Exhibit 10.35


 


Prepared by, and after recording


return to:


Nicholas A. Pirelli, Esq.


Krooth & Altman LLP


1850 M Street, N.W., Suite 400


Washington, D.C. 20036


 


MULTIFAMILY DEED OF TRUST,


ASSIGNMENT OF LEASES AND RENTS,


SECURITY AGREEMENT


AND FIXTURE FILING


 


(TEXAS)


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	 
	Texas	06-12	© 2012 Fannie Mae




     


    

 


MULTIFAMILY DEED OF TRUST,


ASSIGNMENT OF LEASES AND RENTS,


SECURITY AGREEMENT


AND FIXTURE FILING


 


This MULTIFAMILY
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (as amended, restated, replaced, supplemented,
or otherwise modified from time to time, the “Security Instrument”) dated as of May 27, 2014, is executed by BRE
MF CASCADES II LLC, a limited liability company organized and existing under the laws of Delaware, as grantor (“Borrower”),
to NICHOLAS A. PIRULLI, ESQ., as trustee (“Trustee”), for the benefit of WELLS FARGO BANK, NATIONAL ASSOCIATION,
a national banking association, as beneficiary (“Lender”).


 


Borrower, in consideration
of (i) the loan in the original principal amount of $23,175,000.00 (the “Mortgage Loan”) evidenced by
that certain Multifamily Note dated as of the date of this Security Instrument, executed by Borrower and made payable to the order
of Lender (as amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Note”),
(ii) that certain Multifamily Loan and Security Agreement dated as of the date of this Security Instrument, executed by and
between Borrower and Lender (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan
Agreement”), and (iii) the trust created by this Security Instrument, and to secure to Lender the repayment of
the Indebtedness (as defined in this Security Instrument), and all renewals, extensions and modifications thereof, and the performance
of the covenants and agreements of Borrower contained in the Loan Documents (as defined in the Loan Agreement), excluding the
Environmental Indemnity Agreement (as defined in this Security Instrument), irrevocably and unconditionally mortgages, grants,
warrants, conveys, bargains, sells, and assigns to Trustee, in trust, for benefit of Lender, with power of sale and right of entry
and possession, the Mortgaged Property (as defined in this Security Instrument), including the real property located in Smith
County, State of Texas, and described in Exhibit A attached to this Security Instrument and incorporated by reference (the
“Land”), to have and to hold such Mortgaged Property unto Trustee and Trustee’s successors and
assigns, forever; Borrower hereby releasing, relinquishing and waiving, to the fullest extent allowed by law, all rights and benefits,
if any, under and by virtue of the homestead exemption laws of the Property Jurisdiction (as defined in this Security Instrument),
if applicable.


 


Borrower represents
and warrants that Borrower is lawfully seized of the Mortgaged Property and has the right, power and authority to mortgage,
grant, warrant, convey, bargain, sell, and assign the Mortgaged Property, and that the Mortgaged Property is not encumbered by
any Lien (as defined in this Security Instrument) other than Permitted Encumbrances (as defined in this Security Instrument).
Borrower covenants that Borrower will warrant and defend the title to the Mortgaged Property against all claims and demands other
than Permitted Encumbrances.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 1
	Texas	06-12	© 2012 Fannie Mae




     


    

 


Borrower, and by
their acceptance hereof, each of Trustee and Lender covenants and agrees as follows:


 


		1.	Defined Terms.



 


Capitalized terms
used and not specifically defined herein have the meanings given to such terms in the Loan Agreement. All terms used and not specifically
defined herein, but which are otherwise defined by the UCC, shall have the meanings assigned to them by the UCC. The following
terms, when used in this Security Instrument, shall have the following meanings:


 


“Condemnation Action”
means any action or proceeding, however characterized or named, relating to any condemnation or other taking. or conveyance in
lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect.


 


“Enforcement Costs”
means all expenses and costs, including reasonable attorneys’ fees and expenses, fees and out-of-pocket expenses of expert
witnesses and costs of investigation, incurred by Lender as a result of any Event of Default under the Loan Agreement or in connection
with efforts to collect any amount due under the Loan Documents, or to enforce the provisions of the Loan Agreement or any of
the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy or insolvency proceeding
(including any action for relief from the automatic stay of any bankruptcy proceeding or Foreclosure Event) or judicial or non-judicial
foreclosure proceeding, to the extent permitted by law.


 


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


 


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


 


“Event of Default” has the meaning
set forth in the Loan Agreement.


 


“Fixtures” means
all Goods that are so attached or affixed to the Land or the Improvements as to constitute a fixture under the laws of the Property
Jurisdiction.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 2
	Texas	06-12	© 2012 Fannie Mae




     


    

 


“Goods” means
all of Borrower’s present and hereafter acquired right, title and interest in all goods which are used now or in the future
in connection with the ownership, management, or operation of the Land or the Improvements or are located on the Land or in the
Improvements, including inventory; furniture; furnishings; machinery, equipment, engines, boilers, incinerators, and installed
building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water,
air, or light; antennas, cable, wiring, and conduits used in connection with radio, television, security, fire prevention, or
fire detection, or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery
and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus;
plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers,
and other appliances; light fixtures, awnings, storm windows, and storm doors; pictures, screens, blinds, shades, curtains, and
curtain rods; mirrors, cabinets, paneling, rugs, and floor and wall coverings; fences, trees, and plants; swimming pools; exercise
equipment; supplies; tools; books and records (whether in written or electronic form); websites, URLs, blogs, and social network
pages; computer equipment (hardware and software); and other tangible personal property which is used now or in the future in
connection with the ownership, management, or operation of the Land or the Improvements or are located on the Land or in the Improvements.


 


“Imposition Deposits”
means deposits in an amount sufficient to accumulate with Lender the entire sum required to pay the Impositions when due.


 


“Impositions” means


 


(a)          any
water and sewer charges which, if not paid, may result in a lien on all or any part of the Mortgaged Property;


 


(b)          the
premiums for tire and other casualty insurance, liability insurance, rent loss insurance and such other insurance as Lender may
require under the Loan Agreement;


 


(c)          Taxes;
and


 


(d)          amounts
for other charges and expenses assessed against the Mortgaged Property which Lender at any time reasonably deems necessary to
protect the Mortgaged Property, to prevent the imposition of liens on the Mortgaged Property, or otherwise to protect Lender’s
interests, all as reasonably determined from time to time by Lender.


 


“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, facilities, and additions and other construction on the Land.


 


“Indebtedness”
means the principal of, interest on, and all other amounts due at any time under the Note, the Loan Agreement, this Security Instrument
or any other Loan Document (other than the Environmental Indemnity Agreement and Guaranty), including Prepayment Premiums, late
charges. interest charged at the Default Rate, and accrued interest as provided in the Loan Agreement and this Security Instrument,
advances, costs and expenses to perform the obligations of Borrower or to protect the Mortgaged Property or the security of this
Security Instrument, all other monetary obligations of Borrower under the Loan Documents (other than the Environmental Indemnity
Agreement), including amounts due as a result of any indemnification obligations, and any Enforcement Costs.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 3
	Texas	06-12	© 2012 Fannie Mae




     


    

 


“Land” means the real property described
in Exhibit A.


 


“Leases” means
all present and future leases, subleases, licenses, concessions or grants or other possessory interests now or hereafter in force,
whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary
leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals
thereof.


 


“Lien” means
any claim or charge against property for payment of a debt or an amount owed for services rendered, including any mortgage, deed
of trust, deed to secure debt, security interest, tax lien, any materialman’s or mechanic’s lien, or any lien of a
Governmental Authority, including any lien in connection with the payment of utilities, or any other encumbrance.


 


“Mortgaged Property”
means all of Borrower’s present and hereafter acquired right, title and interest, if any, in and to all of the following:


 


(a)          the
Land;


 


(b)          the
Improvements;


 


(c)          the
Personalty;


 


(d)          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 benefitting 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;


 


(e)          insurance
policies relating to the Mortgaged Property (and any unearned premiums) and all proceeds paid or to be paid by any insurer of
the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property, whether or not Borrower obtained the
insurance pursuant to Lender’s requirements;


 


(f)          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 Personalty, or any other part of the Mortgaged Property, including any awards or settlements resulting from
(1) Condemnation Actions, (2) any damage to the Mortgaged Property caused by governmental action that does not result in a Condemnation
Action, or (3) the total or partial taking of the Land, the Improvements, 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;


 


(g)          contracts,
options and other agreements for the sale of the Land, the Improvements, 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;


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 4
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(h)          Leases
and Lease guaranties, letters of credit and any other supporting obligation for any of the Leases given in connection with any
of the Leases, and all Rents;


 


(1)         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 Mortgage Loan and, if Borrower is a cooperative housing corporation, maintenance charges or
assessments payable by shareholders or residents;


 


U)          Imposition Deposits;


 


(k)          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 Security Instrument is dated);


 


(I)            tenant
security deposits;


 


(m)          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 (but excluding any trademarks, trade names or goodwill relating to the names “Orion”
or ‘Blackstone” or any derivatives thereof);


 


(n)          Collateral
Accounts and all Collateral Account Funds;


 


(o)          products,
and all cash and non-cash proceeds from the conversion, voluntary or involuntary, of any of the above into cash or liquidated
claims, and the right to collect such proceeds; and


 


(p)          all
of Borrower’s right, title and interest in the oil, gas, minerals, mineral interests, royalties, overriding royalties, production
payments, net profit interests and other interests and estates in, under and on the Mortgaged Property and other oil, gas and
mineral interests with which any of the foregoing interests or estates are pooled or unitized.


 


“Permitted Encumbrance”
means only the casements, restrictions and other matters listed in a schedule of exceptions to coverage in the Title Policy and
Taxes for the current tax year that are not yet due and payable.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 5
	Texas	06-12	© 2012 Fannie Mae




     


    

 


“Personalty” means
all of Borrower’s present and hereafter acquired right, title and interest in all Goods, accounts, choses of action, chattel
paper, documents, general intangibles (including Software), payment intangibles, instruments, investment property, letter of credit
rights, supporting obligations, computer information, source codes, object codes, records and data, all telephone numbers or listings,
claims (including claims for indemnity or breach of warranty), deposit accounts and other property or assets of any kind or nature
related to the Land or the Improvements now or in the future, including operating agreements, surveys, plans and specifications
and contracts for architectural, engineering and construction services relating to the Land or the Improvements, and all other
intangible property and rights relating to the operation of, or used in connection with, the Land or the Improvements, including
all governmental permits relating to any activities on the Land.


 


“Prepayment Premium” has the meaning
set forth in the Loan Agreement.


 


“Property Jurisdiction” means the
jurisdiction in which the Land is located.


 


“Rents” means
all rents (whether from residential or non-residential space), revenues and other income from the Land or the Improvements. including
subsidy payments received from any sources, including payments under any “Housing Assistance Payments Contract” or
other rental subsidy agreement (if any), 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 tenant security deposits.


 


“Software” means
a computer program and any supporting information provided in connection with a transaction relating to the program. The term
does not include any computer program that is included in the definition of Goods.


 


“Taxes” means
all taxes, assessments, vault rentals and other charges, if any, general, special or otherwise, including 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, may become a lien, on the Land or the Improvements or any taxes upon any Loan Document.


 


“Title Policy” has the meaning set
forth in the Loan Agreement.


 


“UCC” means the Uniform
Commercial Code in effect in the Property Jurisdiction, as amended from time to time.


 


“UCC Collateral”
means any or all of that portion of the Mortgaged Property in which a security interest may be granted under the UCC and in
which Borrower has any present or hereafter acquired right, title or interest.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 6
	Texas	06-12	© 2012 Fannie Mae




     


    

 


		2.	Security Agreement; Fixture Filing.



 


(a)          To
secure to Lender, the repayment of the Indebtedness, and all renewals, extensions and modifications thereof, and the performance
of the covenants and agreements of Borrower contained in the Loan Documents, Borrower hereby pledges, assigns, and grants to Lender
a continuing security interest in the UCC Collateral. This Security Instrument constitutes a security agreement and a financing
statement under the UCC. This Security Instrument also constitutes a financing statement pursuant to the terms of the UCC with
respect to any part of the Mortgaged Property that is or may become a Fixture under applicable law, and will be recorded as a
“fixture filing” in accordance with the UCC. 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 without the signature of Borrower. If an Event of Default has occurred and is continuing, Lender shall have
the remedies of a secured party under the UCC or otherwise provided at law or in equity, in addition to all remedies provided
by this Security Instrument and in any Loan Document. Lender may exercise any or all of its remedies against the UCC Collateral
separately or together, and in any order, without in any way affecting the availability or validity of Lender’s other remedies.
For purposes of the UCC, the debtor is Borrower and the secured party is Lender. The name and address of the debtor and secured
party are set forth after Borrower’s signature below which arc the addresses from which information on the security interest may
be obtained.


 


(b)          Borrower
represents and warrants that: (1) Borrower maintains its chief executive office at the location set forth after Borrower’s signature
below, and Borrower will notify Lender in writing of any change in its chief executive office within five (5) days of such change;
(2) Borrower is the record owner of the Mortgaged Property; (3) Borrower’s state of incorporation, organization, or
formation, if applicable, is as set forth on Page 1 of this Security Instrument; (4) Borrower’s exact legal name is
as set forth on Page 1 of this Security Instrument; (5) Borrower’s organizational identification number, if applicable, is as
set forth after Borrower’s signature below; (6) Borrower is the owner of the UCC Collateral subject to no liens, charges or encumbrances
other than the lien hereof; (7) except as expressly provided in the Loan Agreement, the UCC Collateral will not be removed from
the Mortgaged Property without the consent of Lender; and (8) no financing statement covering any of the UCC Collateral or any
proceeds thereof is on file in any public office except pursuant hereto.


 


(c)          All
property of every kind acquired by Borrower after the date of this Security Instrument which by the terms of this Security Instrument
shall be subject to the lien and the security interest created hereby, shall immediately upon the acquisition thereof by Borrower
and without further conveyance or assignment become subject to the lien and security interest created by this Security Instrument.
Nevertheless, Borrower shall execute, acknowledge, deliver and record or file, as appropriate, all and every such further deeds
of trust, mortgages, deeds to secure debt, security agreements, financing statements, assignments and assurances as Lender shall
require for accomplishing the purposes of this Security Instrument and to comply with the rerecording requirements of the UCC.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 7
	Texas	06-12	© 2012 Fannie Mae




     


    

 


		3.	Assignment of Leases and 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 Leases
and Rents. It is the intention of Borrower to establish present, absolute and irrevocable transfers and assignments to Lender
of all Leases and Rents and to authorize and empower Lender to collect and receive all Rents without the necessity of further
action on the part of Borrower. Borrower and Lender intend the assignments of Leases and Rents to be effective immediately and
to constitute absolute present assignments, and not assignments for additional security only. Only for purposes of giving effect
to these absolute assignments of Leases and Rents, and for no other purpose, the Leases and Rents shall not be deemed to be a
part of the Mortgaged Property. However, if these present, absolute and unconditional assignments of Leases and Rents are not
enforceable by their terms under the laws of the Property Jurisdiction, then each of the Leases and Rents shall be included as
part of the Mortgaged Property, and it is the intention of Borrower, in such circumstance, that this Security Instrument create
and perfect a lien on each of the Leases and Rents in favor of Lender, which liens shall be effective as of the date of this Security•
Instrument.


 


(b)          Until
an Event of Default has occurred and is continuing, but subject to the limitations set forth in the Loan Documents, Borrower shall
have a revocable license to exercise all rights, power and authority granted to Borrower under the Leases (including the right,
power and authority to modify the terms of any Lease, extend or terminate any Lease, or enter into new Leases, subject to the
limitations set forth in the Loan Documents), and 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 Monthly Debt Service Payments 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 and Impositions (to the extent not included in Imposition Deposits), tenant improvements
and other capital expenditures. So long as no Event of Default has occurred and is continuing (and no event which, with the giving
of notice or the passage of time, or both, would constitute an Event of Default has occurred and is continuing), the Rents remaining
after application pursuant to the preceding sentence may be retained and distributed by Borrower to its direct and indirect partners
and members free and clear of, and released from, Lender’s rights with respect to Rents under this Security Instrument.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 8
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(c)          If
an Event of Default has occurred and is continuing, 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, the revocable license granted to Borrower pursuant to Section 3(b) shall automatically terminate, and Lender shall
immediately 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) and, without notice, Lender shall be entitled to
all Rents as they become due and payable, including Rents then due and unpaid. During the continuance 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, and Borrower shall, upon Borrower’s receipt of any Rents from any sources, pay the total
amount of such receipts to Lender. Although the foregoing rights of Lender are self-effecting, at any time during the continuance
of an Event of Default, Lender may make demand for all Rents, and 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. No tenant shall be
obligated to inquire further as to the occurrence or continuance of an Event of Default, and no tenant shall be obligated to pay
to Borrower any amounts that 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.


 


(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, take and maintain full control of the Mortgaged Property, and may exclude
Borrower and its agents and employees therefrom, 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 (including through use of a lockbox, at Lender’s election), 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 this assignment of Rents, protecting the Mortgaged Property or the security
of this Security Instrument and the Mortgage Loan, or for such. other purposes as Lender in its discretion may deem necessary
or desirable.


 


(e)          Notwithstanding
any other right provided Lender under this Security Instrument or any other Loan Document, if an Event of Default has occurred
and is continuing, and regardless of the adequacy of Lender’s security or 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 Section 3. 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 Security Instrument, expressly consents to the appointment of such receiver, including the appointment of a
receiver ex parte, if permitted by applicable law. Borrower consents to shortened time consideration of a motion to appoint
a receiver. Lender or the receiver, as applicable, shall be entitled to receive a reasonable fee for managing the Mortgaged Property
and such fee shall become an additional part of the Indebtedness. Immediately upon appointment of a receiver or Lender’s entry
upon and taking possession and control of the Mortgaged Property, possession of the Mortgaged Property and 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, shall be surrendered to Lender or the receiver, as applicable. If Lender or receiver
takes possession and control of the Mortgaged Property, Lender or receiver may exclude Borrower and its representatives from the
Mortgaged Property.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 9
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(f)          The
acceptance by Lender of the assignments of the Leases and Rents pursuant to this Section 3 shall not at any time or in any event
obligate Lender to take any action under any Loan Document or to expend any money or to incur any expense. Lender shall not be
liable in any way fur any injury or damage to person or property sustained by any Person in, on or about the Mortgaged Property.
Prior to Lender’s actual entry upon and taking possession and control of the Land and Improvements, Lender shall not be:


 


(1)         obligated
to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to
any Lease);


 


(2)         obligated
to appear in or defend any action or proceeding relating to any Lease or the Mortgaged Property; or


 


(3)         responsible
for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property.


 


The execution of this Security Instrument
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 possession and control by Lender of the Land
and Improvements.


 


(g)          Lender
shall be liable to account only to Borrower and only for Rents actually received by Lender. 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 this Section 3, and Borrower hereby releases and discharges Lender from any such liability to the fullest extent
permitted by law, provided that Lender shall not be released from liability that occurs as a result of Lender’s gross negligence
or willful misconduct as determined by a court of competent jurisdiction pursuant to a final, non-appealable court order. 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 be added to, and become a part of, the principal balance of the Indebtedness,
be immediately due and payable, and bear interest at the Default Rate from the date of disbursement until fully paid. Any entering
upon and taking control of the Mortgaged Property by Lender or the receiver, and any application of Rents as provided in this
Security 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 Security Instrument or any Loan Document.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 10
	Texas	06-12	© 2012 Fannie Mae




     


    

 


		4.	Protection of Lender’s Security.



 


If Borrower fails
to perform any of its obligations under this Security Instrument or any other Loan Document, or any action or proceeding is commenced
that purports to affect the Mortgaged Property, Lender’s security, rights or interests under this Security Instrument or any Loan
Document (including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Environmental Laws,
fraudulent conveyance or reorganizations or proceedings involving a debtor or decedent), Lender may, at its option, make such
appearances, disburse or pay such sums and take such actions, whether before or after an Event of Default or whether directly
or to any receiver for the Mortgaged Property. as Lender reasonably deems necessary to perform such obligations of Borrower and
to protect the Mortgaged Property or Lender’s security, rights or interests in the Mortgaged Property or the Mortgage Loan, including:


 


(a)          paying
fees and out-of-pocket expenses of attorneys, accountants, inspectors and consultants;


 


(b)          entering
upon the Mortgaged Property to make repairs or secure the Mortgaged Property;


 


(c)          obtaining
(or force-placing) the insurance required by the Loan Documents; and


 


(d)          paying
any amounts required under any of the Loan Documents that Borrower has failed to pay.


 


Any amounts so disbursed or
paid by Lender shall be added to, and become part of, the principal balance of the Indebtedness, be immediately due and payable
and bear interest at the Default Rate from the date of disbursement until fully paid. The provisions of this Section 4 shall not
be deemed to obligate or require Lender to incur any expense or take any action.


 


		5.	Default; Acceleration; Remedies.



 


(a)          If
an Event of Default has occurred and is continuing, Lender, at its option, may declare the Indebtedness to be immediately due
and payable without further demand, and may either with or without entry or taking possession as herein provided or otherwise,
proceed by suit or suits at law or in equity or any other appropriate proceeding or remedy (1) to enforce payment of the Mortgage
Loan; (2) to foreclose this Security Instrument judicially or non judicially by the power of sale granted herein; (3) to enforce
or exercise any right under any Loan Document; and (4) to pursue any one (1)or more other remedies provided in this Security Instrument
or in any other Loan Document or otherwise afforded by applicable law. Each right and remedy provided in this Security Instrument
or any other Loan Document is distinct from all other rights or remedies under this Security Instrument or any other Loan Document
or otherwise afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively,
in any order. Borrower has the right to bring an action to assert the nonexistence of an Event of Default or any other defense
of Borrower to acceleration and sale.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 11
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(b)          Borrower
acknowledges that the power of sale granted in this Security Instrument may be exercised or directed by Lender without
prior judicial hearing. In the event Lender invokes the power of sale:


 


(1)         Lender
may, by and through the Trustee, or otherwise, sell or offer for sale the Mortgaged Property in such portions, order and parcels
as Lender may determine, with or without having first taken possession of the Mortgaged Property, to the highest bidder for cash
at public auction. Such sale shall be made at the courthouse door of the county in which all or any part of the Mortgaged Property
to be sold is situated (whether the parts or parcel, if any, situated in different counties are contiguous or not, and without
the necessity of having any Personalty present at such sale) on the first Tuesday of any month between the hours of 10:00 a.m.
and 4:00 p.m., after advertising the time, place and terms of sale and that portion of the Mortgaged Property to be sold
by posting or causing to be posted written or printed notice of sale at least twenty-one (21) days before the date of the sale
at the courthouse door of the county in which the sale is to be made and at the courthouse door of any other county in which a
portion of the Mortgaged Property may be situated, and by filing such notice with the County Clerk(s) of the county(s) in which
all or a portion of the Mortgaged Property may be situated, which notice may be posted and filed by the Trustee acting, or by
any person acting for the Trustee, and Lender has, at least twenty-one (21) days before the date of the sale, served written or
printed notice of the proposed sale by certified mail on each debtor obligated to pay the
Indebtedness according to Lender’s records by the deposit of such notice, enclosed in a postpaid wrapper, properly addressed to
such debtor at debtor’s most recent address as shown by Lender’s records, in a post office or official depository under the care
and custody of the United States Postal Service. The affidavit of any person having knowledge of the facts to the effect that
such service was completed shall be primafacie evidence of the fact of service;


 


(2)         Trustee
shall deliver to the purchaser at the sale, within a reasonable time after the sale, a deed conveying the Mortgaged Property so
sold in fee simple with covenants of general warranty. Borrower covenants and agrees to defend generally the purchaser’s title
to the Mortgaged Property against all claims and demands. The recitals in Trustee’s deed shall be prima facie evidence of the
truth of the statements contained in those recitals;


 


(3)         Trustee
shall be entitled to receive fees and expenses from such sale not to exceed the amount permitted by applicable law; and


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 12
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(4)         Lender
shall have the right to become the purchaser at any sale made under or by virtue of this Security Instrument and Lender so purchasing
at any such sale shall have the right to be credited upon the amount of the bid made therefor by Lender with the amount payable
to Lender out of the net proceeds of such sale. In the event of any such sale, the outstanding principal amount of the Mortgage
Loan and the other Indebtedness, if not previously due, shall be and become immediately due and payable without demand or notice
of any kind. If the Mortgaged Property is sold for an amount less than the amount outstanding under the Indebtedness, the deficiency
shall be determined by the purchase price at the sale or sales. Borrower waives all rights, claims, and defenses with respect
to Lender’s ability to obtain a deficiency judgment.


 


(c)          Borrower
acknowledges and agrees that the proceeds of any sale shall be applied as determined by Lender unless otherwise required by applicable
law.


 


(d)          In
connection with the exercise of Lender’s rights and remedies under this Security Instrument and any other Loan Document, there
shall be allowed and included as Indebtedness: (1) all expenditures and expenses authorized by applicable law and all other expenditures
and expenses which may be paid or incurred by or on behalf of Lender for reasonable legal fees, appraisal fees, outlays for documentary
and expert evidence, stenographic charges and publication costs; (2) all expenses of any environmental site assessments, environmental
audits, environmental remediation costs, appraisals, surveys, engineering studies, wetlands delineations, flood plain studies,
and any other similar testing or investigation deemed necessary or advisable by Lender incurred in preparation for, contemplation
of or in connection with the exercise of Lender’s rights and remedies under the Loan Documents; and (3) costs (which may be reasonably
estimated as to items to be expended in connection with the exercise of Lender’s rights and remedies under the Loan Documents)
of procuring all abstracts of title, title searches and examinations, title insurance policies, and similar data and assurance
with respect to title as Lender may deem reasonably necessary either to prosecute any suit or to evidence the true conditions
of the title to or the value of the Mortgaged Property to bidders at any sale which may be held in connection with the exercise
of Lender’s rights and remedies under the Loan Documents. All expenditures and expenses of the nature mentioned in this Section
5, and such other expenses and fees as may be incurred in the protection of the Mortgaged Property and rents and income therefrom
and the maintenance of the lien of this Security Instrument, including the fees of any attorney employed by Lender in any litigation
or proceedings affecting this Security Instrument, the Note, the other Loan Documents, or the Mortgaged Property, including bankruptcy
proceedings, any Foreclosure Event, or in preparation of the commencement or defense of any proceedings or threatened suit or
proceeding, or otherwise in dealing specifically therewith, shall be so much additional Indebtedness and shall be immediately
due and payable by Borrower, with interest thereon at the Default Rate until paid.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 13
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(e)          If
all or any part of the Mortgaged Property is sold pursuant to this Section 5, Borrower will be divested of any and all interest
and claim to the Mortgaged Property, including any interest or claim to all insurance policies, utility deposits, bonds, loan
commitments and other intangible property included as a part of the Mortgaged Property. Additionally, after a sale of all or any
part of the Land, Improvements, Fixtures and Personalty, Borrower will be considered a tenant at sufferance of the purchaser of
the same, and the purchaser shall be entitled to immediate possession of such property. If Borrower shall fail to vacate the Mortgaged
Property immediately, the purchaser may and shall have the right, without further notice to Borrower, to go into any justice court
in any precinct or county in which the Mortgaged Property is located and file an action in forcible entry and detainer, which
action shall lie against Borrower or its assigns or legal representatives, as a tenant at sufferance. This remedy is cumulative
of any and all remedies the purchaser may have under this Security Instrument or otherwise.


 


(f)          In
any action for a deficiency after a foreclosure under this Security Instrument, if any person against whom recovery is sought
requests the court in which the action is pending to determine the fair market value of the Mortgaged Property, as of the date
of the foreclosure sale, the following shall be the basis of the court’s determination of fair market value; provided that Borrower
and any guarantor hereby waive any rights to contest the amount of the deficiency claim afforded to Borrower and such guarantor
under Tex. Prop. Code Sections 51.003; 51.004 and 51.005; in the event the waiver of such provision is held invalid, that the
valuation method as currently set forth below shall be used;


 


(1)         the
Mortgaged Property shall be valued “as is” and in its condition as of the date of foreclosure, and no assumption of
increased value because of post-foreclosure repairs, refurbishment, restorations or improvements shall be made;


 


(2)         any
adverse effect on the marketability of title because of the foreclosure or because of any other title condition not existing as
of the date of this Security Instrument shall be considered;


 


(3)         the
valuation of the Mortgaged Property shall be based upon an assumption that the foreclosure purchaser desires a prompt resale of
the Mortgaged Property for cash within a six (6) month period after foreclosure;


 


(4)         although
the Mortgaged Property may be disposed of more quickly by the foreclosure purchaser, the gross valuation of the Mortgaged Property
as of the date of foreclosure shall be discounted for a hypothetical reasonable holding period (not to exceed six (6) months)
at a monthly rate equal to the average monthly interest rate on the Note for the twelve (12) months before the date of foreclosure;


 


(5)         the
gross valuation of the Mortgaged Property as of the date of foreclosure shall be further discounted and reduced by reasonable
estimated costs of disposition, including brokerage.commissions, title policy premiums, environmental assessment and clean-up
costs, tax and assessment, prorations, costs to comply with legal requirements, and attorneys’ fees;


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 14
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(6)         expert
opinion testimony shall be considered only from a licensed appraiser certified by the State of Texas and, to the extent permitted
under Texas law, a member of the Appraisal Institute, having at least five (5) years’ experience in appraising property similar
to the Mortgaged Property in the county where the Mortgaged Property is located, and who has conducted and prepared a complete
written appraisal of the Mortgaged Property taking into considerations the factors set forth in this Security Instrument; no expert
opinion testimony shall be considered without such written appraisal;


 


(7)         evidence
of comparable sales shall be considered only if also included in the expert opinion testimony and written appraisal referred to
in the preceding paragraph; and


 


(8)         an
affidavit executed by Lender to the effect that the foreclosure bid accepted by Trustee was equal to or greater than the value
of the Mortgaged Property determined by Lender based upon the factors and methods set forth in subparagraphs (1) through (7) above
before the foreclosure shall constitute prima facie evidence that the foreclosure bid was equal to or greater than the fair market
value of the Mortgaged Property on the foreclosure date.


 


(g)          Lender
may, at Lender’s option, comply with these provisions in the manner permitted or required by Title 5, Section 51.002 of the Texas
Property Code (relating to the sale of real estate) or by Chapter 9 of the Texas Business and Commerce Code (relating to the sale
of collateral after default by a debtor), as those titles and chapters now exist or may be amended or succeeded in the future,
or by any other present or future articles or enactments relating to same subject. Unless expressly excluded, the Mortgaged Property
shall include Rents collected before a foreclosure sale, but attributable to the period following the foreclosure sale, and Borrower
shall pay such Rents to the purchaser at such sale. At any such sale:


 


(1)         whether
made under the power contained in this Security Instrument, Section 51.002, the Texas Business and Commerce Code, any other legal
requirement or by virtue of any judicial proceedings or any other legal right, remedy or recourse, it shall not be necessary for
Trustee to have physically present, or to have constructive possession of, the Mortgaged Property (Borrower shall deliver to Trustee
any portion of the Mortgaged Property not actually or constructively possessed by Trustee immediately upon demand by Trustee)
and the title to and right of possession of any such Mortgaged Property shall pass to the purchaser as completely as if the Mortgaged
Property had been actually present and delivered to the purchaser at the sale;


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 15
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(2)         each
instrument of conveyance executed by Trustee shall contain a general warranty of title, binding upon Borrower;


 


(3)         the
recitals contained in any instrument of conveyance made by Trustee shall conclusively establish the truth and accuracy of the
matters recited in the Instrument, including nonpayment of the Indebtedness and the advertisement and conduct of the sale in the
manner provided in this Security Instrument and otherwise by law and the appointment of any successor Trustee;


 


(4)         all
prerequisites to the validity of the sale shall be conclusively presumed to have been satisfied;


 


(5)         the
receipt of Trustee or of such other party or officer making the sale shall be sufficient to discharge to the purchaser or purchasers
for such purchaser(s)’ purchase money, and no such purchaser or purchasers, or such purchaser(s)’ assigns or personal representatives,
shall thereafter be obligated to see to the application of such purchase money or be in any way answerable for any loss, misapplication
or nonapplication of such purchase money; and


 


(6)         to
the fullest extent permitted by law, Borrower shall be completely and irrevocably divested of all of Borrower’s right, title,
interest, claim and demand whatsoever, either at law or in equity, m and to the Mortgaged Property sold, and such sale shall be
a perpetual bar to any claim to all or any part of the Mortgaged Property sold, both at law and in equity, against Borrower and
against any person claiming by, through or under Borrower.


 


(h)          Any
action taken by Trustee or Lender pursuant to the provisions of this Section 5


shall comply with the laws of the Property
Jurisdiction. Such applicable laws shall take precedence over the provisions of this Section 5, but shall not invalidate or render
unenforceable any other provision of any Loan Document that can be construed in a manner consistent with any applicable law. If
any provision of this Security Instrument shall grant to Lender (including Lender acting as a mortgagee-in-possession), Trustee
or a receiver appointed pursuant to the provisions of this Security Instrument any powers, rights or remedies prior to, upon,
during the continuance of or following an Event of Default that are more limited than the powers, rights, or remedies that would
otherwise be vested in such party under any applicable law in the absence of said provision, such party shall be vested with the
powers, rights, and remedies granted in such applicable law to the full extent permitted by law.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 16
	Texas	06-12	© 2012 Fannie Mae




     


    

 


		6.	Waiver of Statute of Limitations and Marshaling.



 


Borrower hereby waives
the right to assert any statute of limitations as a bar to the enforcement of the lien of this Security Instrument or to any action
brought to enforce any Loan Document. 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 Security Instrument and/or any other Loan Document or by 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, for itself and all who may claim by, through, or under it, 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 Security Instrument waives any and all right to require the marshaling of assets or to require that any of the Mortgaged
Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels (at the same time
or different times) in connection with the exercise of any of the remedies provided in this Security Instrument or any other Loan
Document, or afforded by applicable law.


 


		7.	Waiver of Redemption; Rights of Tenants.



 


(a)          Borrower
hereby covenants and agrees that it will not at any time apply for, insist upon, plead, avail itself, or in any manner claim or
take any advantage of, any appraisement, stay, exemption or extension law or any so-called “Moratorium Law” now or at
any time hereafter enacted or in force in order to prevent or hinder the enforcement or foreclosure of this Security Instrument.
Without limiting the foregoing:


 


(1)         Borrower
for itself and all Persons who may claim by, through, or under Borrower, hereby expressly waives any so-called -Moratorium
Law” and any and all rights of reinstatement and redemption, if any, under any order or decree of foreclosure of this Security
Instrument, it being the intent hereof that any and all such “Moratorium Laws,” and all rights of reinstatement and
redemption of Borrower and of all other Persons claiming by, through, or under Borrower are and shall be deemed to be hereby waived
to the fullest extent permitted by applicable law;


 


(2)         Borrower
shall not invoke or utilize any such law or laws or otherwise hinder, delay or impede the execution of any right, power remedy
herein or otherwise granted or delegated to Lender but will suffer and permit the execution of every such right, power and remedy
as though no such law or laws had been made or enacted; and


 


(3)         if
Borrower is a trust, Borrower represents that the provisions of this Section 7 (including the waiver of reinstatement and redemption
rights) were made at the express direction of Borrower’s beneficiaries and the persons having the power of direction over Borrower,
and are made on behalf of the trust estate of Borrower and all beneficiaries of Borrower, as well as all other persons mentioned
above.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 17
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(b)          Lender
shall have the right to foreclose subject to the rights of any tenant or tenants of the Mortgaged Property having an interest
in the Mortgaged Property prior to that of Lender. The failure to join any such tenant or tenants of the Mortgaged Property as
party defendant or defendants in any such civil action or the failure of any decree of foreclosure and sale to foreclose their
rights shall not be asserted by Borrower as a defense in any civil action instituted to collect the Indebtedness, or any part
thereof or any deficiency remaining unpaid after foreclosure and sale of the Mortgaged Property, any statute or rule of law at
any time existing to the contrary notwithstanding.


 


		8.	Notice.



 


(a)          All
notices under this Security Instrument shall be:


 


(1)         in
writing, and shall be (A) delivered, in person, (B) mailed, postage prepaid, either by registered or certified delivery, return
receipt requested, or (C) sent by overnight express courier,


 


(2)         addressed
to the intended recipient at its respective address set forth at the end of this Security Instrument; and


 


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


 


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


 


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


 


(b)          Any
party to this Security 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 8.


 


(c)          Any
required notice under this Security Instrument which does not specify how notices are to be given shall be given in accordance
with this Section 8.


 


		9.	Mortgagee-in-Possession.



 


Borrower
acknowledges and agrees that the exercise by Lender of any of the rights conferred in this Security Instrument shalt 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.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 18
	Texas	06-12	© 2012 Fannie Mae




     


    

 


		10.	Release.



 


Upon payment in full
of the Indebtedness, Lender shall cause the release of this Security Instrument and Borrower shall pay Lender’s costs incurred
in connection with such release.


 


		11.	Trustee.



 


(a)          Trustee
may resign by giving of notice of such resignation in writing to Lender. If Trustee. shall die, resign or become disqualified
from acting under this Security Instrument or shall fail or refuse to act in accordance with this Security Instrument when requested
by Lender or if for any reason and without cause Lender shall prefer to appoint a substitute trustee to act instead of the original
Trustee named in this Security Instrument or any prior successor or substitute trustee, Lender shall have full power to appoint
a substitute trustee and, if preferred, several substitute trustees in succession who shall succeed to all the estate, rights,
powers and duties of the original Trustee named in this Security Instrument. Such appointment may be executed by an authorized
officer, agent or attorney-in-fact of Lender (whether acting pursuant to a power of attorney or otherwise), and such appointment
shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by
Lender.


 


(b)          Any
successor Trustee appointed pursuant to this Section 11 shall, without any further act, deed or conveyance, become vested with
all the estates, properties, rights, powers and trusts of the predecessor Trustee with like effect as if originally named as Trustee
in this Security Instrument; but, nevertheless, upon the written request of Lender or such successor Trustee, the Trustee ceasing
to act shall execute and deliver an instrument transferring to such successor Trustee, all the estates, properties, rights, powers
and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the Mortgaged Property and monies
held by the Trustee ceasing to act to the successor Trustee.


 


(c)          Trustee
may authorize one (1) or more parties to act on Trustee’s behalf to perform the ministerial functions required of Trustee under
this Security Instrument, including the transmittal and posting of any notices.


 


		12.	No Fiduciary Duty.



 


Lender owes no fiduciary or other special duty to
Borrower.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 19
	Texas	06-12	© 2012 Fannie Mae




     


    

 


		13.	Additional Provisions Regarding Assignment of Leases
and Rents.



 


In no event shall
the assignment of Rents or Leases in Section 3 cause the Indebtedness to be reduced by an amount greater than the Rents actually
received by Lender and applied by Lender to the Indebtedness, whether before, during or after (a) an Event of Default, or (b)
a suspension or revocation of the license granted to Borrower in Section 3 with regard to the Rents. Borrower and Lender specifically
intend that the assignment of Rents and Leases in Section 3 is not intended to result in a pro tanto reduction of the Indebtedness.
The assignment of Rents and Leases in Section 3 is not intended to constitute a payment of, or with respect to, the Indebtedness
and, therefore, Borrower and Lender specifically intend that the Indebtedness shall not be reduced by the value of the Rents and
Leases assigned. Such reduction shall occur only if, and to the extent that, Lender actually receives Rents pursuant to Section
3 and applies such Rents to the Indebtedness. Borrower agrees that the value of the license granted with regard to the Rents equals
the value of the absolute assignment of Rents to Lender. The assignment of Rents contained in Section 3 shall terminate upon the
release of this Security Instrument.


 


		14.	Loan Charges.



 


Borrower agrees to
pay an effective rate of interest equal to the sum of the Interest Rate and any additional rate of interest resulting from any
other charges of interest or in the nature of interest paid or to be paid in connection with the Mortgage Loan and any other fees
or amounts to be paid by Borrower pursuant to any of the other Loan Documents. Neither this Security Instrument, the Note, the
Loan Agreement, nor any of the other Loan Documents shall be construed to create a contract for the use, forbearance or detention
of money requiring payment of interest at a rate greater than the maximum interest rate permitted to be charged under applicable
law. It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply with all applicable
laws governing the maximum rate or amount of interest payable on the indebtedness evidenced by this Security Instrument, the Note
and the other Loan Documents. If any applicable law limiting the amount of interest or other charges permitted to be collected
from Borrower is interpreted so that any interest or other charge or amount provided for in any Loan Document, whether considered
separately or together with other charges or amounts provided for in any other Loan Document, or otherwise charged, taken, reserved
or received in connection with the Mortgage Loan, or on acceleration of the maturity of the Mortgage Loan or as a result of any
prepayment by Borrower or otherwise, violates that law, and Borrower is entitled to the benefit of that law, that interest or
charge is hereby reduced to the extent necessary to eliminate any such violation. Amounts, if any, previously paid to Lender in
excess of the permitted amounts shall be applied by Lender to reduce the unpaid principal balance of the Mortgage Loan without
the payment of any Prepayment Premium (or, if the Mortgage Loan has been or would thereby be paid in full, shall be refunded to
Borrower), and the provisions of the Loan Agreement and any other Loan Documents immediately shall be deemed reformed and the
amounts thereafter collectible under the Loan Agreement and any other Loan Documents reduced, without the necessity of the execution
of any new documents, so as to comply with any applicable law, but so as to permit the recovery of the fullest amount otherwise
payable under the Loan Documents. For the purpose of determining whether any applicable law limiting the amount of interest or
other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as
all other charges made in connection with the Indebtedness that constitute interest, and any amount paid or agreed to be paid
to Lender for the use, forbearance or detention of the Indebtedness, shall be deemed to be allocated and spread ratably over the
stated term of the Mortgage Loan. Unless otherwise required by applicable law, such allocation and spreading shall be effected
in such a manner that the rate of interest so computed is uniform throughout the stated term of the Mortgage Loan.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 20
	Texas	06-12	© 2012 Fannie Mae




     


    

 


		15.	ENTIRE AGREEMENT.



 


THIS
SECURITY INSTRUMENT, THE NOTE, THE LOAN AGREEMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. [HERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.


 


		16.	Governing Law; Consent to Jurisdiction and Venue.



 


This Security
Instrument shall be governed by the laws of the Property Jurisdiction without giving effect to any choice of law provisions thereof
that would result in the application of the laws of another jurisdiction. Borrower agrees that any controversy arising under or
in relation to this Security Instrument shall be litigated exclusively in the Property Jurisdiction. The state and federal courts
and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies that arise
under or in relation to any security for the Indebtedness. 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.


 


		17.	Miscellaneous Provisions.



 


(a)          This
Security Instrument shall hind, and the rights granted by this Security Instrument shall benefit, the successors and assigns of
Lender. This Security Instrument shall bind, and the obligations granted by this Security Instrument shall inure to. any permitted
successors and assigns of Borrower under the Loan Agreement. If more than one (1) person or entity signs this Security Instrument
as Borrower, the obligations of such persons and entities shall be joint and several. The relationship between Lender and Borrower
shall be solely that of creditor and debtor, respectively, and nothing contained in this Security Instrument shall create any
other relationship between Lender and Borrower. No creditor of any parry to this Security Instrument and no other person shall
be a third party beneficiary of this Security Instrument or any other Loan Document.


 


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


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 21
	Texas	06-12	© 2012 Fannie Mae




     


    

 


(c)          The
following rules of construction shall apply to this Security Instrument:


 


(1)         The
captions and headings of the sections of this Security Instrument are for convenience only and shall be disregarded in construing
this Security Instrument.


 


(2)         Any
reference in this Security Instrument to an “Exhibit” or “Schedule” or a “Section” or an “Article”
shall, unless otherwise explicitly provided, be construed as referring, respectively, to an exhibit or schedule attached to this
Security Instrument or to a Section or Article of this Security Instrument.


 


(3)         Any
reference in this Security Instrument to a statute or regulation shall be construed as referring to that statute or regulation
as amended from time to time.


 


(4)         Use
of the singular in this Security Instrument includes the plural and use of the plural includes the singular.


 


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


 


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


 


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


 


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


 


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


 



    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 22
	Texas	06-12	© 2012 Fannie Mae




     


    

 


		18.	Time is of the Essence.



 


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


 


		19.	WAIVER OF TRIAL BY JURY.



 


TO THE MAXIMUM
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) (A) COVENANTS AND AGREES NOT TO ELECT
A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS SECURITY 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 OF BORROWER
AND LENDER, KNOWINGLY AND VOLUNTARILY WITH Tiff: BENEFIT OF COMPETENT LEGAL COUNSEL.


 


ATTACHED EXHIBITS.
The following Exhibits are attached to this Security Instrument and incorporated fully herein by reference:


 


	 ̈	Exhibit A	Description of the Land (required)
	 	 	 
	 ̈	Exhibit B	Modifications to Security Instrument


 


[Remainder of Page Intentionally Blank]


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page 23
	Texas	06-12	© 2012 Fannie Mae




     


    

 


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


 


	 	BORROWER:
	 	 
	 	BRE MIF CASCADES II LLC, a Delaware limited
    liability company 
	 	 	 
	 	By:	/s/ Olivia John	 
	 	 	Olivia John
	 	 	Vice President


 


	 	The name, chief executive office
                           and organizational identification number of Borrower (as Debtor under any applicable Uniform Commercial
                           Code) are:

        Debtor Name/Record Owner: BRE MP Cascades II LLC

        Debtor Chief Executive Office Address:

        345 Park Avenue

        New York, NY 10154

        Debtor Organizational II) Number: 550 139



 


[ACKNOWLEDGMENT OCCURS ON THE FOLLOWING
PAGE]


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page S-1
	Texas	06-12	© 2012 Fannie Mae




     


    

 


ACKNOWLEDGMENT


 


STATE OF New York


 


COUNTY OF New York


 


This instrument was acknowledged
before me on May 21, 2014 by Olivia John, as Vice President of BRE MF Cascades II LLC, a Delaware limited liability company,
and on behalf of BRE MF CASCADES II LLC, a Delaware limited liability company.


 


	/s/Andrew
    J. Wolfram	 


 


Notary Public


 


Printed Name:  Andrew J. Wolfram


 


My Commission Expires:


 


	8-12-17	 


 


		ANDREW J.
                           WOLFRAM

        NOTARY PUBLIC, State of New
        York

        No. 01W06287396

        Qualified in New York: County

        Commission Expires Aug. 12,
        2017
	 


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page S-2
	Texas	06-12	© 2012 Fannie Mae




     


    

 


	 	The name and chief executive
    office of Lender (as Secured Party) are:
	 	Secured Party Name: Wells Fargo Bank. National
    Association
	 	Secured Party Chief Executive
        Office Address:

        2010 Corporate Ridge, Suite 1000

	 	Mclean. Virginia 22102
	 	TRUSTEE NOTICE ADDRESS:
	 	1850 M Street, N\V
	 	Suite 400
	 	Washington, D.C. 20036


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page S-3
	Texas	06-12	© 2012 Fannie Mae




     


    

 


EXHIBIT A


 


DESCRIPTION OF THE LAND


 


BEING all that certain lot, tract or parcel of land, being
part of the McKinney & Williams Survey, Abstract No. 728, part of the L.H. Ashcroft Survey. Abstract No. 48, Smith County,
Texas, being all of Lot I, N.C.B. 1802-F, all of Lots 1-31, N.C.B. 1802-G, all of Louise Court (60’ private street). and
all of Pine Terrace (60’ private street), of the Second Amending Plat Cascades VI, as shown by plat of same recorded in
Cabinet E, Slide 92-13, Plat Records, Smith County, Texas, as corrected by Certificate of Correction filed 04121(2014 under Document
No. 2014-000 15135, Official Records of Smith County, Texas, being more completely described as follows, to-wit;


 


BEGINNING at a 5/S” iron rod (found) in the West line
of Lot 21, Block 4, Briarwood Estates, Unit I, as shown by plat of same recorded in Cabinet B, Slide 260-8, the Northeast comer
of the above mentioned Lot 19, the most easterly Southeast corner of Lot J, N.C.B. 1806, Mansions at the Cascades, as shown by
plat of same recorded in Cabinet 0, Page 396-A;


 


THENCE South 00 degrees 54 minutes 25 seconds East with the
West line of Block 4 and Block 8, Briarwood Estates, Unit land the East line of the above mentioned N.C.B. 1802-G, a distance
of 927.14 ft. to a 5/8” iron rod (found) for the Southeast corner of same, the Southeast comer of Lot I, in the North line
of the M, L Hayes Estate 2.56 acre tract recorded in Volume 3720. Page 687;


 


THENCE South 89 degrees 17 minutes 56 seconds West with the
South line of N.C.B. 1802-0. the North line of the 2.56 acre tract and the easterly South line of Lot I. N.C.B. 1802-F, a distance
of 358.68 ft. to a 112” iron rod (set) for easterly Southwest comer of same, in the East line of a 20.0 ft.


private alley, part of N.C.B. 1802-E, as shown by plat of same
recorded in Cabinet E, Slide 92-B, from which a 5/S” iron rod (found) bears North 79 degrees 20 minutes 53 seconds East
- 6.51 ft.;


 


THENCE North 0 j degree 57 minutes 30 seconds East with the
Southerly West line of Lot I, N.C.S. 1802-F and {he East line of the 20.0 ft. alley, a distance of 14.39 ft. to a 112” iron
rod (set) for It Northeast comer of same, an ell corner of Lot I, N.C.S. 1802-F;


 


THENCE westerly with the South line of Lot 1, N.C.B. 1802-F,
the North line of the 20.0 ft, alley and N.C.B. 1802-£, West - 379.69 ft. and North 70 degrees 45 minutes 24 seconds West
- 48.55 ft. to a 112” iron rod (set) for comer, at the p.c. of a curve to the right;


 


THENCE Northwesterly with said curve to the right, having a
chord of North 42 degrees 22 minutes 23 seconds West- 299.99 ft. and a radius of 227.00 ft, a distance of 327.72 ft. to a 112”
iron rod (set) at the p.t. of same;


 


THENCE North 01 degrees 00 minutes 52 seconds West with the
middle West line of Lot I, N.C.S. 1802-F and an East line of the 20 ft. alley, a distance 0[301.61 ft. to a 112” iron rod
(set) for an inner corner of same;


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page A-1
	Texas	06-12	© 2012 Fannie Mae




     


    

 


THENCE North 54 degrees 21 minutes 35 seconds East with a North
line of Lot I, N.C.B. 1802-F, the South line of the 20.0 ft. alley. Lot I and Lot I-A, N.C.B. 1802-E. a distance of 157.24 ft.
to a 112” iron rod (set) for the Southeast comer of same, an inner comer of Lot I, N.C.B. 1802-F;


 


THENCE North 40 degrees 30 minutes 05 seconds West with the
Northerly west line of Lot I, N.C.B. 1802-F, the East line of Lot I-A, N.C.B. 1802-E. a distance of 173.65 ft. to a 1/2”
iron rod (set) for the Northeast comer of same, the Northwest comer of Lot I, N.C.B. 1802-F, in the Southeast right of way line
of Hogan Drive (60 ft. right of way);


 


THENCE North 48 degrees 10 minutes 44
seconds East with the Southeast right of way line of Hogan Drive and the Northwest line of Lot 1, N.C.B. 1802-F, a distance of
17.28 ft. to the p.c. of a curve 10 the left;


 


THENCE Northeasterly with the Southeast right of way line of
Hogan Drive, the Northwest line of Lot I, N.C.B. 1802-F and said curve to the left. having a chord of North 43 degrees 04 minutes
54 seconds East - 49.75 ft., a distance of 49.82 ft. to a 112” iron rod (set) for comer, the westerly comer of Lot I-A.
N.C.B. 1802-E to the p.c. of a curve to the right;


 


THENCE Southeasterly with the Westerly North line of Lot I,
N.C.B. 1802 -F to a 112” iron rod (set) for an inner corner of same. the South corner of Lot I-A and said curve to the right,
having a chord of South 40 degrees 51 minutes 06 seconds East - 199.IS ft. a distance of 199.96 ft to a 112” iron rod (set)
for comer, the Westerly corner of Lot I-A, N.C.B. 1802-E;


 


THENCE North 01 degree 26 minutes 02 seconds West with the
East line of Lot I-A, the Northerly West line of Lot I, N.C.S. 1802-F, a distance of 68 sq. ft. to a 1⁄2” iron rod
(found) for the Northwest comer of same, the Southwest comer of Lot I. N.C.S. 1806, Mansions at the Cascades as shown by plat
of same recorded in Cabinet D, slide 396-A;


 


THENCE North 88 degrees 33 minutes 58 seconds East with the
westerly South line of Lot 1, N.C.B. 1806 and the North li ne of Lot I, N.C.B. 1802-F, a distance of 457.94 ft. to a 112”
iron rod (found) for the Northeast comer of same, the Southwest corner of the above mentioned Lot 16, the westerly Southwest corner
of N.C.B. 1802-G;


 


THENCE North 00 degrees 29 minutes 33 seconds West with the
Southerly East line of N.C.B. 1806 and the Northerly \Vest line of N.C.B. 1802-G, a distance of 169.0 I ft. to a 112” iron
rod (found) for the Northwest comer of same, an inner corner of Lot 1, N.C.S. 1806;


 


THENCE North 88 degrees 39 minutes 25 seconds East with the
easterly South line of Lot 1, N.C.S. 1806 and the North line of N.C.B. 1802-G, a distance of 329.85 ft. to the place of beginning,
containing 17.433 acres of land.


 




    
	Fannie Mae Multifamily Security Instrument	Form 6025.TX	Page A-2
	Texas	06-12	© 2012 Fannie Mae