Hazard Insurance. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Sellers as of the date of origination consistent with the Underwriting Guidelines, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount not less than the greatest of # 100% of the replacement cost of all improvements to the Mortgaged Property, # the outstanding principal balance of the Mortgage Loan, or # the amount necessary to avoid the operation of any co-insurance provisions with respect to the Mortgaged Property, and consistent with the amount that would have been required as of the date of origination in accordance with the Underwriting Guidelines. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Emergency Management Agency is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of # the outstanding principal balance of the Mortgage Loan, # the full insurable value of the Mortgaged Property, and # the maximum amount of insurance available under the National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1974. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard mortgagee clause naming a Seller, its successors and assigns (including, without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without thirty (30) days’ prior written notice to the mortgagee. No such notice has been received by any Seller. All premiums on such insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the mortgagee to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from such Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer and is in full force and effect. No Seller has engaged in, and has no knowledge of the

Hazard Insurance. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Sellers as of the date of origination consistent with the Underwriting Guidelines, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount not less than the greatest of # 100% of the replacement cost of all improvements to the Mortgaged Property, # the outstanding principal balance of the Mortgage Loan, or # the amount necessary to avoid the operation of any co-insurance provisions with respect to the Mortgaged Property, and consistent with the amount that would have been required as of the date of origination in accordance with the Underwriting Guidelines. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Emergency Management Agency is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of # the outstanding principal balance of the Mortgage Loan # the full insurable value of the Mortgaged Property, and # the maximum amount of insurance available under the National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1974. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard mortgagee clause naming a Seller, its successors and assigns (including, without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without thirty (30) days’ prior written notice to the mortgagee. No such notice has been received by any Seller. All premiums on such insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the mortgagee to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from such Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer and is in full force and effect. No Seller has engaged in, and has no knowledge of the Mortgagor’s having engaged in, any act or omission

Hazard Insurance. All buildings or other customarily insured improvements upon the Rental Property (including loss of Rental Proceeds with respect to the Rental Property) are insured by an insurer against loss by fire, hazards of extended coverage and such other hazards in an amount not less than the lesser of the related BPO value and the replacement value of such Rental Property.

Hazard Insurance. All buildings or other customarily insured improvements upon the Underlying REO Property are insured by an insurer against loss by fire, hazards of extended coverage and such other hazards in an amount not less than the BPO value.

Application of Hazard Insurance Proceeds. Borrowers shall after learning thereof promptly notify Lender of any damage or casualty to all or any portion of any Property or Chattels. Lender may participate in all negotiations and appear and participate in all judicial or arbitration proceedings concerning any insurance proceeds that may be payable as a result of such casualty or damage, and may, in Lender’s sole discretion, compromise or settle, in the names of both Borrowers and Lender, any claim for any such insurance proceeds; provided, however, that in any event any such compromise or settlement shall be subject to the prior consent of Lender, which may be granted or withheld in Lender’s discretion. Any such insurance proceeds shall be paid directly to Lender and shall be applied first to reimburse Lender for all out-of-pocket costs and expenses, including, without limitation, reasonable attorneys’ fees, incurred by Lender in connection with the ascertainment and collection of such insurance proceeds. The balance, if any, of any insurance proceeds received by Lender with respect to an insured damage or casualty shall be, in Lender’s sole discretion, either # retained and applied by Lender first toward payment of the Secured Obligations in such order and manner as Lender deems appropriate, or # paid over, in whole or in part and subject to such conditions as Lender may impose, to Borrowers to pay for repairs or replacements necessitated by the damage or casualty. In the event that all of the Secured Obligations have been performed or are discharged by the application of less than all of such insurance proceeds, then, any remaining proceeds shall be paid over to Borrowers. Notwithstanding the foregoing provisions of this [Section 5.1.16(D)], Lender shall pay over to Borrowers any such insurance proceeds as provided in clause (ii) of the immediately preceding sentence, provided that, and on the following conditions: # there does not exist any Default or Event of Default, # Borrowers demonstrate to the reasonable satisfaction of Lender that Borrowers have the financial ability to pay all principal and interest and any other amounts required to be paid under this Agreement and the Note, and perform all of the other Secured Obligations, during the restoration of the applicable Property from Gross Revenue (including, without limitation, proceeds of rent loss or business interruption insurance) or otherwise, # the damage or casualty occurs prior to the date that is six (6) months prior to the Loan Maturity Date and the restoration is capable of being completed prior to the Loan Maturity Date, # all insurance proceeds and other funds provided by Borrowers for such restoration are released under reserve and construction funding arrangements reasonably satisfactory to Lender, # the repair or restoration will return the applicable Property to substantially the same size, design and utility as existed immediately prior to the damage or casualty, # in the event the proceeds of insurance are insufficient to pay for the restoration (as reasonably determined by Lender), Borrowers shall, prior to the commencement of any restoration work, deposit with Lender not later than the date that is fifteen (15) days following the date that Borrowers receive written notification from Lender of such deficiency, such additional funds as are necessary to complete the restoration as reasonably determined by Lender; # Borrowers undertake and covenant and agree (in writing) with Lender to fund any and all deficiencies, and in fact actually fund any and all such deficiencies, not later than the date that is fifteen (15) days following the date that the proceeds of insurance are received by Lender and prior to the distribution of any further insurance proceeds, such that at all times the funds held by Lender and remaining to be disbursed for purposes of the restoration shall be sufficient to complete the restoration; # the annual Gross Revenue that will survive the restoration or repair of the applicable Property produces a Debt Service Coverage Ratio of not less than 1.20 to 1.0 and Borrowers demonstrate to Lender’s satisfaction that Borrowers shall be able to attain a Debt Service Coverage Ratio of at least 1.20 to 1.0 from Gross Revenue within six (6) months following completion of the restoration; and # if any site plan amendment, variance, special use permit or other similar special approval or consent is required from any government authority or any other Person for such repair or restoration, Borrowers shall obtain and deliver to Lender such site plan amendment, variance, special use permit or other similar special approval or consent not later than the date that is one hundred eighty (180) days following the date of such casualty or damage (provided, however, that such one hundred eighty (180) day time period shall in all respects be subject to the foregoing provisions of this [Section 5.1.16(D)] and shall not extend or otherwise modify any time periods in such foregoing provisions).

Flood Hazard Area. None of the Land or Improvements are located in a Special Flood Hazards Area or, if located within any such area, the applicable Borrower has and will maintain the flood insurance prescribed in Section 2.06 below.

Natural Hazard Disclosures. As used herein, the term “Natural Hazard Area” shall mean those areas identified as natural hazard areas or natural hazards in the Natural Hazard Disclosure Act, California Government Code Sections 8589.3, 8589.4 and 51183.5, and California Public Resources Code Sections 2621.9, 2694 and 4136, and any successor statutes or laws (the “Act”). Purchaser hereby acknowledges that, prior to the Date of this Agreement, Seller has provided Purchaser with a Natural Hazard Disclosure Statement (the “Disclosure Statement”) in a form required by the Act. Purchaser acknowledges that Seller retained the services of First American Professional Real Estate Services, Inc. to examine the maps and other information made available to the public by government agencies for the purpose of enabling Seller to fulfill its disclosure obligations with respect to the Act and to prepare the written report of the result of its examination (the “Report”). Purchaser acknowledges that the Report fully and completely discharges Seller from its disclosure obligations under the Act and under California Civil Code Sections 1102 through 1102.17. Purchaser acknowledges and agrees that nothing contained in the Disclosure Statement releases Purchaser from its obligation to fully investigate and satisfy itself with the condition of the Property during the Due Diligence Period, including, without limitation, whether the Property is located in any Natural Hazard Area. Purchaser further acknowledges and agrees that the matters set forth in the Disclosure Statement or Report may change on or prior to the Closing Date and that Seller has no obligation to update, modify or supplement the Disclosure Statement or Report. Purchaser is solely responsible for preparing and delivering its own Disclosure Statement to subsequent prospective purchasers of the Property.

Flood Hazard Determination. Lender shall have received evidence satisfactory to it that the Property is not located in an area designated by the Secretary of Housing and Urban Development as an area having special flood or mudslide hazards, and that flood hazard insurance is not required for any credit to be extended hereunder pursuant to any Applicable Law.

The real property (and improvements thereon) that is required to be subject to the Mortgage herein is not a Flood Hazard Property unless the Lender shall have received the following: # the applicable Loan Party’s written acknowledgment of receipt of written notification # as to the fact that such real property is a Flood Hazard Property, # as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and # such other flood hazard determination forms, notices and confirmations thereof as requested by the Lender and # if the community in which such Flood Hazard Property is located is participating in the National Flood Insurance Program, copies of insurance policies or certificates of insurance of the applicable Loan Party evidencing flood insurance reasonably satisfactory to the Lender and naming the Lender as a loss payee. All flood hazard insurance policies required hereunder have been obtained and remain in full force and effect, and the premiums thereon have been paid in full.

“Special Flood Hazard Area” means a “Special Flood Hazard Area” as designated on any Flood Insurance Rate Map published by FEMA.