Exhibit 10.31


 


Marquis at Cascade I


f/k/a The Mansions at The Cascades I


 


INTEREST RATE CAP RESERVE AND SECURITY
AGREEMENT


 


This INTEREST RATE CAP RESERVE AND SECURITY
AGREEMENT (this "Agreement"), dated as of June 9, 2017, is by and between BR CWS CASCADES I OWNER,
LLC, a Delaware limited liability company ("Borrower"), and FANNIE MAE, a corporation duly
organized under the Federal National Mortgage Association Charter Act, as amended, 12 U.S.C. §1716 et seq. and duly
organized and existing under the laws of the United States ("Lender").


 


RECITALS:


 


A.           Pursuant
to that certain Multifamily Loan and Security Agreement dated May 27, 2014, executed by and between BRE MF Cascades I LLC, a Delaware
limited liability company ("Original Borrower") and Wells Fargo Bank, National Association, a national banking
association ("Original Lender") (as amended, restated, replaced, supplemented or otherwise modified from time
to time, the "Loan Agreement"), Original Lender has agreed to make a loan to Original Borrower in the original
principal amount of $33,207,000.00 (the "Mortgage Loan"), as evidenced by, among other things, that certain Multifamily
Note dated May 27, 2014, executed by Original Borrower and made payable to Lender in the amount of the Mortgage Loan (as amended,
restated, replaced, supplemented or otherwise modified from time to time, the "Note").


 


B.           In
addition to the Loan Agreement, the Mortgage Loan and the Note are also secured by a certain Multifamily Mortgage, Deed of Trust
or Deed to Secure Debt (as amended, restated, replaced, supplemented or otherwise modified from time to time, the "Security
Instrument"), dated as of May 27, 2014, granting a lien on certain real property located in Tyler (Smith County), Texas
(the "Mortgaged Property").


 


C.           Borrower
is assuming the Mortgage Loan from Original Borrower.


 


D.           Lender
has required, and Borrower has agreed to acquire, maintain and pledge to Lender an interest rate cap (the "Interest Rate
Cap"), pursuant to one or more interest rate cap agreements, in order to provide additional support and collateral for
Borrower's obligations to Lender under the Loan Agreement and other Loan Documents (as defined in the Loan Agreement).


 


E.           To
the extent that the term of the initial Interest Rate Cap acquired by Borrower is less than the term of the Mortgage Loan, Borrower
is required to make monthly deposits with Lender for the acquisition of a subsequent Interest Rate Cap, such deposits to be held
in an escrow account by Lender pursuant to the terms of this Agreement.


 


F.           Borrower
and Lender are entering into this Agreement to (i) evidence Borrower's obligation to maintain an Interest Rate Cap for the remaining
term of the Mortgage Loan, (ii) evidence Borrower's obligation to make monthly deposits for the acquisition of a subsequent Interest
Rate Cap (if applicable), and (iii) provide further security for Borrower's obligations under the Loan Documents.


 




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NOW, THEREFORE, in
consideration of the above and the mutual promises contained in this Agreement and for other valuable consideration, including
Lender's making the Mortgage Loan to Borrower, the receipt and sufficiency of which are acknowledged, Borrower and Lender agree
as follows:


 


ARTICLE 1


DEFINITIONS; RULES OF CONSTRUCTION


 


Section 1.01         Recitals.


 


The recitals set
forth above are incorporated herein by reference as if fully set forth in the body of this Agreement.


 


Section 1.02         Defined Terms.


 


Capitalized terms
used and not specifically defined herein shall have the meanings given to such terms in the Loan Agreement. Unless otherwise defined
in this Agreement, terms used in this Agreement that are defined in the UCC shall have the meaning given those terms in the UCC.
The following terms in this Agreement shall have the following meanings:


 


"Collateral"
means the items listed in Section 4.0l(a) through Section 4.0l(k) of this Agreement.


 


"Collateral Liens" means
any lien, security interest, option or other charge or encumbrance.


 


"Counterparty"
means (a) an interest rate cap provider acceptable to Lender under the Interest Rate Cap Documents, or (b) a counterparty
on any list of acceptable counterparties for interest rate caps of the type required by this Agreement maintained by Lender, as
any such list may be modified by Lender from time to time.


 


"Event of Default" has
the meaning set forth in Section 7.01 of this Agreement.


 


"Initial Interest
Rate Cap" means the initial Interest Rate Cap purchased by Borrower with respect to the Mortgage Loan.


 


"Initial
Interest Rate Cap Term" means the period in which the Initial Interest Rate Cap shall be in effect, beginning on
or prior to the Effective Date and terminating not earlier than the first to occur of (a) the last day of the forty-eighth (48th)
full calendar month thereafter and (b) the Maturity Date.


 


"Interest Rate Cap" has
the meaning set forth in Recital C of this Agreement.


 


"Interest
Rate Cap Documents" means the rate cap agreements and related documentation in form and content acceptable to Lender.


 


"Interest
Rate Cap Reserve Escrow" means all Monthly Deposits and all other funds held in the Interest Rate Cap Reserve Escrow Account.


 


"Interest
Rate Cap Reserve Escrow Account" means an interest-bearing account which meets the standards for custodial accounts as
required by Lender from time to time.


 




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"Monthly
Deposit" means, with respect to the first six (6) months after the purchase of the Initial Interest Rate Cap, an
amount equal to one-forty-eighth (1148th) of one hundred percent (100%) of the cost, as reasonably estimated by Lender, to obtain
any required Subsequent Interest Rate Cap. Thereafter, the Monthly Deposit shall mean the amount determined by Lender in accordance
with Section 3.02 of this Agreement.


 


"Payment
Date" means the date by which the Counterparty requires payment of the Purchase Price.


 


"Payments"
means any and all moneys payable to Borrower, from time to time, pursuant to the Interest Rate Cap Documents by the
Counterparty, whether credited to the Interest Rate Cap Reserve Escrow Account, held in the course of payment or collection by
Lender, or otherwise.


 


"Purchase Price" means
the purchase price of the Subsequent Interest Rate Cap.


 


"Required Strike Rate" means
four percent (4.00%).


 


"Subsequent
Interest Rate Cap" means a subsequent Interest Rate Cap required to be purchased and pledged to Lender pursuant
to the terms of this Agreement.


 


"Subsequent
Interest Rate Cap Term" means the period in which the Subsequent Interest Rate Cap shall be in effect, beginning
on or prior to the termination date of the Interest Rate Cap then in effect and terminating not earlier than the first to occur
of (a) the last day of the forty-eighth (48th) full calendar month thereafter and (b) the
Maturity Date.


 


"UCC"
means the Uniform Commercial Code as adopted in the state in which Borrower is organized.


 


ARTICLE
2


TERMS OF INTEREST RATE CAP


 


Section 2.01         General
Terms.


 


To protect
against fluctuations in interest rates during the term of the Mortgage Loan, Borrower shall make arrangements for an Interest Rate
Cap to be in place and maintained at all times with respect to the Mortgage Loan in accordance with the following terms and conditions:


 


(a)          Term.


 


Except
as hereinafter permitted, the Initial Interest Rate Cap shall be in effect for the Initial Interest Rate Cap Term. If
the Initial Interest Rate Cap Term is less than the term of the Mortgage Loan, a Subsequent Interest Rate Cap shall be required.
Any Subsequent Interest Rate Cap shall be in effect for the Subsequent Interest Rate Cap Term.


 


(b)          Notional
Amount.


 


The notional
amount of the Initial Interest Rate Cap shall be equal to the original principal balance of the Mortgage Loan for the entire term
of the Initial Interest Rate Cap. The notional amount of any Subsequent Interest Rate Cap shall be equal to the outstanding principal
balance of the Mortgage Loan at the time that any Subsequent Interest Rate Cap is to become effective. Unless otherwise agreed
by Lender, the notional amount of any Interest Rate Cap shall not amortize over its term.


 




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(c)          Strike
Rate.


 


Each Initial
and any Subsequent Interest Rate Cap shall have a strike rate equal to or less than the Required Strike Rate.


 


(d)          Interest
Rate Cap Documents and Counterparty.


 


All Interest
Rate Caps shall be evidenced, governed and secured on terms and conditions pursuant to Interest Rate Cap Documents between Borrower
and the Counterparty.


 


Section 2.02         Payments
Made under Interest Rate Cap.


 


The Interest
Rate Cap Documents shall require the Counterparty to make all payments due under the Interest Rate Cap directly to Lender for so
long as the Interest Rate Cap is subject to the pledge established hereunder. Such payments will be paid over to Borrower only
if (a) there is no Event of Default, and (b) Lender has received payment in full for all amounts due on the Mortgage Loan as required
by the Loan Documents.


 


Section 2.03         Rights
and Remedies under Interest Rate Cap Documents.


 


For so
long as an Interest Rate Cap is pledged as collateral for the Mortgage Loan pursuant to the terms of this Agreement, Borrower shall
not exercise any right or remedy under any Interest Rate Cap Documents without Lender's prior written consent and shall exercise
its rights and remedies under the Interest Rate Cap Documents as directed by Lender in writing. Rights and remedies under the Interest
Rate Cap Documents include, but are not limited to, any right to designate an "Early Termination Date" or otherwise terminate
the Interest Rate Cap due to the occurrence of a "Termination Event," an "Additional Termination Event" or
an "Event of Default." All capitalized terms appearing in this Section 2.03 in quotation marks are used as defined in
the Interest Rate Cap Documents.


 


Section 2.04         Termination
of Interest Rate Cap.


 


Borrower
shall not terminate, transfer or consent to any transfer of any existing Interest Rate Cap without Lender's prior written consent;
provided, however, that if, and at such time as any amounts due and owing on the Mortgage Loan as required by the Loan Documents
are paid in full or if the Mortgage Loan is converted to a fixed rate of interest, Borrower shall have the right to terminate the
existing Interest Rate Cap in accordance with Section 8.02 of this Agreement. If an Interest
Rate Cap unexpectedly and unavoidably terminates or terminates for any reason on a date other than its scheduled expiration date
without the prior written consent of Lender, Borrower shall, within ten (10) Business Days of such termination, obtain a new Interest
Rate Cap satisfying the requirements of this Agreement.


 


ARTICLE
3


INTEREST RATE CAP RESERVE ESCROW ACCOUNT


 


Section 3.01         Obligation
to Maintain Interest Rate Cap Reserve Escrow Account.


 


During any
period in which an Interest Rate Cap with an original term of less than the remaining term of the Mortgage Loan is in effect, Borrower
is required to make Monthly Deposits to be held in the Interest Rate Cap Reserve Escrow Account to provide a cash reserve for the
purchase of a Subsequent Interest Rate Cap. Borrower shall, with each monthly payment due on the Mortgage Loan, deposit with Lender
the Monthly Deposit into the Interest Rate Cap Reserve Escrow Account.


 




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Section 3.02         Adjustment
of Monthly Deposit.


 


At the end of each
six (6) month period following the date of this Agreement, Lender shall estimate the cost of the Subsequent Interest Rate Cap and
shall adjust the Monthly Deposit based on the then current estimate for purchase of the Subsequent Interest Rate Cap. No adjustment
shall be made to the Monthly Deposit if Lender determines that the current estimate of the cost of the Subsequent Interest Rate
Cap remains the same or has decreased. Borrower shall continue to make the Monthly Deposits at the level required for the most
recent six (6) month period until Lender delivers written notice of a change in the amount of the Monthly Deposit.


 


Section 3.03         Terms
of Interest Rate Cap Reserve Escrow Account.


 


Lender shall deposit
the Monthly Deposits into the Interest Rate Cap Reserve Escrow Account. Lender or a designated representative of Lender shall have
the sole right to make withdrawals from the Interest Rate Cap Reserve Escrow Account. All interest earned on or profits realized
from amounts on deposit in the Interest Rate Cap Reserve Escrow Account shall be added to and become part of the Interest Rate
Cap Reserve Escrow. Lender shall not be responsible for any losses resulting from the investment of the Interest Rate Cap Reserve
Escrow or for obtaining any specific level or percentage of earnings on such investment. If applicable
law requires and provided no Event of Default exists under any of the Loan Documents, Lender shall pay to Borrower the interest
earned on the Interest Rate Cap Reserve Escrow on January 1 of each year. Otherwise, all interest earnings shall remain in the
Interest Rate Cap Reserve Escrow Account.


 


Section 3.04         Lender's
Duties Regarding the Interest Rate Cap Reserve Escrow Account.


 


Lender acknowledges that:


 


(a)          it
will hold the Monthly Deposits and any investments in the Interest Rate Cap Reserve Escrow pursuant to the terms of this Agreement;


 


(b)          it
will credit all Monthly Deposits and any investments in the Interest Rate Cap Reserve Escrow on its own books and records to the
Interest Rate Cap Reserve Escrow Account, subject to the security interests created in this Agreement;


 


(c)          it
will hold all Monthly Deposits for the credit of the Interest Rate Cap Reserve Escrow, subject to the security interest and the
terms of this Agreement; and


 


(d)          it
will keep accurate records regarding amounts on deposit in the Interest Rate Cap Reserve Escrow Account and any interest earned
on or profits realized from amounts on deposit in the Interest Rate Cap Reserve Escrow Account.


 


Section 3.05         Irrevocable
Deposits in Escrow.


 


All deposits into
the Interest Rate Cap Reserve Escrow Account constitute irrevocable payments in escrow solely for use as described in this Agreement.
Borrower shall not have any control over the use of, or any right to withdraw, any moneys from the Interest Rate Cap Reserve Escrow
Account or any proceeds thereof except as provided in Section 3.07 of this Agreement, nor shall Borrower have any right, title
or interest in the Interest Rate Cap Reserve Escrow Account, other than Borrower's right to receive interest pursuant to Section
3.03 above.


 




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Section 3.06         Request for Disbursement.


 


At least ten (I
0) Business Days prior to the date on which the Initial Interest Rate Cap is to expire, Borrower shall be required to purchase
the Subsequent Interest Rate Cap on terms and conditions satisfactory to Lender. In such event, and provided that funds are available
in the Interest Rate Cap Reserve Escrow Account, Borrower shall request a withdrawal from the Interest Rate Cap Reserve Escrow
Account to acquire the Subsequent Interest Rate Cap. Each written request for disbursement from the Interest Rate Cap Reserve Escrow
Account shall specify (a) the Purchase Price, (b) the name, address, contact name, telephone number and wiring instructions of
the Counterparty, (c) the Payment Date, and (d) such other information as Lender may require.


 


Section 3.07         Disbursement for Purchase
of Subsequent Interest Rate Cap.


 


Upon receipt by Lender
of a written request from Borrower in accordance with Section 3.6 above, and the determination by Lender that all applicable terms
and conditions of this Agreement have been satisfied, Lender shall disburse to the Counterparty of the Subsequent Interest Rate
Cap, an amount from the Interest Rate Cap Reserve Escrow Account equal to the lesser of (a) the Purchase Price, or (b) the amount
then on deposit in the Interest Rate Cap Reserve Escrow Account. In no event shall Lender be obligated to disburse funds from the
Interest Rate Cap Reserve Escrow Account if an Event of Default has occurred and is continuing.


 


Section 3.08         Remaining Balance After
Payment of Purchase Price.


 


Provided that Borrower
has no obligation to purchase additional Subsequent Interest Rate Caps under the terms of this Agreement, any balance remaining
in the Interest Rate Cap Reserve Escrow Account after payment of the Purchase Price shall be delivered to Borrower on or promptly
following the Payment Date. Borrower's obligation to make Monthly Deposits hereunder shall cease and terminate upon the earlier
of (a) purchase of a Subsequent Interest Rate Cap with a term of at least the entire remaining term of the Mortgage Loan, (b) conversion
of the Mortgage Loan to a fixed rate of interest, and (c) payment in full of the Mortgage Loan.


 


ARTICLE 4


SECURITY INTEREST IN COLLATERAL; FURTHER
ASSURANCES


 


Section 4.01         Security Interest in Collateral.


 


As security for the
Indebtedness, Borrower hereby grants to Lender, its successors and assigns, a lien and continuing security interest in all of Borrower's
right, title and interest in and to the following Collateral whether now owned or hereafter acquired:


 


(a)          the
Interest Rate Cap and the Interest Rate Cap Documents representing the Initial Interest Rate Cap and any Subsequent Interest Rate
Cap;


 


(b)          any
and all Payments;


 


(c)          any
residual right, title or interest Borrower may have in the Interest Rate Cap Reserve Escrow Account (to the extent required by
this Agreement);


 




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(d)          all
Monthly Deposits, whether credited to the Interest Rate Cap Reserve Escrow Account, held in the course of payment or collection
by Lender, or otherwise;


 


(e)          all
interest earned and profits realized on funds in the Interest Rate Cap Reserve Escrow Account;


 


(f)          all
rights, liens and security interests or guarantees now existing or hereafter granted by the Counterparty or any other person to
secure or guaranty payment of the Payments due pursuant to the Interest Rate Cap Documents;


 


(g)          all
cash, funds, investments, securities, accounts, general intangibles and all other property held from time to time in the Interest
Rate Cap Reserve Escrow Account and all certificates and instruments representing or evidencing any of the foregoing;


 


(h)          all
rights of Borrower under any of the foregoing, including all rights of Borrower to the Payments, contract rights and general intangibles
now existing or hereafter arising with respect to any or all of the foregoing;


 


(i)           all
documents, writings, books, files, records and other documents arising from or relating to any of the foregoing, whether now existing
or hereafter arising;


 


(i)           all
extensions, renewals and replacements of the foregoing; and


 


(k)          all
cash and non-cash proceeds and products of any of the foregoing, including, without limitation, interest, dividends, cash, instruments,
proceeds of any insurance, and other property from time to time received, receivable or otherwise distributed or distributable
in respect of or in exchange for any or all of the foregoing.


 


TO HAVE AND TO HOLD
the Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto,
unto Lender, its successors and assigns, forever, subject, however, to the terms, covenants and conditions herein set forth.
Borrower hereby authorizes Lender to 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 in the Collateral 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 that Lender may require.


 


Section 4.02         Further
Assurances.


 


At any time and from
time to time, at the expense of Borrower, Borrower shall promptly give, execute, deliver, file and record any notice, statement,
instrument, document, agreement or other paper and do such other acts and things that may be necessary, or that Lender may request,
in order to perfect, continue and protect any security interest granted or purported to be granted by this Agreement or to enable
Lender to exercise and enforce its rights and remedies under this Agreement.


 


Section 4.03         Competing
Security Arrangements.


 


Borrower shall not
execute, file, permit to be filed or suffer to remain on file in any jurisdiction any security agreement, financing statement or
like agreement or instrument with respect to the Collateral, or any part of the Collateral, naming anyone other than Lender as
the secured party. Borrower shall not sell, exchange or transfer or otherwise dispose of any of the Collateral, or any interest
in the Collateral, other than any security interest or other lien in favor of Lender.


 




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Section 4.04         No Change.


 


Borrower will not
voluntarily or involuntarily change its principal place of business, chief executive office, name or identity, without at least
thirty (30) days prior written notice to Lender, except in the event of a change in principal place of business or chief executive
office necessitated by fire, flood or other calamity, in which case such notice shall be provided as soon as practicable.


 


Section 4.05         Defense of Collateral.


 


Borrower will defend
the Collateral against all claims and demands of all persons at any time claiming the same or any interest in the Collateral.


 


ARTICLE
5


DELIVERY OF INTEREST RATE CAP DOCUMENTS


 


Section 5.01         Acquisition of Interest
Rate Cap; Delivery of Interest Rate Cap Documents.


 


Borrower has, on or
before the date of this Agreement, executed and delivered the Interest Rate Cap Documents to the Counterparty and has delivered
to Lender fully executed originals of such Interest Rate Cap Documents. True, complete and correct copies of the Interest Rate
Cap Documents and all amendments thereto, fully executed by all parties, are attached as Exhibit A hereto. Borrower hereby
represents and warrants to Lender that there is no additional security for or any other arrangements or agreements relating to
the Interest Rate Cap Documents and that the Counterparty has consented to Borrower's pledge of its rights and interests in the
Interest Rate Cap to Lender as security for the Mortgage Loan.


 


Section 5.02         Obligations Remain Absolute.


 


Nothing contained
herein shall relieve Borrower of its primary obligation to pay all amounts due in respect of its obligations on the Mortgage Loan
as required by the Loan Documents.


 


Section 5.03         Subsequent Interest Rate
Caps.


 


Borrower agrees to
execute and deliver to Lender a Supplemental Agreement substantially in the form of the attached Exhibit B attached hereto
on each occasion on which Borrower acquires a Subsequent Interest Rate Cap. Borrower shall, on or before the date any Subsequent
Interest Rate Cap is to become Collateral under this Agreement, execute and deliver the Interest Rate Cap Documents representing
such Subsequent Interest Rate Cap to the Counterparty and deliver to Lender fully executed originals of such Interest Rate Cap
Documents to be held under this Agreement as a part of the Collateral.


 




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ARTICLE
6


REPRESENTATIONS AND WARRANTIES


 


Section 6.01         Representations
and Warranties of Borrower.


 


Borrower represents and warrants to Lender that:


 


(a)          Borrower
has paid to the Counterparty the entire cost of the Initial Interest Rate Cap;


 


(b)          the
individuals who are signing and delivering this Agreement on behalf of Borrower have been duly authorized to do so in accordance
with the documents and instruments pursuant to which Borrower is organized and which govern the conduct of Borrower's business;


 


(c)          no
consent of any other person or entity and no authorization, approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required or will be required (1) for the pledge by Borrower of the Collateral pursuant
to this Agreement or any Supplemental Agreement or for the execution, delivery or performance of this Agreement or any Supplemental
Agreement by Borrower (other than the consent of the Counterparty where such consent has been obtained), (2) for the perfection
or maintenance of the security interest created hereby or by any Supplemental Agreement (including the first priority nature of
such security interest) other than the filing of any financing statement as may be required by the UCC, or (3) for the execution,
delivery or performance of this Agreement by Borrower;


 


(d)          there
are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived;


 


(e)          neither
the execution nor delivery of this Agreement or any Supplemental Agreement nor the performance by Borrower of its obligations under
this Agreement or any Supplemental Agreement, nor the consummation of the transactions contemplated by this Agreement or any Supplemental
Agreement, will (1) conflict with any provision of the organizational documents of Borrower, (2) conflict with, result in a breach
of, or constitute a default (or an event which would, with the passage of time or the giving of notice or both, constitute a default)
under, or give rise to a right to terminate, amend, modify, abandon or accelerate, any contract, agreement, promissory note, lease,
indenture, instrument or license to which Borrower is a party or by which Borrower's assets or properties may be bound or affected,
(3) violate or conflict with any federal, state or local law, statute, ordinance, rule, regulation, order, judgment, decree or
arbitration award which is either applicable to, binding upon or enforceable against Borrower, (4) result in or require the creation
or imposition of any Collateral Liens upon or with respect to the Collateral, other than Collateral Liens in favor of Lender, (5)
violate any legally protected right of any Person or give to any Person a right or claim against Borrower, or (6) require the consent,
approval, order or authorization of, or the registration, declaration or filing (except to the extent that the filing of financing
statements may be applicable) with, any federal, state or local government entity;


 


(f)          Borrower
is and shall be the sole legal and beneficial owner of, and has and will have good and marketable title to (and has full right
and authority to pledge and assign), the Collateral, free and clear of all Collateral Liens (other than in favor of Lender), all
fiduciary obligations of any kind and any adverse claim of title thereto and the Collateral is not subject to any offset, right
of redemption, defense or counterclaim of a third party. There is no additional security for or any other arrangements or agreements
relating to the Interest Rate Cap Documents, except as may have been disclosed to Lender in writing;


 




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(g)          the
security interest of Lender in the Collateral is, or when it attaches shall be, a first priority and perfected security interest.
No financing statement covering the Collateral, or any part of the Collateral (other than any financing statement naming only Lender
as the secured party), is outstanding or is on file in any public office;


 


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


 


(i)           Borrower
has not commenced (within the meaning of any Insolvency Laws) a voluntary case, consented to the entry of an order for relief against
it in an involuntary case, or consented to the appointment of a receiver or custodian of it or for any part of its property, nor
has a court of competent jurisdiction entered an order or decree under any Insolvency Law that is for relief against it in an involuntary
case or appointed a receiver or custodian for Borrower or any part of its property.


 


ARTICLE
7


EVENTS OF DEFAULT; RIGHTS AND REMEDIES


 


Section 7.01         Event
of Default.


 


The occurrence of
any one or more of the following events shall constitute an "Event of Default" under this Agreement:


 


(a)          the
failure by Borrower to observe and perform any duty, obligation or covenant required to be observed or performed by this Agreement
or any Supplemental Agreement subject to any applicable notice and cure rights provided in this Agreement, any Supplemental Agreement,
or the Loan Agreement;


 


(b)          any
representation or warranty on the part of Borrower contained in this Agreement or repeated and reaffirmed in this Agreement or
any Supplemental Agreement proves to be false, inaccurate, or misleading in any material respect when made or deemed made; and


 


(c)          the
occurrence of an Event of Default under any Loan Document.


 


Section 7.02         Remedies
on Default.


 


If any Event of Default under this Agreement has occurred
and is continuing:


 


(a)          At
the direction of Lender, Borrower shall deliver all Collateral to Lender or its designee;


 


(b)          Lender
may, without further notice, exercise all rights, privileges or options pertaining to the Collateral as if Lender were the absolute
owner of such Collateral, upon such terms and conditions as Lender may determine, all without liability except to account for property
actually received by Lender, and Lender shall have no duty to exercise any of those rights, privileges or options and shall not
be responsible for any failure to do so or delay in so doing; and


 




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(c)          Lender
may, subject to the terms of the Interest Rate Cap Documents, exercise in respect of the Collateral, in addition to other rights
and remedies provided for in this Agreement or otherwise available to it, all of the rights and remedies of a secured party under
the UCC and also may, without notice except as specified below, sell the Collateral at public or private sale, at any of the offices
of Lender or elsewhere, for cash, on credit or for future delivery, and upon such other terms as may be commercially reasonable.
Borrower agrees that, to the extent notice of sale shall be required by applicable law, at least ten (10) days prior notice to
Borrower of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable
notification. Lender shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Lender
may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so adjourned. In case of any sale by Lender of any of the
Collateral, the Collateral so sold may be retained by Lender until the selling price is paid by the purchaser, but Lender shall
not incur any liability in case of failure of the purchaser to take up and pay for the Collateral so sold. In case of any such
failure, such Collateral so sold may be again similarly sold.


 


The foregoing
rights and remedies (1) shall be cumulative and concurrent, (2) may be pursued separately, successively or concurrently against
Borrower and any other party obligated for the Indebtedness, or against the Collateral, or any other security for the Indebtedness,
at the sole discretion of Lender, (3) may be exercised as often as occasion therefor shall arise, it being agreed by Borrower that
the exercise or failure to exercise any of same shall not in any event be construed as a waiver or release thereof or of any other
right, remedy or recourse, and (4) are intended to be and shall be non-exclusive. Nothing in this Agreement shall require or be
construed to require Lender to accept tender of performance of any of Borrower's obligations under this Agreement after the expiration
of any time period set forth in this Agreement for the performance of such obligations and the expiration of any applicable cure
periods, if any.


 


Section 7.03         Application
of Proceeds.


 


Lender shall
apply the Collateral or the cash proceeds actually received from any sale or other disposition of the Collateral in its sole and
absolute discretion to the following, in any order:


 


(a)          to
reimburse Lender for any amounts due to it pursuant to Section 7.0l(a) of this Agreement including the expenses of preparing for
sale, selling and the like and to reasonable attorneys' fees and legal expenses incurred by Lender in connection therewith;


 


(b)          to
the repayment of all amounts then due and unpaid on the Indebtedness in such order of priority as Lender may determine; and


 


(c)          to
purchase any required Subsequent Interest Rate Cap that meets the requirements of this Agreement or any of the other Loan Documents.


 


If
the proceeds of sale, collection or other realization of or upon the Collateral are insufficient to cover the costs and
expenses of such realization and the payment in full of the Indebtedness, Borrower shall remain liable for the deficiency, except
to the extent that Borrower's liability for payment of the Indebtedness is limited by the terms of the Loan Agreement.


 




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Section 7.04         No
Additional Waiver Implied by One Waiver.


 


If
any provision of this Agreement is breached by Borrower and thereafter waived by Lender in writing, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any other breach under this Agreement.


 


Section 7.05         Lender
Appointed Attorney-in-Fact.


 


Borrower
hereby appoints Lender, through any duly authorized officer of Lender, as Borrower's attorney-in-fact, with full authority in the
place and stead of Borrower and in the name of Borrower or otherwise, from time to time in Lender's discretion during the continuance
of an Event of Default, to take any action and to execute any instrument which Lender may deem necessary or advisable to exercise
the rights and remedies granted in this Agreement, including, to receive, endorse and collect all instruments made payable to Borrower
representing any interest payment, dividend, or other distribution in respect of the Collateral or any part of the Collateral and
to give full discharge for the same. Borrower agrees that the power of attorney established pursuant to this Section 7.05 shall
be deemed coupled with an interest and shall be irrevocable.


 


Section 7.06         Nature
of Lender's Rights.


 


The right
of Lender to the Collateral held for its benefit under this Agreement shall not be subject to any right of redemption Borrower
might otherwise have and shall not be suspended, discontinued or reduced or terminated for any cause, including, without limiting
the generality of the foregoing, any event constituting force majeure or any acts or circumstances that may constitute commercial
frustration of purpose.


 


ARTICLE 8


MISCELLANEOUS PROVISIONS


 


Section 8.01         Fees,
Costs and Expenses; Indemnification.


 


Borrower agrees to
reimburse Lender, on demand, for all out-of-pocket costs and expenses incurred by Lender in connection with the administration
and enforcement of this Agreement or any Supplemental Agreement and agrees to indemnify and hold harmless Lender from and against
any and all losses, costs, claims, damages, penalties, causes of action, suits, judgments, liabilities and expenses (including,
without limitation, reasonable attorneys' fees and expenses) incurred by Lender under this Agreement or any Supplemental Agreement
or in connection with this Agreement or any Supplemental Agreement, unless such liability shall be due to willful misconduct or
gross negligence on the part of Lender or its agents or employees. If
Borrower fails to do any act or thing which it has covenanted to do under this Agreement or any Supplemental Agreement or
any representation or warranty on the part of Borrower contained in this Agreement or any Supplemental Agreement or repeated and
reaffirmed in this Agreement or any Supplemental Agreement is breached, Lender may (but shall not be obligated to) do the same
or cause it to be done or remedy any such breach, and may expend its funds for such purpose. Any and all amounts so expended by
Lender shall be repayable to it by Borrower upon Lender's demand. The obligations of Borrower under this Section 8.01 shall survive
the termination of this Agreement or any Supplemental Agreement and the discharge of the other obligations of Borrower under this
Agreement or any Supplemental Agreement.


 




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Section 8.02         Termination.


 


This Agreement
and each Supplemental Agreement and the assignments, pledges and security interests created or granted by this Agreement and each
Supplemental Agreement shall create a continuing security interest in the Collateral and shall terminate upon the earlier to occur
of (a) payment in full of all amounts due under the Loan Documents, or (b) the conversion of the Mortgage Loan to a fixed rate
of interest pursuant to the terms of the Conversion Agreement. Upon termination of this Agreement, Lender shall deliver to Borrower
all Collateral and documents then in the custody or possession of Lender and, if requested by Borrower, shall execute and deliver
to Borrower for recording or filing in each office in which any assignment or financing statement relative to the Collateral or
the agreements relating thereto or any part of the Collateral, shall have been filed or recorded, a termination statement or release
under applicable law (including, if relevant, any financing statement), releasing Lender's interest in the Collateral and such
other documents and instruments as Borrower may reasonably request, all without recourse to or any warranty whatsoever by Lender
and at the cost and expense of Borrower.


 


Section 8.03         No
Deemed Waiver.


 


No failure
on the part of Lender or any of its agents to exercise, and no course of dealing with respect to, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Lender or any of
its agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law.


 


Section 8.04         Non-Recourse.


 


Article
3 (Personal Liability) of the Loan Agreement is hereby incorporated herein as if fully set forth in the body of this Agreement.


 


Section 8.05         Governing
Law; Consent to Jurisdiction and Venue.


 


Section
15.01 (Governing Law; Consent to Jurisdiction and Venue) of the Loan Agreement is hereby incorporated herein as if fully set forth
in the body of this Agreement.


 


Section 8.06         Notices.


 


Section
15.02 (Notice) of the Loan Agreement is hereby incorporated herein as if fully set forth in the body of this Agreement.


 


Section 8.07         Successors
and Assigns Bound; Sale of Mortgage Loan.


 


Section
15.03 (Successors and Assigns Bound; Sale of Mortgage Loan) of the Loan Agreement is hereby incorporated herein as if fully set
forth in the body of this Agreement.


 


Section 8.08         Counterparts.


 


Section
15.04 (Counterparts) of the Loan Agreement is hereby incorporated herein as if fully set forth in the body of this Agreement.


 




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Section 8.09         Severability;
Entire Agreement; Amendments.


 


Section 15.07 (Severability;
Entire Agreement; Amendments) of the Loan Agreement is hereby incorporated herein as if fully set forth in the body of this Agreement.


 


Section 8.10        Construction.


 


Section 15.08 (Construction)
of the Loan Agreement is hereby incorporated herein as if fully set forth in the body of this Agreement.


 


Section 8.11        WAIVER
OF TRIAL BY JURY.


 


Section 15.18 (WAIVER OF TRIAL
BY JURY) of the Loan Agreement is hereby incorporated herein as if fully set forth in the body of this Agreement.


 


[Remainder of Page Intentionally Blank]


 




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


 


	 	BORROWER:
	 	 
	 	BR CWS CASCADES I OWNER, LLC, a
	 	Delaware limited liability company
	 	 	 	 	 
	 	By: 	BR CWS 2017 Portfolio JV, LLC, a Delaware limited liability company, its sole member
	 	 	 	 	 
	 	 	By: 	BR CWS Portfolio Member, LLC, a Delaware limited liability company, its manager
	 	 	 	 	 
	 	 	 	By: 	/s/ Jordan B. Ruddy
	 	 	 	 	Jordan B. Ruddy
	 	 	 	 	Authorized Signatory


 




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	 	LENDER:
	 	 
	 	FANNIE MAE
	 	 	 	 
	 	By:	Wells Fargo Bank, a national banking association, its Attorney-in-Fact
	 	 	 	 
	 	 	By: 	/s/ Christian Adrian
	 	 	 	Christian Adrian
	 	 	 	Managing Director


 




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EXHIBIT A


TO


INTEREST RATE CAP RESERVE AND SECURITY
AGREEMENT


 


Interest Rate Cap Documents


 


See Attached


 




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EXHIBIT B


TO


INTEREST RATE CAP RESERVE AND SECURITY
AGREEMENT


 


SUPPLEMENTAL INTEREST RATE CAP RESERVE


AND SECURITY AGREEMENT


 


This SUPPLEMENTAL INTEREST
RATE CAP RESERVE AND SECURITY AGREEMENT ("Supplemental Agreement"), dated
as of ______________, is made by BR CWS CASCADES I OWNER,
LLC, a Delaware limited liability company, together with its permitted successors and assigns ("Borrower"),
for the benefit of FANNIE MAE, a corporation duly organized under the Federal
National Mortgage Association Charter Act, as amended, 12 U.S.C. §1716 et seq. and duly organized and existing under the laws
of the United States (together with its successors and assigns, "Fannie Mae").


 


This
Supplemental Agreement supplements the Interest Rate Cap Reserve and Security Agreement dated as of ______________, by and between
Borrower and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
(the "Original Lender") (the "Agreement").


 


RECITALS:


 


A.           Borrower
and Original Lender entered into the Agreement pursuant to which Borrower is required to acquire and maintain or replace, as appropriate,
an Interest Rate Cap (as defined in the Agreement) at all times during the term of the Mortgage Loan (as defined in the Agreement).
Each Interest Rate Cap will be represented by one or more Interest Rate Cap Documents (as defined in the Agreement).


 


B.           Original
Lender assigned its interest in the Mortgage Loan to Fannie Mae and Fannie Mae is now the holder of the Note (as defined in the
Agreement) and the mortgagee or beneficiary under the Security Instrument (as defined in the Loan Agreement) and all other Loan
Documents (as defined in the Loan Agreement).


 


C.           Borrower
is entering into a Subsequent Interest Rate Cap (as defined in the Agreement).


 


D.           As
security for Borrower's obligations under the Loan Documents, Borrower is entering into this Supplemental Agreement.


 


NOW, THEREFORE,
in consideration of the mutual covenants and undertakings set forth in this Supplemental Agreement and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by Borrower, the parties agree as follows:


 


Section 1.          Capitalized
Terms.


 


All capitalized
terms used in this Supplemental Agreement have the meanings given to those terms in the Agreement or elsewhere in this Supplemental
Agreement unless the context or use clearly indicates a different meaning.


 




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Section 2.          Grant
of Security Interest.


 


As security for the
due, punctual, full and exact payment, performance or observance by Borrower of all obligations owing to Lender from time to time
under the Loan Documents, whether at stated maturity, by acceleration or otherwise, whether now outstanding or hereafter arising,
Borrower confirms and grants to Fannie Mae a continuing security interest in and to the Subsequent Interest Rate Cap described
in the attached Interest Rate Cap Documents and all such Interest Rate Cap Documents, whether now owned or hereafter acquired.


 


Section 3.          Acquisition
of Interest Rate Cap; Delivery of Interest Rate Cap Documents.


 


Borrower has, on
or before the date of this Supplemental Agreement, executed and delivered the Interest Rate Cap Documents representing the Subsequent
Interest Rate Cap to the Counterparty and has delivered to Fannie Mae fully executed originals of such Interest Rate Cap Documents
to be held under the Agreement as a part of the Collateral. The documents attached to this Supplemental Agreement as Attachment
I are true, complete and correct copies of the Interest Rate Cap Documents and all amendments thereto, representing the Subsequent
Interest Rate Cap, fully executed by all parties. There is no and shall be no additional security for or any other arrangements
or agreements relating to the Interest Rate Cap or the Interest Rate Cap Documents.


 


Section 4.          Representations
and Warranties.


 


As of the
date of this Supplemental Agreement, Borrower repeats and confirms all representations and warranties made by Borrower in the Agreement.


 


Section 5.          Agreement
Confirmed.


 


Except as supplemented
by this Supplemental Agreement, Borrower confirms the original Agreement as previously supplemented and amended from time to time.


 


Section 6.          Obligations
Remain Absolute.


 


Nothing contained
in this Supplemental Agreement shall relieve Borrower of its primary obligation to pay all amounts due in respect of its obligations
under the Loan Documents.


 


Section 7.          Miscellaneous
Provisions.


 


The provisions
of Article 8 of the Agreement are hereby incorporated into this Supplemental Agreement by this reference to the fullest extent
as if the text of such provisions were set forth in their entirety herein.


 


[Remainder of Page Intentionally Blank]


 




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IN WITNESS WHEREOF,
Borrower has signed and delivered this Agreement under seal (where applicable) or has caused this Agreement to be signed and delivered
under seal (where applicable) by its duly authorized representative. Where applicable law so provides, Borrower intends that this
Agreement shall be deemed to be signed and delivered as a sealed instrument


 


	 	BORROWER	 
	 	 	 
	 	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 	 
	 	Title:	 	 


 




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ATTACHMENT I


TO


INTEREST RATE CAP RESERVE AND SECURITY
AGREEMENT


 


Interest Rate Cap Documents for Subsequent
Interest Rate Cap


 


[TO BE SUPPLIED]


 




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