Document:

ex1011loanagreementvista

                                                    EXHIBIT 10.11         MULTIFAMILY LOAN AND      SECURITY AGREEl\lIENT                        (NON-RECOURSE)                         BY AND BETWEEN     STAR III VISTA RIDGE, LLC, a Delaware limited liability company                               AND    PNC BANK, NATIONAL ASSOCIATION, a national banking association                           DATED AS  OF                           May 31, 2019    ~ FamrieMae,  

 

                               TABLE OF CONTENTS   ARTICLE 1 -  DEFINITIONS; SUMMARY OF MORTGAGE LOAN TERMS ................................. 1    SECTION 1.0 I  DEFINED TERMS •.•...•..•...•..•.•.••.••.•..•..•...••••...•...••.........•..••..•..•...•..•...••.......••...•..•..•....•..• 1    SECTION 1.02   SCHEDULES. EXHI131TS, AND AlTACHMENTS INCORPORATED •......•..••..•....•...••.••..•.•..... I  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)   Capilalization of Accrued But Unpaid lnterest. ......................................................................... 3       ( c) Late Charges .............................................................................................................................. 3       ( d) Default Rate .............................................................................................................................. .4       (e)  Address for Payments ................................................................................................................ 5       (f)  Application of Payments ............................................................................................................ 5     SECTION 2.03  LOCKOUT/l'REPA YMENT .•............•..•..•..•••••..•.......•..••..••..•..•...........•..•..••..•.••..•...........•... 5       (a)   Prepayment; Prepayment Lockout; Prepayment Premium ........................................................ 5       (b)  Voluntary Prepayment in Full ................................................................................................... 6       (c)  Acceleration of Mortgage Loan ................................................................................................. 6       (d)  Application of Collateral ........................................................................................................... 7       ( e)  Casualty and Condemnation ...................................................................................................... 7       (f)  No Effect on Payment Obligations ............................................................................................ 7       (g)   Loss Resulting from Prepayment. .............................................................................................. 7   ARTICLE 3 - PERSONAL LIABILITY ................................................................................................... 8     SECTION 3.0 I NON-RECOURSE  MORTGAGE  LOAN; EXCEPTIONS ..•...•..•.•••..•...•..••..•..••..•..•..•..•...•.•..•..• 8     SECTION 3.02  PERSONAL LIABILITY OF BORROWER (EXCEPTIONS TO NON-RECOURSE PROVISION).8       (a)   Personal Liability Based on Lender's Loss ............................................................................... 8       (b)   Full Personal Liability for Mortgage Loan ................................................................................ 9     SECTION 3.03  PERSONAL LIA131LITY FOR INDEMNITY OBLIGATIONS ................................................ 10     SECTION 3.04  LENDER'S RIGHT TO FOREGO RIGHTS AGAINST MORTGAGED PROPERTY ..•.••.••.••.•..• 10   ARTICLE 4-  BORROWER STATUS .................................................................................................... 10     SECTION 4.0 l REPRESENTATIONS AND \V ARRANTIES ....................................................................... l 0       (a)   Due Organization and Qualification ........................................................................................ 10       (b)   Location ................................................................................................................................... 10       (c)   Power and Authority ................................................................................................................ 11       (d)   Due Authorization ................................................................................................................... 11       (e)   Valid and Binding Obligations ................................................................................................ 11       (f)   Effect of Mortgage Loan on Borrower's Financial Condition ................................................. 11       (g)   Economic Sanctions, Anti-Money Laundering, and Anti-Corruption ..................................... 11       (h)   Borrower Single Asset Status .................................................................................................. 12       (i)   No Bankruptcies or Judgments ................................................................................................ 13       U)    No Actions or Litigation .......................................................................................................... 14       (k)   Payment of Taxes, Assessments, and Other Charges .............................................................. 14    Multifamily Loan and Security Agreement   (Non-Recourse)                          Form 6001.NR                              Page i   Fannie Mac                                  04-18                      © 2018 Fannie Mac  

 

   (I)   Not a Foreign Person ............................................................................................................... 14     ( m)  ERi SA ...................................................................................................................................... 14      ( n) Defau It Under Other Ob Iigations  ............................................................................................. 15      (o)  Prohibited Person ..................................................................................................................... 15      (p)  No Contravention ..................................................................................................................... 15      (q)  Lockbox Arrangement. ............................................................................................................ 15    SECTION 4.02 COVENANTS ................................................................................................................. 15      (a)  Maintenance of Existence; Organizational Documents ........................................................... 15      (b)  Economic Sanctions, Anti-Money Laundering, and Anti-Corruption ..................................... 16      (c)  Payment of Taxes, Assessments. and Other Charges .............................................................. 16      (d)  Borrower Single Asset Status .................................................................................................. 17      (e)  ERISA ...................................................................................................................................... 18      (t)  Notice of Litigation or lnsolvency ........................................................................................... 18      (g)  Payment of Costs, Fees, and Expenses .................................................................................... 18      (h)  Restrictions on Distributions ................................................................................................... 19      (i)  Lock box Arrangement. ............................................................................................................ 19  ARTICLE 5- THE MORTGAGE LOAN .............................................................................................. 19    SECTION 5.01 REPRESENTATIONS AND \V ARRANTIES ....................................................................... 19      (a)  Receipt and Review of Loan Documents ................................................................................ 19      (b)  No Default. .............................................................................................................................. 19      (c)  No Defenses ............................................................................................................................. 19      ( d) Loan Document Taxes ............................................................................................................. 20    SECTION 5 .02 COVENANTS .................................................................................................................20       (a)  Ratification of Covenants; Estoppels; Ce11ifications ............................................................... 20      (b)  Further Assurances .................................................................................................................. 20      (c)  Sale of Mortgage Loan ............................................................................................................ 21      (d)  Limitations on Further Acts of Borrower ................................................................................ 21      (e)  Financing Statements; Record Searches .................................................................................. 22      ( t) Loan Document Taxes ............................................................................................................. 22  ARTICLE 6 - PROPERTY USE, PRESERVATION, AND   MAINTENANCE .................................. 22    SECTION 6.0 I REPRESENTATIONS AND \V ARRANTIES .......................................................................22       (a)  Compliance with Law; Permits and Licenses .......................................................................... 22      (b)  Property Characteristics ........................................................................................................... 23      (c)  Property Ownership ................................................................................................................. 23      (d)  Condition of the Mortgaged Property ...................................................................................... 23      (e)  Personal Properly ..................................................................................................................... 23    SECTION 6. 02 COVENANTS .................................................................................................................24       (a)  Use of Property ........................................................................................................................ 24      (b)  Prope11y Maintenance .............................................................................................................. 24      (c)  Property Preservation ............................................................................................................... 26      ( d) Property Inspections ................................................................................................................ 26      ( e) Compliance with Laws ............................................................................................................ 2 7    SECTION 6.03 MORTGAGE LOAN ADMINISTRATION MATTERS REGARDING THE PROPERTY ............ 27      (a)  Property Management. ............................................................................................................. 27       (b)  Subordination of Fees to Affiliated Property Managers .......................................................... 27      (c)  Property Condition Assessment. .............................................................................................. 27    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                         Page ii  Fannie Mac                              04-18                    © 2018 Fannie Mac  

 

ARTICLE 7 -  LEASES  AND  RENTS ..................................................................................................... 28     SECTION 7.01  REPRESENT A TIO NS AND \V ARRANTIES .......................................................................28       (a)   Prior Assignment of Rents ....................................................................................................... 28      (b)   Prepaid Rents ........................................................................................................................... 28    SECTION 7.02  COVENANTS .................................................................................................................28       (a)   Leases ...................................................................................................................................... 28      (b)   Commercial Leases .................................................................................................................. 29      (c)   Payment ofRents ..................................................................................................................... 30      (d)   Assignment ofRents ................................................................................................................ 30      (e)   Further Assignments of Leases and Rents ............................................................................... 30      (t)   Options to Purchase by Tenants ............................................................................................... 30    SECTION 7.03   MORTGAGE LOAN ADMINISTRATION REGARDING LEASES AND  RENTS ..................... 30      (a)   Material Commercial Lease Requirements .............................................................................. 30      (b)   Residential Lease Form ........................................................................................................... 31  ARTICLE   8- BOOKS   AND RECORDS;    FINANCIAL REPORTING .............................................. 31    SECTION 8.01   REPRESENTATIONS AND WARRANTIES .......................................................................31       (a)   Financial Information .............................................................................................................. 31      (b)   No Change in Facts or Circumstances ..................................................................................... 31    SECTION 8.02   COVENANTS .................................................................................................................32       (a)   Obligation to Maintain Accurate Books and Records ............................................................. 32      (b)   Items to Furnish to Lender......................................................................................................  .32       (c)  Audited Financials ................................................................................................................... 35       (d)  Delivery of Books and Records ............................................................................................... 35     SECTION 8.03  MORTGAGE LOAN ADMINISTRATION MATTERS REGARDING BOOKS    AND RECORDS                   AND FINANCIAL REPORTING .......................................................................................35        (a)  Lender's Right to Obtain Audited Books and Records ........................................................... 35       (b)  Credit Rep011s; Credit Score .................................................................................................... 35  ARTICLE 9 -  INSURANCE ..................................................................................................................... 36     SECTION 9.01  REPRESENTATIONS AND \V ARRANTIES .......................................................................36        (a)  Compliance with Insurance Requirements .............................................................................. 36       (b)   Property Condition ................................................................................................................... 36     SECTION 9 .02 COVENANTS .................................................................................................................3  6       (a)   Insurance Requirements ........................................................................................................... 36       (b)   Delivery of Policies, Renewals, Notices, and Proceeds .......................................................... .37     SECTION 9.03  MORTGAGE LOAN ADMINISTRATION MATTERS REGARDING   INSURANCE ................. 37       (a)   Lender's Ongoing Insurance Requirements ............................................................................ 37       (b)   Application of Proceeds on Event ofLoss...............................................................................  38       (c)   Payment Obligations Unaffected ............................................................................................. 40       (d)   Foreclosure Sale ....................................................................................................................... 40       (e)  Appointment of Lender as Attorney-In-Fact. .......................................................................... 40   ARTICLE 10 - CONDEMNATION ....................................................................................................... .40     SECTION I 0.0 I REPRESENTATIONS AND \V ARRANTIES .......................................................................40        (a)   Prior Condemnation Action .................................................................................................... .40       (b)   Pending Condemnation Actions .............................................................................................. 41     Multifamily Loan and Security Agreement   (Non-Recourse)                          Form 6001.NR                             Page iii   Fannie Mac                                  04-18                      © 2018 Fannie Mac  

 

  SECTION I 0.02 COVENANTS .................................................................................................................4  I      (a)  Notice of Condemnation .......................................................................................................... 4 I      (b)  Condemnation Proceeds .......................................................................................................... 41    SECTION I 0.03 MORTGAGE LOAN ADMINISTRATION MATIERS  REGARDING CONDEMNATION ........ .41      (a)  Application of Condemnation Awards ................................................................................... .41      (b)  Payment Obligations Unaffected ............................................................................................ .41      (c)  Appointment of Lender as Attorney-In-Fact. ......................................................................... .41      (d)  Preservation of Mortgaged Property ....................................................................................... .42  ARTICLE 11 - LIENS, TRANSFERS, AND ASSUMPTIONS ........................................................... .42    SECTION 11.0 I REPRESENTATIONS AND \V ARRANTIES .......................................................................42       (a)  No Labor or Materialmen's Claims ........................................................................................ .42      (b)  No Other lnterests ................................................................................................................... .42    SECTION 11.02 COVENANTS •..•.••..•..•..••...•.•....•.•..•..•..••..•..•..••..••..••.••..••..•...•..•..••..•...•..••..•..•.••..•.......... .42      (a)  Liens; Encumbrances ............................................................................................................... 42      (b)  Transfers ................................................................................................................................. .43      (c)  No Other Indebtedness ........................................................................................................... .47      (d)  No Mezzanine Financing or Preferred Equity ........................................................................ .47    SECTION 11.03 MORTGAGE LOAN ADMINISTRATION MAITERS REGARDING LIENS, TRANSFERS, AND                 ASSUMPTIONS .......•.......•....•.•..•..•.•.....••.....••.......•.••..••..•..•......••......•..•...•..•...•.•..••.••.•...4  7      (a)  Assumption of Mortgage Loan ................................................................................................ 47      (b)  Transfers to Key Principal-Owned Affiliates or Guarantor-Owned Affiliates ....................... .49      (c)  Estate Planning ....................................................................................................................... .49      (d)  Termination or Revocation of Trust. ....................................................................................... 50      (e)  Death of Key Principal or Guarantor; Transfer Due to Death ................................................. 50      (fl  Bankruptcy of Guarantor ......................................................................................................... 51      (g)  Further Conditions to Transfers and Assumption .................................................................... 52  ARTICLE 12 - IMPOSITIONS ............................................................................................................... 55    SECTION 12.0 I REPRESENTATIONS AND \V ARRANTIES ....................................................................... 55      (a)  Payment of Taxes, Assessments, and Other Charges .............................................................. 55    SECTION 12.02 COVENANTS ..•.•..•..•...•..••.••.•..•.•.••..•..•.....•..••..••.....•...•...•..•..••..•..••..••..••.••.••..••.•..•..••..•... 55      (a)  Imposition Deposits, Taxes, and Other Charges ...................................................................... 55    SECTION 12.03 MORTGAGE LOAN ADMINISTRATION MATTERS REGARDING IMPOSITIONS .••.••.••.••.•. 56      (a)  Maintenance of Records by Lender ......................................................................................... 56      (b)  Imposition Accounts ................................................................................................................ 56      (c)  Payment of Impositions; Sufficiency oflmposition Deposits ................................................. 56      (d)  Imposition Deposits Upon Event ofDefault... ......................................................................... 57      (e)  Contesting Impositions ............................................................................................................ 57      (fl  Release to Borrower ................................................................................................................ 57  ARTICLE 13 - REPLACEMENT RESERVE AND    REPAffiS ........................................................... 57    SECTION 13.01 COVENANTS •..•.•...•..•..•......•.•..•.•..•..•..•..••.••...•..••..•...•..•..••......•..•..••.•.•.....••.••..•..•........... 57      (a)  Initial Deposits to Replacement Reserve Account and Repairs Escrow Account. .................. 57      (b)  Monthly Replacement Reserve Deposits ................................................................................. 58      (c)  Payment for Replacements and Repairs .................................................................................. 58      (d)  Assignment of Contracts for Replacements and Repairs ......................................................... 58      (e)  lndemnification ........................................................................................................................ 58      (fl  Amendments to Loan Documents ............................................................................................ 58   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page iv  Fannie Mae                              04-18                   © 2018 Fannie Mac  

 

    (n)   Administrative Fees and Expenses .......................................................................................... 59    SEc\10N 13.02  MORTGAGE LOAN ADMINISTRATION  MATTERS REGARDING  RESERVES •...•.••.....•.••.• 59      (a)   Accounts, Deposits, and Disbursements .................................................................................. 59      (b)   Approvals of Contracts; Assignment of Claims ...................................................................... 65      (c)   Delays and Workmanship ........................................................................................................ 65      (d)   Appointment of Lender as Attorney-In-Fact. .......................................................................... 66      (e)   No Lender Obligation .............................................................................................................. 66      (f)   No Lender Warranty ................................................................................................................ 66  ARTICLE 14-   DEFAULTS/REMEDlES ............................................................................................... 67     SECTION 14.0 I EVENTS OF DEFAULT ................................................................................................... 67      (a)   Automatic Events of Default. .................................................................................................. 67       (b)  Events of Default Subject to a Specified Cure Period ............................................................. 68       (cl  Events of Default Subject lo Extended Cure Period ................................................................ 68     SECTION 14.02 REMEDIES .................................................................................................................... 68       (a)  Acceleration; Foreclosure ........................................................................................................ 68       (b)  Loss of Right to Disbursements from Collateral Accounts ..................................................... 69       (c)   Remedies Cumulative .............................................................................................................. 69     SECTION 14.03 ADDITIONAL LENDER RIGHTS; FORBEARANCE ........................................................... 70       (a)  No Effect Upon Obligations .................................................................................................... 70       (b)  No Waiver of Rights or Remedies ........................................................................................... 70       ( c) Appointment of Lender as Attorney-In-Fact. .......................................................................... 71       (d)   Borrower Waivers .................................................................................................................... 72     SECTION 14.04 \VAIYER  OF MARSHALING ........................................................................................... 72  ARTICLE 15 -  MISCELLANEOUS ....................................................................................................... 73     SECTION 15.0 I GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE ...................................... 73       (a)  Governing Law ........................................................................................................................ 73       (b)  Venue ....................................................................................................................................... 73     SECTION 15.02 NOTICE ........................................................................................................................ 73       (a)   Process of Serving Notice ........................................................................................................ 73       (b)  Change of Address ................................................................................................................... 74       (c)   Default Method ofNotice........................................................................................................  74       (d)   Receipt ofNotices .................................................................................................................... 74     SECTION 15.03 SUCCESSORS AND ASSIGNS BOUND; SALE OF MORTGAGE LOAN .••..••.••..•.•.•.••.••.••..•.• 74       (a)   Binding Agreement. ................................................................................................................. 74       (b)   Sale ofMm1gage Loan; Change of Servicer...........................................................................  74     SECTION 15.04 COUNTERPARTS ........................................................................................................... 75     SECTION 15.05 JOINT AND SEVERAL (OR SOLIDARY) LIABILITY ...•...••.••.....••..•..•..•.•..•..•..•...•..•..•........ 75     SECTION 15.06 RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY ...•..•.•..•..••.••..•..•..•..•..•.• 75       (a)   Solely Creditor and Debtor ...................................................................................................... 75       (b)   No Third Party Beneficiaries ................................................................................................... 75     Multifamily Lonn and Security Agreement   (Non-Recourse)                          Form 6001.NR                             Pagcv   Fannie Mac                                  04-18                      © 2018 Fannie Mac  

 

  SECTION   15.07   SEVERABILITY; ENTIRE AGREEMENT; AMENDMENTS •.••.•...•...•..•..........•..•...•..•..•..•.... 75    SECTION   15.08   CONSTRUCTION ••..•..•..•••..•......•.•...•..•........••...•...•.....••..••..•..••.••..•...••..•..••.••.•...•.....•..•..• 76    SECTION   15.09   MORTGAGE LOAN SERVICING .•.....•..•..•..........••..•..•...•...•..•...•..••..•.•••..••.•...•..•..•..•..••.•.. 76    SECTION   15.10   DISCLOSURE OF     INFORMATION ••.•........•.•••..••..••.....•...•...•.....••..•..•....•..•..••.•...•..•..•..•.... 77    SECTION   15.11   WAIVER; CONFLICT .•..•.•.•..•.•..•.••.•..•..•...••.....•...•..•..••..••..•...•..•...•..•...•.........•..•..••.••..•... 77    SECTION   15.12   No RELIANCE .•.....••.••..•........•.•.••.••.........•.••...•...•..•..••..••..•..••.••.....•.•..•..•..••.••..•..•..•..•..• 77    SECTION   15.13   SUBROGATION •..•..........•..•.•..•.•.....•..•......•.••...•...•..•..••...•..•..••..•...•...•..••.••.••.•.•.•..•........• 77    SECTION   15.14   COUNTING OF DAYS •.....•.•..•.•..•..•.•.........•..••...•..••.....•...••.•...•...•..•...•..••..•..•...•.••..•.......• 77    SECTION   15.15   REVIVAL AND REINSTATEMENT OF         INDEBTEDNESS •.•..••..•..•...••..•..••..•..••.••..•..•..•..•..•.• 78    SECTION   15.16   TIME IS OF THE   ESSENCE .......•...••..•..•...•..•...•...•...•.••..••.....••..•...•..•...•......•..•.•.•.••.••..•.... 78    SECTION   15.17   FINAL AGREEMENT .•..•.•.•..•.•..•.•.....•..•..••••••......•.....••...•..•..••.............••..•..•..•..............•. 78    SECTION   15.18   WAIVEROFTRIALBY JURY..•..•..•..•...•...•...•..•..••.........••..•..••.•••...........•...•..•..••.•...  78    Multifamily Loan and Security Agreement  (Non-Recourse)                                      Form 6001.NR                                        Page vi  Fannie Mac                                               04-18                             © 2018  Fannie Mac  

 

                           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)        Form 6001.NR   Schedule 6   Required Repair Schedule (required)             Form 6001.NR   Schedule 7   Exceptions to Representations and Warranties Schedule Form 6001.NR                (required)    Exhibits   Exhibit A    Modifications to Loan Agreement (Waiver of Imposition Form 6228                Deposits)   Exhibit B    Modifications to Loan Agreement (Green Mortgage Form 6241                Loan)    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page vii  Fannie Mac                              0~-18                   © 2018 Fannie Mac  

 

                                                         The Pointe at Vista Ridge            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 VISTA  RIDGE,  LLC,  a  Delaware limited liability company ("Borrower"), and PNC BANK,  NATIONAL ASSOCIATION, a national banking association (·'Lender").                                    RECITALS:        WHEREAS, Borrower desires to obtain the Mortgage Loan (as hereinafter defined) from  Lender to be secured by the Mmtgaged 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                                 LOANTERMS   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 I 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 I  Article I                               04-18                   © 2018 Fannie Mac  

 

          ARTICLE     2 - GENERAL MORTGAGE          LOAN TERMS   Section 2.01   Mortgage Loan Origination and Security.        (a)   Making of Mortgage Loan.        Subject to the tem1s 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. Bo1Tower covenants and agrees that it shall:               (I)   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)   perfom1, 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                    (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 a!1'ears. Interest        shall accrue as provided in the Schedule of Interest Rate Type Provisions and shall be   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                         Page2  Article 2                               04-18                   © 2018 Fannie Mac  

 

      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.               (I)   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        other Loan Document is not received by Lender within ten (I 0) days ( or fifteen (15) days        for any M01igaged 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).    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                         Page3  Article 2                               04-18                   © 2018 Fannie Mac  

 

            (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.               (I)   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 Bo!Tower 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.              (2)   B01Tower acknowledges and agrees that:                    (A)   its failure to make timely payments will cause Lender to incur              additional expenses in servicing and processing the Mo1tgage 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              an.10unt due in respect of the Mortgage Loan is delinquent for more than              tlurty (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;    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                         Pagc4  Article 2                               04-18                   © 2018 Fannie Mac  

 

                        (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.         (I)   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  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.               (I)   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 Mo11gage 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    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                         PngeS  Article 2                               04-18                   © 2018 Fnnnie Mae  

 

      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:               (I)   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)   B01TOwer 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.   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 Pern1itted 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 M011gage Loan;               (2)   all Accrued Interest (calculated through the last day of the month in which        the acceleration occurs);               (3)   the Prepayment Premium; and   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                         Page6  Article 2                               04-18                   © 2018 Fannie Mac  

 

            (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.         (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:               (I)   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        te1111s of the Mortgage Loan are in other respects more favorable to Borrower as a result        of Borrower's voluntary agreement to such prepayment provisions.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                         Pagc7  Article 2                               04-18                   © 2018 Fannie Mac  

 

                   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.  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:               (I)   failure to pay as directed by Lender upon demand after an Event of        Default (to the extent actually received by Bon·ower):                    (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;   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                         Page 8  Article 3                               04-18                   © 2018 Fannie Mac  

 

            (6)   waste or abandonment of the Mortgaged Property; or               (7)   grossly negligent or reckless unintentional material misrepresentation or        omission by Bon-ower, Guarantor, Key Principal, or any officer, director, partner,        manager, or member of B01Tower, Guarantor, or Key Principal or any Person having a        Restricted Ownership Interest in Guarantor or Key Principal in connection with on-going        financial or other reporting required by the Loan Documents, or any request for action or        consent by Lender.  Notwithstanding the foregoing, Bo1rnwer shall not have personal liability under clauses (I), (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 Bon-ower, upon the occurrence of  any of the following:               (1)   failure by Bo1Tower 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) Bo1Tower, 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        on-going 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                         Page 9  Article 3                               04-18                   © 2018 Fannie Mac  

 

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 Bon·ower under any Loan  Document.  Bmrnwer'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  pennitted 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  Bmrnwer was unable to apply as required or pem1itted 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 \Varranties.         The representations and warranties made by BotTower 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 M011gaged Property or the  validity, enforceability or the ability of Borrower to perfonn its obligations under this Loan  Agreement or any other Loan Document.         (b)   Location.        Borrower's General Business Address is Borrower's principal place of business and  principal office.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 10  Article 3                               0~-18                   © 2018 Fannie Mac  

 

      (c)   Power and Authorit)',         Borrower has the requisite power and authority:               (I)   to own the Mortgaged Property and to carry on its business as now        conducted and as contemplated to be conducted in connection with the perfommnce ?f i~s        obligations under this Loan Agreement and under the other Loan Documents to wluch 1t        is a patty; and              (2)   to execute and deliver this Loan Agreement and the other Loa_n        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 patty.         (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 pa1ty have been  duly executed and delivered by Borrower and constitute the legal, valid, and binding obligations  of B01TOwer, 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 M011gaged 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 M01tgage 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.         (g)   Economic Sanctions, Anti-Money Laundering, and Anti-Corruption.               (I)   None  of Bon·ower, 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 B01TOwer, Guarantor, or Key Principal, is in violation of   Multifamily Loan und Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 11  Article 4                               04-18                   © 2018 Fannie Mae  

 

      any applicable civil or criminal laws or regulations, including th~se requiring inte~nal        controls, intended to prohibit, prevent, or regulate money laundenng, drug traffickmg,        ten·orism, or corruption, of the United States and the jurisdiction where the Mortgaged        Prope11y 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 Bo!'l"ower, Guarantor, or Key Principal that also has a direct or        indirect ownership interest in Bo1rnwer, Guarantor, or Key Principal, is a Person:                    (A)   against whom proceedings are pending for any alleged violation of              any laws described in Section 4.0 I (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 4.0 I (g)( I); 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 tel'l"itories, 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:               (I)   does not own or lease any real property, personal property, or assets other        than the Mortgaged Property;               (2)   does not own, operate, or participate 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        instrument to which Bo!'l"ower is a party, or by which Bo!'l"ower 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;    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 12  Article 4                               04-18                   © 2018 Fannie Mae  

 

                  (B)   if the Security Instrument grants a lien on ~ leasehold  estate,              Borrower's obligations as lessee under the ground lease creatmg 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 in 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.        (i)   No Bankruptcies or Judgments.         None of Borrower, Guarantor, or Key Principal, nor to Bon·ower'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:               (I)   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.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 600LNR                         Page 13  Article 4                               04-18                   © 2018 Fannie Mac  

 

      (j)   No Actions or Litigation.               (I)   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 BmTower's knowledge,        threatened against or affecting Guarantor or Key Principal, which claims, actions, suits,        or proceedings, if adversely detern1ined (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:              (I)   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 repo1is;              (3)   there is no controversy or objection pending, or to the knowledge of        Borrower, threatened in respect of any tax returns of Bon·ower; 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.         (l)   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:               (I)   Borrower is not an Employee Benefit Plan;             . (2)   no asset of Borrower constitutes "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;              (3)   no asset of Borrower is subject to any laws of any Governmental        Authority governing the assets of an Employee Benefit Plan; and    Multifamily Lonn and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 14  Article 4                               04-18                   © 2018 Fannie Mac  

 

            (4)   neither Bon·ower nor any ERISA Affiliate is subject to any obligation or        liability with respect to any ERISA Plan.        (n)   Default Under Other Obligations.               (I)   The execution, delivery, and performance of the obli~ati9n~ imposed 911        Borrower under this Loan Agreement and the Loan Documents to which 1t 1s a party will        not cause Bo!1'ower 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 Bo!1'ower's  knowledge, is any Person:               (I)   Controlling Bo!1'ower, 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.         (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 tem1s, 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)   Lockbox Arrangement.         Borrower is not party to any type of lockbox agreement or similar cash management  an·angement that has not been approved by Lender in writing, and no direct or indirect owner of  Bo!1'ower 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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 15  Article 4                               04-18                   © 2018 Fannie Mac  

 

Borrower to perform its obligations under this Loan Agreement. or any other Loan Document.  Neither Borrower nor any partner, member, manager, officer, or d11"ector of Borrower shall:               (I)   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.         (b)   Economic Sanctions, Anti-Money Laundering, and Anti-Corruption.              (I)   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)   Al no time shall Bon·ower, 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 )(I);                    (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 )(I); or                    (C)   with whom any United States Person, any entity organized under              the laws of the United States or its constituent states or te1Titories, 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 remain 111        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.   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 16  Article 4                               04-18                   © 2018 Fannie Mac  

 

      (d)   Borrower Single Asset Status.        Until the Indebtedness is fully paid, Borrower:              {I)   shall not acquire or lease any real property, personal prope1ty, or assets        other than the Mortgaged Property;              (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        Mmtgaged 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 17  Article 4                               04-18                   © 2018 Fannie Mac  

 

            (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:               (I)   no asset of Borrower shall constitute "plan assets" (within the meaning of        Section 3( 42) of ERISA and Department of Labor Regulation Section 2510.3-10 I) 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.         (t)   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:                     (A)   the Mortgaged Property;                     (B)   any event, act, condition, or circumstance in connection with the              Mortgaged Property; or    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 18  Article 4                               0~-18                   © 2018 Fannie Mae  

 

                  (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  Bonower 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 Prope11y that has not  been approved by Lender in writing. Lender's approval of any such cash management  alTangement 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 \Varranties.        The representations and warranties made by Bonower to Lender in this Section 5.0lare  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.         (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 Bonower or Guarantor, including the defense of usury, and  neither BoITower nor Guarantor has asserted any right of rescission, set-off, counterclaim, or  defense with respect thereto.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 19  Article 4                               0~-18                   © 2018 Fannie Mae  

 

      ( 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 cmTently 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:               (I)   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 (I 0) 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              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 (I 0) 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 instrnments as Lender may reasonably require        from time to time in order to better assure, grant, and convey to Lender the rights   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 20  Article 5                               04-18                   © 2018 Fannie Mac  

 

      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 (I 0) 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 Bon·ower 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.        Bon·ower shall, subject to Section 5.02(d) below:               (I)   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;              (2)   ratify and affirm in writing the representations and warranties set fo11h 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, co1Tections, 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:               (I)   changing the economic terms of the Mortgage Loan set forth in the related        commitment letter between Borrower and Lender;    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 21  Article 5                               04-18                   © 2018 Fannie Mae  

 

            (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.               (I)   BmTower 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        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.               (I)   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.   Multifamily Lonn and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 22  Article 5                               04-18                   © 2018 Fannie Mae  

 

            (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 ce1tificates 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 Mmtgaged Property has been purchased with the        proceeds of any illegal activity.         (b)   Property Characteristics.               (I)   The Mmtgaged 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.               (!)   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.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page23  Article 6                               04-18                   © 2018 Fannie Mae  

 

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:               (I)   change the use of all or any part of the Mortgaged Prope11y;              (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;              (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 pm1 of the Land to be included or assessed under or as pm1 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:              (I)   pay the expenses of operating, managing, maintaining, and repairing the        M011gaged 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 M011gaged 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;    Multifamily Loun and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 24  Article 6                               04-18                   © 2018 Fannie Mue  

 

                  (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;                    (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 Jaws 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 Jaws, ordinances, rules, and              regulations of any Governmental Authority, including applicable building codes,              special use permits, and environmental regulations;                     (C)   in 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 purp011ing 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 25  Article 6                               04-18                   © 2018 Fannie Mac  

 

      (c)   Property Preservation.         Borrower shall:              (I)   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 Prope1ty or any pait of the Mortgaged Property,        or remove any Personalty or Fixtures from the Mmtgaged 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 iV!ortgaged 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:               (I)   pem1it 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 (I) Business Day:                     (C)   at any time when exigent circumstances exist; or                     (D)   at any time after an Event of Default has occurred and is              continuing; and               (2)   pay for reasonable costs or expenses incuned by Lender or its agents in        connection with any such inspections.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 26  Article 6                               04-18                   © 2018 Fannie Mac  

 

      (e)   Compliance with Laws.         Borrower shall:              (I)   comply with all Jaws, 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 pe11aining 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, apai1ment licenses, or the equivalent;              (3)   comply with all applicable Jaws 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        Mm1gaged 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.         (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 fo1m 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 Prope11y has deteriorated (ordinary wear and tear excepted) since  the Effective Date, Lender may obtain, at Borrower's expense, a property condition assessment   Multifamily Loan and Security Agreement  (Non-Rcconrsc)                       Form 6001.NR                        Page 27  Article 6                               04-18                   ID 2018 Fannie Mac  

 

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.   Section 7.02   Covenants.         (a)   Leases.         Borrower shall:               (I)   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()) 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)    Multifamily Lonn and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 28  Article 6                               04-18                   ID 2018 Fannie Mac  

 

      month shall be permitted so long as the total number of such Residential Leases does not        exceed ten percent (I 0%) 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.               (I)   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 tenninate 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                    (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 ( I 0)        days after a request by Borrower, a certificate of estoppel, or if not provided by tenant        within such ten (I 0) 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;   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page29  Article 7                               04-18                   © 2018 Fannie Mae  

 

                  (E)   whether or not Borrower is in default (or whet\1er any event or              condition exists which, with the passage of time, would conslitute 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:               (I)   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              (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.         Bon-ower shall not:               (I)   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:               (I)   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;   Multifamily Lonn and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 30  Article 7                               04-18                   © 2018 Fannie Mae  

 

            (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              (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 fonns  approved by Lender.      ARTICLE 8 -    BOOKS AND RECORDS;         FINANCIAL REPORTING   Section 8.01   Representations and \Varranties.        The representations and warranties made by Borrower to Lender in this Section 8.0 I 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;               (I)   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.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 31  Anicle 7                                04-18                   © 2018 Fannie Mac  

 

Section 8.02   Covenants.        (a)   Obligation to Maintain Accurate Books and Records.        Bbrrower 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:               (I)   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              (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:               (I)   within forty-five (45)  days after the end of each first, second, and third        calendar quarter, a statement of income and expenses for Bo1Tower 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 Bo1Tower 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 (EU!), 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 ST AR Portfolio Manager for the reporting of the              energy consumption metric and Borrower does not use ENERGY ST AR 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:    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Pagc32  Article 8                               04-18                   © 2018 Fannie Mae  

 

                        (i)   Bo1Tower has taken no action m violation of Section                    4.02(d) regarding its single asset status;                          (ii)  Bon·ower has received no notice of any building code                    violation, or if Borrower has received such notice, evidence of                    remediation;                          (iii) Bmrnwer  has made  no  application for rezoning nor                    received any notice that the Mortgaged Property has been or is being                    rezoned; and                          (iv)  Bo1Tower has taken no action and has no knowledge of any                    action that would violate the provisions of Section l 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 Bo1Tower that Control Borrower (excluding any Publicly­                   Held Corporations or Publicly-Held Trusts), or (3) the indirect owners of                    Bo!Tower that hold twenty-five percent (25%) or more of the ownership                    interests in B01Tower (excluding any Publicly-Held Corporations or                    Publicly-Held Trusts), and their respective interests;                           (ii)  the names of all officers and directors of (1) any Bo1Tower                    which is a corporation, (2) any corporation which is a general partner of                    any Bo1Tower 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 Bo1Tower which is a limited                    liability company; and                     (I-I) 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              Prope11y 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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Pagc33  Article 8                               04-18                   © 2018 Fannie Mac  

 

      year, and at any other time upon Lender's written request, a rent schedule for the        Mortgaged Property showing the name of each tenant and for each tenant, the space        occupied, the lease expiration date, the rent payable for the cun-ent 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 Bon-ower;                    (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 Bon-ower              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 Bon-ower and their respective interests;                           (ii)  the indirect owners (and any non-member managers) of                    B01TOwer  that Control Bon-ower  (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    Multifamily Lonn and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 34  Anicle 8                                04-18                   © 2018 Fannie Mae  

 

                  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 ),  Bon-ower 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 occun-ed 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  BmTower's expense, by an independent ce11ified 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:               (I)   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 dete1mined 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 Bon-ower's fiscal year so long as  no Event of Default has occurred during such fiscal year ( 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). 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  Bon-ower within ten ( I 0) 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 Bon-ower or  Guarantor at any time at Lender's expense.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 35  Article 8                               04-18                   © 2018 Fannie Mac  

 

                         ARTICLE 9 -   INSURANCE   Section 9.01   Representations and Warranties.        The representations and warranties made by Bo!1'ower 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 Mmigaged Property        has been repaired and the Mortgaged Property has been fully restored.   Section 9.02   Covenants.         (a)   Insurance Requirements.               (I)   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              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, te!1'orism              insurance, windstorm insurance and, if the Mmigaged Property does not confonn              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, e!1'ors 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.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Pagc36  Article 9                               04-18                   © 2018 Fannie Mac  

 

      (b)   Delivery of Policies, Renewals, Notices, and Proceeds.         Borrower shall:              (I)   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 ofloss;              (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.   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:               (I)   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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 37  Anicle 9                                04-18                   © 2018 Fnnnic Mae  

 

MADE AGAINST BORROWER IN      CONNECTION WITH THE MORTGAGED PROPERTY.  IF LENDER   PURCHASES    INSURANCE    FOR   THE  MORTGAGED      PROPERTY   AS  PER.i\1ITTED HEREUNDER,  BORROWER WILL    BE RESPONSIBLE   FOR THE COSTS   OF  THAT  INSURANCE,   INCLUDING    INTEREST  AT  Tl-IE DEFAULT   RATE  AND  ANY  OTHER  CHARGES   LENDER MAY IMPOSE     IN CONNECTION   WITH  THE PLACEMENT  OF THE INSURANCE UNTIL THE EFFECTIVE DA TE 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.               (I)   Upon an event of loss, Lender may, al 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                    (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 1.0x (the debt service coverage ratio  shall be calculated on a                    thirty (30) year am011izing 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  detem1ines that the  Restoration will be                    completed before the earlier of (I) one year before the stated Maturity                    Date, or (2) one year after the date of the loss or casualty; and    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 38  Article 9                               0~-18                   © 2018 Fannie Mac  

 

                        (v)   Borrower provides Lender, upon written request, evidence                    of the availability during and after the Restoration of the insurance                    required to be maintained by Bon·ower 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       ot:attorney 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)   Bonower shall immediately notify Lender of the casualty giving              rise to the claim;                    (B)   no Event of Default has occuned 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 occuned 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 prope11y damage insurance  shall be issued in the              forn1 ofjoint  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;                     (l-1) Bonower  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 tern1s of this Loan Agreement, Borrower shall not be obligated to        restore or repair the Mo1igaged Prope11y. 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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 39  Article 9                               04-18                   © 2018 Fannie Mac  

 

      part of the damaged Mortgaged Property to the extent necessary to keep and maintain the        Mortgaged Prope1ty 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 Bo1TOwer 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  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 detem1ined 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 Mo1tgaged 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 transfened 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 Mo1tgaged Prope1ty 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.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 40  Article 9                               04-18                   © 2018 Fannie Mae  

 

      (b)   Pending Condemnation Actions.        No Condemnation Action is pending nor, to Bon·ower's knowledge, is threatened for the  partial or total condemnation or taking of the Mortgaged Property.   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:               (I)   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 41  Article 10                              04-18                   © 2018 Fannie Mac  

 

      ( 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 Prope1ty in a safe, habitable, and marketable condition. Nothing in this Section  I 0.03(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 c01Tect except as disclosed on the Exceptions to  Representations and Warranties Schedule.        (a)   No Labor or Materialmen's Claims.        All paities 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:               (I)   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.   Section 11.02  Covenants.         (a)   Liens; Encumbrances.        Bon·ower shall not permit the grant, creation, or existence of any Lien, whether  voluntary, involuntary, or by operation of law, on all or any po1tion of the Mortgaged Property   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 42  Article 10                              04-18                   0 2018 Fannie Mac  

 

(including any. voluntary, elective, or n01~-compu/so~-y tax . li~n or a_ssessment pursuant to a  voluntary, electlve, or non-compulsory special tax d1stnct or s1m1lar regime) other than:               (I)   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              Bon-ower 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 pennitted pursuant to the Loan Documents;                     (C)   the grant of an easement solely for cable and internet services,              provided such easement is a standard fmm of cable and internet service easement              used by nationally recognized cable and 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);                     (E)   the grant of an easement, servitude, or restrictive covenant to              which Lender has consented, and Bon-ower has paid to Lender, upon demand, all              costs and expenses incurred by Lender in connection with reviewing Bon-ower' 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 pern1itted 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)   Bon-ower provides Lender with at least thirty (30) days                    prior written notice of the proposed easement;    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 43  Anicle 11                               04-18                   © 2018 Fannie Mae  

 

                        (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 Mo1igaged 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 incured                    by Lender in connection with reviewing Borrower's request;                          (vi)  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 B01Tower 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 l 1.02(b )( I )(E)                    shall be distributed as follows:                                (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)  fomih, any remaining funds will be deposited into                          the Replacement Reserve;                    (F)   a lien permitted pursuant to Section l 1.02(a) of this Loan              Agreement; or                     (G)   the conveyance of the Mortgaged Property following a Foreclosure              Event.   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 44  Article 11                              04-18                   © 2018 Fannie Mac  

 

            (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.        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 (I 0%) 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 l 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;   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page45  Article 11                              04-18                   © 2018 Fannie Mae  

 

                  (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);                     (0)   Borrower shall pay to Lender:                          (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                     (I-I) 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 confim1ation from the title company   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 46  Article 11                              04-18                   © 2018 Fannie Mae  

 

            (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                     (E)   no later than ten (I 0) 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 fommtion 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: (I) 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:               (I)   Borrower has submitted to Lender all information required by Lender to        make the determination required by this Section l l .03(a);    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 47  Article 11                              04-18                   © 2018 Fannie Mae  

 

            (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 occuned and is continuing;               (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 b01TOwer, new key principal, new guarantor, and  any              Person in Control of them, and the organization of the new bonower, 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 b01Tower, 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 bo1Tower, 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 bo1Tower to assume and perform              all obligations of Borrower (or any other transferor), and that may require that the              new bonower comply with any provisions of any Loan Document that previously              may have been waived by Lender for Bonower, subject to the terms of Section              1 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 c01Tectly 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:                    (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    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 48  Article 11                              04-18                   © 2018 Fannie Mac  

 

                  (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 l l .03(g).         (b)   Transfers to Key Principal-Owned Affiliates or Guarantor-Owned Affiliates.               (I)   Except as otherwise covered in Section 1 l.03(b)(2) below, Transfers of        direct or indirect ownership interests in B01Tower 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        Bon·ower immediately prior to the date of such Transfer, shall be consented to by Lender        if such Transfer satisfies the applicable requirements of Section l l .03(a) as they would        relate to such transferee, other than Section l l .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 l l .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  l l .03(g).         ( c)  Estate Planning.         Notwithstanding the provisions of Section l l.02(b )(2), so long as (I) the Transfer does  not cause a change in the Control of B01TOwer, 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;                    (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    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page49  Article 11                              04-18                   © 2018 Fannie Mae  

 

            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 Bo1Tower shall pay the Review Fee and out-of-pocket costs set forth in Section  11.03(g).        (d)   Termination or Revocation of Trust.        If any of Borrower, Guarantor, or Key Principal is a trust, or if Control of Bo1Tower,  Guarantor, or Key Principal is Transferred or if a Restricted Ownership Interest in Bo1Tower,  Guarantor, or Key Principal would be Transfe1Ted 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 Bo!Tower, 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 Bmrnwer shall pay the Review Fee and out-of-pocket costs set forth in Section  l 1.03(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 Bon·ower, 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 Bo!Tower's        satisfaction of the following conditions:                     (A)   Bo1Tower 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);    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 50  Article 11                              04-18                   © 2018 Fannie Mae  

 

                        (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 I l.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.  If the conditions set forth in this Section I 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  I I .03(g).         (f)   Bankruptcy of Guarantor.               (I)   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)   Bonower  has submitted to Lender all info1mation required by              Lender to make the determination required by this Section I I .03(t);                     (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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 51  Article 11                              04-18                   © 2018 Fannie Mae  

 

                  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 J 1.03(t), 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 prope11y manager be replaced with a prope11y              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.   If the conditions set forth in this Section 11.03(t) 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 l .03(g).         (g)   Further Conditions to Transfers and Assumption.              (I)   In connection with any Transfer of the Mortgaged Prope11y, 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    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 52  Article 11                              04-18                   © 2018 Fannie Mae  

 

            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.         Notwithstanding any terms to the contrary in Section l 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: (I) 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 Bmrnwer.         (i)   Steadfast Affiliate Transfer.         Notwithstanding the restrictions contained in Section 11.02(b )(2) (Interests in Borrower,  Key  Principal, or Guarantor) and Section 11.03(g)(I) (Fui1her 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 pe1mitted, provided the following conditions  are satisfied:               (I)   Bonower has submitted to Lender all infornmtion required by Lender to        make the determination required by this Section 11.03(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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 53  Article 11                              04-18                   <D 2018 Fannie Mac  

 

            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:                     (A)   an assumption agreement acceptable to Lender that requires the              new guarantor to assume and perforn1 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, inctl!1'ed by Lender in connection with        its review of the Transfer request: and               (8)   Borrower shall execute upon demand such documents or certifications as        Lender reasonably requires in order to confinn 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).               (9) (i) The Steadfast Affiliate is Controlled by, is under common Control with, or        Controls, the Key Principal or (ii) the Steadfast Affiliate and the Key Principal have the        same chief executive officer.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 54  Article 11                              04-18                   ID 2018 Fannie Mae  

 

                       ARTICLE    12 - IMPOSITIONS   Section 12.01  Representations and \Varranties.        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.         (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:              (!)   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(! 0) 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;    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 55  Anicle 12                               0~-18                   CD 2018 Fannie Mac  

 

            (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;              (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:              (I)   no Event of Default exists;              (2)   Bon-ower 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.         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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 56  Article 12                              04-18                   t!:> 2018 Fannie Mac  

 

necessary by Lender to be held in connection with such Imposition, the excess may be credited  against future installments oflmposition 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:               (I)   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.          ARTICLE 13    - REPLACEMENT RESERVE AND REP AIRS   Section 13.01  Covenants.         (a)   Initial Deposits to Replacement Reserve Account and Repairs Escrow  Account.        On the Effective Date, Borrower shall pay to Lender:               (I)   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.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 57  Article 12                              04-18                   © 2018 Fannie Mac  

 

      (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:               (I)   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.        (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 harn1less 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 11011-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 po1tion of the  Mortgaged Property for which Reserve/Escrow Account Funds were expended.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 58  Article 13                              04-18                   © 2018 Fannie Mac  

 

      (g)   Administrative Fees and Expenses.         Borrower shall pay to Lender:              (I)   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 Prope1ty 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.   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 occu1Ted 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 Replacement 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 Bo1Tower        request and after satisfaction of all conditions for disbursement.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 59  Article 13                              04-18                   © 2018 Fannie Mac  

 

            (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 prope1ty" as indicated on              the Summary of Loan Tem1s), a property condition assessment shall be ordered              by Lender for the Mortgaged Prope1ty 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 (I 0th) 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              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.    Multifamily Lonn and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 60  Article 13                              04-18                   © 2018 Fannie Mac  

 

            (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              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 Bo1Tower for the actual cost of the              Repairs (unless Lender has agreed to issue joint checks in connection with a              particular Replacement), up to the Maximum Repair 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 price 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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 61  Article 13                              04-18                   © 2018 Fannie Mac  

 

            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              accordance with any plans and specifications previously approved by Lender (if              applicable) and in compliance with all applicable laws, ordinances, mies, 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 (I) 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 Prope11y 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 Lonn and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 62  Anicle 13                               04-18                   © 2018 Fannie Mac  

 

            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 tem1s 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.                    Borrower may submit a disbursement request from the Replacement              Reserve Account or the Repairs Escrow Account to reimburse Borrower for any              Borrower Requested Replacement oi' 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:    Multifamily Lonn and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 63  Article 13                              04-18                   © 2018 Fannie Mac  

 

                        (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                    Required Replacements or Required Repairs (at the Maximum Repair                    Cost), as applicable, and any other B01Tower 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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 64  Article 13                              04-18                   © 2018 Fannie Mae  

 

            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        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:    Multifamily Lonn and Security Agreement  (Non-Recourse)                       Form 600 J.NR                       Page 65  Article 13                              04-18                   © 2018 Fannie Mac  

 

            ( 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).         (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.   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 66  Article 13                              04-18                   © 2018 Fannie Mac  

 

                  ARTICLE 14 -    DEFAULTS/REMEDIES   Section 14.01  Events of Default.        The occu11"ence of any one or more of the following in this Section 14.0 I 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;              (4)   if any wan·anty, 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 Bmrnwer, 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        tennination or revocation of a trust, the termination or revocation of such trust, except as        set forth in Section l l.03(d);   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 67  Article 14                              04-18                   © 2018 Fannie Mac  

 

            ( 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:              (I)   if Key Principal or Guarantor is a natural person, the death of such        individual, unless all requirements of Section 1 J.03(e) are met;              (2)   the occurrence of a Guarantor Bankruptcy Event, unless requirements of        Section I J.03(t) 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 B01Tower, 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 ham1 to  Lender or impaim1ent 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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 68  Article 14                              04-18                   ID 2018 Fannie Mae  

 

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 Mortgageμ  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  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:               (I)   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                        Page 69  Article 14                              04-18                   © 2018 Fannie Mac  

 

Section 14.03  Additional Lender Rights; Forbearance.         (a)   No Effect Upon Obligations.        Lender may, but shall not be obligated to, agree wit~ Bon-ower, from time to ti\11e, _and  without giving notice to, or obtaining the consent of, or havmg any effect upon !he ob~1gat1ons  of, Guarantor, Key Principal, or other third paity obligor, to take any of the followmg actions:              (I)   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 M01tgage 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,        su1Tendered, 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  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    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 70  Article 14                              04-18                   © 2018 Fannie Mae  

 

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 Bm1'ower'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:               (I)   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;               (I 0) execute all applications and certificates in the name of Borrower which        may be required by any of the contract documents;               (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    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 71  Article 14                              0~-18                   (i) 2018 Fannie Mac  

 

            ( 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 in-evocable and shall not be affected        by the disability or incompetence of Borrower. Bo!Tower 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. Bo1Tower hereby ratifies and confirms all that such        attorney-in-fact may do or cause to be done by viitue 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 detern1ines, 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 Prope1ty.         (d)   Borrower \Vaivers.        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:              (l)   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              (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 pmty, 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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 72  Article 14                              04-18                   © 2018 Fannie Mac  

 

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 FAIL URE 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 comis and authorities with jurisdiction in the Property  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:               (I)   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    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 73  Article 14                              04-18                   © 2018 Fannie Mac  

 

                  (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 pai1y 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.         (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 pern1itted 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.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 600 I .NR                      Page 74  Article 15                              04-18                   © 2018 Fannie Mac  

 

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.         (b)   No Third Party Beneficiaries.        No creditor of any paity 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:               (I)   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.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 75  Article 15                              04-18                   © 2018 Fannie Mac  

 

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.         (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.         (t)   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, pennitted, 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.         G)    If the Mo11gage Loan proceeds are disbursed on a date that is later than the  Effective Date, as described in Section 2.02(a)(I ), 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.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 76  Article 15                              04-18                   © 2018 Fannie Mac  

 

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 perfornrnnce of multifamily mortgage loans.  Bon-ower irrevocably waives any and all rights it may have under applicable law to prohibit such  disclosure, including any right of privacy.   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 Bon-ower 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 fm1her action on its pa11, 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 perforn1 an obligation under this Loan Agreement is not a Business Day, Bon-ower   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 77  Article 15                              04-18                   © 2018 Fannie Mac  

 

shall be required to perform such obligation by the Business Day immediately preceding such  date; provided, however, in respect of a~y Payment Date, or if the Maturity Date is o~her than a  Business Day, Borrower shall be obligated to make such payment by the Busmess Day  immediately following such date.   Section 15.15  Revival and Reinstatement of Indebtedness.        If the payment of all or any pait of the Indebtedness by Borrower, Guarantor, or any other  Person, or the transfer to Lender of any collateral or other prope1ty 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,  Ki"JOWINGL Y AND   VOLUNTARILY    WITH  THE  BENEFIT   OF COMPETENT    LEGAL  COUNSEL.        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   Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 78  Article 15                              04-18                   © 2018 Fannie Mae  

 

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.                        [Remainder of Page Intentionally Blank]    Multifamily Lonn and Security Agreement  (Non-Recourse)                       Form 6001.NR                        Page 79  Article 15                              04-18                   © 2018 Fannie Mac  

 

                                      BORRO\VER:                                         STAR   III VISTA RIDGE, LLC, a Delaware                                            limited liability company                                         By:  Steadfast Apartment Advisor III, LLC, a                                             Delaware limited liability company, its                                             Manager                                              By: Na~ifd~K inJ.Ke.ing                                                     Title: Treasurer    l\Iultifnmily Lonn und Security Agreement  (Non-Recourse)                         Form 6001.NR                          Pngc S-1  Signature Pnge                            04-18                     © 2018 Fnnnie l\lnc  

 

                                           LENDER:                                              PNC BANK, NATIONAL ASSOCIATION, a                                                 national banking association    Multifamily Loan :ind Security Agreement  (Non-Recourse)                              Form 6001.NR                              P:tgc S-2  Signature P:tgc                                 04-18                        © 2018 F:mnic i\lac  

 

                                SCHEDULE 1              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 Accrned 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 M011gaged 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        (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 Bon·ower;  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   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                         Page 1  Fannie Mac                              12-17                   © 2017 Fannie Mae  

 

proceeding or case occurred with~ut. the consent, encouragemen~ or active participation of  (1) Borrower, Guarantor, or Key Pnnc1pal, (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 M011gaged 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 M011gaged Property.  "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.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 61 OJ.FR                        Pnge2  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

"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 Mo1tgage  Loan.  "Completion Period" has the meaning set forth in the Summary of Loan Tem1s.   "Condemnation Action" has the meaning set forth in the Security Instrument.   "Control" (including with con-elative 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 pmtnership; (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 a11d 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.   ';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 I (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 OF AC 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 fmth in the Security Instrument.   Schedule I to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6IOI.FR                         Pagc3  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

"Environmental Indemnit:y Agreement" means  that certain Environmental Indemnity  Agreement dated as of the Effective Date made by BmTower 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 faith 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  B011'0wer, would be treated as a single employer under Section 414(b) or (c) of the Internal  Revenue Code, or Section 400l(a)(l4) ofERISA, 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.  "Exceptions to Representations and \Varranties 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 Prope1ty;    Schedule l to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                         Page4  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

      (c)   delivery by Borrower to Lender (or its designee or nominee) of a  deed or other  conveyance of Borrower's interest in the Mortgaged Prope1ty 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;        (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  (I) 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.    Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                         Pagc5  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

"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  Tem1s.  ·'Insolvency Laws" means the United States Bankruptcy Code, 11 U.S.C. Section IO I, 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,  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 creditors; 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 ofB01Tower and the Mortgaged Property, as  identified as such in the Summary of Loan Terms; or    Schedule I to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                         Page 6  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

      (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.   "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   Schedule l to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                         Page7  Fannie Mae                              12-17                   © 2017 Fannie Mac  

 

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.   ··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:               (I)   solar power, themial 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 Tem1s.  ''Maximum Inspection Fee·· has the meaning set fo11h 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  Tem1s.   "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.   Schedule I to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                         Page 8  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

"Monthly Debt Service Payment" has the meaning set forth in the Summary of Loan Tem1s.   "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 Te1ms.   "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 Mo1tgaged 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 faith in the Security Instrument.   "Permitted Mezzanine Debt" means Mezzanine Debt inct11Ted 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.   Schedule 1 to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6IOI.FR                         Page 9  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

"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 Goods, accounts, choses of action, chattel paper, documents, general intangibles  (including Software),  payment intangibles, instruments, investment property, letter of credit  rights, supporting obligations, computer info1mation, 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 Bonower 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.  "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.    Schedule l to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                        Page 10  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

"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.   "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 f011h 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.    Schedule I to Multifamily Loan und  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                        Page 11  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

"Replacement Reserve Account Administration Fee" has the meaning set forth in 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.   "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 pai1nership or joint venture interests in such entity;         (b)   if such entity is a limited partnership:               (I)   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 pai1nership:    Schedule I to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                        Page 12  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

            (I)   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        (t)   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)  (I) an agency of the government of a Sanctioned Country, (2) an organization controlled by a  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 OF AC consistent with the guidance issued by OF AC.   "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 ce11ain multifamily mo11gage, 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 a!1"angement 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.    Schedule I to Multifamily Loan and  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                        Page 13  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

"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 fo1th 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 pennitted by this Loan Agreement;        (b)   a granting, pledging, creating or attachment of a lien, encumbrance or security  interest (whether voluntary, involuntary, or by operation oflaw);         ( 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, division or liquidation of a legal entity.   "Transfer Fee·• means a fee equal to one percent (I%) 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" m: "Prepayment Premium Period End Date" has the  meaning set forth in the Summary of Loan Tenns.  "Yield Maintenance Period Term" m: "Prepayment Premium Period Term" has the meaning  set forth in the Summary of Loan Terms.    Schedule I to Multifamily Loan nod  Security Agreement - Definitions Schedule  (Interest Rate Type - Fixed Rate)    Form 6101.FR                        Page 14  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

                                            B01T0wer  Initials    Schedule  I  to l\Iultifnmily Lonn nnd  Security Agreement - Definitions Schedule   (Interest Rate Type - Fixed Rnte)           Form 6101.FR                               Page 15   Fnnnie l\lnc                                    12-17                        © 2017 Fannie l\lac  

 

                                 SCHEDULE2              TO MULTIFAMILY LOAN AND SECURITY AGREEMENT                              Summary of Loan Terms                           (Interest Rate Type - Fixed Rate)       I.    GENERAL PARTY AND IVIULTIFAMILY PROJECT INFORMATION                                   ST AR III VISTA RIDGE, LLC, a Delaware limited  Borrower                         liability company                                    PNC BANK, NATIONAL ASSOCIATION, a  Lender                           national banking association                                    STEADFAST APARTMENT REIT III, INC., a  Key Principal                    Maryland corporation   Guarantor                        STEADFAST APARTMENT REIT III, INC., a                                   Maryland corporation   Multifamily Project              The Pointe at Vista Ridge                                    ADDRESSES                                   c/o Steadfast Companies  Borrower's General Business      18100 Von Kannan Avenue, Suite 500  Address                          Irvine, California 92612                                   Attention - General Counsel: Ana Marie de! Rio                                    c/o Steadfast Companies                                   18100 Von Kannan Avenue, Suite 500                                   Irvine, California 92612                                   Attention - General Counsel: Ana Marie del Rio                                   Email: anamarie.delrio@steadfastco.com                                   with a courtesv copy to Borrower's counsel: 1                                       DeFrenza Lee LLP                                      3200 Park Center Drive, Suite 1160  Borrower's Notice Address           Costa Mesa, California 92626                                      Attention: Marcello F. DeFrenza                                      Email: marc@defrenzalee.com                                    1 Lender shall endeavor to give Borrower's counsel a                                   courtesy copy of any notice given to Bonower 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 subiect Lender to anv claim   Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                      Page 1  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

                              by or liability to Borrower.                                 2701 MacArthur Boulevard  Multifamily Project Address   Lewisville, Texas 75067   Multifamily Project County    Denton County                                 c/o Steadfast Companies  Key Principal'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 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 Avenue,  Suite 500                                Irvine, California 92612                                Attention - General Counsel: Ana Marie del Rio                                Email: anamarie.delrio@steadfastco.com                                with a comiesv copy to Guarantor's counsel: 1                                   DeFrenza Lee LLP                                   3200 Park Center Drive, Suite 1160                                   Costa Mesa. California 92626  Guarantor's Notice Address       Attention: Marcello F. DeFrenza                                   Emai I: 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.   Lender's General Business Address 26901 Agoura Road, Suite 200                               Calabasas Hills, California 9130 I   Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR               Pagc2  Fannie Mac                          12-17                 © 2017 Fannie Mac  

 

                             Attn: Loan Servicing Manage1·                                26901 Agoura Road, Suite 200  Lender's Notice Address      Calabasas Hills, California 91301                               Email: CustomerCenter@pnc.com                               Mailing Address:                               PNC Bank, National Association                               Lockbox #773319                               3319 Solutions Center                               Chicago, Illinois 60677-3003                               Overnight Address:                               PNC Bank, National Association  Lender's Payment Address     Lockbox #773319                               350 East Devon Avenue                               Itasca, Illinois 60143                               Wiring Instructions:                               PNC Bank, N.A.                               ABA #: 043000096                               PNC Bank. National Association                               Credit #lOi 9802702                               Ref Loan #310232177                 II.  MULTIFAMILY PROJECT INFORMATION   Property Square Footage      651,959   Total Parking Spaces         609   Total Residential Units      300                                      Yes  Affordable Housing Property  D                               18)   No                    III. MORTGAGE LOAN INFOR1'1ATION  Amortization Period          360 months   Schedule 2 to Multifnmily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR               Pnge3  Fannie Mac                          12-17                 © 2017 Fannie Mae  

 

                                D     Amortizing  Amortization Type               D     Full Tem1 Interest Only                                  [8]   Partial Interest Only   Effective Date                  As of May 31, 2019   First Payment Date              July l, 2019   First Principal and Interest    July 1, 2024  Payment Date   Fixed Rate                      3.82%                                   D     30/360 ( computed on the basis of a three                                  hundred sixty (360) day yeal" consisting of twelve (12)                                  thirty (30) day months).                                  or                                  [8J   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   Interest Rate                   The Fixed Rate   Interest Rate Type              Fixed Rate   Last Interest Only Payment Date June l, 2024   Loan Amount                     $30,265,000.00   Loan Term                        120 months    Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                      Pagc4  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

                                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.                                   June l, 2029, or any earlier date on which the unpaid  Maturity Date                   principal balance of the Mortgage Loan becomes due                                  and payable by acceleration or otherwise.                                    (i)   $96,343.58 for the First Payment Date;                                   (ii)  for each Payment Date thereafter through and                                         including the Last Interest Only Payment Date:                                         (a)   $89,920.68 if the prior month was a 28-                                              day month;                                         (b)   $93,132.13 if the prior month was a 29-                                              day month;  Monthly Debt Service Payment                                         (c)   $96,343.58 if the prior month was a 30-                                              day month; and                                         (d)   $99,555.04 if the prior month was a 31-                                              day month; and                                   {iii) $141.366.79 for the First Principal and Interest                                         Payment  Date  and  each Payment  Date                                         thereafter until the Mortgage Loan is fully                                         paid.   Prepayment Lockout Period       The OLoan  Year of the term of the Mortgage Loan.        IV.   YIELD MAINTENANCE/PREPAYMENT PREMIUM INFORMATION  Yield Maintenance Period End  Date                            The last day of November, 2028   Yield Maintcmmce Period Term    114 months                          V.    RESERVE INFORMATION   Completion Period               Within twelve (12) months after the Effective Date or as                                  otherwise shown on the Required Repair Schedule.   Initial Replacement Reserve  Deposit                         $24,446.04    Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6102.FR                      Pages  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

Maximum Inspection Fee          $1,000.00   Maximum Repair Disbursement     One time per calendar month  Interval   Maximum Replacement Resen•c     One time per calendar quarter  Disbursement Interval   Minimum Repairs Disbursement    $5,000.00  Amount   Minimum Replacement Resen•e                                  $5,000.00  Disbursement Amount   Monthly Replacement Reserve     $6,229.25  Deposit   Repair Threshold                $50,000.00   Repairs Escrow Account  Administrative Fee              $500.00, payable one time   Repairs Escrow Deposit          $137,140.00   Replacement Reserve Account     One-eighth of one percent (0.125%) of the average  Administration Fee              Replacement Reserve account balance, payable annually   Replacement Reserve Account                                  Monthly  Interest Disbursement Frequency   Replacement Threshold           $50,000.00    Schedule 2 to Multifamily Loan and  Security Agreement - Summary of Loan  Terms (Interest Rate Type - Fixed Rate) Form 6 I02.FR                     Pagc6  Fannie Mac                              12-17                   © 2017 Fannie Mac  

 

                                            Bon·ower t; mtia s    Schedule  2  to Multifamily Loan  aud  Security Agreement - Summary  of Loan  Terms (Interest Rate Type - Fixed Rate)      Form 6102.FR                                Page 7  Fnnnfo i\.'luc                                  12-17                        © 2017 Fannie l\Inc  

 

                                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 I  Fannie Mac                              01-11                   © 2011 Fannie Mac  

 

                                                    V                                              Borrower Initials    Schedule  3  to l\lultifnmily Lonn nnd  Security Agreement - Interest Rnte Type  Pro,·isions (Fixed Rnte)                     Form 6103.FR                               Pnge2  Faunie l\fae                                    01-11                        © 2011 Fnnnie l\lne  

 

                                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:               (I)   one percent (I%) 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 belmv) 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:                                       I - rt+ rrn112                                            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                                the unpaid principal balance of the Mortgage Loan and                                (ii) the Yield Maintenance Period End Date.    Schedule 4 to Multifamily Loan and  Security Agreement (Prepayment Premium  Schedule - Standard Yield Maintenance - Fixed Rate)                           Form 6104.01                      Page 1  Fannie Mac                               08-13                 © 2013 Fannie Mac  

 

                              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 tem1 of the Yield Maintenance                                Period Term, as follows (rounded to three (3) decimal                                places):                                        (a-b) x(=-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 in 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 detem1ine the                                Yield Rate from another source selected by Lender. Any                                detem1ination 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 (I%) of the amount of principal  being prepaid.        (c)   Notwithstanding the provisions 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                      Page2  Fannie Mae                               08-13                 <D 2013 Fannie Mae  

 

                                                     PV                                              BmTDwer   Initials    Schedtde  4  to I\lultifnmily Lonn mtd  Security Agreement (Prepayment Premium  Schedule - St1111dnrd Yield i\lnintennncc -  Fixed Rnte)                                  Form 6104.01                             Pnge3  Fannie Mne                                       08-13                      © 2013 Fnnnie Mnc  

 

                                      SCHEDULE 5 TO                   MULTIFAMILY LOAN AND             SECURITY AGREEMENT                                  Required Replacement Schedule                                             See Attached    Multifamily Loan and Security Agreement  (Non-Recourse)                                Form 6001.NR                                  Page I  Schedule 5                                        04-18                          ID 2018 Fannie Mac  

 

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i\lultifnmily Lonn and Security Agreement  (Non-Recourse)                              Form 6001.NR                                 Pngc3  Schedule 5                                      04-18                        © 2018 Fnnnic i\"lnc  

 

                                   SCHEDULE 6 TO                 MULTIFAMILY LOAN AND          SECURITY AGREEMENT                                  Required Repair Schedule       Immediate Repairs'l'nble       Hems                  Est. Cost  Escrow    Co1111>Icli Co111111c11{s                                       Amount    on Time                                                 in Mos.      Ln11tlllc11ping       7,500.00   0,00      12       l.imiled uvcrgruwlh ilrouml Viltiuus                                                          buildings wns noted with some brnnches                                                          bt                                                          contucl with sidcwnlls and rooflines.                                                          T1im h:ick nnl' nnd all vccctation.      Provide Van Accessible 250.00    0.00      12       Provide n vnu accessible parking space      Parking Spnce                                       near leasing onicc      Painting - Extel'ior  0.00       O.o:>     12       The property is currently in process of                                                          being f:linted. Contimmtion including                                                          complete ongoing exterior painting,                                                          stucco repairs mul c.mlking is                                                          l'CCOllllDl!llded.     EWEM 4: Lighting - Interior - 18,930.00 18.930.00 12 Encim• nnd Waler Efficiency Measure     Hich Efficacy (LED),     Apartments      EWEM  5: Lighting - Exterior 8,960.00 8,960.00 12     - High Efficacy (LED),     Common Area     E\VEM 6: Lighting - Exterior 680.00 680.00  12     - High Efficacy (LED},     Ap artmcn ls      liWliM 8: HVAC - Smart 60,UOO.UO  60,000.00 12     "l11ennostot, Apm1mcnl!i      RWEM  l•I: Wnler 1:i,.:111re. 1ll,d  1D.00 10,.!10.00 12     Kitchen Acrators/Fmicels ( I     gpm 87% Aerator/ 13%     F3ucct Rcplnccment),     Ap11rt1m:nls       E\VEM 15: \Voter Fixture- 38,160.00 38,ICiO.OO 12     WatcrScnsc Certified     Showerheads (1.25 gpm),     Ap11rum:nts      Tolnl                  J1M1890.00                                       1371l•m.oo              - ---    Multifamily Loan and Security Agreement   (Non-Recourse)                          Form 6001.NR                             Pnge 1  Schedule 6                                   04-18                      © 2018 Fnnnie Mac  

 

                                           B01Tower  Initials    Multifamily Loan nnd Security Agreement  (Non-Recourse)                              Form 6001,NR                                Puge 2  Schedule 6                                      04-18                        © 2018 Fannie i\lne  

 

                               SCHEDULE 7 TO                MULTIFAMILY LOAN AND      SECURITY AGREEMENT                  Exceptions to Representations and Warranties Schedule   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.   With respect to the representation under Section 3 of the Assignment of Management  Agreement, Borrower notes the following exception:     B01TOwer further represents and warrants to Lender that it has not executed any prior     assignment of the Management Agreement that remains in effect.    Multifamily Loan and Security Agreement  (Non-Recourse)                       Form 6001.NR                         Page I  Schedule 7                              04-18                   © 2018 Fannie Mac  

 

l\lultifnmily Lonn nnd Security Agreement  (Non~Recourse)                               Form 6001.NR                                Pugel  Schedule 7                                      04~18                        © 2018 Fannie i\Iue  

 

                                  EXHIBIT A       MODIFICATIONS TO    MULTIFAMILY LOAN AND      SECURITY AGREEMENT                           (Waiver oflmposition 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 oflmposition Deposits.                     (I)   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 Taxes, provided, that:                           (A)   Borrower shall pay all Taxes directly to the                    appropriate taxing authority at least ten (I 0) days prior to the date                    such Taxes are due;                           (B)   Borrower shall provide Lender with evidence                    acceptable to Lender of payments of Taxes within five (5) days                    after the date such Taxes are paid; and                           (C)   Borrower shall pay the cost of a third-party tax                    search service firm engaged by Lender to confirm payment of the                    Taxes when due.                     (2)   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 (I 0) days prior to expiration or    Modifications to Multifamily Loan and  Security Agreement (Waiver of Imposition  Deposits)                             Form 6228                           Page I  Fannie Mae                              04-12                   <D 2012 Fannie Mae  

 

                  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                    that all of the Required Insurance Coverage is in full force and                    effect.                    (3)   Lender reserves the right to require Borrower to deposit the              Imposition Deposits with Lender on each Payment Date for Taxes and              Insurance Impositions in accordance with this Section 12.02 (Imposition              Deposits, Taxes, and Other Charges - Covenants) upon:                          (A)   Borrower's failure to pay Taxes or Insurance                    Impositions or to provide Lender with proof of payment of Taxes                    and Insurance Impositions as required in this Section 12.02(b)                    (Conditional Waiver of Collection oflmposition 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.                    (4)   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)                             Form 6228                           Page2  Fannie Mac                              04-12                   <D 2012 Fannie Mac  

 

                                            Bormw~e;    i\.Iodificntions to i\.Iultifamily Lonn nnd  Security Agreement (\Vnivcr of Imposition  Deposits)                                      Form 6228                                 Pnge3  Fnnnie i\.Inc                                    04-12                       © 2012 Fannie i\.Ine  

 

                                   EXHIBIT  B       MODIFICATIONS TO     MULTIFAMILY LOAN AND      SECURITY AGREEMENT                                (Green Mortgage Loan)          The foregoing Loan Agreement is hereby modified as follows:         I.    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   Mmtgage 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 Mo1tgaged Prope1ty in ENERGY         STAR  Portfolio Manager.                (b)   Borrower shall include with the delivery of items required under         Section S.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 infommtion for the Mortgaged         Property:                      (1)   the ENERGY STAR score;                      (2)   the Source Energy Use Intensity (EU!);                      (3)   the annual cost of each energy type;                      (4)   the EPA Water Score;                      (5)   the Water Use Intensity (WUI);                      ( 6)  the annual cost of water;                      (7)   the month and year ending period for items (1) through (6)               above;and    Modifications to Multifamily Loan and Security  Agreement (Green Mortgage Loan)          Form 6241                        Page 1  Fannie Mae                                 12-18                 © 2018 Fannie Mac  

 

                   (8)   the ENERGY     STAR   Portfolio lv1anager 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 pennit 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 nomml business hours, (ii) at such other         reasonable time upon reasonable notice of not less than one (I) Business Day, and         (iii) at any time after an Event of Default has occu!1'ed and is continuing.    Modifications to Multifamily Lonn and Security  Agreement (Green Mortgage Loan)          Form 6241                        Pagc2  Fannie Mac                                 12-18                 © 2018 Fannie Mae  

 

                                                           Bmrnwer Initials     Modificntions to i\Iultifnmily Lonn nnd Security  Agreement (Green i\Iortgngc Lonn)                 Form 6241                              Pngc3   Funnic Mne                                         12-18                     © 2018 F:umic MacExhibit

EXHIBIT 10.12
Prepared by, and after recording
return to:

Jeremy M. McLean, Esquire
Troutman Sanders LLP
P.O. Box 1122
Richmond, VA 23218
MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT
AND FIXTURE FILING
(TEXAS)

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	 

	Texas
	12-17
	© 2017 Fannie Mae

The Pointe at Vista Ridge

MULTIFAMILY DEED OF TRUST,
ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT
AND FIXTURE FILING
This MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (as amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Security Instrument”) dated as of the 31st day of May, 2019, is executed by STAR III VISTA RIDGE, LLC, a limited liability company organized and existing under the laws of Delaware, as grantor (“Borrower”), to GARY S. FARMER, as trustee (“Trustee”), for the benefit of PNC BANK, NATIONAL ASSOCIATION, a national banking association, as beneficiary (“Lender”).
Borrower, in consideration of (i) the loan in the original principal amount of $30,265,000.00 (the “Mortgage Loan”) evidenced by that certain Multifamily Note dated as of the date of this Security Instrument, executed by Borrower and made payable to the order of Lender (as amended, restated, replaced, supplemented, or otherwise modified from time to time, the “Note”), (ii) that certain Multifamily Loan and Security Agreement dated as of the date of this Security Instrument, executed by and between Borrower and Lender (as amended, restated, replaced, supplemented or otherwise modified from time to time, the “Loan Agreement”), and (iii) the trust created by this Security Instrument, and to secure to Lender the repayment of the Indebtedness (as defined in this Security Instrument), and all renewals, extensions and modifications thereof, and the performance of the covenants and agreements of Borrower contained in the Loan Documents (as defined in the Loan Agreement), excluding the Environmental Indemnity Agreement (as defined in this Security Instrument), irrevocably and unconditionally mortgages, grants, warrants, conveys, bargains, sells, and assigns to Trustee, in trust, for benefit of Lender, with power of sale and right of entry and possession, the Mortgaged Property (as defined in this Security Instrument), including the real property located in Denton County, State of Texas, and described in Exhibit A attached to this Security Instrument and incorporated by reference (the “Land”), to have and to hold such Mortgaged Property unto Trustee and Trustee’s successors and assigns, forever; Borrower hereby releasing, relinquishing and waiving, to the fullest extent allowed by law, all rights and benefits, if any, under and by virtue of the homestead exemption laws of the Property Jurisdiction (as defined in this Security Instrument), if applicable.
Borrower represents and warrants that Borrower is lawfully seized of the Mortgaged Property and has the right, power and authority to mortgage, grant, warrant, convey, bargain, sell, and assign the Mortgaged Property, and that the Mortgaged Property is not encumbered by any Lien (as defined in this Security Instrument) other than Permitted Encumbrances (as defined in this Security Instrument).  Borrower covenants that Borrower will warrant and defend the title to the Mortgaged Property against all claims and demands other than Permitted Encumbrances.

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 1

	Texas
	12-17
	© 2017 Fannie Mae

Borrower, and by their acceptance hereof, each of Trustee and Lender covenants and agrees as follows:
1.Defined Terms.
Capitalized terms used and not specifically defined herein have the meanings given to such terms in the Loan Agreement.  All terms used and not specifically defined herein, but which are otherwise defined by the UCC, shall have the meanings assigned to them by the UCC.  The following terms, when used in this Security Instrument, shall have the following meanings:
“Condemnation Action” means any action or proceeding, however characterized or named, relating to any condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect.
“Enforcement Costs” means all expenses and costs, including reasonable attorneys’ fees and expenses, fees and out-of-pocket expenses of expert witnesses and costs of investigation, incurred by Lender as a result of any Event of Default under the Loan Agreement or in connection with efforts to collect any amount due under the Loan Documents, or to enforce the provisions of the Loan Agreement or any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy or insolvency proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding or Foreclosure Event) or judicial or non-judicial foreclosure proceeding, to the extent permitted by law.
“Environmental Indemnity Agreement” means that certain Environmental Indemnity Agreement dated as of the date of this Security Instrument, executed by Borrower to and for the benefit of Lender, as the same may be amended, restated, replaced, supplemented, or otherwise modified from time to time.
“Environmental Laws” has the meaning set forth in the Environmental Indemnity Agreement.
“Event of Default” has the meaning set forth in the Loan Agreement.
“Fixtures” means all Goods that are so attached or affixed to the Land or the Improvements as to constitute a fixture under the laws of the Property Jurisdiction.
“Goods” means all of Borrower’s present and hereafter acquired right, title and interest in all goods which are used now or in the future in connection with the ownership, management, or operation of the Land or the Improvements or are located on the Land or in the Improvements, including inventory; furniture; furnishings; machinery, equipment, engines, boilers, incinerators, and installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air, or light; antennas, cable, wiring, and conduits used in connection with radio, television, security, fire prevention, or fire detection, or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers, and other appliances; light fixtures, awnings, storm windows, and storm doors; pictures, screens, blinds, shades, curtains, and curtain rods; mirrors, cabinets, paneling, rugs, and floor and wall coverings; fences, trees, and plants; swimming pools; exercise equipment; supplies; tools; books and records (whether in written or electronic form); websites, URLs, blogs, and social network pages; computer equipment (hardware and software); and other tangible personal property which is used now or in the future in connection with the ownership, management, or operation of the Land or the Improvements or are located on the Land or in the Improvements.

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 2

	Texas
	12-17
	© 2017 Fannie Mae

“Imposition Deposits” means deposits in an amount sufficient to accumulate with Lender the entire sum required to pay the Impositions when due.
“Impositions” means
(a)    any water and sewer charges which, if not paid, may result in a lien on all or any part of the Mortgaged Property;
(b)    the premiums for fire and other casualty insurance, liability insurance, rent loss insurance and such other insurance as Lender may require under the Loan Agreement;
(c)    Taxes; and
(d)    amounts for other charges and expenses assessed against the Mortgaged Property which Lender at any time reasonably deems necessary to protect the Mortgaged Property, to prevent the imposition of liens on the Mortgaged Property, or otherwise to protect Lender’s interests, all as reasonably determined from time to time by Lender.
“Improvements” means the buildings, structures, improvements, and alterations now constructed or at any time in the future constructed or placed upon the Land, including any future replacements, facilities, and additions and other construction on the Land.
“Indebtedness” means the principal of, interest on, and all other amounts due at any time under the Note, the Loan Agreement, this Security Instrument or any other Loan Document (other than the Environmental Indemnity Agreement and Guaranty), including Prepayment Premiums, late charges, interest charged at the Default Rate, and accrued interest as provided in the Loan Agreement and this Security Instrument, advances, costs and expenses to perform the obligations of Borrower or to protect the Mortgaged Property or the security of this Security Instrument, all other monetary obligations of Borrower under the Loan Documents (other than the Environmental Indemnity Agreement), including amounts due as a result of any indemnification obligations, and any Enforcement Costs.
“Land” means the real property described in Exhibit A.
“Leases” means all present and future leases, subleases, licenses, concessions or grants or other possessory interests now or hereafter in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals thereof.
“Lien” means any claim or charge against property for payment of a debt or an amount owed for services rendered, including any mortgage, deed of trust, deed to secure debt, security interest, tax lien, any materialman’s or mechanic’s lien, or any lien of a Governmental Authority, including any lien in connection with the payment of utilities, or any other encumbrance.
“Mortgaged Property” means all of Borrower’s present and hereafter acquired right, title and interest, if any, in and to all of the following:
(a)    the Land;
(b)    the Improvements;
(c)    the Personalty;

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 3

	Texas
	12-17
	© 2017 Fannie Mae

(d)    current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights‐of‐way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses, and appurtenances related to or benefitting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated;
(e)    insurance policies relating to the Mortgaged Property (and any unearned premiums) and all proceeds paid or to be paid by any insurer of the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property, whether or not Borrower obtained the insurance pursuant to Lender’s requirements;
(f)    awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property, including any awards or settlements resulting from (1) Condemnation Actions, (2) any damage to the Mortgaged Property caused by governmental action that does not result in a Condemnation Action, or (3) the total or partial taking of the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof;
(g)    contracts, options and other agreements for the sale of the Land, the Improvements, the Personalty, or any other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations;
(h)    Leases and Lease guaranties, letters of credit and any other supporting obligation for any of the Leases given in connection with any of the Leases, and all Rents;
(i)    earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the Mortgage Loan and, if Borrower is a cooperative housing corporation, maintenance charges or assessments payable by shareholders or residents;
(j)    Imposition Deposits;
(k)    refunds or rebates of Impositions by any municipal, state or federal authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Security Instrument is dated);
(l)    tenant security deposits;
(m)    names under or by which any of the above Mortgaged Property may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Mortgaged Property;
(n)    Collateral Accounts and all Collateral Account Funds;
(o)    products, and all cash and non-cash proceeds from the conversion, voluntary or involuntary, of any of the above into cash or liquidated claims, and the right to collect such proceeds; and
(p)    all of Borrower’s right, title and interest in the oil, gas, minerals, mineral interests, royalties, overriding royalties, production payments, net profit interests and other interests and estates in, under and on the Mortgaged Property and other oil, gas and mineral interests with which any of the foregoing interests or estates are pooled or unitized.

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 4

	Texas
	12-17
	© 2017 Fannie Mae

“Permitted Encumbrance” means only the easements, restrictions and other matters listed in a schedule of exceptions to coverage in the Title Policy and Taxes for the current tax year that are not yet due and payable.
“Personalty” means all of Borrower’s present and hereafter acquired right, title and interest in all Goods, accounts, choses of action, chattel paper, documents, general intangibles (including Software), payment intangibles, instruments, investment property, letter of credit rights, supporting obligations, computer information, source codes, object codes, records and data, all telephone numbers or listings, claims (including claims for indemnity or breach of warranty), deposit accounts and other property or assets of any kind or nature related to the Land or the Improvements now or in the future, including operating agreements, surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements, and all other intangible property and rights relating to the operation of, or used in connection with, the Land or the Improvements, including all governmental permits relating to any activities on the Land.
“Prepayment Premium” has the meaning set forth in the Loan Agreement.
“Property Jurisdiction” means the jurisdiction in which the Land is located.
“Rents” means all rents (whether from residential or non-residential space), revenues and other income from the Land or the Improvements, including subsidy payments received from any sources, including payments under any “Housing Assistance Payments Contract” or other rental subsidy agreement (if any), parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due, or to become due, and tenant security deposits.
“Software” means a computer program and any supporting information provided in connection with a transaction relating to the program.  The term does not include any computer program that is included in the definition of Goods.
“Taxes” means all taxes, assessments, vault rentals and other charges, if any, general, special or otherwise, including assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, may become a lien, on the Land or the Improvements or any taxes upon any Loan Document.
“Title Policy” has the meaning set forth in the Loan Agreement.
“UCC” means the Uniform Commercial Code in effect in the Property Jurisdiction, as amended from time to time.
“UCC Collateral” means any or all of that portion of the Mortgaged Property in which a security interest may be granted under the UCC and in which Borrower has any present or hereafter acquired right, title or interest.
2.Security Agreement; Fixture Filing.
(a)    To secure to Lender, the repayment of the Indebtedness, and all renewals, extensions and modifications thereof, and the performance of the covenants and agreements of Borrower contained in the Loan Documents, Borrower hereby pledges, assigns, and grants to Lender a continuing security interest in the UCC Collateral.  This Security Instrument constitutes a security agreement and a financing statement under the UCC.  This Security Instrument also constitutes a financing statement pursuant to the terms of the UCC with respect to any part of the Mortgaged 

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 5

	Texas
	12-17
	© 2017 Fannie Mae

Property that is or may become a Fixture under applicable law, and will be recorded as a “fixture filing” in accordance with the UCC. Borrower hereby authorizes Lender to file financing statements, continuation statements and financing statement amendments in such form as Lender may require to perfect or continue the perfection of this security interest without the signature of Borrower.  If an Event of Default has occurred and is continuing, Lender shall have the remedies of a secured party under the UCC or otherwise provided at law or in equity, in addition to all remedies provided by this Security Instrument and in any Loan Document.  Lender may exercise any or all of its remedies against the UCC Collateral separately or together, and in any order, without in any way affecting the availability or validity of Lender’s other remedies.  For purposes of the UCC, the debtor is Borrower and the secured party is Lender.  The name and address of the debtor and secured party are set forth after Borrower’s signature below which are the addresses from which information on the security interest may be obtained.
(b)    Borrower represents and warrants that:  (1) Borrower maintains its chief executive office at the location set forth after Borrower’s signature below, and Borrower will notify Lender in writing of any change in its chief executive office within five (5) days of such change; (2) Borrower is the record owner of the Mortgaged Property; (3) Borrower’s state of incorporation, organization, or formation, if applicable, is as set forth on Page 1 of this Security Instrument; (4) Borrower’s exact legal name is as set forth on Page 1 of this Security Instrument; (5) Borrower’s organizational identification number, if applicable, is as set forth after Borrower’s signature below; (6) Borrower is the owner of the UCC Collateral subject to no liens, charges or encumbrances other than the lien hereof; (7) except as expressly provided in the Loan Agreement, the UCC Collateral will not be removed from the Mortgaged Property without the consent of Lender; and (8) no financing statement covering any of the UCC Collateral or any proceeds thereof is on file in any public office except pursuant hereto.
(c)    All property of every kind acquired by Borrower after the date of this Security Instrument which by the terms of this Security Instrument shall be subject to the lien and the security interest created hereby, shall immediately upon the acquisition thereof by Borrower and without further conveyance or assignment become subject to the lien and security interest created by this Security Instrument.  Nevertheless, Borrower shall execute, acknowledge, deliver and record or file, as appropriate, all and every such further deeds of trust, mortgages, deeds to secure debt, security agreements, financing statements, assignments and assurances as Lender shall require for accomplishing the purposes of this Security Instrument and to comply with the rerecording requirements of the UCC.
3.Assignment of Leases and Rents; Appointment of Receiver; Lender in Possession.
(a)    As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all Leases and Rents.  It is the intention of Borrower to establish present, absolute and irrevocable transfers and assignments to Lender of all Leases and Rents and to authorize and empower Lender to collect and receive all Rents without the necessity of further action on the part of Borrower.  Borrower and Lender intend the assignments of Leases and Rents to be effective immediately and to constitute absolute present assignments, and not assignments for additional security only.  Only for purposes of giving effect to these absolute assignments of Leases and Rents, and for no other purpose, the Leases and Rents shall not be deemed to be a part of the Mortgaged Property.  However, if these present, absolute and unconditional assignments of Leases and Rents are not enforceable by their terms under the laws of the Property Jurisdiction, then each of the Leases and Rents shall be included as part of the Mortgaged Property, and it is the intention of Borrower, in such circumstance, that this Security Instrument create and perfect a lien on each of the Leases and Rents in favor of Lender, which liens shall be effective as of the date of this Security Instrument.

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 6

	Texas
	12-17
	© 2017 Fannie Mae

(b)    Until an Event of Default has occurred and is continuing, but subject to the limitations set forth in the Loan Documents, Borrower shall have a revocable license to exercise all rights, power and authority granted to Borrower under the Leases (including the right, power and authority to modify the terms of any Lease, extend or terminate any Lease, or enter into new Leases, subject to the limitations set forth in the Loan Documents), and to collect and receive all Rents, to hold all Rents in trust for the benefit of Lender, and to apply all Rents to pay the Monthly Debt Service Payments and the other amounts then due and payable under the other Loan Documents, including Imposition Deposits, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities and Impositions (to the extent not included in Imposition Deposits), tenant improvements and other capital expenditures.  So long as no Event of Default has occurred and is continuing (and no event which, with the giving of notice or the passage of time, or both, would constitute an Event of Default has occurred and is continuing), the Rents remaining after application pursuant to the preceding sentence may be retained and distributed by Borrower free and clear of, and released from, Lender’s rights with respect to Rents under this Security Instrument.
(c)    If an Event of Default has occurred and is continuing, without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, the revocable license granted to Borrower pursuant to Section 3(b) shall automatically terminate, and Lender shall immediately have all rights, powers and authority granted to Borrower under any Lease (including the right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease) and, without notice, Lender shall be entitled to all Rents as they become due and payable, including Rents then due and unpaid.  During the continuance of an Event of Default, Borrower authorizes Lender to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender, and Borrower shall, upon Borrower’s receipt of any Rents from any sources, pay the total amount of such receipts to Lender.  Although the foregoing rights of Lender are self-effecting, at any time during the continuance of an Event of Default, Lender may make demand for all Rents, and Lender may give, and Borrower hereby irrevocably authorizes Lender to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents to Lender.  No tenant shall be obligated to inquire further as to the occurrence or continuance of an Event of Default, and no tenant shall be obligated to pay to Borrower any amounts that are actually paid to Lender in response to such a notice.  Any such notice by Lender shall be delivered to each tenant personally, by mail or by delivering such demand to each rental unit.
(d)    If an Event of Default has occurred and is continuing, Lender may, regardless of the adequacy of Lender’s security or the solvency of Borrower, and even in the absence of waste, enter upon, take and maintain full control of the Mortgaged Property, and may exclude Borrower and its agents and employees therefrom, in order to perform all acts that Lender, in its discretion, determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents (including through use of a lockbox, at Lender’s election), the making of repairs to the Mortgaged Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing this assignment of Rents, protecting the Mortgaged Property or the security of this Security Instrument and the Mortgage Loan, or for such other purposes as Lender in its discretion may deem necessary or desirable.
(e)    Notwithstanding any other right provided Lender under this Security Instrument or any other Loan Document, if an Event of Default has occurred and is continuing, and regardless of the adequacy of Lender’s security or Borrower’s solvency, and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in 

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 7

	Texas
	12-17
	© 2017 Fannie Mae

Section 3.  If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this Security Instrument, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte, if permitted by applicable law.  Borrower consents to shortened time consideration of a motion to appoint a receiver.  Lender or the receiver, as applicable, shall be entitled to receive a reasonable fee for managing the Mortgaged Property and such fee shall become an additional part of the Indebtedness.  Immediately upon appointment of a receiver or Lender’s entry upon and taking possession and control of the Mortgaged Property, possession of the Mortgaged Property and all documents, records (including records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property, and all security deposits and prepaid Rents, shall be surrendered to Lender or the receiver, as applicable.  If Lender or receiver takes possession and control of the Mortgaged Property, Lender or receiver may exclude Borrower and its representatives from the Mortgaged Property.
(f)    The acceptance by Lender of the assignments of the Leases and Rents pursuant to this Section 3 shall not at any time or in any event obligate Lender to take any action under any Loan Document or to expend any money or to incur any expense.  Lender shall not be liable in any way for any injury or damage to person or property sustained by any Person in, on or about the Mortgaged Property.  Prior to Lender’s actual entry upon and taking possession and control of the Land and Improvements, Lender shall not be:
(1)    obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease);
(2)    obligated to appear in or defend any action or proceeding relating to any Lease or the Mortgaged Property; or
(3)    responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property.
The execution of this Security Instrument shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and shall be that of Borrower, prior to such actual entry and taking possession and control by Lender of the Land and Improvements.
(g)    Lender shall be liable to account only to Borrower and only for Rents actually received by Lender.  Lender shall not be liable to Borrower, anyone claiming under or through Borrower or anyone having an interest in the Mortgaged Property by reason of any act or omission of Lender under this Section 3, and Borrower hereby releases and discharges Lender from any such liability to the fullest extent permitted by law, provided that Lender shall not be released from liability that occurs as a result of Lender’s gross negligence or willful misconduct as determined by a court of competent jurisdiction pursuant to a final, non-appealable court order.  If the Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged Property and collecting the Rents, any funds expended by Lender for such purposes shall be added to, and become a part of, the principal balance of the Indebtedness, be immediately due and payable, and bear interest at the Default Rate from the date of disbursement until fully paid.  Any entering upon and taking control of the Mortgaged Property by Lender or the receiver, and any application of Rents as provided in this Security Instrument, shall not cure or waive any Event of Default or invalidate any other right or remedy of Lender under applicable law or provided for in this Security Instrument or any Loan Document.
4.    Protection of Lender’s Security.

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 8

	Texas
	12-17
	© 2017 Fannie Mae

If Borrower fails to perform any of its obligations under this Security Instrument or any other Loan Document, or any action or proceeding is commenced that purports to affect the Mortgaged Property, Lender’s security, rights or interests under this Security Instrument or any Loan Document (including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Environmental Laws, fraudulent conveyance or reorganizations or proceedings involving a debtor or decedent), Lender may, at its option, make such appearances, disburse or pay such sums and take such actions, whether before or after an Event of Default or whether directly or to any receiver for the Mortgaged Property, as Lender reasonably deems necessary to perform such obligations of Borrower and to protect the Mortgaged Property or Lender’s security, rights or interests in the Mortgaged Property or the Mortgage Loan, including:
(a)    paying fees and out-of-pocket expenses of attorneys, accountants, inspectors and consultants;
(b)    entering upon the Mortgaged Property to make repairs or secure the Mortgaged Property;
(c)    obtaining (or force-placing) the insurance required by the Loan Documents; and
(d)    paying any amounts required under any of the Loan Documents that Borrower has failed to pay.
Any amounts so disbursed or paid by Lender shall be added to, and become part of, the principal balance of the Indebtedness, be immediately due and payable and bear interest at the Default Rate from the date of disbursement until fully paid.  The provisions of this Section 4 shall not be deemed to obligate or require Lender to incur any expense or take any action.
5.    Default; Acceleration; Remedies.
(a)    If an Event of Default has occurred and is continuing, Lender, at its option, may declare the Indebtedness to be immediately due and payable without further demand, and may either with or without entry or taking possession as herein provided or otherwise, proceed by suit or suits at law or in equity or any other appropriate proceeding or remedy (1) to enforce payment of the Mortgage Loan; (2) to foreclose this Security Instrument judicially or non-judicially by the power of sale granted herein; (3) to enforce or exercise any right under any Loan Document; and (4) to pursue any one (1) or more other remedies provided in this Security Instrument or in any other Loan Document or otherwise afforded by applicable law.  Each right and remedy provided in this Security Instrument or any other Loan Document is distinct from all other rights or remedies under this Security Instrument or any other Loan Document or otherwise afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively, in any order.  Borrower has the right to bring an action to assert the nonexistence of an Event of Default or any other defense of Borrower to acceleration and sale.
(b)    Borrower acknowledges that the power of sale granted in this Security Instrument may be exercised or directed by Lender without prior judicial hearing.  In the event Lender invokes the power of sale:
(1)    Lender may, by and through the Trustee, or otherwise, sell or offer for sale the Mortgaged Property in such portions, order and parcels as Lender may determine, with or without having first taken possession of the Mortgaged Property, to the highest bidder for cash at public auction.  Such sale shall be made at the courthouse door of the county in which all or any part of the Mortgaged Property to be sold is situated (whether the parts or parcel, if any, situated in different counties are contiguous or not, and without the necessity 

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 9

	Texas
	12-17
	© 2017 Fannie Mae

of having any Personalty present at such sale) on the first Tuesday of any month between the hours of 10:00 a.m. and 4:00 p.m., after advertising the time, place and terms of sale and that portion of the Mortgaged Property to be sold by posting or causing to be posted written or printed notice of sale at least twenty-one (21) days before the date of the sale at the courthouse door of the county in which the sale is to be made and at the courthouse door of any other county in which a portion of the Mortgaged Property may be situated, and by filing such notice with the County Clerk(s) of the county(s) in which all or a portion of the Mortgaged Property may be situated, which notice may be posted and filed by the Trustee acting, or by any person acting for the Trustee, and Lender has, at least twenty-one (21) days before the date of the sale, served written or printed notice of the proposed sale by certified mail on each debtor obligated to pay the Indebtedness according to Lender’s records by the deposit of such notice, enclosed in a postpaid wrapper, properly addressed to such debtor at debtor’s most recent address as shown by Lender’s records, in a post office or official depository under the care and custody of the United States Postal Service.  The affidavit of any person having knowledge of the facts to the effect that such service was completed shall be prima facie evidence of the fact of service;
(2)    Trustee shall deliver to the purchaser at the sale, within a reasonable time after the sale, a deed conveying the Mortgaged Property so sold in fee simple with covenants of general warranty.  Borrower covenants and agrees to defend generally the purchaser’s title to the Mortgaged Property against all claims and demands.  The recitals in Trustee’s deed shall be prima facie evidence of the truth of the statements contained in those recitals;
(3)    Trustee shall be entitled to receive fees and expenses from such sale not to exceed the amount permitted by applicable law; and
(4)    Lender shall have the right to become the purchaser at any sale made under or by virtue of this Security Instrument and Lender so purchasing at any such sale shall have the right to be credited upon the amount of the bid made therefor by Lender with the amount payable to Lender out of the net proceeds of such sale.  In the event of any such sale, the outstanding principal amount of the Mortgage Loan and the other Indebtedness, if not previously due, shall be and become immediately due and payable without demand or notice of any kind.  If the Mortgaged Property is sold for an amount less than the amount outstanding under the Indebtedness, the deficiency shall be determined by the purchase price at the sale or sales.  Borrower waives all rights, claims, and defenses with respect to Lender’s ability to obtain a deficiency judgment.
(c)    Borrower acknowledges and agrees that the proceeds of any sale shall be applied as determined by Lender unless otherwise required by applicable law.
(d)    In connection with the exercise of Lender’s rights and remedies under this Security Instrument and any other Loan Document, there shall be allowed and included as Indebtedness:  (1) all expenditures and expenses authorized by applicable law and all other expenditures and expenses which may be paid or incurred by or on behalf of Lender for reasonable legal fees, appraisal fees, outlays for documentary and expert evidence, stenographic charges and publication costs; (2) all expenses of any environmental site assessments, environmental audits, environmental remediation costs, appraisals, surveys, engineering studies, wetlands delineations, flood plain studies, and any other similar testing or investigation deemed necessary or advisable by Lender incurred in preparation for, contemplation of or in connection with the exercise of Lender’s rights and remedies under the Loan Documents; and (3) costs (which may be reasonably estimated as to items to be expended in connection with the exercise of Lender’s rights and remedies under the Loan Documents) of procuring all abstracts of title, title searches and examinations, title insurance policies, and similar data and assurance with respect to title as Lender may deem reasonably 

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 10

	Texas
	12-17
	© 2017 Fannie Mae

necessary either to prosecute any suit or to evidence the true conditions of the title to or the value of the Mortgaged Property to bidders at any sale which may be held in connection with the exercise of Lender’s rights and remedies under the Loan Documents.  All expenditures and expenses of the nature mentioned in this Section 5, and such other expenses and fees as may be incurred in the protection of the Mortgaged Property and rents and income therefrom and the maintenance of the lien of this Security Instrument, including the fees of any attorney employed by Lender in any litigation or proceedings affecting this Security Instrument, the Note, the other Loan Documents, or the Mortgaged Property, including bankruptcy proceedings, any Foreclosure Event, or in preparation of the commencement or defense of any proceedings or threatened suit or proceeding, or otherwise in dealing specifically therewith, shall be so much additional Indebtedness and shall be immediately due and payable by Borrower, with interest thereon at the Default Rate until paid.
(e)    If all or any part of the Mortgaged Property is sold pursuant to this Section 5, Borrower will be divested of any and all interest and claim to the Mortgaged Property, including any interest or claim to all insurance policies, utility deposits, bonds, loan commitments and other intangible property included as a part of the Mortgaged Property.  Additionally, after a sale of all or any part of the Land, Improvements, Fixtures and Personalty, Borrower will be considered a tenant at sufferance of the purchaser of the same, and the purchaser shall be entitled to immediate possession of such property.  If Borrower shall fail to vacate the Mortgaged Property immediately, the purchaser may and shall have the right, without further notice to Borrower, to go into any justice court in any precinct or county in which the Mortgaged Property is located and file an action in forcible entry and detainer, which action shall lie against Borrower or its assigns or legal representatives, as a tenant at sufferance.  This remedy is cumulative of any and all remedies the purchaser may have under this Security Instrument or otherwise.
(f)    In any action for a deficiency after a foreclosure under this Security Instrument, if any person against whom recovery is sought requests the court in which the action is pending to determine the fair market value of the Mortgaged Property, as of the date of the foreclosure sale, the following shall be the basis of the court’s determination of fair market value; provided that Borrower and any guarantor hereby waive any rights to contest the amount of the deficiency claim afforded to Borrower and such guarantor under Tex. Prop. Code Sections 51.003; 51.004 and 51.005; in the event the waiver of such provision is held invalid, that the valuation method as currently set forth below shall be used;
(1)    the Mortgaged Property shall be valued “as is” and in its condition as of the date of foreclosure, and no assumption of increased value because of post-foreclosure repairs, refurbishment, restorations or improvements shall be made;
(2)    any adverse effect on the marketability of title because of the foreclosure or because of any other title condition not existing as of the date of this Security Instrument shall be considered;
(3)    the valuation of the Mortgaged Property shall be based upon an assumption that the foreclosure purchaser desires a prompt resale of the Mortgaged Property for cash within a six (6) month period after foreclosure;
(4)    although the Mortgaged Property may be disposed of more quickly by the foreclosure purchaser, the gross valuation of the Mortgaged Property as of the date of foreclosure shall be discounted for a hypothetical reasonable holding period (not to exceed six (6) months) at a monthly rate equal to the average monthly interest rate on the Note for the twelve (12) months before the date of foreclosure;

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 11

	Texas
	12-17
	© 2017 Fannie Mae

(5)    the gross valuation of the Mortgaged Property as of the date of foreclosure shall be further discounted and reduced by reasonable estimated costs of disposition, including brokerage commissions, title policy premiums, environmental assessment and clean-up costs, tax and assessment, prorations, costs to comply with legal requirements, and attorneys’ fees;
(6)    expert opinion testimony shall be considered only from a licensed appraiser certified by the State of Texas and, to the extent permitted under Texas law, a member of the Appraisal Institute, having at least five (5) years’ experience in appraising property similar to the Mortgaged Property in the county where the Mortgaged Property is located, and who has conducted and prepared a complete written appraisal of the Mortgaged Property taking into considerations the factors set forth in this Security Instrument; no expert opinion testimony shall be considered without such written appraisal;
(7)    evidence of comparable sales shall be considered only if also included in the expert opinion testimony and written appraisal referred to in the preceding paragraph; and
(8)    an affidavit executed by Lender to the effect that the foreclosure bid accepted by Trustee was equal to or greater than the value of the Mortgaged Property determined by Lender based upon the factors and methods set forth in subparagraphs (1) through (7) above before the foreclosure shall constitute prima facie evidence that the foreclosure bid was equal to or greater than the fair market value of the Mortgaged Property on the foreclosure date.
(g)    Lender may, at Lender’s option, comply with these provisions in the manner permitted or required by Title 5, Section 51.002 of the Texas Property Code (relating to the sale of real estate) or by Chapter 9 of the Texas Business and Commerce Code (relating to the sale of collateral after default by a debtor), as those titles and chapters now exist or may be amended or succeeded in the future, or by any other present or future articles or enactments relating to same subject.  Unless expressly excluded, the Mortgaged Property shall include Rents collected before a foreclosure sale, but attributable to the period following the foreclosure sale, and Borrower shall pay such Rents to the purchaser at such sale.  At any such sale:
(1)    whether made under the power contained in this Security Instrument, Section 51.002, the Texas Business and Commerce Code, any other legal requirement or by virtue of any judicial proceedings or any other legal right, remedy or recourse, it shall not be necessary for Trustee to have physically present, or to have constructive possession of, the Mortgaged Property (Borrower shall deliver to Trustee any portion of the Mortgaged Property not actually or constructively possessed by Trustee immediately upon demand by Trustee) and the title to and right of possession of any such Mortgaged Property shall pass to the purchaser as completely as if the Mortgaged Property had been actually present and delivered to the purchaser at the sale;
(2)    each instrument of conveyance executed by Trustee shall contain a general warranty of title, binding upon Borrower;
(3)    the recitals contained in any instrument of conveyance made by Trustee shall conclusively establish the truth and accuracy of the matters recited in the Instrument, including nonpayment of the Indebtedness and the advertisement and conduct of the sale in the manner provided in this Security Instrument and otherwise by law and the appointment of any successor Trustee;

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 12

	Texas
	12-17
	© 2017 Fannie Mae

(4)    all prerequisites to the validity of the sale shall be conclusively presumed to have been satisfied;
(5)    the receipt of Trustee or of such other party or officer making the sale shall be sufficient to discharge to the purchaser or purchasers for such purchaser(s)’ purchase money, and no such purchaser or purchasers, or such purchaser(s)’ assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money or be in any way answerable for any loss, misapplication or nonapplication of such purchase money; and
(6)    to the fullest extent permitted by law, Borrower shall be completely and irrevocably divested of all of Borrower’s right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the Mortgaged Property sold, and such sale shall be a perpetual bar to any claim to all or any part of the Mortgaged Property sold, both at law and in equity, against Borrower and against any person claiming by, through or under Borrower.
(h)    Any action taken by Trustee or Lender pursuant to the provisions of this Section 5 shall comply with the laws of the Property Jurisdiction.  Such applicable laws shall take precedence over the provisions of this Section 5, but shall not invalidate or render unenforceable any other provision of any Loan Document that can be construed in a manner consistent with any applicable law.  If any provision of this Security Instrument shall grant to Lender (including Lender acting as a mortgagee-in-possession), Trustee or a receiver appointed pursuant to the provisions of this Security Instrument any powers, rights or remedies prior to, upon, during the continuance of or following an Event of Default that are more limited than the powers, rights, or remedies that would otherwise be vested in such party under any applicable law in the absence of said provision, such party shall be vested with the powers, rights, and remedies granted in such applicable law to the full extent permitted by law.
6.    Waiver of Statute of Limitations and Marshaling.
Borrower hereby waives the right to assert any statute of limitations as a bar to the enforcement of the lien of this Security Instrument or to any action brought to enforce any Loan Document.  Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender shall have the right to determine the order in which any or all of the Mortgaged Property shall be subjected to the remedies provided in this Security Instrument and/or any other Loan Document or by applicable law.  Lender shall have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies.  Borrower, for itself and all who may claim by, through, or under it, and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of this Security Instrument waives any and all right to require the marshaling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels (at the same time or different times) in connection with the exercise of any of the remedies provided in this Security Instrument or any other Loan Document, or afforded by applicable law.
7.    Waiver of Redemption; Rights of Tenants.
(a)    Borrower hereby covenants and agrees that it will not at any time apply for, insist upon, plead, avail itself, or in any manner claim or take any advantage of, any appraisement, stay, exemption or extension law or any so-called “Moratorium Law” now or at any time hereafter enacted or in force in order to prevent or hinder the enforcement or foreclosure of this Security Instrument. Without limiting the foregoing:

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 13

	Texas
	12-17
	© 2017 Fannie Mae

(1)    Borrower for itself and all Persons who may claim by, through, or under Borrower, hereby expressly waives any so-called “Moratorium Law” and any and all rights of reinstatement and redemption, if any, under any order or decree of foreclosure of this Security Instrument, it being the intent hereof that any and all such “Moratorium Laws,” and all rights of reinstatement and redemption of Borrower and of all other Persons claiming by, through, or under Borrower are and shall be deemed to be hereby waived to the fullest extent permitted by applicable law;
(2)    Borrower shall not invoke or utilize any such law or laws or otherwise hinder, delay or impede the execution of any right, power remedy herein or otherwise granted or delegated to Lender but will suffer and permit the execution of every such right, power and remedy as though no such law or laws had been made or enacted; and
(3)    if Borrower is a trust, Borrower represents that the provisions of this Section 7 (including the waiver of reinstatement and redemption rights) were made at the express direction of Borrower’s beneficiaries and the persons having the power of direction over Borrower, and are made on behalf of the trust estate of Borrower and all beneficiaries of Borrower, as well as all other persons mentioned above.
(b)    Lender shall have the right to foreclose subject to the rights of any tenant or tenants of the Mortgaged Property having an interest in the Mortgaged Property prior to that of Lender.  The failure to join any such tenant or tenants of the Mortgaged Property as party defendant or defendants in any such civil action or the failure of any decree of foreclosure and sale to foreclose their rights shall not be asserted by Borrower as a defense in any civil action instituted to collect the Indebtedness, or any part thereof or any deficiency remaining unpaid after foreclosure and sale of the Mortgaged Property, any statute or rule of law at any time existing to the contrary notwithstanding.
8.    Notice.
(a)    All notices under this Security Instrument shall be:
(1)    in writing, and shall be (A) delivered, in person, (B) mailed, postage prepaid, either by registered or certified delivery, return receipt requested, or (C) sent by overnight express courier;
(2)    addressed to the intended recipient at its respective address set forth at the end of this Security Instrument; and
(3)    deemed given on the earlier to occur of:
(A)    the date when the notice is received by the addressee; or
(B)    if the recipient refuses or rejects delivery, the date on which the notice is so refused or rejected, as conclusively established by the records of the United States Postal Service or such express courier service.
(b)    Any party to this Security Instrument may change the address to which notices intended for it are to be directed by means of notice given to the other party in accordance with this Section 8.
(c)    Any required notice under this Security Instrument which does not specify how notices are to be given shall be given in accordance with this Section 8.

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 14

	Texas
	12-17
	© 2017 Fannie Mae

9.    Mortgagee-in-Possession.
Borrower acknowledges and agrees that the exercise by Lender of any of the rights conferred in this Security Instrument shall not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and Improvements.
10.    Release.
Upon payment in full of the Indebtedness, Lender shall cause the release of this Security Instrument and Borrower shall pay Lender’s costs incurred in connection with such release.
11.    Trustee.
(a)    Trustee may resign by giving of notice of such resignation in writing to Lender.  If Trustee shall die, resign or become disqualified from acting under this Security Instrument or shall fail or refuse to act in accordance with this Security Instrument when requested by Lender or if for any reason and without cause Lender shall prefer to appoint a substitute trustee to act instead of the original Trustee named in this Security Instrument or any prior successor or substitute trustee, Lender shall have full power to appoint a substitute trustee and, if preferred, several substitute trustees in succession who shall succeed to all the estate, rights, powers and duties of the original Trustee named in this Security Instrument.  Such appointment may be executed by an authorized officer, agent or attorney‐in‐fact of Lender (whether acting pursuant to a power of attorney or otherwise), and such appointment shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by Lender.
(b)    Any successor Trustee appointed pursuant to this Section 11 shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers and trusts of the predecessor Trustee with like effect as if originally named as Trustee in this Security Instrument; but, nevertheless, upon the written request of Lender or such successor Trustee, the Trustee ceasing to act shall execute and deliver an instrument transferring to such successor Trustee, all the estates, properties, rights, powers and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the Mortgaged Property and monies held by the Trustee ceasing to act to the successor Trustee.
(c)    Trustee may authorize one (1) or more parties to act on Trustee’s behalf to perform the ministerial functions required of Trustee under this Security Instrument, including the transmittal and posting of any notices.
12.    No Fiduciary Duty.
Lender owes no fiduciary or other special duty to Borrower.
13.    Additional Provisions Regarding Assignment of Leases and Rents.
In no event shall the assignment of Rents or Leases in Section 3 cause the Indebtedness to be reduced by an amount greater than the Rents actually received by Lender and applied by Lender to the Indebtedness, whether before, during or after (a) an Event of Default, or (b) a suspension or revocation of the license granted to Borrower in Section 3 with regard to the Rents.  Borrower and Lender specifically intend that the assignment of Rents and Leases in Section 3 is not intended to result in a pro tanto reduction of the Indebtedness.  The assignment of Rents and Leases in Section 3 is not intended to constitute a payment of, or with respect to, the Indebtedness and, therefore, Borrower and Lender specifically intend that the Indebtedness shall not be reduced by the value of 

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 15

	Texas
	12-17
	© 2017 Fannie Mae

the Rents and Leases assigned.  Such reduction shall occur only if, and to the extent that, Lender actually receives Rents pursuant to Section 3 and applies such Rents to the Indebtedness.  Borrower agrees that the value of the license granted with regard to the Rents equals the value of the absolute assignment of Rents to Lender.  The assignment of Rents contained in Section 3 shall terminate upon the release of this Security Instrument.
14.    Loan Charges.
Borrower agrees to pay an effective rate of interest equal to the sum of the Interest Rate and any additional rate of interest resulting from any other charges of interest or in the nature of interest paid or to be paid in connection with the Mortgage Loan and any other fees or amounts to be paid by Borrower pursuant to any of the other Loan Documents.  Neither this Security Instrument, the Note, the Loan Agreement, nor any of the other Loan Documents shall be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate greater than the maximum interest rate permitted to be charged under applicable law.  It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply with all applicable laws governing the maximum rate or amount of interest payable on the indebtedness evidenced by this Security Instrument, the Note and the other Loan Documents.  If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower is interpreted so that any interest or other charge or amount provided for in any Loan Document, whether considered separately or together with other charges or amounts provided for in any other Loan Document, or otherwise charged, taken, reserved or received in connection with the Mortgage Loan, or on acceleration of the maturity of the Mortgage Loan or as a result of any prepayment by Borrower or otherwise, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate any such violation.  Amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the unpaid principal balance of the Mortgage Loan without the payment of any Prepayment Premium (or, if the Mortgage Loan has been or would thereby be paid in full, shall be refunded to Borrower), and the provisions of the Loan Agreement and any other Loan Documents immediately shall be deemed reformed and the amounts thereafter collectible under the Loan Agreement and any other Loan Documents reduced, without the necessity of the execution of any new documents, so as to comply with any applicable law, but so as to permit the recovery of the fullest amount otherwise payable under the Loan Documents.  For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, and any amount paid or agreed to be paid to Lender for the use, forbearance or detention of the Indebtedness, shall be deemed to be allocated and spread ratably over the stated term of the Mortgage Loan.  Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Mortgage Loan.
15.    ENTIRE AGREEMENT.
THIS SECURITY INSTRUMENT, THE NOTE, THE LOAN AGREEMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
16.    Governing Law; Consent to Jurisdiction and Venue.
This Security Instrument shall be governed by the laws of the Property Jurisdiction without giving effect to any choice of law provisions thereof that would result in the application of the laws 

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 16

	Texas
	12-17
	© 2017 Fannie Mae

of another jurisdiction.  Borrower agrees that any controversy arising under or in relation to this Security Instrument shall be litigated exclusively in the Property Jurisdiction.  The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies that arise under or in relation to any security for the Indebtedness.  Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise.
17.    Texas Specific Provisions.
(a)    BORROWER ACKNOWLEDGES THAT EVERY RELEASE AND INDEMNITY PROVISION PROVIDED IN ANY LOAN DOCUMENT FOR THE BENEFIT OF LENDER, INCLUDING THE INDEMNITIES SET FORTH IN SECTION 3.03 OF THE LOAN AGREEMENT AND SECTION 8 OF THE ENVIRONMENTAL INDEMNITY AGREEMENT, WILL APPLY EVEN IF AND WHEN THE SUBJECT MATTER OF THE INDEMNITY OR RELEASE ARISES OUT OF OR RESULTS FROM THE NEGLIGENCE OR STRICT LIABILITY OF LENDER, BUT WILL NOT APPLY TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LENDER.
(b)    TEXAS FINANCE CODE SECTION 307.052 COLLATERAL PROTECTION INSURANCE NOTICE:  (1) BORROWER IS REQUIRED TO: (A) KEEP THE MORTGAGED PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNT LENDER SPECIFIES; (B) PURCHASE THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER; AND (C) NAME LENDER AS THE PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS; (2) BORROWER MUST, IF REQUIRED BY LENDER, DELIVER TO LENDER A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS; AND (3) IF BORROWER FAILS TO MEET ANY REQUIREMENT LISTED IN CLAUSE (1) OR (2), LENDER MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF BORROWER AT BORROWER’S EXPENSE.  THE PROVISIONS OF THIS SECTION SHALL BE IN ADDITION TO ANY INSURANCE REQUIREMENTS OF THE LOAN AGREEMENT.
18.    Miscellaneous Provisions.
(a)    This Security Instrument shall bind, and the rights granted by this Security Instrument shall benefit, the successors and assigns of Lender.  This Security Instrument shall bind, and the obligations granted by this Security Instrument shall inure to, any permitted successors and assigns of Borrower under the Loan Agreement.  If more than one (1) person or entity signs this Security Instrument as Borrower, the obligations of such persons and entities shall be joint and several.  The relationship between Lender and Borrower shall be solely that of creditor and debtor, respectively, and nothing contained in this Security Instrument shall create any other relationship between Lender and Borrower.  No creditor of any party to this Security Instrument and no other person shall be a third party beneficiary of this Security Instrument or any other Loan Document.
(b)    The invalidity or unenforceability of any provision of this Security Instrument or any other Loan Document shall not affect the validity or enforceability of any other provision of this Security Instrument or of any other Loan Document, all of which shall remain in full force and effect.  This Security Instrument contains the complete and entire agreement among the parties as to the matters covered, rights granted and the obligations assumed in this Security Instrument.  This Security Instrument may not be amended or modified except by written agreement signed by the parties hereto.

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 17

	Texas
	12-17
	© 2017 Fannie Mae

(c)    The following rules of construction shall apply to this Security Instrument:
(1)    The captions and headings of the sections of this Security Instrument are for convenience only and shall be disregarded in construing this Security Instrument.
(2)    Any reference in this Security Instrument to an “Exhibit” or “Schedule” or a “Section” or an “Article” shall, unless otherwise explicitly provided, be construed as referring, respectively, to an exhibit or schedule attached to this Security Instrument or to a Section or Article of this Security Instrument.
(3)    Any reference in this Security Instrument to a statute or regulation shall be construed as referring to that statute or regulation as amended from time to time.
(4)    Use of the singular in this Security Instrument includes the plural and use of the plural includes the singular.
(5)    As used in this Security Instrument, the term “including” means “including, but not limited to” or “including, without limitation,” and is for example only, and not a limitation.
(6)    Whenever Borrower’s knowledge is implicated in this Security Instrument or the phrase “to Borrower’s knowledge” or a similar phrase is used in this Security Instrument, Borrower’s knowledge or such phrase(s) shall be interpreted to mean to the best of Borrower’s knowledge after reasonable and diligent inquiry and investigation.
(7)    Unless otherwise provided in this Security Instrument, if Lender’s approval, designation, determination, selection, estimate, action or decision is required, permitted or contemplated hereunder, such approval, designation, determination, selection, estimate, action or decision shall be made in Lender’s sole and absolute discretion.
(8)    All references in this Security Instrument to a separate instrument or agreement shall include such instrument or agreement as the same may be amended or supplemented from time to time pursuant to the applicable provisions thereof.
(9)    “Lender may” shall mean at Lender’s discretion, but shall not be an obligation.
19.    Time is of the Essence.
Borrower agrees that, with respect to each and every obligation and covenant contained in this Security Instrument and the other Loan Documents, time is of the essence.
20.    WAIVER OF TRIAL BY JURY.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS SECURITY INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH OF 

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 18

	Texas
	12-17
	© 2017 Fannie Mae

BORROWER AND LENDER, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
ATTACHED EXHIBITS.  The following Exhibits are attached to this Security Instrument and incorporated fully herein by reference:
	
				
	X
	 
	Exhibit A
	Description of the Land (required)

	 
	 
	 
	 

	 
	 
	Exhibit B
	Modifications to Security Instrument

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

[Remainder of Page Intentionally Blank]

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page 19

	Texas
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	© 2017 Fannie Mae

BORROWER:
STAR III VISTA RIDGE, LLC, a Delaware limited liability company

		
	By:
	Steadfast Apartment Advisor III, LLC, a Delaware limited liability company, its Manager

By: /s/ Kevin J. Keating__________________
Name: Kevin J. Keating
Title: Treasurer

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page S-1

	Texas
	12-17
	© 2017 Fannie Mae

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

		
	▪
	Debtor Name/Record Owner: STAR III Vista Ridge, LLC

		
	▪
	Debtor Chief Executive Office Address:

c/o Steadfast Companies 
18100 Von Karman Avenue, Suite 500 
Irvine, California 92612 
Attention - General Counsel:  Ana Marie del Rio
		
	▪
	Debtor Organizational ID Number: 6397883

The name and chief executive office of Lender (as Secured Party) are:

		
	▪
	Secured Party Name: PNC Bank, National Association

		
	▪
	Secured Party Chief Executive Office Address:

26901 Agoura Road, Suite 200 
Calabasas Hills, California 91301 
Attn:  Loan Servicing Manager

The name and chief executive office of Trustee are:

		
	▪
	Trustee Name:  Gary S. Farmer

		
	▪
	Trustee Office Address:  

401 Congress Avenue, Suite 1500
Austin, Texas 78701

	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page S-2

	Texas
	12-17
	© 2017 Fannie Mae

EXHIBIT A
DESCRIPTION OF THE LAND

TRACT 1: Lot 1, Block A, THE VINEYARDS AT VISTA RIDGE, a subdivision in Denton County, Texas, according to the map or plat thereof, recorded in Cabinet U, Page 534 of the Plat Records of Denton County, Texas, and being described as a 14.967 acre tract in deed dated September 26, 2014 recorded under Document No. 201498304 of the Official Public Records of Denton County, Texas, and being more fully described in the Exhibit "A" attached hereto and made a part hereof.

TRACT 2: Easement Estate created by that certain 10' x 25' Private Utility Easement dated November 15, 2002, recorded in Volume 5219, Page 3738 of the Real Property Records of Denton County, Texas.

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page A-1

	Texas
	12-17
	© 2017 Fannie Mae

EXHIBIT A

Tract 1: (Fee Simple)

BEING a tract of land situated in the Thomas B. Garvin Survey, Abstract No. 506 in the City of Lewisville, Denton County, Texas and being all of Lot 1, Block A of THE VINEYARDS at VISTA RIDGE, an addition to the City of Lewisville, Denton County, Texas, according to the plat thereof recorded in Cabinet U, Page 534 of the Plat Records of Denton County, Texas and being all of the called 14.964 acre tract of land described in deed to Dallas Estancia at Vista Ridge, L.P., recorded in Volume 5208, Page 1563 of the Real Property Records of Denton County, Texas, and being more particularly described as follows:

BEGINNING at a 5/8-inch "KHA" capped iron rod found in the east right-of-way line of Mac Arthur Boulevard (120 foot ROW), for the northwest corner of aforementioned Lot 1, Block A, and for the southerly most west corner of Lot 3, Block H of VISTA RIDGE an addition to the City of Lewisville, Denton County, Texas, according to the plat thereof recorded in Cabinet F, Page 271 of the Plat Records of Denton County, Texas;

THENCE with the common line of said Lot 1 and Lot 3, Block H, the following courses and distances to wit:

North 89 degrees 31 minutes 08 seconds East, a distance of 329.25 feet to a 5/8-inch "Carter & Burgess" capped iron rod found for corner;
South 80 degrees 14 minutes 49 seconds East, a distance of 94.37 feet to a 5/8-inch "Carter & Burgess" capped iron rod found for corner;
South 68 degrees 56 minutes 57 seconds East, a distance of 186.45 feet to a 5/8-inch capped iron rod found for corner;
North 76 degrees 28 minutes 05 seconds East, a distance of 162.51 feet to a 5/8-inch "KHA" capped iron rod set for corner;
North 67 degrees 42 minutes 21 seconds East, a distance of 131.85 feet to a 5/8-inch "KHA" capped iron rod set for corner;
North 87 degrees 59 minutes 20 seconds East, a distance of 143.09 feet to a 5/8-inch "KHA" capped iron rod set for corner;
South 83 degrees 42 minutes 43 seconds East, a distance of 127.94 feet to a 5/8-inch .KHA. capped iron rod set for the northeast corner of said Lot 1, same being the northwest corner of Lot 2, Block A of VISTA POINT EAST ADDITION, an addition to the City of Lewisville, Denton County, Texas, according to the plat thereof recorded in Cabinet X, Page 982 of the Plat Records of Denton County, Texas;

THENCE leaving the south line of said Lot 3 and along the common line of said Lot 1 and Lot 2, Block A, the following courses and distances to wit:

South 01 degree 06 minutes 32 seconds West, a distance of 550.61 feet to a 5/8-inch "KHA" capped iron rod found for the southeast corner of said Lot 1;

South 78 degrees 42 minutes 58 seconds West, a distance of 130.45 feet to a 1/2-inch iron rod found for the most westerly corner of said Lot 2, same being on the north line of Lot 4, Block A of VISTA RIDGE/MACARTHUR ADDITION, an addition to the City of Lewisville, Denton County, Texas, according to the plat thereof recorded in Cabinet V, Page 230 of the Plat Records of Denton County, Texas;

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page A-2

	Texas
	12-17
	© 2017 Fannie Mae

THENCE leaving the west line of said Lot 2 and along the common line of said Lot 1 and Lot 4, Block A, the following courses and distances to wit:
South 85 degrees 29 minutes 29 seconds West, a distance of 451.67 feet to a 1/2-inch "Pacheco Koch" capped iron rod found for the beginning of a tangent curve to the left, having a central angle of 10 degrees 01 minute 40 seconds, a radius of 315.00 feet, and a chord bearing and distance of South 80 degrees 28 minutes 39 seconds West, 55.06 feet;

Southwesterly with said curve to the left, an arc distance of 55.13 feet to a 5/8-inch iron rod found for corner;

South 75 degrees 27 minutes 49 seconds West, a distance of 356.42 feet to an "X" cut found in the west right-of-way line dedicated to the City of Lewisville, Texas for deceleration lane in MacArthur Boulevard and for the beginning of a non-tangent curve to the right;

THENCE with the west right-of-way line of said Mac Arthur Boulevard, the following courses and distances to wit:

Northwesterly with said curve to the right, through a central angle of 01 degree 14 minutes 12 seconds, having a radius of 5328.00 feet, and a chord bearing and distance of North 14 degrees 17 minutes 39 seconds West, 115.00 feet, an arc distance of 115.00 feet to a 5/8 inch iron rod found for corner;

North 64 degrees 21 minutes 40 seconds West, a distance of 15.50 feet to a 5/8 inch iron rod found for the beginning of a non-tangent curve to the right;

Northwesterly with said curve to the right, through a central angle of 03 degrees 24 minutes 58 seconds, having a radius of 5340.00 feet, and a chord bearing and distance of North 11 degrees 51 minutes 45 seconds West, 318.34 feet, an arc distance of 318.39 feet to a 5/8 inch iron rod found for corner; 

North 10 degrees 09 minutes 16 seconds West, a distance of 286.06 feet to the POINT OF BEGINNING and containing 14.967 acres (651,957 square feet) of land, more or less.

    
	
			
	Fannie Mae Multifamily Security Instrument
	Form 6025.TX
	Page A-3

	Texas
	12-17
	© 2017 Fannie Mae

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