalty (or, when used in reference to a property that is not the Mortgaged Property, all  improvements, fixtures, and personalty located on such property), excluding any deduction for  depreciation, all as determined annually by Borrower using customary methodology and sources  of information acceptable to Lender in Lender’s Discretion. Replacement Cost will not include  the cost to reconstruct foundations or site improvements, such as driveways, parking lots,  sidewalks, and landscaping.    “Replacement Guarantor” means a Person acceptable to Lender that executes a Guaranty in  connection with (i) a Transfer, (ii) a Guarantor Status Event, (iii) a Guarantor Bankruptcy, or (iv)  the death of a Guarantor, and that meets the Replacement Guarantor Net Worth and Liquidity  Requirements.     “Replacement Guaranty” means a Guaranty executed by a Replacement Guarantor in a form  acceptable to Lender and in substantially the same form as the Guaranty executed on the same  date as this Loan Agreement.  If the Replacement Guarantor is an entity, the Replacement  Guarantor’s Guaranty will be modified to include, at Replacement Guarantor’s option, either  Lender’s current form of the Rider to Guaranty – Material Adverse Change, or Lender’s current  form of the Rider to Guaranty – Minimum Net Worth/Liquidity.   “Replacement Guarantor Net Worth and Liquidity Requirements” means that all Guarantors  (including any Replacement Guarantors) collectively satisfy the following requirements:           (a)  A net worth of at least:                      (i)  $5,000,000 for Loans with an unpaid principal balance of the Loan at the                    time of the applicable Transfer of less than $15,000,000.                            (ii)  $10,000,000 for Loans with an unpaid principal balance of the Loan at the                    time of the applicable Transfer of at least $15,000,000 and less than                    $30,000,000.                            (iii)  $15,000,000 for Loans with an unpaid principal balance of the Loan at the                    time of the applicable Transfer of at least $30,000,000 and less than                    $50,000,000.                            (iv)  30% of the unpaid principal balance of the Loan at the time of the                    applicable Transfer for Loans of at least $50,000,000.                           (b)         Liquidity equal to the greater of 10% of the unpaid principal balance of the Loan              at the time of the applicable Transfer or one year of debt service unless another              amount is set forth in this Loan Agreement. If the Loan has a floating interest              rate, then the liquidity requirement will be 10% of the unpaid principal balance.              If the Loan is an interest-only or partial interest only loan, then Lender will              calculate one year of debt service using the amortizing debt service.             Multifamily Loan and Security Agreement                                Page 117  

 

   “Required Co-Owner” means a Person that must maintain at least the Required Co-Owner  Interest after a Co-Owner Transfer, as set forth in Part B.9, Summary of Loan Terms.     “Required Co-Owner Interest” means the percentage of direct or indirect interest in the  Mortgaged Property that the Required Co-Owner must maintain after a Co-Owner Transfer, as  set forth in Part B.9, Summary of Loan Terms.    “Required Equity Owner” means a Person that must maintain at least the Required Equity  Ownership Interest, as set forth in Part B.9, Summary of Loan Terms.    “Required Equity Owner Transfer” is defined in Section 7.03(c)(ii).     “Required Equity Ownership Interest” means the minimum percentage of direct or indirect  interest in Borrower that the Required Equity Owner must maintain, as set forth in Part B.10,  Summary of Loan Terms.    “Reserve Fund” means each account established for Imposition Reserve Deposits, the  Replacement Reserve Fund, the Repair Reserve Fund (if any), the Rate Cap Agreement Reserve  Fund (if any), the Rental Achievement Reserve Fund (if any), and any other account established  pursuant to Article IV of this Loan Agreement.    “Restoration” is defined in Section 6.10(j)(i).    “Scheduled Debt Payments” is defined in Section 11.12(g)(i)(B).    “Second Beneficiary” is defined in Section 7.03(b)(i).    “Secondary Market Transaction” means any of the following:            (i)  Any sale or assignment of this Loan Agreement, the Note and the other Loan              Documents to one or more investors as a whole loan.                (ii)  A participation of the Loan to one or more investors.                (iii)  Any deposit of this Loan Agreement, the Note and the other Loan Documents              with a trust or other entity which may sell certificates or other instruments to              investors evidencing an ownership interest in the assets of such trust or other              entity.                (iv)  Any other sale, assignment or transfer of the Loan or any interest in the Loan to              one or more investors.     “Securitization” means when the Note or any portion of the Note is assigned to a REMIC or  grantor trust.    “Securitization Indemnification” is defined in Section 10.02(d).    Multifamily Loan and Security Agreement                                Page 118  

 

        “Security Instrument” means the mortgage, deed of trust, deed to secure debt or other similar   security instrument encumbering the Mortgaged Property and securing Borrower’s performance   of its Loan obligations, including Borrower’s obligations under the Note and this Loan   Agreement (including any Amended and Restated Security Instrument, Consolidation,   Modification and Extension Agreement, Extension and Modification Agreement or similar   agreement or instrument amending and restating existing security instruments).      “Senior Indebtedness” means, for a Supplemental Loan, if any, the Indebtedness evidenced by   each Senior Note and secured by each Senior Instrument for the benefit of each Senior Lender.      “Senior Instrument” means, for a Supplemental Loan, each Senior Instrument identified in Part   B.13, Summary of Loan Terms. If the Loan is a first lien on the Mortgaged Property, the term   “Senior Instrument” is not applicable.       “Senior Lender” means each holder of a Senior Note.      “Senior Loan Documents” means, for a Supplemental Loan, if any, all documents relating to   each loan evidenced by a Senior Note.      “Senior Note” means, for a Supplemental Loan, if any, each Multifamily Note secured by a   Senior Instrument.      “Servicing Arrangement” is defined in Section 11.06(b).      “Settlement Notice” is defined in Section 7.03(b)(i).     “Single Purpose Entity” is defined in Section 6.13(a).    “Site Assessment” means an environmental assessment report for the Mortgaged Property  prepared at Borrower’s expense by a qualified environmental consultant engaged by Borrower,  or by Lender on behalf of Borrower, and approved by Lender, and in a manner reasonably  satisfactory to Lender, based upon an investigation relating to and making appropriate inquiries  to evaluate the risks associated with Mold and any existence of Hazardous Materials on or about  the Mortgaged Property, and the past or present discharge, disposal, release or escape of any  such substances, all consistent with the most current version of the ASTM 1527 standard (or any  successor standard published by ASTM) and good customary and commercial practice.     “SPE Equity Owner” if applicable, means the Person identified as such in Part B.2, Summary   of Loan Terms. If an SPE Equity Owner is not identified in Part B.2, Summary of Loan Terms   then Borrower will not be required to maintain an SPE Equity Owner in its organizational   structure during the term of the Loan and all references to SPE Equity Owner in this Loan   Agreement and in the Note will be of no force or effect.        Multifamily Loan and Security Agreement                                Page 119  

 

     “Special Transfer Processing Fee” means a nonrefundable fee of $25,000 for Lender’s review   of (i) a proposed or completed Conditionally Permitted Transfer – Category II or (ii) certain   other actions or events relating to Guarantor set forth in Article VIII.     “Status Event” means any of the following events have occurred in connection with an entity:          (i)    Termination of its existence.          (ii)   Merger or consolidation of the entity with another entity (whether or not the entity              is the surviving entity).          (iii)  Surrender of its charter.          (iv)  Dissolution of the entity.          (v)    Liquidation of its assets.          (vi)  Division of the entity.          (vii)  Reconstitution of the entity into another entity.          (viii)  The filing of any document with the applicable governmental authority to effect              any action listed in (i) through (vii) of this definition.     “Successor Borrower” is defined in Section 11.12(b).    “Supplemental Indebtedness” the Indebtedness evidenced by the Supplemental Note(s) and  secured by the Supplemental Instrument(s) for the benefit of Supplemental Lender(s), if any.    “Supplemental Instrument” means, for each Supplemental Loan (whether one or more), if any,   the Security Instrument executed to secure the Supplemental Note for that Supplemental Loan.      “Supplemental Lender” means, for each Supplemental Loan (whether one or more), if any, the   lender named in the Supplemental Instrument for that Supplemental Loan and its successors   and/or assigns.      “Supplemental Loan” means any loan that is subordinate to the Senior Indebtedness.      “Supplemental Loan Documents” means, for each Supplemental Loan (whether one or more),   if any, all documents relating to the loan evidenced by the Supplemental Note for that   Supplemental Loan.      “Supplemental Mortgage Product” is defined in Section 11.11(a).      “Supplemental Note” means, for each Supplemental Loan (whether one or more), if any, the   Multifamily Note secured by the Supplemental Instrument for that Supplemental Loan.     Multifamily Loan and Security Agreement                                Page 120  

 

     “Tax Code” means the Internal Revenue Code of the United States, 26 U.S.C. Section 1 et seq.,  as amended from time to time.    “Taxes” means all taxes, assessments, vault rentals and other charges, if any, whether general,  special or otherwise, including all assessments for schools, public betterments and general or  local improvements, which are levied, assessed or imposed by any public authority or quasi- public authority, and which, if not paid, will become a Lien on the Land or the Improvements.    “Tenancy in Common Agreement” means a written agreement that sets out the rights and  responsibilities of each Co-Owner Borrower.    “TIC Roll-up Transfer” is defined in Section 7.03(a)(v).    “Title Policy” means the title policy issued to and accepted by Lender contemporaneously with  the execution of this Loan Agreement insuring Lender’s interest in the Mortgaged Property.    “Total Insurable Value” means the sum of the Replacement Cost, business income/rental value  Insurance and the value of any business personal property.    “Transfer” means any of the following:          (i)  A sale, assignment, transfer or other disposition or divestment of any legal or              equitable direct or indirect interest in Borrower, any Designated Entity for              Transfer or the Mortgaged Property (whether voluntary, involuntary or by              operation of law).           (ii)  The granting, creating or attachment of a Lien, encumbrance or security interest              (whether voluntary, involuntary or by operation of law).          (iii)  The issuance or other creation of a legal or equitable ownership interest in a legal              entity, including a partnership interest, interest in a limited liability company or              corporate stock.          (iv)  The withdrawal, retirement, removal or involuntary resignation of a partner in a              partnership or a member or Manager in a limited liability company.          (v)   The  addition,  appointment,  substitution  or removal  of  a  manager  on  a  board  of              managers or a director on a board of directors.          (vi)  A Status Event.                (vii)  The termination or revocation of a trust, or the addition, removal, appointment or              substitution of a trustee of a trust.       Multifamily Loan and Security Agreement                                Page 121  

 

   For purposes of defining the term “Transfer,” the term “partnership” means a general  partnership, a limited partnership, a joint venture, a limited liability partnership, or a limited  liability limited partnership and the term “partner” means a general partner, a limited partner, or  a joint venturer.    “Transfer” does not include any of the following:          (i)  A conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure              sale under the Security Instrument.                (ii)  The Mortgaged Property becoming part of a bankruptcy estate by operation of law              under the Bankruptcy Code.          (iii)  The filing or recording of a Lien against the Mortgaged Property for local taxes              and/or assessments not then due and payable.    “Transfer and Assumption Agreement” is defined in Section 11.12(f)(iv).    “Transfer Due to Death” is defined in Section 7.03(b)(i).    “Transfer Fee” means a fee paid when the Transfer is completed. Unless otherwise specified,  the Transfer Fee will be equal to the lesser of the following:          (i)  1% of the outstanding principal balance of the Indebtedness as of the date of the              Transfer.                (ii)  $250,000.    “Transfer Processing Fee” means a nonrefundable fee of $15,000 for Lender’s review of a  proposed or completed Transfer.    “Transfer to Previously Underwritten Person(s)” is defined in Section 7.03(a)(iii).    “Trust” means a legal entity in which a trustee agrees to hold and manage certain assets or  property of the trustor for the benefit of the beneficiary(ies). “Trust” includes a revocable trust,  irrevocable trust, testamentary trust, and Delaware Statutory Trust.      “U.S. Treasury Obligations” means direct, non-callable and non-redeemable securities issued,  or fully insured as to payment, by the United States of America.    “UCC Collateral” is defined in Section 3.03.    “Underwriter Group” is defined in Section 10.02(d).    “Uniform Commercial Code” means the Uniform Commercial Code as promulgated in the  applicable jurisdiction.    Multifamily Loan and Security Agreement                                Page 122  

 

     “Windstorm Coverage” is defined in Section 6.10(a)(iv).    Multifamily Loan and Security Agreement                                Page 123  

 

   ARTICLE XIII     INCORPORATION OF ATTACHED RIDERS.    The Riders listed in Part D of the Summary of Loan Terms are attached to and incorporated into  this Loan Agreement.    ARTICLE XIV       INCORPORATION OF ATTACHED EXHIBITS.    The Exhibits listed in Part C of the Summary of Loan Terms, if marked with an “X” in the space  provided, are attached to this Loan Agreement:    ARTICLE XV        RESERVED.                 REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;                      SIGNATURES ON FOLLOWING PAGES   Multifamily Loan and Security Agreement                                Page 124  

 

                                BORROWER:                                   SIR TAPESTRY PARK, LLC                                  a Delaware limited liability company                                   By:    Steadfast Income Advisor, LLC                                         a Delaware limited liability company                                         Manager                                          By:                     SIGNATURES CONTINUE ON FOLLOWING PAGE    Multifamily Loan and Security Agreement                                      Page S-1  

 

                             LENDER:                                BERKELEY POINT CAPITAL LLC,                               d/b/a NEWMARK KNIGHT FRANK,                               a Delaware limited liability company                                By:  ~(lll!/_,~f----1.l:'/f!!j~;h---(SEAL)                                     Deborah Demoney                                     Vice President    Multifamily Loan and Security Agreement                              Page S-2  

 

           RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                                   TRADE NAMES                                   (Revised 3-1-2014)    The following changes are made to the Loan Agreement which precedes this Rider:                    A.    Section 6.30 is deleted and replaced with the following:                6.30  Lender’s  Right  To  Use  Trade  Name.  Notwithstanding  anything  contained  in              this  Loan  Agreement,  Borrower  agrees  that  Lender  will  have  an  irrevocable              license, coupled with an interest and for which consideration has been paid and              received,  to  use  and  disseminate  existing  brochures,  pamphlets,  and  other              marketing  materials  relating  to  any  of  the  Mortgaged  Property,              notwithstanding  that  they  may  include the names “SIR”,  “STAR”  or              “Steadfast” and/or associated trademark rights and trade names relating to any of              the Mortgaged Property for a period not to exceed 120 days after the date Lender              acquires the Mortgaged Property by foreclosure or deed-in-lieu of foreclosure.    B.    Section (xv) of the definition of “Mortgaged Property” in Article XII is modified to        read as follows:                      (xv)  All names under or by which any of the mortgaged property may                          be  operated  or  known,  and  all  trademarks,  trade  names  and                          goodwill  relating  to  any  of  the  mortgaged  property;  provided                          however,  that  the  names “SIR”,  “STAR”  or “Steadfast”  and/or                          associated  trademark  rights  are  not assigned  to lender,  subject to                          Section 6.30 of this Loan Agreement.      Rider to Multifamily Loan and Security Agreement                         Page 1   Trade Names  

 

           RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                            MONTH TO MONTH LEASES                                 (Revised 5-1-2015)  The following changes are made to the Loan Agreement which precedes this Rider:  A.    Section 5.11(b) is deleted and replaced with the following:        (b)   They are for initial terms of at least 6 months and not more than 2 years (unless              otherwise  approved  in  writing  by  Lender). Notwithstanding  the  foregoing,              Lender agrees that not more than 10% of all Leases for residential dwelling units              may be for an initial term of less than 6 months, provided that such leases have an              initial term of at least 1 month.  B.    Section 6.15(b)(ii) is deleted and replaced with the following:              (ii)  They  will  be  for  initial  terms  of  at  least  6  months  and  not  more  than  2                    years (unless otherwise approved in writing by Lender). Notwithstanding                    the  foregoing, Lender  agrees  that  not  more  than  10%  of  all  Leases  for                    residential dwelling units may be for an initial term of less than 6 months,                    provided that such leases have an initial term of at least 1 month.            Rider to Multifamily Loan and Security Agreement                         Page 1   Month to Month Leases  

 

           RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                               CORPORATE LEASES                                (Revised 4-19-2018)  The following changes are made to the Loan Agreement which precedes this Rider:  A.    Section 5.11(c) is deleted and replaced with the following:              (c)  They do not include any Corporate Leases (unless otherwise approved in                    writing  by Lender). Notwithstanding  the foregoing, Lender  agrees  that                    no more than 10% of all residential dwelling units may be leased pursuant                    to one or more Corporate Leases; provided, however, no more than 5%                    of  all  residential  units  may  be  leased  pursuant  to  one  or  more                    Corporate  Leases  to  any  one  corporate  tenant  at  any  time  and                    provided  that  under  no  circumstances  may  Corporate  Leases                    affecting  5%  or  more  of  all  residential  dwelling  units  expire  in  the                    same 6 month period as any other Corporate Leases.  The form of any                    such  Corporate  Lease  must  be  approved  by  Lender.  Any  subleases                    executed in connection with a Corporate Lease must be on forms that are                    customary  for  similar multifamily  properties  in  the  Property  Jurisdiction                    and must provide for a minimum term of 1 month.   B.    Section 6.15(b)(iii) is deleted and replaced with the following:                    (iii)  They  will  not  include  any  Corporate  Leases  (unless  otherwise                          approved in writing by Lender). Notwithstanding the foregoing,                          Lender  agrees  that  no  more  than  10%  of  all  residential  dwelling                          units  may  be  leased  pursuant  to  one  or  more  Corporate  Leases;                          provided,  however,  no  more  than  5%  of  all  residential  units                          may  be  leased  pursuant  to  one  or  more  Corporate  Leases  to                          any one corporate tenant at any time and provided that under                          no circumstances may Corporate Leases affecting 5% or more                          of  all  residential  dwelling  units  expire  in  the  same  6  month                          period  as  any  other  Corporate  Leases.  The form of any such                          Corporate  Lease  must  be  approved  by  Lender.  Any  subleases                          executed in connection with a Corporate Lease must be on forms                          that  are  customary  for  similar  multifamily  properties  in  the                          Property Jurisdiction and must provide for a minimum term of 1                          month. Borrower may not, in connection with any Corporate Lease (or                         otherwise), participate in any Home Sharing Activities or enter into any                         Corporate Lease for units that it knows or should know are intended to                         be used for full-time or part-time Home Sharing Activities.  C.    The following definition is added to Article XII:          “Home Sharing Activities” means short-term rentals of units that are marketed through a        peer-to-peer  online  marketplace  or  a  home  sharing  platform  (such  as  Airbnb,  VRBO,        HomeAway, Booking.com, and other similar platforms).            Rider to Multifamily Loan and Security Agreement                         Page 1   Corporate Leases  

 

           RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                                                        TERMITE OR WOOD DAMAGING INSECT CONTROL                                                                          (Revised 3-1-2014)                                                                                     The following changes are made to the Loan Agreement which precedes this Rider:    A.    Section 6.09(k) is deleted and replaced with the following:          (k)   Termite or Wood Damaging Insect Control. Within ninety (90) days of              the Closing Date, Borrower will enter into maintain a contract with a              qualified service provider for control of termites or other wood damaging              insects at the Mortgaged Property and maintain such contract for so              long as the Indebtedness remains outstanding.      Rider to Multifamily Loan and Security Agreement                         Page 1   Termite or Wood Damaging Insect Control  

 

                              RECYCLED BORROWER                                                                         (Revised 4-19-2018)    The following changes are made to the Loan Agreement which precedes this Rider:    A.    Section 5.40 is replaced with the following:          5.40  Recycled Borrower.                (a)  Underwriting Representations. Borrower represents that as of the date of                    this Loan Agreement, each of the following is true:                      (i)  Borrower is and always has been duly formed, validly existing, and                          in  good  standing  in  the  state  of  its  formation  and  in  all  other                          jurisdictions where it is qualified to do business.                                (ii)   Borrower  is  not  now,  nor  has  it  ever  been,  party  to  any  lawsuit,                         arbitration,  summons,  or  legal  proceeding  that  is  still  pending                          which, if adversely determined, would have a Material Adverse                          Effect,  or that resulted in a judgment against it that has not been                          paid in full, and there are no liens of any nature against Borrower                          except (a) for  tax  liens  not  yet  due or (b) as shown in the                          schedule of exceptions to coverage in the Title Policy issued to                          and accepted by Lender contemporaneously with the execution                          of this Loan.                                  (iii)  Borrower  is  in  compliance  with  all  laws,  regulations,  and orders                          applicable to it (“legal, non-conforming” status with respect to                          uses or structures will be considered to comply with zoning and                          land  use  laws  and  regulations  for  the  purposes  of  this                          representation) and,  except  as  otherwise  disclosed  in  this  Loan                          Agreement, has received all permits necessary for it to operate.                                  (iv)  Borrower is not involved in any dispute with any taxing authority.                                   (v)   Borrower has paid all taxes which it owes.                                  (vi)  Borrower  has  never  owned  any  real  property  other  than  the                          Mortgaged Property and personal property necessary or incidental                          to  its  ownership  or  operation  of  the  Mortgaged  Property  and  has                          never  engaged  in  any  business  other  than  the  ownership  and                          operation of the Mortgaged Property.                                  (vii)  Borrower has provided Lender with complete financial statements                          that  reflect  a  fair  and  accurate  view  of  the  entity’s  financial                          condition in all material respects as of the date set forth                          thereon.                                  (viii)  If  required  by  Lender,  Lender  has  received  a  current  Phase  I                          environmental  Site  Assessment for  the  Mortgaged  Property  and                          that  Site  Assessment  has  not identified  any  recognized                          environmental  conditions  that  require  further  investigation  or                          remediation.                 Rider to Multifamily Loan and Security Agreement                         Page 1   Recycled Borrower  

 

                     (ix)  Borrower  has  no  material  contingent  or  actual  obligations not                          related to the Mortgaged Property.                                  (x)   Each  amendment  and  restatement  of  Borrower’s  organizational                          documents  has  been  accomplished  in  accordance  with,  and  was                          permitted by, the relevant provisions of said documents prior to its                          amendment or restatement from time to time.                      (b)   Separateness  Representations.  Borrower  represents  that  from  the  date  of                    its formation, each of the following is true:                            (i)  Borrower has not entered into any contract or agreement with any                          Related Party Affiliate, except upon terms and conditions that are                          commercially  reasonable  and  substantially  similar  to  those                          available in an arm’s-length transaction with an unrelated party.                                  (ii)  Borrower  has  paid  all  of  its  debts  and  liabilities  from  its  assets,                          including  any  fair  and  reasonable  allocated  portion  of  shared                          expenses with Affiliates.                                  (iii)  Borrower  has  done  or  caused  to  be  done  all  things  necessary  to                          observe  all  organizational  formalities  applicable  to  it  and  to                          preserve its existence.                                  (iv)  Except with respect to financial statements which are covered                          by subsection (v) below, Borrower has maintained all of its books,                          records,  financial  statements  and  bank  accounts  separate  from                          those of any other Person.                                  (v)   Borrower  has  not  had  its  assets  listed  as  assets  on  the  financial                          statement  of  any  other  Person;  provided,  however,  Borrower’s                          assets may have been included in a consolidated financial                          statement of its Affiliate if each of the following conditions is met:                                              (A)  Appropriate  notation  was made  on  such  consolidated                               financial  statements  to  indicate  the  separateness  of                               Borrower  from  such  Affiliate  and  to  indicate  that                               Borrower’s  assets  and  credit  were  not  available  to  satisfy                               the  debts  and  other  obligations  of  such  Affiliate  or  any                               other Person.                                                  (B)   Such  assets  were  also  listed  on  Borrower’s  own  separate                               balance sheet.                                      (vi)   Borrower has filed its own tax returns (except to the extent that it                         has  been  a  tax-disregarded  entity  not  required  to  file  tax  returns                         under  applicable  law)  and,  if  it  is  a  corporation,  has  not  filed  a                         consolidated federal income tax return with any other Person.                                (vii)  Borrower has been, and at all times has held itself out to the public                         as,  a  legal  entity  separate  and  distinct  from  any  other  Person                         (including any Affiliate or other Related Party Affiliate).                                (viii)  Borrower has corrected any known misunderstanding regarding its                         status as a separate entity.   Rider to Multifamily Loan and Security Agreement                         Page 2   Recycled Borrower  

 

                                   (ix)  Borrower has conducted all of its business and held all of its assets                          in its own name.                                  (x)   Borrower  has  not  identified  itself  or  any  of  its  affiliates as a                          division or part of the other.                                  (xi)  Borrower  has  maintained  and  used  separate  stationery,  invoices                         and checks bearing its own name.                                (xii)  Borrower  has  not  commingled  its  assets  with  those  of  any other                         Person and has held all of its assets in its own name.                                (xiii)  Borrower has not guaranteed or become obligated for the debts of                         any other Person.                                (xiv)  Borrower has not held itself out as being responsible for the debts                         or obligations of any other Person.                                (xv)   Borrower  has  allocated  fairly  and  reasonably  any  overhead                         expenses that have been shared with an Affiliate, including paying                         for  office  space  and  services  performed  by  any  employee  of  an                         Affiliate or Related Party Affiliate.                                (xvi)  Borrower has not pledged its assets to secure the obligations of any                         other Person.                                (xvii)  Borrower  has  maintained  adequate  capital  in  light  of  its                         contemplated business operations.                                (xviii)  Borrower has maintained a sufficient number of employees in light                         of its contemplated business operations and has paid the salaries of                         its own employees from its own funds.                                (xix)  Borrower  has  not  owned  any  subsidiary  or  any  equity  interest in                         any other entity.                                (xx)   Borrower has not incurred any indebtedness that is still outstanding                         other  than  Indebtednessindebtedness  that  is  permitted  under  the                          Loan Documents.                                  (xxi)  Borrower  has  not  had  any  of  its  obligations  guaranteed  by an                         Affiliate or other Related Party Affiliate, except for guarantees that                         have been either released or discharged (or that will be discharged                         as  a  result  of  the  closing  of  the  Loan)  or  guarantees  that  are                         expressly contemplated by the Loan Documents.                                (xxii)  None of the tenants holding leasehold interests with respect to the                         Mortgaged Property are an Affiliate of Borrower or other Related                          Party Affiliate.                B.    The following definition is added to Article XII:      Rider to Multifamily Loan and Security Agreement                         Page 3   Recycled Borrower  

 

         “Related  Party  Affiliate”  means  any  of  the  Borrower’s  Affiliates,  constituents,  or        owners, or any guarantors of any of the Borrower’s obligations or any Affiliate of any of        the foregoing.                                                                                          Rider to Multifamily Loan and Security Agreement                         Page 4   Recycled Borrower  

 

           RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                                                     COOPERATION WITH RATING AGENCIES AND INVESTORS                                                                                                                  (Revised 1-27-2015)      A.    Section 11.14 is deleted and replaced with the following:          11.14  Cooperation with Rating Agencies and Investors. At the request of Lender and,              to the extent not already required to be provided by Borrower under this Loan              Agreement, Borrower must use reasonable efforts to satisfy the market standards              to which Lender customarily adheres or which may be reasonably required in the              marketplace or by the Rating Agencies in connection with any Securities secured              by or evidencing ownership interests in the Note and this Loan Agreement,             including all of the following:                           (a)    Borrower will provide financial and other information with respect                         to the Mortgaged Property, the Borrower and the Property                         Manager.                                (b)    Borrower will perform or permit or cause to be performed or                         permitted such site inspections and other due diligence                         investigations of the Mortgaged Property, as may be requested by                          Lender in Lender’s Discretion or may reasonably be requested by                          the Rating Agencies or as may be necessary or appropriate in                          connection with the Secondary Market Transaction. Lender will                          reimburse Borrower for any third party costs which Borrower                          reasonably incurs in connection with any such due diligence                          investigation.                                  (c)   Borrower will make such representations and warranties as of the                          closing date of the Secondary Market Transaction with respect to                          the Mortgaged Property, Borrower and the Loan Documents as are                          customarily provided in securitization transactions and as may be                          requested by Lender in Lender’s Discretion or may reasonably be                         requested by the Rating Agencies and consistent with the facts                         covered by such representations and warranties as they exist on the                         date of this Loan Agreement, including the representations and                         warranties made in the Loan Documents, together, if customary,                         with appropriate verification of and/or consents to the Provided                         Information through letters of auditors or opinions of counsel of                         independent attorneys acceptable to Lender and to the Rating                         Agencies. Lender will reimburse Borrower for any third party costs    Rider to Multifamily Loan and Security Agreement                         Page 1   Cooperation with Rating Agencies and Investors  

 

                             which Borrower reasonably incurs in connection with obtaining                           such auditors’ letters or opinions of counsel.                                           (d)   Borrower will cause its counsel to render opinions, which may be                           relied upon by Lender, the Rating Agencies and their respective                          counsel, agents and representatives, as to nonconsolidation or any                           other opinion customary in securitization transactions with respect                          to the Mortgaged Property and Borrower and its Affiliates, which                          counsel and opinions must be satisfactory to Lender in Lender’s                          Discretion and be reasonably satisfactory to the Rating Agencies.                          Lender will reimburse Borrower for any third party costs which                          Borrower reasonably incurs in connection with obtaining such                          opinions of Borrower’s counsel.                                        (e)    Borrower will execute such amendments to the Loan Documents                          and organizational documents, establish and fund the Replacement                          Reserve Fund, if any, and complete any Repairs, if any, as may be                          requested by Lender or by the Rating Agencies or otherwise to                          effect the Secondary Market Transaction; provided, however, that                          the Borrower will not be required to modify or amend any Loan                          Document if such modification or amendment would (i) change the                          interest rate, the stated maturity or the amortization of principal set                          forth in the Note, or (ii) modify or amend any other material                          economic term of the Loan.                      B.     The following definitions are added to Article XII:           “Provided Information” means the information provided by Borrower as required by        Section 11.14 (a), (b) and (c).                 “Securities” means single or multi-class securities.          Rider to Multifamily Loan and Security Agreement                         Page 2    Cooperation with Rating Agencies and Investors  

 

           RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                                                     REPLACEMENT RESERVE FUND – IMMEDIATE DEPOSITS                                                                          (Revised 7-1-2014)                                             The following changes are made to the Loan Agreement which precedes this Rider:    A.    Section 4.04 is deleted and replaced with the following:          4.04  Replacement Reserve Fund.                            (a)   Deposits to Replacement Reserve Fund. On the Closing Date, the parties                    will establish the Replacement Reserve Fund and Borrower will pay the                    Initial Deposit to Lender for deposit into the Replacement Reserve Fund.                    Commencing on the date the first installment of principal and/or interest is                    due under the Note and continuing on the same day of each successive                    month until the Loan is paid in full, Borrower will pay the Monthly                    Deposit to Lender for deposit into the Replacement Reserve Fund,                    together with its regular monthly payments of principal and/or interest as                    required by the Note. A transfer of funds into the Replacement Reserve                    Fund from the Repair Reserve Fund, pursuant to the terms of Section                    4.03(e), if applicable, will not alter or reduce the amount of any deposits to                    the Replacement Reserve Fund.                (b)   Costs Charged by Lender.                                   (i)  If Lender, in Lender’s Discretion, retains a professional inspection                          engineer or other qualified third party to inspect any Capital                          Replacements pursuant to the terms of Section 6.06, Lender may                          charge Borrower an amount sufficient to pay all reasonable costs                          and expenses charged by such third party inspector.                                        (ii)  If there are sufficient funds in Replacement Reserve Fund, Lender                          will be entitled, but not obligated, to deduct from the Replacement                          Reserve Fund the costs and expenses set forth in Section 4.04(b)(i).                         Lender will be entitled to charge Borrower for such costs and                         expenses and Borrower will pay the amount of such item(s) to                         Lender immediately after Notice from Lender to Borrower of such                         charge(s).                                      (iii)  If there are insufficient funds in the Replacement Reserve Fund,                         then Lender will be entitled to charge Borrower for the costs and                         expenses specified in Section 4.04(b)(i), and Borrower will pay the                         amount of such item(s) to Lender immediately after Notice from                         Lender to Borrower of such charge(s).   Rider to Multifamily Loan and Security Agreement                         Page 1   Replacement Reserve Fund – Immediate Deposits  

 

                 (c)   Adjustments to Replacement Reserve Fund. If the initial term of the Loan                    is greater than 120 months, then the following provisions will apply:                                  (i)  Lender reserves the right to adjust the amount of the Monthly                          Deposit based on Lender’s assessment of the physical condition of                          the Mortgaged Property, however, Lender will not make such an                          adjustment prior to the date that is 120 months after the first                          installment due date, nor more frequently than every 10 years                          thereafter during the term of the Loan.                                         (ii)  Borrower will pay the cost of any assessment required by Lender                          pursuant to Section 4.04(c)(i) to Lender immediately after Notice                          from Lender to Borrower of such charge.                                        (iii)  Upon Notice from Lender or Loan Servicer, Borrower will begin                          paying the Revised Monthly Deposit on the first monthly payment                          date that is at least 30 days after the date of Lender’s or Loan                          Servicer’s Notice. If Lender or Loan Servicer does not provide                         Borrower with Notice of a Revised Monthly Deposit, Borrower                         will continue to pay the Monthly Deposit or the Revised Monthly                         Deposit then in effect.                (d)   Insufficient Amount in Replacement Reserve Fund. If Borrower requests                    disbursement from the Replacement Reserve Fund for a Capital                    Replacement in accordance with this Loan Agreement in an amount which                   exceeds the amount on deposit in the Replacement Reserve Fund, Lender                    will disburse to Borrower only the amount on deposit in the Replacement                    Reserve Fund. Borrower will pay all additional amounts required in                    connection with any such Capital Replacement from Borrower’s own                    funds.                (e)   Reserved.                (f)   Reserved.                (g)   Disbursements from Replacement Reserve Fund.                      (i)  Requests for Disbursement. Lender will disburse funds from the                          Replacement Reserve Fund as follows:                            (A)  Borrower’s Request. If Borrower determines, at any time or                                from time to time, that a Capital Replacement is necessary                                or desirable, Borrower will perform such Capital                                Replacement and request from Lender, in writing,                                reimbursement for such Capital Replacement. Borrower’s                                request for reimbursement will include (1) a detailed                                description of the Capital Replacement performed, together   Rider to Multifamily Loan and Security Agreement                         Page 2   Replacement Reserve Fund – Immediate Deposits  

 

                                 with evidence, satisfactory to Lender, that the cost of such                               Capital Replacement has been paid, and (2) if required by                               Lender, lien waivers from each contractor and material                               supplier supplying labor or materials for such Capital                               Replacement.                                                  (B)   Lender’s Request. If Lender reasonably determines at any                                time or from time to time, that a Capital Replacement is                                necessary for the proper maintenance of the Mortgaged                                Property, it will so notify Borrower, in writing, requesting                                that Borrower obtain and submit to Lender bids for all labor                                and materials required in connection with such Capital                                Replacement. Borrower will submit such bids and a time                                schedule for completing each Capital Replacement to                                Lender within 30 days after Borrower’s receipt of Lender’s                                Notice. Borrower will perform such Capital Replacement                                and request from Lender, in writing, reimbursement for                                such Capital Replacement. Borrower’s request for                                reimbursement will include (1) a detailed description of the                                Capital Replacement performed, together with evidence,                                satisfactory to Lender, that the cost of such Capital                                Replacement has been paid, and (2) if required by Lender,                                lien waivers from each contractor and material supplier                                supplying labor or materials for such Capital Replacement.                      (ii)  Conditions Precedent. Disbursement from the Replacement                          Reserve Fund will be made no more frequently than once every                          Replacement Reserve Disbursement Period and, except for the                          final disbursement, no disbursement will be made in an amount                          less than the Minimum Replacement Disbursement Request                          Amount. Disbursements will be made only if the following                          conditions precedent have been satisfied, as determined by Lender                          in Lender’s Discretion:                             (A)   Each Capital Replacement has been performed and/or                                installed on the Mortgaged Property in a good and                                workmanlike manner with suitable materials (or in the case                               of a partial disbursement, performed and/or installed on the                               Mortgaged Property to an acceptable stage), in accordance                               with good building practices and all applicable laws,                               ordinances, rules and regulations, building setback lines                               and restrictions applicable to the Mortgaged Property, and                               has been paid for by Borrower as evidenced by copies of all                               applicable paid invoices or bills submitted to Lender by                               Borrower at the time Borrower requests disbursement from                               the Replacement Reserve Fund.   Rider to Multifamily Loan and Security Agreement                         Page 3   Replacement Reserve Fund – Immediate Deposits  

 

                             (B)  There is no condition, event or act that would constitute a                                default (with or without Notice and/or lapse of time).                            (C)  No Lien or claim based on furnishing labor or materials has                                been recorded, filed or asserted against the Mortgaged                                Property, unless Borrower has properly provided a bond or                                other security against loss in accordance with applicable                                law.                            (D)  All licenses, permits and approvals of any Governmental                               Authority required for the Capital Replacement as                               completed to the applicable stage have been obtained and                               submitted to Lender upon Lender’s request.                (h)   Right to Complete Capital Replacements. If Borrower abandons or fails to                    proceed diligently with any Capital Replacement in a timely fashion or an                    Event of Default occurs and continues under this Loan Agreement for 30                    days after Notice of such failure by Lender to Borrower, Lender will have                    the right (but not the obligation) to enter upon the Mortgaged Property and                    take over and cause the completion of such Capital Replacement.                    However, no such Notice or cure period will apply in the case of such                    failure which could, in Lender’s sole and absolute discretion, absent                    immediate exercise by Lender of a right or remedy under this Loan                    Agreement, result in harm to Lender, tenants or third parties or                    impairment of the security given under this Loan Agreement, the Security                    Instrument or any other Loan Document. Any contracts entered into or                    indebtedness incurred upon the exercise of such right may be in the name                    of Borrower, and Lender is irrevocably appointed the attorney in fact for                    Borrower, such appointment being coupled with an interest, to enter into                    such contracts, incur such obligations, enforce any contracts or agreements                    made by or on behalf of Borrower (including the prosecution and defense                    of all actions and proceedings in connection with the Capital Replacement                    and the payment, settlement or compromise of all bills and claims for                    materials and work performed in connection with the Capital                    Replacement) and do any and all things necessary or proper to complete                    any Capital Replacement, including signing Borrower’s name to any                    contracts and documents as may be deemed necessary by Lender. In no                    event will Lender be required to expend its own funds to complete any                    Capital Replacement, but Lender may, in Lender’s Discretion, advance                    such funds. Any funds advanced will be added to the Indebtedness,                    secured by the Security Instrument and payable to Lender by Borrower in                    accordance with the provisions of the Note, this Loan Agreement, the                    Security Instrument and any other Loan Document pertaining to the                    protection of Lender’s security and advances made by Lender.                  Rider to Multifamily Loan and Security Agreement                         Page 4   Replacement Reserve Fund – Immediate Deposits  

 

               (i)   Completion of Capital Replacements. Lender’s disbursement of monies                    from the Replacement Reserve Fund or other acknowledgment of                    completion of any Capital Replacement in a manner satisfactory to Lender                    in Lender’s Discretion will not be deemed a certification by Lender that                    the Capital Replacement has been completed in accordance with                    applicable building, zoning or other codes, ordinances, statutes, laws,                    regulations or requirements of any Governmental Authority. Borrower                    will at all times have the sole responsibility for ensuring that all Capital                    Replacements are completed in accordance with all such requirements of                    any Governmental Authority.                (j)  Reserved.                (k)   Reserved.    B.    The following definitions are added to Article XII:          “Initial Deposit” means $0.                “Minimum Replacement Disbursement Request Amount” means $5,000.                 “Monthly Deposit” means $7,404.                “Replacement Reserve Deposit” means the Initial Deposit, the Monthly Deposit and/or        the Revised Monthly Deposit, as appropriate.                “Replacement Reserve Disbursement Period” means the interval between        disbursements from the Replacement Reserve Fund, which interval will be no shorter        than once a month.                “Replacement Reserve Fund” means the account established pursuant to this Loan        Agreement to defray the costs of Capital Replacements.               “Revised Monthly Deposit” means the adjusted amount per month that Lender       determines Borrower must deposit in the Replacement Reserve Fund following any        adjustment determination by Lender pursuant to Section 4.04(c).      Rider to Multifamily Loan and Security Agreement                         Page 5   Replacement Reserve Fund – Immediate Deposits  

 

                                        EXHIBIT A                                DESCRIPTION OF THE LAND                                                                                                                                                                               Multifamily Loan and Security Agreement                                        Page A-1   

 

                                    EXHIBIT B         MODIFICATIONS TO MULTIFAMILY LOAN AND SECURITY AGREEMENT    The  following  modifications  are  made  to  the  text  of  the  Loan  Agreement  that  precedes  this  Exhibit.    I.   BORROWER MODIFICATIONS.    1.    Section 5.02 is deleted in its entirety and replaced with the following:          5.02  Condition of Mortgaged Property. Except as Borrower may have disclosed to              Lender in writing in connection with the issuance of the Commitment Letter or              except for ordinary wear and tear, (a), the Mortgaged Property has not been              damaged by fire, water, wind or other cause of loss, or (b) any previous damage              to the Mortgaged Property has been fully restored.    2.    Section 5.09(a) is deleted in its entirety and replaced with the following:                      (a)   Borrower and any operatorproperty manager of the Mortgaged Property,                    if applicable, and to the best of  Borrower’s  knowledge,  any  commercial                    tenant of the Mortgaged Property is in possession of all material licenses,                    permits  and  authorizations  required  for  use  of  the  Mortgaged  Property,                    which  are  valid  and  in  full  force  and  effect  as  of  the  date  of this  Loan                    Agreement.    3.    Section 6.04(a) is deleted in its entirety and replaced with the following:                      (a)   Prohibited  New  Non-Residential  Leases  or  Modified  Non-Residential                    Leases. Except as set forth in Section 6.04(b), Borrower will not enter into                    any New Non-Residential Lease, enter into any Modified Non-Residential                    Lease  or  terminate  any  Non-Residential  Lease  (including  any  Non-                   Residential  Lease  in  existence  on  the  date  of  this  Loan  Agreement)                    without  the  prior  consent  of  Lender,  except  Borrower  may  terminate                    any  Non-Residential  Lease  (including  any  Non-Residential  Lease in                    existence on the date of this Loan Agreement) as a result of a default                    thereunder that continues after any applicable notice or cure period                    without the prior written consent of Lender, provided that Borrower                    gives Lender written notice within ten (10) days of such termination.                4.    The lead-in clause of Section 6.04(d) is deleted in its entirety and replaced with the       following:                    (d)    Subordination and Attornment Requirements. All Non-Residential Leases                    entered into after the date of this Loan Agreement, regardless of whether                    Lender’s  consent  or  approval  is  required,  will  specifically  include  the                    following provisions unless otherwise agreed to by Lender:                5.    Section 6.06(a) is deleted in its entirety and replaced with the following:                      (a)  Right  of  Entry.  Subject  to  the  rights  of  tenants  under  Leases,  Borrower                    will  permit  Lender,  its  agents,  representatives  and  designees  and  any                    interested  Governmental  Authority  to  make  or  cause  to  be  made  entries    Multifamily Loan and Security Agreement                                Page B-1   

 

                       upon and inspections of the Mortgaged Property to inspect, among other                     things:   (i)  Repairs,  (ii)  Capital  Replacements,  (iii)  Restorations,  (iv)                     Property Improvement Alterations, and (v) any other Improvements, both                     in process and upon completion (including environmental inspections and                     tests  performed  by  professional inspection  engineers)  during  normal                     business hours, or at any other reasonable time, upon reasonable Notice to                     Borrower if the inspection is to include occupied residential units (which                     Notice need not be in writing). During normal business hours, or at any                     other  reasonable time,  upon  reasonable  Notice  to  Borrower,  Borrower                     will  also  permit  Lender  to  examine  all  books  and  records  and  contracts                     and  bills  pertaining  to  the  foregoing.  Notice  to  Borrower  will not  be                     required  in  the  case  of  an  emergency,  as  determined  in  Lender’s                     Discretion, or when an Event of Default has occurred and is continuing.          6.     Section 6.08(b) is deleted in its entirety and replaced with the following:                      (b)    Payment  of  Operating  Expenses.  Subject  to  the  provisions  of  Section                     6.08(c),  Borrower  will  (i)  pay  the  expenses  of  operating,  managing,                     maintaining  and  repairing  the  Mortgaged  Property  (including  utilities,                     Repairs and Capital Replacements) (an “Operating Expense”) before the                     last date upon which each such payment may be made without any penalty                     or interest charge being added; provided, however, Borrower, at its own                     expense,  may  contest  by  appropriate  legal  proceedings,  conducted                     diligently and in good faith, the amount or validity of any Operating                     Expense,  if  (A)  Borrower  notifies  Lender  of  the  commencement  or                     expected  commencement  of  such  proceedings,  (B)  the  Mortgaged                     Property is not in danger of being sold or forfeited, (C) Borrower has                     demonstrated  to  Lender’s  reasonable  satisfaction  that  any  delay in                     paying  the  Operating  Expense  will  not  result  in  (1)  damage  to  the                     Mortgaged Property, (2) a depreciation of the Mortgaged Property as                     determined by Lender in Lender’s Discretion, or (3) otherwise impair                     Lender’s interest under the Loan Documents, (D) if Borrower has not                     already paid the Operating Expense, Borrower deposits with Lender                     reserves  sufficient  to  pay  the  contested  Operating  Expense,  if                     requested by Lender, and (E) Borrower furnishes whatever additional                     security is required in the proceedings or is reasonably requested by                     Lender,  which  may  include  the  delivery  to  Lender  of  reserves                     established by Borrower to pay the contested Operating Expense, and                     (ii) pay Insurance premiums prior to the expiration date of each policy of                     Insurance, unless applicable law specifies some lesser period..                  7.    Section 6.10(a)(iv) is deleted in its entirety and replaced with the following:                        (iv)  Windstorm.  If coverage  for windstorm  and/or  windstorm  related                           perils  and/or  “named  storm”  (collectively,  “Windstorm                           Coverage”),  areis  excluded  from  the  “Causes  of  Loss  –  Special                           Form”  policy  required  under  Section  6.10(a)(i),  then  separate                           coverage  for  such  risks,  either  through  an  endorsement  or  a                           separate policy. Windstorm Coverage will be written in an amount                           not less than the Replacement Cost of the Mortgaged Property.      8.    Section 6.10(m) is deleted in its entirety and replaced with the following:             Multifamily Loan and Security Agreement                                Page B-2   

 

               (m)  Lender’s  Succession  to  Insurance  Policies.  If  the  Mortgaged  Property  is                    sold  at  a  foreclosure  sale  or  Lender  acquires  title  to  the  Mortgaged                    Property, Lender will automatically succeed to all rights of Borrower in                    and  to  any  Insurance  policies (other than blanket Insurance policies)                    and  unearned  Insurance  premiums  (other  than with  respect  to  blanket                    Insurance policies) and in and to the proceeds resulting from any damage                    to the Mortgaged Property prior to such sale or acquisition.                9.    Section 6.14(c) is deleted in its entirety and replaced with the following:                (c)   Lien  Protection.  Borrower  will  promptly  pay  or  cause  to  be  paid,  when                    due,  all  costs,  charges  and  expenses  incurred  in  connection  with  the                   construction and completion of the Repairs or Capital Replacements, and                   will keep the Mortgaged Property free and clear of any and all Liens other                   than  the  Lien  of  the  Security  Instrument  and  any  other  Lien  to which                   Lender  has  consented  subject  to  the  cure  rights  set  forth  in  Section                    6.09(m) of this Loan Agreement.                10.   Section 6.14(d) is deleted in its entirety and replaced with the following:                (d)   Adverse Claims. Borrower will promptly advise Lender in writing of any                    litigation, Liens or written claims affecting the Mortgaged Property and                    of  all written complaints  and  charges  made  by  any  Governmental                    Authority  that  may  delay  or  adversely  affect  the  Repairs  or  Capital                    Replacements.    11.   Section 7.03(d) is replaced with the following:         (d)    Steadfast Affiliate Transfer.                The merger of Steadfast Income REIT, Inc. (“SIR”) into Steadfast Apartment              REIT, Inc. (“STAR”) or its wholly-owned and Controlled Affiliate (the “REIT              Transfer”), provided, that, the conditions set forth below and the applicable              conditions set forth in Section 7.04 of this Loan Agreement are satisfied:                (i)   In place of the requirements under Section 7.04(d), Borrower delivers to                    Lender organizational charts, in form and detail acceptable to Lender,                    reflecting the structure of Borrower prior to and after the REIT Transfer,                    and the Loan Agreement must be amended to revise (A) Exhibit H to                    reflect the post-REIT Transfer organizational chart, and (B) Exhibit I to                    reflect the Replacement Guarantor(s) and post-REIT Transfer Designated                    Entities for Transfers as determined by Lender.                      (ii)  In place of the requirements under Section 7.04(i), following the REIT                    Transfer, Control and management of the operations of Borrower continue                    to be held by the Person exercising such Control and management                   immediately prior to the REIT Transfer, except that SIR will be replaced                   with STAR or STAR’s wholly-owned and Controlled Affiliate.           Multifamily Loan and Security Agreement                                Page B-3   

 

               (iii) STAR or its wholly owned and Controlled Affiliate becomes a                    Replacement Guarantor and executes and delivers a Replacement                    Guaranty.                      (iv)  STAR certifies in writing to Lender that, since the date of this Loan                    Agreement, except as disclosed to and approved by Lender in writing,                    STAR has not been:                            (A)   Subject to a claim in any litigation or other proceeding (even if                          settled) relating to fraud, breach of fiduciary duty, breach of trust                          or other similar claim, or money laundering, terrorist financing,                          terrorism or similar claim.                                        (B)  To the best of STAR’s knowledge, investigated by any                          Governmental Authority in connection with any matter set forth in                          Section 7.03(d)(iv)(A).                                        (C)  The subject of a complaint or indictment charging a felony.                                        (D)  Involved in any pending or current criminal litigation.                                        (E)   The subject of a Bankruptcy.                                        (F)   Suspended, barred or otherwise restricted by any department or                          agency of the federal government.                                  (v)   STAR certifies in writing to Lender that its net worth and liquidity are                    substantially the same as or better than the net worth and liquidity of                    STAR as of the date of this Loan Agreement.    Multifamily Loan and Security Agreement                                Page B-4   

 

                                        EXHIBIT C                                REPAIR SCHEDULE OF WORK                                              N/A                Multifamily Loan and Security Agreement                                        Page C-1   

 

                                    EXHIBIT D                          REPAIR DISBURSEMENT REQUEST    The undersigned requests from                     (“Lender”) the disbursement of funds in the amount of $_________________  (“Disbursement Request”) from the Repair Reserve Fund established pursuant to the Multifamily  Loan and Security Agreement dated      , 20     by and between  Lender and the undersigned ( “Loan Agreement”) to pay for repairs to the multifamily apartment  project known as          and located in           .    The undersigned represents and warrants to Lender that the following information and  certifications provided in connection with this Disbursement Request are true and correct as of the  date hereof:    1.   Purpose for which disbursement is requested:                      2.   To whom the disbursement will be made (may be the undersigned in the case of        reimbursement for advances and payments made or cost incurred for work done by the        undersigned):               3.   Estimated costs of completing the uncompleted Repairs as of the date of this Disbursement        Request:                                                                                                        4.   The undersigned certifies that each of the following is true:          (a)  The disbursement requested pursuant to this Disbursement Request will be used              solely to pay a cost or costs allowable under the Loan Agreement.         (b)    None of the items for which disbursement is requested pursuant to this              Disbursement Request has formed the basis for any disbursement previously made              from the Repair Reserve Fund.         (c)   All labor and materials for which disbursements have been requested have been              incorporated into the Improvements or suitably stored upon the Mortgaged Property             in accordance with reasonable and standard building practices, the Loan Agreement             and all applicable laws, ordinances, rules and regulations of any governmental             authority having jurisdiction over the Mortgaged Property.                      (d)   The materials, supplies and equipment furnished or installed for the Repairs are not             subject to any Lien or security interest or that the funds to be disbursed pursuant to             this Disbursement Request are to be used to satisfy any such Lien or security             interest.    Multifamily Loan and Security Agreement                                Page D-1  

 

     5.    All capitalized terms used in this Disbursement Request without definition will have the        meanings ascribed to them in the Loan Agreement.    IN WITNESS WHEREOF, the undersigned has executed this Disbursement Request as of the day  and date first above written.                      BORROWER:    Date:                                   Multifamily Loan and Security Agreement                                Page D-2  

 

                                    EXHIBIT E                   WORK COMMENCED AT MORTGAGED PROPERTY        Ongoing general maintenance and upkeep of the Mortgaged Property and upgrades in connection  with  residential  unit  turns  performed  in  the  ordinary  course  of business at the Mortgaged  Property, all such work subject to any and all requirements set forth in this Loan Agreement and  the other Loan Documents; all invoices for the same to be paid by Borrower when due.                                                          Multifamily Loan and Security Agreement                                Page E-1  

 

                                    EXHIBIT F                              CAPITAL REPLACEMENTS         Carpet/vinyl flooring       Window treatments       Roofs       Furnaces/boilers       Air conditioners       Ovens/ranges       Refrigerators       Dishwashers       Water heaters       Garbage disposals       pool plaster/liner       pavement (seal, stripe, minor repairs)       exterior walls (paint/finish)       common area floors       microwaves       clothes washers and dryers       Other items that Lender may approve subject to any conditions that Lender may require,        all in Lender’s sole and absolute discretion.                                   Multifamily Loan and Security Agreement                                Page F-1  

 

                                        EXHIBIT G                                                                        DESCRIPTION OF GROUND LEASE                                              N/A       Multifamily Loan and Security Agreement                                        Page G-1  

 

                                      EXHIBIT H                 ORGANIZATIONAL CHART OF BORROWER AS OF THE                         DATE OF THIS LOAN AGREEMENT                                                                                                                                 Multifamily Loan and Security Agreement                                Page H-1  

 

                                        EXHIBIT I             DESIGNATED ENTITIES FOR TRANSFERS AND GUARANTOR(S)                                           Designated Entities for Transfers    Steadfast Income REIT, Inc.  Steadfast Income Advisor, LLC  Steadfast Income REIT Operating Partnership, L.P.          Guarantor(s)    Steadfast Income REIT, Inc.   Multifamily Loan and Security Agreement                                 Page I-1  

 

                                      EXHIBIT O                              BORROWER’S CERTIFICATE OF               PROPERTY IMPROVEMENT ALTERATIONS COMPLETION       THIS BORROWER’S CERTIFICATE OF PROPERTY IMPROVEMENT ALTERATIONS   COMPLETION (“Certificate”) is made as of _______ ___, 20___, by ______________, a  ________________ (“Borrower”) for the benefit of ________________, a ________________,  and it successors and assigns (collectively, “Lender”).      In connection with Section 6.09(e)(v)(G) of the Loan Agreement, Borrower certifies to Lender as   follows:         [INSERT THE APPLICABLE SECTION (a) AND DELETE THE OTHER:]         [USE THE FOLLOWING IF ALL PROPERTY IMPROVEMENT ALTERATIONS   THAT WERE COMMENCED HAVE BEEN COMPLETED]          (a)   All Property Improvement Alterations described in the Property Improvement Notice that         were commenced have been completed.  The completed Property Improvement         Alterations and their completion dates are as follows:                                                    Description of Property Improvement          Completion Date                 Alteration Commenced                                                                       [OR]         [USE THE FOLLOWING IF MINIMUM OCCUPANCY HAS DECREASED BELOW   THE MINIMUM OCCUPANCY REQUIREMENT AND NOT ALL THE PROPERTY   IMPROVEMENT ALTERATIONS THAT WERE COMMENCED HAD BEEN   COMPLETED AT SUCH TIME]             (a)   All Property Improvement Alterations described in the Property Improvement Notice that         resulted in individual residential units not being available for leasing that were         commenced have been or will be completed in a timely manner.  Such Property         Improvement Alterations that were commenced and their completion dates and/or, if         applicable, anticipated completion dates, are as follows:               Description of Property  Completion   Anticipated       Comments            Improvement Alteration      Date      Completion                 Commenced                           Date     Multifamily Loan and Security Agreement                                Page O-1  

 

                                                                  [FOR ALL LOANS:]      (b)   The completed Property Improvement Alterations were completed in a good and         workmanlike manner and in compliance with all laws (including, without limitation, any         and all life safety laws, environmental laws, building codes, zoning ordinances and laws        for the handicapped and/or disabled)           (c)   Should Borrower intend to contest any claim or claims for labor, materials or other costs,        Borrower agrees to give Lender notice within 30 days of the existence of such claim or         claims and certifies to Lender that payment of the full amount which might in any event         be payable in order to satisfy such claim or claims will be made.           [INSERT THE FOLLOWING IF MINIMUM OCCUPANCY HAS DECREASED   BELOW THE MINIMUM OCCUPANCY REQUIREMENT]            (d)   Any additional Property Improvement Alterations not yet commenced which would cause         residential units to be unavailable for leasing have been suspended.                                                         [BORROWER SIGNATURE]           Multifamily Loan and Security Agreement                                Page O-2

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