Document:

ex105mfnotebristolvillag

                                                                  EXHIBIT 10.5                                MULTIFAMILY NOTE   us $34,331,000.00                                              as of May 31, 2019         FOR VALUE RECEIVED, the undersigned ("Borrower")  promises to pay to the order  of BERKELEY POINT CAPITAL LLC, d/b/a NEWMARK KNIGHT FRANK, a Delaware  limited liability company ("Lender"), the principal amount of Thirty-Four Million Three­ Hundred Thirty-One Thousand and 00/100 Dollars (US $34,331,000.00) (the "Mortgage  Loan"), together with interest thereon accruing at the Interest Rate on the unpaid principal  balance from the date the Mortgage Loan proceeds are disbursed until fully paid in accordance  with the terms hereof and of that certain Multifamily Loan and Security Agreement dated as of  the date hereof, by and between Borrower and Lender (as the same may be amended, restated,  replaced, supplemented or otherwise modified from time to time, the "Loan Agreement").   1.    Defined Terms.         Capitalized terms used and not specifically defined in this Multifamily Note (this "Note")  have the meanings given to such terms in the Loan Agreement.   2.    Repayment.         Borrower agrees to pay the principal amount of the Mortgage Loan and interest on the  principal amount of the Mortgage Loan from time to time outstanding at the Interest Rate or such  other rate or rates and at the times specified in the Loan Agreement, together with all other  amounts due to Lender under the Loan Documents. The outstanding balance of the Mortgage  Loan and all accrued and unpaid interest thereon shall be due and payable on the Maturity Date,  together with all other amounts due to Lender under the Loan Documents.   3.    Security.         The Mortgage Loan evidenced by this Note, together with all other Indebtedness is  secured by, among other things, the Security Instrument, the Loan Agreement and the other Loan  Documents. All of the terms, covenants and conditions contained in the Loan Agreement, the  Security Instrument and the other Loan Documents are hereby made part of this Note to the same  extent and with the same force as if they were fully set forth herein. In the event of a conflict or  inconsistency between the terms of this Note and the Loan Agreement, the terms and provisions  of the Loan Agreement shall govern.   4.    Acceleration.         In accordance with the Loan Agreement, if an Event of Default has occurred and is  continuing, the entire unpaid principal balance of the Mortgage Loan, any accrued and unpaid  interest, including interest accruing at the Default Rate, the Prepayment Premium (if applicable),  and all other amounts payable under this Note, the Loan Agreement and any other Loan  Document shall at once become due and payable, at the option of Lender, without any prior    Multifamily Note - Multistate         Form6010                            Page 1  Fannie Mae                              12-17                    © 2017 Fannie Mae  

 

notice to Borrower, unless applicable law requires otherwise (and in such case, after satisfactory  notice has been given).   5.    Personal Liability.         The  provisions of Article 3 (Personal Liability) of the Loan Agreement are hereby  incorporated by reference into this Note to the same extent and with the same force as if fully set  forth herein.   6.    Governing Law.         This Note shall be governed in accordance with the terms and provisions of Section 15.01  (Governing Law; Consent to Jurisdiction and Venue) of the Loan Agreement.   7.    Waivers.         Presentment, demand for payment, notice of nonpayment and dishonor, protest and notice  of protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity,  presentment for payment, notice of nonpayment, and grace and diligence in collecting the  Indebtedness are waived by Borrower, for and on behalf of itself, Guarantor and Key Principal,  and all endorsers and guarantors of this Note and all other third party obligors or others who may  become liable for the payment of all or any part of the Indebtedness.   8.    Commercial Purpose.         Borrower represents that the Indebtedness is being incurred by Borrower solely for the  purpose of carrying on a business or commercial enterprise or activity, and not for agricultural,  personal, family or household purposes.   9.    Construction; Joint and Several (or Solidary, as applicable) Liability.         (a)   Section 15.08 (Construction) of the Loan Agreement is hereby incorporated  herein as if fully set forth in the body of this Note.         (b)   If more than one Person executes this Note as Borrower, the obligations of such  Person shall be joint and several (solidary instead for purposes of Louisiana law).   10.   Notices.         All Notices required or permitted to be given by Lender to Borrower pursuant to this   Note shall be given in accordance with Section 15.02 (Notice) of the Loan Agreement.   11.   Time is of the Essence.         Borrower agrees that, with respect to each and every obligation and covenant contained  in this Note, time is of the essence.    Multifamily Note - Multistate          Form6010                           Page2  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

12.   Loan Charges Savings Clause.         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 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 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.   13.   WAIVER OF TRIAL BY JURY.         TO THE MAXIMUM EXTENT PERMITTED BYLAW, EACH OF BORROWER  AND LENDER (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO  ANY  ISSUE  ARISING   OUT  OF  THIS NOTE   OR  THE  RELATIONSHIP    BETWEEN  THE PARTIES AS    LENDER AND BORROWER THAT IS        TRIABLE OF RIGHT BY A  JURY  AND   (B) WAIVES  ANY   RIGHT  TO  TRIAL   BY JURY   WITH  RESPECT    TO  SUCH ISSUE TO   THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE  FUTURE.   THIS  WAIVER OF RIGHT TO     TRIAL BY JURY IS   SEPARATELY GIVEN    Multifamily Note - Multistate          Form6010                           Page3  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

BY  EACH   PARTY,  KNOWINGLY     AND  VOLUNTARILY     WITH   THE  BENEFIT   OF  COMPETENT LEGAL COUNSEL.   14.   Receipt of Loan Documents.         Borrower acknowledges receipt of a copy of each of the Loan Documents.   15.   Incorporation of Schedules.         The schedules, if any, attached to this Note are incorporated fully into this Note by this  reference and each constitutes a substantive part of this Note.          ATTACHED SCHEDULE.       The following Schedule is attached to this Note:              D           Schedule 1        Modifications to Note                         [Remainder of Page Intentionally Blank]    Multifamily Note - Multistate          Form6010                           Page4  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

      IN  WITNESS   WHEREOF,     Borrower has signed and delivered this Note under seal  (where applicable) or has caused this Note to be signed and delivered under seal (where  applicable) by its duly authorized representative. Where applicable law so provides, Borrower  intends that this Note shall be deemed to be signed and delivered as a sealed instrument.                                         BORROWER:                                         STAR III BRISTOL VILLAGE, LLC                                        a Delaware limited liability company                                         By:    Steadfast Apartment Advisor III, LLC                                               a Delaware limited liability company                                               its Manager                                                By:    Multifamily Note - Multistate            Form 6010                            Page 5  Fannie Mae                                 12-17                    © 2017 Fannie Maeex106loanagreementsweetw

                                                       EXHIBIT 10.6           MULTIFAMILY LOAN AND SECURITY AGREEMENT                          (NON-RECOURSE)                           BY AND BETWEEN       STAR III SWEETWATER, LLC, a Delaware limited liability company                                  AND    BERKELEY POINT CAPITAL LLC, d/b/a NEWMARK KNIGHT FRANK,                    a Delaware limited liability company                             DATED AS OF                             MAY 31,2019    @ Fannie Mae~  

 

                                TABLE OF CONTENTS    ARTICLE 1-DEFINITIONS; SUMMARY OF MORTGAGE LOAN TERMS ................................. 1     SECTION 1.01  DEFINED TERMS ............................................................................................................ 1     SECTION 1.02  SCHEDULES, EXHIBITS, AND ATTACHMENTS INCORPORATED ...................................... l   ARTICLE 2 - GENERAL MORTGAGE LOAN TERMS ...................................................................... 2     SECTION 2.01  MORTGAGE LOAN ORIGINATION AND  SECURITY ......................................................... 2       (a)   Making of Mortgage Loan ......................................................................................................... 2       (b)   Security for Mortgage Loan ...................................................................................................... 2       (c)   Protective Advances .................................................................................................................. 2     SECTION 2.02  PAYMENTS ON MORTGAGE LOAN ................................................................................. 2       (a)   Debt Service Payments .............................................................................................................. 2       (b)   Capitalization of Accrued But Unpaid Interest. ........................................................................ 3       (c)   Late Charges .............................................................................................................................. 3       (d)   Default Rate ............................................................................................................................... 4       (e)   Address for Payments ................................................................................................................ 5       (f)   Application of Payments ........................................................................................................... 5     SECTION 2.03  LOCKOUT/PREPAYMENT ............................................................................................... 6       (a)   Prepayment; Prepayment Lockout; Prepayment Premium ........................................................ 6       (b)   Voluntary Prepayment in Full. .................................................................................................. 6       ( c)  Acceleration of Mortgage Loan ................................................................................................. 7       (d)   Application of Collateral. .......................................................................................................... 7       (e)   Casualty and Condemnation ...................................................................................................... 7       (f)   No Effect on Payment Obligations ............................................................................................ 8       (g)   Loss Resulting from Prepayment. ............................................................................................. 8   ARTICLE 3 - PERSONAL LIABILITY .................................................................................................. 8     SECTION 3.01  NON-RECOURSE MORTGAGE LOAN; EXCEPTIONS ........................................................ 8     SECTION 3.02  PERSONAL LIABILITY OF BORROWER (EXCEPTIONS TO NON-RECOURSE PROVISION). 9       (a)   Personal Liability Based on Lender's Loss ............................................................................... 9       (b)   Full Personal Liability for Mortgage Loan .............................................................................. 10     SECTION 3.03  PERSONAL LIABILITY FOR INDEMNITY OBLIGATIONS ................................................ 10     SECTION 3.04  LENDER'S RIGHT TO FOREGO RIGHTS AGAINST MORTGAGED PROPERTY ................. 11   ARTICLE 4 - BORROWER STATUS ................................................................................................... 11     SECTION 4.01  REPRESENTATIONS AND WARRANTIES ....................................................................... 11       (a)   Due Organization and Qualification ........................................................................................ 11       (b)   Location ................................................................................................................................... 11       ( c)  Power and Authority ................................................................................................................ 12       (d)   Due Authorization ................................................................................................................... 12       (e)   Valid and Binding Obligations ................................................................................................ 12       (f)   Effect of Mortgage Loan on Borrower's Financial Condition ................................................ 12       (g)   Economic Sanctions, Anti-Money Laundering, and Anti-Corruption ..................................... 13       (h)   Borrower Single Asset Status .................................................................................................. 13       (i)   No Bankruptcies or Judgments ................................................................................................ 15       U)    No Actions or Litigation .......................................................................................................... 15       (k)   Payment of Taxes, Assessments, and Other Charges .............................................................. 15   Multifamily Loan and Security Agreement  (Non-Recourse)                            Form 6001.NR                             Pagei  Fannie Mae                                   04-18                      © 2018 Fannie Mae  

 

      (I)  Not a Foreign Person ............................................................................................................... 16        (m)  ERISA ...................................................................................................................................... 16        (n)  Default Under Other Obligations ............................................................................................ 16        (o)  Prohibited Person ..................................................................................................................... 16        (p)  No Contravention .................................................................................................................... 17        (q)  Lockbox Arrangement. ............................................................................................................ 17     SECTION 4.02   COVENANTS ................................................................................................................. 17        (a)  Maintenance of Existence; Organizational Documents ........................................................... 17        (b)  Economic Sanctions, Anti-Money Laundering, and Anti-Corruption ..................................... 18        (c)  Payment of Taxes, Assessments, and Other Charges .............................................................. 18        (d)  Borrower Single Asset Status .................................................................................................. 18        (e)  ERISA ...................................................................................................................................... 20       (f)   Notice of Litigation or Insolvency ........................................................................................... 20       (g)   Payment of Costs, Fees, and Expenses .................................................................................... 20        (h)  Restrictions on Distributions ................................................................................................... 21        (i)  Lockbox Arrangement. ............................................................................................................ 21   ARTICLE 5 -  THE MORTGAGE LOAN .............................................................................................. 21     SECTION 5.01   REPRESENTATIONS AND WARRANTIES ....................................................................... 21       (a)   Receipt and Review of Loan Documents ................................................................................ 21       (b)   No Default. .............................................................................................................................. 22        (c)  No Defenses ............................................................................................................................. 22        (d)  Loan Document Taxes ............................................................................................................. 22     SECTION 5.02   COVENANTS ................................................................................................................. 22       (a)   Ratification of Covenants; Estoppels; Certifications ............................................................... 22       (b)   Further Assurances .................................................................................................................. 23       ( c)  Sale of Mortgage Loan ............................................................................................................ 23       (d)   Limitations on Further Acts of Borrower ................................................................................ 24        (e)  Financing Statements; Record Searches .................................................................................. 24       (f)   Loan Document Taxes ............................................................................................................. 25   ARTICLE 6 -  PROPERTY USE, PRESERVATION, AND MAINTENANCE .................................. 25     SECTION 6.01   REPRESENTATIONS AND WARRANTIES'. ...................................................................... 25       (a)   Compliance with Law; Permits and Licenses .......................................................................... 25       (b)   Property Characteristics ........................................................................................................... 26       (c)   Property Ownership ................................................................................................................. 26       (d)   Condition of the Mortgaged Property ...................................................................................... 26       (e)   Personal Property ..................................................................................................................... 26     SECTION 6.02   COVENANTS ................................................................................................................. 26       (a)   Use of Property ........................................................................................................................ 26       (b)   Property Maintenance .............................................................................................................. 27       (c)   Property Preservation .............................................................................................................. 29       (d)   Property Inspections ................................................................................................................ 29       (e)   Compliance with Laws ............................................................................................................ 30     SECTION 6.03   MORTGAGE LOAN ADMINISTRATION MATIERS   REGARDING THE PROPERTY ........... 30       (a)   Property Management. ............................................................................................................. 30       (b)   Subordination of Fees to Affiliated Property Managers .......................................................... 31       (c)   Property Condition Assessment ............................................................................................... 31    Multifamily Loan and Security Agreement  (Non-Recourse)                            Form 6001.NR                             Page ii  Fannie Mae                                    04-18                      © 2018 Fannie Mae  

 

  ARTICLE 7 - LEASES AND RENTS ..................................................................................................... 31      SECTION 7.01  REPRESENTATIONS AND WARRANTIES ....................................................................... 31        ( a) Prior Assignment of Rents ....................................................................................................... 31        (b)  Prepaid Rents ........................................................................................................................... 31      SECTION 7.02  COVENANTS ................................................................................................................. 32        (a)   Leases ...................................................................................................................................... 32        (b)   Commercial Leases .................................................................................................................. 32        ( c) Payment of Rents ..................................................................................................................... 33        ( d) Assignment of Rents ................................................................................................................ 34        (e)  Further Assignments of Leases and Rents ............................................................................... 34        (t)  Options to Purchase by Tenants .............................................................................................. 34     SECTION 7.03   MORTGAGE LOAN ADMINISTRATION REGARDING LEASES AND   RENTS .................... 34        (a)  Material Commercial Lease Requirements ............................................................................. 34        (b)  Residential Lease Form ........................................................................................................... 35   ARTICLE 8 -  BOOKS AND RECORDS; FINANCIAL REPORTING .............................................. 35     SECTION 8.01   REPRESENTATIONS AND WARRANTIES ....................................................................... 35        (a)  Financial Information .............................................................................................................. 35        (b)  No Change in Facts or Circumstances ..................................................................................... 35     SECTION 8.02   COVENANTS ................................................................................................................. 35       (a)   Obligation to Maintain Accurate Books and Records ............................................................. 35       (b)   Items to Furnish to Lender ....................................................................................................... 36        (c)  Audited Financials ................................................................................................................... 39        (d)  Delivery of Books and Records ............................................................................................... 39     SECTION 8.03   MORTGAGE LOAN ADMINISTRATION MATTERS REGARDING BOOKS AND    RECORDS                    AND FINANCIAL REPORTING ....................................................................................... 39       (a)   Lender's Right to Obtain Audited Books and Records ........................................................... 39       (b)   Credit Reports; Credit Score .................................................................................................... 40   ARTICLE 9 -  INSURANCE .................................................................................................................... 40     SECTION 9.01   REPRESENTATIONS AND WARRANTIES ...................................................................... .40       (a)   Compliance with Insurance Requirements ............................................................................. .40       (b)   Property Condition .................................................................................................................. 40     SECTION 9.02   COVENANTS ................................................................................................................. 40       (a)   Insurance Requirements .......................................................................................................... 40       (b)   Delivery of Policies, Renewals, Notices, and Proceeds ......................................................... .41     SECTION 9.03   MORTGAGE LOAN ADMINISTRATION MATTERS REGARDING lNSURANCE ................ .42       (a)   Lender's Ongoing Insurance Requirements ............................................................................ 42       (b)   Application of Proceeds on Event of Loss .............................................................................. 42       (c)   Payment Obligations Unaffected ............................................................................................. 44       (d)   Foreclosure Sale ...................................................................................................................... 45       (e)   Appointment of Lender as Attorney-In-Fact .......................................................................... .45   ARTICLE 10 -  CONDEMNATION ........................................................................................................ 45     SECTION 10.01  REPRESENTATIONS AND WARRANTIES ...................................................................... .45       (a)   Prior Condemnation Action ..................................................................................................... 45       (b)   Pending Condemnation Actions .............................................................................................. 45    Multifamily Loan and Security Agreement  (Non-Recourse)                            Form 6001.NR                            Page iii  Fannie Mae                                    04-18                      © 2018 Fannie Mae  

 

   SECTION 10.02 COVENANTS ................................................................................................................. 46       (a)   Notice of Condemnation .......................................................................................................... 46       (b)   Condemnation Proceeds .......................................................................................................... 46     SECTION 10.03 MORTGAGE LOAN ADMINISTRATION MATTERS REGARDING CONDEMNATION ........ .46       (a)   Application of Condemnation Awards ................................................................................... .46       (b)   Payment Obligations Unaffected ............................................................................................. 46       (c)   Appointment of Lender as Attorney-In-Fact ........................................................................... 46       ( d)  Preservation of Mortgaged Property ........................................................................................ 4 7   ARTICLE 11  - LIENS, TRANSFERS, AND ASSUMPTIONS ............................................................ 47     SECTION 11.01 REPRESENTATIONS AND WARRANTIES ....................................................................... 47       (a)  No Labor or Materialmen's Claims ........................................................................................ .47       (b)  No Other Interests .................................................................................................................... 47    SECTION 11.02  COVENANTS ................................................................................................................. 48       (a)   Liens; Encumbrances ............................................................................................................... 48       (b)   Transfers .................................................................................................................................. 48       ( c) No Other Indebtedness ............................................................................................................ 53       (d)  No Mezzanine Financing or Preferred Equity ......................................................................... 53    SECTION 11.03  MORTGAGE LOAN ADMINISTRATION MATIERS   REGARDING LIENS, TRANSFERS, AND                   ASSUMPTIONS ............................................................................................................. 53       (a)  Assumption of Mortgage Loan ................................................................................................ 53       (b)  Transfers to Key Principal-Owned Affiliates or Guarantor-Owned Affiliates ........................ 55       (c)  Estate Planning ........................................................................................................................ 55       ( d) Termination or Revocation of Trust. ....................................................................................... 56       (e)  Death of Key Principal or Guarantor; Transfer Due to Death ................................................. 56       (f)  Bankruptcy of Guarantor ......................................................................................................... 58       (g)  Further Conditions to Transfers and Assumption .................................................................... 59  ARTICLE 12 -  IMPOSITIONS ............................................................................................................... 61    SECTION 12.01  REPRESENTATIONS AND WARRANTIES ....................................................................... 61       (a)  Payment of Taxes, Assessments, and Other Charges .............................................................. 62    SECTION 12.02  COVENANTS ................................................................................................................. 62      (a)   Imposition Deposits, Taxes, and Other Charges ..................................................................... 62    SECTION 12.03  MORTGAGE LOAN ADMINISTRATION MATTERS REGARDING IMPOSITIONS ............... 63       ( a) Maintenance of Records by Lender ......................................................................................... 63       (b)  Imposition Accounts ................................................................................................................ 63       (c)  Payment of Impositions; Sufficiency of Imposition Deposits ................................................. 63       (d)  Imposition Deposits Upon Event of Default. .......................................................................... 64      (e)   Contesting Impositions ............................................................................................................ 64      (f)   Release to Borrower ................................................................................................................ 64  ARTICLE 13 -  REPLACEMENT RESERVE AND REPAIRS ........................................................... 65    SECTION 13.01  COVENANTS ................................................................................................................. 65      (a)   Initial Deposits to Replacement Reserve Account and Repairs Escrow Account. .................. 65      (b)   Monthly Replacement Reserve Deposits ................................................................................. 65      (c)   Payment for Replacements and Repairs .................................................................................. 65      ( d)  Assignment of Contracts for Replacements and Repairs ........................................................ 65      (e)   Indemnification ........................................................................................................................ 66      (f)   Amendments to Loan Documents ........................................................................................... 66   Multifamily Loan and Security Agreement  (Non-Recourse)                           Form 6001.NR                             Page iv  Fannie Mae                                   04-18                      © 2018 Fannie Mae  

 

      (g)   Administrative Fees and Expenses .......................................................................................... 66      SECTION 13.02 MORTGAGE LOAN ADMINISTRATION MATTERS REGARDING RESERVES ................... 67        (a)   Accounts, Deposits, and Disbursements .................................................................................. 67        (b)   Approvals of Contracts; Assignment of Claims ...................................................................... 74         (c)   Delays and Workmanship ........................................................................................................ 74        (d)   Appointment of Lender as Attorney-In-Fact. .......................................................................... 74        (e)   No Lender Obligation .............................................................................................................. 75        (f)   No Lender Warranty ................................................................................................................ 75    ARTICLE 14 · DEFAULTS/REMEDIES .............................................................................................. 75       SECTION 14.01 EVENTS OF DEFAULT...................................................................................................  75        (a)   Automatic Events of Default. .................................................................................................. 75        (b)   Events of Default Subject to a Specified Cure Period ............................................................. 76        ( c)  Events of Default Subject to Extended Cure Period ................................................................ 77      SECTION 14.02 REMEDIES .................................................................................................................... 77        (a)   Acceleration; Foreclosure ........................................................................................................ 77        (b)   Loss of Right to Disbursements from Collateral Accounts ..................................................... 78        (c)   Remedies Cumulative .............................................................................................................. 78      SECTION 14.03 ADDITIONAL LENDER RIGHTS; FORBEARANCE .......................................................... 79        (a)   No Effect Upon Obligations .................................................................................................... 79        (b)   No Waiver of Rights or Remedies ........................................................................................... 79        ( c)  Appointment of Lender as Attorney-In-Fact ........................................................................... 80        (d)   Borrower Waivers ................................................................................................................... 81     SECTION 14.04  W AIYER OF MARSHALING ........................................................................................... 82   ARTICLE 15 · MISCELLANEOUS ....................................................................................................... 82     SECTION 15.01  GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE ...................................... 82        (a)   Governing Law ........................................................................................................................ 82        (b)   Venue ....................................................................................................................................... 82     SECTION 15.02  NOTICE ........................................................................................................................ 83        (a)  Process of Serving Notice ........................................................................................................ 83        (b)  Change of Address .................................................................................................................. 83        (c)  Default Method of Notice ........................................................................................................ 83       ( d)  Receipt of Notices ................................................................................................................... 84     SECTION 15 .03 SUCCESSORS AND ASSIGNS BOUND; SALE OF MORTGAGE LOAN .............................. 84       (a)   Binding Agreement. ................................................................................................................ 84       (b)   Sale of Mortgage Loan; Change of Servicer ........................................................................... 84     SECTION 15.04  COUNTERPARTS ........................................................................................................... 84     SECTION 15.05  JOINT AND SEVERAL (OR SOLIDARY) LIABILITY ......................................................... 84     SECTION 15.06  RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY .................................... 84       (a)   Solely Creditor and Debtor. ..................................................................................................... 84       (b)   No Third Party Beneficiaries ................................................................................................... 85    Multifamily Loan and Security Agreement  (Non-Recourse)                            Form 6001.NR                             Pagev  Fannie Mae                                    04-18                      © 2018 Fannie Mae  

 

    SECTION 15.07     SEVERABILITY; ENTIRE AGREEMENT; AMENDMENTS ................................................ 85      SECTION 15.08     CONSTRUCTION ........................................................................................................... 85      SECTION 15.09     MORTGAGE LOAN SERVICING ..................................................................................... 86      SECTION 15.10     DISCLOSURE OF INFORMATION ................................................................................... 86      SECTION 15 .11    W AIYER; CONFLICT ..................................................................................................... 87      SECTION 15.12     No RELIANCE .............................................................................................................. 87      SECTION 15.13     SUBROGATION ............................................................................................................. 87      SECTION   15.14   COUNTINGOFDAYS .................................................................................................... 87      SECTION 15 .15    REVIVAL AND     REINSTATEMENT OF INDEBTEDNESS ................................................... 88      SECTION 15 .16    TIME IS  OF THE ESSENCE ............................................................................................. 88      SECTION 15 .17    FINAL AGREEMENT ..................................................................................................... 88      SECTION 15.18     WAIVER OF TRIAL BY JURY ................................................................................. 88    Multifamily  Loan  and  Security Agreement  (Non-Recourse)                                        Form 6001.NR                                       Page vi  Fannie Mae                                                04-18                              © 2018 Fannie Mae  

 

                             SCHEDULES & EXHIBITS      Schedules     Schedule 1   Definitions Schedule (required)                 Form 6101.FR     Schedule 2   Summary of Loan Terms (required)                Form 6102.FR     Schedule 3   Interest Rate Type Provisions (required)        Form 6103.FR     Schedule 4   Prepayment Premium Schedule (required)          Form 6104.01     Schedule 5   Required Replacement Schedule (required)     Schedule 6   Required Repair Schedule (required)     Schedule 7   Exceptions to Representations and Warranties Schedule                  (required)     Exhibits    Exhibit A     Modifications to Multifamily Loan and Security  Form 6228                  Agreement (Waiver of Imposition Deposits)     ExhibitB      Modifications to Multifamily Loan and Security  Form 6241                  Agreement (Green Mortgage Loan)    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page vii  Fannie Mae                               04-18                    © 2018 Fannie Mae  

 

           MULTIFAMILY LOAN AND SECURITY AGREEMENT                                  (Non-Recourse)          This MULTIFAMILY   LOAN  AND  SECURITY   AGREEMENT    (as amended, restated,   replaced, supplemented, or otherwise modified from time to time, the "Loan Agreement") is   made  as of the Effective Date (as hereinafter defined) by and between STAR III   SWEETWATER, LLC, a Delaware limited liability company ("Borrower"), and BERKELEY   POINT  CAPITAL LLC,   d/b/a NEWMARK KNIGHT     FRANK,   a Delaware limited liability   company ("Lender").                                     RECITALS:          WHEREAS, Borrower desires to obtain the Mortgage Loan (as hereinafter defined) from   Lender to be secured by the Mortgaged Property (as hereinafter defined); and          WHEREAS,   Lender is willing to make the Mortgage Loan on the terms and conditions   contained in this Loan Agreement and in the other Loan Documents (as hereinafter defined);          NOW,  THEREFORE,   in consideration of the making of the Mortgage Loan by Lender   and other good and valuable consideration, the receipt and adequacy of which are hereby   conclusively acknowledged, the parties hereby covenant, agree, represent, and warrant as   follows:                                  AGREEMENTS:            ARTICLE 1 -   DEFINITIONS; SUMMARY OF MORTGAGE                                  LOAN TERMS    Section 1.01   Defined Terms.          Capitalized terms not otherwise defined in the body of this Loan Agreement shall have   the meanings set forth in the Definitions Schedule attached as Schedule 1 to this Loan   Agreement.    Section 1.02   Schedules, Exhibits, and Attachments Incorporated.          The schedules, exhibits, and any other addenda or attachments are incorporated fully into   this Loan Agreement by this reference and each constitutes a substantive part of this Loan   Agreement.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 1  Article I                                04-18                   © 2018 Fannie Mae  

 

            ARTICLE 2 -   GENERAL MORTGAGE LOAN TERMS    Section 2.01   Mortgage Loan Origination and Security.          (a)   Making of Mortgage Loan.          Subject to the terms and conditions of this Loan Agreement and the other Loan   Documents, Lender hereby makes the Mortgage Loan to Borrower, and Borrower hereby accepts   the Mortgage Loan from Lender. Borrower covenants and agrees that it shall:                (1)   pay the Indebtedness, including the Prepayment Premium, if any (whether         in connection with any voluntary prepayment or in connection with an acceleration by         Lender of the Indebtedness), in accordance with the terms of this Loan Agreement and         the other Loan Documents; and                (2)   perform, observe, and comply with this Loan Agreement and all other         provisions of the other Loan Documents.          (b)   Security for Mortgage Loan.          The Mortgage Loan is made pursuant to this Loan Agreement, is evidenced by the Note,   and is secured by the Security Instrument, this Loan Agreement, and the other Loan Documents   that are expressly stated to be security for the Mortgage Loan.          (c)   Protective Advances.          As provided in the Security Instrument, Lender may take such actions or disburse such   funds as Lender reasonably deems necessary to perform the obligations of Borrower under this   Loan Agreement  and the other Loan Documents and to protect Lender's interest in the   Mortgaged Property.    Section 2.02   Payments on Mortgage Loan.          (a)   Debt Service Payments.                (1)   Short Month Interest.                If the date the Mortgage Loan proceeds are disbursed is any day other than the         first day of the month, interest for the period beginning on the disbursement date and         ending on and including the last day of the month in which the disbursement occurs shall         be payable by Borrower on the date the Mortgage Loan proceeds are disbursed. In the         event that the disbursement date is not the same as the Effective Date, then:                      (A)   the disbursement date and the Effective Date must be in the same               month, and    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                         Page2  Article 2                                04-18                    © 2018 Fannie Mae  

 

                   (B)   the Effective Date shall not be the first day of the month.                (2)   Interest Accrual and Computation.                Except as provided in Section 2.02(a)(l), interest shall be paid in arrears. Interest         shall accrue as provided in the Schedule of Interest Rate Type Provisions and shall be         computed in accordance with the Interest Accrual Method. If the Interest Accrual         Method is "Actual/360," Borrower acknowledges and agrees that the amount allocated to         interest for each month will vary depending on the actual number of calendar days during         such month.                (3)   Monthly Debt Service Payments.                Consecutive monthly debt service installments (comprised of either interest only         or principal and interest, depending on the Amortization Type), each in the amount of the         applicable Monthly Debt Service Payment, shall be due and payable on the First Payment         Date, and on each Payment Date thereafter until the Maturity Date, at which time all         Indebtedness shall be due. Any regularly scheduled Monthly Debt Service Payment that         is received by Lender before the applicable Payment Date shall be deemed to have been         received on such Payment Date solely for the purpose of calculating interest due. All         payments made by Borrower under this Loan Agreement shall be made without set-off,         counterclaim, or other defense.                (4)   Payment at Maturity.                The unpaid principal balance of the Mortgage Loan, any Accrued Interest thereon         and all other Indebtedness shall be due and payable on the Maturity Date.                (5)   Interest Rate Type.                See the Schedule of Interest Rate Type Provisions for additional provisions, if         any, specific to the Interest Rate Type.          (b)   Capitalization of Accrued But Unpaid Interest.          Any accrued and unpaid interest on the Mortgage Loan remaining past due for thirty (30)   days or more may, at Lender's election, be added to and become part of the unpaid principal   balance of the Mortgage Loan.          (c)   Late Charges.                (1)   If any Monthly Debt Service Payment due hereunder is not received by         Lender within ten (10) days (or fifteen (15) days for any Mortgaged Property located in         Mississippi or North Carolina to comply with applicable law) after the applicable         Payment Date, or any amount payable under this Loan Agreement (other than the         payment due on the Maturity Date for repayment of the Mortgage Loan in full) or any   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                         Page3  Article 2                                04-18                   © 2018 Fannie Mae  

 

       other Loan Document is not received by Lender within ten (10) days (or fifteen (15) days         for any Mortgaged Property located in Mississippi or North Carolina to comply with         applicable law) after the date such amount is due, inclusive of the date on which such         amount is due, Borrower shall pay to Lender, immediately without demand by Lender,         the Late Charge.          The Late Charge is payable in addition to, and not in lieu of, any interest payable at the         Default Rate pursuant to Section 2.02(d).                (2)   Borrower acknowledges and agrees that:                      (A)   its failure to make timely payments will cause Lender to incur               additional expenses in servicing and processing the Mortgage Loan;                      (B)   it is extremely difficult and impractical to determine those               additional expenses;                      (C)   Lender is entitled to be compensated for such additional expenses;               and                      (D)   the Late Charge represents a fair and reasonable estimate, taking               into account all circumstances existing on the date hereof, of the additional               expenses Lender will incur by reason of any such late payment.          (d)   Default Rate.                (1)   Default interest shall be paid as follows:                      (A)   If any amount due in respect of the Mortgage Loan (other than               amounts due on the Maturity Date) remains past due for thirty (30) days or more,               interest on such unpaid amount(s) shall accrue from the date payment is due at the               Default Rate and shall be payable upon demand by Lender.                      (B)   If any Indebtedness due is not paid in full on the Maturity Date,               then interest shall accrue at the Default Rate on all such unpaid amounts from the               Maturity Date until fully paid and shall be payable upon demand by Lender.          Absent a demand by Lender, any such amounts shall be payable by Borrower in the same         manner as provided for the payment of Monthly Debt Service Payments. To the extent         permitted by applicable law, interest shall also accrue at the Default Rate on any         judgment obtained by Lender against Borrower in connection with the Mortgage Loan.         To the extent Borrower or any other Person is vested with a right of redemption, interest         shall continue to accrue at the Default Rate during any redemption period until such time         as the Mortgaged Property has been redeemed.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                         Page4  Article 2                                04-18                    © 2018 Fannie Mae  

 

             (2)   Borrower acknowledges and agrees that:                      (A)   its failure to make timely payments will cause Lender to incur               additional expenses in servicing and processing the Mortgage Loan; and                      (B)   in connection with any failure to timely pay all amounts due in               respect of the Mortgage Loan on the Maturity Date, or during the time that any               amount  due in respect of the Mortgage Loan is delinquent for more than               thirty (30) days:                            (i)   Lender's risk of nonpayment of the Mortgage Loan will be                     materially increased;                            (ii)  Lender's ability to meet its other obligations and to take                     advantage of other investment opportunities will be adversely impacted;                            (iii) Lender will incur additional costs and expenses arising                     from its loss of the use of the amounts due;                            (iv)  it is extremely difficult and impractical to determine such                     additional costs and expenses;                            (v)   Lender is entitled to be compensated for such additional                     risks, costs, and expenses; and                            (vi)  the increase from the Interest Rate to the Default Rate                     represents a fair and reasonable estimate of the additional risks, costs, and                     expenses Lender will incur by reason of Borrower's delinquent payment                     and the additional compensation Lender is entitled to receive for the                     increased risks of nonpayment associated with a delinquency on the                     Mortgage Loan (taking into account all circumstances existing on the                     Effective Date).          (e)   Address for Payments.          All payments due pursuant to the Loan Documents shall be payable at Lender's Payment   Address, or such other place and in such manner as may be designated from time to time by   written notice to Borrower by Lender.          (f)   Application of Payments.          If at any time Lender receives, from Borrower or otherwise, any payment in respect of   the Indebtedness that is less than all amounts due and payable at such time, then Lender may   apply such payment to amounts then due and payable in any manner and in any order determined   by Lender or hold in suspense and not apply such payment at Lender's election. Neither   Lender's acceptance of a payment that is less than all amounts then due and payable, nor   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                         Page5  Article 2                                04-18                    © 2018 Fannie Mae  

 

 Lender's application of, or suspension of the application of, such payment, shall constitute or be   deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.   Notwithstanding the application of any such payment to the Indebtedness, Borrower's   obligations under this Loan Agreement and the other Loan Documents shall remain unchanged.    Section 2.03   Lockout/Prepayment.          (a)   Prepayment; Prepayment Lockout; Prepayment Premium.                (1)   Borrower shall not make a voluntary full or partial prepayment on the         Mortgage Loan during any Prepayment Lockout Period nor shall Borrower make a         voluntary partial prepayment at any time. Except as expressly provided in this Loan         Agreement (including as provided in the Prepayment Premium Schedule), a Prepayment         Premium  calculated in accordance with the Prepayment Premium Schedule shall be         payable in connection with any prepayment of the Mortgage Loan.                (2)   If a Prepayment Lockout Period applies to the Mortgage Loan, and during         such Prepayment Lockout Period Lender accelerates the unpaid principal balance of the         Mortgage Loan or otherwise applies collateral held by Lender to the repayment of any         portion of the unpaid principal balance of the Mortgage Loan, the Prepayment Premium         shall be due and payable and equal to the amount obtained by multiplying the percentage         indicated (if at all) in the Prepayment Premium Schedule by the amount of principal         being prepaid at the time of such acceleration or application.          (b)   Voluntary Prepayment in Full.          At any time after the expiration of any Prepayment Lockout Period, Borrower may   voluntarily prepay the Mortgage Loan in full on a Permitted Prepayment Date so long as:                (1)   Borrower delivers to Lender a Prepayment Notice specifying the Intended         Prepayment Date not more than sixty (60) days, but not less than thirty (30) days (if         given via U.S. Postal Service) or twenty (20) days (if given via facsimile, e-mail, or         overnight courier) prior to such Intended Prepayment Date; and                (2)   Borrower pays to Lender an amount equal to the sum of:                      (A)   the entire unpaid principal balance of the Mortgage Loan; plus                      (B)   all Accrued Interest (calculated through the last day of the month               in which the prepayment occurs); plus                      (C)   the Prepayment Premium; plus                      (D)   all other Indebtedness.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                         Page6  Article 2                                04-18                    © 2018 Fannie Mae  

 

 In connection with any such voluntary prepayment, Borrower acknowledges and agrees that   interest shall always be calculated and paid through the last day of the month in which the   prepayment occurs (even if the Permitted Prepayment Date for such month is not the last day of   such month, or if Lender approves prepayment on an Intended Prepayment Date that is not a   Permitted Prepayment Date). Borrower further acknowledges that Lender is not required to   accept a voluntary prepayment of the Mortgage Loan on any day other than a Permitted   Prepayment Date. However, if Lender does approve an Intended Prepayment Date that is not a   Permitted Prepayment Date and accepts a prepayment on such Intended Prepayment Date, such   prepayment shall be deemed to be received on the immediately following Permitted Prepayment   Date. If Borrower fails to prepay the Mortgage Loan on the Intended Prepayment Date for any   reason (including on any Intended Prepayment Date that is approved by Lender) and such failure   either continues for five (5) Business Days, or into the following month, Lender shall have the   right to recalculate the payoff amount. If Borrower prepays the Mortgage Loan either in the   following month or more than five (5) Business Days after the Intended Prepayment Date that   was approved by Lender, Lender shall also have the right to recalculate the payoff amount based   upon the amount of such payment and the date such payment was received by Lender. Borrower   shall immediately pay to Lender any additional amounts required by any such recalculation.          (c)   Acceleration of Mortgage Loan.          Upon acceleration of the Mortgage Loan, Borrower shall pay to Lender:                ( 1)  the entire unpaid principal balance of the Mortgage Loan;                (2)   all Accrued Interest (calculated through the last day of the month in which         the acceleration occurs);                (3)   the Prepayment Premium; and                (4)   all other Indebtedness.          (d)   Application of Collateral.          Any application by Lender of any collateral or other security to the repayment of all or   any portion of the unpaid principal balance of the Mortgage Loan prior to the Maturity Date in   accordance with the Loan Documents shall be deemed to be a prepayment by Borrower. Any   such prepayment shall require the payment to Lender by Borrower of the Prepayment Premium   calculated on the amount being prepaid in accordance with this Loan Agreement.          (e)   Casualty and Condemnation.          Notwithstanding any provision of this Loan Agreement to the contrary, no Prepayment   Premium shall be payable with respect to any prepayment occurring as a result of the application   of any insurance proceeds or amounts received in connection with a Condemnation Action in   accordance with this Loan Agreement.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                         Page7  Article 2                                04-18                    © 2018 Fannie Mae  

 

       (f)   No Effect on Payment Obligations.          Unless otherwise expressly provided in this Loan Agreement, any prepayment required   by any Loan Document of less than the entire unpaid principal balance of the Mortgage Loan   shall not extend or postpone the due date of any subsequent Monthly Debt Service Payments,   Monthly Replacement Reserve Deposit, or other payment, or change the amount of any such   payments or deposits.          (g)   Loss Resulting from Prepayment.          In any circumstance in which a Prepayment Premium is due under this Loan Agreement,   Borrower acknowledges that:                (1)   any prepayment of the unpaid principal balance of the Mortgage Loan,         whether voluntary or involuntary, or following the occurrence of an Event of Default by         Borrower, will result in Lender's incurring loss, including reinvestment loss, additional         risk, expense, and frustration or impairment of Lender's ability to meet its commitments         to third parties;                (2)   it is extremely difficult and impractical to ascertain the extent of such         losses, risks, and damages;                (3)   the formula for calculating the Prepayment Premium represents a         reasonable estimate of the losses, risks, and damages Lender will incur as a result of a         prepayment; and                (4)   the provisions regarding the Prepayment Premium contained in this Loan         Agreement are a material part of the consideration for the Mortgage Loan, and that the         terms of the Mortgage Loan are in other respects more favorable to Borrower as a result         of Borrower's voluntary agreement to such prepayment provisions.                       ARTICLE 3 -    PERSONAL LIABILITY    Section 3.01   Non-Recourse Mortgage Loan; Exceptions.          Except as otherwise provided in this Article 3 or in any other Loan Document, none of   Borrower, or any director, officer, manager, member, partner, shareholder, trustee, trust   beneficiary, or employee of Borrower, shall have personal liability under this Loan Agreement or   any other Loan Document for the repayment of the Indebtedness or for the performance of any   other obligations of Borrower under the Loan Documents, and Lender's only recourse for the   satisfaction of such Indebtedness and the performance of such obligations shall be Lender's   exercise of its rights and remedies with respect to the Mortgaged Property and any other   collateral held by Lender as security for the Indebtedness. This limitation on Borrower's liability   shall not limit or impair Lender's enforcement of its rights against Guarantor under any Loan   Document.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                         Page8  Article 2                                04-18                    © 2018 Fannie Mae  

 

 Section 3.02   Personal Liability of Borrower (Exceptions to Non-Recourse Provision).          (a)   Personal Liability Based on Lender's Loss.          Borrower shall be personally liable to Lender for the repayment of the portion of the   Indebtedness equal to any loss or damage suffered by Lender as a result of, subject to any notice   and cure period, if any:                ( 1)  failure to pay as directed by Lender upon demand after an Event of         Default (to the extent actually received by Borrower):                      (A)   all Rents to which Lender is entitled under the Loan Documents;               and                      (B)   the amount of all security deposits then held or thereafter collected               by Borrower from tenants and not properly applied pursuant to the applicable               Leases;                (2)   failure to maintain all insurance policies required by the Loan Documents,         except to the extent Lender has the obligation to pay the premiums pursuant to Section         12.03(c);                (3)   failure to apply all insurance proceeds received by Borrower or any         amounts received by Borrower in connection with a Condemnation Action, as required         by the Loan Documents;                (4)   failure to comply with any provision of this Loan Agreement or any other         Loan Document relating to the delivery of books and records, statements, schedules, and         reports;                (5)   except to the extent directed otherwise by Lender pursuant to Section         3.02(a)(l), failure to apply Rents to the ordinary and necessary expenses of owning and         operating the Mortgaged Property and Debt Service Amounts, as and when each is due         and payable, except that Borrower will not be personally liable with respect to Rents that         are distributed by Borrower in any calendar year if Borrower has paid all ordinary and         necessary expenses of owning and operating the Mortgaged Property and Debt Service         Amounts for such calendar year;                (6)   waste or abandonment of the Mortgaged Property; or                (7)   grossly negligent or reckless unintentional material misrepresentation or         omission by Borrower, Guarantor, Key Principal, or any officer, director, partner,         manager, or member of Borrower, Guarantor, or Key Principal or any Person having a         Restricted Ownership Interest in Guarantor or Key Principal in connection with ongoing         financial or other reporting required by the Loan Documents, or any request for action or         consent by Lender.   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                         Page9  Article 3                                04-18                    © 2018 Fannie Mae  

 

 Notwithstanding the foregoing, Borrower shall not have personal liability under clauses (1), (3),   or (5) above to the extent that Borrower lacks the legal right to direct the disbursement of the   applicable funds due to an involuntary Bankruptcy Event that occurs without the consent,   encouragement, or active participation of (A) Borrower, Guarantor, or Key Principal, (B) any   Person Controlling Borrower, Guarantor, or Key Principal or (C) any Person Controlled by or   under common Control with Borrower, Guarantor, or Key Principal.          (b)   Full Personal Liability for Mortgage Loan.          Borrower shall be personally liable to Lender for the repayment of all of the   Indebtedness, and the Mortgage Loan shall be fully recourse to Borrower, upon the occurrence of   any of the following:                (1)   failure by Borrower to comply with the single-asset entity requirements of         Section 4.02(d) of this Loan Agreement;                (2)   a Transfer (other  than a conveyance of the Mortgaged Property at a         Foreclosure Event pursuant to the Security Instrument and this Loan Agreement) that is         not permitted under this Loan Agreement or any other Loan Document;                (3)   the occurrence of any Bankruptcy Event (other than an acknowledgement         in writing as described in clause (b) of the definition of "Bankruptcy Event"); provided,         however, in the event of an involuntary Bankruptcy Event, Borrower shall only be         personally liable if such involuntary Bankruptcy Event occurs with the consent,         encouragement, or active participation of (A) Borrower, Guarantor, or Key Principal, (B)         any Person Controlling Borrower, Guarantor, or Key Principal, or (C) any Person         Controlled by or under common Control with Borrower, Guarantor, or Key Principal;                (4)   fraud, written material misrepresentation, or material omission by         Borrower, Guarantor, Key Principal, or any officer, director, partner, manager, or         member, of Borrower, Guarantor, or Key Principal or any Person having a Restricted         Ownership Interest in Guarantor or Key Principal in connection with any application for         or creation of the Indebtedness; or                (5)   fraud, written intentional material misrepresentation, or intentional         material omission by Borrower, Guarantor, Key Principal, or any officer, director,         partner, manager, or member of Borrower, Guarantor, or Key Principal or any Person         having a Restricted Ownership Interest in Guarantor or Key Principal in connection with         ongoing financial or other reporting required by the Loan Documents, or any request for         action or consent by Lender.    Section 3.03   Personal Liability for Indemnity Obligations.          Borrower shall be personally and fully liable to Lender for Borrower's indemnity   obligations under Section 13.0l(e) of this Loan Agreement, the Environmental Indemnity   Agreement, and any other express indemnity obligations provided by Borrower under any Loan   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 10  Article 3                                04-18                    © 2018 Fannie Mae  

 

 Document.  Borrower's liability for such indemnity obligations shall not be limited by the   amount of the Indebtedness, the repayment of the Indebtedness, or otherwise, provided that   Borrower's liability for such indemnities shall not include any loss caused by the gross   negligence or willful misconduct of Lender as determined by a court of competent jurisdiction   pursuant to a final non-appealable court order.    Section 3.04   Lender's Right to Forego Rights Against Mortgaged Property.          To the extent that Borrower has personal liability under this Loan Agreement or any other   Loan Document, Lender may exercise its rights against Borrower personally to the fullest extent   permitted by applicable law without regard to whether Lender has exercised any rights against   the Mortgaged Property, the UCC Collateral, or any other security, or pursued any rights against   Guarantor, or pursued any other rights available to Lender under this Loan Agreement, any other   Loan Document, or applicable law. For purposes of this Section 3.04 only, the term "Mortgaged   Property" shall not include any funds that have been applied by Borrower as required or   permitted by this Loan Agreement prior to the occurrence of an Event of Default, or that   Borrower was unable to apply as required or permitted by this Loan Agreement because of a   Bankruptcy Event. To the fullest extent permitted by applicable law, in any action to enforce   Borrower's personal liability under this Article 3, Borrower waives any right to set off the value   of the Mortgaged Property against such personal liability.                        ARTICLE 4 -   BORROWER STATUS    Section 4.01   Representations and Warranties.          The representations and warranties made by Borrower to Lender in this Section 4.01 are   made as of the Effective Date and are true and correct except as disclosed on the Exceptions to   Representations and Warranties Schedule.          (a)   Due Organization and Qualification.          Borrower is validly existing and 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 good 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 or in   good standing 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 Loan   Agreement or any other Loan Document.          (b)   Location.          Borrower's General Business Address 1s Borrower's principal place of business and   principal office.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 11  Article 3                                04-18                    © 2018 Fannie Mae  

 

       (c)   Power and Authority.          Borrower has the requisite power and authority:                 ( 1) to own the Mortgaged Property and to carry on its business as now         conducted and as contemplated to be conducted in connection with the performance of its         obligations under this Loan Agreement and under the other Loan Documents to which it         is a party; and                (2)   to execute and deliver this Loan Agreement and the other Loan         Documents to which it is a party, and to carry out the transactions contemplated by this         Loan Agreement and the other Loan Documents to which it is a party.          (d)   Due Authorization.          The execution, delivery, and performance of this Loan Agreement and the other Loan   Documents  to which it is a party have been duly authorized by all necessary action and   proceedings by or on behalf of Borrower, and no further approvals or filings of any kind,   including any approval of or filing with any Governmental Authority, are required by or on   behalf of Borrower as a condition to the valid execution, delivery, and performance by Borrower   of this Loan Agreement or any of the other Loan Documents to which it is a party, except filings   required to perfect and maintain the liens to be granted under the Loan Documents and routine   filings to maintain good standing and its existence.          (e)   Valid and Binding Obligations.          This Loan Agreement and the other Loan Documents to which it is a party have been   duly executed and delivered by Borrower and constitute the legal, valid, and binding obligations   of Borrower, enforceable against Borrower in accordance with their respective terms, except as   such enforceability may be limited by applicable Insolvency Laws or by the exercise of   discretion by any court.          (f)   Effect of Mortgage Loan on Borrower's Financial Condition.          The Mortgage Loan will not render Borrower Insolvent. Borrower has sufficient working   capital, including proceeds from the Mortgage Loan, cash flow from the Mortgaged Property, or   other sources, not  only to adequately maintain the Mortgaged Property, but also to pay all of   Borrower's outstanding debts as they come due, including all Debt Service Amounts, exclusive   of Borrower's ability to refinance or pay in full the Mortgage Loan on the Maturity Date. In   connection with the execution and delivery of this Loan Agreement and the other Loan   Documents (and the delivery to, or for the benefit of, Lender of any collateral contemplated   thereunder), and the incurrence by Borrower of the obligations under this Loan Agreement and   the other Loan Documents, Borrower did not receive less than reasonably equivalent value in   exchange for the incurrence of the obligations of Borrower under this Loan Agreement and the   other Loan Documents.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 12  Article 4                                04-18                    © 2018 Fannie Mae  

 

       (g)   Economic Sanctions, Anti-Money Laundering, and Anti-Corruption.                (1)   None  of Borrower, Guarantor, or Key Principal, nor to Borrower's         knowledge, any Person Controlling Borrower, Guarantor, or Key Principal, nor any         Person Controlled by Borrower, Guarantor, or Key Principal that also has a direct or         indirect ownership interest in Borrower, Guarantor, or Key Principal, is in violation of         any applicable civil or criminal laws or regulations, including those requiring internal         controls, intended to prohibit, prevent, or regulate money laundering, drug trafficking,         terrorism, or corruption, of the United States and the jurisdiction where the Mortgaged         Property is located or where the Person resides, is domiciled, or has its principal place of         business.                (2)   None  of Borrower, Guarantor, or Key Principal, nor to Borrower's         knowledge, any Person Controlling Borrower, Guarantor, or Key Principal, nor any         Person Controlled by Borrower, Guarantor, or Key Principal that also has a direct or         indirect ownership interest in Borrower, Guarantor, or Key Principal, is a Person:                      (A)   against whom proceedings are pending for any alleged violation of               any laws described in Section 4.0l(g)(l);                      (B)   that has been convicted of any violation of, has been subject to               civil penalties or Economic Sanctions pursuant to, or had any of its property               seized or forfeited under, any laws described in Section 4.0l(g)(l); or                      (C)   with whom any United States Person, any entity organized under               the laws of the United States or its constituent states or territories, or any entity,               regardless of where organized, having its principal place of business within the               United States or any of its territories, is a Sanctioned Person or is otherwise               prohibited from  transacting business of the type contemplated by this Loan               Agreement and the other Loan Documents under any other applicable law.                (3)   Borrower, Guarantor, and Key Principal are in compliance with all         applicable Economic Sanctions laws and regulations.          (h)   Borrower Single Asset Status.          Borrower:                (1)   does not own or lease any real property, personal property, or assets other         than the Mortgaged Property;                (2)   does not own, operate, or part1c1pate in any business other than the         leasing, ownership, management, operation, and maintenance of the Mortgaged Property;                (3)   has no material financial obligation under or secured by any indenture,         mortgage, deed of trust, deed to secure debt, loan agreement, or other agreement or   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 13  Article 4                                04-18                   © 2018 Fannie Mae  

 

       instrument to which Borrower is a party, or by which Borrower is otherwise bound, or to         which the Mortgaged Property is subject or by which it is otherwise encumbered, other         than:                      (A)   unsecured trade payables incurred in the ordinary course of the               operation of the Mortgaged Property (exclusive of amounts for rehabilitation,               restoration, repairs, or replacements of the Mortgaged Property) that (i) are not               evidenced by a promissory note, (ii) are payable within sixty (60) days of the date               incurred, and (iii) as of the Effective Date, do not exceed, in the aggregate, four               percent (4%)  of the original principal balance of the Mortgage Loan;                      (B)   if the Security Instrument grants a lien on a leasehold estate,               Borrower's obligations as lessee under the ground lease creating such leasehold               estate; and                      (C)   obligations under the Loan Documents and obligations secured by               the Mortgaged Property to the extent permitted by the Loan Documents;                (4)   has maintained its financial statements, accounting records, and other         partnership, real estate investment trust, limited liability company, or corporate         documents, as the case may be, separate from those of any other Person (unless         Borrower's assets have been included in a consolidated financial statement prepared in         accordance with generally accepted accounting principles);                (5)   has not commingled its assets or funds with those of any other Person,         unless such assets or funds can easily be segregated and identified in the ordinary course         of business from those of any other Person;                (6)   has been adequately capitalized m light of its contemplated business         operations;                (7)   has not assumed, guaranteed, or pledged its assets to secure the liabilities         or obligations of any other Person (except  in connection with the Mortgage Loan or other         mortgage loans that have been paid in full or collaterally assigned to Lender, including in         connection with any Consolidation, Extension and Modification Agreement or similar         instrument), or held out its credit as being available to satisfy the obligations of any other         Person;                (8)   has not made loans or advances to any other Person; and                (9)   has not entered into, and is not a party to, any transaction with any         Borrower Affiliate, except in the ordinary course of business and on terms which are no         more favorable to any such Borrower Affiliate than would be obtained in a comparable         arm's length transaction with an unrelated third party.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 14  Article 4                                04-18                    © 2018 Fannie Mae  

 

       (i)   No Bankruptcies or Judgments.          None  of Borrower, Guarantor, or Key Principal, nor to Borrower's knowledge, any   Person Controlling Borrower, Guarantor, or Key Principal, nor any Person Controlled by   Borrower, Guarantor, or Key Principal that also has a direct or indirect ownership interest in   Borrower, Guarantor, or Key Principal, is currently:                (1)   the subject of or a party to any completed or pending bankruptcy,         reorganization, including any receivership or other insolvency proceeding (other  than as a         creditor);                (2)   preparing or intending to be the subject of a Bankruptcy Event; or                (3)   the subject of any judgment unsatisfied of record or docketed in any court;         or                (4)   Insolvent.          (j)   No Actions or Litigation.                ( 1)  There are no claims, actions, suits, or proceedings at law or in equity by or         before any Governmental Authority now pending against or, to Borrower's knowledge,         threatened against or affecting Borrower or the Mortgaged Property not otherwise         covered by insurance (except  claims, actions, suits, or proceedings regarding fair         housing, anti-discrimination, or equal opportunity, which shall always be disclosed); and                (2)   there are no claims, actions, suits, or proceedings at law or in equity by or         before any Governmental Authority now pending or, to Borrower's knowledge,         threatened against or affecting Guarantor or Key Principal, which claims, actions, suits,         or proceedings, if adversely determined (individually or in the aggregate) reasonably         would be expected to materially adversely affect the financial condition or business of         Borrower, Guarantor, or Key Principal or the condition, operation, or ownership of the         Mortgaged Property (except  claims, actions, suits, or proceedings regarding fair housing,         anti-discrimination, or equal opportunity, which shall always be deemed material).          (k)   Payment of Taxes, Assessments, and Other Charges.          Borrower confirms that:                (1)   it has filed all federal, state, county, and municipal tax returns and reports         required to have been filed by Borrower;                (2)   it has paid, before any fine, penalty interest, lien, or costs may be added         thereto, all taxes, governmental charges, and assessments due and payable with respect to         such returns and reports;    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 15  Article 4                                04-18                   © 2018 Fannie Mae  

 

             (3)   there is no controversy or objection pending, or to the knowledge of         Borrower, threatened in respect of any tax returns of Borrower; and                (4)   it has made adequate reserves on its books and records for all taxes that         have accrued but which are not yet due and payable.          (I)   Not a Foreign Person.          Borrower is not a "foreign person" within the meaning of Section 1445(f)(3) of the   Internal Revenue Code.          (m)   ERISA.          Borrower represents and warrants that:                ( 1)  Borrower is not an Employee Benefit Plan;                (2)   no asset of Borrower constitutes "plan assets" (within the meaning of         Section 3(42) of BRISA and Department of Labor Regulation Section 2510.3-101) of an         Employee Benefit Plan;                (3)   no  asset of Borrower is subject to any laws of any Governmental         Authority governing the assets of an Employee Benefit Plan; and                (4)   neither Borrower nor any BRISA Affiliate is subject to any obligation or         liability with respect to any BRISA Plan.          (n)   Default Under Other Obligations.                (1)   The execution, delivery, and performance of the obligations imposed on         Borrower under this Loan Agreement and the Loan Documents to which it is a party will         not cause Borrower to be in default under the provisions of any agreement, judgment, or         order to which Borrower is a party or by which Borrower is bound.                (2)   None of Borrower, Guarantor, or Key Principal is in default under any         obligation to Lender.          (o)   Prohibited Person.          None of Borrower, Guarantor, or Key Principal is a Prohibited Person, nor to Borrower's   knowledge, is any Person:                (1)   Controlling Borrower, Guarantor, or Key Principal a Prohibited Person; or                (2)   Controlled by and having a direct or indirect ownership interest in         Borrower, Guarantor, or Key Principal a Prohibited Person.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 16  Article 4                                04-18                    © 2018 Fannie Mae  

 

       (p)   No Contravention.          Neither the execution and delivery of this Loan Agreement and the other Loan   Documents to which Borrower is a party, nor the fulfillment of or compliance with the terms and   conditions of this Loan Agreement and the other Loan Documents to which Borrower is a party,   nor the performance of the obligations of Borrower under this Loan Agreement and the other   Loan Documents does or will conflict with or result in any breach or violation of, or constitute a   default under, any of the terms, conditions, or provisions of Borrower's organizational   documents, or any indenture, existing agreement, or other instrument to which Borrower is a   party or to which Borrower, the Mortgaged Property, or other assets of Borrower are subject.          (q)   Lock box Arrangement.          Borrower is not party to any type of lockbox agreement or similar cash management   arrangement that has not been approved by Lender in writing, and no direct or indirect owner of   Borrower is party to any type of lockbox agreement or similar cash management arrangement   with respect to Rents or other income from the Mortgaged Property that has not been approved   by Lender in writing.    Section 4.02   Covenants.          (a)   Maintenance of Existence; Organizational Documents.          Borrower shall maintain its existence, its entity status, franchises,  rights, and privileges   under the laws of the state of its formation or organization (as applicable). Borrower shall   continue to be duly qualified and in good standing to transact business in each jurisdiction in   which qualification or standing is required according to applicable law to conduct its business   with respect to the Mortgaged Property and where the failure to do so 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 Loan Agreement or any other Loan Document.   Neither Borrower nor any partner, member, manager, officer, or director of Borrower shall:                (1)   make or allow any material change to the organizational documents or         organizational structure of Borrower, including changes relating to the Control of         Borrower, or                (2)   file any action, complaint, petition, or other claim to:                      (A)   divide, partition, or otherwise compel the sale of the Mortgaged               Property, or                      (B)   otherwise change the Control of Borrower.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 17  Article 4                                04-18                   © 2018 Fannie Mae  

 

       (b)   Economic Sanctions, Anti-Money Laundering, and Anti-Corruption.                (1)   Borrower, Guarantor, Key Principal, and  any Person Controlling         Borrower, Guarantor, or Key Principal, or any Person Controlled by Borrower,         Guarantor, or Key Principal that also has a direct or indirect ownership interest in         Borrower, Guarantor, or Key Principal shall remain in compliance with any applicable         civil or criminal laws or regulations (including those requiring internal controls) intended         to prohibit, prevent, or regulate money laundering, drug trafficking, terrorism, or         corruption, of the United States and the jurisdiction where the Mortgaged Property is         located or where the Person resides, is domiciled, or has its principal place of business.                (2)   At no time shall Borrower, Guarantor, or Key Principal, or any Person         Controlling Borrower, Guarantor, or Key Principal, or any Person Controlled by         Borrower, Guarantor, or Key Principal that also has a direct or indirect ownership interest         in Borrower, Guarantor, or Key Principal, be a Person:                      (A)   against whom proceedings are pending for any alleged violation of               any laws described in Section 4.02(b)(l);                      (B)   that has been convicted of any violation of, has been subject to               civil penalties or Economic Sanctions pursuant to, or had any of its property               seized or forfeited under, any laws described in Section 4.02(b)(l); or                      (C)   with whom any United States Person, any entity organized under               the laws of the United States or its constituent states or territories, or any entity,               regardless of where organized, having its principal place of business within the               United States or any of its territories, is a Sanctioned Person or is otherwise               prohibited from  transacting business of the type contemplated by this Loan               Agreement and the other Loan Documents under any other applicable law.                (3)   Borrower, Guarantor, and Key Principal shall at all times remam m         compliance with any applicable Economic Sanctions laws and regulations.          (c)   Payment of Taxes, Assessments, and Other Charges.          Borrower shall  file all federal, state, county, and municipal tax returns and reports   required to be filed by Borrower and shall pay, before any fine, penalty interest, or cost may be   added thereto, all taxes payable with respect to such returns and reports.          (d)   Borrower Single Asset Status.          Until the Indebtedness is fully paid, Borrower:                (1)   shall not acquire or lease any real property, personal property, or assets         other than the Mortgaged Property;    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 18  Article 4                                04-18                    © 2018 Fannie Mae  

 

             (2)   shall not acquire, own, operate, or participate in any business other than         the leasing, ownership, management, operation, and maintenance of the Mortgaged         Property;                (3)   shall not commingle its assets or funds with those of any other Person,         unless such assets or funds can easily be segregated and identified in the ordinary course         of business from those of any other Person;                (4)   shall maintain its financial statements, accounting records, and other         partnership, real estate investment trust, limited liability company, or corporate         documents, as the case may be, separate from those of any other Person (unless         Borrower's assets are included in a consolidated financial statement prepared in         accordance with generally accepted accounting principles);                (5)   shall have no material financial obligation under any indenture, mortgage,         deed of trust, deed to secure debt, loan agreement, other agreement or  instrument to         which Borrower is a party or by which Borrower is otherwise bound, or to which the         Mortgaged Property is subject or by which it is otherwise encumbered, other than:                      (A)   unsecured trade payables incurred in the ordinary course of the               operation of the Mortgaged Property (exclusive of amounts (i) to be paid out of               the Replacement Reserve Account or Repairs Escrow Account, or (ii) for               rehabilitation, restoration, repairs, or replacements of the Mortgaged Property or               otherwise approved by Lender) so long as such trade payables (1) are not               evidenced by a promissory note, (2) are payable within sixty (60) days of the date               incurred, and (3) as of any date, do not exceed, in the aggregate, two percent (2%)               of the original principal balance of the Mortgage Loan; provided, however, that               otherwise compliant outstanding trade payables may exceed two percent (2%) up               to an aggregate amount of four percent (4%) of the original principal balance of               the Mortgage Loan for a period (beginning on or after the Effective Date) not to               exceed ninety (90) consecutive days;                      (B)   if the Security Instrument grants a lien on a leasehold estate,               Borrower's obligations as lessee under the ground lease creating such leasehold               estate; and                      (C)   obligations under the Loan Documents and obligations secured by               the Mortgaged Property to the extent permitted by the Loan Documents;                (6)   shall not assume, guaranty, or pledge its assets to secure the liabilities or         obligations of any other Person (except in connection with the Mortgage Loan or other         mortgage loans that have been paid in full or collaterally assigned to Lender, including in         connection with any Consolidation, Extension and Modification Agreement or similar         instrument) or hold out its credit as being available to satisfy the obligations of any other         Person;   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 19  Article 4                                04-18                    © 2018 Fannie Mae  

 

             (7)   shall not make loans or advances to any other Person; or                (8)   shall not enter into, or become a party to, any transaction with any         Borrower Affiliate, except in the ordinary course of business and on terms which are no         more favorable to any such Borrower Affiliate than would be obtained in a comparable         arm's-length transaction with an unrelated third party.          (e)   ERISA.          Borrower covenants that:                (1)   no asset of Borrower shall constitute "plan assets" (within the meaning of         Section 3(42) of ERISA and Department of Labor Regulation Section 2510.3-101) of an         Employee Benefit Plan;                (2)   no asset of Borrower shall be subject to the laws of any Governmental         Authority governing the assets of an Employee Benefit Plan; and                (3)   neither Borrower nor any ERISA Affiliate shall incur any obligation or         liability with respect to any ERISA Plan.          (f)   Notice of Litigation or Insolvency.          Borrower shall give immediate written notice to Lender of any claims, actions, suits, or   proceedings at law or in equity (including any insolvency, bankruptcy, or receivership   proceeding) by or before any Governmental Authority pending or, to Borrower's knowledge,   threatened against or affecting Borrower, Guarantor, Key Principal, or the Mortgaged Property,   which  claims, actions, suits, or proceedings, if adversely determined reasonably would be   expected to materially adversely affect the financial condition or business of Borrower,   Guarantor, or Key Principal, or the condition, operation, or ownership of the Mortgaged Property   (including any claims, actions, suits, or proceedings regarding fair housing, anti-discrimination,   or equal opportunity, which shall always be deemed material).          (g)   Payment of Costs, Fees, and Expenses.          In addition to the payments specified in this Loan Agreement, Borrower shall pay, on   demand, all of Lender's out-of-pocket fees, costs, charges, or expenses (including the reasonable   fees and expenses of attorneys, accountants, and other experts) incurred by Lender in connection   with:                (1)   any amendment  to, or consent, or waiver required under, this Loan         Agreement or any of the Loan Documents (whether or not any such amendments,         consents, or waivers are entered into);                (2)   defending or participating in any litigation arising from actions by third         parties and brought against or involving Lender with respect to:   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 20  Article 4                                04-18                   © 2018 Fannie Mae  

 

                   (A)   the Mortgaged Property;                      (B)   any event, act, condition, or circumstance in connection with the               Mortgaged Property; or                      (C)   the relationship between or among Lender, Borrower, Key               Principal, and Guarantor in connection with this Loan Agreement or any of the               transactions contemplated by this Loan Agreement;                (3)   the administration or enforcement of, or preservation of rights or remedies         under, this Loan Agreement or any other Loan Documents including or in connection         with any litigation or appeals, any Foreclosure Event or other disposition of any collateral         granted pursuant to the Loan Documents; and                (4)   any Bankruptcy Event or Guarantor Bankruptcy Event.          (h)   Restrictions on Distributions.          No distributions or dividends of any nature with respect to Rents or other income from   the Mortgaged Property shall be made to any Person having a direct ownership interest in   Borrower if an Event of Default has occurred and is continuing.          (i)   Lockbox Arrangement.          Borrower shall not enter into any type of lockbox agreement or similar cash management   arrangement that has not been approved by Lender in writing, and no direct or indirect owner of   Borrower shall enter into any type of lockbox agreement or similar cash management   arrangement with respect to Rents or other income from the Mortgaged Property that has not   been approved by Lender in writing. Lender's approval of any such cash management   arrangement may be conditioned upon requiring Borrower to enter into a lockbox agreement or   similar cash management arrangement with Lender in form and substance acceptable to Lender   with regard to Rents and other income from the Mortgaged Property.                       ARTICLE 5 -   THE MORTGAGE LOAN    Section 5.01   Representations and Warranties.          The representations and warranties made by Borrower to Lender in this Section 5.01 are   made as of the Effective Date and are true and correct except as disclosed on the Exceptions to   Representations and Warranties Schedule.          (a)   Receipt and Review of Loan Documents.          Borrower has received and reviewed this Loan Agreement and all of the other Loan   Documents.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page21  Article 4                                04-18                   © 2018 Fannie Mae  

 

       (b)   No Default.          No default exists under any of the Loan Documents.          (c)   No Defenses.          The  Loan Documents are not currently subject to any right of rescission, set-off,   counterclaim, or defense by either Borrower or Guarantor, including the defense of usury, and   neither Borrower nor Guarantor has asserted any right of rescission, set-off, counterclaim, or   defense with respect thereto.          (d)   Loan Document Taxes.          All mortgage, mortgage recording, stamp, intangible, or any other similar taxes required   to be paid by any Person under applicable law currently in effect in connection with the   execution, delivery, recordation, filing, registration, perfection, or enforcement of any of the   Loan Documents, including the Security Instrument, have been paid or will be paid in the   ordinary course of the closing of the Mortgage Loan.    Section 5.02   Covenants.          (a)   Ratification of Covenants; Estoppels; Certifications.          Borrower shall:                (1)   promptly notify Lender in writing upon any violation of any covenant set         forth in any Loan Document of which Borrower has notice or knowledge; provided,         however, any such written notice by Borrower to Lender shall not relieve Borrower of, or         result in a waiver of, any obligation under this Loan Agreement or any other Loan         Document; and                (2)   within ten (10) days after a request from Lender, provide a written         statement, signed and acknowledged by Borrower, certifying to Lender or any person         designated by Lender, as of the date of such statement:                      (A)   that the Loan Documents are unmodified and in full force and               effect (or,  if there have been modifications, that the Loan Documents are in full               force and effect as modified and setting forth such modifications);                      (B)   the unpaid principal balance of the Mortgage Loan;                      (C)   the date to which interest on the Mortgage Loan has been paid;                      (D)   that Borrower is not in default in paying the Indebtedness or in               performing or observing any of the covenants or agreements contained in this    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page22  Article 5                                04-18                    © 2018 Fannie Mae  

 

             Loan Agreement or any of the other Loan Documents (or, if Borrower is in               default, describing such default in reasonable detail);                      (E)   whether or not there are then-existing any setoffs or defenses               known to Borrower against the enforcement of any right or remedy of Lender               under the Loan Documents; and                      (F)   any additional facts reasonably requested in writing by Lender.          (b)   Further Assurances.                (1)   Other Documents As Lender May Require.                Within ten (10) days after request by Lender, Borrower shall, subject to Section         5.02(d) below, execute, acknowledge, and deliver, at its cost and expense, all further acts,         deeds, conveyances, assignments, financing statements, transfers, documents,         agreements, assurances, and such other instruments as Lender may reasonably require         from time to time in order to better assure, grant, and convey to Lender the rights         intended to be granted, now or in the future, to Lender under this Loan Agreement and         the other Loan Documents.                (2)   Corrective Actions.                Within ten (10) days after request by Lender, Borrower shall provide, or cause to         be provided, to Lender, at Borrower's cost and expense, such further documentation or         information reasonably deemed necessary or appropriate by Lender in the exercise of its         rights under the related commitment letter between Borrower and Lender or to correct         patent mistakes in the Loan Documents, the Title Policy, or the funding of the Mortgage         Loan.          (c)   Sale of Mortgage Loan.          Borrower shall, subject to Section 5.02(d) below:                (1)   comply with the reasonable requirements of Lender or any Investor of the         Mortgage Loan or provide, or cause to be provided, to Lender or any Investor of the         Mortgage Loan within ten ( 10) days of the request, at Borrower's cost and expense, such         further documentation or information as Lender or Investor may reasonably require, in         order to enable:                      (A)   Lender to sell the Mortgage Loan to such Investor;                      (B)   Lender to obtain a refund of any commitment fee from any such               Investor; or                      (C)   any such Investor to further sell or securitize the Mortgage Loan;   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 23  Article 5                                04-18                   © 2018 Fannie Mae  

 

             (2)   ratify and affirm in writing the representations and warranties set forth in         any Loan Document as of such date specified by Lender modified as necessary to reflect         changes that have occurred subsequent to the Effective Date;                (3)   confirm that Borrower is not in default in paying the Indebtedness or in         performing or observing any of the covenants or agreements contained in this Loan         Agreement or any of the other Loan Documents (or,  if Borrower is in default, describing         such default in reasonable detail); and                (4)   execute and  deliver to Lender and/or any Investor such other         documentation, including any amendments, corrections, deletions, or additions to this         Loan Agreement or other Loan Document(s) as is reasonably required by Lender or such         Investor.          (d)   Limitations on Further Acts of Borrower.          Nothing in Section 5.02(b) and Section 5.02(c) shall require Borrower to do any further   act that has the effect of:                ( 1)  changing the economic terms of the Mortgage Loan set forth in the related         commitment letter between Borrower and Lender;                (2)   imposing on Borrower or Guarantor greater personal liability under the         Loan Documents than that set forth in the related commitment letter between Borrower         and Lender; or                (3)   materially changing the rights and obligations of Borrower or Guarantor         under the commitment letter.          (e)   Financing Statements; Record Searches.                (1)   Borrower shall pay all costs and expenses associated with:                      (A)   any filing or recording of any financing statements, including all               continuation statements, termination statements, and amendments or any other               filings related to security interests in or liens on collateral; and                      (B)   any record searches for financing statements that Lender may               require.                (2)   Borrower hereby authorizes Lender to file any financing statements,         continuation statements, termination statements, and amendments (including an "all         assets" or "all personal property" collateral description or words of similar import) in         form and substance as Lender may require in order to protect and preserve Lender's lien         priority and security interest in the Mortgaged Property (and to the extent Lender has    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 24  Article 5                                04-18                    © 2018 Fannie Mae  

 

       filed any such financing statements, continuation statements, or amendments prior to the         Effective Date, such filings by Lender are hereby authorized and ratified by Borrower).          (f)   Loan Document Taxes.          Borrower shall pay, on demand, any transfer taxes, documentary taxes, assessments, or   charges made by any Governmental Authority in connection with the execution, delivery,   recordation, filing, registration, perfection, or enforcement of any of the Loan Documents or the   Mortgage Loan.     ARTICLE 6 -   PROPERTY USE, PRESERVATION, AND MAINTENANCE    Section 6.01   Representations and Warranties.          The representations and warranties made by Borrower to Lender in this Section 6.01 are   made as of the Effective Date and are true and correct except as disclosed on the Exceptions to   Representations and Warranties Schedule.          (a)   Compliance with Law; Permits and Licenses.                (1)   To Borrower's knowledge, all improvements to the Land and the use of         the Mortgaged Property comply with all applicable laws, ordinances, statutes, rules, and         regulations, including all applicable statutes, rules, and regulations pertaining to         requirements for equal opportunity, anti-discrimination, fair housing, and rent control,         and Borrower has no knowledge of any action or proceeding (or threatened action or         proceeding) regarding noncompliance or nonconformity with any of the foregoing.                (2)   To Borrower's knowledge, there is no evidence of any illegal activities on         the Mortgaged Property.                (3)   To  Borrower's knowledge, no  permits or  approvals from any         Governmental Authority, other than those previously obtained and furnished to Lender,         are necessary for the commencement and completion of the Repairs or Replacements, as         applicable, other than those permits or approvals which will be timely obtained in the         ordinary course of business.                (4)   All required permits, licenses, and certificates to comply with all zoning         and land use statutes, laws, ordinances, rules, and regulations, and all applicable health,         fire, safety, and building codes, and for the lawful use and operation of the Mortgaged         Property, including certificates of occupancy, apartment licenses, or the equivalent, have         been obtained and are in full force and effect.                (5)   No  portion of the Mortgaged Property has been purchased with the         proceeds of any illegal activity.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page25  Article 5                                04-18                   © 2018 Fannie Mae  

 

       (b)   Property Characteristics.                ( 1)  The Mortgaged Property contains at least:                      (A)   the Property Square Footage;                      (B)   the Total Parking Spaces; and                      (C)   the Total Residential Units.                (2)   No part of the Land is included or assessed under or as part of another tax         lot or parcel, and no part of any other property is included or assessed under or as part of         the tax lot or parcels for the Land.          (c)   Property Ownership.          Borrower is sole owner or ground lessee of the Mortgaged Property.          (d)   Condition of the Mortgaged Property.                (1)   Borrower has not made any claims, and to Borrower's knowledge, no         claims have been made, against any contractor, engineer, architect, or other party with         respect to the construction or condition of the Mortgaged Property or the existence of any         structural or other material defect therein; and                (2)   neither the Land nor the Improvements has sustained any damage other         than damage which has been fully repaired, or is fully insured and is being repaired in the         ordinary course of business.          (e)   Personal Property.          Borrower owns (or, to the extent disclosed on the Exceptions to Representations and   Warranties Schedule, leases) all of the Personal Property that is material to and is used  in   connection with the management, ownership, and operation of the Mortgaged Property.    Section 6.02   Covenants.          (a)   Use of Property.          From and after the Effective Date, Borrower shall not, unless required by applicable law   or Governmental Authority:                (1)   change the use of all or any part of the Mortgaged Property;                (2)   convert any individual dwelling units or common areas to commercial use,         or convert any common area or commercial use to individual dwelling units without         Lender's prior written consent;   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 26  Article 6                                04-18                    © 2018 Fannie Mae  

 

             (3)   initiate or acquiesce in a change in the zoning classification of the Land;                (4)   establish any condominium or cooperative regime with respect to the         Mortgaged Property;                (5)   subdivide the Land; or                (6)   suffer, permit, or initiate the joint assessment of any Mortgaged Property         with any other real property constituting a tax lot separate from such Mortgaged Property         which could cause the part of the Land to be included or assessed under or as part of         another tax lot or parcel, or any part of any other property to be included or assessed         under or as part of the tax lot or parcels for the Land.          (b)   Property Maintenance.          Borrower shall:                (1)   pay the expenses of operating, managing, maintaining, and repairing the         Mortgaged Property (including insurance premiums, utilities, Repairs, and Replacements)         before the last date upon which each such payment may be made without any penalty or         interest charge being added;                (2)   keep the Mortgaged Property in good repair and marketable condition         (ordinary  wear and tear excepted) (including the replacement of Personalty and Fixtures         with items of equal or better function and quality) and subject to Section 9.03(b)(3) and         Section 10.03(d) restore or repair promptly, in a good and workmanlike manner, any         damaged part of the Mortgaged Property to the equivalent of its original condition or         condition immediately prior to the damage (if improved after the Effective Date),         whether or not any insurance proceeds or amounts received in connection with a         Condemnation Action are available to cover any costs of such restoration or repair;                (3)   commence   all Required Repairs, Additional Lender Repairs, and         Additional Lender Replacements as follows:                      (A)   with respect to any Required Repairs, promptly following the               Effective Date (subject to Force Majeure, if applicable), in accordance with the               timelines set forth on the Required Repair Schedule, or if no timelines are               provided, as soon as practical following the Effective Date;                      (B)   with respect to Additional Lender Repairs, in the event that Lender               determines that Additional Lender Repairs are necessary from time to time or               pursuant to Section 6.03(c), promptly following Lender's written notice of such               Additional Lender Repairs (subject to Force Majeure, if applicable), commence               any such Additional Lender Repairs in accordance with Lender's timelines, or if               no timelines are provided, as soon as practical;    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page27  Article 6                                04-18                    © 2018 Fannie Mae  

 

                   (C)   with respect to Additional Lender Replacements, in the event that               Lender determines that Additional Lender Replacements are necessary from time               to time or pursuant to Section 6.03(c), promptly following Lender's written notice               of such Additional Lender Replacements (subject to Force Majeure, if applicable),               commence  any  such Additional Lender Replacements in accordance with               Lender's timelines, or if no timelines are provided, as soon as practical;                (4)   make,  construct, install, diligently perform, and complete all         Replacements, Repairs, and any other work permitted under the Loan Documents:                      (A)   in a  good and workmanlike manner as soon  as practicable               following the commencement thereof, free and clear of any Liens, including               mechanics' or  materialmen's liens and encumbrances (except Permitted               Encumbrances and mechanics' or materialmen's liens which attach automatically               under the laws of any Governmental Authority upon the commencement of any               work upon, or delivery of any materials to, the Mortgaged Property and for which               Borrower is not delinquent in the payment for any such work or materials);                      (B)   in accordance with all applicable laws, ordinances, rules, and               regulations of any Governmental Authority, including applicable building codes,               special use permits, and environmental regulations;                      (C)   m   accordance with all applicable insurance and bonding               requirements; and                      (D)   within all timeframes required by Lender, and  Borrower               acknowledges that it shall be an Event of Default if Borrower abandons or ceases               work on any Repair at any time prior to the completion of the Repairs for a period               of longer than twenty (20) days (except  when Force Majeure exists and Borrower               is diligently pursuing the reinstitution of such work, provided, however, any such               abandonment or cessation shall not in any event allow the Repair to be completed               after the Completion Period, subject to Force Majeure ); and                (5)   subject to the terms of Section 6.03(a), provide for professional         management  of the Mortgaged Property by a residential rental property manager         satisfactory to Lender under a contract approved by Lender in writing;                (6)   give written notice to Lender of, and, unless otherwise directed in writing         by Lender, appear in and defend any action or proceeding purporting to affect the         Mortgaged Property, Lender's security for the Mortgage Loan, or Lender's rights under         this Loan Agreement; and                (7)   upon Lender's written request, submit to Lender any contracts or work         orders described in Section 13.02(b).    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 28  Article 6                                04-18                    © 2018 Fannie Mae  

 

       (c)   Property Preservation.          Borrower shall:                ( 1)  not commit waste or abandon or (ordinary  wear and tear excepted) permit         impairment or deterioration of the Mortgaged Property;                (2)   not (nor permit any other Person to) demolish, make any change in the         unit mix, otherwise alter the Mortgaged Property or any part of the Mortgaged Property,         or remove any Personalty or Fixtures from the Mortgaged Property, except for: (A)         alterations required in connection with Repairs and Replacements; or (B) the replacement         of tangible Personalty or Fixtures, provided (i) such Personalty or Fixtures are replaced         with items of equal or better function and quality, and (ii) such replacement does not         result in any disruption in occupancy (other than in connection with the routine re-leasing         of units);                (3)   not engage in or knowingly permit, and shall take appropriate measures to         prevent and abate or cease and desist, any illegal activities at the Mortgaged Property that         could endanger tenants or visitors, result in damage to the Mortgaged Property, result in         forfeiture of the Land or otherwise materially impair the lien created by the Security         Instrument or Lender's interest in the Mortgaged Property;                (4)   not permit any condition to exist on the Mortgaged Property that would         invalidate any part of any insurance coverage required by this Loan Agreement; or                (5)   not subject the Mortgaged Property to any voluntary, elective, or non-        compulsory tax lien or assessment (or opt in to any voluntary, elective, or non­        compulsory special tax district or similar regime).          (d)   Property Inspections.          Borrower shall:                (1)   permit Lender, its agents, representatives, and designees to enter upon and         inspect the Mortgaged Property (including in connection with any Replacement or         Repair, or to conduct any Environmental Inspection pursuant to the Environmental         Indemnity Agreement), and shall cooperate and provide access to all areas of the         Mortgaged Property (subject to the rights of tenants under the Leases):                      (A)   during normal business hours;                      (B)   at such other reasonable time upon reasonable notice of not less               than one ( 1) Business Day;                      (C)   at any time when exigent circumstances exist; or    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page29  Article 6                                04-18                   © 2018 Fannie Mae  

 

                   (D)   at any time after an Event of Default has occurred and 1s               continuing; and                (2)   pay for reasonable costs or expenses incurred by Lender or its agents in         connection with any such inspections.          (e)   Compliance with Laws.          Borrower shall:                (1)   comply with all laws, ordinances, statutes, rules, and regulations of any         Governmental Authority and all recorded lawful covenants and agreements relating to or         affecting the Mortgaged Property, including all laws, ordinances, statutes, rules and         regulations, and covenants pertaining to construction of improvements on the Land, fair         housing, and requirements for equal opportunity, anti-discrimination, and Leases;                (2)   procure and maintain all required permits, licenses, charters, registrations,         and certificates necessary to comply with all zoning and land use statutes, laws,         ordinances, rules and regulations, and all applicable health, fire, safety, and building         codes and for the lawful use and operation of the Mortgaged Property, including         certificates of occupancy, apartment licenses, or the equivalent;                (3)   comply with all applicable laws that pertain to the maintenance and         disposition of tenant security deposits;                (4)   at all times maintain records sufficient to demonstrate compliance with the         provisions of this Section 6.02(e); and                (5)   promptly after receipt or notification thereof, provide Lender copies of any         building code or zoning violation from any Governmental Authority with respect to the         Mortgaged Property.    Section 6.03   Mortgage Loan Administration Matters Regarding the Property.          (a)   Property Management.          From and after the Effective Date, each property manager and each property management   agreement must be approved by Lender. If, in connection with the making of the Mortgage   Loan, or at any later date, Lender waives in writing the requirement that Borrower enter into a   written contract for management of the Mortgaged Property, and Borrower later elects to enter   into a written contract or change the management of the Mortgaged Property, such new property   manager or the property management agreement must be approved by Lender. As a condition to   any approval by Lender, Lender may require that Borrower and such new property manager   enter into a collateral assignment of the property management agreement on a form approved by   Lender.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 30  Article 6                                04-18                    © 2018 Fannie Mae  

 

       (b)   Subordination of Fees to Affiliated Property Managers.          Any  property manager that is a Borrower Affiliate to whom fees are payable for the   management  of the Mortgaged Property must enter into an assignment of management   agreement or other agreement with Lender, in a form approved by Lender, providing for   subordination of those fees and such other provisions as Lender may require.          (c)   Property Condition Assessment.          If, in connection with any inspection of the Mortgaged Property, Lender determines that   the condition of the Mortgaged Property has deteriorated (ordinary  wear and tear excepted) since   the Effective Date, Lender may obtain, at Borrower's expense, a property condition assessment   of the Mortgaged Property. Lender's right to obtain a property condition assessment pursuant to   this Section 6.03(c) shall be in addition to any other rights available to Lender under this Loan   Agreement in connection with any such deterioration. Any such inspection or property condition   assessment may result in Lender requiring Additional Lender Repairs or Additional Lender   Replacements as further described in Section 13.02(a)(9)(B).                         ARTICLE 7 -   LEASES AND RENTS    Section 7 .01  Representations and Warranties.          The representations and warranties made by Borrower to Lender in this Section 7.01 are   made as of the Effective Date and are true and correct except as disclosed on the Exceptions to   Representations and Warranties Schedule.          (a)   Prior Assignment of Rents.          Borrower has not executed any:                ( 1)  prior assignment of Rents (other  than an assignment of Rents securing         prior indebtedness that has been paid off and discharged or will be paid off and         discharged with the proceeds of the Mortgage Loan); or                (2)   instrument which would prevent Lender from exercising its rights under         this Loan Agreement or the Security Instrument.          (b)   Prepaid Rents.          Borrower has not accepted, and does not expect to receive prepayment of, any Rents for   more than two (2) months prior to the due dates of such Rents.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 31  Article 6                                04-18                    © 2018 Fannie Mae  

 

 Section 7 .02  Covenants.          (a)   Leases.          Borrower shall:                (1)   comply  with and observe Borrower's obligations under all Leases,         including Borrower's obligations pertaining to the maintenance and disposition of tenant         security deposits;                (2)   surrender possession of the Mortgaged Property, including all Leases and         all security deposits and prepaid Rents, immediately upon appointment of a receiver or         Lender's entry upon and taking of possession and control of the Mortgaged Property, as         applicable;                (3)   require that all Residential Leases have initial terms of not less than six (6)         months and not more than twenty-four (24) months (however, if customary in the         applicable market for properties comparable to the Mortgaged Property, Residential         Leases with terms of less than six (6) months (but in no case less than one (1) month)         may  be permitted with Lender's prior written consent); notwithstanding the foregoing,         Residential Leases having initial terms of less than six (6) months but at least one (1)         month shall be permitted so long as the total number of such Residential Leases does not         exceed ten percent ( 10%) of all residential units; and                (4)   promptly provide Lender a copy of any non-Residential Lease at the time         such Lease is executed (subject to Lender's consent rights for Material Commercial         Leases in Section 7.02(b)) and, upon Lender's written request, promptly provide Lender a         copy of any Residential Lease then in effect.          (b)   Commercial Leases.                (1)   With respect to Material Commercial Leases, Borrower shall not:                      (A)   enter into any Material Commercial Lease except with the prior               written consent of Lender; or                      (B)   modify the terms of, extend, or terminate any Material Commercial               Lease (including any Material Commercial Lease in existence on the Effective               Date) without the prior written consent of Lender.                (2)   With respect to any non-Material Commercial Lease, Borrower shall not:                      (A)   enter into any non-Material Commercial Lease that materially               alters the use and type of operation of the premises subject to the Lease in effect               as of the Effective Date or reduces the number or size of residential units at the               Mortgaged Property; or   Multifamily Loan and Security Agreement   (Non-Recourse)                       Form 6001.NR                        Page 32  Article 7                                04-18                    © 2018 Fannie Mae  

 

                   (B)   modify  the terms of any  non-Material Commercial Lease               (including any non-Material Commercial Lease in existence on the Effective               Date) in any way that materially alters the use and type of operation of the               premises subject to such non-Material Commercial Lease in effect as of the               Effective Date, reduces the number or size of residential units at the Mortgaged               Property, or results in such non-Material Commercial Lease being deemed a               Material Commercial Lease.                (3)   With  respect to any Material Commercial Lease or non-Material         Commercial Lease, Borrower shall cause the applicable tenant to provide within ten ( 10)         days after a request by Borrower, a certificate of estoppel, or if not provided by tenant         within such ten ( 10) day period, Borrower shall provide such certificate of estoppel,         certifying:                      (A)   that such Material Commercial Lease or non-Material Commercial               Lease is unmodified and in full force and effect (or  if there have been               modifications, that such Material Commercial Lease or non-Material Commercial               Lease is in full force and effect as modified and stating the modifications);                      (B)   the term of the Lease including any extensions thereto;                      (C)   the dates to which the Rent and any other charges hereunder have               been paid by tenant;                      (D)   the amount of any security deposit delivered to Borrower as               landlord;                      (E)   whether or not Borrower is in default (or whether any event or               condition exists which, with the passage of time, would constitute an event of               default) under such Lease;                      (F)   the address to which notices to tenant should be sent; and                      (G)   any other information as may be reasonably required by Lender.          (c)   Payment of Rents.          Borrower shall:                ( 1)  pay to Lender upon demand all Rents after an Event of Default has         occurred and is continuing;                (2)   cooperate with Lender's efforts in connection with the assignment of         Rents set forth in the Security Instrument; and    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 33  Article 7                                04-18                   © 2018 Fannie Mae  

 

             (3)   not accept Rent under any Lease (whether a Residential Lease or a non-        Residential Lease) for more than two (2) months in advance.          (d)   Assignment of Rents.          Borrower shall not:                (1)   perform any acts nor execute any instrument that would prevent Lender         from exercising its rights under the assignment of Rents granted in the Security         Instrument or in any other Loan Document; nor                (2)   interfere with Lender's collection of such Rents.          (e)   Further Assignments of Leases and Rents.          Borrower shall execute and deliver any further assignments of Leases and Rents as   Lender may reasonably require.          (f)   Options to Purchase by Tenants.          No  Lease (whether a Residential Lease or a non-Residential Lease) shall contain an   option to purchase, right of first refusal to purchase or right of first offer to purchase, except as   required by applicable law.    Section 7.03   Mortgage Loan Administration Regarding Leases and Rents.          (a)   Material Commercial Lease Requirements.          Each Material Commercial Lease, including any renewal or extension of any Material   Commercial Lease in existence as of the Effective Date, shall provide, directly or pursuant to a   subordination, non-disturbance and attornment agreement approved by Lender, that:                (1)   the tenant shall, upon written notice from Lender after the occurrence of         an Event of Default, pay all Rents payable under such Lease to Lender;                (2)   such Lease  and all rights of the tenant thereunder are expressly         subordinate to the lien of the Security Instrument;                (3)   the tenant shall attorn to Lender and any purchaser at a Foreclosure Event         (such attornment to be self-executing and effective upon acquisition of title to the         Mortgaged Property by any purchaser at a Foreclosure Event or by Lender in any         manner);                (4)   the tenant agrees to execute such further evidences of attornment as         Lender or any purchaser at a Foreclosure Event may from time to time request; and    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 34  Article 7                                04-18                    © 2018 Fannie Mae  

 

             (5)   such Lease shall not terminate as a result of a Foreclosure Event unless         Lender or any other purchaser at such Foreclosure Event affirmatively elects to terminate         such Lease pursuant to the terms of the subordination, non-disturbance and attornment         agreement.          (b)   Residential Lease Form.          All Residential Leases entered into from and after the Effective Date shall be on forms   approved by Lender.        ARTICLE 8 -    BOOKS AND RECORDS; FINANCIAL REPORTING    Section 8.01   Representations and Warranties.          The representations and warranties made by Borrower to Lender in this Section 8.01 are   made as of the Effective Date and are true and correct except as disclosed on the Exceptions to   Representations and Warranties Schedule.          (a)   Financial Information.          All financial statements and data, including statements of cash flow and income and   operating expenses, that have been delivered to Lender in respect of the Mortgaged Property:                (1)   are true, complete, and correct in all material respects; and                (2)   accurately represent the financial condition of the Mortgaged Property as         of such date.          (b)   No Change in Facts or Circumstances.          All information in the Loan Application and in all financial statements, rent rolls, reports,   certificates, and other documents submitted in connection with the Loan Application are   complete and accurate in all material respects. There has been no material adverse change in any   fact or circumstance that would make any such information incomplete or inaccurate.    Section 8.02   Covenants.          (a)   Obligation to Maintain Accurate Books and Records.          Borrower shall keep and maintain at all times at the Mortgaged Property or the property   management agent's offices or Borrower's General Business Address and, upon Lender's written   request, shall make available at the Land:                ( 1)  complete and accurate books of account and records (including copies of         supporting bills and invoices) adequate to reflect correctly the operation of the Mortgaged         Property; and   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 35  Article 7                                04-18                   © 2018 Fannie Mae  

 

             (2)   copies of all written contracts, Leases, and other instruments that affect         Borrower or the Mortgaged Property.          (b)   Items to Furnish to Lender.          Borrower shall furnish to Lender the following, certified as true, complete, and accurate,   in all material respects, by an individual having authority to bind Borrower (or Guarantor, as   applicable), in such form and with such detail as Lender reasonably requires:                (1)   within forty-five (45) days after the end of each first, second, and third         calendar quarter, a statement of income and expenses for Borrower on a year-to-date         basis as of the end of each calendar quarter;                (2)   within one hundred twenty (120) days after the end of each calendar year:                      (A)   for any Borrower that is an entity, a statement of income and               expenses and a statement of cash flows for such calendar year;                      (B)   for any Borrower that is an individual, or a trust established for               estate-planning purposes, a personal financial statement for such calendar year;                      (C)   when requested in writing by Lender, balance sheet(s) showing all               assets and liabilities of Borrower and a statement of all contingent liabilities as of               the end of such calendar year;                      (D)   if an energy consumption metric for the Mortgaged Property is               required to be reported to any Governmental Authority, the Fannie Mae Energy               Performance Metrics report, as generated by ENERGY  STAR®  Portfolio               Manager, for the Mortgaged Property for such calendar year, which report must               include the ENERGY STAR  score, the Source Energy Use Intensity (EUI),  the               month and year ending period for such ENERGY STAR score and such Source               Energy Use Intensity, and the ENERGY STAR  Portfolio Manager Property               Identification Number; provided that, if the Governmental Authority does not               require the use of ENERGY STAR Portfolio Manager for the reporting of the               energy consumption metric and Borrower does not use ENERGY STAR  Portfolio               Manager, then Borrower shall furnish to Lender the Source Energy Use Intensity               for the Mortgaged Property for such calendar year;                      (E)   a written certification ratifying and affirming that:                            (i)   Borrower has taken no action in violation of Section                     4.02(d) regarding its single asset status;                            (ii)  Borrower has received no notice of any building code                     violation, or if Borrower has received such notice, evidence of                     remediation;   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 36  Article 8                                04-18                    © 2018 Fannie Mae  

 

                         (iii) Borrower has made  no  application for rezoning nor                     received any notice that the Mortgaged Property has been or is being                     rezoned; and                            (iv)  Borrower has taken no action and has no knowledge of any                     action that would violate the provisions of Section 1 l .02(b )( 1)(F)                      regarding liens encumbering the Mortgaged Property;                      (F)   an accounting of all security deposits held pursuant to all Leases,               including the name of the institution (if any) and the names and identification               numbers of the accounts (if any) in which such security deposits are held and the               name  of the person to contact at such financial institution, along with any               authority or release necessary for Lender to access information regarding such               accounts; and                      (G)   written confirmation of:                            (i)   any changes occurring since the Effective Date (or that no                     such changes have occurred since the Effective Date) in (1) the direct                     owners of Borrower, (2) the indirect owners (and any non-member                     managers) of Borrower that Control Borrower (excluding any Publicly­                    Held Corporations or Publicly-Held Trusts), or (3) the indirect owners of                     Borrower that hold twenty-five  percent (25%) or more of the ownership                     interests in Borrower (excluding any Publicly-Held Corporations or                     Publicly-Held Trusts), and their respective interests;                            (ii)  the names of all officers and directors of (1) any Borrower                     which is a corporation, (2) any corporation which is a general partner of                     any Borrower which is a partnership, or (3) any corporation which is the                     managing member or non-member manager of any Borrower which is a                     limited liability company; and                            (iii) the names of all managers who are not members of (1) any                     Borrower which is a limited liability company, (2) any limited liability                     company  which is a general partner of any Borrower which is a                     partnership, or (3) any limited liability company which is the managing                     member  or non-member manager of any Borrower which is a limited                     liability company; and                      (H)   if not already provided pursuant to Section 8.02(b )(2)(A) above, a               statement of income and expenses for Borrower's operation of the Mortgaged               Property on a year-to-date basis as of the end of each calendar year;                (3)   within forty-five (45) days after the end of each first, second, and third         calendar quarter and within one hundred twenty (120) days after the end of each calendar         year, and at any other time upon Lender's written request, a rent schedule for the   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 37  Article 8                                04-18                   © 2018 Fannie Mae  

 

       Mortgaged Property showing the name of each tenant and for each tenant, the space         occupied, the lease expiration date, the rent payable for the current month, the date         through which rent has been paid, and any related information requested by Lender; and                (4)   upon Lender's written request (but, absent an Event of Default, no more         frequently than once in any six (6) month period):                      (A)   any item described in Section 8.02(b)(l) or Section 8.02(b)(2) for               Borrower, certified as true, complete, and accurate by an individual having               authority to bind Borrower;                      (B)   a property management or leasing report for the Mortgaged               Property, showing the number of rental applications received from tenants or               prospective tenants and deposits received from tenants or prospective tenants, and               any other information requested by Lender;                      (C)   a statement of income and expenses for Borrower's operation of               the Mortgaged Property on a year-to-date basis as of the end of each month for               such period as requested by Lender, which statement shall be delivered within               thirty (30) days after the end of such month requested by Lender;                      (D)   a statement of real estate owned directly or indirectly by Borrower               and Guarantor for such period as requested by Lender, which statement(s) shall be               delivered within thirty (30) days after the end of such month requested by Lender;                      (E)   for any Guarantor, by the later of thirty (30) days after the date               requested by Lender and the date one hundred twenty (120) days after the end of               the most recent calendar year:                            (i)   that is an entity, a statement of income and expenses and a                     statement of cash flows for such calendar year;                            (ii)  that is an individual, or a trust established for estate-                    planning purposes, a personal financial statement for such calendar year;                     and                            (iii) balance sheet(s) showing all assets and liabilities of                     Guarantor and a statement of all contingent liabilities as of the end of such                     calendar year; and                      (F)   a statement that identifies:                            (i)   the direct owners of Borrower and their respective interests;    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 38  Article 8                                04-18                    © 2018 Fannie Mae  

 

                        (ii)  the indirect owners (and any non-member managers) of                    Borrower  that Control  Borrower (excluding any  Publicly-Held                    Corporations or Publicly-Held Trusts) and their respective interests; and                           (iii) the indirect owners of Borrower that hold twenty-five                    percent (25%) or more of the ownership interests in Borrower (excluding                    any  Publicly-Held Corporations or Publicly-Held Trusts) and their                    respective interests.         (c)   Audited Financials.         In the event Borrower or Guarantor receives or obtains any audited financial statements  and such financial statements are required to be delivered to Lender under Section 8.02(b ),  Borrower shall deliver or cause to be delivered to Lender the audited versions of such financial  statements.         (d)   Delivery of Books and Records.         If an Event of Default has occurred and is continuing, Borrower shall deliver to Lender,  upon written demand, all books and records relating to the Mortgaged Property or its operation.   Section 8.03   Mortgage Loan  Administration Matters Regarding Books and Records  and Financial Reporting.         (a)   Lender's Right to Obtain Audited Books and Records.         Lender may require that Borrower's or Guarantor's books and records be audited, at  Borrower's expense, by an independent certified public accountant selected by Lender in order to  produce or audit any statements, schedules, and reports of Borrower, Guarantor, or the  Mortgaged Property required by Section 8.02, if:               (1)   Borrower or Guarantor fails to provide in a timely manner the statements,        schedules, and reports required by Section 8.02 and, thereafter, Borrower or Guarantor        fails to provide such statements, schedules, and reports within the cure period provided in        Section 14.0l(c);               (2)   the statements, schedules, and reports submitted to Lender pursuant to        Section 8.02 are not full, complete, and accurate in all material respects as determined by        Lender and, thereafter, Borrower or Guarantor fails to provide such statements,        schedules, and reports within the cure period provided in Section 14.0l(c); or               (3)   an Event of Default has occurred and is continuing.         Notwithstanding the foregoing, the ability of Lender to require the delivery of audited  financial statements shall be limited to not more than once per Borrower's fiscal year so long as  no Event of Default has occurred during such fiscal year (or any event which, with the giving of   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 39  Article 8                               04-18                    © 2018 Fannie Mae  

 

 written notice or the passage of time, or both, would constitute an Event of Default has occurred   and is continuing). Borrower shall cooperate with Lender in order to satisfy the provisions of   this Section 8.03(a). All related costs and expenses of Lender shall become due and payable by   Borrower within ten (10) Business Days after demand therefor.          (b)   Credit Reports; Credit Score.          No more often than once in any twelve (12) month period, Lender is authorized to obtain   a credit report (if applicable) on Borrower or Guarantor, the cost of which report shall be paid by   Borrower.  Lender is authorized to obtain a Credit Score (if applicable) for Borrower or   Guarantor at any time at Lender's expense.                             ARTICLE 9 -   INSURANCE    Section 9.01   Representations and Warranties.          The representations and warranties made by Borrower to Lender in this Section 9.01 are   made as of the Effective Date and are true and correct except as disclosed on the Exceptions to   Representations and Warranties Schedule.          (a)   Compliance with Insurance Requirements.          Borrower is in compliance with Lender's insurance requirements (or  has obtained a   written waiver from Lender for any non-compliant coverage) and has timely paid all premiums   on all required insurance policies.          (b)   Property Condition.                (1)   The Mortgaged Property has not been damaged by fire, water, wind, or         other cause of loss; or                (2)   if previously damaged, any previous damage to the Mortgaged Property         has been repaired and the Mortgaged Property has been fully restored.    Section 9.02   Covenants.          (a)   Insurance Requirements.                (1)   As required by Lender and applicable law, and as may be modified from         time to time, Borrower shall:                      (A)   keep the Improvements insured at all times against any hazards,               which insurance shall include coverage against loss by fire and all other perils               insured by the "special causes of loss" coverage form, general boiler and               machinery coverage, business income coverage, and flood (if any of the               Improvements are located in an area identified by the Federal Emergency   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page40  Article 8                                04-18                    © 2018 Fannie Mae  

 

             Management Agency (or  any successor) as an area having special flood hazards               and to the extent flood insurance is available in that area), and may include               sinkhole insurance, mine subsidence insurance, earthquake insurance, terrorism               insurance, windstorm insurance and, if the Mortgaged Property does not conform               to applicable building, zoning, or land use laws, ordinance and law coverage;                      (B)   maintain at all times commercial general liability insurance,               workmen's  compensation insurance, and such other liability, errors and               omissions, and fidelity insurance coverage; and                      (C)   maintain builder's risk and public liability insurance, and other               insurance in connection with completing the Repairs or Replacements, as               applicable.          (b)   Delivery of Policies, Renewals, Notices, and Proceeds.          Borrower shall:                (1)   cause all insurance policies (including any policies not otherwise required         by  Lender) which can be endorsed with standard non-contributing, non-reporting         mortgagee clauses making loss payable to Lender (or  Lender's assigns) to be so         endorsed;                (2)   promptly deliver to Lender a copy of all renewal and other notices         received by Borrower with respect to the policies and all receipts for paid premiums;                (3)   deliver evidence, in form and content acceptable to Lender, that each         required insurance policy under this Article 9 has been renewed not less than fifteen (15)         days prior to the applicable expiration date, and (if such evidence is other than an original         or duplicate original of a renewal policy) deliver the original or duplicate original of each         renewal policy (or  such other evidence of insurance as may be required by or acceptable         to Lender) in form and content acceptable to Lender within ninety (90) days after the         applicable expiration date of the original insurance policy;                (4)   provide immediate written notice to the insurance company and to Lender         of any event of loss;                (5)   execute such further evidence of assignment of any insurance proceeds as         Lender may require; and                (6)   provide immediate written notice to Lender of Borrower's receipt of any         insurance proceeds under any insurance policy required by Section 9.02(a)(l) above and,         if requested by Lender, deliver to Lender all of such proceeds received by Borrower to be         applied by Lender in accordance with this Article 9.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 41  Article 9                                04-18                    © 2018 Fannie Mae  

 

 Section 9.03   Mortgage Loan Administration Matters Regarding Insurance          (a)   Lender's Ongoing Insurance Requirements.          Borrower acknowledges that Lender's insurance requirements may change from time to   time. All insurance policies and renewals of insurance policies required by this Loan Agreement   shall be:                (1)   in the form and with the terms required by Lender;                (2)   in such amounts, with such maximum deductibles and for such periods         required by Lender; and                (3)   issued by insurance companies satisfactory to Lender.          BORROWER     ACKNOWLEDGES      THAT   ANY  FAILURE   OF  BORROWER     TO   COMPLY   WITH  THE  REQUIREMENTS    SET FORTH   IN SECTION  9.02(a) OR SECTION   9.02(b)(3) ABOVE  SHALL   PERMIT   LENDER    TO  PURCHASE    THE  APPLICABLE   INSURANCE    AT BORROWER'S    COST.   SUCH  INSURANCE   MAY,  BUT  NEED   NOT,   PROTECT BORROWER'S      INTERESTS.  THE  COVERAGE THAT    LENDER   PURCHASES   MAY   NOT  PAY  ANY  CLAIM  THAT  BORROWER    MAKES   OR  ANY  CLAIM  THAT  IS   MADE AGAINST BORROWER IN       CONNECTION WITH THE MORTGAGED PROPERTY.   IF  LENDER   PURCHASES    INSURANCE    FOR  THE   MORTGAGED     PROPERTY    AS   PERMITTED HEREUNDER, BORROWER WILL BE RESPONSIBLE FOR THE COSTS             OF   THAT   INSURANCE,   INCLUDING   INTEREST   AT  THE  DEFAULT   RATE  AND  ANY   OTHER CHARGES     LENDER MAY IMPOSE IN    CONNECTION WITH THE PLACEMENT   OF THE INSURANCE UNTIL THE EFFECTNE DATE OF THE CANCELLATION OR THE   EXPIRATION   OF  THE  INSURANCE.   THE  COSTS   OF THE  INSURANCE   SHALL   BE   ADDED   TO BORROWER'S TOTAL OUTSTANDING BALANCE OR           OBLIGATION AND   SHALL    CONSTITUTE    ADDITIONAL    INDEBTEDNESS.      THE   COSTS   OF  THE   INSURANCE MAY BE MORE THAN THE COST OF INSURANCE BORROWER MAY BE   ABLE   TO  OBTAIN   ON   ITS OWN.    BORROWER     MAY   LATER   CANCEL    ANY   INSURANCE    PURCHASED   BY  LENDER,  BUT  ONLY  AFTER  PROVIDING   EVIDENCE   THAT   BORROWER    HAS  OBTAINED    INSURANCE   AS  REQUIRED   BY  THIS  LOAN   AGREEMENT AND THE OTHER LOAN DOCUMENTS.          (b)   Application of Proceeds on Event of Loss.                (1)   Upon an event of loss, Lender may, at Lender's option:                      (A)   hold such proceeds to be applied to reimburse Borrower for the               cost of Restoration (in accordance with Lender's then-current policies relating to               the restoration of casualty damage on similar multifamily residential properties);               or    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 42  Article 9                                04-18                    © 2018 Fannie Mae  

 

                   (B)   apply such proceeds to the payment of the Indebtedness, whether               or not then due; provided, however, Lender shall not apply insurance proceeds to               the payment of the Indebtedness and shall permit Restoration pursuant to Section               9.03(b)(l)(A) if all of the following conditions are met:                            (i)   no Event of Default has occurred and is continuing (or any                     event which, with the giving of written notice or the passage of time, or                     both, would constitute an Event of Default has occurred and is                     continuing);                            (ii)  Lender determines that the combination of insurance                     proceeds and amounts provided by Borrower will be sufficient funds to                     complete the Restoration;                            (iii) Lender determines that the Net Cash Flow generated by the                     Mortgaged Property after completion of the Restoration will be sufficient                     to support a debt service coverage ratio not less than the debt service                     coverage ratio immediately prior to the event of loss, but in no event less                     than l .Ox (the debt service coverage ratio shall be calculated on a                     thirty (30) year amortizing basis (if applicable, on a proforma basis                     approved by Lender) in all events and shall include all operating costs and                     other expenses, Imposition Deposits, deposits to Collateral Accounts, and                     Mortgage Loan repayment obligations);                            (iv)  Lender  determines that the  Restoration will be                     completed before the earlier of ( 1) one year before the stated Maturity                     Date, or (2) one year after the date of the loss or casualty; and                            (v)   Borrower provides Lender, upon written request, evidence                     of the availability during and after the Restoration of the insurance                     required to be maintained by Borrower pursuant to this Loan Agreement.                After the completion of Restoration in accordance with the above requirements, as               determined by Lender, the balance, if any, of such proceeds shall be returned to               Borrower.                (2)   Notwithstanding the foregoing, if any loss is estimated to be in an amount         equal to or less than $50,000, Lender shall not exercise its rights and remedies as power­        of-attomey  herein and shall allow Borrower to make proof of loss, to adjust and         compromise any claims under policies of property damage insurance, to appear in and         prosecute any action arising from such policies of property damage insurance, and to         collect and receive the proceeds of property damage insurance; provided that each of the         following conditions shall be satisfied:                      (A)   Borrower shall immediately notify Lender of the casualty giving               rise to the claim;   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page43  Article 9                                04-18                   © 2018 Fannie Mae  

 

                   (B)   no Event of Default has occurred and is continuing (or  any event               which, with the giving of written notice or the passage of time, or both, would               constitute an Event of Default has occurred and is continuing);                      (C)   the Restoration will be completed before the earlier of (i) one year               before the stated Maturity Date, or (ii) one year after the date of the loss or               casualty;                      (D)   Lender determines that the combination of insurance proceeds and               amounts provided by Borrower will be sufficient funds to complete the               Restoration;                      (E)   all proceeds of property damage insurance shall be issued in the               form of joint checks to Borrower and Lender;                      (F)   all proceeds of property damage insurance shall be applied to the               Restoration;                      (G)   Borrower shall deliver to Lender evidence satisfactory to Lender of               completion of the Restoration and obtainment of all lien releases;                      (H)   Borrower shall have complied to Lender's satisfaction with the               foregoing requirements on any prior claims subject to this provision, if any; and                      (I)   Lender shall have the right to inspect the Mortgaged Property               (subject to the rights of tenants under the Leases).                (3)   If Lender elects to apply insurance proceeds to the Indebtedness in         accordance with the terms of this Loan Agreement, Borrower shall not be obligated to         restore or repair the Mortgaged Property. Rather, Borrower shall restrict access to the         damaged portion of the Mortgaged Property and, at its expense and regardless of whether         such costs are covered by insurance, clean up any debris resulting from the casualty         event, and, if required or otherwise permitted by Lender, demolish or raze any remaining         part of the damaged Mortgaged Property to the extent necessary to keep and maintain the         Mortgaged Property in a safe, habitable, and marketable condition. Nothing in this         Section 9.03(b) shall affect any of Lender's remedial rights against Borrower in         connection with a breach by Borrower of any of its obligations under this Loan         Agreement or under any Loan Document, including any failure to timely pay Monthly         Debt Service Payments or maintain the insurance coverage(s) required by this Loan         Agreement.          (c)   Payment Obligations Unaffected.          The application of any insurance proceeds to the Indebtedness shall not extend or   postpone the Maturity Date, or the due date or the full payment of any Monthly Debt Service   Payment, Monthly Replacement Reserve Deposit, or any other installments referred to in this   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 44  Article 9                                04-18                   © 2018 Fannie Mae  

 

 Loan Agreement or in any other Loan Document. Notwithstanding the foregoing, if Lender   applies insurance proceeds to the Indebtedness in connection with a casualty of less than the   entire Mortgaged Property, and after such application of proceeds the debt service coverage ratio   (as determined by Lender) is less than l.25x based on the then-applicable Monthly Debt Service   Payment and the anticipated ongoing Net Cash  Flow of the Mortgaged Property after such   casualty event, then Lender may, at its discretion, permit an adjustment to the Monthly Debt   Service Payments that become due and owing thereafter, based on Lender's then-current   underwriting requirements. In no event shall the preceding sentence obligate Lender to make   any adjustment to the Monthly Debt Service Payments.          (d)   Foreclosure Sale.          If the Mortgaged Property is transferred pursuant to a Foreclosure Event or Lender   otherwise acquires title to the Mortgaged Property, Borrower acknowledges that Lender shall   automatically succeed to all rights of Borrower in and to any insurance policies and unearned   insurance premiums applicable to the Mortgaged Property and in and to the proceeds resulting   from any damage to the Mortgaged Property prior to such Foreclosure Event or such acquisition.          (e)   Appointment of Lender as Attorney-In-Fact.          Borrower hereby authorizes and appoints Lender as attorney-in-fact pursuant to Section   14.03(c).                          ARTICLE 10 -   CONDEMNATION    Section 10.01  Representations and Warranties.          The representations and warranties made by Borrower to Lender in this Section 10.01 are   made as of the Effective Date and are true and correct except as disclosed on the Exceptions to   Representations and Warranties Schedule.          (a)   Prior Condemnation Action.          No part of the Mortgaged Property has been taken in connection with a Condemnation   Action.          (b)   Pending Condemnation Actions.          No Condemnation Action is pending nor, to Borrower's knowledge, is threatened for the   partial or total condemnation or taking of the Mortgaged Property.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page45  Article 9                                04-18                    © 2018 Fannie Mae  

 

 Section 10.02  Covenants.          (a)   Notice of Condemnation.          Borrower shall:                (1)   promptly notify Lender of any Condemnation Action of which Borrower         has knowledge;                (2)   appear in and prosecute or defend, at its own cost and expense, any action         or proceeding relating to any Condemnation Action, including any defense of Lender's         interest in the Mortgaged Property tendered to Borrower by Lender, unless otherwise         directed by Lender in writing; and                (3)   execute such further evidence of assignment of any condemnation award         in connection with a Condemnation Action as Lender may require.          (b)   Condemnation Proceeds.          Borrower shall pay to Lender all awards or proceeds of a Condemnation Action promptly   upon receipt.    Section 10.03  Mortgage Loan Administration Matters Regarding Condemnation.          (a)   Application of Condemnation Awards.          Lender may apply any awards or proceeds of a Condemnation Action, after the deduction   of Lender's expenses incurred in the collection of such amounts, to:                ( 1)  the restoration or repair of the Mortgaged Property, if applicable;                (2)   the payment of the Indebtedness, with the balance, if any, paid to         Borrower; or                (3)   Borrower.          (b)   Payment Obligations Unaffected.          The application of any awards or proceeds of a Condemnation Action to the Indebtedness   shall not extend or postpone the Maturity Date, or the due date or the full payment of any   Monthly Debt  Service Payment, Monthly Replacement Reserve Deposit, or any other   installments referred to in this Loan Agreement or in any other Loan Document.          (c)   Appointment of Lender as Attorney-In-Fact.          Borrower hereby authorizes and appoints Lender as attorney-in-fact pursuant to Section   14.03(c).   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 46  Article 10                               04-18                    © 2018 Fannie Mae  

 

       (d)   Preservation of Mortgaged Property.          If a Condemnation Action results in or from damage to the Mortgaged Property and   Lender elects to apply the proceeds or awards from such Condemnation Action to the   Indebtedness in accordance with the terms of this Loan Agreement, Borrower shall not be   obligated to restore or repair the Mortgaged Property. Rather, Borrower shall restrict access to   any portion of the Mortgaged Property which has been damaged or destroyed in connection with   such Condemnation Action and, at Borrower's expense and regardless of whether such costs are   covered by insurance, clean up any debris resulting in or from the Condemnation Action, and, if   required by any Governmental Authority or otherwise permitted by Lender, demolish or raze any   remaining part of the damaged Mortgaged Property to the extent necessary to keep and maintain   the Mortgaged Property in a safe, habitable, and marketable condition. Nothing in this Section   10.03(d) shall affect any of Lender's remedial rights against Borrower in connection with a   breach by Borrower of any of its obligations under this Loan Agreement or under any Loan   Document, including any failure to timely pay Monthly Debt Service Payments or maintain the   insurance coverage(s) required by this Loan Agreement.             ARTICLE 11    - LIENS, TRANSFERS, AND ASSUMPTIONS    Section 11.01  Representations and Warranties.          The representations and warranties made by Borrower to Lender in this Section 11.01 are   made as of the Effective Date and are true and correct except as disclosed on the Exceptions to   Representations and Warranties Schedule.          (a)   No Labor or Materialmen's Claims.          All parties furnishing labor and materials on behalf of Borrower have been paid in full.   There are no mechanics' or materialmen's liens (whether filed or unfiled) outstanding for work,   labor, or materials (and no claims or work outstanding that under applicable law could give rise   to any such mechanics' or materialmen's liens) affecting the Mortgaged Property, whether prior   to, equal with, or subordinate to the lien of the Security Instrument.          (b)   No Other Interests.          No Person:                (1)   other than Borrower has any possessory ownership or interest in the         Mortgaged Property or right to occupy the same except under and pursuant to the         provisions of existing Leases, the material terms of all such Leases having been         previously disclosed in writing to Lender; nor                (2)   has an option, right of first refusal, or right of first offer (except  as         required by applicable law) to purchase the Mortgaged Property, or any interest in the         Mortgaged Property.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 47  Article 10                               04-18                   © 2018 Fannie Mae  

 

 Section 11.02  Covenants.          (a)   Liens; Encumbrances.          Borrower shall not permit the grant, creation, or existence of any Lien, whether   voluntary, involuntary, or by operation of law, on all or any portion of the Mortgaged Property   (including any voluntary, elective, or non-compulsory tax lien or assessment pursuant to a   voluntary, elective, or non-compulsory special tax district or similar regime) other than:                (1)   Permitted Encumbrances;                (2)   the creation of:                      (A)   any  tax lien, municipal lien, utility lien, mechanics' lien,               materialmen's lien, or judgment lien against the Mortgaged Property if bonded               off, released of record, or otherwise remedied to Lender's satisfaction within               sixty (60) days after the earlier of the date Borrower has actual notice or               constructive notice of the existence of such lien; or                      (B)   any mechanics' or materialmen's liens which attach automatically               under the laws of any Governmental Authority upon the commencement of any               work upon, or delivery of any materials to, the Mortgaged Property and for which               Borrower is not delinquent in the payment for any such work or materials; and                (3)   the lien created by the Loan Documents.          (b)   Transfers.                (1)   Mortgaged Property.                Borrower shall not Transfer, or cause or permit a Transfer of, all or any part of the         Mortgaged Property (including any interest in the Mortgaged Property) other than:                      (A)   a Transfer to which Lender has consented in writing;                      (B)   Leases permitted pursuant to the Loan Documents;                      (C)   the grant of an easement solely for telephone, cable and/or internet               services, provided such easement is a standard form of telephone, cable and/or               internet service easement used by nationally or regionally recognized telephone,               cable and/or internet service providers;                      (D)   a Transfer of obsolete or worn out Personalty or Fixtures that are               contemporaneously replaced by items of equal or better function and quality               which are free of Liens (other than those created by the Loan Documents);    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 48  Article 11                               04-18                    © 2018 Fannie Mae  

 

                   (E)   the grant of an easement, servitude, or restrictive covenant to               which Lender has consented, and Borrower has paid to Lender, upon demand, all               costs and expenses incurred by Lender in connection with reviewing Borrower's               request (including reasonable attorneys' fees and a $5,000 review fee, which shall               be in lieu of any other Review Fee or Transfer Fee); provided, however, that               Borrower shall be permitted to grant an easement over the Mortgaged Property to               a publicly operated or private franchise utility provided that each of the following               conditions is satisfied:                      (i)   Borrower provides Lender with at least thirty (30) days prior                     written notice of the proposed easement;                      (ii)  no Event of Default has occurred and is continuing, and no event                     or condition has occurred and is continuing that, with the giving of written                     notice or the passage of time, or both, would become an Event of Default;                      (iii) prior to the grant, Lender determines, in its sole discretion, (aa)                     that the easement will not materially affect the operation, marketability, or                     value of the Mortgaged Property; the health or safety of tenants or visitors;                     Lender's interest in the Mortgaged Property; or Borrower's access to the                     Mortgaged Property or the use of any easements or amenities which                     benefit the Mortgaged Property, and (bb) that the easement will not result                     in the loss of the use of any residential or commercial units;                      (iv)  the proposed easement and all rights of the grantee thereunder are                     expressly subordinate to the lien of the Security Instrument;                      (v)   Borrower has paid to Lender all costs and expenses incurred by                     Lender in connection with reviewing Borrower's request;                      (vi)  at Lender's sole discretion and at Borrower's expense, Borrower                     delivers an endorsement to the Lender's Loan Policy evidencing the                     recordation of the easement and an update to the Survey, if applicable, to                     reflect the easement if plottable; and                      (vii) Lender has reviewed and approved the documents evidencing the                     proposed easement, and Borrower delivers to Lender recorded copies of                     the easement and signed copies of any unrecorded documents within ten                     ( 10) days following the granting of the easement.                      Any  consideration paid to Borrower under this Section 11.02(b)(l)(E)                     shall be distributed as follows:    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 49  Article 11                               04-18                    © 2018 Fannie Mae  

 

                         (AA)  first, to payment of all of Lender's out of pocket expenses,                     including but not limited to attorneys' fees, as well as recording and title                     costs;                            (BB)  second, to restoration or repair of the remainder of the                     Mortgaged Property, if applicable;                            (CC)  third, an amount not to exceed $250 per individual dwelling                     unit (after deducting Borrower's cost and expense incurred in connection                     with the granting of such easement) to Borrower for its own account; and                            (DD)  fourth, any remaining funds will be deposited into the                     Replacement Reserve;                      (F)   a  lien permitted pursuant to Section 1 l.02(a) of this Loan               Agreement; or                      (G)   the conveyance of the Mortgaged Property following a Foreclosure               Event.                (2)   Interests in Borrower, Key Principal, or Guarantor.                Other than a Transfer to which Lender has consented in writing, Borrower shall         not Transfer, or cause or permit to be Transferred:                      (A)   any  direct or indirect ownership interest in Borrower, Key               Principal, or Guarantor (if applicable) if such Transfer would cause a change in               Control;                      (B)   a direct or indirect Restricted Ownership Interest in Borrower, Key               Principal, or Guarantor (if applicable);                      (C)   fifty percent (50%) or more of Key Principal's or Guarantor's               direct or indirect ownership interests in Borrower that existed on the Effective               Date (individually or on an aggregate basis);                      (D)   the economic benefits or rights to cash flows attributable to any               ownership interests in Borrower, Key Principal, or Guarantor (if applicable)               separate from the Transfer of the underlying ownership interests if the Transfer of               the underlying ownership interest is prohibited by this Loan Agreement; or                      (E)   a Transfer to a new key principal or new guarantor (if such new               key principal or guarantor is an entity), which entity has an organizational               existence termination date that ends before the Maturity Date.    Multifamily Loan and Security Agreement   (Non-Recourse)                       Form 6001.NR                        Page 50  Article 11                               04-18                    © 2018 Fannie Mae  

 

       Notwithstanding the foregoing, if a Publicly-Held Corporation or a Publicly-Held Trust         Controls Borrower, Key Principal, or Guarantor, or owns a direct or indirect Restricted         Ownership Interest in Borrower, Key Principal, or Guarantor, a Transfer of any         ownership interests in such Publicly-Held Corporation or Publicly-Held Trust shall not be         prohibited under this Loan Agreement as long as (i) such Transfer does not result in a         conversion of such Publicly-Held Corporation or Publicly-Held Trust to a privately held         entity, and (ii) Borrower provides written notice to Lender not later than thirty (30) days         thereafter of any such Transfer that results in any Person owning ten percent (10%) or         more of the ownership interests in such Publicly-Held Corporation or Publicly-Held         Trust.                (3)   Transfers of Non-Controlling Interests.                Transfers of direct or indirect limited partnership or non-managing member         interests in Borrower that result in a Transfer of fifty percent (50%) or more of the         limited partnership or non-managing membership interests shall be consented to by         Lender if such Transfer satisfies the following conditions:                      (A)   Key Principal or Guarantor (as applicable) Controls Borrower with               the same rights and abilities as Key Principal or Guarantor (as applicable)               Controls Borrower immediately prior to the date of such Transfer;                      (B)   such Transfer satisfies the requirements of Section 1 l.02(b)(2)(C);                      (C)   Borrower shall provide Lender not less than thirty (30) days prior               written notice of the proposed Transfer and obtain Lender's approval;                      (D)   Borrower shall provide with its notice to Lender an organizational               chart reflecting, and all organizational documents relevant to, the proposed               Transfer;                      (E)   Borrower shall provide with its notice to Lender a certification that               no change of Control of Borrower or Key Principal shall occur as a result of such               Transfer;                      (F)   the transferee shall not be, as of the date of the Transfer, a               Prohibited Person if, as a result of the Transfer, the transferee will own twenty­              five percent (25%) or more of the direct or indirect ownership interests in               Borrower (or,  if any other investor will own twenty-five percent (25%) or more of               the direct or indirect ownership interests in Borrower that did not own twenty­              five percent (25%) or more before the Transfer, such investor shall not, as of the               date of the Transfer, be a Prohibited Person);                      (G)   Borrower shall pay to Lender:    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page51  Article 11                               04-18                    © 2018 Fannie Mae  

 

                         (i)   concurrently with its notice to Lender, the Review Fee plus                     a Transfer Fee of $25,000; and                            (ii)  upon  demand, any out-of-pocket costs and expenses,                     including reasonable attorneys' fees and expenses, incurred by Lender in                     connection with its review of the Transfer request; and                      (H)   Borrower  shall execute upon demand  such documents  or               certifications as Lender reasonably requires in order to confirm the post-transfer               ownership structure, compliance with the stated conditions, and any other relevant               factual matter.                (4)   Name Change or Entity Conversion.                Lender shall consent to Borrower changing its name, changing its jurisdiction of         organization, or converting from one type of legal entity into another type of legal entity         for any lawful purpose, provided that:                      (A)   Lender receives written notice at least thirty (30) days prior to such               change or conversion, which notice shall include organizational charts that reflect               the structure of Borrower both prior to and subsequent to such name change or               entity conversion;                      (B)   such Transfer is not otherwise prohibited under the provisions of               Section l l.02(b )(2);                      (C)   Borrower executes an amendment to this Loan Agreement and any               other Loan Documents required by Lender documenting the name change or               entity conversion;                      (D)   Borrower agrees and acknowledges, at Borrower's expense, that (i)               Borrower will execute and record in the land records any instrument required by               the Property Jurisdiction to be recorded to evidence such name change or entity               conversion (or provide Lender with written confirmation from the title company               (via electronic mail or letter) that no such instrument is required), (ii) Borrower               will execute any additional documents required by Lender, including the               amendment to this Loan Agreement, and allow such documents to be recorded or               filed in the land records of the Property Jurisdiction, (iii) at Lender's sole               discretion, Lender will obtain a "date down" endorsement to the Lender's Title               Policy (or  obtain a new Title Policy if a "date down" endorsement is not available               in the Property Jurisdiction), evidencing title to the Mortgaged Property being in               the name of the successor entity and the Lien of the Security Instrument against               the Mortgaged Property, and (iv) Lender will file any required UCC-3 financing               statement and make any other filing deemed necessary to maintain the priority of               its Liens on the Mortgaged Property; and    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 52  Article 11                               04-18                    © 2018 Fannie Mae  

 

                   (E)   no later than ten (10) days subsequent to such name change or               entity conversion, Borrower shall provide Lender (i) the documentation filed with               the appropriate office in Borrower's state of formation evidencing such name               change or entity conversion, (ii) copies of the organizational documents of               Borrower, including any amendments, filed with the appropriate office in               Borrower's state of formation reflecting the post-conversion Borrower name,               form of organization, and structure, and (iii) if available, new certificates of good               standing or valid formation for Borrower.                (5)   No Delaware Statutory Trust or Series LLC Conversion.                Notwithstanding any provisions herein to the contrary, no Borrower, Guarantor,         or Key Principal shall convert to a Delaware Statutory Trust or a series limited liability         company.          (c)   No Other Indebtedness.          Other than the Mortgage Loan, Borrower shall not incur or be obligated at any time with   respect to any loan or other indebtedness (except trade payables as otherwise permitted in this   Loan Agreement), including any indebtedness secured by a Lien on, or the cash flows from, the   Mortgaged Property.          (d)   No Mezzanine Financing or Preferred Equity.          Neither Borrower nor any direct or indirect owner of Borrower shall: (1) incur any   Mezzanine Debt other than Permitted Mezzanine Debt; (2) issue any Preferred Equity other than   Permitted Preferred Equity; or (3) incur any similar indebtedness or issue any similar equity.    Section 11.03  Mortgage Loan Administration Matters Regarding Liens, Transfers, and   Assumptions.          (a)   Assumption of Mortgage Loan.          Lender shall consent to a Transfer of the Mortgaged Property to and an assumption of the   Mortgage Loan by a new borrower if each of the following conditions is satisfied prior to the   Transfer:                ( 1)  Borrower has submitted to Lender all information required by Lender to         make the determination required by this Section 1 l .03(a);                (2)   no Event of Default has occurred and is continuing, and no event which,         with the giving of written notice or the passage of time, or both, would constitute an         Event of Default has occurred and is continuing;    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page53  Article 11                               04-18                    © 2018 Fannie Mae  

 

             (3)   Lender determines that:                      (A)   the proposed new borrower, new key principal, and any other new               guarantor fully satisfy all of Lender's then-applicable borrower, key principal, or               guarantor eligibility, credit, management, and other loan underwriting standards,               which shall include an analysis of (i) the previous relationships between Lender               and the  proposed new borrower, new key principal, new guarantor, and  any               Person in Control of them, and the organization of the new borrower, new key               principal, and new guarantor (if applicable), and (ii) the operating and financial               performance of the Mortgaged Property, including physical condition and               occupancy;                      (B)   none of the proposed new borrower, new key principal, and  any               new guarantor, or any owners of the proposed new borrower, new key principal,               and any new guarantor, are a Prohibited Person; and                      (C)   none of the proposed new borrower, new key principal, and any               new guarantor (if any of such are entities) shall have an organizational existence               termination date that ends before the Maturity Date;                (4)   [reserved];                (5)   the proposed new borrower has:                      (A)   executed an assumption agreement acceptable to Lender that,               among other things, requires the proposed new borrower to assume and perform               all obligations of Borrower ( or any other transferor), and that may require that the               new borrower comply with any provisions of any Loan Document that previously               may have been waived by Lender for Borrower, subject to the terms of Section               l l.03(g);                      (B)   if required by Lender, delivered to the title company for filing               and/or recording in all applicable jurisdictions, all applicable Loan Documents               including the assumption agreement to correctly evidence the assumption and the               confirmation, continuation, perfection, and priority of the Liens created hereunder               and under the other Loan Documents; and                      (C)   delivered to Lender a "date-down" endorsement to the Title Policy               acceptable to Lender ( or a new title insurance policy if a "date-down"               endorsement is not available);                (6)   one or more individuals or entities acceptable to Lender as new guarantors         have executed and delivered to Lender:    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page54  Article 11                               04-18                   © 2018 Fannie Mae  

 

                   (A)   an assumption agreement acceptable to Lender that requires the               new guarantor to assume and perform all obligations of Guarantor under any               Guaranty given in connection with the Mortgage Loan; or                      (B)   a substitute Non-Recourse Guaranty and other substitute guaranty               in a form acceptable to Lender;                (7)   Lender has reviewed and approved the Transfer documents; and                (8)   Lender has received the fees described in Section 11.03(g).          (b)   Transfers to.Key Principal-Owned Affiliates or Guarantor-Owned Affiliates.                (1)   Except as otherwise covered in Section 11.03(b)(2) below, Transfers of         direct or indirect ownership interests in Borrower to Key Principal or Guarantor, or to a         transferee through which Key Principal or Guarantor (as applicable) Controls Borrower         with the same rights and abilities as Key Principal or Guarantor (as applicable) Controls         Borrower immediately prior to the date of such Transfer, shall be consented to by Lender         if such Transfer satisfies the applicable requirements of Section 11.03(a) as they would         relate to such transferee, other than Section 11.03(a)(5).                (2)   Transfers of direct or indirect interests in Borrower held by a Key         Principal or Guarantor to other Key Principals or Guarantors, as applicable, shall be         consented to by Lender if such Transfer satisfies the following conditions:                      (A)   the Transfer does not cause a change in the Control of Borrower;               and                      (B)   the transferor Key Principal or Guarantor maintains the same right               and ability to Control Borrower as existed prior to the Transfer.    If the conditions set forth in this Section 11.03(b) are satisfied, the Transfer Fee shall be waived   provided Borrower shall pay the Review Fee and out-of-pocket costs set forth in Section   11.03(g).          (c)   Estate Planning.          Notwithstanding the provisions of Section 1 l.02(b)(2), so long as (1) the Transfer does   not cause a change in the Control of Borrower, and (2) Key Principal and Guarantor, as   applicable, maintain the same right and ability to Control Borrower as existed prior to the   Transfer, Lender shall consent to Transfers of direct or indirect ownership interests in Borrower   and Transfers of direct or indirect ownership interests in an entity Key Principal or entity   Guarantor to:                      (A)   Immediate Family Members of such transferor, each of whom               must have obtained the legal age of majority;   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 55  Article 11                               04-18                   © 2018 Fannie Mae  

 

                   (B)   United States domiciled trusts established for the benefit of the               transferor or Immediate Family Members of the transferor; or                      (C)   partnerships or limited liability companies of which the partners or               members,  respectively, are comprised entirely of (i) such transferor and               Immediate Family Members (each of whom must have obtained the legal age of               majority) of such transferor, (ii) Immediate Family Members (each of whom must               have obtained the legal age of majority) of such transferor, or (iii) United States               domiciled trusts established for the benefit of the transferor or Immediate Family               Members of the transferor.    If the conditions set forth in this Section 11.03(c) are satisfied, the Transfer Fee shall be waived   provided Borrower shall pay the Review Fee and out-of-pocket costs set forth in Section   l 1.03(g).          (d)   Termination or Revocation of Trust.          If any of Borrower, Guarantor, or Key Principal is a trust, or if Control of Borrower,   Guarantor, or Key Principal is Transferred or if a Restricted Ownership Interest in Borrower,   Guarantor, or Key Principal would be Transferred due to the termination or revocation of a trust,   the termination or  revocation of such trust is an unpermitted Transfer; provided that the   termination or  revocation of the trust due to the death of an individual trustor shall not be   considered an unpermitted Transfer so long as:                ( 1)  Lender is notified within thirty (30) days of the death; and                (2)   such Borrower, Guarantor, Key Principal, or other Person, as applicable, is         replaced with an individual or entity acceptable to Lender, in accordance with the         provisions of Section 11.03(a) within ninety (90) days of the date of the death causing the         termination or revocation.    If the conditions set forth in this Section 11.03(d) are satisfied, the Transfer Fee shall be waived;   provided Borrower shall pay the Review Fee and out-of-pocket costs set forth in Section   1 l.03(g).          (e)   Death of Key Principal or Guarantor; Transfer Due to Death.                ( 1)  If a Key Principal or Guarantor that is a natural person dies, or if Control         of Borrower, Guarantor, or Key Principal is Transferred, or if a Restricted Ownership         Interest in Borrower, Guarantor, or Key Principal would be Transferred as a result of the         death of a Person (except in the case of trusts which is addressed in Section 11.03(d)),         Borrower must notify Lender in writing within ninety (90) days in the event of such         death. Unless waived in writing by Lender, the deceased shall be replaced by an         individual or entity within one hundred eighty (180) days, subject to Borrower's         satisfaction of the following conditions:    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 56  Article 11                               04-18                    © 2018 Fannie Mae  

 

                   (A)   Borrower has submitted to Lender all information required by               Lender to make the determination required by this Section 11.03(e);                      (B)   Lender determines that, if applicable:                            (i)   any  proposed new key principal and any other new                     guarantor (or  Person Controlling such new key principal or new guarantor)                     fully satisfies all of Lender's then-applicable key principal or guarantor                     eligibility, credit, management, and other loan underwriting standards                     (including any standards with respect to previous relationships between                     Lender and the proposed new key principal and new guarantor (or  Person                     Controlling such new key principal or new guarantor) and the organization                     of the new key principal and new guarantor);                            (ii)  none of any proposed new key principal or any new                     guarantor, or any owners of the proposed new key principal or any new                     guarantor, is a Prohibited Person; and                            (iii) none of any proposed new key principal or any new                     guarantor (if any of such are entities) shall have an organizational                     existence termination date that ends before the Maturity Date; and                      (C)   if applicable, one or more individuals or entities acceptable to               Lender as new guarantors have executed and delivered to Lender:                            (i)   an assumption agreement acceptable to Lender that requires                     the new guarantor to assume and perform all obligations of Guarantor                     under any Guaranty given in connection with the Mortgage Loan; or                            (ii)  a substitute Non-Recourse Guaranty and other substitute                     guaranty in a form acceptable to Lender.                (2)   In the event a replacement Key Principal, Guarantor, or other Person is         required by Lender due to the death described in this Section 11.03(e), and such         replacement has not occurred within such period, the period for replacement may be         extended by Lender to a date not more than one year from the date of such death;         however, Lender may require as a condition to any such extension that:                      (A)   the then-current property manager be replaced with a property               manager reasonably acceptable to Lender (or if a property manager has not been               previously engaged, a property manager reasonably acceptable to Lender be               engaged); or                      (B)   a lockbox agreement or similar cash management arrangement               (with the property manager) reasonably acceptable to Lender during such               extended replacement period be instituted.   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 57  Article 11                               04-18                   © 2018 Fannie Mae  

 

 If the conditions set forth in this Section l l.03(e) are satisfied, the Transfer Fee shall be waived,   provided Borrower shall pay the Review Fee and out-of-pocket costs set forth in Section    11.03(g).          (f)   Bankruptcy of Guarantor.                (1)   Upon  the occurrence of any Guarantor Bankruptcy Event, unless waived         in writing by Lender, the applicable Guarantor shall be replaced by an individual or entity         within ninety (90) days of such Guarantor Bankruptcy Event, subject to Borrower's         satisfaction of the following conditions:                      (A)   Borrower has submitted to Lender all information required by               Lender to make the determination required by this Section 11.03(f);                      (B)   Lender determines that:                            (i)   the proposed new guarantor fully satisfies all of Lender's                     then-applicable guarantor eligibility, credit, management, and other loan                     underwriting standards (including any standards with respect to previous                     relationships between Lender and the proposed new guarantor and the                     organization of the new guarantor (if applicable));                            (ii)  no new guarantor is a Prohibited Person; and                            (iii) no new guarantor (if any of such are entities) shall have an                     organizational existence termination date that ends before the Maturity                     Date; and                      (C)   one or more individuals or entities acceptable to Lender as new               guarantors have executed and delivered to Lender:                            (i)   an assumption agreement acceptable to Lender that requires                     the new guarantor to assume and perform all obligations of Guarantor                     under any Guaranty given in connection with the Mortgage Loan; or                            (ii)  a substitute Non-Recourse Guaranty and other substitute                     guaranty in a form acceptable to Lender.                (2)   In the event a replacement Guarantor is required by Lender due to the         Guarantor Bankruptcy Event described in this Section 1 l .03(f), and such replacement has         not occurred within such period, the period for replacement may be extended by Lender         in its discretion; however, Lender may require as a condition to any such extension that:                      (A)   the then-current property manager be replaced with a property               manager reasonably acceptable to Lender (or if a property manager has not been    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 58  Article 11                               04-18                    © 2018 Fannie Mae  

 

             previously engaged, a property manager reasonably acceptable to Lender be               engaged);or                      (B)   a lockbox  agreement or similar cash management arrangement               (with the property manager) reasonably acceptable to Lender during such               extended replacement period be instituted.    If the conditions set forth in this Section 11.03(f) are satisfied, the Transfer Fee shall be waived,   provided Borrower shall pay the Review Fee and out-of-pocket costs set forth in Section   11.03(g).          (g)   Further Conditions to Transfers and Assumption.                (1)   In connection with any Transfer of the Mortgaged Property, or an         ownership interest in Borrower, Key Principal, or Guarantor for which Lender's approval         is required under this Loan Agreement (including Section l 1.03(a)), Lender may, as a         condition to any such approval, require:                      (A)   additional collateral, guaranties, or other credit support to mitigate               any risks concerning the proposed transferee or the performance or condition of               the Mortgaged Property;                      (B)   amendment  of the Loan Documents to delete or modify any               specially negotiated terms or provisions previously granted for the exclusive               benefit of original Borrower, Key Principal, or Guarantor and to restore the               original provisions of the standard Fannie Mae form multifamily loan documents,               to the extent such provisions were previously modified; or                      (C)   a modification to the amounts required to be deposited into the               Reserve/Escrow Account pursuant to the terms of Section 13.02(a)(3)(B).                (2)   In connection with any request by Borrower for consent to a Transfer,         Borrower shall pay to Lender upon demand:                      (A)   the Transfer Fee (to the extent charged by Lender);                      (B)   the Review Fee (regardless of whether Lender approves or denies               such request); and                      (C)   all of Lender's out-of-pocket costs (including reasonable attorneys'               fees) incurred in reviewing the Transfer request, regardless of whether Lender               approves or denies such request.          (h)   Public Offering of Securities in Guarantor and/or Key Principal.    Multifamily Loan and Security Agreement   (Non-Recourse)                       Form 6001.NR                        Page 59  Article 11                               04-18                    © 2018 Fannie Mae  

 

             Notwithstanding any terms to the contrary in Section 1 l.02(b)(2) above,         Guarantor and/or Key Principal may engage in a public offering of securities of         Guarantor and/or Key Principal, as applicable, and Lender shall waive any Transfer Fee         otherwise due in connection therewith, so long as: (1) such public offering shall not         occur without Lender's prior written notice and consent to the same; (2) such public         offering shall not result in any change in the management and/or Control of Borrower; (3)         such public offering shall not result in the dilution of the aggregate ownership interests of         Guarantor or Key Principal in Borrower to less than a 51 % ownership interest; and (4)         following any such public offering, there is no Transfer of a Restricted Ownership         Interest in Borrower.          (i)    Steadfast Affiliate Transfer.          Notwithstanding the restrictions contained in Section l 1.02(b )(2) (Interests in Borrower,   Key  Principal, or Guarantor) and Section 1 l.03(g)(l) (Further Conditions to Transfers and   Assumption), a Transfer of the ownership interests in, or held by, the Key Principal to Steadfast   Apartment REIT, Inc. or other affiliated entity (the "Steadfast Affiliate"), including without   limitation by way of a merger with the Steadfast Affiliate, and a replacement of Key Principal   and Guarantor by the Steadfast Affiliate, shall be permitted, provided the following conditions   are satisfied:                ( 1)   Borrower has submitted to Lender all information required by Lender to         make the determination required by this Section l 1.03(i);                (2)    Lender determines that:                      (A)    (i) the eligibility, organization, credit, and experience in the               management of similar properties of the Steadfast Affiliate are appropriate to the               overall structure and documentation of the Loan and (ii) the Steadfast Affiliate               and any proposed new key principal and any other new guarantor (or  Person               Controlling such new key principal or new guarantor) fully satisfies all of               Lender's then-applicable key principal or guarantor eligibility, credit,               management, and other loan underwriting standards (including any standards with               respect to previous relationships between Lender and the proposed new key               principal and new guarantor (or  Person Controlling such new key principal or new               guarantor) and the organization of the new key principal and new guarantor);                      (B)   none of the Steadfast Affiliate, any proposed new key principal, or               any new guarantor, nor any owners of the Steadfast Affiliate, any proposed new               key principal, or any new guarantor, is a Prohibited Person; and                      (C)   none of the Steadfast Affiliate, any proposed new key principal, or               any new  guarantor (if any of such are entities) shall have an organizational               existence termination date that ends before the Maturity Date;                (3)    One  or more individuals or entities acceptable to Lender as new         guarantors have executed and delivered to Lender:    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page60  Article 11                               04-18                    © 2018 Fannie Mae  

 

                   (A)    an assumption agreement acceptable to Lender that requires the               new guarantor to assume and perform all obligations of Guarantor under any               Guaranty given in connection with the Mortgage Loan; or                      (B)   a substitute Non-Recourse Guaranty and other substitute guaranty               in a form acceptable to Lender.                (4)    Borrower shall provide with its notice to Lender an organizational chart         reflecting, and all organizational documents relevant to, the proposed Transfer;                (5)   Borrower shall provide with its notice to Lender a certification that:                      (i)    no Event of Default shall occur as a result of such Transfer; and                      (ii)   no Event of Default has occurred and is continuing;                (6)   No Event of Default shall have occurred and be continuing:                      (i)    at the time Lender is notified of the Transfer; and                      (ii)   at the time of such Transfer;                (7)    Borrower shall pay to Lender, concurrently with its notice to Lender, the         Review Fee plus a Transfer Fee of $0.00 and, upon demand, any out-of-pocket costs and         expenses, including attorneys' fees and expenses, incurred by Lender in connection with         its review of the Transfer request;                (8)   Borrower shall execute upon demand such documents or certifications as         Lender reasonably requires in order to confirm the post-transfer ownership structure,         compliance with the stated conditions, and any other relevant factual matter (including         any modifications necessary or desirable to identify the new key principal in the Loan         Documents); and                (9) The Steadfast Affiliate is Controlled by, is under common Control with, or         Controls, the Key Principal or the Steadfast Affiliate and the Key Principal have the same         chief executive officer.                           ARTICLE 12 -    IMPOSITIONS    Section 12.01  Representations and Warranties.          The representations and warranties made by Borrower to Lender in this Section 12.01 are   made as of the Effective Date and are true and correct except as disclosed on the Exceptions to   Representations and Warranties Schedule.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 61  Article 11                               04-18                   © 2018 Fannie Mae  

 

       (a)   Payment of Taxes, Assessments, and Other Charges.          Borrower has:                (1)   paid (or with the approval of Lender, established an escrow fund sufficient         to pay when due and payable) all amounts and charges relating to the Mortgaged Property         that have become due and payable before any fine, penalty interest, lien, or costs may be         added thereto, including Impositions, leasehold payments, and ground rents;                (2)   paid all Taxes for the Mortgaged Property that have become due before         any fine, penalty interest, lien, or costs may be added thereto pursuant to any notice of         assessment received by Borrower and any  and all taxes that have become due against         Borrower before any fine, penalty interest, lien, or costs may be added thereto;                (3)   no knowledge of any basis for any additional assessments;                (4)   no knowledge of any presently pending special assessments against all or         any part of the Mortgaged Property, or any presently pending special assessments against         Borrower; and                (5)   not received any written notice of any contemplated special assessment         against the Mortgaged Property, or any contemplated special assessment against         Borrower.    Section 12.02  Covenants.          (a)   Imposition Deposits, Taxes, and Other Charges.          Borrower shall:                (1)   deposit the Imposition Deposits with Lender on each Payment Date (or  on         another day designated in writing by Lender) in amount sufficient, in Lender's discretion,         to enable Lender to pay each Imposition before the last date upon which such payment         may be made without any penalty or interest charge being added, plus an amount equal to         no more  than one-sixth (1/6) (or the amount permitted by applicable law) of the         Impositions for the trailing twelve (12) months (calculated based on the aggregate annual         Imposition costs divided by twelve (12) and multiplied by two (2));                (2)   deposit with Lender, within ten (10) days after written notice from Lender         (subject to applicable law), such additional amounts estimated by Lender to be         reasonably necessary to cure any deficiency in the amount of the Imposition Deposits         held for payment of a specific Imposition;                (3)   except as set forth in Section 12.03(c) below, pay all Impositions,         leasehold payments, ground rents, and Taxes when due and before any fine, penalty         interest, lien, or costs may be added thereto;   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 62  Article 12                               04-18                    © 2018 Fannie Mae  

 

             (4)   promptly deliver to Lender a copy of all notices of, and invoices for,         Impositions, and, if Borrower pays any Imposition directly, Borrower shall promptly         furnish to Lender receipts evidencing such payments; and                (5)   promptly deliver to Lender a copy of all notices of any special assessments         and contemplated special assessments against the Mortgaged Property or Borrower.    Section 12.03  Mortgage Loan Administration Matters Regarding Impositions.          (a)   Maintenance of Records by Lender.          Lender shall maintain records of the monthly and aggregate Imposition Deposits held by   Lender for the purpose of paying Taxes, insurance premiums, and each other obligation of   Borrower for which Imposition Deposits are required.          (b)   Imposition Accounts.          All Imposition Deposits shall be held in an institution (which may be Lender, if Lender is   such an institution) whose deposits or accounts are insured or guaranteed by a federal agency and   which accounts meet the standards for custodial accounts as required by Lender from time to   time. Lender shall not be obligated to open additional accounts, or deposit Imposition Deposits   in additional institutions, when the amount of the Imposition Deposits  exceeds the maximum   amount of the federal deposit insurance or guaranty. No interest, earnings, or profits on the   Imposition Deposits shall be paid to Borrower unless applicable law so requires. Imposition   Deposits shall not be trust funds, nor shall they operate to reduce the Indebtedness, unless   applied by Lender for that purpose in accordance with this Loan Agreement. For the purposes of   9-104(a)(3) of the UCC, Lender is the owner of the Imposition Deposits and shall be deemed a   "customer" with sole control of the account holding the Imposition Deposits.          (c)   Payment of Impositions; Sufficiency of Imposition Deposits.          Lender may pay an Imposition according to any bill, statement, or estimate from the   appropriate public office or insurance company without inquiring into the accuracy of the bill,   statement, or estimate or into the validity of the Imposition. Imposition Deposits shall be   required to be used by Lender to pay Taxes, insurance premiums and any other individual   Imposition only if:                ( 1)  no Event of Default exists;                (2)   Borrower has timely delivered to Lender all applicable bills or premium         notices that it has received; and                (3)   sufficient Imposition Deposits are held by Lender for each Imposition at         the time such Imposition becomes due and payable.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 63  Article 12                               04-18                    © 2018 Fannie Mae  

 

       Lender shall have no liability to Borrower or any other Person for failing to pay any   Imposition if any of the conditions are not satisfied. If at any time the amount of the Imposition   Deposits held for payment of a specific Imposition exceeds the amount reasonably deemed   necessary by Lender to be held in connection with such Imposition, the excess may be credited   against future installments of Imposition Deposits for such Imposition.          (d)   Imposition Deposits Upon Event of Default.          If an Event of Default has occurred and is continuing, Lender may apply any Imposition   Deposits, in such amount and in such order as Lender determines, to pay any Impositions or as a   credit against the Indebtedness.          (e)   Contesting Impositions.          Other than insurance premiums, Borrower may contest, at its expense, by appropriate   legal proceedings, the amount or validity of any Imposition if:                ( 1)  Borrower  notifies Lender of  the commencement   or  expected         commencement of such proceedings;                (2)   Lender determines that the Mortgaged Property is not in danger of being         sold or forfeited;                (3)   Borrower deposits with Lender (or the applicable Governmental Authority         if required by applicable law) reserves sufficient to pay the contested Imposition, if         required by Lender (or the applicable Governmental Authority);                (4)   Borrower furnishes whatever additional security is required in the         proceedings or is reasonably requested in writing by Lender; and                (5)   Borrower commences, and at all times thereafter diligently prosecutes,         such contest in good faith until a final determination is made by the applicable         Governmental Authority.          (f)   Release to Borrower.          Upon  payment in full of all sums secured by the Security Instrument and this Loan   Agreement and release by Lender of the lien of the Security Instrument, Lender shall disburse to   Borrower the balance of any Imposition Deposits then on deposit with Lender.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 64  Article 12                               04-18                    © 2018 Fannie Mae  

 

         ARTICLE 13     - REPLACEMENT RESERVE AND REPAIRS    Section 13.01  Covenants.          (a)   Initial Deposits to Replacement Reserve Account and Repairs Escrow   Account.          On the Effective Date, Borrower shall pay to Lender:                (1)   the Initial Replacement Reserve Deposit for deposit into the Replacement         Reserve Account; and                (2)   the Repairs Escrow Deposit for deposit into the Repairs Escrow Account.          (b)   Monthly Replacement Reserve Deposits.          Borrower shall deposit the applicable Monthly Replacement Reserve Deposit into the   Replacement Reserve Account on each Payment Date.          (c)   Payment for Replacements and Repairs.          Borrower shall:                ( 1)  pay all invoices for the Replacements and Repairs, regardless of whether         funds on deposit in the Replacement Reserve Account or the Repairs Escrow Account, as         applicable, are sufficient, prior to any request for disbursement from the Replacement         Reserve Account or the Repairs Escrow Account, as applicable (unless Lender has agreed         to issue joint checks in connection with a particular Replacement or Repair);                (2)   pay all applicable fees and charges of any Governmental Authority on         account of the Replacements and Repairs, as applicable; and                (3)   provide evidence satisfactory to Lender of completion of  the         Replacements and  any Required Repairs (within the Completion Period or within such         other period or by such other date set forth in the Required Repair Schedule and any         Borrower Requested Repairs and Additional Lender Repairs (by the date specified by         Lender for any such Borrower Requested Repairs or Additional Lender Repairs)).          (d)   Assignment of Contracts for Replacements and Repairs.          Borrower shall collaterally assign to Lender as additional security any contract or   subcontract for Replacements or Repairs, upon Lender's written request, on a form of   assignment approved by Lender.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page65  Article 13                               04-18                    © 2018 Fannie Mae  

 

       (e)   Indemnification.          If Lender elects to exercise its rights under Section 14.03 due to Borrower's failure to   timely commence or complete any Replacements or Repairs, Borrower shall indemnify and hold   Lender harmless for, from and against any and all actions, suits, claims, demands, liabilities,   losses, damages, obligations, and costs or expenses, including litigation costs and reasonable   attorneys' fees, arising from or in any way connected with the performance by Lender of the   Replacements or Repairs or investment of the Reserve/Escrow Account Funds; provided that   Borrower shall have no indemnity obligation if such actions, suits, claims, demands, liabilities,   losses, damages, obligations, and costs or expenses, including litigation costs and reasonable   attorneys' fees, arise as a result of the willful misconduct or gross negligence of Lender,   Lender's agents, employees, or representatives as determined by a court of competent   jurisdiction pursuant to a final non-appealable court order.          (f)   Amendments to Loan Documents.          Subject to Section 5.02, Borrower shall execute and deliver to Lender, upon written   request, an amendment to this Loan Agreement, the Security Instrument, and any other Loan   Document deemed  necessary or desirable to perfect Lender's lien upon any portion of the   Mortgaged Property for which Reserve/Escrow Account Funds were expended.          (g)   Administrative Fees and Expenses.          Borrower shall pay to Lender:                (1)   by the date specified in the applicable invoice, the Repairs Escrow         Account Administrative Fee and the Replacement Reserve Account Administration Fee         for Lender's services in administering the Repairs Escrow Account and Replacement         Reserve Account and investing the funds on deposit in the Repairs Escrow Account and         the Replacement Reserve Account, respectively;                (2)   upon  demand, a reasonable inspection fee, not exceeding the Maximum         Inspection Fee, for each inspection of the Mortgaged Property by Lender in connection         with a Repair or Replacement, plus all other reasonable costs and out-of-pocket expenses         relating to such inspections; and                (3)   upon  demand, all reasonable fees charged by any engineer, architect,         inspector or other person inspecting the Mortgaged Property on behalf of Lender for each         inspection of the Mortgaged Property in connection with a Repair or Replacement, plus         all other reasonable costs and out-of-pocket expenses relating to such inspections.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 66  Article 13                               04-18                   © 2018 Fannie Mae  

 

 Section 13.02  Mortgage Loan Administration Matters Regarding Reserves.          (a)   Accounts, Deposits, and Disbursements.                (1)   Custodial Accounts.                      (A)   The Replacement Reserve Account shall be an interest-bearing               account that meets the standards for custodial accounts as required by Lender               from time to time. Lender shall not be responsible for any losses resulting from               the investment of the Replacement Reserve Deposits or for obtaining any specific               level or percentage of earnings on such investment. All interest, if any, earned on               the Replacement Reserve Deposits shall be added to and become part of the               Replacement Reserve Account; provided, however, if applicable law requires, and               so long as no Event of Default has occurred and is continuing under any of the               Loan Documents, Lender shall pay to Borrower the interest earned on the               Replacement Reserve Account not less frequently than the Replacem~nt Reserve               Account Interest Disbursement Frequency. In no event shall Lender be obligated               to disburse funds from the Reserve/Escrow Account if an Event of Default has               occurred and is continuing.                      (B)   Lender shall not be obligated to deposit the Repairs Escrow               Deposits into an interest-bearing account.                (2)   Disbursements by Lender Only.                Only Lender or a designated representative of Lender may make disbursements         from the Replacement Reserve Account and the Repairs Escrow Account. Except as         provided in Section 13.02(a)(8), disbursements shall only be made upon Borrower         request and after satisfaction of all conditions for disbursement.                (3)   Adjustment to Deposits.                      (A)   Mortgage Loan Terms Exceeding Ten (10) Years.                      If the Loan Term exceeds ten (10) years (or five (5) years in the case of               any Mortgaged Property that is an "affordable housing property" as indicated on               the Summary of Loan Terms), a property condition assessment shall be ordered               by Lender for the Mortgaged Property at the expense of Borrower (which expense               may  be paid out of the Replacement Reserve Account if excess funds are               available). The property condition assessment shall be performed no earlier than               the sixth (6th) month and no later than the ninth (9th) month of the tenth (10th)               Loan Year and every tenth (10th) Loan Year thereafter if the Loan Term exceeds               twenty (20) years (or the fifth (5th) Loan Year in the case of any Mortgaged               Property that is an "affordable housing property" as indicated on the Summary of               Loan Terms and every fifth (5th) Loan Year thereafter if the Loan Term exceeds               ten (10) years). After review of the property condition assessment, the amount of   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 67  Article 13                               04-18                   © 2018 Fannie Mae  

 

             the Monthly Replacement Reserve Deposit may be adjusted by Lender for the               remaining Loan Term by  written notice to Borrower so that the Monthly               Replacement Reserve Deposits are sufficient to fund the Replacements as and               when required and/or the amount to be held in the Repairs Escrow Account may               be adjusted by Lender so that the Repairs Escrow Deposit is sufficient to fund the               Repairs as and when required.                      (B)   Transfers.                      In connection with any Transfer of the Mortgaged Property, or any               Transfer of an ownership interest in Borrower, Guarantor, or Key Principal that               requires Lender's consent, Lender may review the amounts on deposit, if any, in               the Replacement Reserve Account or the Repairs Escrow Account, the amount of               the Monthly  Replacement Reserve Deposit and  the likely repairs and               replacements required by the Mortgaged Property,  and the related contingencies               which may arise during the  remaining Loan Term. Based upon that review,               Lender may require an additional deposit to the Replacement Reserve Account or               the Repairs Escrow Account, or an increase in the amount of the Monthly               Replacement Reserve Deposit as a condition to Lender's consent to such Transfer.                (4)   Insufficient Funds.                Lender may, upon thirty (30) days' prior written notice to Borrower, require an         additional deposit(s) to the Replacement Reserve Account or Repairs Escrow Account, or         an increase in the amount of the Monthly Replacement Reserve Deposit, if Lender         determines that the amounts on deposit in either the Replacement Reserve Account or the         Repairs Escrow Account are not sufficient to cover the costs for Required Repairs or         Required Replacements or, pursuant to the terms of Section 13.02(a)(9), not sufficient to         cover the costs for Borrower Requested Repairs, Additional Lender Repairs, Borrower         Requested Replacements, or Additional Lender Replacements. Borrower's agreement to         complete the Replacements or Repairs as required by this Loan Agreement shall not be         affected by the insufficiency of any balance in the Replacement Reserve Account or the·         Repairs Escrow Account, as applicable.                (5)   Disbursements for Replacements and Repairs.                      (A)   Disbursement requests may only be made after completion of the               applicable Replacements and only to reimburse Borrower for the actual approved               costs of the Replacements (unless Lender has agreed to issue joint checks in               connection with a particular Replacement). Lender shall not disburse from the               Replacement Reserve Account the costs of routine maintenance to the Mortgaged               Property or for costs which are to be reimbursed from the Repairs Escrow               Account or any similar account. Disbursement from the Replacement Reserve               Account shall not be made more frequently than the Maximum Replacement               Reserve Disbursement Interval. Other than in connection with a final request for   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 68  Article 13                               04-18                    © 2018 Fannie Mae  

 

             disbursement, disbursements from the Replacement Reserve Account shall not be               less than the Minimum Replacement Reserve Disbursement Amount.                      (B)   Disbursement requests may only be made after completion of the               applicable Repairs and only to reimburse Borrower for the actual cost of the               Repairs (unless Lender has agreed to issue joint checks in connection with a               particular Repair), up to the Maximum Rep.air Cost. Lender shall not disburse               any amounts which would cause the funds remaining in the Repairs Escrow               Account after any disbursement (other than with respect to the final disbursement)               to be less than the Maximum Repair Cost of the then-current estimated cost of               completing all remaining Repairs. Lender shall not disburse from the Repairs               Escrow Account the costs of routine maintenance to the Mortgaged Property or               for costs which are to be reimbursed from the Replacement Reserve Account or               any similar account. Disbursement from the Repairs Escrow Account shall not be               made more frequently than the Maximum Repair Disbursement Interval. Other               than in connection with a final request for disbursement, disbursements from the               Repairs Escrow  Account shall not be less than the Minimum  Repairs               Disbursement Amount.                (6)   Disbursement Requests.                Each request by Borrower for disbursement from the Replacement Reserve         Account or the Repairs Escrow Account must  be in writing, must specify the         Replacement or Repair for which reimbursement is requested (provided that for any         Borrower Requested Replacements, Borrower Requested Repairs, Additional Lender         Replacements, and Additional Lender Repairs, Lender shall have approved the use of the         Reserve/Escrow Account Funds for such replacements or repairs pursuant to the terms of         Section 13.02(a)(9)), and must:                      (A)   if applicable, specify the quantity and pnce of the items or               materials purchased, grouped by type or category;                      (B)   if applicable, specify the cost of all contracted labor or other               services involved in the Replacement or Repair for which such request for               disbursement is made;                      (C)   if applicable, include copies of invoices for all items or materials               purchased and all contracted labor or services provided;                      (D)   include evidence of payment of such Replacement or Repair               satisfactory to Lender (unless Lender has agreed to issue joint checks in               connection with a particular Repair or Replacement as provided in this Loan               Agreement); and                      (E)   contain a certification by Borrower that the Repair or Replacement               has been completed lien free and in a good and workmanlike manner, in   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page69  Article 13                               04-18                    © 2018 Fannie Mae  

 

             accordance with any plans and specifications previously approved by Lender (if               applicable) and in compliance with all applicable laws, ordinances, rules, and               regulations of any Governmental Authority having jurisdiction over the               Mortgaged Property, and otherwise in accordance with the provisions of this Loan               Agreement.                (7)   Conditions to Disbursement.                Lender may require any or all of the following at the expense of Borrower as a         condition to disbursement of funds from the Replacement Reserve Account or the         Repairs Escrow Account (provided that for any Borrower Requested Replacements,         Borrower Requested Repairs, Additional Lender Replacements, and Additional Lender         Repairs, Lender shall have approved the use of the Reserve/Escrow Account Funds for         such replacements or repairs pursuant to the terms of Section 13.02(a)(9)):                      (A)   an inspection by Lender of the Mortgaged Property and the               applicable Replacement or Repair;                      (B)   an inspection or certificate of completion by an appropriate               independent qualified professional (such as an architect, engineer or property               inspector, depending on the nature of the Repair or Replacement) selected by               Lender;                      (C)   either:                            (i)   a search of title to the Mortgaged Property effective to the                     date of disbursement; or                            (ii)  a "date-down" endorsement to Lender's Title Policy (or a                     new Lender's Title Policy if a "date-down" is not available) extending the                     effective date of such policy to the date of disbursement, and showing no                     Liens other than (1) Permitted Encumbrances, (2) liens which Borrower is                     diligently contesting in good faith that have been bonded off to the                     satisfaction of Lender, or (3) mechanics' or materialmen's liens which                     attach automatically under the laws of any Governmental Authority upon                     the commencement of any work upon, or delivery of any materials to, the                     Mortgaged Property and for which Borrower is not delinquent in the                     payment for any such work or materials; and                      (D)   an acknowledgement of payment, waiver of claims, and release of               lien for work  performed and materials supplied from each contractor,               subcontractor or materialman in accordance with the requirements of applicable               law and covering all work performed and materials supplied (including equipment               and fixtures) for the Mortgaged Property by that contractor, subcontractor, or               materialman through the date covered by the disbursement request (or,  in the               event  that payment to such contractor, subcontractor, or materialman is to be   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 70  Article 13                               04-18                    © 2018 Fannie Mae  

 

             made  by a joint check, the release of lien shall be effective through the date               covered by the previous disbursement).                (8)   Joint Checks for Periodic Disbursements.                Lender may, upon Borrower's written request, issue joint checks, payable to         Borrower and the applicable supplier, materialman, mechanic, contractor, subcontractor,         or other similar party, if:                      (A)   the cost of the Replacement or Repair exceeds the Replacement               Threshold or the Repair Threshold, as applicable, and the contractor performing               such Replacement or Repair requires periodic payments pursuant to the terms of               the applicable written contract;                      (B)   the contract for such Repair or Replacement requires payment               upon completion of the applicable portion of the work;                      (C)   Borrower makes the disbursement request after completion of the               applicable portion of the work required to be completed under such contract;                      (D)   the materials for which the request for disbursement has been made               are on site at the Mortgaged Property and are properly secured or installed;                      (E)   Lender determines that the remaining funds in the Replacement               Reserve Account designated for such Replacement, or in the Repairs Escrow               Account designated for such Repair, as applicable, are sufficient to pay such costs               and the then-current estimated cost of completing all remaining Required               Replacements or Required Repairs (at the Maximum Repair Cost), as applicable,               and  any other Borrower Requested Replacements, Borrower Requested Repairs,               Additional Lender Replacements, or Additional Lender Repairs that have been               previously approved by Lender;                      (F)   each supplier, materialman, mechanic, contractor, subcontractor, or               other similar party receiving payments shall have provided, if requested in writing               by Lender, a waiver of liens with respect to amounts which have been previously               paid to them; and                      (G)   all other conditions for disbursement have been satisfied.                (9)   Replacements and Repairs Other than Required Replacements or         Required Repairs.                      (A)   Borrower Requested Replacements and Borrower Requested               Repairs.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 71  Article 13                               04-18                    © 2018 Fannie Mae  

 

                  Borrower may  submit a disbursement request from the Replacement              Reserve Account or the Repairs Escrow Account to reimburse Borrower for any              Borrower  Requested Replacement or Borrower Requested Repair.  The              disbursement request must be in writing and include an explanation for such              request. Lender shall make disbursements for Borrower Requested Replacements              or Borrower Requested Repairs if:                           (i)   they are of the type intended to be covered by the                    Replacement Reserve Account or the Repairs Escrow Account, as                    applicable;                           (ii)  the costs are commercially reasonable;                           (iii) the amount of funds in the Replacement Reserve Account                    or Repairs Escrow Account, as applicable, is sufficient to pay such costs                    and the then-current estimated cost of completing all remaining Required                    Replacements or Required Repairs (at the Maximum Repair Cost), as                    applicable, and  any other Borrower Requested Replacements, Borrower                    Requested Repairs, Additional Lender Replacements or Additional Lender                    Repairs that have been previously approved by Lender; and                           (iv)  all conditions for disbursement from the Replacement                    Reserve Account or Repairs Escrow Account, as applicable, have been                    satisfied.               Nothing in this Loan Agreement shall limit Lender's right to require an additional              deposit to the Replacement Reserve Account or an increase to the Monthly              Replacement Reserve Deposit in connection with any such Borrower Requested              Replacements, or an additional deposit to the Repairs Escrow Account for any              such Borrower Requested Repairs.                     (B)   Additional Lender  Replacements  and Additional Lender              Repairs.                     Lender may require, as set forth in Section 6.02(b), Section 6.03(c), or              otherwise from time to time, upon written notice to Borrower, that Borrower              make  Additional Lender Replacements or Additional Lender Repairs. Lender              shall make disbursements from the Replacement Reserve Account for Additional              Lender Replacements or from the Repairs Escrow Account for Additional Lender              Repairs, as applicable, if:                           (i)   the costs are commercially reasonable;                           (ii)  the amount of funds in the Replacement Reserve Account                    or the Repairs Escrow Account, as applicable, is sufficient to pay such                    costs and the then-current  estimated cost of completing all remaining   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page72  Article 13                              04-18                    © 2018 Fannie Mae  

 

                   Required Replacements or Required Repairs (at the Maximum Repair                     Cost), as applicable, and  any other Borrower Requested Replacements,                     Borrower Requested Repairs, Additional Lender Replacements, or                     Additional Lender Repairs that have been previously approved by Lender;                     and                            (iii) all conditions for disbursement from the Replacement                     Reserve Account or Repairs Escrow Account, as applicable, have been                     satisfied.                Nothing in this Loan Agreement shall limit Lender's right to require an additional               deposit to the Replacement Reserve Account or an increase to the Monthly               Replacement Reserve Deposit for any such Additional Lender Replacements or an               additional deposit to the Repairs Escrow Account for any such Additional Lender               Repair.                (10)  Excess Costs.                In the event any Replacement or Repair exceeds the approved cost set forth on the         Required Replacement Schedule for Replacements, or the Maximum Repair Cost for         Repairs, Borrower may submit a disbursement request to reimburse Borrower for such         excess cost. The disbursement request must be in writing and include an explanation for         such request. Lender shall make disbursements from the Replacement Reserve Account         or the Repairs Escrow Account, as applicable, if:                      (A)   the excess cost is commercially reasonable;                      (B)   the amount of funds in the Replacement Reserve Account or the               Repairs Escrow Account, as applicable, is sufficient to pay such costs and the               then-current estimated cost of completing all remaining Required Replacements               or Required Repairs (at the Maximum Repair Cost), as applicable, and any other               Borrower Requested Replacements, Borrower Requested Repairs, Additional               Lender Replacements, or Additional Lender Repairs that have been previously               approved by Lender; and                      (C)   all conditions for disbursement from the Replacement Reserve               Account or the Repairs Escrow Account have been satisfied.                (11)  Final Disbursements.                Upon completion of all Repairs in accordance with this Loan Agreement and so         long as no Event of Default has occurred and is continuing, Lender shall disburse to         Borrower any amounts then remaining in the Repairs Escrow Account. Upon payment in         full of the Indebtedness and release by Lender of the lien of the Security Instrument,         Lender shall disburse to Borrower any and all amounts then remaining in the    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page73  Article 13                               04-18                   © 2018 Fannie Mae  

 

       Replacement Reserve Account and the Repairs Escrow Account (if not previously         released).          (b)   Approvals of Contracts; Assignment of Claims.          Lender retains the right to approve all contracts or work orders with materialmen,   mechanics, suppliers, subcontractors, contractors, or other parties providing labor or materials in   connection with the Replacements or Repairs. Notwithstanding Borrower's assignment (in the   Security Instrument) of its rights and claims against all Persons supplying labor or materials in   connection with the Replacement or Repairs, Lender will not pursue any such right or claim   unless an Event of Default has occurred and is continuing or as otherwise provided in Section   14.03(c).          (c)   Delays and Workmanship.          If any work for any Replacement or Repair has not timely commenced, has not been   timely performed in a workmanlike manner, or has not been timely completed in a workmanlike   manner, Lender may, without notice to Borrower:                (1)   withhold disbursements from the Replacement Reserve Account or         Repairs Escrow Account for such unsatisfactory Replacement or Repair, as applicable;                (2)   proceed under existing contracts or contract with third parties to make or         complete such Replacement or Repair;                (3)   apply the funds in the Replacement Reserve Account or Repairs Escrow         Account toward the labor and materials necessary to make or complete such Replacement         or Repair, as applicable; or                (4)   exercise any  and all other remedies available to Lender under this Loan         Agreement or any other Loan Document, including any remedies otherwise available         upon an Event of Default pursuant to the terms of Section 14.02.    To facilitate Lender's completion or making of such Replacements or Repairs, Lender shall have   the right to enter onto the Mortgaged Property and perform any and all work and labor necessary   to make or complete the Replacements or Repairs and employ watchmen to protect the   Mortgaged Property from damage. All funds so expended by Lender shall be deemed to have   been advanced to Borrower, shall be part of the Indebtedness and shall be secured by the   Security Instrument and this Loan Agreement.          (d)   Appointment of Lender as Attorney-In-Fact.          Borrower hereby authorizes and appoints Lender as attorney-in-fact pursuant to Section   14.03(c).    Multifamily Loan and Security Agreement   (Non-Recourse)                       Form 6001.NR                        Page 74  Article 13                               04-18                    © 2018 Fannie Mae  

 

       (e)   No Lender Obligation.          Nothing in this Loan Agreement shall:                ( 1)  make Lender responsible for making or completing the Replacements or         Repairs;                (2)   require Lender to expend funds, whether from the Replacement Reserve         Account, the Repairs Escrow Account, or otherwise, to make or complete any         Replacement or Repair;                (3)   obligate Lender to proceed with the Replacements or Repairs; or                (4)   obligate Lender to demand from Borrower additional sums to make or         complete any Replacement or Repair.          (f)   No Lender Warranty.          Lender's approval of any plans for any Replacement or Repair, release of funds from the   Replacement Reserve Account or Repairs Escrow Account, inspection of the Mortgaged   Property by Lender or its agents, representatives, or designees, or other acknowledgment of   completion of any Replacement or Repair in a manner satisfactory to Lender shall not be deemed   an acknowledgment or warranty to any Person that the Replacement or Repair has been   completed in accordance with applicable building, zoning, or other codes, ordinances, statutes,   laws, regulations, or requirements of any Governmental Authority, such responsibility being at   all times exclusively that of Borrower.                       ARTICLE 14 -   DEFAULTS/REMEDIES    Section 14.01  Events of Default.          The occurrence of any one or more of the following in this Section 14.01 shall constitute   an Event of Default under this Loan Agreement.          (a)   Automatic Events of Default.          Any of the following shall constitute an automatic Event of Default:                (1)   any failure by Borrower to pay or deposit when due any amount required         by the Note, this Loan Agreement or any other Loan Document;                (2)   any failure by Borrower to maintain the insurance coverage required by         any Loan Document;                (3)   any failure by Borrower to comply with the provisions of Section 4.02(d)         relating to its single asset status;   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 75  Article 13                               04-18                    © 2018 Fannie Mae  

 

             (4)   if any warranty, representation, certification, or statement of Borrower,         Guarantor, or Key Principal in this Loan Agreement or any of the other Loan Documents         is false, inaccurate, or misleading in any material respect when made;                (5)   fraud, gross negligence, willful misconduct, or material misrepresentation         or material omission by or on behalf of Borrower, Guarantor, or Key Principal or any of         their officers, directors, trustees, partners, members, or managers in connection with:                      (A)   the application for, or creation of, the Indebtedness;                      (B)   any financial statement, rent roll, or other report or  information               provided to Lender during the term of the Mortgage Loan; or                      (C)   any request for Lender's consent to any proposed action, including               a request for disbursement of Reserve/Escrow Account Funds or Collateral               Account Funds;                (6)   the occurrence of any Transfer not permitted by the Loan Documents;                (7)   the occurrence of a Bankruptcy Event;                (8)   the commencement of a forfeiture action or other similar proceeding,         whether civil or criminal, which, in Lender's reasonable judgment, could result in a         forfeiture of the Mortgaged Property or otherwise materially impair the lien created by         this Loan Agreement or the Security Instrument or Lender's interest in the Mortgaged         Property;                (9)   if Borrower, Guarantor, or Key Principal is a trust, or if Control of         Borrower, Guarantor, or Key Principal is Transferred or if a Restricted Ownership         Interest in Borrower, Guarantor, or Key Principal would be Transferred due to the         termination or revocation of a trust, the termination or revocation of such trust, except as         set forth in Section 1 l.03(d);                (10)  any failure by Borrower to complete any Repair related to fire, life, or         safety issues in accordance with the terms of this Loan Agreement within the Completion         Period (or  such other date set forth on the Required Repair Schedule or otherwise         required by Lender in writing for such Repair); or                (11)  any exercise by the holder of any other debt instrument secured by a         mortgage, deed of trust, or deed to secure debt on the Mortgaged Property of a right to         declare all amounts due under that debt instrument immediately due and payable.          (b)   Events of Default Subject to a Specified Cure Period.          Any of the following shall constitute an Event of Default subject to the cure period set   forth in the Loan Documents:   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 76  Article 14                               04-18                    © 2018 Fannie Mae  

 

             ( 1)  if Key Principal or Guarantor is a natural person, the death of such         individual, unless all requirements of Section 1 l.03(e) are met;                (2)   the occurrence of a Guarantor Bankruptcy Event, unless requirements of         Section 11.03(f) are met;                (3)   any failure by Borrower, Key Principal, or Guarantor to comply with the         provisions of Section 5.02(b) and Section 5.02(c); or                (4)   any failure by Borrower to perform any obligation under this Loan         Agreement or any Loan Document that is subject to a specified written notice and cure         period, which failure continues beyond such specified written notice and cure period as         set forth herein or in the applicable Loan Document.          (c)   Events of Default Subject to Extended Cure Period.          The following shall constitute an Event of Default if the existence of such condition or   event, or such failure to perform or default in performance continues for a period of thirty (30)   days after written notice by Lender to Borrower of the existence of such condition or event, or of   such failure to perform or default in performance, provided, however, such period may be   extended for up to an additional thirty (30) days if Borrower, in the discretion of Lender, is   diligently pursuing a cure of such; provided, further, however, no such written notice, grace   period, or extension shall apply if, in Lender's discretion, immediate exercise by Lender of a   right or remedy under this Loan Agreement or any Loan Document is required to avoid harm to   Lender or impairment of the Mortgage Loan (including the Loan Documents), the Mortgaged   Property or any other security given for the Mortgage Loan:                (1)   any failure by Borrower to perform any of its obligations under this Loan         Agreement or any Loan Document (other than those specified in Section 14.0l(a) or         Section 14.0l(b) above) as and when required.    Section 14.02  Remedies.          (a)   Acceleration; Foreclosure.          If an Event of Default has occurred and is continuing, the entire unpaid principal balance   of the Mortgage Loan, any Accrued Interest, interest accruing at the Default Rate, the   Prepayment Premium (if applicable), and all other Indebtedness, at the option of Lender, shall   immediately become due and payable, without any prior written notice to Borrower, unless   applicable law requires otherwise (and in such case, after any required written notice has been   given). Lender may exercise this option to accelerate regardless of any prior forbearance. In   addition, Lender shall have all rights and remedies afforded to Lender hereunder and under the   other Loan Documents, including, foreclosure on and/or the power of sale of the Mortgaged   Property, as provided in the Security Instrument, and any rights and remedies available to Lender   at law or in equity (subject to Borrower's statutory rights of reinstatement, if any). Any proceeds   of a Foreclosure Event may be held and applied by Lender as additional collateral for the   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 77  Article 14                               04-18                    © 2018 Fannie Mae  

 

 Indebtedness pursuant to this Loan Agreement. Notwithstanding the foregoing, the occurrence   of any Bankruptcy Event shall automatically accelerate the Mortgage Loan and all obligations   and Indebtedness shall be immediately due and payable without written notice or further action   by Lender.          (b)   Loss of Right to Disbursements from Collateral Accounts.          If an Event of Default has occurred and is continuing, Borrower shall immediately lose   all of its rights to receive disbursements from the Reserve/Escrow Accounts and any Collateral   Accounts.  During the continuance of any such Event of Default, Lender may use the   Reserve/Escrow Account Funds and  any Collateral Account Funds (or  any portion thereof) for   any purpose, including:                (1)   repayment of the Indebtedness, including principal prepayments and the         Prepayment Premium  applicable to such full or partial prepayment, as applicable         (however, such application of funds shall not cure or be deemed to cure any Event of         Default);                (2)   reimbursement of Lender for all losses and expenses (including reasonable         legal fees) suffered or incurred by Lender as a result of such Event of Default;                (3)   completion of the Replacement or Repair or for any other replacement or         repair to the Mortgaged Property; and                (4)   payment of any amount expended in exercising ( and the exercise of) all         rights and remedies available to Lender at law or in equity or under this Loan Agreement         or under any of the other Loan Documents.    Nothing in this Loan Agreement shall obligate Lender to apply all or any portion of the   Reserve/Escrow Account Funds or Collateral Account Funds on account of any Event of Default   by Borrower or to repayment of the Indebtedness or in any specific order of priority.          (c)   Remedies Cumulative.          Each right and remedy provided in this Loan Agreement is distinct from all other rights   or remedies under this Loan Agreement or any other Loan Document or afforded by applicable   law, and each shall be cumulative and may be exercised  concurrently, independently, or   successively, in any order. Lender shall not be required to demonstrate any actual impairment of   its security or any increased risk of additional default by Borrower in order to exercise any of its   remedies with respect to an Event of Default.     Multifamily Loan and Security Agreement   (Non-Recourse)                       Form 6001.NR                        Page78  Article 14                               04-18                    © 2018 Fannie Mae  

 

 Section 14.03  Additional Lender Rights; Forbearance.          (a)   No Effect Upon Obligations.          Lender may, but shall not be obligated to, agree with Borrower, from time to time, and   without giving notice to, or obtaining the consent of, or having any effect upon the obligations   of, Guarantor, Key Principal, or other third party obligor, to take any of the following actions:                (1)   the time for payment of the principal of or interest on the Indebtedness         may be extended, or the Indebtedness may be renewed in whole or in part;                (2)   the rate of interest on or period of amortization of the Mortgage Loan or         the amount of the Monthly Debt Service Payments payable under the Loan Documents         may be modified;                (3)   the time for Borrower's performance of or compliance with any covenant         or agreement contained in any Loan Document, whether presently existing or hereinafter         entered into, may be extended or such performance or compliance may be waived;                (4)   any or all payments due under this Loan Agreement or any other Loan         Document may be reduced;                (5)   any Loan  Document may  be modified or amended by Lender and         Borrower in any respect, including an increase in the principal amount of the Mortgage         Loan;                (6)   any amounts under this Loan Agreement or any other Loan Document         may be released;                (7)   any security for the Indebtedness may be modified, exchanged, released,         surrendered, or otherwise dealt with, or additional security may be pledged or mortgaged         for the Indebtedness;                (8)   the payment of the Indebtedness or any security for the Indebtedness, or         both, may be subordinated to the right to payment or the security, or both, of any other         present or future creditor of Borrower; or                (9)   any other terms of the Loan Documents may be modified.          (b)   No Waiver of Rights or Remedies.          Any waiver of an Event of Default or forbearance by Lender in exercising any right or   remedy under this Loan Agreement or any other Loan Document or otherwise afforded by   applicable law, shall not be a waiver of any other Event of Default or preclude the exercise or   failure to exercise of any other right or remedy. The acceptance by Lender of payment of all or   any part of the Indebtedness after the due date of such payment, or in an amount which is less   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page79  Article 14                               04-18                   © 2018 Fannie Mae  

 

than the required payment, shall not be a waiver of Lender's right to require prompt payment  when due of all other payments on account of the Indebtedness or to exercise any remedies for  any failure to make prompt payment. Enforcement by Lender of any security for the  Indebtedness shall not constitute an election by Lender of remedies so as to preclude the exercise  or failure to exercise of any other right available to Lender. Lender's receipt of any insurance  proceeds or amounts in connection with a Condemnation Action shall not operate to cure or  waive any Event of Default.         (c)   Appointment of Lender as Attorney-In-Fact.         Borrower hereby irrevocably makes, constitutes, and appoints Lender (and any officer of  Lender or any Person designated by Lender for that purpose) as Borrower's true and lawful  proxy and attorney-in-fact (and agent-in-fact) in Borrower's name, place, and stead, with full  power of substitution, to:               ( 1)  use any of the funds in the Replacement Reserve Account or Repairs        Escrow Account for the purpose of making or completing the Replacements or Repairs;               (2)   make  such additions, changes, and corrections to the Replacements or        Repairs as shall be necessary or desirable to complete the Replacements or Repairs;               (3)   employ such contractors, subcontractors, agents, architects, and inspectors        as shall be required for such purposes;               (4)   pay, settle, or compromise all bills and claims for materials and work        performed in connection with the Replacements or Repairs, or as may be necessary or        desirable for the completion of the Replacements or Repairs, or for clearance of title;               (5)   adjust and compromise any claims under any and all policies of insurance        required pursuant to this Loan Agreement and any other Loan Document, subject only to        Borrower's rights under this Loan Agreement;               (6)   appear in and prosecute any action arising from any insurance policies;               (7)   collect and receive the proceeds of insurance, and to deduct from such        proceeds Lender's expenses incurred in the collection of such proceeds;               (8)   commence, appear in, and prosecute, in Lender's or Borrower's name, any        Condemnation Action;               (9)   settle or compromise any claim in connection with any Condemnation        Action;               (10)  execute all applications and certificates in the name of Borrower which        may be required by any of the contract documents;    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page80  Article 14                              04-18                    © 2018 Fannie Mae  

 

             ( 11) prosecute and defend all actions or proceedings in connection with the         Mortgaged Property or the rehabilitation and repair of the Mortgaged Property;                (12)  take such actions as are permitted in this Loan Agreement and  any other         Loan Documents;                (13)  execute such financing statements and other documents and to do such         other acts as Lender may require to perfect and preserve Lender's security interest in, and         to enforce such interests in, the collateral; and                (14)  carry out any remedy provided for in this Loan Agreement and any other         Loan Documents, including endorsing Borrower's name to checks, drafts, instruments         and other items of payment and proceeds of the collateral, executing change of address         forms with the postmaster of the United States Post Office serving the address of         Borrower, changing the address of Borrower to that of Lender, opening all envelopes         addressed to Borrower, and applying any payments contained therein to the Indebtedness.          Borrower hereby acknowledges that the constitution and appointment of such proxy and         attorney-in-fact are coupled with an interest and are irrevocable and shall not be affected         by the disability or incompetence of Borrower. Borrower specifically acknowledges and         agrees that this power of attorney granted to Lender may be assigned by Lender to         Lender's successors or assigns as holder of the Note (and the other Loan Documents).         The foregoing powers conferred on Lender under this Section 14.03(c) shall not impose         any duty upon Lender to exercise any such powers and shall not require Lender to incur         any expense or take any action. Borrower hereby ratifies and confirms all that such         attorney-in-fact may do or cause to be done by virtue of any provision of this Loan         Agreement and any other Loan Documents.          Notwithstanding the foregoing provisions, Lender shall not exercise its rights as set forth         in this Section 14.03(c) unless: (A) an Event of Default has occurred and is continuing, or         (B) Lender determines, in  its discretion, that exigent circumstances exist or that such         exercise is necessary or prudent in order to protect and preserve the Mortgaged Property,         or Lender's lien priority and security interest in the Mortgaged Property.          (d)   Borrower Waivers.          If more than one Person signs this Loan Agreement as Borrower, each Borrower, with   respect to any other Borrower, hereby agrees that Lender, in its discretion, may:                (1)   bring suit against Borrower, or any one or more of Borrower, jointly and         severally, or against any one or more of them;                (2)   compromise or settle with any one or more of the persons constituting         Borrower, for such consideration as Lender may deem proper;                (3)   release one or more of the persons constituting Borrower, from liability; or    Multifamily Loan and Security Agreement   (Non-Recourse)                       Form 6001.NR                        Page 81  Article 14                               04-18                    © 2018 Fannie Mae  

 

             (4)   otherwise deal with Borrower, or any one or more of them, in any manner,         and no such action shall impair the rights of Lender to collect from any Borrower the full         amount of the Indebtedness.    Section 14.04  Waiver of Marshaling.          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 Loan   Agreement, any other Loan Document or applicable law. Lender shall have the right to   determine the order in which all or any part of the Indebtedness is satisfied from the proceeds   realized upon the exercise of such remedies. Borrower and any party who now or in the future   acquires a security interest in the Mortgaged Property and who has actual or constructive notice   of this Loan Agreement 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 or as an entirety in connection with the exercise of any of   the remedies permitted by applicable law or provided in this Loan Agreement or any other Loan   Documents.          Lender shall account for any moneys received by Lender in respect of any foreclosure on   or disposition of collateral hereunder and under the other Loan Documents provided that Lender   shall not have any duty as to any collateral, and Lender shall be  accountable only for amounts   that it actually receives as a result of the exercise of such powers. NONE OF LENDER OR ITS   AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR REPRESENTATIVES   SHALL  BE  RESPONSIBLE   TO BORROWER     (a) FOR ANY ACT  OR  FAILURE  TO ACT   UNDER   ANY   POWER   OF ATTORNEY    OR  OTHERWISE,   EXCEPT   IN RESPECT   OF   DAMAGES    ATTRIBUTABLE     SOLELY   TO  THEIR  OWN   GROSS   NEGLIGENCE   OR   WILLFUL MISCONDUCT AS      FINALLY DETERMINED PURSUANT TO       A FINAL, NON­  APPEALABLE    COURT  ORDER BY A   COURT   OF COMPETENT JURISDICTION,    OR  (b)   FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.                         ARTICLE 15 -    MISCELLANEOUS    Section 15.01  Governing Law; Consent to Jurisdiction and Venue.          (a)   Governing Law.          This Loan Agreement and  any other Loan Document which does not itself expressly   identify the law that is to apply to it, shall be governed by the laws of the Property Jurisdiction   without regard to the application of choice of law principles.          (b)   Venue.          Any controversy arising under or in relation to this Loan Agreement or any other Loan   Document shall be litigated exclusively in the Property Jurisdiction without regard to conflicts of   laws principles. The state and federal courts and authorities with jurisdiction in the Property   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 82  Article 14                               04-18                    © 2018 Fannie Mae  

 

 Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in   relation to this Loan Agreement or any other Loan Document. Borrower irrevocably consents to   service, jurisdiction, and venue of such courts for any such litigation and waives any other venue   to which it might be entitled by virtue of domicile, habitual residence, or otherwise.    Section 15.02  Notice.          (a)   Process of Serving Notice.          Except as otherwise set forth herein or in any other Loan Document, all notices under this   Loan Agreement and any other Loan Document 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;                      (C)   sent by overnight courier; or                      (D)   sent by electronic mail with originals to follow by overnight               courier;                (2)   addressed to the intended recipient at Borrower's Notice Address and         Lender's Notice Address, as applicable; 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)   Change of Address.          Any party to this Loan Agreement may change the address to which notices intended for   it are to be directed by means of notice given to the other parties identified on the Summary of   Loan Terms in accordance with this Section 15.02.          (c)   Default Method of Notice.          Any required notice under this Loan Agreement or any other Loan Document which does   not specify how notices are to be given shall be given in accordance with this Section 15.02.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 83  Article 15                               04-18                   © 2018 Fannie Mae  

 

       (d)   Receipt of Notices.          Neither Borrower nor Lender shall refuse or reject delivery of any notice given in   accordance with this Loan Agreement. Each party is required to acknowledge, in  writing, the   receipt of any notice upon request by the other party.    Section 15.03  Successors and Assigns Bound; Sale of Mortgage Loan.          (a)   Binding Agreement.          This Loan Agreement shall bind, and the rights granted by this Loan Agreement shall   inure to, the successors and assigns of Lender and the permitted successors and assigns of   Borrower. However, a Transfer not permitted by this Loan Agreement shall be an Event of   Default and shall be void ab initio.          (b)   Sale of Mortgage Loan; Change of Servicer.          Nothing in this Loan Agreement shall limit Lender's (including its successors and   assigns) right to sell or transfer the Mortgage Loan or any interest in the Mortgage Loan. The   Mortgage Loan or a partial interest in the Mortgage Loan (together with this Loan Agreement   and the other Loan Documents) may be sold one or more times without prior written notice to   Borrower. A sale may result in a change of the Loan Servicer.    Section 15.04  Counterparts.          This Loan Agreement may be executed in any number of counterparts with the same   effect as if the parties hereto had signed the same document and all such counterparts shall be   construed together and shall constitute one instrument.    Section 15.05  Joint and Several (or Solidary) Liability.          If more than one Person signs this Loan Agreement as Borrower, the obligations of such   Persons shall be joint and several (solidary instead for purposes of Louisiana law).    Section 15.06  Relationship of Parties; No Third Party Beneficiary.          (a)   Solely Creditor and Debtor.          The relationship between Lender and Borrower shall be solely that of creditor and debtor,   respectively, and nothing contained in this Loan Agreement shall create any other relationship   between Lender and Borrower. Nothing contained in this Loan Agreement shall constitute   Lender as a joint venturer, partner, or agent of Borrower, or render Lender liable for any debts,   obligations, acts, omissions, representations, or contracts of Borrower.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page84  Article 15                               04-18                    © 2018 Fannie Mae  

 

       (b)   No Third Party Beneficiaries.          No creditor of any party to this Loan Agreement and no other Person shall be a third   party beneficiary of this Loan Agreement or any other Loan Document or any account created or   contemplated under this Loan Agreement or any other Loan Document. Nothing contained in   this Loan Agreement shall be deemed or construed to create an obligation on the part of Lender   to any third party nor shall any third party have a right to enforce against Lender any right that   Borrower may have under this Loan Agreement. Without limiting the foregoing:                ( 1)  any Servicing Arrangement between Lender and any Loan Servicer shall         constitute a contractual obligation of such Loan Servicer that is independent of the         obligation of Borrower for the payment of the Indebtedness;                (2)   Borrower shall not be a third party beneficiary of any Servicing         Arrangement; and                (3)   no payment by the Loan Servicer under any Servicing Arrangement will         reduce the amount of the Indebtedness.    Section 15.07  Severability; Entire Agreement; Amendments.          The invalidity or unenforceability of any provision of this Loan Agreement or any other   Loan Document shall not affect the validity or enforceability of any other provision of this Loan   Agreement or of any other Loan Document, all of which shall remain in full force and effect,   including the Guaranty. This Loan Agreement contains the complete and entire agreement   among the parties as to the matters covered, rights granted, and the obligations assumed in this   Loan Agreement. This Loan Agreement may not be amended or modified except by written   agreement signed by the parties hereto.    Section 15.08  Construction.          (a)   The captions and headings of the sections of this Loan Agreement and the Loan   Documents are for convenience only and shall be disregarded in construing this Loan Agreement   and the Loan Documents.          (b)   Any  reference in this Loan Agreement 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 Loan Agreement or to a Section or Article   of this Loan Agreement.          (c)   Any reference in this Loan Agreement to a statute or regulation shall be construed   as referring to that statute or regulation as amended from time to time.          (d)   Use of the singular in this Loan Agreement includes the plural and use of the   plural includes the singular.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 85  Article 15                               04-18                    © 2018 Fannie Mae  

 

       (e)   As used in this Loan Agreement, the term "including" means "including, but not   limited to" or "including, without limitation," and is for example only and not a limitation.          (f)   Whenever Borrower's knowledge is implicated in this Loan Agreement or the   phrase "to Borrower's knowledge" or a similar phrase is used in this Loan Agreement,   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.          (g)   Unless otherwise provided in this Loan Agreement, 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.          (h)   All references in this Loan Agreement 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.          (i)   "Lender may" shall mean at Lender's discretion, but shall not be an obligation.          U)    If the Mortgage Loan proceeds are disbursed on a date that is later than the   Effective Date, as described in Section 2.02(a)(l), the representations and warranties in the Loan   Documents with respect to the ownership and operation of the Mortgaged Property shall be   deemed to be made as of the disbursement date.    Section 15.09  Mortgage Loan Servicing.          All actions regarding the servicing of the Mortgage Loan, including the collection of   payments, the giving and receipt of notice, inspections of the Mortgaged Property, inspections of   books and records, and the granting of consents and approvals, may be taken by the Loan   Servicer unless Borrower receives notice to the contrary. If Borrower receives conflicting   notices regarding the identity of the Loan Servicer or any other subject, any such written notice   from Lender shall govern. The Loan Servicer may change from time to time (whether related or   unrelated to a sale of the Mortgage Loan). If there is a change of the Loan Servicer, Borrower   will be given written notice of the change.    Section 15.10  Disclosure of Information.          Lender may furnish information regarding Borrower, Key Principal, or Guarantor, or the   Mortgaged Property to third parties with an existing or prospective interest in the servicing,   enforcement,  evaluation, performance, purchase, or securitization of the Mortgage Loan,   including trustees, master servicers, special servicers, rating agencies, and organizations   maintaining databases on the underwriting and performance of multifamily mortgage loans.   Borrower irrevocably waives any and all rights it may have under applicable law to prohibit such   disclosure, including any right of privacy.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 86  Article 15                               04-18                    © 2018 Fannie Mae  

 

 Section 15.11  Waiver; Conflict.          No  specific waiver of any of the terms of this Loan Agreement shall be considered as a   general waiver. If any provision of this Loan Agreement is in conflict with any provision of any   other Loan Document, the provision contained in this Loan Agreement shall control.    Section 15.12  No Reliance.          Borrower acknowledges, represents, and warrants that:          (a)   it understands the nature and structure of the transactions contemplated by this   Loan Agreement and the other Loan Documents;          (b)   it is familiar with the provisions of all of the documents and instruments relating   to such transactions;          (c)   it understands the risks inherent in such transactions, including the risk of loss of   all or any part of the Mortgaged Property;          (d)   it has had the opportunity to consult counsel; and          (e)   it has not relied on Lender for any guidance or expertise in analyzing the financial   or other consequences of the transactions contemplated by this Loan Agreement or any other   Loan Document or otherwise relied on Lender in any manner in connection with interpreting,   entering into, or otherwise in connection with this Loan Agreement, any other Loan Document,   or any of the matters contemplated hereby or thereby.    Section 15.13  Subrogation.          If, and to the extent that, the proceeds of the Mortgage Loan are used to pay, satisfy, or   discharge any obligation of Borrower for the payment of money that is secured by a pre-existing   mortgage, deed of trust, or other lien encumbering the Mortgaged Property, such Mortgage Loan   proceeds shall be deemed to have been advanced by Lender at Borrower's request, and Lender   shall be subrogated automatically, and without further action on its part, to the rights, including   lien priority, of the owner or holder of the obligation secured by such prior lien, whether or not   such prior lien is released.    Section 15.14  Counting of Days.          Except where otherwise specifically provided, any reference in this Loan Agreement to a   period of "days" means calendar days, not Business Days. If the date on which Borrower is   required to perform an obligation under this Loan Agreement is not a Business Day, Borrower   shall be required to perform such obligation by the Business Day immediately preceding such   date; provided, however, in respect of any Payment Date, or if the Maturity Date is other than a   Business Day, Borrower shall be obligated to make such payment by the Business Day   immediately following such date.   Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page 87  Article 15                               04-18                    © 2018 Fannie Mae  

 

 Section 15.15  Revival and Reinstatement of Indebtedness.          If the payment of all or any part of the Indebtedness by Borrower, Guarantor, or any other   Person, or the transfer to Lender of any collateral or other property should for any reason   subsequently be declared to be void or voidable under any state or federal law relating to   creditors' rights, including provisions of the Insolvency Laws relating to a Voidable Transfer,   and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or   elects to do so upon the advice of its counsel, then the amount of such Voidable Transfer or the   amount of such Voidable Transfer that Lender is required or elects to repay or restore, including   all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection therewith,   and the Indebtedness shall be automatically revived, reinstated, and restored by such amount and   shall exist as though such Voidable Transfer had never been made.    Section 15.16  Time is of the Essence.          Borrower agrees that, with respect to each and every obligation and covenant contained   in this Loan Agreement and the other Loan Documents, time is of the essence.    Section 15.17  Final Agreement.          THIS  LOAN   AGREEMENT     ALONG    WITH   ALL   OF  THE  OTHER    LOAN   DOCUMENTS    REPRESENT   THE FINAL AGREEMENT BETWEEN THE PARTIES         WITH   RESPECT  TO  THE SUBJECT MATTER HEREOF      AND  MAY  NOT  BE  CONTRADICTED   BY   EVIDENCE    OF   PRIOR,  CONTEMPORANEOUS,       OR   SUBSEQUENT     ORAL   AGREEMENTS.    THERE ARE NO    UNWRITTEN    ORAL  AGREEMENTS    BETWEEN THE   PARTIES.   All prior or contemporaneous agreements, understandings, representations, and   statements, oral or written, are merged into this Loan Agreement and the other Loan Documents.   This Loan Agreement, the other Loan Documents, and  any of their provisions may not be   waived, modified, amended, discharged, or terminated except by an agreement in writing signed   by the party against which the enforcement of the waiver, modification, amendment, discharge,   or termination is sought, and then only to the extent set forth in that agreement.    Section 15.18  WAIVER OF TRIAL BY JURY.          TO  THE MAXIMUM     EXTENT  PERMITTED    BY APPLICABLE   LAW,  EACH   OF   BORROWER AND     LENDER   (a) COVENANTS  AND  AGREES   NOT  TO ELECT  A TRIAL   BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS       LOAN AGREEMENT   OR  ANY   OTHER   LOAN   DOCUMENT,    OR  THE   RELATIONSHIP   BETWEEN    THE   PARTIES  AS BORROWER    AND   LENDER,  THAT  IS TRIABLE  OF RIGHT  BY A  JURY,   AND  (b) WAIVES  ANY  RIGHT  TO TRIAL BY  JURY  WITH  RESPECT  TO  SUCH  ISSUE   TO THE EXTENT THAT ANY SUCH RIGHT       EXISTS  NOW  OR IN THE FUTURE.    THIS   WAIVER   OF RIGHT  TO TRIAL  BY JURY  IS SEPARATELY   GIVEN  BY EACH   PARTY,   KNOWINGLY    AND   VOLUNTARILY    WITH   THE  BENEFIT  OF  COMPETENT    LEGAL   COUNSEL.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                        Page88  Article 15                               04-18                   © 2018 Fannie Mae  

 

                        [Remainder of Page Intentionally Blank]    Multifamily Loan and Security Agreement  (Non-Recourse)                           Form 6001.NR                            Page 89  Article 15                                   04-18                      © 2018 Fannie Mae  

 

        IN WITNESS WHEREOF, Borrower and      Lender have signed and delivered this Loan    Agreement under seal (where applicable) or have caused this Loan Agreement to be signed and    delivered under seal (where applicable) by their duly authorized representatives. Where    applicable law so provides, Borrower and Lender intend that this Loan Agreement shall be    deemed to be signed and delivered as a sealed instrument.                                          BORROWER:                                          STAR III SWEETWATER, LLC                                         a Delaware limited liability company                                          By:   Steadfast Apartment Advisor III, LLC                                               a Delaware limited liability company                                               its Manager                                                By:                                                      ~~EAL)ineating                                                                 Treasurer    Multifamily Loan and Security Agreement  (Non-Recourse)                         Form 6001.NR                         Page S-1  Signature Page                             04-18                    © 2018 Fannie Mae  

 

                                             LENDER:                                                BERKELEY POINT CAPITAL LLC,                                               d/b/a NEWMARK KNIGHT FRANK,                                               a Delaware limited liability company                                               By:    Multifamily Loan and Security Agreement  (Non-Recourse)                               Form 6001.NR                              Page S-2  Signature Page                                   04-18                        © 2018 Fannie Mae  

 

                                  SCHEDULEl               TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                                  Definitions Schedule                            (Interest Rate Type - Fixed Rate)          Capitalized terms used in the Loan Agreement have the meanings given to such terms in   this Definitions Schedule.    "Accrued Interest" means unpaid interest, if any, on the Mortgage Loan that has not been added   to the unpaid principal balance of the Mortgage Loan pursuant to Section 2.02(b) (Capitalization   of Accrued But Unpaid Interest) of the Loan Agreement.    "Additional Lender Repairs" means repairs of the type listed on the Required Repair Schedule   but not otherwise identified thereon that are determined advisable by Lender to keep the   Mortgaged Property in good order and repair (ordinary  wear and tear excepted) and in good   marketable condition or to prevent deterioration of the Mortgaged Property.    "Additional Lender Replacements" means replacements of the type listed on the Required   Replacement Schedule but not otherwise identified thereon that are determined advisable by   Lender to keep the Mortgaged Property in good order and repair (ordinary  wear and tear   excepted) and in good marketable condition or to prevent deterioration of the Mortgaged   Property.    "Amortization Period" has the meaning set forth in the Summary of Loan Terms.    "Amortization Type" has the meaning set forth in the Summary of Loan Terms.    "Bank  Secrecy Act" means the Bank Secrecy Act of 1970, as amended (e.g., 31 U.S.C.   Sections 5311-5330).    "Bankruptcy Event" means any one or more of the following:          (a)   the commencement, filing or continuation of a voluntary case or proceeding under   one or more of the Insolvency Laws by Borrower;          (b)   the acknowledgment in writing by Borrower (other  than to Lender in connection   with a workout) that it is unable to pay its debts generally as they mature;          (c)   the making of a general assignment for the benefit of creditors by Borrower;          (d)   the commencement, filing or continuation of an involuntary case or proceeding   under one or more Insolvency Laws against Borrower; or    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                         Page 1  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

       (e)   the appointment of a receiver (other than a receiver appointed at the direction or   request of Lender under the terms of the Loan Documents), liquidator, custodian, sequestrator,   trustee or other similar officer who exercises control over Borrower or any substantial part of the   assets of Borrower;    provided, however, that any proceeding or case under (d) or (e) above shall not be a Bankruptcy   Event until the ninetieth (90th) day after filing (if not earlier dismissed) so long as such   proceeding or case occurred without the consent, encouragement or active participation of   (1) Borrower, Guarantor, or Key Principal, (2) any Person Controlling Borrower, Guarantor, or   Key Principal, or (3) any Person Controlled by or under common Control with Borrower,   Guarantor, or Key Principal (in which event such case or proceeding shall be a Bankruptcy Event   immediately).    "Borrower" means, individually (and jointly and severally (solidarily instead for purposes of   Louisiana law) if more than one), the entity (or entities) identified as "Borrower" in the first   paragraph of the Loan Agreement.    "Borrower Affiliate" means, as to Borrower, Guarantor or Key Principal:          (a) any Person (other than the shareholders or beneficial owners of any Publicly-Held            Corporation or a Publicly-Held Trust) that owns any direct ownership interest in            Borrower, Guarantor or Key Principal;          (b)   any Person that indirectly owns, with the power to vote, twenty percent (20%) or   more of the ownership interests in Borrower, Guarantor or Key Principal;          (c)   any Person Controlled by, under common Control with, or which Controls,   Borrower, Guarantor or Key Principal;          (d)   any entity in which Borrower, Guarantor or Key Principal directly or indirectly   owns, with the power to vote, twenty percent (20%) or more of the ownership interests in such   entity; or          (e)   any other individual that is related (to the third degree of consanguinity) by blood   or marriage to Borrower, Guarantor or Key Principal.    "Borrower Requested Repairs" means repairs not listed on the Required Repair Schedule   requested by Borrower to be reimbursed from the Repairs Escrow Account and determined   advisable by Lender to keep the Mortgaged Property in good order and repair and in a good   marketable condition or to prevent deterioration of the Mortgaged Property.    "Borrower  Requested Replacements" means  replacements not listed on the Required   Replacement Schedule requested by Borrower to be reimbursed from the Replacement Reserve   Account and determined advisable by Lender to keep the Mortgaged Property in good order and   repair and in a good marketable condition or to prevent deterioration of the Mortgaged Property.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                         Page2  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

 "Borrower's General Business Address" has the meaning set forth in the Summary of Loan   Terms.    "Borrower's Notice Address" has the meaning set forth in the Summary of Loan Terms.    "Business Day" means any day other than (a) a Saturday, (b) a Sunday, (c) a day on which   Lender is not open for business, or (d) a day on which the Federal Reserve Bank of New York is   not open for business.    "Collateral Account Funds" means, collectively, the funds on deposit in any or all of the   Collateral Accounts, including the Reserve/Escrow Account Funds.    "Collateral Accounts" means any account designated as such by Lender pursuant to a Collateral   Agreement or as established pursuant to this Loan Agreement, including the Reserve/Escrow   Account.    "Collateral Agreement" means any separate agreement between Borrower and Lender and any   other party for the establishment of any other fund, reserve or account affecting the Mortgage   Loan.    "Completion Period" has the meaning set forth in the Summary of Loan Terms.    "Condemnation Action" has the meaning set forth in the Security Instrument.    "Control" (including with correlative meanings, such as "Controlling," "Controlled by" and   "under common  Control with") means, as applied to any entity, the possession, directly or   indirectly, of the power to direct or cause the direction of the management and operations of such   entity (including, by way of illustration, the power to (1) elect the  majority of the directors of   such entity; (2) make management decisions on behalf of or independently select the manager of   a limited liability company or the managing partner of a partnership; (3) independently remove   and then select a majority of those individuals exercising managerial authority over any entity;   and (4)  limit or otherwise modify the extent of control over the management and operations of an   entity by any Person exercising managerial authority over such entity), whether through the   ownership of voting securities or other ownership interests, by contract or otherwise.    "Credit Score" means a numerical value or a categorization derived from a statistical tool or   modeling system used to measure credit risk and predict the likelihood of certain credit   behaviors, including default.    "Debt Service Amounts" means the Monthly Debt Service Payments and all other amounts   payable under the Loan Agreement, the Note, the Security Instrument or any other Loan   Document.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                         Page3  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

 "Default Rate" means an interest rate equal to the lesser of:          (a)   the sum of the Interest Rate plus four (4) percentage points; or          (b)   the maximum  interest rate which may be collected from Borrower under   applicable law.    "Definitions Schedule" means this Schedule 1 (Definitions Schedule) to the Loan Agreement.    "Economic Sanctions" means any economic or financial sanction administered or enforced by   the United States Government (including, without limitation, those administered by OFAC at   http://www. treasury. gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets­   Control.aspx ), the U.S. Department of Commerce, or the U.S. Department of State.    "Effective Date" has the meaning set forth in the Summary of Loan Terms.    "Employee Benefit Plan" means a plan described in Section 3(3) of ERISA, regardless of   whether the plan is subject to ERISA.    "Enforcement Costs" has the meaning set forth in the Security Instrument.    "Environmental Indemnity  Agreement"  means  that certain Environmental Indemnity   Agreement dated as of the Effective Date made 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 Inspections" has the meaning set forth in the Environmental Indemnity   Agreement.    "Environmental Laws" has the meaning set forth in the Environmental Indemnity Agreement.    "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.    "ERISA  Affiliate" shall mean, with respect to Borrower, any entity that, together with   Borrower, would be treated as a single employer under Section 414(b) or (c) of the Internal  · Revenue Code, or Section 4001(a)(l4) of ERISA, or the regulations thereunder.    "ERISA Plan" means any employee pension benefit plan within the meaning of Section 3(2) of   ERISA (or  related trust) that is subject to the requirements of Title IV of ERISA, Sections 430 or   431 of the Internal Revenue Code, or Sections 302, 303, or 304 of ERISA, which is maintained   or contributed to by Borrower or its ERISA Affiliates.    "Event of Default" means the occurrence of any event listed in Section 14.01 (Events of   Default) of the Loan Agreement.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                         Page4  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

 "Exceptions to Representations and Warranties Schedule" means that certain Schedule 7   (Exceptions to Representations and Warranties Schedule) to the Loan Agreement.    "First Payment Date" has the meaning set forth in the Summary of Loan Terms.    "First Principal and Interest Payment Date" has the meaning set forth in the Summary of   Loan Terms, if applicable.    "Fixed Rate" has the meaning set forth in the Summary of Loan Terms.    "Fixtures" has the meaning set forth in the Security Instrument.    "Force Majeure" shall mean acts of God, acts of war, civil disturbance, governmental action   (including the revocation or refusal to grant licenses or permits, where such revocation or refusal   is not due to the fault of Borrower), strikes, lockouts, fire, unavoidable casualties or any other   causes beyond the reasonable control of Borrower (other than lack of financing), and of which   Borrower shall have notified Lender in writing within ten ( 10) days after its occurrence.    "Foreclosure Event" means:           (a)  foreclosure under the Security Instrument;           (b)  any other exercise by Lender of rights and remedies (whether under the Security   Instrument or under applicable law, including Insolvency Laws) as holder of the Mortgage Loan   and/or the Security Instrument, as a result of which Lender (or  its designee or nominee) or a third   party purchaser becomes owner of the Mortgaged Property;           (c)  delivery by Borrower to Lender (or its designee or nominee) of a deed or other   conveyance of Borrower's interest in the Mortgaged Property in lieu of any of the foregoing; or           (d)  in Louisiana, any dation en paiement.    "Goods" has the meaning set forth in the Security Instrument.    "Governmental Authority" means any court, board, commission, department or body of any   municipal, county, state or federal governmental unit, or any subdivision of any of them, that has   or acquires jurisdiction over Borrower or the Mortgaged Property or the use, operation or   improvement of the Mortgaged Property.    "Guarantor" means, individually and collectively, any guarantor of the Indebtedness or any   other obligation of Borrower under any Loan Document.    "Guarantor Bankruptcy Event" means any one or more of the following:          (a)   the commencement, filing or continuation of a voluntary case or proceeding under   one or more of the Insolvency Laws by Guarantor;    Schedule 1 to Multifamily Loan and   Security Agreement - Definitions Schedule   (Interest Rate Type - Fixed Rate)    Form 6101.FR                         PageS  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

       (b)   the acknowledgment in writing by Guarantor (other than to Lender in connection   with a workout) that it is unable to pay its debts generally as they mature;          (c)   the making of a general assignment for the benefit of creditors by Guarantor;          (d)   the commencement, filing or continuation of an involuntary case or proceeding   under one or more Insolvency Laws against Guarantor; or          (e)   the appointment of a receiver, liquidator, custodian, sequestrator, trustee or other   similar officer who exercises control over Guarantor or any substantial part of the assets of   Guarantor, as applicable;    provided, however, that any proceeding or case under (d) or (e) above shall not be a Guarantor   Bankruptcy Event until the ninetieth (90th) day after filing (if not earlier dismissed) so long as   such proceeding or case occurred without the consent, encouragement or active participation of   (1) Borrower, Guarantor or Key Principal, (2) any Person Controlling Borrower, Guarantor or   Key  Principal, or (3) any Person Controlled by or under common Control with Borrower,   Guarantor or Key Principal (in which event such case or proceeding shall be a Guarantor   Bankruptcy Event immediately).    "Guarantor's General Business Address" has the meaning set forth in the Summary of Loan   Terms.    "Guarantor's Notice Address" has the meaning set forth in the Summary of Loan Terms.    "Guaranty"  means, individually and collectively, any Payment Guaranty, Non-Recourse   Guaranty or other guaranty executed by Guarantor in connection with the Mortgage Loan.    "Immediate Family Members" means a child, stepchild, grandchild, spouse,  sibling, or parent,   each of whom is not a Prohibited Person.    "Imposition Deposits" has the meaning set forth in the Security Instrument.    "Impositions" has the meaning set forth in the Security Instrument.    "Improvements" has the meaning set forth in the Security Instrument.    "Indebtedness" has the meaning set forth in the Security Instrument.    "Initial Replacement Reserve Deposit" has the meaning set forth in the Summary of Loan   Terms.    "Insolvency Laws" means the United States Bankruptcy Code, 11 U.S.C. Section 101, et seq.,   together with any other federal or state law affecting debtor and creditor rights or relating to the   bankruptcy, insolvency, reorganization, arrangement, moratorium, readjustment of debt,    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                         Page6  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

 dissolution, liquidation or similar laws, proceedings, or equitable principles affecting the   enforcement of creditors' rights, as amended from time to time.    "Insolvent" means:          (a)   that the sum total of all of a specified Person's liabilities (whether secured or   unsecured, contingent or fixed, or liquidated or unliquidated) is in excess of the value of such   Person's non-exempt assets, i.e., all of the assets of such Person that are available to satisfy   claims of cred~tors; or          (b)   such Person's inability to pay its debts as they become due.    "Intended Prepayment  Date" means the date upon which Borrower intends to make a   prepayment on the Mortgage Loan, as set forth in the Prepayment Notice.    "Interest Accrual Method" has the meaning set forth in the Summary of Loan Terms.    "Interest Only Term" has the meaning set forth in the Summary of Loan Terms.    "Interest Rate" means the Fixed Rate.    "Interest Rate Type" has the meaning set forth in the Summary of Loan Terms.    "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended.    "Investor" means any Person to whom Lender intends to (a) sell, transfer, deliver or assign the   Mortgage Loan in the secondary mortgage market, or (b) sell an MBS backed by the Mortgage   Loan.    "Key Principal" means, collectively:          (a)   the natural person(s) or entity that Controls Borrower that Lender determines is   critical to the successful operation and management of Borrower and the Mortgaged Property, as   identified as such in the Summary of Loan Terms; or          (b)   any natural person or entity who becomes a Key Principal after the date of the   Loan Agreement and is identified as such in an assumption agreement, or another amendment or   supplement to the Loan Agreement.    "Key Principal's General Business Address" has the meaning set forth in the Summary of   Loan Terms.    "Key Principal's Notice Address" has the meaning set forth in the Summary of Loan Terms.    "Land" means the land described in Exhibit A to the Security Instrument.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                         Page7  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

 "Last Interest Only Payment Date" has the meaning set forth in the Summary of Loan Terms,   if applicable.    "Late Charge" means an amount equal to the delinquent amount then due under the Loan   Documents multiplied by five percent (5% ).    "Leases" has the meaning set forth in the Security Instrument.    "Lender" means the entity identified as "Lender" in the first paragraph of the Loan Agreement   and its transferees, successors and assigns, or any subsequent holder of the Note.    "Lender's General Business Address" has the meaning set forth in the Summary of Loan   Terms.    "Lender's Notice Address" has the meaning set forth in the Summary of Loan Terms.    "Lender's Payment Address" has the meaning set forth in the Summary of Loan Terms.    "Lien" has the meaning set forth in the Security Instrument.    "Loan  Agreement" means the Multifamily Loan and Security Agreement dated as of the   Effective Date executed by and between Borrower and Lender to which this Definitions   Schedule is attached, as the same may be amended, restated, replaced, supplemented or   otherwise modified from time to time.    "Loan Amount" has the meaning set forth in the Summary of Loan Terms.    "Loan Application" means the application for the Mortgage Loan submitted by Borrower to   Lender.    "Loan  Documents" means  the Note, the Loan Agreement, the Security Instrument, the   Environmental Indemnity Agreement, the Guaranty, all guaranties, all indemnity agreements, all   Collateral Agreements, all O&M Plans, and  any other documents now or in the future executed   by Borrower, Guarantor, Key Principal, any other guarantor or any other Person in connection   with the Mortgage Loan, as such documents may be amended, restated, replaced, supplemented   or otherwise modified from time to time.    "Loan Servicer" means the entity that from time to time is designated by Lender to collect   payments and deposits and receive notices under the Note, the Loan Agreement, the Security   Instrument and any other Loan Document, and otherwise to service the Mortgage Loan for the   benefit of Lender. Unless Borrower receives notice to the contrary, the Loan Servicer shall be   the Lender originally named on the Summary of Loan Terms.    "Loan Term" has the meaning set forth in the Summary of Loan Terms.    "Loan Year" has the meaning set forth in the Summary of Loan Terms.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                         Page8  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

 "Material Commercial Lease" means:          (a)   any Lease that comprises five percent (5%) or more of the total gross income at   the Mortgaged Property on an annualized basis; or          (b)   regardless of the percentage of the total gross income at the Mortgaged Property   that it comprises, any Lease relating to:                (1)   solar power, thermal power generation, or co-power generation, or for the         installation of solar panels or any other electrical power generation equipment, and  any         related power purchase agreement;                (2)   mineral rights or rights relating to subsurface oil and/or natural gas;                (3)   telecommunications or a cell tower; or                (4)   any dwelling  unit at the Mortgaged Property leased to Guarantor, Key         Principal, or another Borrower Affiliate.    "Maturity Date" has the meaning set forth in the Summary of Loan Terms.    "Maximum Inspection Fee" has the meaning set forth in the Summary of Loan Terms.    "Maximum Repair  Cost" shall be the amount(s) set forth in the Required Repair Schedule, if   any.    "Maximum Repair Disbursement Interval" has the meaning set forth in the Summary of Loan   Terms.    "Maximum   Replacement Reserve Disbursement Interval" has the meaning set forth in the   Summary of Loan Terms.    "MBS"  means an investment security that represents an undivided beneficial interest in a pool of   mortgage loans or participation interests in mortgage loans held in trust pursuant to the terms of a   governing trust document.    "Mezzanine Debt" means a loan to a direct or indirect owner of Borrower secured by a pledge   of such owner's interest in an entity owning a direct or indirect interest in Borrower.    "Minimum  Repairs Disbursement Amount"  has the meaning set forth in the Summary of   Loan Terms.    "Minimum  Replacement Reserve Disbursement Amount" has the meaning set forth in the   Summary of Loan Terms.    "Monthly Debt Service Payment" has the meaning set forth in the Summary of Loan Terms.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                         Page9  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

"Monthly Replacement Reserve Deposit" has the meaning set forth in the Summary of Loan  Terms.   "Mortgage Loan"  means the mortgage loan made by Lender to Borrower in the principal  amount of the Note made pursuant to the Loan Agreement, evidenced by the Note and secured  by the Loan Documents that are expressly stated to be security for the Mortgage Loan.   "Mortgaged Property" has the meaning set forth in the Security Instrument.   "Multifamily Project" has the meaning set forth in the Summary of Loan Terms.   "Multifamily Project Address" has the meaning set forth in the Summary of Loan Terms.   "Net Cash Flow" means, for any specified period, the total of (a) the net rental income for the  Mortgaged Property, plus (b) other allowable income for the Mortgaged Property, if any, minus  (c) operating expenses for the Mortgaged Property, minus (d) the full amount underwritten for  the Replacement Reserve Account (regardless of whether deposits have been or will be waived  or reduced), and as adjusted for economic vacancy and other factors by Lender for the specific  asset class or loan type.   "Non-Recourse  Guaranty" means, if applicable, that certain Guaranty of Non-Recourse  Obligations of even date herewith executed by Guarantor to and for the benefit of Lender, as the  same may be amended, restated, replaced, supplemented or otherwise modified from time to  time.   "Note" means that certain Multifamily Note of even date herewith in the original principal  amount of the stated Loan Amount made by Borrower in favor of Lender, and all schedules,  riders, allonges and addenda attached thereto, as the same may be amended, restated, replaced,  supplemented or otherwise modified from time to time.   "O&M Plan" has the meaning set forth in the Environmental Indemnity Agreement.   "OFAC"  means the United States Treasury Department, Office of Foreign Assets Control, and  any successor thereto.   "Payment Date" means the First Payment Date and the first day of each month thereafter until  the Mortgage Loan is fully paid.   "Payment  Guaranty" means, if applicable, that certain Guaranty (Payment) of even date  herewith executed by Guarantor to and for the benefit of Lender, as the same may be amended,  restated, replaced, supplemented or otherwise modified from time to time.   "Permitted Encumbrance" has the meaning set forth in the Security Instrument.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                        Page 10  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

 "Permitted Mezzanine Debt" means Mezzanine Debt incurred by a direct or indirect owner or   owners of Borrower where the exercise of any of the rights and remedies by the holder or holders   of the Mezzanine Debt would not in any circumstance cause (a) a change in Control in Borrower,   Key  Principal, or Guarantor, or (b) a Transfer of a direct or indirect Restricted Ownership   Interest in Borrower, Key Principal, or Guarantor.    "Permitted Preferred Equity" means Preferred Equity that does not (a) require mandatory   dividends, distributions, payments or returns (including at maturity or in connection with a   redemption), or (b) provide the Preferred Equity owner with rights or remedies on account of a   failure to receive any preferred dividends, distributions, payments or returns (or, if such rights   are provided, the exercise of such rights do not violate the Loan Documents or are otherwise   exercised with the prior written consent of Lender in accordance with Article 11 (Liens,   Transfers and Assumptions) of the Loan Agreement and the payment of all applicable fees and   expenses as set forth in Section 11.03(g) (Further Conditions to Transfers and Assumption) of   the Loan Agreement).    "Permitted Prepayment Date" means the last Business Day of a calendar month.    "Person" means an individual, an estate, a trust, a corporation, a partnership, a limited liability   company or any other organization or entity (whether governmental or private).    "Personal Property" means all of Borrower's present and hereafter acquired right, title, and   interest in the 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, 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.    "Personalty" has the meaning set forth in the Security Instrument.    "Preferred Equity" means a direct or indirect equity ownership interest in, economic interests   in, or rights with respect to, Borrower that provide an equity owner preferred dividend,   distribution, payment, or return treatment relative to other equity owners.    "Prepayment Lockout Period" has the meaning set forth in the Summary of Loan Terms.    "Prepayment Notice" means the written notice that Borrower is required to provide to Lender in   accordance with Section 2.03 (Lockout/Prepayment) of the Loan Agreement in order to make a   prepayment on the Mortgage Loan, which shall include, at a minimum, the Intended Prepayment   Date.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                        Page 11  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

 "Prepayment  Premium"  means the amount payable by Borrower in connection with a   prepayment of the Mortgage Loan, as provided in Section 2.03 (Lockout/Prepayment) of the   Loan Agreement and calculated in accordance with the Prepayment Premium Schedule.    "Prepayment Premium Period End Date" or "Yield Maintenance Period End Date" has the   meaning set forth in the Summary of Loan Terms.    "Prepayment Premium Period Term" or "Yield Maintenance Period Term" has the meaning   set forth in the Summary of Loan Terms.    "Prepayment  Premium  Schedule" means that certain Schedule 4 (Prepayment Premium   Schedule) to the Loan Agreement.    "Prohibited Person" means:          (a)   any Person with whom Lender or Fannie Mae is prohibited from doing business   pursuant to any law, rule, regulation, judicial proceeding or administrative directive; or          (b)   any Person identified on the United States Department of Housing and Urban   Development's "Limited Denial of Participation, HUD Funding Disqualifications and Voluntary   Abstentions List," or on the General Services Administration's "System for Award Management   (SAM)" exclusion list, each of which may be amended from time to time, and any successor or   replacement thereof; or          (c)   any Person that is determined by Fannie Mae to pose an unacceptable credit risk   due to the aggregate amount of debt of such Person owned or held by Fannie Mae; or          (d)   any Person that has caused any unsatisfactory experience of a material nature with   Fannie Mae  or Lender, such as a default, fraud, intentional misrepresentation, litigation,   arbitration or other similar act.    "Property Jurisdiction" has the meaning set forth in the Security Instrument.    "Property Square Footage" has the meaning set forth in the Summary of Loan Terms.    "Publicly-Held Corporation" means a corporation, the outstanding voting stock of which is   registered under Sections 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended.    "Publicly-Held Trust" means a real estate investment trust, the outstanding voting shares or   beneficial interests of which are registered under Sections 12(b) or 12(g) of the Securities   Exchange Act of 1934, as amended.    "Rents" has the meaning set forth in the Security Instrument.    "Repair Threshold" has the meaning set forth in the Summary of Loan Terms.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                        Page 12  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

 "Repairs" means, individually and collectively, the Required Repairs, Borrower Requested   Repairs, and Additional Lender Repairs.    "Repairs Escrow Account" means the account established by Lender into which the Repairs   Escrow Deposit is deposited to fund the Repairs.    "Repairs Escrow Account Administrative Fee" has the meaning set forth in the Summary of   Loan Terms.    "Repairs Escrow Deposit" has the meaning set forth in the Summary of Loan Terms.    "Replacement Reserve Account" means the account established by Lender into which the   Replacement Reserve Deposits are deposited to fund the Replacements.    "Replacement Reserve Account  Administration Fee" has the meaning set forth m the   Summary of Loan Terms.    "Replacement Reserve Account Interest Disbursement Frequency" has the meaning set forth   in the Summary of Loan Terms.    "Replacement Reserve Deposits" means the Initial Replacement Reserve Deposit, Monthly   Replacement Reserve Deposits and any other deposits to the Replacement Reserve Account   required by the Loan Agreement.    "Replacement Threshold" has the meaning set forth in the Summary of Loan Terms.    "Replacements" means, individually and collectively, the Required Replacements, Borrower   Requested Replacements and Additional Lender Replacements.    "Required Repair Schedule" means that certain Schedule 6 (Required Repair Schedule) to the   Loan Agreement.    "Required Repairs" means those items listed on the Required Repair Schedule.    "Required Replacement Schedule" means that certain Schedule 5 (Required Replacement   Schedule) to the Loan Agreement.    "Required Replacements" means those items listed on the Required Replacement Schedule.    "Reserve/Escrow Account  Funds"  means, collectively, the funds on deposit in the   Reserve/Escrow Accounts.    "Reserve/Escrow Accounts" means, together, the Replacement Reserve Account and the   Repairs Escrow Account.    "Residential Lease" means a Lease of an individual dwelling unit.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                        Page 13  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

 "Restoration" means restoring and repairing the Mortgaged Property to the equivalent of its   physical condition immediately prior to such casualty or to another condition approved by   Lender following a casualty.    "Restricted Ownership Interest" means, with respect to any entity, the following:          (a)   if such entity is a general partnership or a joint venture, fifty percent (50%) or   more of all general partnership or joint venture interests in such entity;          (b)   if such entity is a limited partnership:                (1)   the interest of any general partner; or                (2)   fifty percent (50%) or more of all limited partnership interests in such         entity;          (c)   if such entity is a limited liability company or a limited liability partnership:                (1)   the interest of any managing member or the contractual rights of any non-        member manager; or                (2)   fifty percent (50%) or more of all membership or other ownership interests         in such entity;          (d)   if such entity is a corporation (other than a Publicly-Held Corporation) with only   one class of voting stock, fifty percent (50%) or more of voting stock in such corporation;          (e)   if such entity is a corporation (other than a Publicly-Held Corporation) with more   than one class of voting stock, the amount of shares of voting stock sufficient to have the power   to elect the majority of directors of such corporation; or          (f)   if such entity is a trust (other than a land trust or a Publicly-Held Trust), the power   to Control such trust vested in the trustee of such trust  or the ability to remove, appoint or   substitute the trustee of such trust (unless the trustee of such trust after such removal,   appointment or substitution is a trustee identified in the trust agreement approved by Lender).    "Review Fee" means the non-refundable fee of $3,000 payable to Lender.    "Sanctioned Country" means a country subject to either a targeted or comprehensive country­  wide sanctions program administered and enforced by OFAC, which list is updated from time to   time.    "Sanctioned Person" means (a) a Person named on the list of "Specially Designated Nationals   and Blocked Persons" maintained by OFAC, available at http://www.treasury.gov/resource­  center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time; (b)   (1) an agency of the government of a Sanctioned Country, (2) an organization controlled by a   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                        Page 14  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

Sanctioned Country, or (3) a Person resident in a Sanctioned Country, to the extent any Person  described in clauses (1), (2) or (3) is the subject of a sanctions program administered by OFAC;  and, (c) a Person whose property and interests in property are blocked pursuant to an Executive  Order or regulations administered by OFAC consistent with the guidance issued by OFAC.   "Schedule of Interest Rate Type Provisions" means that certain Schedule 3 (Schedule of  Interest Rate Type Provisions) to the Loan Agreement.   "Security Instrument" means that certain multifamily mortgage, deed to secure debt or deed of  trust executed and delivered by Borrower as security for the Mortgage Loan and encumbering  the Mortgaged Property, including all riders or schedules attached thereto, as the same may be  amended, restated, replaced, supplemented or otherwise modified from time to time.   "Servicing Arrangement" means any arrangement between Lender and the Loan Servicer for  loss sharing or interim advancement of funds.   "Summary  of Loan Terms" means that certain Schedule 2 (Summary of Loan Terms) to the  Loan Agreement.   "Taxes" has the meaning set forth in the Security Instrument.   "Title Policy" means the mortgagee's loan policy of title insurance issued in connection with the  Mortgage Loan and insuring the lien of the Security Instrument as set forth therein, as approved  by Lender.   "Total Parking Spaces" has the meaning set forth in the Summary of Loan Terms.   "Total Residential Units" has the meaning set forth in the Summary of Loan Terms.   "Transfer" means:         (a)   a sale, assignment, transfer or other disposition (whether voluntary, involuntary,  or by operation of law), other than Residential Leases, Material Commercial Leases or non­ Material Commercial Leases permitted by this Loan Agreement;         (b)   a granting, pledging, creating or .attachment of a lien, encumbrance or security  interest (whether voluntary, involuntary, or by operation of law);         (c)   an issuance or other creation of a direct or indirect ownership interest;         (d)   a withdrawal, retirement, removal or involuntary resignation of any owner or  manager of a legal entity; or         (e)   a merger, consolidation, dissolution or liquidation of a legal entity.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                        Page 15  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

 "Transfer Fee" means a fee equal to one percent ( 1%  ) of the unpaid principal balance of the   Mortgage Loan payable to Lender.    "UCC" has the meaning set forth in the Security Instrument.    "UCC Collateral" has the meaning set forth in the Security Instrument.    "Voidable Transfer" means any fraudulent conveyance, preference or other voidable or   recoverable payment of money or transfer of property.    "Yield Maintenance Period End Date" or "Prepayment Premium Period End Date" has the   meaning set forth in the Summary of Loan Terms.    "Yield Maintenance Period Term" or "Prepayment Premium Period Term" has the meaning   set forth in the Summary of Loan Terms.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)     Form 6101.FR                        Page 16  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

                                                          Borrower Initials    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)           Form 6101.FR                           Initial Page  Fannie Mae                                      12-17                        © 2017 Fannie Mae  

 

                                  SCHEDULE2               TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                                Summary of Loan Terms                            (Interest Rate Type - Fixed Rate)                                      STAR III SWEETWATER, LLC, a Delaware limited   Borrower                                    liability company                                     BERKELEY     POINT    CAPITAL    LLC,   d/b/a   Lender                           NEWMARK KNIGHT      FRANK,   a Delaware limited                                    liability company                                     STEADFAST    APARTMENT     REIT  III, INC., a   Key Principal                                    Maryland corporation                                     STEADFAST    APARTMENT     REIT  III, INC., a   Guarantor                                    Maryland corporation    Multifamily Project              REFLECTIONS ON SWEETWATER                                      c/o Steadfast Companies   Borrower's   General   Business  18100 Von Karman A venue, Suite 500   Address                          Irvine, California 92612                                    Attention: General Counsel - Ana Marie del Rio                                    c/o Steadfast Companies                                    18100 Von Karman Avenue, Suite 500                                    Irvine, California 92612                                    Attention: General Counsel - Ana Marie del Rio                                    Email: anamarie.delrio@steadfastco.com    Borrower's Notice Address        Lender is permitted to include the request of a courtesy                                    copy of notices as follows:                                     with a courtesy copy to Borrower's counsel: 1                                       DeFrenza Lee LLP                                       3200 Park Center Drive, Suite 1160                                       Costa Mesa, California 92626                                       Attention: Marcello F. De Frenza                                       Email: marc@defrenzalee.com   Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                       Page 1  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

                                  1 Lender shall endeavor to give Borrower's counsel a                                    courtesy copy of any notice given to Borrower by                                    Lender; provided, however, failure to provide such                                    courtesy copy notice shall not affect the validity or                                    sufficiency of any notice to Borrower, shall not affect                                    Lender's rights and remedies hereunder or under any                                    other Loan Document, nor subject Lender to any claim                                    by or liability to Borrower.                                      3405 SWEETWATER ROAD   Multifamily Project Address                                    LAWRENCEVILLE, GEORGIA 30044    Multifamily Project County       GWINNETT                                     c/o Steadfast Companies   Key  Principal's General Business 18100 Von Karman A venue, Suite 500   Address                          Irvine, California 92612                                    Attention: General Counsel - Ana Marie del Rio                                    c/o Steadfast Companies                                    18100 Von Karman Avenue, Suite 500   Key Principal's Notice Address   Irvine, California 92612                                    Attention: General Counsel - Ana Marie del Rio                                    Email: anamarie.delrio@steadfastco.com                                     c/o Steadfast Companies   Guarantor's   General  Business  18100 Von Karman Avenue, Suite 500   Address                          Irvine, California 92612                                    Attention: General Counsel - Ana Marie del Rio                                    c/o Steadfast Companies                                    18100 Von Karman A venue, Suite 500                                    Irvine, California 92612                                    Attention: General Counsel - Ana Marie del Rio                                    Email: anamarie.delrio@steadfastco.com   Guarantor's Notice Address                                     Lender is permitted to include the request of a courtesy                                    copy of notices as follows:                                     with a courtesy copy to Guarantor's counsel: 1   Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                       Page2  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

                                     DeFrenza Lee LLP                                       3200 Park Center Drive, Suite 1160                                       Costa Mesa, California 92626                                       Attention: Marcello F. De Frenza                                       Email: marc@defrenzalee.com                                     1 Lender shall endeavor to give Guarantor's counsel a                                    courtesy copy of any notice given to Guarantor by                                    Lender; provided, however, failure to provide such                                    courtesy copy notice shall not affect the validity or                                    sufficiency of any notice to Guarantor, shall not affect                                    Lender's rights and remedies hereunder or under any                                    other Loan Document, nor subject Lender to any claim                                    by or liability to Guarantor.                                     7700 Wisconsin A venue, Suite 1100   Lender's General Business Address                                    Bethesda, Maryland 20814                                    Berkeley Point Capital LLC, d/b/a Newmark Knight                                    Frank                                    225 Franklin Street, Suite #1800   Lender's Notice Address          Boston, Massachusetts 02110                                    Attention: Director Loan Servicing                                    OR                                    email: MF-Servicing.Reguests@ngkf.com    Lender's Payment Address         See Below    Payment Mailing Address:    Payment Overnight Address: Payment Wiring Instructions:   Berkeley Point Capital LLC, d/b/a Berkeley Point Capital LLC, d/b/a PNCBank,NA   Newmark Knight Frank        Newmark Knight Frank     ABA#043000096   Lockbox                     Lockbox                  Berkeley Point Capital LLC, d/b/a   Box 773194                  Box 773194               Newmark Knight Frank   3194 Solutions Center       350 East Devon A venue   Credit #1019788912   Chicago, IL 60677-3001      Itasca, IL 60143         Ref Loan #201940580     Property Square Footage          787,000    Total Parking Spaces             539    Total Residential Units          280   Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                       Page3  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

                                        Yes  I Affordable Housing Property                                   1~     No     Amortization Period              three hundred sixty (360) months                                     D     Amortizing   Amortization Type                D     Full Term Interest Only                                    ~     Partial Interest Only    Effective Date                   as of May 31, 2019.    First Payment Date               The first day of July, 2019.    First  Principal  and   Interest   Payment Date                     The first day of July, 2024.     Fixed Rate                       3.73%                                     D     30/360 (computed  on the basis of a three                                    hundred sixty (360) day year consisting of twelve (12)                                    thirty (30) day months).                                    or                                    ~     Actual/360 (computed  on the basis of a three   Interest Accrual Method          hundred sixty (360) day year and the actual number of                                    calendar days during the applicable month, calculated                                    by multiplying the unpaid principal balance of the                                    Mortgage Loan by the Interest Rate, dividing the                                    product by three hundred sixty (360), and multiplying                                    the quotient obtained by the actual number of days                                    elapsed in the applicable month).    Interest Only Term               60 months    Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                       Page4  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

Interest Rate                    The Fixed Rate   Interest Rate Type               Fixed Rate   Last Interest Only Payment Date  The first day of June, 2024.   Loan Amount                      $30,265,000.00   Loan Term                        120 months                                    The period beginning on the Effective Date and ending  Loan Year                        on the last day of May, 2020, and each successive                                   twelve (12) month period thereafter.                                    The first day of June, 2029, or any earlier date on  Maturity Date                    which the unpaid principal balance of the Mortgage                                   Loan becomes due and payable by acceleration or                                   otherwise.                                    (i)   $94,073.71 for the First Payment Date;                                   (ii)  for each Payment Date thereafter through and                                         including the Last Interest Only Payment Date:                                         (a)   $87,802.13 if the prior month was a 28-                                              day month;                                         (b)   $90,937.92 if the prior month was a 29-                                              day month;  Monthly Debt Service Payment            (c)  $94,073.71 if the prior month was a 30-                                              day month; and                                         (d)   $97,209.50 if the prior month was a 31-                                              day month; and                                   (iii)  $139,818.69 for the First Principal and Interest                                         Payment  Date  and  each  Payment  Date                                         thereafter until the Mortgage Loan is fully                                         paid.   Prepayment Lockout Period        The O Loan Year of the term of the Mortgage Loan.    Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                      Page5  Fannie Mae                               12-17                   © 2017 Fannie Mae  

 

 Yield  Maintenance Period  End  The last day of November, 2028.   Date     Prepayment  Premium Period End   Date    Yield Maintenance Period Term                  or                                   one hundred fourteen (114) months   Prepayment    Premium    Period   Term                                     Within six (6) months after the Effective Date or as   Completion Period                                   otherwise shown on the Required Repair Schedule.    Initial  Replacement   Reserve  $O   Deposit    Maximum Inspection Fee          $1,000.00    Maximum    Repair Disbursement   Interval                        One ( 1) time per calendar month.    Maximum    Replacement Reserve         .   Disbursement Interval           One ( 1) time per calendar month.    Minimum   Repairs Disbursement   Amount                          $5,000.00    Minimum   Replacement  Reserve  $S,OOO.OO   Disbursement Amount    Monthly   Replacement  Reserve  $ ,  _                                   5 506 67   Deposit    Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                       Page6  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

 Repair Threshold                $25,000.00    Repairs     Escrow     Account                                   $0.00, payable one time   Administrative Fee    Repairs Escrow Deposit          $226,086.00    Replacement   Reserve  Account                                   $0.00, payable annually   Administration Fee    Replacement   Reserve  Account                                   quarterly   Interest Disbursement Frequency    Replacement Threshold           $10,000.00    Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                       Page7  Fannie Mae                               12-17                    © 2017 Fannie Mae  

 

                                                          B~mtla s             Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate)     Form 6102.FR                           Initial Page  Fannie Mae                                      12-17                        © 2017 Fannie Mae  

 

                                 SCHEDULE3              TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                        Schedule of Interest Rate Type Provisions                                    (Fixed Rate)   1.    Defined Terms.         Capitalized terms not otherwise defined in this Schedule have the meanings given to such  terms in the Definitions Schedule to the Loan Agreement.   2.    Interest Accrual.         Except as otherwise provided in the Loan Agreement, interest shall accrue at the Interest  Rate until fully paid.    Schedule 3 to Multifamily Loan and  Security Agreement - Interest Rate Type  Provisions (Fixed Rate)              Form 6103.FR                         Page 1  Fannie Mae                              01-11                    © 2011 Fannie Mae  

 

Schedule 3 to Multifamily Loan and  Security Agreement - Interest Rate Type  Provisions (Fixed Rate)                    Form 6103.FR                           Initial Page  Fannie Mae                                     01-11                        © 2011 Fannie Mae  

 

                                 SCHEDULE4              TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                             Prepayment Premium Schedule                       (Standard Yield Maintenance - Fixed Rate)   1.    Defined Terms.         All capitalized terms used but not defined in this Prepayment Premium Schedule shall  have the meanings assigned to them in the Loan Agreement.   2.    Prepayment Premium.         Any Prepayment Premium payable under Section 2.03 (Lockout/Prepayment) of the Loan  Agreement shall be computed as follows:         (a)   If the prepayment is made at any time after the Effective Date and before the  Yield Maintenance Period End Date, the Prepayment Premium shall be the greater of:               ( 1)  one percent ( 1%  ) of the amount of principal being prepaid; or               (2)   the product obtained by multiplying:                     (A)   the amount of principal being prepaid,                     by                     (B)   the difference obtained by subtracting from the Fixed Rate on the              Mortgage Loan, the Yield Rate (as defined below) on the twenty-fifth (25th)              Business Day preceding (i) the Intended Prepayment Date, or (ii) the date Lender              accelerates the Mortgage Loan or otherwise accepts a prepayment pursuant to              Section 2.03(d) (Application of Collateral) of the Loan Agreement,                     by                     (C)   the present value factor calculated using the following formula:                                       1 - (1 + rrn/12                                            r                           [r =  Yield Rate                           n =   the number of months remaining between (i) either of the                                following: (x) in the case of a voluntary prepayment, the                                last day of the month in which the prepayment is made, or                                (y) in any other case, the date on which Lender accelerates  Schedule 4 to Multifamily Loan and  Security Agreement (Prepayment Premium  Schedule - Standard Yield Maintenance - Fixed Rate)                           Form 6104.01                       Page 1  Fannie Mae                               08-13                  © 2013 Fannie Mae  

 

                              the unpaid principal balance of the Mortgage Loan and                                (ii) the Yield Maintenance Period End Date.                                 For purposes of this clause (2), the "Yield Rate" means the                                yield calculated by interpolating the yields for the                                immediately shorter and longer term U.S. "Treasury                                constant maturities" (as reported in the Federal Reserve                                Statistical Release H.15 Selected Interest Rates (the "Fed                                Release") under the heading "U.S. government securities")                                closest to the remaining term of the Yield Maintenance                                Period Term, as follows (rounded to three (3) decimal                                places):                                        [ (a-b) x(z-y))+b                                        (x- y)                                 a=    the yield for the longer U.S. Treasury constant                                      maturity                                b=    the yield for the shorter U.S. Treasury constant                                      maturity                                x=    the term of the longer U.S. Treasury  constant                                      maturity                                y=    the term of the shorter U.S. Treasury  constant                                      maturity                                z=    "n"  (as defined m  the present value factor                                      calculation above) divided by twelve (12).                                 Notwithstanding any provision to the contrary, if "z" equals                                a  term reported under the U.S. "Treasury constant                                maturities" subheading in the Fed Release, the yield for                                such term shall be used, and interpolation shall not be                                necessary. If publication of the Fed Release is discontinued                                by the Federal Reserve Board, Lender shall determine the                                Yield Rate from another source selected by Lender. Any                                determination of the Yield Rate by Lender will be binding                                absent manifest error.]         (b)   If the prepayment is made on or after the Yield Maintenance Period End Date but  before the last calendar day of the fourth (4th) month prior to the month in which the Maturity  Date occurs, the Prepayment Premium shall be one percent (1 % ) of the amount of principal  being prepaid.    Schedule 4 to Multifamily Loan and  Security Agreement (Prepayment Premium  Schedule - Standard Yield Maintenance - Fixed Rate)                           Form 6104.01                       Page2  Fannie Mae                               08-13                  © 2013 Fannie Mae  

 

      (c)   Notwithstanding the prov1S1ons of Section 2.03 (Lockout/Prepayment) of the  Loan Agreement, no Prepayment Premium shall be payable with respect to any prepayment  made on or after the last calendar day of the fourth (4th) month prior to the month in which the  Maturity Date occurs.    Schedule 4 to Multifamily Loan and  Security Agreement (Prepayment Premium  Schedule - Standard Yield Maintenance - Fixed Rate)                           Form 6104.01                       Page3  Fannie Mae                               08-13                 © 2013 Fannie Mae  

 

Schedule 4 to Multifamily Loan and  Security Agreement (Prepayment Premium  Schedule - Standard Yield Maintenance - Fixed Rate)                                  Form 6104.01                        Initial Page  Fannie Mae                                      08-13                      © 2013 Fannie Mae  

 

                                SCHEDULE 5 TO                 MULTIFAMILY LOAN AND SECURITY AGREEMENT                             Required Replacement Schedule       •  Mill and overlay asphalt pavement      •  Exterior wall paint      •  Exterior steel & concrete tread stairs      •  Individual domestic water heaters      •  Split system, air cooled condensing units      •  Finishes in common area toilet rooms      •  Resilient (vinyl) flooring      •  Carpet      •  Refrigerators      •  Dishwashers      •  Microwaves      •  Clothes Dryers      •  Clothes Washers    Requests for reimbursement of costs may only be made for the replacement of the components   specified above. Releases will not be allowed for parts or ongoing repairs and maintenance of   these items. Labor costs for in-house personnel may not be included.    Multifamily Loan and Security Agreement  (Non-Recourse)                        Form 6001.NR                         Page 1  Schedule 5                               04-18                    © 2018 Fannie Mae  

 

                                                          Borrower Initials    Multifamily Loan and Security Agreement  (Non~Recourse)                              Form 6001.NR                            Initial Page  Schedule 5                                      04-18                        © 2018 Fannie Mae  

 

                                        SCHEDULE 6 TO                     MULTIFAMILY LOAN AND SECURITY AGREEMENT                                       Required Repair Schedule                                  COMPLETION REPAIR RE      1. Remedy and Repair A small stain was noted at the ceiling AC                                                                 $700        WAIVED           $0    Unit Ceilin Stain  re ·ster near the kitchen in Unit 434.    2. Visual Barrier                       Visual barrier protection for the blind is not    Protection Behind                                           $5,500       WAIVED           $0                       located at breezeway stairs of all buildings    Stairwa s    3. Repair Trip Hazard A trip hazard was noted in the pool area and                                                                 $350        WAIVED           $0    in Pool Area       should be round down.                       CBRE recommends a short-term radon test can                       be placed into Unit #418 and an additional unit                       in Building 2. Additional testing in the form of    4. Radon Testing   long term testing or mitigation would be  $150        WAIVED           $0                       recommended if the results of this short term                       radon test can are at or exceed the EPA Action                       Level.                        Significant stretches of sidewalks sections are                       severely cracked and deteriorated. Remove    1. Replace Concrete deteriorated sections, prepare bed, and install                                                                $3,500       WAIVED           $0    Sidewalk Sections  new Sidewalks. Such conditions of settlement                       were noted at Buildings 2 and 3 at curb cut to                       sidewalk connection.                       Sidewalk sections that exhibit cracks but that do                       not warrant replacement should have all cracks    2. Repair sidewalk pointed with a non-shrinking grout. Such                                                                 $900        WAIVED           $0    Cracks             conditions of cracking were noted at sidewalks                       leading from parking areas to Buildings 3, 5, 7                       and 8.    3. Replace Concrete                       Extensive cracking and deterioration observed. $10,000 WAIVED          $0    Pool Deck                       Property management stated resurfaced in 2017    4. Tennis Court                       and yet it was observed with cracking and $5,000      WAIVED           $0    Resurfacing                       surface eelin .    5. Van-Designated  No van designated signage at van spaces to                                                                 $500        WAIVED           $0    Vertical Si a  e   resident buildinos.    6. Roll-Under Knee Add pipe protection to common toilets with pool                                                                 $300        WAIVED           $0    Protection         men's and women's restroom.                       Slope of sidewalk from parking curb cut to    7. Sidewalk Slope                                           $1,000       WAIVED           $0                       Building 4 too stee for ADA com liance.    8. Playground      Playground not accessible due to wood timber                                                                 $500        WAIVED           $0    Accessibilit       board.   Multifamily Loan and  Security Agreement  (Non-Recourse)                                 Form 6001.NR                                  Page 1  Schedule 6                                          04-18                         © 2018 Fannie Mae  

 

                     Replace existing apartment manual thermostats    1. Install programmable                       with smart programmable thermostats and  $47,320        100%         $47,320    thermostats                       program custom schedules in all units.                        Replace 6% of existing split system condensing    2. Install or replace                       units with electric resistance heating with 18 $84,100  100%         $84,100    heat pumps                       SEER/10 HSPF heat pump units.                        Replace interior apartment incandescent,    3. Upgrade in-unit                       compact, circling or linear fluorescent lamps $62,347   100%         $62,347    lighting                       with LED lam s in aJJ units.    4. Install low-flow bath Replace high nominal flow bathroom faucet                                                                $5,969         100%          $5,969    faucets            aerators with 0.5 m aerators in all units.    5. Install low-flow Replace high nominal flow showerheads with                                                                 $929          100%           $929    showerheads         1.5 m showerheads in 40 units.                       Install thermostatic shut off valves and auto-   6. Upgrade controls diverters on 280 shower/tub combinations to $25,421    100%         $25,421                       eliminate behavioral water waste in all units.                                         TOTAL  REPAIR  COST:  $254,486  TOTAL ESCROW:      $226,086    Multifamily Loan and  Security Agreement  (Non-Recourse)                                 Form 6001.NR                                  Page2  Schedule 6                                          04-18                         © 2018 Fannie Mae  

 

                                                          Borrower Initials    Multifamily Loan and Security Agreement  (Non-Recourse)                              Form 6001.NR                           Initial Page  Schedule 6                                      04-18                        © 2018 Fannie Mae  

 

                                 SCHEDULE 7 TO                 MULTIFAMILY LOAN AND SECURITY AGREEMENT                   Exceptions to Representations and Warranties Schedule           1. With respect to the representation under Section 11.0l(a) of this Loan Agreement,         Borrower notes the following exception:          Ongoing general maintenance and upkeep of the Mortgaged Property and upgrades in         connection with residential unit turns performed in the ordinary course of business at the         Mortgaged Property, all such work subject to any and all requirements set forth in this         Loan Agreement and the other Loan Documents; all invoices for the same to be paid by         Borrower when due.    Multifamily Loan and Security Agreement   (Non-Recourse)                       Form 6001.NR                         Page 1  Schedule 7                               04-18                    © 2018 Fannie Mae  

 

                                                          Borrower Initials    Multifamily Loan and Security Agreement  (Non-Recourse)                              Form 6001.NR                           Initial Page  Schedule 7                                      04-18                        © 2018 Fannie Mae  

 

                                  EXHIBIT A       MODIFICATIONS TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                            (Waiver of Imposition Deposits)         The foregoing Loan Agreement is hereby modified as follows:          1.   Capitalized terms used and not specifically defined herein have the meanings  given to such terms in the Loan Agreement.         2.    The  Definitions Schedule is hereby amended by adding the following new  definitions in the appropriate alphabetical order:         "Insurance Impositions" means the premiums for maintaining all Required        Insurance Coverage.         "Required  Insurance Coverage" means  the insurance coverage required        pursuant to Article 9 (Insurance) of the Loan Agreement and under any other        Loan Document.         3.    Section 12.02 (Imposition Deposits, Taxes, and Other Charges - Covenants) of  the Loan Agreement is hereby amended by adding the following provisions to the end thereof:                (b)  Conditional Waiver of Collection of Imposition Deposits.                      (1)  Notwithstanding anything contained in this Section 12.02              (Imposition Deposits, Taxes, and Other Charges - Covenants) to the              contrary, Lender hereby agrees to waive the collection of Imposition              Deposits for Insurance Impositions, provided, that:                           (A)   Borrower shall pay such Insurance Impositions                    directly to the carrier or agent ten (10) days prior to expiration or                    as necessary to prevent the Required Insurance Coverage from                    lapsing due to non-payment of premiums;                           (B)   Borrower  shall provide Lender with proof of                    payment acceptable to Lender of all Insurance Impositions within                    five (5) days after the date such Insurance Impositions are paid;                    and                           (C)   Borrower shall cause its insurance agent to provide                    Lender with such certifications regarding the Required Insurance                    Coverage as Lender may request from time to time evidencing that                    the Insurance Impositions have been paid in a timely manner and    Modifications to Multifamily Loan and  Security Agreement (Waiver of Imposition  Deposits)                              Form6228                           Page 1  Fannie Mae                               04-12                   © 2012 Fannie Mae  

 

                   that all of the Required Insurance Coverage is in full force and                     effect.                      (2)  Lender reserves the right to require Borrower to deposit the               Imposition Deposits with Lender on each Payment Date for Insurance              Impositions in accordance with this Section 12.02 (Imposition Deposits,              Taxes, and Other Charges - Covenants) upon:                            (A)  Borrower's failure to pay Insurance Impositions or                    to provide Lender with proof of payment of Insurance Impositions                     as required in this Section 12.02(b) (Conditional Waiver of                     Collection of Imposition Deposits);                            (B)  Borrower's failure to maintain insurance coverage                    in accordance with the requirements of Article 9 (Insurance);                            (C)  the occurrence of any Transfer which is not                    permitted by the Loan Documents, or any Transfer which requires                    Lender's consent; or                            (D)  the occurrence of a default under any of the other                    terms, conditions and covenants set  forth in this Loan Agreement                    or any of the other Loan Documents.                      (3)  Except as specifically provided in this Section 12.02(b)              (Conditional Waiver of Collection of Imposition Deposits), the provisions              of  Article 9 (Insurance) shall remain in full force and effect.    Modifications to Multifamily Loan and  Security Agreement (Waiver of Imposition  Deposits)                              Form6228                           Page2  Fannie Mae                               04-12                   © 2012 Fannie Mae  

 

                                                         Borrower Initials    Modifications to Multifamily Loan and  Security Agreement (Waiver of Imposition  Deposits)                                     Form 6228                            Initial Page  Fannie Mae                                      04-12                       © 2012 Fannie Mae  

 

                                  EXHIBITB       MODIFICATIONS TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                               (Green Mortgage Loan)         The foregoing Loan Agreement is hereby modified as follows:          1.    Capitalized terms used and not specifically defined herein have the meanings               given to such terms in the Loan Agreement.         2.     The following Article is hereby added to the Loan Agreement as Article 16 (Green  Mortgage Loan):                   ARTICLE 16 -    GREEN MORTGAGE LOAN         Section 16.01 Covenants.                (a)  Borrower  shall (1) track and report the energy and water        consumption and cost for all energy and water sources, metered and unmetered         (e.g., unmetered sources including invoiced delivery of fuel oil or wood pellets, or        use of well water), that provide energy and water service to the Mortgaged        Property using the United States Environmental Protection Agency's ENERGY        STAR®   Portfolio Manager; and (2) perform any other ongoing monitoring        necessary for tracking and reporting the energy and water consumption        performance and energy and water costs of the Mortgaged Property in ENERGY        STAR   Portfolio Manager.                (b)  Borrower shall include with the delivery of items required under        Section 8.02(b)(2), the Fannie Mae Energy Performance Metrics report, as        generated by ENERGY    STAR   Portfolio Manager (or any successor or        replacement application), for the Mortgaged Property for such calendar year. All        fields applicable to the Mortgaged Property must be filled out, regardless of        whether such field is listed in Portfolio Manager as "optional," and which must        result in a report that includes all of the following information for the Mortgaged        Property:                     (1)   the ENERGY STAR score;                     (2)   the Source Energy Use Intensity (EUI);                     (3)   the annual cost of each energy type;                     (4)   the EPA Water Score;                     (5)   the Water Use Intensity (WUI);    Modifications to Multifamily Loan and Security  Agreement (Green Mortgage Loan)          Form6241                         Page 1  Fannie Mae                                 12-18                 © 2018 Fannie Mae  

 

                   (6)   the annual cost of water;                      (7)   the month and year ending period for items (1) through (6)               above;and                      (8)   the ENERGY     STAR   Portfolio Manager  Property               Identification Number.                (c)   Borrower shall furnish to Lender such  other energy, water, waste,         and other utility information relating to the Mortgaged Property as Lender may        request, and shall permit Lender, its agents, representatives, and designees to enter        upon and inspect the Mortgaged Property for such purposes (subject to the rights of        tenants under the Leases) (i) during normal business hours, (ii) at such other        reasonable time upon reasonable notice of not less than one (1) Business Day, and         (iii) at any time after an Event of Default has occurred and is continuing.    Modifications to Multifamily Loan and Security  Agreement (Green Mortgage Loan)          Form6241                         Page2  Fannie Mae                                 12-18                 © 2018 Fannie Mae  

 

                                                          B  rrowerK. mtia s     Modifications to Multifamily Loan and Security  Agreement (Green Mortgage Loan)                  Form 6241                         Initial Page  Fannie Mae                                         12-18                    © 2018 Fannie Mae

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