Document:

Multifamily Note effective September 26, 2007

 Exhibit 10.2 
 Freddie Mac Loan Number 981208657 
 MULTIFAMILY NOTE 
 MULTISTATE – FIXED TO FLOAT 
 (REVISION DATE 03-30-2006) 
  

			
	US $6,250,000.00	  	Effective Date: as of September 26, 2007

 FOR VALUE RECEIVED, the undersigned (together with such party’s or parties’ successors
and assigns, “Borrower”), jointly and severally (if more than one) promises to pay to the order of NorthMarq Capital, Inc., a Minnesota corporation, the principal sum of Six Million Two Hundred Fifty Thousand and No/100 Dollars
(US $6,250,000.00), with interest on the unpaid principal balance, as hereinafter provided. 
 1. Defined Terms. 
 (a) As used in this Note: 
 “Adjustable Interest Rate” means the variable annual interest rate calculated for
each Interest Adjustment Period so as to equal the Index Rate for such Interest Adjustment Period (truncated at the fifth (5th) decimal place if
necessary) plus the Margin. 
 “Amortization Period” means a period of 0 full consecutive calendar months. 

“Base Recourse” means a portion of the Indebtedness equal to Zero percent (0%) of the original principal balance of this Note.

 “Business Day” means any day other than a Saturday, a Sunday or any other day on which Lender or the national banking
associations are not open for business. 
 “Default Rate” means (i) during the Fixed Rate Period, an annual interest
rate equal to four (4) percentage points above the Fixed Interest Rate; and (ii) during the Extension Period, a variable annual interest rate equal to four (4) percentage points above the Adjustable Interest Rate in effect from time
to time. However, at no time will the Default Rate exceed the Maximum Interest Rate. 
 “Extended Maturity Date” means, if
the Extension Period becomes effective pursuant to this Note, the earlier of (i) October 1, 2018 and (ii) the date on which the unpaid principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the
Loan Documents or the exercise by Lender of any right or remedy thereunder. 
  

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 “Extension Period” means the twelve (12) consecutive calendar months period
commencing on the Scheduled Initial Maturity Date. 
 “Fixed Interest Rate” means the annual interest rate of Five and Ninety
Five Hundredths percent (5.95%). 
 “Fixed Rate Period” means the period beginning on the date of this Note and continuing
through September 30, 2017. 
 “Index Rate” means, for any
Interest Adjustment Period, the Reference Bill® Index Rate for such Interest Adjustment Period. 
 “Initial Maturity Date” means the earlier of (i) October 1, 2017 (the “Scheduled Initial Maturity Date”), and (ii) the date on which the unpaid principal balance of
this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any right or remedy thereunder. 
 “Installment Due Date” means, for any monthly installment of interest only or principal and interest, the date on which such monthly installment is due and payable pursuant to Section 3 of this
Note. The “First Installment Due Date” under this Note is November 1, 2007. 
 “Interest Adjustment
Period” means each successive one calendar month period during the Extension Period and until the entire Indebtedness is paid in full. 
 “Lender” means the holder from time to time of this Note. 
 “LIBOR Index” means the British
Bankers Association’s (BBA) one (1) month LIBOR Rate for United States Dollar deposits, as displayed on the LIBOR Index Page used to establish the LIBOR Index Rate. 
 “LIBOR Index Rate” means, for any Interest Adjustment Period after the first Interest Adjustment Period, the BBA’s LIBOR Rate for
the LIBOR Index released by the BBA most recently preceding the first day of such Interest Adjustment Period, as such LIBOR Rate is displayed on the LIBOR Index Page. The LIBOR Index Rate for the first Interest Adjustment Period means the British
Bankers Association’s (BBA) LIBOR Rate for the LIBOR Index released by the BBA most recently preceding the first day of the month in which the first Interest Adjustment Period begins, as such LIBOR Rate is displayed on the LIBOR Index Page.
“LIBOR Index Page” is the Bloomberg L.P., page “BBAM”, or such other page for the LIBOR Index as may replace page BBAM on that service, or at 

  

 PAGE 2 

 
the option of Lender (i) the applicable page for the LIBOR Index on another service which electronically transmits or displays BBA LIBOR Rates, or
(ii) any publication of LIBOR rates available from the BBA. In the event the BBA ceases to set or publish a LIBOR rate/interest settlement rate for the LIBOR Index, Lender will designate an alternative index, and such alternative index shall
constitute the LIBOR Index Page. 
 “Loan” means the loan evidenced by this Note. 
 “Margin” means two and one-half (2.5) percentage points (250 basis points). 
 “Maturity Date” means the Extended Maturity Date unless pursuant to Section 3(e) of this Note the Extension Period does not or
cannot become effective, in which case the Maturity Date means the Initial Maturity Date. 
 “Maximum Interest Rate” means
the rate of interest that results in the maximum amount of interest allowed by applicable law. 
 “Prepayment Premium Period”
means the period during which, if a prepayment of principal occurs, a prepayment premium will be payable by Borrower to Lender. The Prepayment Premium Period is the period from and including the date of this Note until but not including the first
day of the Window Period. For this Note, the Prepayment Premium Period equals the Yield Maintenance Period. 
 “Reference Bills®” means the unsecured general obligations of the Federal Home Loan Mortgage Corporation (“Freddie Mac”)
designated by Freddie Mac as “Reference Bills®Securities” and having original durations to maturity most comparable to the term of the Reference Bill Index, and issued by Freddie
Mac at regularly scheduled auctions. In the event Freddie Mac shall at any time cease to designate any unsecured general obligations of Freddie Mac as “Reference Bills Securities”, then at the option of Lender (i) Lender may select
from time to time another unsecured general obligation of Freddie Mac having original durations to maturity most comparable to the term of the Reference Bill Index and issued by Freddie Mac at regularly scheduled auctions, and the term
“Reference Bills” as used in this Note shall mean such other unsecured general obligations as selected by Lender; or (ii) for any one or more Interest Adjustment Periods, Lender may use the applicable LIBOR Index Rate as the Index
Rate for such Interest Adjustment Period(s). 
 “Reference Bill Index” means the one-month Reference Bills. One-month
reference bills have original durations to maturity of approximately 30 days. 
  

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 “Reference Bill Index Rate” means, for any Interest Adjustment Period after the first
Interest Adjustment Period, the Money Market Yield for the Reference Bills as established by the Reference Bill auction conducted by Freddie Mac most recently preceding the first day of such Interest Adjustment Period, as displayed on the Reference
Bill Index Page. The Reference Bill Index Rate for the first Interest Adjustment Period means the Money Market Yield for the Reference Bills as established by the Reference Bill auction conducted by Freddie Mac most recently preceding the first day
of the month in which the first Interest Adjustment Period begins, as displayed on the Reference Bill Index Page. The “Reference Bill Index Page” is the Freddie Mac Debt Securities Web Page (accessed via the Freddie Mac internet
site at www.freddiemac.com), or at the option of Lender, any publication of Reference Bills auction results available from Freddie Mac. However, if Freddie Mac has not conducted a Reference Bill auction within the 60-calendar day period prior to the
first day of an Interest Adjustment Period, the Reference Bill Index Rate for such Interest Adjustment Period will be the LIBOR Index Rate for such Interest Adjustment Period. 
 “Remaining Amortization Period” means, at any point in time, the number of consecutive calendar months equal to the number of months in
the Amortization Period minus the number of scheduled monthly installments of principal and interest that have elapsed since the date of this Note. 
 “Security Instrument” means the multifamily mortgage, deed to secure debt or deed of trust effective as of the effective date of this Note, from Borrower to or for the benefit of Lender and securing
this Note. 
 “Treasury Security” means the 9.125% U.S. Treasury Security due May 15, 2018. 
 “Window Period” means the Extension Period. 
 “Yield Maintenance Period” means the period from and including the date of this Note until but not including the Scheduled Initial Maturity Date. 
 (b) Other capitalized terms used but not defined in this Note shall have the meanings given to such terms in the Security Instrument. 
 2. Address for Payment. All payments due under this Note shall be payable at 3500 American Boulevard West, Suite 500, Bloomington, Minnesota
55431, or such other place as may be designated by Notice to Borrower from or on behalf of Lender. 
  

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 3. Payments. 
 (a) During the Fixed Rate Period, interest will accrue on the outstanding principal balance of this Note at the Fixed Interest Rate, subject to the provisions of Section 8 of this Note. During the Extension
Period, interest will accrue on the outstanding principal balance of this Note at the Adjustable Interest Rate, subject to the provisions of Section 8 of this Note. 
 (b) Interest under this Note shall be computed, payable and allocated on the basis of an actual/360 interest calculation schedule (interest is payable for the actual number of days in each month, and each month’s
interest is calculated by multiplying the unpaid principal amount of this Note as of the first day of the month for which interest in being calculated by the Fixed Interest Rate (during the Fixed Rate Period) or the applicable Adjustable Interest
Rate (during the Extension Period), dividing the product by 360, and multiplying the quotient by the number of days in the month for which interest is being calculated). For convenience in determining the amount of a monthly installment of principal
and interest under this Note, Lender will use a 30/360 interest calculation payment schedule (each year is treated as consisting of twelve 30-day months). However, as provided above, the portion of the monthly installment actually payable as and
allocated to interest will be based upon an actual/360 interest calculation schedule, and the amount of each installment attributable to principal and the amount attributable to interest will vary based upon the number of days in the month for which
such installment is paid. Each monthly payment of principal and interest will first be applied to pay in full interest due, and the balance of the monthly payment paid by Borrower will be credited to principal. 
 (c) Unless disbursement of principal is made by Lender to Borrower on the first day of a calendar month, interest for the period beginning on the date of
disbursement and ending on and including the last day of such calendar month shall be payable by Borrower simultaneously with the execution of this Note. If disbursement of principal is made by Lender to Borrower on the first day of a calendar
month, then no payment will be due from Borrower at the time of the execution of this Note. The Installment Due Date for the first monthly installment payment under Section 3(d) of interest only or principal and interest, as applicable, will be
the First Installment Due Date set forth in Section 1(a) of this Note. Except as provided in this Section 3(c) and in Section 10, accrued interest will be payable in arrears. 
 (d) Beginning on the First Installment Due Date, and continuing until and including the monthly installment due on the Initial Maturity Date, accrued
interest only shall be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of each monthly installment of interest only payable pursuant to this Section 3(d) on an
Installment Due Date shall vary, and shall equal $1,032.99 multiplied by the number of days in the month prior to the Installment Due Date. 
 (e) Except as otherwise provided in this Section 3(e), all remaining Indebtedness, including all principal and interest, shall be due and payable by Borrower on the Initial Maturity Date. However, so long as (i) the Initial
Maturity Date has not occurred prior to the Scheduled Initial Maturity Date, and (ii) no Event of Default or event or circumstance which, with the giving of notice or passage of time or both, could constitute an Event of Default exists on the

  

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Scheduled Initial Maturity Date, then the Extension Period automatically will become effective and the date for full payment of the Indebtedness
automatically shall be extended until the Extended Maturity Date. If the Extension Period becomes effective, monthly installments of principal and interest or interest only will be payable during the Extension Period as provided in
Section 3(f). Anything in Section 21 of the Security Instrument to the contrary notwithstanding, during the Extension Period, Borrower will not request that Lender consent to, and Lender will not consent to, a Transfer that, absent such
consent, would constitute an Event of Default. 
 (f) If the Extension Period becomes effective, beginning on November 1, 2017 and
continuing until and including the monthly installment due on the Extended Maturity Date, accrued interest only shall be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of
the monthly installment of interest only payable pursuant to this Section 3(f) on an Installment Due Date shall equal the product of (i) annual interest on the unpaid principal balance of this Note as of the first day of the Interest
Adjustment Period immediately preceding the Installment Due Date (annual interest being such principal balance of this Note multiplied by the Adjustable Interest Rate in effect for such Interest Adjustment Period), divided by 360, multiplied by
(ii) the number of days in such Interest Adjustment Period. 
 (g) During the Extension Period, Lender shall provide Borrower with
Notice, given in the manner specified in the Security Instrument, of the amount of each monthly installment due under this Note. However, if Lender has not provided Borrower with prior notice of the monthly payment due on any Installment Due Date,
then Borrower shall pay on that Installment Due Date an amount equal to the monthly installment payment for which Borrower last received notice. If Lender at any time determines that Borrower has paid one or more monthly installments in an incorrect
amount because of the operation of the preceding sentence, or because Lender has miscalculated the Adjustable Interest Rate or has otherwise miscalculated the amount of any monthly installment, then Lender shall give notice to Borrower of such
determination. If such determination discloses that Borrower has paid less than the full amount due for the period for which the determination was made, Borrower, within 30 calendar days after receipt of the notice from Lender, shall pay to Lender
the full amount of the deficiency. If such determination discloses that Borrower has paid more than the full amount due for the period for which the determination was made, then the amount of the overpayment shall be credited to the next
installment(s) of interest only or principal and interest, as applicable, due under this Note (or, if an Event of Default has occurred and is continuing, such overpayment shall be credited against any amount owing by Borrower to Lender). 

(h) All payments under this Note shall be made in immediately available U.S. funds. 
 (i) Any regularly scheduled monthly installment of interest only or principal and interest payable pursuant to this Section 3 that is received by
Lender before the date it is due shall be deemed to have been received on the due date for the purpose of calculating interest due. 
  

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 (j) Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may be
added to and become part of the unpaid principal balance of this Note and any reference to “accrued interest” shall refer to accrued interest which has not become part of the unpaid principal balance. Any amount added to principal pursuant
to the Loan Documents shall bear interest at the applicable rate or rates specified in this Note and shall be payable with such interest upon demand by Lender and absent such demand, as provided in this Note for the payment of principal and
interest. 
 (k) In accordance with Section 14, interest charged under this Note cannot exceed the Maximum Interest Rate. If the
Adjustable Interest Rate at any time exceeds the Maximum Interest Rate, resulting in the charging of interest hereunder to be limited to the Maximum Interest Rate, then any subsequent reduction in the Adjustable Interest Rate shall not reduce the
rate at which interest under this Note accrues below the Maximum Interest Rate until the total amount of interest accrued hereunder equals the amount of interest which would have accrued had the Adjustable Interest Rate at all times been in effect.

 4. 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, Lender may apply the amount received to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Borrower agrees that neither
Lender’s acceptance of a payment from Borrower in an amount that is less than all amounts then due and payable nor Lender’s application of such payment shall constitute or be deemed to constitute either a waiver of the unpaid amounts or an
accord and satisfaction. 
 5. Security. The Indebtedness is secured by, among other things, the Security Instrument, and reference is
made to the Security Instrument for other rights of Lender as to collateral for the Indebtedness. 
 6. Acceleration. If an Event of
Default has occurred and is continuing, the entire unpaid principal balance, any accrued interest, any prepayment premium payable under Section 10, and all other amounts payable under this Note and any other Loan Document, shall at once become
due and payable, at the option of Lender, without any prior notice to Borrower (except if notice is required by applicable law, then after such notice). Lender may exercise this option to accelerate regardless of any prior forbearance. For purposes
of exercising such option, Lender shall calculate the prepayment premium as if prepayment occurred on the date of acceleration. If prepayment occurs thereafter, lender shall recalculate the prepayment premium as of the actual prepayment date.

 7. Late Charge. 
 (a)
If any monthly installment of interest or principal and interest or other amount payable under this Note or under the Security Instrument or any other Loan Document is not received in full by Lender (i) during the Fixed Rate Period, within ten
(10) days after the installment or other amount is due, or (ii) during the Extension Period, within five (5) days after the installment or other amount is due, counting from and including the date such installment or other amount is
due (unless applicable law requires a longer period of time before a late charge may be imposed, in which event such longer period shall be substituted), Borrower shall pay to Lender, immediately and without demand by Lender, a late charge equal to
five percent (5%) of such installment or other amount due (unless applicable law requires a lesser amount be charged, in which event such lesser amount shall be substituted). 
  

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 (b) Borrower acknowledges that its failure to make timely payments will cause Lender to incur additional
expenses in servicing and processing the Loan and that it is extremely difficult and impractical to determine those additional expenses. Borrower agrees that the late charge payable pursuant to this Section represents a fair and reasonable
estimate, taking into account all circumstances existing on the date of this Note, of the additional expenses Lender will incur by reason of such late payment. The late charge is payable in addition to, and not in lieu of, any interest payable at
the Default Rate pursuant to Section 8. 
 8. Default Rate. 
 (a) So long as (i) any monthly installment under this Note remains past due for thirty (30) days or more or (ii) any other Event of
Default has occurred and is continuing, then notwithstanding anything in Section 3 of this Note to the contrary, interest under this Note shall accrue on the unpaid principal balance from the Installment Due Date of the first such unpaid
monthly installment or the occurrence of such other Event of Default, as applicable, at the Default Rate. 
 (b) From and after the Maturity
Date, the unpaid principal balance shall continue to bear interest at the Default Rate until and including the date on which the entire principal balance is paid in full. 
 (c) Borrower acknowledges that (i) its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan, (ii) during the time that any monthly installment
under this Note is delinquent for thirty (30) days or more, Lender will incur additional costs and expenses arising from its loss of the use of the money due and from the adverse impact on Lender’s ability to meet its other obligations and
to take advantage of other investment opportunities; and (iii) it is extremely difficult and impractical to determine those additional costs and expenses. Borrower also acknowledges that, during the time that any monthly installment under this
Note is delinquent for thirty (30) days or more or any other Event of Default has occurred and is continuing, Lender’s risk of nonpayment of this Note will be materially increased and Lender is entitled to be compensated for such increased
risk. Borrower agrees that the increase in the rate of interest payable under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional costs
and expenses Lender will incur by reason of the Borrower’s delinquent payment and the additional compensation Lender is entitled to receive for the increased risks of nonpayment associated with a delinquent loan. 
 9. Limits on Personal Liability. 
 (a) Except as otherwise provided in this Section 9, Borrower shall have no personal liability under this Note, the Security Instrument or any other Loan Document for the repayment 

  

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of the Indebtedness or for the performance of any other obligations of Borrower under the Loan Documents and Lender’s only recourse for the satisfaction
of the Indebtedness and the performance of such obligations shall be Lender’s exercise of its rights and remedies with respect to the Mortgaged Property and to any other collateral held by Lender as security for the Indebtedness. This
limitation on Borrower’s liability shall not limit or impair Lender’s enforcement of its rights against any guarantor of the Indebtedness or any guarantor of any other obligations of Borrower. 
 (b) Borrower shall be personally liable to Lender for the amount of the Base Recourse, plus any other amounts for which Borrower has personal liability
under this Section 9. 
 (c) In addition to the Base Recourse, Borrower shall be personally liable to Lender for the repayment of a
further portion of the Indebtedness equal to any loss or damage suffered by Lender as a result of the occurrence of any of the following events: 
  

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

  

	 	(ii)	Borrower fails to apply all insurance proceeds and condemnation proceeds as required by the Security Instrument. However, Borrower will not be personally liable for any failure
described in this subsection (ii) if Borrower is unable to apply insurance or condemnation proceeds as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

  

	 	(iii)	Borrower fails to comply with Section 14(g) or (h) of the Security Instrument relating to the delivery of books and records, statements, schedules and reports.

  

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

  

			
	[Deferred]	  	Hazard Insurance premiums or other insurance premiums,
	[Collect]	  	Taxes,
	[Deferred]	  	water and sewer charges (that could become a lien on the Mortgaged Property),
	[NA]	  	ground rents,
	[Deferred]	  	assessments or other charges (that could become a lien on the Mortgaged Property)

  

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 (d) In addition to the Base Recourse, Borrower shall be personally liable to Lender for: 
  

	 	(i)	the performance of all of Borrower’s obligations under Section 18 of the Security Instrument (relating to environmental matters); 

  

	 	(ii)	the costs of any audit under Section 14(g) of the Security Instrument; and 

  

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

 (e) All payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the
Security Instrument and the other Loan Documents shall be applied first to the portion of the Indebtedness for which Borrower has no personal liability. 
 (f) Notwithstanding the Base Recourse, Borrower shall become personally liable to Lender for the repayment of all of the Indebtedness upon the occurrence of any of the following Events of Default: 
  

	 	(i)	Borrower’s ownership of any property or operation of any business not permitted by Section 33 of the Security Instrument; 

  

	 	(ii)	a Transfer (including, but not limited to, a lien or encumbrance) that is an Event of Default under Section 21 of the Security Instrument, other than a Transfer consisting
solely of the involuntary removal or involuntary withdrawal of a general partner in a limited partnership or a manager in a limited liability company; or 

  

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

 (g) To the extent that Borrower has personal liability
under this Section 9, Lender may exercise its rights against Borrower personally without regard to whether Lender has exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any guarantor, or
pursued any other rights available to Lender under this Note, the Security Instrument, any other Loan Document or applicable law. To the fullest extent permitted 

  

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by applicable law, in any action to enforce Borrower’s personal liability under this Section 9, Borrower waives any right to set off the value of
the Mortgaged Property against such personal liability. 
 10. Voluntary and Involuntary Prepayments. 
 (a) Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments
pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion
of the unpaid principal balance of this Note constitutes a prepayment under this Note. 
 (b) Borrower may voluntarily prepay all of the
unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment Due Date
(as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 10 only, the term “Installment Due Date” shall mean the Business Day immediately preceding the
scheduled Installment Due Date. 
 (c) Notwithstanding subsection (b) above, Borrower may voluntarily prepay all of the unpaid principal
balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in subsection (b) and meets the other requirements set forth in this subsection. Borrower acknowledges that Lender
has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender shall deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the
Installment Due Date immediately following such prepayment and Borrower shall be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

 (d) Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal
balance of this Note. In order to voluntarily prepay all or any part of the principal of this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note,
plus (ii) all other sums due to Lender at the time of such prepayment, plus (iii) any prepayment premium calculated pursuant to Section 10(e). 
 (e) Except as provided in Section 10(f), a prepayment premium shall be due and payable by Borrower in connection with any prepayment of principal under this Note during the Prepayment Premium Period. The
prepayment premium shall be whichever is the greater of subsections (A) and (B) below: 
 (A) 1.0% of the amount of
principal being prepaid; or 
  

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 (B) the product obtained by multiplying: 
  

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

 by 
  

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

 by 
  

	 	(3)	the Present Value Factor. 

 For purposes
of subsection (B), the following definitions shall apply: 
 Monthly Note Rate: one-twelfth (1/12) of the Fixed Interest
Rate, expressed as a decimal calculated to five digits. 
 Prepayment Date: in the case of a voluntary prepayment, the date on which
the prepayment is made; in the case of the application by Lender of collateral or security to a portion of the principal balance, the date of such application. 
 Assumed Reinvestment Rate: one-twelfth (1/12) of the yield rate, as of the date 5 Business Days before the Prepayment Date, on the Treasury Security, as reported in The Wall Street Journal,
expressed as a decimal calculated to five digits. In the event that no yield is published on the applicable date for the Treasury Security, Lender, in its discretion, shall select the non-callable Treasury Security maturing in the same year as the
Treasury Security with the lowest yield published in The Wall Street Journal as of the applicable date. If the publication of such yield rates in The Wall Street Journal is discontinued for any reason, Lender shall select a security
with a comparable rate and term to the Treasury Security. The selection of an alternate security pursuant to this Section shall be made in Lender’s discretion. 
 Present Value Factor: the factor that discounts to present value the costs resulting to Lender from the difference in interest rates during the months remaining in the Yield Maintenance Period, using the
Assumed Reinvestment Rate as the discount rate, with monthly compounding, expressed numerically as follows: 
 

 
  

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 n = the number of months remaining in Yield Maintenance Period; provided, however, if a prepayment
occurs on an Installment Due Date, then the number of months remaining in the Yield Maintenance Period shall be calculated beginning with the month in which such prepayment occurs and if such prepayment occurs on a Business Day other than an
Installment Due Date, then the number of months remaining in the Yield Maintenance Period shall be calculated beginning with the month immediately following the date of such prepayment. 
 ARR = Assumed Reinvestment Rate 
 (f)
Notwithstanding any other provision of this Section 10, no prepayment premium shall be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security Instrument. 
 (g) Unless Lender agrees otherwise in writing, a permitted or
required prepayment of less than the unpaid principal balance of this Note shall not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments. 
 (h) Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an
Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to
Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating
prepayment premiums set forth in this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that any lockout and the prepayment premium provisions of this Note are a material
part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the lockout and prepayment premium provisions. 
 11. Costs and Expenses. To the fullest extent allowed by applicable law, Borrower shall pay all expenses and costs, including Attorneys’ Fees
and Costs incurred by Lender as a result of any default under this Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in
post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding. 
 12. Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Security Instrument, or any other Loan Document
or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of that or any other right or 

  

 PAGE 13 

 
remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, shall not be a
waiver of Lender’s right to require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s obligations under
this Note shall not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender. 
 13. Waivers. Borrower and all endorsers and guarantors of this Note and all other third party obligors waive presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate payment
or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness. 
 14. Loan Charges.
Neither this Note nor any of the other Loan Documents shall be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate greater than the Maximum Interest Rate. If any applicable law
limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan is interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together
with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation. The amounts, if any,
previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting the amount of interest or other charges
permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, shall be deemed to be allocated and spread ratably
over the stated term of this Note. Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of this Note. 
 15. Commercial Purpose. Borrower represents that Borrower is incurring the Indebtedness solely for the purpose of carrying on a business or
commercial enterprise, and not for personal, family, household, or agricultural purposes. 
 16. Counting of Days. Except where
otherwise specifically provided, any reference in this Note to a period of “days” means calendar days, not Business Days. 
 17.
Governing Law. This Note shall be governed by the law of the Property Jurisdiction. 
 18. Captions. The captions of the
Sections of this Note are for convenience only and shall be disregarded in construing this Note. 
 19. Notices; Written
Modifications. 
  

 PAGE 14 

 (a) All Notices, demands and other communications required or permitted to be given pursuant to this Note
shall be given in accordance with Section 31 of the Security Instrument. 
 (b) Any modification or amendment to this Note shall be
ineffective unless in writing signed by the party sought to be charged with such modification or amendment; provided, however, that in the event of a Transfer under the terms of the Security Instrument that requires Lender’s consent, any or
some or all of the Modifications to Multifamily Note set forth in Exhibit A to this Note may be modified or rendered void by Lender at Lender’s option, by Notice to Borrower and the transferee, as a condition of Lender’s consent.

 20. Consent to Jurisdiction and Venue. Borrower agrees that any controversy arising under or in relation to this Note may be
litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have jurisdiction over all controversies that shall arise under or in relation to this Note. Borrower
irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Note is
intended to limit any right that Lender may have to bring any suit, action or proceeding relating to matters arising under this Note in any court of any other jurisdiction. 
 21. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE
OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL. 
 22. State-Specific Provisions. NA 
 ATTACHED EXHIBIT. The Exhibit noted below, if marked with an “X” in
the space provided, is attached to this Note: 
 x Exhibit A Modifications to Multifamily
Note 
  

 PAGE 15 

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

			
	KC PHEASANT ASSOCIATES, LLC,
	a Delaware limited liability company
		
	By:	 	JTL Asset Management, Inc.,
		 	a Missouri corporation,
		 	its Managing Member

					
			
		 	By:	 	/s/ James E. Lippert
		 		 	James E. Lippert, President
	
	Borrower’s Employer ID Number: 35-2305006

					
	Signature Page – Pheasant Run Apartments – Note	 	PAGE S-1	 	

 FHLMC Loan No. 981208657 
 PAY TO THE ORDER OF: ____________________________________________________, WITHOUT RECOURSE, AS OF THE 26th DAY OF SEPTEMBER, 2007. 
  

			
	NORTHMARQ CAPITAL, INC.,
	a Minnesota corporation
		
	By:	 	/s/ Paul W. Cairns
		 	Paul W. Cairns, Vice President

					
	Signature Page – Pheasant Run Apartments – Note	 	PAGE S-2	 	

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

 NONE. 
  

 PAGE A-1Multifamily Deed of Trust

 Exhibit 10.3 
 SPACE ABOVE THIS LINE IS FOR RECORDER’S USE ONLY 
  

			
	DOCUMENT TITLE:	  	Multifamily Deed of Trust, Assignment of Rents and Security Agreement
		
	DOCUMENT DATE:	  	As of September 26, 2007
		
	GRANTOR NAME AND	  	
	MAILING ADDRESS:	  	KC PHEASANT ASSOCIATES, LLC
		  	2300 MAIN, SUITE 910, KANSAS CITY, MO, 64018
		
	GRANTEE (TRUSTEE) NAME	  	
	AND MAILING ADDRESS:	  	Roger W. Hershey
		  	2345 Grand Blvd., Suite 2100
		  	Kansas City, MO 64108-2619
		
	GRANTEE (BENEFICIARY)	  	
	NAME AND MAILING	  	
	ADDRESS:	  	NORTHMARQ CAPITAL, INC.
		  	3500 AMERICAN BOULEVARD WEST, SUITE 500,
		  	BLOOMINGTON, MINNESOTA 55431
		
	LEGAL DESCRIPTION:	  	See Exhibit A attached hereto and incorporated herein, found on pages A -____ through A -______ of this document.
		
	 AFFECTS DOCUMENTS
 RECORDED AS FOLLOWS:
	  	[None][Document _________, Book _____, Page _____][See Exhibit B attached hereto and incorporated herein, found on pages ____ through ______ of this document.]

 Prepared by, and after recording 
 return to: 
 Moss & Barnett (WAHA) 
 A
Professional Association 
 4800 Wells Fargo Center 
 90 South
Seventh Street 
 Minneapolis, MN 55402-4129 
 MULTIFAMILY DEED OF TRUST, 
 ASSIGNMENT OF RENTS 
 AND SECURITY AGREEMENT 
 (MISSOURI – REVISION DATE 05-11-2004)

 FHLMC Loan No. 981208657 

 MULTIFAMILY DEED OF TRUST, 
 ASSIGNMENT OF RENTS AND 
 SECURITY AGREEMENT 
 (MISSOURI – REVISION DATE 05-11-2004) 
 THIS MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the “Instrument”) is made as of September 26, 2007, among KC Pheasant Associates, LLC, a limited liabilty company organized and existing under
the laws of Delaware, whose mailing address is 2300 Main, Suite 910, Kansas City, MO 64018, as grantor (“Borrower”), Roger W. Hershey, whose mailing address is 2345 Grand Blvd., Suite 2100, Kansas City, MO 64108-2619, as trustee
(“Trustee”), for the benefit of NorthMarq Capital, Inc., a corporation organized and existing under the laws of Minnesota, whose mailing address is 3500 American Boulevard West, Suite 500, Bloomington, Minnesota 55431, as
beneficiary (“Lender”). Borrower’s organizational identification number, if applicable, is 4399264. 
 Borrower, in
consideration of the Indebtedness and the trust created by this Instrument, irrevocably grants, bargains, sells, conveys, confirms and assigns to Trustee, in trust, with power of sale, the Mortgaged Property, including the Land located in Jackson
County, State of Missouri and described in Exhibit A attached to this Instrument. 
 TO SECURE TO LENDER the repayment of the Indebtedness
evidenced by Borrower’s Multifamily Note payable to Lender dated as of the date of this Instrument, and maturing on October 1, 2018 (the “Maturity Date”), in the principal amount of $6,250,000.00, and all renewals,
extensions and modifications of the Indebtedness, and the performance of the covenants and agreements of Borrower contained in the Loan Documents. 
 Borrower represents and warrants that Borrower is lawfully seized of the Mortgaged Property and has the right, power and authority to grant, convey and assign the Mortgaged Property, and that the Mortgaged Property is unencumbered except as
shown on the schedule of exceptions to coverage in the title policy issued to and accepted by Lender contemporaneously with the execution and recordation of this Instrument and insuring Lender’s interest in the Mortgaged Property (the
“Schedule of Title Exceptions”). Borrower covenants that Borrower will warrant and defend generally the title to the Mortgaged Property against all claims and demands, subject to any easements and restrictions listed in the Schedule
of Title Exceptions. 
  

 PAGE 1 

 UNIFORM COVENANTS 
 REVISION DATE 01-30-2006 
 Covenants. In consideration of the mutual promises set forth in this Instrument, Borrower
and Lender covenant and agree as follows: 
 1. DEFINITIONS. The following terms, when used in this Instrument (including when used in
the above recitals), shall have the following meanings: 
 (a) “Attorneys’ Fees and Costs” means (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; and
(iii) investigatory fees. 
 (b) “Borrower” means all persons or entities identified as “Borrower” in the
first paragraph of this Instrument, together with their successors and assigns. 
 (c) “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. 
 (d)
“Collateral Agreement” means any separate agreement between Borrower and Lender for the purpose of establishing replacement reserves for the Mortgaged Property, establishing a fund to assure the completion of repairs or improvements
specified in that agreement, or assuring reduction of the outstanding principal balance of the Indebtedness if the occupancy of or income from the Mortgaged Property does not increase to a level specified in that agreement, or any other agreement or
agreements between Borrower and Lender which provide for the establishment of any other fund, reserve or account. 
 (e) “Controlling
Entity” means an entity which owns, directly or indirectly through one or more intermediaries, (i) a general partnership interest or a Controlling Interest of the limited partnership interests in Borrower (if Borrower is a partnership
or joint venture), (ii) a manager’s interest in Borrower or a Controlling Interest of the ownership or membership interests in Borrower (if Borrower is a limited liability company), (iii) a Controlling Interest of any class of voting
stock of Borrower (if Borrower is a corporation), (iv) a trustee’s interest or a Controlling Interest of the beneficial interests in Borrower (if Borrower is a trust), or (v) a managing partner’s interest or a Controlling
Interest of the partnership interests in Borrower (if Borrower is a limited liability partnership). 
 (f) “Controlling
Interest” means (i) 51 percent or more of the ownership interests in an entity, or (ii) a percentage ownership interest in an entity of less than 51 percent, if the owner(s) of that interest actually
direct(s) the business and affairs of the entity without the requirement of consent of any other party. The Controlling Interest shall be deemed to be 51 percent unless otherwise stated in Exhibit B. 
 (g) “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. 
 (h) “Event of Default” means the
occurrence of any event listed in Section 22. 
  

 PAGE 2 

 (i) “Fixtures” means all property owned by Borrower which is so attached to the Land or
the Improvements as to constitute a fixture under applicable law, including: machinery, equipment, engines, boilers, incinerators, 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. 
 (j) “Governmental Authority” means any
board, commission, department or body of any municipal, county, state or federal governmental unit, or any subdivision of any of them, that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of the
Mortgaged Property. 
 (k) “Hazard Insurance” is defined in Section 19. 
 (l) “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 federal, state or local authority; any substance that requires special
handling and any other material or 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. 
 (m) “Hazardous Materials Laws” means all federal, state, and local laws, ordinances and regulations and standards, rules, policies and
other governmental requirements, administrative rulings and court judgments and decrees in effect now or in the future and 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, but are not limited to, 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. 
  

 PAGE 3 

 (n) “Impositions” and “Imposition Deposits” are defined in
Section 7(a). 
 (o) “Improvements” means the buildings, structures, improvements, and alterations now constructed or
at any time in the future constructed or placed upon the Land, including any future replacements and additions. 
 (p)
“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 Instrument or any other Loan Document, including prepayment
premiums, late charges, default interest, and advances as provided in Section 12 to protect the security of this Instrument. 
 (q)
“Initial Owners” means, with respect to Borrower or any other entity, the persons or entities that (i) on the date of the Note, or (ii) on the date of a Transfer to which Lender has consented, own in the aggregate
100 percent of the ownership interests in Borrower or that entity. 
 (r) “Land” means the land described in Exhibit A.

 (s) “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. 
 (t) “Lender” means the entity identified as
“Lender” in the first paragraph of this Instrument, or any subsequent holder of the Note. 
 (u) “Loan Documents”
means the Note, this Instrument, all guaranties, all indemnity agreements, all Collateral Agreements, 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. 
 (v) “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, this Instrument and any other Loan Document, and otherwise to service the loan evidenced by the Note for the benefit of Lender.
Unless Borrower receives Notice to the contrary, the Loan Servicer is the entity identified as “Lender” in the first paragraph of this Instrument. 
 (w) “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 Instrument. 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. 
  

 PAGE 4 

 (x) “Mold” means mold, fungus, microbial contamination or pathogenic organisms.

 (y) “Mortgaged Property” means all of Borrower’s present and future right, title and interest in and to all of the
following: 
  

	 	(i)	the Land; 

  

	 	(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, 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
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, 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 above into cash or liquidated claims, and the right to collect such proceeds; 

  

	 	(x)	all Rents and Leases; 

  

 PAGE 5 

	 	(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 secured by this Instrument and, if Borrower is a cooperative housing corporation, maintenance charges or assessments payable by shareholders or residents; 

  

	 	(xii)	all Imposition Deposits; 

  

	 	(xiii)	all refunds or rebates of Impositions by any municipal, state or federal authority or insurance company (other than refunds applicable to periods before the real property tax year
in which this Instrument 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; and 

  

	 	(xv)	all names under or by which any of the above Mortgaged Property may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Mortgaged Property.

 (z) “Note” means the Multifamily Note described on page 1 of this Instrument, including all schedules,
riders, allonges and addenda, as such Multifamily Note may be amended from time to time. 
 (aa) “O&M Program” is
defined in Section 18(d). 
 (bb) “Personalty” means all: 
  

	 	(i)	accounts (including deposit accounts) of Borrower related to the Mortgaged Property; 

  

	 	(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), 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); 

  

 PAGE 6 

	 	(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; and 

  

	 	(vii)	any rights of Borrower in or under letters of credit. 

 (cc) “Property Jurisdiction” is defined in Section 30(a). 
 (dd) “Rents” 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. 
 (ee) “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. 
 (ff) “Transfer” is
defined in Section 21. 
 2. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. 
 (a) This Instrument 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, 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 Borrower hereby grants to Lender a security interest in the UCC Collateral. Borrower hereby authorizes Lender to prepare and file financing statements, continuation statements and financing statement amendments in such form as Lender may require
to perfect or continue the perfection of this security interest and Borrower agrees, if Lender so requests, to execute and deliver to Lender such financing statements, continuation statements and amendments. Borrower shall pay all filing costs and
all costs and expenses of any record searches for financing statements and/or amendments that Lender may require. Without the prior written consent of Lender, Borrower shall not create or permit to exist any other lien or security interest in any of
the UCC Collateral. 
  

 PAGE 7 

 (b) Unless Borrower gives Notice to Lender within 30 days after the occurrence of any of the
following, and executes and delivers to Lender modifications or supplements of this Instrument (and any financing statement which may be filed in connection with this Instrument) as Lender may require, Borrower shall not (i) change its name,
identity, structure or jurisdiction of organization; (ii) change the location of its place of business (or chief executive office if more than one place of business); or (iii) add to or change any location at which any of the Mortgaged
Property is stored, held or located. 
 (c) If an Event of Default has occurred and is continuing, Lender shall have the remedies of a
secured party under the Uniform Commercial Code, in addition to all remedies provided by this Instrument or existing under applicable law. In exercising any remedies, Lender may exercise its remedies against the UCC Collateral separately or
together, and in any order, without in any way affecting the availability of Lender’s other remedies. 
 (d) This Instrument constitutes
a financing statement with respect to any part of the Mortgaged Property that is or may become a Fixture, if permitted by applicable law. 
 3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION. 
 (a) As part of the consideration for the
Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all Rents. It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all Rents and to authorize and
empower Lender to collect and receive all Rents without the necessity of further action on the part of Borrower. Promptly upon request by Lender, Borrower agrees to execute and deliver such further assignments as Lender may from time to time
require. Borrower and Lender intend this assignment of Rents to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to this absolute assignment
of Rents, and for no other purpose, Rents shall not be deemed to be a part of the Mortgaged Property. However, if this present, absolute and unconditional assignment of Rents is not enforceable by its terms under the laws of the Property
Jurisdiction, then the Rents shall be included as a part of the Mortgaged Property and it is the intention of the Borrower that in this circumstance this Instrument create and perfect a lien on Rents in favor of Lender, which lien shall be effective
as of the date of this Instrument. 
 (b) After the occurrence of an Event of Default, Borrower authorizes Lender to collect, sue for and
compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender. However, until the occurrence of an Event of Default, Lender hereby grants to Borrower a revocable license to collect and receive all
Rents, to hold all Rents in trust for the benefit of Lender and to apply all Rents to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents,
including Imposition Deposits, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities, Taxes and insurance premiums (to the extent not included in Imposition Deposits), tenant

  

 PAGE 8 

 
improvements and other capital expenditures. So long as no Event of Default has occurred and is continuing, the Rents remaining after application pursuant to
the preceding sentence may be retained by Borrower free and clear of, and released from, Lender’s rights with respect to Rents under this Instrument. From and after the occurrence of an Event of Default, and without the necessity of Lender
entering upon and taking and maintaining control of the Mortgaged Property directly, or by a receiver, Borrower’s license to collect Rents shall automatically terminate and Lender shall without Notice be entitled to all Rents as they become due
and payable, including Rents then due and unpaid. Borrower shall pay to Lender upon demand all Rents to which Lender is entitled. At any time on or after the date of Lender’s demand for Rents, (i) Lender may give, and Borrower hereby
irrevocably authorizes Lender to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents to Lender, (ii) no tenant shall be obligated to inquire further as to the occurrence or continuance of an Event of Default,
and (iii) no tenant shall be obligated to pay to Borrower any amounts which are actually paid to Lender in response to such a notice. Any such notice by Lender shall be delivered to each tenant personally, by mail or by delivering such demand
to each rental unit. Borrower shall not interfere with and shall cooperate with Lender’s collection of such Rents. 
 (c) Borrower
represents and warrants to Lender that Borrower has not executed any prior assignment of Rents (other than an assignment of Rents securing any prior indebtedness that is being assigned to Lender, or paid off and discharged with the proceeds of the
loan evidenced by the Note), that Borrower has not performed, and Borrower covenants and agrees that it will not perform, any acts and has not executed, and shall not execute, any instrument which would prevent Lender from exercising its rights
under this Section 3, and that at the time of execution of this Instrument there has been no anticipation or prepayment of any Rents for more than two months prior to the due dates of such Rents. Borrower shall not collect or accept payment of
any Rents more than two months prior to the due dates of such Rents. 
 (d) If an Event of Default has occurred and is continuing, Lender
may, regardless of the adequacy of Lender’s security or the solvency of Borrower and even in the absence of waste, enter upon and take and maintain full control of the Mortgaged Property in order to perform all acts that Lender in its
discretion determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents, the making of repairs to the Mortgaged
Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing the assignment of Rents pursuant to Section 3(a), protecting the Mortgaged
Property or the security of this Instrument, or for such other purposes as Lender in its discretion may deem necessary or desirable. Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy of Lender’s
security, without regard to Borrower’s solvency and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property
to take any or all of the actions set forth in the preceding sentence. If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution
of this Instrument, expressly consents to the appointment of such receiver, including the 

  

 PAGE 9 

 
appointment of a receiver ex parte if permitted by applicable law. Lender or the receiver, as the case may be, shall be entitled to receive a
reasonable fee for managing the Mortgaged Property. Immediately upon appointment of a receiver or immediately upon the Lender’s entering upon and taking possession and control of the Mortgaged Property, Borrower shall surrender possession of
the Mortgaged Property to Lender or the receiver, as the case may be, and shall deliver to Lender or the receiver, as the case may be, all documents, records (including records on electronic or magnetic media), accounts, surveys, plans, and
specifications relating to the Mortgaged Property and all security deposits and prepaid Rents. In the event Lender takes possession and control of the Mortgaged Property, Lender may exclude Borrower and its representatives from the Mortgaged
Property. Borrower acknowledges and agrees that the exercise by Lender of any of the rights conferred under this Section 3 shall not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not
itself entered into actual possession of the Land and Improvements. 
 (e) If Lender enters the Mortgaged Property, Lender shall be liable to
account only to Borrower and only for those Rents actually received. Except to the extent of Lender’s gross negligence or willful misconduct, Lender shall not be liable to Borrower, anyone claiming under or through Borrower or anyone having an
interest in the Mortgaged Property, by reason of any act or omission of Lender under Section 3(d), and Borrower hereby releases and discharges Lender from any such liability to the fullest extent permitted by law. 
 (f) If the Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged Property and collecting the Rents, any funds
expended by Lender for such purposes shall become an additional part of the Indebtedness as provided in Section 12. 
 (g) Any entering
upon and taking of control of the Mortgaged Property by Lender or the receiver, as the case may be, and any application of Rents as provided in this Instrument shall not cure or waive any Event of Default or invalidate any other right or remedy of
Lender under applicable law or provided for in this Instrument. 
 4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY. 

 (a) As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all of
Borrower’s right, title and interest in, to and under the Leases, including Borrower’s right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease. It is the intention of Borrower to establish a
present, absolute and irrevocable transfer and assignment to Lender of all of Borrower’s right, title and interest in, to and under the Leases. Borrower and Lender intend this assignment of the Leases to be immediately effective and to
constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose, the Leases shall not be deemed to be a part of the
Mortgaged Property. However, if this present, absolute and unconditional assignment of the Leases is not enforceable by its terms under the laws of the Property 

  

 PAGE 10 

 
Jurisdiction, then the Leases shall be included as a part of the Mortgaged Property and it is the intention of the Borrower that in this circumstance this
Instrument create and perfect a lien on the Leases in favor of Lender, which lien shall be effective as of the date of this Instrument. 
 (b) Until Lender gives Notice to Borrower of Lender’s exercise of its rights under this Section 4, Borrower shall have all rights, power and authority granted to Borrower under any Lease (except as otherwise limited by this
Section or any other provision of this Instrument), including the right, power and authority to modify the terms of any Lease or extend or terminate any Lease. Upon the occurrence of an Event of Default, the permission given to Borrower
pursuant to the preceding sentence to exercise all rights, power and authority under Leases shall automatically terminate. Borrower shall comply with and observe Borrower’s obligations under all Leases, including Borrower’s obligations
pertaining to the maintenance and disposition of tenant security deposits. 
 (c) Borrower acknowledges and agrees that the exercise by
Lender, either directly or by a receiver, of any of the rights conferred under this Section 4 shall not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual
possession of the Land and the Improvements. The acceptance by Lender of the assignment of the Leases pursuant to Section 4(a) shall not at any time or in any event obligate Lender to take any action under this Instrument or to expend any
money or to incur any expenses. Except to the extent of Lender’s gross negligence or willful misconduct, Lender shall not be liable in any way for any injury or damage to person or property sustained by any person or persons, firm or
corporation in or about the Mortgaged Property. Prior to Lender’s actual entry into and taking possession of the Mortgaged Property, Lender shall not (i) be obligated to perform any of the terms, covenants and conditions contained in any
Lease (or otherwise have any obligation with respect to any Lease); (ii) be obligated to appear in or defend any action or proceeding relating to the Lease or the Mortgaged Property; or (iii) be responsible for the operation, control,
care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property. The execution of this Instrument by Borrower shall constitute conclusive evidence that all responsibility for the operation, control, care, management and
repair of the Mortgaged Property is and shall be that of Borrower, prior to such actual entry and taking of possession. 
 (d) Upon delivery
of Notice by Lender to Borrower of Lender’s exercise of Lender’s rights under this Section 4 at any time after the occurrence of an Event of Default, and without the necessity of Lender entering upon and taking and maintaining control
of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, Lender immediately shall have all rights, powers and authority granted to Borrower under any Lease, including
the right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease. 
 (e) Borrower shall, promptly
upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect. All Leases for residential dwelling units shall be on forms approved by Lender, shall be for initial terms of at least six months and not more
than two 

  

 PAGE 11 

 
years, and shall not include options to purchase. If Borrower is a cooperative housing corporation, association or other validly organized entity under
municipal, county, state or federal law, notwithstanding anything to the contrary contained in this subsection, so long as Borrower is not in breach of any covenant of this Instrument, Lender hereby consents to the execution of leases of apartments
for a term in excess of two years from Borrower to a tenant shareholder of Borrower, to the surrender or termination of such leases of apartments where the surrendered or terminated lease is immediately replaced or where the Borrower makes its best
efforts to secure such immediate replacement by a newly executed lease of the same apartment to a tenant shareholder of the Borrower. However, no consent is hereby 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. 
 (f) Borrower shall not lease any portion of the Mortgaged Property for non-residential use except with the prior written
consent of Lender and Lender’s prior written approval of the Lease agreement. Borrower shall not modify the terms of, or extend or terminate, any Lease for non-residential use (including any Lease in existence on the date of this
Instrument) without the prior written consent of Lender. However, Lender’s consent shall not be required for the modification or extension of a non-residential Lease if such modification or extension is on terms at least as favorable to
Borrower as those customary at that time in the applicable market and the income from the extended or modified Lease will not be less than the income received from the Lease as of the date of this Instrument. Borrower shall, without request by
Lender, deliver an executed copy of each non-residential Lease to Lender promptly after such Lease is signed. All non-residential Leases, including renewals or extensions of existing Leases, shall specifically provide that (i) such Leases are
subordinate to the lien of this Instrument; (ii) the tenant shall 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; (iii) 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; (iv) the Lease shall not be
terminated by foreclosure or any other transfer of the Mortgaged Property; (v) after a foreclosure sale of the Mortgaged Property, Lender or any other purchaser at such foreclosure sale may, at Lender’s or such purchaser’s option,
accept or terminate such Lease; and (vi) the tenant shall, upon receipt after the occurrence of an Event of Default of a written request from Lender, pay all Rents payable under the Lease to Lender. 
 (g) Borrower shall not receive or accept Rent under any Lease (whether residential or non-residential) for more than two months in advance.

 5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT PREMIUM. Borrower shall pay the Indebtedness when due in
accordance with the terms of the Note and the other Loan Documents and shall perform, observe and comply with all other provisions of the Note and the other Loan Documents. 

  

 PAGE 12 

 
Borrower shall 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. 
 6. EXCULPATION. Borrower’s personal liability for
payment of the Indebtedness and for performance of the other obligations to be performed by it under this Instrument is limited in the manner, and to the extent, provided in the Note. 
 7. DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES. 
 (a) Unless this requirement is waived in writing by Lender, which waiver may be contained in this Section 7(a), Borrower shall 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” below. Lender will not require the Borrower to make Imposition Deposits with respect to the items marked “Deferred” below. 
  

			
	[Deferred]	  	Hazard Insurance premiums or other insurance premiums required by Lender under Section 19,
		
	[Collect]	  	Taxes,
		
	[Deferred]	  	water and sewer charges (that could become a lien on the Mortgaged Property),
		
	[NA]	  	ground rents,
		
	[Deferred]	  	assessments or other charges (that could become a lien on the Mortgaged Property)

 The amounts deposited under the preceding sentence are collectively referred to in this Instrument as the
“Imposition Deposits.” The obligations of Borrower for which the Imposition Deposits are required are collectively referred to in this Instrument as “Impositions.” The amount of the Imposition Deposits shall 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 shall maintain records indicating how much of the monthly Imposition Deposits and how much of
the aggregate Imposition Deposits held by Lender are held for the purpose of paying Taxes, insurance premiums and each other Imposition. 
 (b) Imposition Deposits shall be held in an institution (which may be Lender, if Lender is such an institution) whose deposits or accounts are insured or guaranteed by a federal agency. Lender shall not be obligated to open additional
accounts or deposit Imposition Deposits in additional institutions when the amount of the Imposition Deposits exceeds the maximum amount of the federal deposit insurance or guaranty. Lender shall apply the Imposition Deposits to pay Impositions so
long as no Event of Default has occurred and is continuing. Unless applicable law requires, Lender shall not be required to pay Borrower any interest, earnings or profits on the Imposition Deposits. As additional security for all of 

  

 PAGE 13 

 
Borrower’s obligations under this Instrument and the other Loan Documents, Borrower hereby pledges and grants to Lender a security interest in the
Imposition Deposits and all proceeds of, and all interest and dividends on, the Imposition Deposits. Any amounts deposited with Lender under this Section 7 shall not be trust funds, nor shall they operate to reduce the Indebtedness, unless
applied by Lender for that purpose under Section 7(e). 
 (c) If Lender receives a bill or invoice for an Imposition, Lender shall pay
the Imposition from the Imposition Deposits held by Lender. Lender shall have no obligation to pay any Imposition to the extent it exceeds Imposition Deposits then held by Lender. Lender may pay an Imposition according to any bill, statement or
estimate from the appropriate public office or insurance company without inquiring into the accuracy of the bill, statement or estimate or into the validity of the Imposition. 
 (d) If at any time the amount of the Imposition Deposits held by Lender for payment of a specific Imposition exceeds the amount reasonably deemed
necessary by Lender, the excess shall be credited against future installments of Imposition Deposits. If at any time the amount of the Imposition Deposits held by Lender for payment of a specific Imposition is less than the amount reasonably
estimated by Lender to be necessary, Borrower shall pay to Lender the amount of the deficiency within 15 days after Notice from Lender. 
 (e) If an Event of Default has occurred and is continuing, Lender may apply any Imposition Deposits, in any amounts and in any order as Lender determines, in Lender’s discretion, to pay any Impositions or as a credit against the
Indebtedness. Upon payment in full of the Indebtedness, Lender shall refund to Borrower any Imposition Deposits held by Lender. 
 (f) If
Lender does not collect an Imposition Deposit with respect to an Imposition either marked “Deferred” in Section 7(a) or pursuant to a separate written waiver by Lender, then on or before the date each such Imposition is due, or on the
date this Instrument requires each such Imposition to be paid, Borrower must provide Lender with proof of payment of each such Imposition for which Lender does not require collection of Imposition Deposits. Lender may revoke its deferral or waiver
and require Borrower to deposit with Lender any or all of the Imposition Deposits listed in Section 7(a), regardless of whether any such item is marked “Deferred” in such section, upon Notice to Borrower, (i) if Borrower does not
timely pay any of the Impositions, (ii) if Borrower fails to provide timely proof to Lender of such payment, or (iii) at any time during the existence of an Event of Default. 
 (g) In the event of a Transfer prohibited by or requiring Lender’s approval under Section 21, Lender’s waiver of the collection of any
Imposition Deposit in this Section 7 may be modified or rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s) as a condition of Lender’s approval of such Transfer. 
 8. COLLATERAL AGREEMENTS. Borrower shall deposit with Lender such amounts as may be required by any Collateral Agreement and shall perform all
other obligations of Borrower under each Collateral Agreement. 
  

 PAGE 14 

 9. 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, in Lender’s 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 shall constitute or be deemed to constitute either a waiver of the unpaid amounts or an
accord and satisfaction. Notwithstanding the application of any such amount to the Indebtedness, Borrower’s obligations under this Instrument and the Note shall remain unchanged. 
 10. COMPLIANCE WITH LAWS. Borrower shall comply with all laws, ordinances, regulations and requirements of any Governmental Authority and all
recorded lawful 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, fair housing, disability accommodation, zoning and land use, and Leases. Borrower also shall comply with all applicable laws that pertain to the maintenance and disposition of tenant security deposits. Borrower shall at all times maintain
records sufficient to demonstrate compliance with the provisions of this Section 10. Borrower shall take appropriate measures to prevent, and shall not engage in or knowingly permit, any illegal activities at the Mortgaged Property that could
endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise materially impair the lien created by this Instrument or Lender’s interest in the Mortgaged Property.
Borrower represents and warrants to Lender that no portion of the Mortgaged Property has been or will be purchased with the proceeds of any illegal activity. 
 11. USE OF PROPERTY. Unless required by applicable law, Borrower shall not (a) allow changes in the use for which all or any part of the Mortgaged Property is being used at the time this Instrument was
executed, except for any change in use approved by Lender, (b) convert any individual dwelling units or common areas to commercial use, (c) initiate a change in the zoning classification of the Mortgaged Property or acquiesce without
Notice to and consent of Lender in a change in the zoning classification of the Mortgaged Property, (d) establish any condominium or cooperative regime with respect to the Mortgaged Property, (e) 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, or (f) subdivide or otherwise split any tax parcel constituting all or any part of the Mortgaged Property without the prior consent of Lender.

 12. PROTECTION OF LENDER’S SECURITY; INSTRUMENT SECURES FUTURE ADVANCES. 
 (a) If Borrower fails to perform any of its obligations under this Instrument 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 Instrument, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws,
fraudulent conveyance or reorganizations or proceedings involving a 

  

 PAGE 15 

 
bankrupt or decedent, then Lender at Lender’s option 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 19, and (v) payment of amounts which Borrower has failed to pay
under Sections 15 and 17. 
 (b) Any amounts disbursed by Lender under this Section 12, or under any other provision of this
Instrument that treats such disbursement as being made under this Section 12, shall be secured by this Instrument, shall be added to, and become part of, the principal component of the Indebtedness, shall be immediately due and payable and
shall bear interest from the date of disbursement until paid at the “Default Rate,” as defined in the Note. 
 (c) Nothing in this
Section 12 shall require Lender to incur any expense or take any action. 
 13. INSPECTION. 
 (a) Lender, its agents, representatives, and designees may make or cause to be made entries upon and inspections of the Mortgaged Property (including
environmental inspections and tests) 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). Notice to
Borrower shall 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) If Lender determines that Mold has 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 as
frequently as Lender determines is necessary until any issue with Mold and its cause(s) are resolved to Lender’s satisfaction. Such inspection shall be limited to a visual and olfactory inspection of the area that has experienced the Mold,
water intrusion event or leak. Borrower shall be responsible for the cost of such professional inspection and any remediation deemed to be necessary as a result of the professional inspection. After any issue with Mold, water intrusion or leaks is
remedied to Lender’s satisfaction, Lender shall not require a professional inspection any more frequently than once every three years unless Lender is otherwise aware of Mold as a result of a subsequent water intrusion event or leak.

  

 PAGE 16 

 (c) 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 shall be prepared to provide and must actually 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 tenants, management agent or governmental authorities
regarding odors, indoor air quality, mold, fungus, microbial contamination or pathogenic organisms (“Mold”) or any activity, condition, event or omission that causes or facilitates the growth of 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. 
 14. BOOKS AND RECORDS; FINANCIAL REPORTING. 
 (a) Borrower shall keep and maintain at all times at
the Mortgaged Property or the management agent’s office, and upon Lender’s request shall make available at the Mortgaged Property (or, at Borrower’s option, at the management agent’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 shall be subject to examination and inspection by Lender at any reasonable time. 
 (b) Within 120 days after the end of each fiscal year of Borrower, Borrower shall furnish to Lender a statement of income and expenses for Borrower’s operation of the Mortgaged Property for that fiscal year, a
statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal year and, when requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the
end of that fiscal year. If Borrower’s fiscal year is other than the calendar year, Borrower must also submit to Lender a year-end statement of income and expenses within 120 days after the end of the calendar year. 
  

 PAGE 17 

 (c) Within 120 days after the end of each calendar year, and at any other time, upon Lender’s
request, Borrower shall furnish to Lender each of the following. However, Lender shall not require any of the following 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, upon written request to Borrower, require Borrower to furnish any of the following more frequently: 
  

	 	(i)	a rent schedule for the Mortgaged Property showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable for the current
month, the date through which rent has been paid, and any related information requested by Lender; 

  

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

  

	 	(iii)	a statement that identifies all owners of any interest in Borrower and any Controlling Entity and the interest held by each (unless Borrower or any Controlling Entity is a
publicly-traded entity in which case such statement of ownership shall not be required), if Borrower or a Controlling Entity is a corporation, all officers and directors of Borrower and the Controlling Entity, and if Borrower or a Controlling Entity
is a limited liability company, all managers who are not members. 

 (d) At any time upon Lender’s request, Borrower shall
furnish to Lender each of the following. However, Lender shall not require any of the following 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 any of the following more frequently: 
  

	 	(i)	a balance sheet, a statement of income and expenses for Borrower and a statement of changes in financial position of Borrower for Borrower’s most recent fiscal year;

  

	 	(ii)	a quarterly or year-to-date income and expense statement for the Mortgaged Property; and 

  

	 	(iii)	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. 

 (e) Upon Lender’s request at any time
when an Event of Default has occurred and is continuing, Borrower shall furnish to Lender monthly income and expense statements and rent schedules for the Mortgaged Property. 
 (f) An individual having authority to bind Borrower shall certify each of the statements, schedules and reports required by
Sections 14(b) through 14(e) to be complete and accurate. Each of the statements, schedules and reports required by Sections 14(b) through 14(e) shall 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 Section 14(b) and 

  

 PAGE 18 

 
14(c)(i) and (ii) 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. 
 (g) If Borrower fails to provide in a timely manner the statements, schedules and reports required by
Sections 14(b) through (e), Lender shall give Borrower Notice specifying the statements, schedules and reports required by Section 14(b) through (e) 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 Lender shall 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 shall become immediately due and payable and shall become an additional part of the Indebtedness as provided in
Section 12. Notice to Borrower shall 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. 
 (h) If an Event of Default has occurred and is continuing, Borrower shall deliver to Lender upon written demand all books and records relating to the
Mortgaged Property or its operation. 
 (i) Borrower authorizes Lender to obtain a credit report on Borrower at any time. 
 15. TAXES; OPERATING EXPENSES. 
 (a)
Subject to the provisions of Section 15(c) and Section 15(d), Borrower shall pay, or cause to be paid, all Taxes when due and before the addition of any interest, fine, penalty or cost for nonpayment. 
 (b) Subject to the provisions of Section 15(c), Borrower shall (i) pay the expenses of operating, managing, maintaining and repairing the
Mortgaged Property (including utilities, repairs and 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 at least 30 days
prior to the expiration date of each policy of insurance, unless applicable law specifies some lesser period. 
 (c) If Lender is collecting
Imposition Deposits, to the extent that Lender holds sufficient Imposition Deposits for the purpose of paying a specific Imposition, then Borrower shall not be obligated to pay such Imposition, so long as no Event of Default exists and Borrower has
timely delivered to Lender any bills or premium notices that it has received. If an Event of Default exists, Lender may exercise any rights Lender may have with respect to Imposition Deposits without regard to whether Impositions are then due and
payable. Lender shall have no liability to Borrower for failing to pay any Impositions to the extent that (i) any Event of Default 

  

 PAGE 19 

 
has occurred and is continuing, (ii) insufficient Imposition 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 above. 
 (d) 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, 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. 
 (e) Borrower shall promptly deliver to Lender a copy of all notices of, and invoices for, Impositions, and if Borrower pays any Imposition directly, Borrower shall furnish to Lender on or before the date this Instrument requires such
Impositions to be paid, receipts evidencing that such payments were made. 
 16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to
the extent provided in Section 21, the grant, creation or existence of any mortgage, deed of trust, deed to secure debt, security interest or other lien or encumbrance (a “Lien”) on the Mortgaged Property (other than the
lien of this Instrument) or on certain ownership interests in Borrower, whether voluntary, involuntary or by operation of law, and whether or not such Lien has priority over the lien of this Instrument, is a “Transfer” which
constitutes an Event of Default and subjects Borrower to personal liability under the Note. 
 17. PRESERVATION, MANAGEMENT AND
MAINTENANCE OF MORTGAGED PROPERTY. 
 (a) Borrower shall not commit waste or permit impairment or deterioration of the Mortgaged
Property. 
 (b) Borrower shall not abandon the Mortgaged Property. 
 (c) Borrower shall 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; however, Borrower shall not be obligated to
perform such restoration or repair if (i) no Event of Default has occurred and is continuing, and (ii) Lender has elected to apply any available insurance proceeds and/or condemnation awards to the payment of Indebtedness pursuant to
Section 19(h)(ii), (iii), (iv) or (v), or pursuant to Section 20. 
 (d) Borrower shall keep the Mortgaged Property in good
repair, including the replacement of Personalty and Fixtures with items of equal or better function and quality. 
  

 PAGE 20 

 (e) Borrower shall provide for professional management of the Mortgaged Property by a residential rental
property manager satisfactory to Lender at all times under a contract approved by Lender in writing, which contract must be terminable upon not more than 30 days notice without the necessity of establishing cause and without payment of a
penalty or termination fee by Borrower or its successors. 
 (f) Borrower shall give Notice to Lender of and, unless otherwise directed in
writing by Lender, shall appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Instrument. Borrower shall not (and shall 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
(i) in connection with the replacement of tangible Personalty, (ii) if Borrower is a cooperative housing corporation, to the extent permitted with respect to individual dwelling units under the form of proprietary lease or occupancy
agreement and (iii) repairs and replacements in connection with making an individual unit ready for a new occupant. 
 (g) Unless
otherwise waived by Lender in writing, Borrower must have or must establish and must adhere to the MMP. If the Borrower is required to have an MMP, the Borrower must keep all MMP documentation at the Mortgaged Property or at the management
agent’s office and available for the Lender or the Loan Servicer to review during any annual assessment or other inspection of the Mortgaged Property that is required by Lender. 
 18. ENVIRONMENTAL HAZARDS. 
 (a)
Except for matters described in Section 18(b), Borrower shall not cause or permit any 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 or any other property of Borrower that is adjacent to 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 or any other property of Borrower that is adjacent to 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 or any property of Borrower that is adjacent to the Mortgaged
Property; 

  

 PAGE 21 

	 	(v)	any violation or noncompliance with the terms of any O&M Program as defined in subsection (d). 

 The matters described in clauses (i) through (v) above, except as otherwise provided in Section 18(b), are referred to collectively in this Section 18 as “Prohibited Activities or
Conditions.” 
 (b) Prohibited Activities or Conditions shall not include 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 dwelling 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. 
 (c) Borrower shall take all commercially reasonable actions (including the inclusion of appropriate provisions in any Leases executed after the date of
this Instrument) to prevent its employees, agents, and contractors, and all tenants and other occupants from causing or permitting any Prohibited Activities or Conditions. Borrower shall 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. 
 (d) As required by Lender, Borrower shall 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 18 must be approved by Lender and shall be referred to herein as an
“O&M Program.” Borrower shall 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
shall 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 and Borrower’s performance shall be
paid by Borrower upon demand by Lender. Any such out-of-pocket costs of Lender that Borrower fails to pay promptly shall become an additional part of the Indebtedness as provided in Section 12. 
 (e) Borrower represents and warrants to Lender that, 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 Instrument): 
  

 PAGE 22 

	 	(i)	Borrower has not at any time engaged in, caused or permitted any Prohibited Activities or Conditions on the Mortgaged Property; 

  

	 	(ii)	to the best of Borrower’s knowledge after reasonable and diligent inquiry, no Prohibited Activities or Conditions exist or have existed on the Mortgaged Property;

  

	 	(iii)	the Mortgaged Property does not now contain any underground storage tanks, and, to the best of Borrower’s knowledge after reasonable and diligent inquiry, 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; 

  

	 	(iv)	to the best of Borrower’s knowledge after reasonable and diligent inquiry, 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, Borrower has obtained all Environmental Permits required for the operation of the Mortgaged Property in accordance with Hazardous Materials Laws now in
effect and all such Environmental Permits are in full force and effect; 

  

	 	(v)	to the best of Borrower’s knowledge after reasonable and diligent inquiry, no event has occurred with respect to the Mortgaged Property that constitutes, or with the passing of
time or the giving of notice would constitute, noncompliance with the terms of any Environmental Permit; 

  

	 	(vi)	there are no actions, suits, claims or proceedings pending or, to the best of Borrower’s knowledge after reasonable and diligent inquiry, threatened that involve the Mortgaged
Property and allege, arise out of, or relate to any Prohibited Activity or Condition; and 

  

	 	(vii)	Borrower has not received 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 other property of Borrower that is adjacent to the Mortgaged Property. 

 (f) Borrower shall promptly notify Lender in writing upon the occurrence of any of the following events: 
  

	 	(i)	Borrower’s discovery of any Prohibited Activity or Condition; 

  

 PAGE 23 

	 	(ii)	Borrower’s receipt of or knowledge of any written complaint, order, notice of violation or other communication from any tenant, management agent, 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 or any other property of Borrower that is adjacent to the Mortgaged
Property; or 

  

	 	(iii)	Borrower’s breach of any of its obligations under this Section 18. 

 Any such notice given by Borrower shall not relieve Borrower of, or result in a waiver of, any obligation under this Instrument, the Note, or any other Loan Document. 
 (g) Borrower shall 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 Section 21, 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 shall become an additional part of the Indebtedness as provided in Section 12. 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 shall make available to Borrower, without representation of any kind, copies of Environmental Inspections prepared by third parties and delivered to Lender. Lender hereby reserves the right, and Borrower
hereby 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
assure 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 shall have no liability whatsoever as a result of delivering the results to any third party of any Environmental Inspections made by or for Lender, and Borrower hereby 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 of Environmental Inspections made by or for Lender. 
 (h) 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 

  

 PAGE 24 

 
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 shall, 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 shall 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 Remedial Work, Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower shall reimburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender shall become
part of the Indebtedness as provided in Section 12. 
 (i) Borrower shall comply with all Hazardous Materials Laws applicable to the
Mortgaged Property. Without limiting the generality of the previous sentence, Borrower shall (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) comply with any governmental or judicial order that arises from any alleged Prohibited Activity or Condition. 
 (j) Borrower shall indemnify, hold harmless and defend (i) Lender, (ii) any prior owner or holder of the Note, (iii) the Loan Servicer,
(iv) any prior Loan Servicer, (v) the officers, directors, shareholders, partners, employees and trustees of any of the foregoing, and (vi) the heirs, legal representatives, successors and assigns of each of the foregoing
(collectively, the “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 this Section 18; 

  

	 	(ii)	any failure by Borrower to perform any of its obligations under this Section 18; 

  

	 	(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 or on or under any property of Borrower that is adjacent to
the Mortgaged Property; and 

  

	 	(v)	the actual or alleged violation of any Hazardous Materials Law. 

 (k) Counsel selected by Borrower to defend Indemnitees shall be subject to the approval of those Indemnitees. In any circumstances in which the indemnity under this Section 18 applies, Lender may employ its own legal counsel and
consultants to prosecute, 

  

 PAGE 25 

 
defend or negotiate any claim or legal or administrative proceeding and Lender, with the prior written consent of Borrower (which shall 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 its discretion, Lender shall permit Borrower to undertake the actions referenced in this Section 18 in accordance with this Section 18(k) and Section 18(l) so long as Lender approves such action, which
approval shall not be unreasonably withheld or delayed. Borrower shall reimburse Lender upon demand for all costs and expenses incurred by Lender, including all costs of settlements entered into in good faith, consultants’ fees and
Attorneys’ Fees and Costs. 
 (l) Borrower shall not, without the prior written consent of those Indemnitees who are named as parties to
a claim or legal or administrative proceeding (a “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 its discretion. 
 (m) Borrower’s obligation to indemnify the Indemnitees shall 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 Instrument 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; and 

  

	 	(vii)	Lender’s failure to properly perfect any lien or security interest given as security for the Indebtedness. 

  

 PAGE 26 

 (n) Borrower shall, 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 Section 18; 

  

	 	(ii)	reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Section 18; and

  

	 	(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 Section 18, or in monitoring and participating in any legal or administrative proceeding. 

 (o) The provisions of
this Section 18 shall 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 shall be entitled to indemnification under this Section 18
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 or entity, the obligation of those persons or entities to indemnify the Indemnitees under this Section 18 shall be joint and several. The obligation of Borrower to indemnify the Indemnitees
under this Section 18 shall 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 this Instrument.
Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of, or held title to, the Mortgaged Property, Borrower shall have no obligation to indemnify the Indemnitees under this Section 18 after the date of the release
of record of the lien of this Instrument by payment in full at the Maturity Date or by voluntary prepayment in full. 
 19. PROPERTY AND
LIABILITY INSURANCE. 
 (a) Borrower shall keep the Improvements insured at all times against such hazards as Lender may from time to
time require, which insurance shall include but not be limited to coverage against loss by fire and allied perils, general boiler and machinery coverage, rent loss and extra expense insurance. If Lender so requires, such insurance shall also include
sinkhole insurance, mine subsidence insurance, earthquake insurance, and, if the Mortgaged Property does not conform to applicable zoning or land use laws, building ordinance or law coverage. Borrower acknowledges and agrees that Lender’s
insurance requirements may change from time to time throughout the term of the Indebtedness. If any of the Improvements is located in an area identified by the Federal Emergency Management Agency (or any successor to that agency) as an area
having special flood hazards, Borrower shall insure such Improvements against loss by flood. All insurance required pursuant to this Section 19(a) shall be referred to as “Hazard Insurance.” 
  

 PAGE 27 

 (b) All premiums on Hazard Insurance policies required under Section 19(a) shall be paid in the
manner provided in Section 7, unless Lender has designated in writing another method of payment. All such policies shall also be in a form approved by Lender. All policies of property damage insurance shall include a non-contributing,
non-reporting mortgage clause in favor of, and in a form approved by, Lender. Lender shall have the right to hold the original policies or duplicate original policies of all Hazard Insurance required by Section 19(a). Borrower shall promptly
deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies and all receipts for paid premiums. At least 5 days prior to the expiration date of any Hazard Insurance policy, Borrower shall deliver to
Lender evidence acceptable to Lender that the policy has been renewed. If Borrower has not delivered the original (or a duplicate original) of a renewal policy prior to the expiration date of any Hazard Insurance policy, Borrower shall deliver
the original (or a duplicate original) of a renewal policy in a form satisfactory to Lender within 120 days after the expiration date of the original policy. 
 (c) Borrower shall maintain at all times commercial general liability insurance, workers’ compensation insurance and such other liability, errors and omissions and fidelity insurance coverages as Lender may from
time to time require. 
 (d) All insurance policies and renewals of insurance policies required by this Section 19 shall be in such
amounts and for such periods as Lender may from time to time require, and shall be issued by insurance companies satisfactory to Lender. 
 (e) Borrower shall comply with all insurance requirements and shall not permit any condition to exist on the Mortgaged Property that would invalidate any part of any insurance coverage that this Instrument requires Borrower to maintain.

 (f) In the event of loss, Borrower shall give immediate written notice to the insurance carrier and to Lender. Borrower hereby authorizes
and appoints Lender as attorney-in-fact for Borrower to make proof of loss, to adjust and compromise any claims under policies of Hazard Insurance, to appear in and prosecute any action arising from such Hazard Insurance policies, to collect and
receive the proceeds of Hazard 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 19 shall require Lender to incur any expense or take any action. Lender may, at Lender’s option, (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 (the “Restoration”), or (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. To the extent Lender determines to require a repair or replacement settlement and apply insurance proceeds to Restoration,
Lender shall apply the proceeds in accordance with Lender’s then-current policies relating to the restoration of casualty damage on similar multifamily properties. 
  

 PAGE 28 

 (g) Notwithstanding any provision to the contrary in this Section 19, 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, 
  

	 	(i)	in the event of a casualty resulting in damage to the Mortgaged Property which will cost $10,000 or less to repair, the Borrower shall 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 the Lender so long as the insurance proceeds are used solely for the Restoration of the Mortgaged Property; and

  

	 	(ii)	in the event of a casualty resulting in damage to the Mortgaged Property which will cost more than $10,000 but less than $50,000 to repair, the Borrower is authorized to make proof
of loss and adjust and compromise the claim without the prior consent of Lender, and Lender shall hold the applicable insurance proceeds to be used to reimburse Borrower for the cost of Restoration of the Mortgaged Property and shall not apply such
proceeds to the payment of sums due under this Instrument. 

 (h) Lender will have the right to exercise its option to apply
insurance proceeds to the payment of the Indebtedness only if Lender determines that at least one of the following conditions is met: 
  

	 	(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)	Lender determines, in its discretion, that 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)	Lender determines, in its discretion, that the rental income from the Mortgaged Property after completion of the Restoration will not be sufficient to meet all operating costs and
other expenses, Imposition Deposits, deposits to reserves and loan repayment obligations relating to the Mortgaged Property; 

  

	 	(iv)	Lender determines, in its discretion, that the Restoration will not be completed at least one year before the Maturity Date (or six months before the Maturity Date if Lender
determines in its discretion that re-leasing of the Mortgaged Property will be completed within such six-month period); or 

  

	 	(v)	Lender determines that the Restoration will not be completed within one year after the date of the loss or casualty. 

  

 PAGE 29 

 (i) If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged
Property, Lender shall 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.

 (j) Unless Lender otherwise agrees in writing, any application of any insurance proceeds to the Indebtedness shall not extend or postpone
the due date of any monthly installments referred to in the Note, Section 7 of this Instrument or any Collateral Agreement, or change the amount of such installments. 
 (k) Borrower agrees to execute such further evidence of assignment of any insurance proceeds as Lender may require. 
 20. CONDEMNATION. 
 (a) Borrower
shall 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, whether direct or indirect (a
“Condemnation”). Borrower shall 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 20 shall require Lender to incur any
expense or take any action. Borrower hereby 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) Lender may 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 shall not extend or postpone the due date of any monthly installments
referred to in the Note, Section 7 of this Instrument or any Collateral Agreement, or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require.

  

 PAGE 30 

 21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER. [RIGHT TO UNLIMITED TRANSFERS —
WITH LENDER APPROVAL]. 
 (a) “Transfer” means 
  

	 	(i)	a sale, assignment, transfer or other disposition (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 an 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; or 

  

	 	(v)	the merger, dissolution, liquidation, or consolidation of a legal entity or the reconstitution of one type of legal entity into another type of legal entity.

 For purposes of defining the term “Transfer,” the term “partnership” shall mean a general partnership, a limited
partnership, a joint venture and a limited liability partnership, and the term “partner” shall mean a general partner, a limited partner and a joint venturer. 
 (b) “Transfer” does not include 
  

	 	(i)	a conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure sale under this Instrument, 

  

	 	(ii)	the Mortgaged Property becoming part of a bankruptcy estate by operation of law under the United States Bankruptcy Code, or 

  

	 	(iii)	a lien against the Mortgaged Property for local taxes and/or assessments not then due and payable. 

 (c) The occurrence of any of the following Transfers shall not constitute an Event of Default under this Instrument, notwithstanding any provision of
Section 21(e) to the contrary: 
  

	 	(i)	a Transfer to which Lender has consented; 

  

	 	(ii)	a Transfer that occurs in accordance with Section 21(d); 

  

 PAGE 31 

	 	(iii)	the grant of a leasehold interest in an individual dwelling unit for a term of two years or less not containing an option to purchase; 

  

	 	(iv)	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, encumbrances
and security interests other than those created by the Loan Documents or consented to by Lender; 

  

	 	(v)	the creation of a mechanic’s, materialman’s, or judgment lien against the Mortgaged Property, which is released of record or otherwise remedied to Lender’s
satisfaction within 60 days of the date of creation; 

  

	 	(vi)	if Borrower is a housing cooperative, any Transfer of the shares in the housing cooperative or any assignment of the occupancy agreements or leases relating thereto by tenant
shareholders of the housing cooperative; and 

  

	 	(vii)	any Transfer of an interest in Borrower or any interest in a Controlling Entity (which, if such Controlling Entity were Borrower, would result in an Event of Default) listed in
(A) through (F) below (a “Preapproved Transfer”), under the terms and conditions listed as items (1) through (7) below: 

  

	 	(A)	a sale or transfer to one or more of the transferor’s immediate family members; or 

  

	 	(B)	a sale or transfer to any trust having as its sole beneficiaries the transferor and/or one or more of the transferor’s immediate family members; or 

  

	 	(C)	a sale or transfer from a trust to any one or more of its beneficiaries who are immediate family members of the transferor; or 

  

	 	(D)	the substitution or replacement of the trustee of any trust with a trustee who is an immediate family member of the transferor; or 

  

	 	(E)	a sale or transfer to an entity owned and controlled by the transferor or the transferor’s immediate family members; or 

  

	 	(F)	a sale or transfer to an individual or entity that has an existing interest in the Borrower or in a Controlling Entity. 

  

	 	(1)	Borrower shall provide Lender with prior written Notice of the proposed Preapproved Transfer, which Notice must be accompanied by a non-refundable review fee in the amount of
$3,000.00. 

  

	 	(2)	For the purposes of these Preapproved Transfers, a transferor’s immediate family members will be deemed to include a spouse, parent, child or grandchild of such transferor.

  

 PAGE 32 

	 	(3)	Either directly or indirectly, James E. Lippert shall retain at all times a managing interest in the Borrower. 

  

	 	(4)	At the time of the proposed Preapproved Transfer, no Event of Default shall have occurred and be continuing and no event or condition shall have occurred and be continuing that,
with the giving of Notice or the passage of time, or both, would become an Event of Default. 

  

	 	(5)	Lender shall be entitled to collect all costs, including the cost of all title searches, title insurance and recording costs, and all Attorneys’ Fees and Costs.

  

	 	(6)	Lender shall not be entitled to collect a transfer fee as a result of these Preapproved Transfers. 

  

	 	(7)	In the event of a Transfer prohibited by or requiring Lender’s approval under this Section 21, this Section (c)(vii) may be modified or rendered void by Lender
at Lender’s option by Notice to Borrower and the transferee(s), as a condition of Lender’s consent. 

 (d) The
occurrence of any of the following Transfers shall not constitute an Event of Default under this Instrument, provided that Borrower has notified Lender in writing within 30 days following the occurrence of any of the following, and such
Transfer does not constitute an Event of Default under any other Section of this Instrument: 
  

	 	(i)	a change of the Borrower’s name, provided that UCC financing statements and/or amendments sufficient to continue the perfection of Lender’s security interest have been
properly filed and copies have been delivered to Lender; 

  

	 	(ii)	a change of the form of the Borrower not involving a transfer of the Borrower’s assets and not resulting in any change in liability of any Initial Owner, provided that UCC
financing statements and/or amendments sufficient to continue the perfection of Lender’s security interest have been properly filed and copies have been delivered to Lender; 

  

	 	(iii)	the merger of the Borrower with another entity when the Borrower is the surviving entity; 

  

 PAGE 33 

	 	(iv)	a Transfer that occurs by devise, descent, or by operation of law upon the death of a natural person; and 

  

	 	(v)	the grant of an easement, if before the grant Lender determines that the easement will not materially affect the operation or value of the Mortgaged Property or Lender’s
interest in the Mortgaged Property, and Borrower pays to Lender, upon demand, all costs and expenses, including Attorneys’ Fees and Costs, incurred by Lender in connection with reviewing Borrower’s request. 

 (e) The occurrence of any of the following Transfers shall constitute an Event of Default under this Instrument: 
  

	 	(i)	a Transfer of all or any part of the Mortgaged Property or any interest in the Mortgaged Property; 

  

	 	(ii)	if Borrower is a limited partnership, a Transfer of (A) any general partnership interest, or (B) limited partnership interests in Borrower that would cause the Initial
Owners of Borrower to own less than a Controlling Interest of all limited partnership interests in Borrower; 

  

	 	(iii)	if Borrower is a general partnership or a joint venture, a Transfer of any general partnership or joint venture interest in Borrower; 

  

	 	(iv)	if Borrower is a limited liability company, (A) a Transfer of any membership interest in Borrower which would cause the Initial Owners to own less than a Controlling Interest
of all the membership interests in Borrower, (B) a Transfer of any membership or other interest of a manager in Borrower that results in a change of manager or (C) a change in a nonmember manager; 

  

	 	(v)	if Borrower is a corporation (A) the Transfer of any voting stock in Borrower which would cause the Initial Owners to own less than a Controlling Interest of any class of
voting stock in Borrower or (B) if the outstanding voting stock in Borrower is held by 100 or more shareholders, one or more Transfers by a single transferor within a 12-month period affecting an aggregate of 5 percent or more of that
stock; 

  

	 	(vi)	if Borrower is a trust, (A) a Transfer of any beneficial interest in Borrower which would cause the Initial Owners to own less than a Controlling Interest of all the beneficial
interests in Borrower, (B) the termination or revocation of the trust, or (C) the removal, appointment or substitution of a trustee of Borrower; 

  

 PAGE 34 

	 	(vii)	if Borrower is a limited liability partnership, (A) a Transfer of any partnership interest in Borrower which would cause the Initial Owners to own less than a Controlling
Interest of all partnership interests in Borrower, or (B) a transfer of any partnership or other interest of a managing partner in Borrower that results in a change of manager; and 

  

	 	(viii)	a Transfer of any interest in a Controlling Entity which, if such Controlling Entity were Borrower, would result in an Event of Default under any of
Sections 21(e)(i) through (vii) above. 

 Lender shall not be required to demonstrate any actual impairment of its security or
any increased risk of default in order to exercise any of its remedies with respect to an Event of Default under this Section 21. 
 (f)
Lender shall consent, without any adjustment to the rate at which the Indebtedness secured by this Instrument bears interest or to any other economic terms of the Indebtedness set forth in the Note, to a Transfer that would otherwise violate this
Section 21 if, prior to the Transfer, Borrower has satisfied each of the following requirements: 
  

	 	(i)	the submission to Lender of all information required by Lender to make the determination required by this Section 21(f); 

  

	 	(ii)	the absence of any Event of Default; 

  

	 	(iii)	the transferee meets all of the eligibility, credit, management and other standards (including but not limited to any standards with respect to previous relationships between Lender
and the transferee) customarily applied by Lender at the time of the proposed Transfer to the approval of borrowers in connection with the origination or purchase of similar mortgages on multifamily properties; 

  

	 	(iv)	the transferee’s organization, credit and experience in the management of similar properties are deemed by the Lender, in its discretion, to be appropriate to the overall
structure and documentation of the existing financing; 

  

	 	(v)	the Mortgaged Property, at the time of the proposed Transfer, meets all standards as to its physical condition, occupancy, net operating income and the collection of reserves that
are customarily applied by Lender at the time of the proposed Transfer to the approval of properties in connection with the origination or purchase of similar mortgages on multifamily properties; 

  

 PAGE 35 

	 	(vi)	in the case of a Transfer of all or any part of the Mortgaged Property, (A) the execution by the transferee of Lender’s then-standard assumption agreement that, among
other things, requires the transferee to perform all obligations of Borrower set forth in the Note, this Instrument and any other Loan Documents, and may require that the transferee comply with any provisions of this Instrument or any other Loan
Document which previously may have been waived or modified by Lender, (B) if Lender requires, the transferee causes one or more individuals or entities acceptable to Lender to execute and deliver to Lender a guaranty in a form acceptable to
Lender, and (C) the transferee executes such additional Collateral Agreements as Lender may require; 

  

	 	(vii)	in the case of a Transfer of any interest in a Controlling Entity, if a guaranty has been executed and delivered in connection with the Note, this Instrument or any of the other
Loan Documents, the Borrower causes one or more individuals or entities acceptable to Lender to execute and deliver to Lender a guaranty in a form acceptable to Lender; and 

  

	 	(viii)	Lender’s receipt of all of the following: 

  

	 	(A)	a review fee in the amount of $3,000; 

  

	 	(B)	a transfer fee in an amount equal to one percent of the unpaid principal balance of the Indebtedness immediately before the applicable Transfer; and 

  

	 	(C)	the amount of Lender’s out-of-pocket costs (including reasonable Attorneys’ Fees and Costs) incurred in reviewing the Transfer request. 

 22. EVENTS OF DEFAULT. The occurrence of any one or more of the following shall constitute an Event of Default under this Instrument: 

(a) any failure by Borrower to pay or deposit when due any amount required by the Note, this Instrument or any other Loan Document; 
 (b) any failure by Borrower to maintain the insurance coverage required by Section 19; 
 (c) any failure by Borrower to comply with the provisions of Section 33; 
 (d) fraud or material misrepresentation or material omission by Borrower, any of its officers, directors, trustees, general partners or managers or any
guarantor 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 any Collateral Agreement; 
 (e) any failure to comply with the provisions of Section 20; 
  

 PAGE 36 

 (f) any Event of Default under Section 21; 
 (g) the commencement of a forfeiture action or proceeding, whether civil or criminal, which, in Lender’s reasonable judgment, could result in a
forfeiture of the Mortgaged Property or otherwise materially impair the lien created by this Instrument or Lender’s interest in the Mortgaged Property; 
 (h) any failure by Borrower to perform any of its obligations under this Instrument (other than those specified in Sections 22(a) through (g)), as and when required, which 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 22(h) is of the nature that it cannot be cured within the 30 day grace period but
reasonably could be cured within 90 days, then Borrower shall have additional time as determined by Lender in its 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 30-day grace period and diligently pursues the cure of such default. However, no such Notice or grace periods shall 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 Instrument, result in harm to Lender, impairment of the Note or this Instrument or any other security given under any other Loan Document; 
 (i) any failure by Borrower to perform any of its obligations as and when required under any Loan Document other than this Instrument which continues
beyond the applicable cure period, if any, specified in that Loan Document; 
 (j) any exercise by the holder of any other debt instrument
secured by a mortgage, deed of trust or deed to secure debt on the Mortgaged Property of a right to declare all amounts due under that debt instrument immediately due and payable; 
 (k) Borrower voluntarily files for bankruptcy protection under the United States Bankruptcy Code or voluntarily becomes subject to any reorganization,
receivership, insolvency proceeding or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights, or an involuntary case is commenced against Borrower by any creditor (other than Lender) of
Borrower pursuant to the United States Bankruptcy Code or other federal or state law affecting debtor and creditor rights and is not dismissed or discharged within 90 days after filing; and 
 (l) any of Borrower’s representations and warranties in this Instrument is false or misleading in any material respect. 
 23. REMEDIES CUMULATIVE. Each right and remedy provided in this Instrument is distinct from all other rights or remedies under this Instrument or
any other Loan Document or afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively, in any order. 
  

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 24. FORBEARANCE. 
 (a) Lender may (but shall not be obligated to) agree with Borrower, from time to time, and without giving notice to, or obtaining the consent of, or having any effect upon the obligations of, any guarantor or
other third party obligor, to take any of the following actions: extend the time for payment of all or any part of the Indebtedness; reduce the payments due under this Instrument, the Note, or any other Loan Document; release anyone liable for the
payment of any amounts under this Instrument, the Note, or any other Loan Document; accept a renewal of the Note; modify the terms and time of payment of the Indebtedness; join in any extension or subordination agreement; release any Mortgaged
Property; take or release other or additional security; modify the rate of interest or period of amortization of the Note or change the amount of the monthly installments payable under the Note; and otherwise modify this Instrument, the Note, or any
other Loan Document. 
 (b) Any forbearance by Lender in exercising any right or remedy under the Note, this Instrument, or any other Loan
Document or otherwise afforded by applicable law, shall 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, shall not be a waiver of Lender’s right to require prompt payment when due of all other payments on account of the Indebtedness or to
exercise any remedies for any failure to make prompt payment. Enforcement by Lender of any security for the Indebtedness shall not constitute an election by Lender of remedies so as to preclude the exercise of any other right available to Lender.
Lender’s receipt of any awards or proceeds under Sections 19 and 20 shall not operate to cure or waive any Event of Default. 
 25. LOAN CHARGES. 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 hereby reduced to the extent necessary to eliminate that violation. The amounts, if
any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the principal 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, shall be deemed to be allocated and spread
over the stated term of the Note. Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Note. 
 26. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the right to assert any statute of limitations as a bar to the enforcement of the
lien of this Instrument or to any action brought to enforce any Loan Document. 
  

 PAGE 38 

 27. WAIVER OF MARSHALLING. Notwithstanding the existence of any other security interests in the
Mortgaged Property held by Lender or by any other party, Lender shall have the right to determine the order in which any or all of the Mortgaged Property shall be subjected to the remedies provided in this Instrument, the Note, any other Loan
Document or applicable law. Lender shall 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 this 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 Instrument. 
 28. FURTHER ASSURANCES. Borrower shall execute, acknowledge, and 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 Instrument and the Loan Documents. 
 29. ESTOPPEL CERTIFICATE. Within 10 days after a request from Lender,
Borrower shall 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 Instrument or any of the other Loan Documents (or, if the Borrower is in
default, describing such default in reasonable detail); (v) whether or not there are then existing any setoffs or defenses known to Borrower against the enforcement of any right or remedy of Lender under the Loan Documents; and (vi) any
additional facts requested by Lender. 
 30. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE. 
 (a) This Instrument, and any Loan Document which does not itself expressly identify the law that is to apply to it, shall be governed by the laws of the
jurisdiction in which the Land is located (the “Property Jurisdiction”). 
 (b) Borrower agrees that any controversy arising
under or in relation to the Note, this Instrument, 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 shall have jurisdiction over all
controversies that shall 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 

  

 PAGE 39 

 
which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 30 is intended to limit
Lender’s right to bring any suit, action or proceeding relating to matters under this Instrument in any court of any other jurisdiction. 
 31. NOTICE. 
 (a) All Notices, demands and other communications (“Notice”) under or concerning this
Instrument shall be in writing. Each Notice shall be addressed to the intended recipient at its address set forth in this Instrument, and shall 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. 
 (b) Any party to this Instrument
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 31. Each party agrees that it will not refuse or reject delivery of any Notice given in
accordance with this Section 31, 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 shall be deemed for purposes of this Section 31 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. 
 (c) Any Notice under the Note and any other Loan Document that does not specify how Notices are to be given shall be given in accordance with this Section 31. 
 32. SALE OF NOTE; CHANGE IN SERVICER; LOAN SERVICING. The Note or a partial interest in the Note (together with this Instrument 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 shall govern. 
 33. SINGLE ASSET BORROWER. Until the Indebtedness is paid in full,
Borrower (a) shall not own any real or personal property other than the Mortgaged Property and personal property related to the operation and maintenance of the Mortgaged Property; (b) shall not operate any business other than the
management and operation of the Mortgaged Property; and (c) shall not maintain its assets in a way difficult to segregate and identify. 
  

 PAGE 40 

 34. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and the rights granted by this
Instrument shall inure to, the respective successors and assigns of Lender and Borrower. However, a Transfer not permitted by Section 21 shall be an Event of Default. 
 35. JOINT AND SEVERAL LIABILITY. If more than one person or entity signs this Instrument as Borrower, the obligations of such persons and entities
shall be joint and several. 
 36. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY. 
 (a) The relationship between Lender and Borrower shall be solely that of creditor and debtor, respectively, and nothing contained in this Instrument
shall create any other relationship between Lender and Borrower. 
 (b) No creditor of any party to this Instrument and no other person shall
be a third party beneficiary of this Instrument or any other Loan Document. Without limiting the generality of the preceding sentence, (i) any arrangement (a “Servicing Arrangement”) between the Lender and any Loan
Servicer for loss sharing or interim advancement of funds shall constitute a contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (ii) Borrower shall 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. 
 37. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability of any provision of this Instrument shall not affect the validity or enforceability of any other provision, and all other provisions shall remain
in full force and effect. This Instrument contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Instrument. This Instrument may not be amended or modified except by a writing signed by the party
against whom enforcement is sought; provided, however, that in the event of a Transfer prohibited by or requiring Lender’s approval under Section 21, any or some or all of the Modifications to Instrument set forth in Exhibit B (if
any) may be modified or rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s). 
 38.
CONSTRUCTION. The captions and headings of the Sections of this Instrument are for convenience only and shall be disregarded in construing this Instrument. Any reference in this Instrument to an “Exhibit” or a “Section”
shall, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit attached to this Instrument or to a Section of this Instrument. All Exhibits attached to or referred to in this Instrument are incorporated by
reference into this Instrument. Any reference in this Instrument to a statute or regulation shall be construed as referring to that statute or regulation as amended from time to time. Use of the singular in this Agreement includes the plural and use
of the plural includes the singular. As used in this Instrument, the term “including” means “including, but not limited to.” 
  

 PAGE 41 

 39. DISCLOSURE OF INFORMATION. Lender may furnish information regarding Borrower or the Mortgaged
Property to third parties with an existing or prospective interest in the servicing, enforcement, evaluation, performance, purchase or securitization of the Indebtedness, including but not limited to trustees, master servicers, special servicers,
rating agencies, and organizations maintaining databases on the underwriting and performance of multifamily mortgage loans. Borrower irrevocably waives any and all rights it may have under applicable law to prohibit such disclosure, including but
not limited to any right of privacy. 
 40. NO CHANGE IN FACTS OR CIRCUMSTANCES. Borrower warrants that (a) all information in
the application for the loan submitted to Lender (the “Loan Application”) and in all financial statements, rent schedules, reports, certificates and other documents submitted in connection with the Loan Application are complete and
accurate in all material respects; and (b) there has been no material adverse change in any fact or circumstance that would make any such information incomplete or inaccurate. 
 41. SUBROGATION. If, and to the extent that, the proceeds of the loan evidenced by the Note are used to pay, satisfy or discharge any obligation
of Borrower for the payment of money that is secured by a pre-existing mortgage, deed of trust or other lien encumbering the Mortgaged Property (a “Prior Lien”), such loan proceeds shall be deemed to have been advanced by Lender at
Borrower’s request, and Lender shall automatically, and without further action on its part, be subrogated to the rights, including lien priority, of the owner or holder of the obligation secured by the Prior Lien, whether or not the Prior Lien
is released. 
 42. ADJUSTABLE RATE MORTGAGE - THIRD PARTY CAP AGREEMENT “CAP COLLATERAL.” 
 (a) If the Note provides for interest to accrue at an adjustable or variable interest rate (other than during the “Extension Period,” as
defined in the Note, if applicable), then the definition of “Mortgaged Property” shall include the “Cap Collateral.” The “Cap Collateral” shall mean 
  

	 	(i)	any interest rate cap agreement, interest rate swap agreement, or other interest rate-hedging contract or agreement obtained by Borrower as a requirement of any Loan Document or as
a condition of Lender’s making the Loan (a “Cap Agreement”); 

  

	 	(ii)	any and all moneys (collectively, “Cap Payments”) payable pursuant to any Cap Agreement by the interest rate cap provider or other counterparty to a Cap Agreement
or any guarantor of the obligations of any such cap provider or counterparty (a “Cap Provider”); 

  

	 	(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 Instrument; 

  

 PAGE 42 

	 	(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 Payment whether existing now or granted
after the date of this Instrument; 

  

	 	(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
Instrument; and 

  

	 	(vi)	all cash and non-cash proceeds and products of (ii) – (v) above. 

 (b) As additional security for Borrower’s obligation under the Loan Documents, Borrower hereby assigns and pledges to Lender all of Borrower’s right, title and interest in and to the Cap Collateral. Borrower
has instructed and will instruct each Cap Provider and any guarantor of a Cap Provider’s obligations to make Cap Payments directly to Lender or to Loan Servicer on behalf of Lender. 
 (c) 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. 
 (d) Following an Event of Default, in addition to any other rights and remedies Lender may
have, Lender may retain any Cap Payments and apply them to the Indebtedness in such order and amounts as Lender determines. Neither the existence of a Cap Agreement nor anything in this Instrument shall 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. 
 (e) If the Note does not provide for
interest to accrue at an adjustable or variable interest rate (other than during the Extension Period) then this Section 42 shall be of no force or effect. 
 [END OF UNIFORM COVENANTS; STATE-SPECIFIC PROVISIONS FOLLOW] 
 43. ACCELERATION; REMEDIES. At any time during the
existence of an Event of Default, Lender, at Lender’s option, may declare the Indebtedness to be immediately due and payable without further demand, and may request Trustee to exercise the power of sale and Lender may exercise any other
remedies permitted by applicable law or provided in this Instrument or in any other Loan Document. Borrower acknowledges that the power of sale 

  

 PAGE 43 

 
granted in this Instrument may be exercised by Trustee without prior judicial hearing. Borrower has the right to bring an action to assert the non-existence
of an Event of Default or any other defense of Borrower to acceleration and sale. Lender shall be entitled to collect all costs and expenses incurred in pursuing such remedies, including attorneys’ fees, costs of documentary evidence, abstracts
and title reports. 
 If Lender invokes the power of sale, Lender or Trustee shall mail copies of the notice of sale to Borrower and to other
persons prescribed by applicable law in the manner provided by applicable law. Trustee may sell the Mortgaged Property at the time and place and under the terms designated in the notice of sale in one or more parcels and in such order as Trustee may
determine. Trustee may postpone sale of all or any parcel of the Mortgaged Property to any later time on the same date by public announcement at the time and place of any previously scheduled sale. Lender or Lender’s designee may purchase the
Mortgaged Property at any sale. 
 Trustee shall deliver to the purchaser at the sale, within a reasonable time after the sale, a deed
conveying the Mortgaged Property so sold without any covenant or warranty, express or implied. The recitals in Trustee’s deed shall be prima facie evidence of the truth of the statements contained in those recitals. Trustee shall apply the
proceeds of the sale in the following order: (a) to all costs and expenses of the sale, including Trustee’s fees in the amount allowed by applicable law, attorneys’ fees and costs of title evidence; (b) to the Indebtedness in
such order as Lender, in Lender’s discretion, directs; and (c) the excess, if any, to the person or persons legally entitled to it. 
 Lender shall have the right on one or more occasions to institute one or more actions or proceedings at law or in equity to enforce the rights and remedies of Lender under this Instrument. 
 Trustee hereby lets the Mortgaged Property to Borrower until a sale is held under the foregoing provisions or until the occurrence of an Event of
Default, upon the following terms and conditions: Borrower, and all persons claiming or possessing the Mortgaged Property or any part thereof by, through or under Borrower, shall pay rent therefore during said term at the rate of one cent
(1¢) per month, payable monthly upon demand, and shall surrender immediate peaceable possession of the Mortgaged Property and any and every part thereof sold under the foregoing power of sale to the purchaser at such sale, without notice
or demand therefore, and shall and will at once, without notice, surrender possession of the Mortgaged Property and every part thereof in the event Lender shall take charge and enter the Mortgaged Property as provided in this Instrument. 

44. RELEASE. Upon payment of the Indebtedness, Lender shall release the lien of this Instrument. Borrower shall pay Lender’s reasonable
costs incurred in releasing this Instrument. 
 45. FINANCING STATEMENT. As provided in Section 2, this Instrument constitutes a
financing statement with respect to any part of the Mortgaged Property which is or 

  

 PAGE 44 

 
may become a Fixture and for the purposes of such financing statement: (a) the Debtor shall be Borrower and the Secured Party shall be Lender;
(b) the addresses of Borrower as Debtor and of Lender as Secured Party are as specified above in the first paragraph of this Instrument; (c) the name of the record owner is Borrower; (d) the types or items of collateral consist of any
part of the Mortgaged Property which is or may become a Fixture; and (e) the social security number or the federal employer identification number of Borrower as Debtor is. 
 46. APPOINTMENT OF RECEIVER. Section 3(b) and Section 4(d) are amended by (i) deleting the following phrase, each time it appears:
“Lender entering upon and taking and maintaining control of the Mortgaged Property,” and (ii) inserting the following new phrase in its place: “Lender entering upon and taking and maintaining control or possession of the
Mortgaged Property or any equivalent action.” 
 47. FURTHER ASSURANCES FOR TRUSTEE. Borrower shall execute, acknowledge, and
deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing statements, transfers and assurances as Trustee may require from time to time in order to better assure, grant, and convey to
Trustee the rights intended to be granted, now or in the future, to Trustee under this Instrument. 
 48. SUCCESSOR TRUSTEE. Lender,
at Lender’s option, with or without cause, may from time to time remove Trustee and appoint a successor trustee by an instrument recorded in the city or county in which this Instrument is recorded. Without conveyance of the Mortgaged Property,
the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee in this Instrument and by applicable law. For purposes of this Instrument, the term “Trustee” means the person identified as Trustee in the
first paragraph of this Instrument and any successor trustee appointed by Lender pursuant to this Section or otherwise appointed as permitted by law. 
 49. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE
PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL. 
 ATTACHED EXHIBITS. The
following Exhibits are attached to this Instrument: 
  

					
	x	  	Exhibit A	  	 Description of the Land (required).

			
	x	  	Exhibit B	  	 Modifications to Instrument

  

 PAGE 45 

 IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or has caused this
Instrument to be signed and delivered by its duly authorized representative. 
  

			
	KC PHEASANT ASSOCIATES, LLC,
	a Delaware limited liability company
		
	By:	 	JTL Asset Management, Inc.,
		 	a Missouri corporation,
		 	its Managing Member

					
			
		 	By:	 	/s/ James E. Lippert
		 		 	James E. Lippert, President

 STATE OF
MISSOURI                    ) 
                                        
           )ss. 
 COUNTY
OF                                    ) 
 On this ______ day of September, 2007, before me, the undersigned, a Notary Public in and for the State of Missouri, duly commissioned and sworn,
personally appeared James E. Lippert, to me known to be the President of JTL Asset Management, Inc., a Missouri corporation the Managing Member of KC Pheasant Associates, LLC, a Delaware limited liability company, described in the foregoing
instrument, acknowledged to me that he signed and sealed the foregoing instrument as the free and voluntary act and deed of the company, for the uses and purposes therein mentioned. 
 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year above written. 
  

	
	
	  
	Notary Public
	My Commission
Expires:                            

					
	Signature Page - Pheasant Run Apartments - Security Instrument	  	
	Page S-1

 EXHIBIT A 
 [DESCRIPTION OF THE LAND] 
  

 PAGE A-1 

 EXHIBIT B 
 MODIFICATIONS TO INSTRUMENT 
 The following modifications are made to the text of the Instrument that precedes this Exhibit:

  

	1.	Section 21(c) of the Security Instrument will be amended by adding the following new subsections (viii) and (ix): 

  

	 	(viii) 	A Transfer of shares in that certain real estate investment trust that has a Controlling Interest in PRIP or the Transfer of limited partnership interests in the operating
partnership of such real estate investment trust, which operating partnership is the sole member of PRIP. 

  

	 	(ix)	The removal of the managing member entity of the Borrower (i.e., JTL Asset Management, Inc., which is wholly owned and controlled by James T. Lippert) and replacement by PRIP 1102,
LLC, a Delaware limited liability company (“PRIP”) (a current non-managing member of Borrower), in strict accordance with PRIP’s rights under the limited liability company agreement of Borrower in effect as of the date of this
Instrument, provided the following conditions are satisfied: 

  

	 	(A)	Such replacement managing member must be acceptable to Lender in its reasonable discretion; 

  

	 	(B)	Such replacement managing member must execute and deliver a replacement Guaranty on Lender’s standard form and which is otherwise acceptable to Lender in its reasonable
discretion; 

  

	 	(C)	Borrower shall provide Lender with prior written Notice of the proposed Transfer, which Notice must be accompanied by a non-refundable review fee in the amount of $3,000;

  

	 	(D)	Lender shall not be entitled to collect a transfer fee as a result of such Transfer; and 

  

	 	(E)	Lender shall be entitled to collect all costs, including the cost of all title searches, title insurance and recording costs, and all Attorneys’ Fees and Costs.

  

 PAGE B-1 

	2.	The following Section 50 is added in full as follows: 

 [50.] REGULATORY AGREEMENT OR AFFORDABLE HOUSING AGREEMENT. Lender acknowledges that the Mortgaged Property is subject to a LAND USE RESTRICTION AGREEMENT (the “Agreement”) in favor of The Industrial Development
Authority of the County of Jackson, State of Missouri (the “Housing Authority”). Borrower represents and warrants to Lender as follows: 
 (a) Annual Compliance. Borrower will submit to Lender on an annual basis, evidence that the Mortgaged Property is in ongoing compliance with all income, occupancy and rent restrictions under the Agreement
relating to the Mortgaged Property. Such submissions to Lender will be made contemporaneously with the submission of reports to the Housing Authority as required under the Agreement. 
 (b) Reporting Requirements. Borrower will promptly provide Lender with a copy of any notice Borrower receives alleging that Borrower is in breach
of the Agreement. Borrower will provide Lender with Notice at such time as the Agreement is terminated 
 (c) Cross-Default. Borrower
acknowledges and agrees that any default, event of default, or breach (however such terms may be defined) after the expiration of any applicable notice and/or cure periods under the Agreement will be an Event of Default under this Instrument and
that any costs, damages or other amounts, including reasonable attorney’s fees incurred by the Lender as a result of such an Event of Default by Borrower, including amounts paid to cure any default or event of default, under the Agreement will
be an obligation of Borrower and become a part of the Indebtedness secured by this Instrument. 
 (d) Lender’s Consent. Borrower
agrees to obtain Lender’s prior approval for an amendment or modification of the Agreement. 
  

 PAGE B-2

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