Document:

mcfaexecutedcwcommunitie

                                                Execution Version               MASTER CREDIT FACILITY AGREEMENT                         BY AND BETWEEN    THE BORROWERS LISTED ON THE SUMMARY OF MASTER TERMS                               AND             BERKADIA COMMERCIAL MORTGAGE, LLC                           DATED AS OF                            May 30, 2019                           Cottonwood Communities  

 

                                  TABLE OF CONTENTS   Article 1   DEFINITIONS; SUMMARY OF TERMS ........................................................... 2        Section 1.01   Defined Terms ..................................................................................... 2        Section 1.02   Schedules, Exhibits, and Attachments Incorporated ............................ 2  Article 2   ADVANCES; COLLATERAL EVENTS ............................................................. 2        Section 2.01   Variable Advance and Fixed Advance ................................................ 2              (a)   Variable Advance....................................................................................... 2              (b)   Fixed Advance ........................................................................................... 3        Section 2.02   Advances .............................................................................................. 3              (a)   Request ....................................................................................................... 3              (b)   Limitations on Executions ......................................................................... 3              (c)   Making Advances ...................................................................................... 3        Section 2.03   Advance Terms and Payments on Advances ....................................... 5              (a)   Debt Service Payments .............................................................................. 5              (b)   Capitalization of Accrued but Unpaid Interest .......................................... 8              (c)   Late Charges .............................................................................................. 8              (d)   Default Rate ............................................................................................... 8              (e)   Address for Payments ................................................................................ 9              (f)   Application of Payments .......................................................................... 10        Section 2.04   Prepayment; Prepayment Lockout; Prepayment Premium ................ 10        Section 2.05   Acceleration of Advances .................................................................. 11        Section 2.06   Application of Collateral.................................................................... 11        Section 2.07   Casualty and Condemnation .............................................................. 11        Section 2.08   No Effect on Payment Obligations .................................................... 12        Section 2.09   Loss Resulting from Prepayment ....................................................... 12        Section 2.10   Collateral Events ................................................................................ 12              (a)   Conversion from Variable Note to Fixed Note ........................................ 12              (b)   Right to Obtain Releases of Mortgaged Property .................................... 12              (c)   Right to Add Additional Mortgaged Properties as Collateral .................. 13              (d)   Right to Substitutions ............................................................................... 13    Master Credit Facility Agreement    Form 6001.MCFA                        Page i  Fannie Mae                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (e)   Limitation on Collateral Events ............................................................... 13              (f)   [Intentionally Deleted.] ............................................................................ 13              (g)   Elected Coverage and LTV Tests ........................................................... 13        Section 2.11   Termination of Master Agreement..................................................... 13              (a)   Request ..................................................................................................... 13              (b)   Conditions Precedent ............................................................................... 14              (c)   Closing ..................................................................................................... 14  Article 3   PERSONAL LIABILITY .................................................................................... 14        Section 3.01   Non-Recourse Liability; Exceptions .................................................. 14        Section 3.02   Personal Liability of Borrower .......................................................... 15              (a)   Personal Liability Based on Lender’s Loss (Partial Recourse) ............... 15              (b)   Full Personal Liability (Full Recourse).................................................... 16        Section 3.03   Personal Liability for Indemnity Obligations .................................... 17        Section 3.04   Lender’s Right to Forego Rights Against Mortgaged Property ......... 17        Section 3.05   Borrower Agency Provisions ............................................................. 18        Section 3.06   Joint and Several Obligation; Cross-Guaranty .................................. 18        Section 3.07   Waivers With Respect to Other Borrower Secured Obligation ......... 19        Section 3.08   No Impairment ................................................................................... 23        Section 3.09   Election of Remedies ......................................................................... 23        Section 3.10   Subordination of Other Obligations ................................................... 24        Section 3.11   Insolvency and Liability of Other Borrower ...................................... 25        Section 3.12   Preferences, Fraudulent Conveyances, Etc ........................................ 25        Section 3.13   Maximum Liability of Each Borrower .............................................. 26        Section 3.14   Liability Cumulative .......................................................................... 26  Article 4   BORROWER STATUS ....................................................................................... 26        Section 4.01   Representations and Warranties ......................................................... 26              (a)   Due Organization and Qualification; Organizational Agreements .......... 27              (b)   Location ................................................................................................... 27              (c)   Power and Authority ................................................................................ 27              (d)   Due Authorization .................................................................................... 28              (e)   Valid and Binding Obligations ................................................................ 28     Master Credit Facility Agreement    Form 6001.MCFA                        Page ii  Fannie Mae                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (f)   Effect of Master Agreement on Financial Condition ............................... 28              (g)   Economic Sanctions, Anti-Money Laundering, and Anti-                   Corruption ................................................................................................ 28              (h)   Single Purpose Status ............................................................................... 29              (i)   No Bankruptcies or Judgments ................................................................ 31              (j)   No Actions or Litigation .......................................................................... 32              (k)   Payment of Taxes, Assessments, and Other Charges .............................. 32              (l)   Not a Foreign Person ............................................................................... 32              (m)   ERISA ...................................................................................................... 32              (n)   Default Under Other Obligations ............................................................. 33              (o)   Prohibited Person ..................................................................................... 33              (p)   No Contravention; No Liens .................................................................... 33              (q)   Lockbox Arrangement ............................................................................. 34              (r)   No Reliance .............................................................................................. 34              (s)   Investment Company Act ........................................................................ 34        Section 4.02   Covenants ........................................................................................... 35              (a)   Maintenance of Existence; Organizational Documents ........................... 35              (b)   Economic Sanctions, Anti-Money Laundering, and Anti-                   Corruption ................................................................................................ 35              (c)   Payment of Taxes, Assessments, and Other Charges .............................. 36              (d)   Single Purpose Status ............................................................................... 36              (e)   ERISA ...................................................................................................... 38              (f)   Notice of Litigation or Insolvency ........................................................... 39              (g)   Payment of Costs, Fees, and Expenses .................................................... 39              (h)   Restrictions on Distributions.................................................................... 40              (i)   Lockbox Arrangement ............................................................................. 40              (j)   Confidentiality of Certain Information .................................................... 40  Article 5   THE ADVANCES ............................................................................................... 41        Section 5.01   Representations and Warranties ......................................................... 41              (a)   Receipt and Review of Loan Documents................................................. 41              (b)   No Default ................................................................................................ 41              (c)   No Defenses ............................................................................................. 41    Master Credit Facility Agreement    Form 6001.MCFA                       Page iii  Fannie Mae                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (d)   Loan Document Taxes ............................................................................. 41        Section 5.02   Covenants ........................................................................................... 41              (a)   Ratification of Covenants; Estoppels; Certifications ............................... 41              (b)   Further Assurances................................................................................... 42              (c)   Sale of Advances...................................................................................... 43              (d)   Limitations on Further Acts of Borrower ................................................ 44              (e)   Financing Statements; Record Searches .................................................. 44              (f)   Loan Document Taxes ............................................................................. 44              (g)   Date-Down Endorsements ....................................................................... 44        Section 5.03   Administrative Matters Regarding Advances .................................... 45              (a)   Determination of Allocable Facility Amount and Valuations ................. 45  Article 6   PROPERTY USE, PRESERVATION, AND MAINTENANCE........................ 46        Section 6.01   Representations and Warranties ......................................................... 46              (a)   Compliance with Law; Permits and Licenses .......................................... 46              (b)   Property Characteristics ........................................................................... 47              (c)   Property Ownership ................................................................................. 47              (d)   Condition of the Mortgaged Property ...................................................... 47              (e)   Personal Property ..................................................................................... 47        Section 6.02   Covenants ........................................................................................... 48              (a)   Use of Property ........................................................................................ 48              (b)   Property Maintenance .............................................................................. 48              (c)   Property Preservation ............................................................................... 50              (d)   Property Inspections................................................................................. 50              (e)   Compliance with Laws ............................................................................ 51              (f)   Alterations to any Mortgaged Property.................................................... 52              (g)   Flood Zone Designation ........................................................................... 52        Section 6.03   Administration Matters Regarding the Property ................................ 53              (a)   Property Management .............................................................................. 53              (b)   Subordination of Fees to Affiliated Property Managers .......................... 53              (c)   Property Condition Assessment ............................................................... 53  Article 7   LEASES AND RENTS........................................................................................ 54     Master Credit Facility Agreement    Form 6001.MCFA                       Page iv  Fannie Mae                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         Section 7.01   Representations and Warranties ......................................................... 54              (a)   Prior Assignment of Rents ....................................................................... 54              (b)   Prepaid Rents ........................................................................................... 54        Section 7.02   Covenants ........................................................................................... 54              (a)   Leases ....................................................................................................... 54              (b)   Commercial Leases .................................................................................. 55              (c)   Payment of Rents ..................................................................................... 56              (d)   Assignment of Rents ................................................................................ 56              (e)   Further Assignments of Leases and Rents ............................................... 56              (f)   Options to Purchase by Tenants ............................................................... 57        Section 7.03   Administration Regarding Leases and Rents ..................................... 57              (a)   Material Commercial Lease Requirements .............................................. 57              (b)   Residential Lease Form............................................................................ 57  Article 8   BOOKS AND RECORDS; FINANCIAL REPORTING .................................... 57        Section 8.01   Representations and Warranties ......................................................... 57              (a)   Financial Information............................................................................... 58              (b)   No Change in Facts or Circumstances ..................................................... 58        Section 8.02   Covenants ........................................................................................... 58              (a)   Obligation to Maintain Accurate Books and Records; Access;                    Discussions with Officers and Accountants ............................................ 58              (b)   Items to Furnish to Lender ....................................................................... 59              (c)   Audited Financials ................................................................................... 62              (d)   Delivery of Books and Records ............................................................... 63        Section 8.03   Administration Matters Regarding Books and Records and                       Financial Reporting ............................................................................ 63              (a)   Lender’s Right to Obtain Audited Books and Records ........................... 63              (b)   Credit Reports; Credit Score .................................................................... 63  Article 9   INSURANCE ....................................................................................................... 64        Section 9.01   Representations and Warranties ......................................................... 64              (a)   Compliance with Insurance Requirements .............................................. 64              (b)   Property Condition ................................................................................... 64        Section 9.02   Covenants ........................................................................................... 64    Master Credit Facility Agreement    Form 6001.MCFA                        Page v  Fannie Mae                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (a)   Insurance Requirements ........................................................................... 64              (b)   Delivery of Policies, Renewals, Notices, and Proceeds........................... 65        Section 9.03   Administration Matters Regarding Insurance .................................... 65              (a)   Lender’s Ongoing Insurance Requirements ............................................. 65              (b)   Application of Proceeds on Event of Loss ............................................... 66              (c)   Payment Obligations Unaffected ............................................................. 68              (d)   Foreclosure Sale ....................................................................................... 68              (e)   Appointment of Lender as Attorney-In-Fact ........................................... 69  Article 10  CONDEMNATION ............................................................................................. 69        Section 10.01  Representations and Warranties ......................................................... 69              (a)   Prior Condemnation Action ..................................................................... 69              (b)   Pending Condemnation Actions .............................................................. 69        Section 10.02  Covenants ........................................................................................... 69              (a)   Notice of Condemnation .......................................................................... 69              (b)   Condemnation Proceeds........................................................................... 70        Section 10.03  Administration Matters Regarding Condemnation ............................ 70              (a)   Application of Condemnation Awards .................................................... 70              (b)   Payment Obligations Unaffected ............................................................. 70              (c)   Appointment of Lender as Attorney-In-Fact ........................................... 70              (d)   Preservation of Mortgaged Property ........................................................ 70  Article 11  LIENS, TRANSFERS, AND ASSUMPTIONS .................................................. 71        Section 11.01  Representations and Warranties ......................................................... 71              (a)   No Labor or Materialmen’s Claims ......................................................... 71              (b)   No Other Interests .................................................................................... 71        Section 11.02  Covenants ........................................................................................... 71              (a)   Liens; Encumbrances ............................................................................... 71              (b)   Transfers .................................................................................................. 72              (c)   No Other Indebtedness ............................................................................. 74              (d)   No Mezzanine Financing or Preferred Equity ......................................... 74        Section 11.03  Administration Matters Regarding Liens, Transfers, and                       Assumptions ....................................................................................... 75              (a)   Transfer of Collateral Pool....................................................................... 75    Master Credit Facility Agreement    Form 6001.MCFA                       Page vi  Fannie Mae                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (b)   Permitted Transfers of Ownership Interests ............................................ 76              (c)   Estate Planning......................................................................................... 79              (d)   Termination or Revocation of Trust ........................................................ 80              (e)   Death of Key Principal or Guarantor; Restricted Ownership                    Interest/Controlling Interest Transfer Due to Death ................................ 80              (f)   [Intentionally Deleted.] ............................................................................ 82              (g)   Further Conditions on Transfers Requiring Lender’s Consent ................ 82  Article 12  IMPOSITIONS .................................................................................................... 83        Section 12.01  Representations and Warranties ......................................................... 83              (a)   Payment of Taxes, Assessments, and Other Charges .............................. 83        Section 12.02  Covenants ........................................................................................... 84              (a)   Imposition Deposits, Taxes, and Other Charges ...................................... 84        Section 12.03  Administration Matters Regarding Impositions................................. 84              (a)   Maintenance of Records by Lender ......................................................... 84              (b)   Imposition Accounts ................................................................................ 84              (c)   Payment of Impositions; Sufficiency of Imposition Deposits ................. 85              (d)   Imposition Deposits Upon Event of Default ............................................ 85              (e)   Contesting Impositions ............................................................................ 85              (f)   Release to Borrower ................................................................................. 86  Article 13  REPLACEMENT RESERVE AND REPAIRS................................................... 86        Section 13.01  Covenants ........................................................................................... 86              (a)   Initial Deposits to Replacement Reserve Account and Repairs                    Escrow Account ....................................................................................... 86              (b)   Monthly Replacement Reserve Deposits ................................................. 86              (c)   Payment for Replacements and Repairs .................................................. 86              (d)   Assignment of Contracts for Replacements and Repairs ......................... 87              (e)   Indemnification ........................................................................................ 87              (f)   Amendments to Loan Documents ............................................................ 87              (g)   Administrative Fees and Expenses .......................................................... 87        Section 13.02  Administration Matters Regarding Reserves ..................................... 88              (a)   Accounts, Deposits, and Disbursements .................................................. 88              (b)   Approvals of Contracts; Assignment of Claims ...................................... 95    Master Credit Facility Agreement    Form 6001.MCFA                       Page vii  Fannie Mae                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (c)   Delays and Workmanship ........................................................................ 95              (d)   Appointment of Lender as Attorney-In-Fact ........................................... 96              (e)   No Lender Obligation .............................................................................. 96              (f)   No Lender Warranty ................................................................................ 96  Article 14  DEFAULTS/REMEDIES .................................................................................... 96        Section 14.01  Events of Default ............................................................................... 96              (a)   Automatic Events of Default ................................................................... 97              (b)   Events of Default Subject to a Specified Cure Period ............................. 98              (c)   Events of Default Subject to Extended Cure Period or Release .............. 98        Section 14.02  Remedies ............................................................................................ 99              (a)   Acceleration; Foreclosure ........................................................................ 99              (b)   Loss of Right to Disbursements from Collateral Accounts ................... 100              (c)   Remedies Cumulative ............................................................................ 101        Section 14.03  Additional Lender Rights; Forbearance ........................................... 101              (a)   No Effect Upon Obligations .................................................................. 101              (b)   No Waiver of Rights or Remedies ......................................................... 102              (c)   Appointment of Lender as Attorney-In-Fact ......................................... 102              (d)   Borrower Waivers .................................................................................. 103        Section 14.04  Waiver of Marshaling ...................................................................... 104        Section 14.05  Severed Loan Documents ................................................................ 104  Article 15  MISCELLANEOUS .......................................................................................... 105        Section 15.01  Choice of Law; Consent to Jurisdiction ........................................... 105        Section 15.02  Waiver of Jury Trial ......................................................................... 106        Section 15.03  Notice ............................................................................................... 106              (a)   Process of Serving Notice ...................................................................... 106              (b)   Change of Address ................................................................................. 107              (c)   Default Method of Notice ...................................................................... 107              (d)   Receipt of Notices .................................................................................. 107        Section 15.04  Successors and Assigns Bound; Sale of Advances .......................... 107              (a)   Binding Agreement ................................................................................ 107              (b)   Sale of Advances; Change of Servicer................................................... 108     Master Credit Facility Agreement    Form 6001.MCFA                       Page viii  Fannie Mae                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         Section 15.05  Counterparts ..................................................................................... 108        Section 15.06  [Intentionally Deleted.] .................................................................... 108        Section 15.07  Relationship of Parties; No Third Party Beneficiary ....................... 108              (a)   Solely Creditor and Debtor .................................................................... 108              (b)   No Third Party Beneficiaries ................................................................. 108        Section 15.08  Severability; Entire Agreement; Amendments ................................ 109        Section 15.09  Construction ..................................................................................... 109        Section 15.10  Loan Servicing ................................................................................. 110        Section 15.11  Disclosure of Information ................................................................ 110        Section 15.12  Waiver; Conflict............................................................................... 110        Section 15.13  [Intentionally Deleted.] .................................................................... 110        Section 15.14  No Reliance ...................................................................................... 110        Section 15.15  Subrogation ...................................................................................... 111        Section 15.16  Counting of Days ............................................................................. 111        Section 15.17  Revival and Reinstatement of Indebtedness .................................... 111        Section 15.18  Time is of the Essence ..................................................................... 111        Section 15.19  Final Agreement............................................................................... 111        Section 15.20  Survival ............................................................................................ 112        Section 15.21  Assignments; Third Party Rights ..................................................... 112        Section 15.22  Interpretation .................................................................................... 112      Master Credit Facility Agreement    Form 6001.MCFA                       Page ix  Fannie Mae                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                  MASTER CREDIT FACILITY AGREEMENT         This  MASTER  CREDIT  FACILITY  AGREEMENT  (as  amended,  restated,  replaced,  supplemented, or otherwise modified from time to time, and further defined in the Definitions  Schedule, the “Master Agreement”) is made as of May 30, 2019, by and among (i) the entities  identified as Borrower on the Summary of Master Terms, as “Borrower” and (ii) BERKADIA  COMMERCIAL MORTGAGE LLC, a Delaware limited liability company, as Lender.                                    RECITALS         A.    Borrower  owns  one (1)  or  more  Multifamily  Residential  Properties  as  more  particularly described in Exhibit A to this Master Agreement.         B.    Borrower has requested that Lender make a loan in favor of Borrower, comprised  of  a  $35,995,000  Fixed  Advance.   Future  Advances  may  be  made  by  Lender  to  Borrower  in  accordance with the terms of this Master Agreement.         C.    To secure the obligations of Borrower under this Master Agreement and the other  Loan Documents, Borrower shall create a Collateral Pool in favor of Lender.  The Collateral Pool  shall be comprised of (i) the Multifamily Residential Properties listed on Exhibit A and (ii) any  other  collateral  pledged  to  Lender  from  time  to  time  by  Borrower  pursuant  to  this  Master  Agreement or any other Loan Documents.         D.    Each Note and Security Document shall be cross-defaulted (i.e., a default under any  Note, Security Document or this Master Agreement shall constitute a default under each other  Note and Security Document and under this Master Agreement) and cross-collateralized (i.e., each  Security  Instrument  shall  secure  all  of  Borrower’s  obligations  under  each  Note,  this  Master  Agreement, and the other Loan Documents).  It is the intent of the parties to this Master Agreement  that, after an Event of Default, Lender may accelerate any Note without the obligation but with the  right to accelerate any other Note and that in the exercise of its rights and remedies under the Loan  Documents, Lender may exercise and perfect any and all of its rights and remedies in and under  the Loan Documents with regard to any Mortgaged Property without the obligation but with the  right to exercise and perfect its rights and remedies with respect to any other Mortgaged Property.   Any  such  exercise  shall  be  without  regard  to  the  Allocable  Facility  Amount  assigned  to  such  Mortgaged Property.   Lender may recover an  amount equal to the full amount Outstanding in  respect of any of the Notes in connection with such exercise and any such amount shall be applied  to the Indebtedness as determined by Lender pursuant to the terms of this Master Agreement, the  Notes, and the other Loan Documents.         E.    It is the intent of the parties that, notwithstanding anything to the contrary herein or  the  existence  of  any  cash  management  system  maintained  by  Borrower,  and/or  Guarantor  or  Borrower Affiliates or the provision by Guarantor of the Guaranty, Lender is making Advances to  Borrower (not to Guarantor or Borrower Affiliates).  Lender has underwritten the making of the  Advances based on its analysis of the value of the Collateral.  In making the Advances, Lender is  relying on each Borrower being and maintaining itself as a Single Purpose entity whose sole asset     Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Article 1                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   is  its  Mortgaged Property and  ancillary  property related  thereto.   Lender acknowledges  that  it  views its credit risk as the performance and value of the Mortgaged Properties and it views the  Guaranty as independent supplemental support in the event that one of the exceptions to the non- recourse events occurs.         F.    Subject to the terms, conditions, and limitations of this Master Agreement, Lender  has agreed to make the Advances.         G.    It is anticipated that Lender shall assign each Advance made hereunder to Fannie  Mae; however Fannie Mae shall not assume (i) any of the obligations of Lender, if any, under this  Master Agreement to make Future Advances, or (ii) any of the obligations of Lender which are  servicing obligations delegated to Lender as servicer of the Advances.         NOW, THEREFORE, in consideration of Borrower and Lender entering into this Master  Agreement  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 TERMS   Section 1.01   Defined Terms.         Capitalized terms not otherwise defined in the body of this Master Agreement shall have  the meanings set forth in the Definitions Schedule attached to this Master Agreement.   Section 1.02   Schedules, Exhibits, and Attachments Incorporated.         The schedules, exhibits, and any other addenda or attachments are incorporated fully into  this Master Agreement by this reference and each constitutes a substantive part of this Master  Agreement.                                     Article 2                    ADVANCES; COLLATERAL EVENTS   Section 2.01   Variable Advance and Fixed Advance.         Subject to the terms, conditions, and limitations of this Master Agreement:         (a)   Variable Advance.         Lender agrees to make Variable Advances to Borrower in accordance with the terms and  provisions  of  this  Master  Agreement.   Future  Advances  may  be  made  pursuant  to Section     Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Article 1                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   2.02(c)(2) (Future Advances).  Pursuant to the terms of Section 2.10(a) (Conversion from Variable  Note to Fixed Note), Borrower may convert a Variable Note to a Fixed Note.         (b)   Fixed Advance.         Lender agrees  to  make  Fixed  Advances  to  Borrower in  accordance with  the terms  and  provisions  of  this  Master  Agreement.   Future  Advances  may  be  made  pursuant  to Section  2.02(c)(2) (Future Advances).   Section 2.02   Advances.         (a)   Request.         Assuming  Advances  are  available  to  Borrower  under  this  Master  Agreement  and  this  Section 2.02 (Advances), Borrower shall request a Future Advance by giving Lender a Future  Advance Request.  The Future Advance Request shall indicate whether the Request is for a Fixed  Advance or Variable Advance or more than one type of Advance.         (b)   Limitations on Executions.         Notwithstanding anything in this Master Agreement or any other Loan Document to the  contrary,  any  Future  Advance  (whether  a  Variable  Advance  or  a  Fixed  Advance)  and  any  Conversion of an Advance shall be subject to the precondition that  Lender must confirm with  Fannie Mae that Fannie Mae is generally offering to purchase in the marketplace advances of the  execution type requested by Borrower at the time of the Request and at the time the rate for such  Advance is locked.  In the event Fannie Mae is not purchasing advances of the type requested by  Borrower, Lender agrees to offer, to the extent available from Fannie Mae, alternative advance  executions based on the types of executions Fannie Mae is generally offering to purchase in the  marketplace at that time.  Any alternative execution offered would be subject to mutually agreeable  documentation necessary to implement the terms and conditions of such alternative execution.         (c)   Making Advances.               (1)   Initial Advances.               Assuming conditions of Lender have been met prior to or as of the date of this        Master Agreement, Lender shall make the Initial Advance(s) to Borrower.               (2)   Future Advances.                     (A)   Subject  to Section  2.02(b)  (Limitations  on  Executions)  and              satisfaction of the terms in the Future Advance Schedule, Borrower may request a              Future Advance.  Lender is not committing in this Master Agreement to make a              Future Advance and any Future Advance will be at the option of Lender except for              a Borrow Up provided in the proviso of Section 2.02(c)(2)(B) (Future Advances)              below, subject to  the  requirements  of such proviso  and this  Master  Agreement.     Master Credit Facility Agreement    Form 6001.MCFA                        Page 3  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               Once made, any Future Advance shall be subject to this Master Agreement in all              respects  and  shall  be  secured  by  the  Security  Instruments  encumbering  the              Mortgaged Properties.                     (B)   Any Future Advance shall be made in connection with the Addition              of Additional Mortgaged Properties; provided, however, if there are two (2) or more              Mortgaged Properties in the Collateral Pool, Borrower may request that one or more              Future Advances made pursuant to Section 2.02(c)(2)(A) (Future Advances) above              be made without the Addition of Additional Mortgaged Property (each a “Borrow              Up”) based on compliance with the terms of the Future Advance Schedule and the              Underwriting and Servicing Requirements and subject to the terms of this Section              2.02(c)(2)  (Future  Advances)  and  Section  2.02(b)  (Limitations  on  Executions);              notwithstanding the foregoing, Borrower may request one (1) Borrow Up with one              (1) Mortgaged Property in the Collateral Pool.  Such Borrow Up shall be made, if              at all (a) prior to the election by Borrower of the Elected Coverage and LTV Test,              during  the  period  beginning  on  the  First  Anniversary  and  ending  on  the  Fifth              Anniversary, and (b) from and after the election by Borrower, if at all, of the Elected              Coverage and LTV Test, during the period beginning on the First Anniversary and              ending on the Tenth Anniversary.  Borrower may not request more than one (1)              Borrower Up in any single Facility Year or more than five (5) times in total during              the Term of this Master Agreement.                       (C)   All Future Advances must satisfy the terms of the Future Advance              Schedule and any addition of Additional Mortgaged Property shall satisfy the terms              of the Mortgaged Property Addition Schedule.                     (D)   [Intentionally Deleted.]                     (E)   [Intentionally Deleted.]                     (F)   Notwithstanding anything to the contrary in this Master Agreement,              no Future Advance or Conversion shall be permitted unless immediately after such              Future Advance or Conversion the Advances then Outstanding will not exceed one              hundred  percent (100%)  of  the  aggregate  fair  market  value  of  all  real  property              securing such Advances (where fair market value is determined for these purposes              based upon a current Appraisal or some other commercially reasonable valuation              method as determined by Lender).               (3)   Closing of Future Advance.               If the conditions set forth in this Section 2.02 (Advances) and the Future Advance        Schedule are satisfied (and, if applicable, all conditions set forth on the Mortgaged Property        Addition Schedule are satisfied), Lender shall make the requested Future Advance on an        Effective Date selected by Lender (or on such other date as Borrower and Lender may        agree).     Master Credit Facility Agreement    Form 6001.MCFA                        Page 4  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Section 2.03   Advance Terms and Payments on Advances.         (a)   Debt Service Payments.               (1)   Short Month Interest.               If the date the proceeds of an Advance 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  Advance  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; Amortization; Interest Rate Cap.                     (A)   Except  as  provided  in Section  2.03(a)(1)  (Short  Month  Interest),              interest  shall  be  paid  in  arrears.   Except  as  otherwise  provided  in  this  Master              Agreement, for Fixed Advances, interest shall accrue at the Interest Rate until fully              paid;  and  for  Variable  Structured  ARM  Advances,  interest  shall  accrue  at  the              Adjustable Rate until fully paid.  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.                     (B)   With  respect  to  any  Variable  Structured  ARM  Advances,  the              following provisions shall apply:                           (i)   The Initial Adjustable Rate shall be effective until the first                    Rate Change Date.  Thereafter, the Adjustable Rate shall change on each                    Rate Change Date based on fluctuations in the Current Index.                           (ii)  Each  amortizing  Monthly  Debt  Service  Payment  shall                    include  a  principal  payment  equal  to  the  Fixed  Monthly  Principal                    Component.                           (iii) Before  each  Payment  Change  Date,  Lender  shall  notify                    Borrower of any change in the Adjustable Rate and the amount of the next                    Monthly Debt Service Payment.                           (iv)  If Lender determines at any time that it has miscalculated the                    amount  of  a  Monthly  Debt  Service  Payment  (whether  because  of  a                    miscalculation of the Adjustable Rate or otherwise), then Lender shall give    Master Credit Facility Agreement    Form 6001.MCFA                        Page 5  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     notice to Borrower of the corrected amount of the Monthly Debt Service                    Payment (and the corrected Adjustable Rate, if applicable) and (1) if the                    corrected  amount  of  the  Monthly  Debt  Service  Payment  represents  an                    increase, then Borrower shall, within thirty (30) calendar days thereafter,                    pay to Lender any sums that Borrower would have otherwise been obligated                    to pay to Lender had the amount of the Monthly Debt Service Payment not                    been  miscalculated,  or  (2)  if  the  corrected  amount  of  the  Monthly  Debt                    Service Payment represents a decrease and an Event of Default does not                    exist, then Borrower shall thereafter be paid the sums that Borrower would                    not have otherwise been obligated to pay to Lender had the amount of the                    Monthly Debt Service Payment not been miscalculated.                           (v)   [Intentionally Deleted.]                           (vi)  If  required  by  Lender,  to  protect  against  fluctuations  in                    interest rates during the  Term of this Master Agreement,  Borrower shall                    enter into the Cap Security Agreement.  Pursuant to the terms of the Cap                    Security  Agreement,  Borrower  shall  make  arrangements  for  a  LIBOR-                   based interest rate cap in form and substance satisfactory to Lender with a                    counterparty satisfactory to Lender (“Interest Rate Cap”) to be in place                    and maintained at all times with respect to any Variable Advance which has                    been funded and remains Outstanding.  The seller of the Interest Rate Cap                    (seller  and  its  transferees  and  assigns,  the  “Counterparty”)  shall  be  a                    financial  institution  meeting  the  minimum  requirements  for  hedge                    counterparties acceptable to Lender.  The  Interest Rate Cap shall have a                    minimum initial term of three (3) years.  Borrower shall be required to make                    Monthly Deposits (as defined in the Cap Security Agreement) to be held in                    an  Interest  Rate  Cap  Reserve  Escrow  Account  (as  defined  in  the  Cap                    Security  Agreement).   As  set  forth  in  the  Cap  Security  Agreement,                    Borrower agrees to pledge its right, title, and interest in the Interest Rate                    Cap to Lender as additional collateral for the Indebtedness.                      (C)   The  amortization  and  payment  of  interest  (and  principal,  if              applicable) for  each Advance shall  be  determined at the  Effective  Date  of each              Advance.               (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 for an Advance, shall be due and payable on the        First Payment Date, and on each Payment Date thereafter until the Maturity Date of such        Advance,  at  which  time  all  Indebtedness  relating  to  such  Advance  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    Master Credit Facility Agreement    Form 6001.MCFA                        Page 6  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         solely for the purpose of calculating interest due.  All payments made by Borrower under        this Master Agreement shall be made without set-off, counterclaim, or other defense.               (4)   Payment at Maturity.                     (A)   The unpaid principal balance of an Advance, any Accrued Interest              thereon,  and  all  other  Indebtedness  relating  to  such  Advance  shall  be  due  and              payable on the applicable Maturity Date for such Advance.                     (B)   Except in connection with a complete repayment of all Advance(s),              if Borrower pays any Advances at maturity of such Advance and requests a Release              of any Mortgaged Property, such Release shall be subject to the Release Price and              release tests in the Mortgaged Property Release Schedule.               (5)   Maturity Dates.                     (A)   The Maturity Date of each Variable Advance shall be specified by              Borrower for such Variable Advance, provided that such Maturity Date shall be no              earlier than the date that is the first day of the month following the date five (5)              years after the Effective Date of such Variable Advance and no later than the date              that is the first day of the month following the date ten (10) years after the Effective              Date of such Variable Advance provided no Maturity Date shall exceed the date              that is the first day of the month following the date fifteen (15) years after the Initial              Effective Date.                     (B)   The  Maturity  Date  of  each  Fixed  Advance  shall  be  specified  by              Borrower for such Fixed Advance, provided that such Maturity Date shall be no              earlier than the date that is the first day of the month following the date five (5)              years after the Effective Date for such Fixed Advance and no later than the date              that  is  the  first  day  of  the  month  following  the  date  fifteen (15)  years  after  the              Effective Date of such Fixed Advance provided no Maturity Date shall exceed the              date that is the first day of the month following the date fifteen (15) years after the              Initial Effective Date.               (6)   Interest Rate Type; Notes.                     (A)   The obligation of Borrower to repay each Variable Advance shall              be evidenced by one or more separate Variable Notes.  Each Variable Note shall be              payable to the order of Lender and shall be made in the original principal amount              of such Variable Advance.                     (B)   The obligation of Borrower to repay each Fixed Advance shall be              evidenced by one or more separate Fixed Notes.  The Fixed Note shall be payable              to the order of Lender and shall be made in the original principal amount of such              Fixed Advance.     Master Credit Facility Agreement    Form 6001.MCFA                        Page 7  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (b)   Capitalization of Accrued but Unpaid Interest.         Any accrued and unpaid interest on an Advance 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  such Advance.         (c)   Late Charges.               (1)   If  any  Monthly  Debt Service  Payment  due hereunder  is  not  received  by        Lender within ten (10) days  after the applicable  Payment Date, or any amount payable        under this Master Agreement (other than the payment due on the applicable Maturity Date        for repayment of an Advance in full) or any other Loan Document is not received by Lender        within ten (10) days 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.               (2)   The Late Charge is payable in addition to, and not in lieu of, any interest        payable at the Default Rate pursuant to Section 2.03(d) (Default Rate).               (3)   Borrower acknowledges and agrees that:                     (A)   its  failure  to  make  timely  payments  will  cause  Lender  to  incur              additional expenses in servicing and processing the Advances;                     (B)   it is extremely difficult and impractical to determine those additional              expenses;                     (C)   Lender is entitled to be compensated for such additional expenses;              and                     (D)   the  Late Charge represents  a fair  and reasonable estimate,  taking              into  account  all  circumstances  existing  on  the  date  hereof,  of  the  additional              expenses Lender will incur by reason of any such late payment.         (d)   Default Rate.               (1)   Default interest shall be paid as follows:                     (A)   If any amount due in respect of an Advance (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 until fully paid at the              Default Rate and shall be payable upon demand by Lender.                     (B)   If any Indebtedness due is not paid in full on the applicable Maturity              Date, then interest shall accrue at the Default Rate on all such unpaid amounts from              such Maturity Date until fully paid and shall be payable upon demand by Lender.     Master Credit Facility Agreement    Form 6001.MCFA                        Page 8  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               Absent a demand by Lender, any such amounts shall be payable by Borrower in the        same manner as provided for the payment of Monthly Debt Service Payments.  To the        extent permitted by Applicable Law, interest shall also accrue at the Default Rate on any        judgment obtained by Lender against Borrower in connection with the Advances.  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)   Borrower acknowledges and agrees that:                     (A)   its  failure  to  make  timely  payments  will  cause  Lender  to  incur              additional expenses in servicing and processing the Advances; and                     (B)   in  connection  with  any  failure  to  timely  pay  all  amounts  due  in              respect of an Advance on the applicable Maturity Date, or during the time that any              amount due in respect of an Advance is delinquent for more than thirty (30) days:                           (i)   Lender’s  risk  of  nonpayment  of  the  Advance  will  be                    materially increased;                           (ii)  Lender’s  ability  to  meet  its  other  obligations  and  to  take                    advantage of other investment opportunities will be adversely impacted;                           (iii) Lender will incur additional costs and expenses arising from                    its loss of the use of the amounts due;                           (iv)  it  is  extremely difficult  and impractical to  determine such                    additional costs and expenses;                           (v)   Lender  is  entitled  to  be  compensated  for  such  additional                    risks, costs, and expenses; and                           (vi)  the  increase  from  the  Interest  Rate  to  the  Default  Rate                    represents a fair and reasonable estimate of the additional risks, costs, and                    expenses  Lender will incur by reason of Borrower’s delinquent payment                    and  the  additional  compensation  Lender  is  entitled  to  receive  for  the                    increased  risks  of  nonpayment  associated  with  a  delinquency  on  the                    Advance (taking into account all circumstances existing on the applicable                    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.     Master Credit Facility Agreement    Form 6001.MCFA                        Page 9  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (f)   Application of Payments.         Subject  to  the  terms  of  Section (d)  (Application  of  Release  Price)  of  the  Mortgaged  Property  Release  Schedule,  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 Master Agreement and the other Loan Documents shall remain unchanged.   Section 2.04   Prepayment; Prepayment Lockout; Prepayment Premium.         (a)   Subject  to  the  terms  and  conditions  of  the  applicable  Prepayment  Premium  Schedule  and  the  requirements  relating  to  application  of  the  Release  Price  set  forth  in  the  Mortgaged Property Release Schedule, Notes are prepayable in whole or in part, provided that  Borrower shall not make a voluntary full or partial prepayment of a Note during any Prepayment  Lockout Period, if any.  Except as expressly provided in this Master Agreement (including as  provided in the Prepayment Premium Schedule applicable to such Note), a Prepayment Premium  calculated in accordance with the Prepayment Premium Schedule applicable to such Note shall be  payable in connection with any prepayment of such Note.         (b)   If a Prepayment Lockout Period applies to the applicable Note, and during such  Prepayment  Lockout  Period  Lender  accelerates  the  unpaid  principal  balance  of  the  Note  or  otherwise applies collateral held by Lender to the repayment of any portion of the unpaid principal  balance of the Note, the Prepayment Premium shall be due and payable and equal to the amount  obtained by multiplying the percentage indicated (if at all) in the Prepayment Premium Schedule  for  such  Note  by  the  amount  of  principal  being  prepaid  at  the  time  of  such  acceleration  or  application.         (c)   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 a Note on any day other than a Permitted Prepayment Date.  However,  if Lender does approve an Intended Prepayment Date that is not a Permitted Prepayment Date and  accepts a prepayment on such Intended Prepayment Date, such prepayment shall be deemed to be  received on the immediately following Permitted Prepayment Date.  If Borrower fails to prepay  the applicable Note (or such portion of the Note as is intended to be prepaid) 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 a Note either in    Master Credit Facility Agreement    Form 6001.MCFA                       Page 10  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   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.         (d)   After receipt of a partial prepayment, Lender shall re-calculate the Monthly Debt  Service Payment based upon the remaining unpaid principal balance of the applicable Note for  each subsequent monthly debt service installment due under such Note.  For amortizing Advances,  the subsequent Monthly Debt Service Payments shall be calculated by amortizing the remaining  unpaid principal balance of the applicable Note over the Remaining Amortization Period utilizing  the Fixed Rate and the Interest Accrual Method set forth in the applicable Schedule of Advance  Terms.   Lender  shall  notify  Borrower  of  the  new  required  Monthly  Debt  Service  Payment  following receipt of a partial prepayment and Borrower shall execute any amendment requested  by Lender to evidence such new required monthly installment(s).   Section 2.05   Acceleration of Advances.         Upon acceleration of any Advance, Borrower shall pay to Lender:         (a)   the entire unpaid principal balance of the Advances;         (b)   all  Accrued  Interest  (calculated  through  the  last  day  of  the  month  in  which  the  acceleration occurs);         (c)   the Prepayment Premium; and         (d)   all other Indebtedness.   Section 2.06   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 Advances 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 Master Agreement and applied in accordance with  Section (d) (Application of Release Price) of the Mortgaged Property Release Schedule.   Section 2.07   Casualty and Condemnation.         Notwithstanding any provision of this Master 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 Master Agreement.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 11  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Section 2.08   No Effect on Payment Obligations.         Unless otherwise expressly provided in this Master Agreement, any prepayment required  by any Loan Document of less than the entire unpaid principal balance of the Advance(s) shall not  extend or postpone the  due date of any subsequent Monthly Debt Service Payments, Monthly  Replacement Reserve Deposit, or other payment.   Section 2.09   Loss Resulting from Prepayment.         In any circumstance in which a Prepayment Premium is due under this Master Agreement,  Borrower acknowledges that:         (a)   any prepayment of the unpaid principal balance of any Advance, 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;         (b)   it is extremely difficult and impractical to ascertain the extent of such losses, risks  and damages;         (c)   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         (d)   the  provisions  regarding  the  Prepayment  Premium  contained  in  this  Master  Agreement are a material part of the consideration for this Master Agreement, and that the terms  of  this  Master  Agreement  are  in  other  respects  more  favorable  to  Borrower  as  a  result  of  Borrower’s voluntary agreement to such prepayment provisions.   Section 2.10   Collateral Events.         (a)   Conversion from Variable Note to Fixed Note.         Subject to and in accordance with the terms and conditions of the Conversion Schedule,  Borrower shall have the right, from time to time during the Conversion Availability Period, to  convert all or any portion of a Variable Note to a Fixed Note.         (b)   Right to Obtain Releases of Mortgaged Property.         Subject to and in accordance with the terms and conditions of the Mortgaged Property  Release Schedule, Borrower shall have the right from time to time to obtain a release of one or  more Mortgaged Properties (a “Release”) from the Collateral Pool.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 12  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (c)   Right to Add Additional Mortgaged Properties as Collateral.         Subject to and in accordance with the terms and conditions of the Mortgaged Property  Addition Schedule, Borrower shall have the right, from time to time to add one or more Additional  Mortgaged Properties (an “Addition”) to the Collateral Pool.         (d)   Right to Substitutions.         Subject to and in accordance with the terms and conditions of the Mortgaged Property  Release Schedule and the Mortgaged Property Addition Schedule, Borrower shall have the right  to obtain the release of one or more Mortgaged Properties by replacing such Mortgaged Property  with one (1) or more Additional Mortgaged Properties that meet the requirements of this Master  Agreement thereby effecting a “Substitution” of Collateral.         (e)   Limitation on Collateral Events.         Notwithstanding anything to the contrary in this Master Agreement, no Collateral Event  (other than a Conversion) shall be permitted unless immediately after such Collateral Event the  Advances then Outstanding  will not  exceed one hundred percent (100%)  of  the  aggregate fair  market value of all real property securing such Advances (where fair market value is determined  for  these  purposes  based  upon  a  current  Appraisal  or  some  other  commercially  reasonable  valuation method as determined by Lender).         (f)   [Intentionally Deleted.]         (g)    Elected Coverage and LTV Tests.         At any time during the Term of this Master Agreement, by giving prior written notice to  Lender, Borrower shall have the one-time right, which shall be exercised solely at Borrower’s  discretion, to permanently change the loan to value ratio and debt service coverage test for the  Collateral  Pool  to  the  Elected  Coverage  and  LTV  Tests.   From  and  after  the  date  Borrower  exercises  the foregoing  right and  elects  the Elected Coverage  and  LTV  Tests,  any subsequent  Collateral Event shall be effected based on the Elected Coverage and LTV Tests.   Section 2.11   Termination of Master Agreement.         Subject  to  the  terms  and  conditions  set  forth  below,  Borrower  shall  have  the  right  to  terminate this Master Agreement and receive a Release of all of the Collateral.         (a)   Request.         To  terminate  this  Master  Agreement,  Borrower  shall  deliver  a  Termination  Request  to  Lender.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 13  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (b)   Conditions Precedent.         The right of Borrower to terminate this Master Agreement and to receive a Release of all  of  the  Collateral  from  the  Collateral  Pool  and  Lender’s  obligation  to  execute  and  deliver  the  Termination Documents on the Effective Date are subject to the following conditions precedent:               (1)   receipt by Lender of the fully executed Termination Request;               (2)   payment by  Borrower  in full  of  each Note  Outstanding on  the Effective        Date, including any associated Prepayment Premiums or other amounts due under each        Note  and  all  of  the  other  amounts  owing  by  Borrower  to  Lender  under  this  Master        Agreement and the Other Loan Documents; and               (3)   payment by Borrower of Lender’s and Fannie Mae’s reasonable third party        out-of-pocket  fees  and  expenses  payable  in  accordance  with  this  Master  Agreement,        including  Lender’s  and  Fannie  Mae’s  legal  fees  and  expenses;  provided,  however,  if        Borrower makes a Termination Request and fails to close on the Termination Request for        any reason other than the default by Lender, then Borrower, in addition to the above fees        and expenses, shall also pay to Lender and Fannie Mae all actual damages incurred by        Lender and Fannie Mae in connection with the failure to close.         (c)   Closing.         If  all  conditions  precedent  contained  in  this Section  2.11  (Termination  of  Master  Agreement) are satisfied, this Master Agreement shall terminate, and Lender shall cause all of the  Collateral to be Released on an Effective Date selected by Lender, within thirty (30) calendar days  after all of the conditions with respect to such Termination Request have been satisfied (or on such  other date as Borrower and Lender may agree), and all applicable parties shall execute and deliver,  all at the sole cost and expense of Borrower, the Termination Documents.                                     Article 3                            PERSONAL LIABILITY   Section 3.01   Non-Recourse Liability; Exceptions.         Except as otherwise provided in this Article 3 (Personal Liability) 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 Master  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 Properties 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.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 14  Article 2                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Section 3.02   Personal Liability of Borrower.         (a)   Personal Liability Based on Lender’s Loss (Partial Recourse).         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, or in any manner relating to:               (1)   failure to pay as directed by Lender upon demand after an Event of Default        (to the extent actually received by Borrower):                     (A)   all Rents to which Lender is entitled under the Loan Documents; and                     (B)   the amount of all security deposits then held or thereafter collected              by  Borrower  from  tenants  and  not  properly  applied  pursuant  to  the  applicable              Leases;               (2)   failure to maintain all insurance policies required by the Loan Documents,        except to the extent Lender has the obligation to pay the premiums pursuant to Section        12.03(c) (Payment of Impositions; Sufficiency of Imposition Deposits);               (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 Master 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)(1) (Personal Liability Based on Lender’s Loss (Partial Recourse)), failure to apply        Rents  to  the  ordinary  and  necessary  expenses  of  owning  and  operating  the  Mortgaged        Properties 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 Properties and Debt Service Amounts for such        Calendar Year;               (6)   waste or abandonment of any Mortgaged Property;                (7)   grossly  negligent  or  reckless  unintentional  material  misrepresentation  or        omission by Borrower, Guarantor, Key Principal, or any officer, director, partner, manager,        member, shareholder, or trustee of Borrower, Guarantor, or Key Principal in connection        with ongoing financial or other reporting required by the Loan Documents, or any request        for action or consent by Lender; or     Master Credit Facility Agreement    Form 6001.MCFA                       Page 15  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (8)   failure to comply with each of the Single Purpose requirements of Section        4.02(d)(3), (4), (7)-(12), and (14)-(17) (Borrower Status – Covenants –  Single Purpose        Status) of this Master Agreement (subject to possible full recourse liability as set forth in        Section 3.02(b)(1) (Full Personal Liability (Full Recourse)); provided, however, no such        recourse liability shall arise until the expiration of the cure periods set forth in this Section        3.02(a)(8) (Personal Liability Based on Lender’s Loss (Partial Recourse)). Borrower must        deliver on an annual basis or upon Lender’s written request, a certification as to compliance        with the covenants set forth in Section 4.02(d) (Borrower Status – Covenants – Single        Purpose Status). If Borrower breaches a covenant set forth in Section 4.02(d) (Borrower        Status – Covenants – Single Purpose Status), then, if such breach can be cured, Borrower        shall have thirty (30) days from the earlier of the date of delivery of the annual Officer’s        Certificate  set  forth  in  Section  8.02(b)(5)  (Items  to  Furnish  to  Lender)  indicating  such        breach, the date Lender notices Borrower of such breach, or the date Borrower discovers        such breach, to cure such breach, provided that if such breach can be cured but cannot        reasonably  be  cured  within  such  thirty  (30)  day  period  and  Borrower  shall  have        commenced to cure such breach within such thirty (30) day period and thereafter diligently        and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended        for so long as it shall require Borrower in the exercise of due diligence to cure such breach,        it being agreed that no such extension shall be for a period in excess of sixty (60) days for        any individual breach.               (9)   Unless and until the original Prior Note is delivered to Lender (as assignee        of Synovus Bank), any and all losses, costs and expenses (including attorneys’ fees and        expenses), stemming from actions, claims, suits, damages, charges or liabilities related to        the loss of the original Prior Note including, any other person or entity having any interest        in the Prior Note.   Notwithstanding the foregoing, Borrower shall not have personal liability under clauses (1), (3) or  (5)  above  to  the  extent  that  Borrower  lacks  the  legal  right  to  direct  the  disbursement  of  the  applicable funds due to an involuntary Bankruptcy Event with respect to Borrower that occurs  without the consent, encouragement, or active participation of Guarantor, Key Principal or any  Borrower Affiliate (other than a limited partner or non-managing member not Controlled by, under  common Control with, or which Controls, any Borrower Entity or Identified Party).   If Borrower has personal liability under clause (9) above, Borrower’s personal liability at such  time  under  such  clause(9)  shall  not  exceed  ten  percent  (10%)  of  the  aggregate  Advances  Outstanding as of each date on which personal liability is incurred under such clause.         (b)   Full Personal Liability (Full Recourse).         Borrower shall be personally liable to Lender for the repayment of all of the Indebtedness,  and the Advances shall be fully recourse to Borrower, upon the occurrence of any of the following:               (1)   failure to comply with each of the Single Purpose requirements of:     Master Credit Facility Agreement    Form 6001.MCFA                       Page 16  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (A)   Section  4.02(d)(1), (2), (5), (6)  and (13)  (Borrower  Status  –              Covenants – Single Purpose Status) of this Master Agreement; and               (2)   Section  4.02(d)(3), (4), (7)-(12),  and  (14)-(16)  (Borrower  Status  –        Covenants – Single Purpose Status) of this Master Agreement and, pursuant to a final non-       appealable  court  order, a court of competent jurisdiction  holds  or determines  that such        failure  or  combination  of  failures  is  the  basis,  in  whole  or  in  part,  for  the  substantive        consolidation of the assets and liabilities of Borrower or any SPE Owner with the assets        and liabilities of a debtor pursuant to Title 11 of the Bankruptcy Code;               (3)   a  Transfer  (other  than  a  conveyance  of  a  Mortgaged  Property  at  a        Foreclosure Event pursuant to the Security Instrument and this Master Agreement) that is        not permitted under this Master Agreement or any other Loan Document;               (4)   the occurrence of any Bankruptcy Event with respect to Borrower or with        respect  to  Sole  Member,  (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 with respect to Borrower or such Sole Member, Borrower        shall  only  be  personally  liable  if  such  involuntary  Bankruptcy  Event  occurs  with  the        consent, encouragement or active participation of Borrower, Sole Member, Guarantor, Key        Principal, SPE Owner  or any Borrower Affiliate  (other than  a limited partner  or  non-       managing member not Controlled by, under common Control with, or which Controls, any        Borrower Entity or Identified Party);               (5)   fraud,  written  material  misrepresentation,  or  material  omission  by        Borrower, Guarantor, Key Principal, or any officer, director, partner, manager, member,        shareholder, or trustee of Borrower, Guarantor, or Key Principal in connection with any        application for or creation of the Indebtedness; or               (6)   fraud, written intentional material misrepresentation or intentional material        omission by Borrower, Guarantor, Key Principal, or any officer, director, partner, manager,        member, shareholder, or trustee of Borrower, Guarantor, or Key Principal in connection        with ongoing financial or other reporting required by the Loan Documents, or any request        for action or consent by Lender.   Section 3.03   Personal Liability for Indemnity Obligations.         Borrower  shall  be  personally  and  fully  liable  to  Lender  for  (a)  Borrower’s  indemnity  obligations under Section 13.01(e) (Replacement Reserves and Repairs – Indemnification) of this  Master  Agreement,  (b)  the  Environmental  Indemnity  Agreement  and  (c)  any  other  express  indemnity obligations provided by Borrower under any Loan Document.  Borrower’s liability for  such indemnity obligations shall not be limited by the amount of the Indebtedness, the repayment  of the Indebtedness, or otherwise, provided that Borrower’s liability for such indemnities shall not  include any loss caused by the gross negligence or willful misconduct of Lender as determined by  a court of competent jurisdiction pursuant to a final non-appealable court order.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 17  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Section 3.04   Lender’s Right to Forego Rights Against Mortgaged Property.         To the extent that Borrower has personal liability under this Master Agreement or any other  Loan Document, Lender may exercise its rights against Borrower personally to the fullest extent  permitted by Applicable Law without regard to whether Lender has exercised any rights against  any Mortgaged Property or any other security, or pursued any rights against Guarantor, or pursued  any other rights available to Lender under this Master Agreement, any other Loan Document, or  Applicable  Law.   For purposes of this Section 3.04 (Lender’s Right to Forego Rights Against  Mortgaged Property) only, the term “Mortgaged Property” shall not include any funds that have  been  applied  by  Borrower  as  required  or  permitted  by  this  Master  Agreement  prior  to  the  occurrence of an Event of Default, or that Borrower was unable to apply as required or permitted  by this Master Agreement because of a Bankruptcy Event with respect to Borrower.  To the fullest  extent permitted by Applicable Law, in any action to enforce Borrower’s personal liability under  this Article 3 (Personal Liability), Borrower waives any right to set off the value of a Mortgaged  Property against such personal liability.   Section 3.05   Borrower Agency Provisions.         (a)   Each Borrower shall irrevocably designate Borrower Agent to be its agent and in  such  capacity  to  receive  on  behalf  of  Borrower  all  proceeds,  receive  all  notices  on  behalf  of  Borrower  under  this  Master  Agreement,  make  all  requests  under  this  Master  Agreement,  and  execute,  deliver,  and  receive  all  instruments,  certificates,  requests,  documents,  amendments,  writings, and further assurances now or hereafter required hereunder, on behalf of such Borrower,  and hereby authorizes Lender to pay over all proceeds hereunder in accordance with the request  of Borrower Agent.  Each Borrower hereby acknowledges that all notices required to be delivered  by Lender to any Borrower shall be delivered to Borrower Agent and thereby shall be deemed to  have been received by such Borrower.         (b)   The handling of this Master Agreement as a co-borrowing facility with a Borrower  Agent in the manner set forth in this Master Agreement is solely as an accommodation to each of  Borrower and Guarantor and is at their mutual request.  Lender shall not incur liability to Borrower  or Guarantor as a result thereof.  To induce Lender to do so and in consideration thereof, each  Borrower hereby indemnifies  Lender and holds  Lender harmless from and against any  and all  liabilities, expenses, losses, damages, and claims of damage or injury asserted against Lender by  any  Person  arising  from  or  incurred  by  reason  of  Borrower  Agent  handling  of  the  financing  arrangements of Borrower as provided herein, reliance by Lender on any request or instruction  from  Borrower  Agent  or  any  other  action  taken  by  Lender  with  respect  to  this Section  3.05  (Borrower  Agency  Provisions)  except  due  to  willful  misconduct  or  gross  negligence  of  the  indemnified party  as determined by a court of competent jurisdiction pursuant to a final, non- appealable court order.   Section 3.06   Joint and Several Obligation; Cross-Guaranty.         Notwithstanding  anything  contained  in  this  Master  Agreement  or  the  other  Loan  Documents to the contrary (but subject to the provisions of Section 3.01 (Non-Recourse Liability;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 18  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Exceptions), Section 3.02(a) (Personal Liability Based on Lender’s Loss (Partial Recourse)) and  Section 3.02(b) (Full Personal Liability (Full Recourse)), the last sentence of this Section 3.06  (Joint  and  Several Obligation;  Cross-Guaranty) and  the  provisions  of Section 3.13  (Maximum  Liability  of  Each  Borrower),  each  Borrower  shall  have  joint  and  several  liability  for  the  Indebtedness.  Notwithstanding the intent of all of the parties to this Master Agreement that the  Indebtedness of each Borrower under this Master Agreement and the other Loan Documents shall  be joint and several obligations of each Borrower, each Borrower, on a joint and several basis,  hereby irrevocably guarantees on a non-recourse basis, subject to the exceptions to non-recourse  provisions  of Section  3.01  (Non-Recourse  Liability;  Exceptions), Section  3.02(a)  (Personal  Liability Based on Lender’s Loss (Partial Recourse)) and Section 3.02(b) (Full Personal Liability  (Full Recourse)), to Lender and its successors and assigns, the full and prompt payment (whether  at stated maturity, by acceleration or otherwise) and performance of, all Indebtedness owed or  hereafter owing to Lender by each other Borrower.  Each Borrower agrees that its non-recourse  guaranty obligation hereunder is an unconditional guaranty of payment and performance and not  merely a guaranty of collection.  The Indebtedness of each Borrower under this Master Agreement  shall not be subject to any counterclaim, set-off, recoupment, deduction, cross-claim, or defense  based upon any claim any Borrower may have against Lender or any other Borrower.   Section 3.07   Waivers With Respect to Other Borrower Secured Obligation.         To the extent that a Security Instrument or any other Loan Document executed by one  Borrower  secures  an  Obligation  of  another  Borrower  (the  “Other  Borrower  Secured  Obligation”),  or  to  the  extent  that  a  Borrower  has  guaranteed  the  debt  of  another  Borrower  pursuant  to Article  3  (Personal  Liability),  Borrower  who  executed  such  Loan  Document  or  guaranteed such debt (the “Waiving Borrower”) hereby agrees to the extent permitted by law, to  the provisions of this Section 3.07 (Waivers with Respect to Other Borrower Secured Obligation).   To the extent that any Mortgaged Properties are located in California, and to the extent permitted  by law, the references to the California statutes below shall apply to this Master Agreement and  any  California  Security  Instrument  securing  or  encumbering  a  Mortgaged  Property  located  in  California; otherwise the California statutes referenced below shall have no effect on this Master  Agreement  or  any  other  Loan  Document.   All  references  in Article  3  (Personal  Liability)  to  California law are only  applicable if any Mortgaged Property is located in California.  To the  maximum extent permitted by Applicable Law:         (a)   the Waiving Borrower hereby waives any right it may now or hereafter have to  require the beneficiary, assignee, or other secured party under such Loan Document, as a condition  to  the  exercise  of  any  remedy  or  other  right  against  it  thereunder  or  under  any  other  Loan  Document executed by the Waiving Borrower in connection with the Other Borrower Secured  Obligation: (1) to proceed against any other Borrower or any other Person, or against any other  collateral assigned to Lender by any Borrower or any other Person; (2) to pursue any other right  or remedy in Lender’s power; (3) to give notice of the time, place, or terms of any public or private  sale of real or personal property collateral assigned to Lender by any other Borrower or any other  Person, or otherwise to comply with Section 9615 of the California Commercial Code (as modified  or recodified from time to time) with respect to any such personal property collateral located in  the  State  of  California;  or  (4) to  make  or  give  (except  as  otherwise  expressly  provided  in  the    Master Credit Facility Agreement    Form 6001.MCFA                       Page 19  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Security Documents) any presentment, demand, protest, notice of dishonor, notice of protest, or  other demand or notice of any kind in connection with the Other Borrower Secured Obligation or  any collateral for the Other Borrower Secured Obligation;         (b)   the Waiving Borrower hereby waives any defense it may now or hereafter have that  relates to: (1) any disability or other defense of any other Borrower or any other Person; (2) the  cessation, from any cause other than full performance, of the Other Borrower Secured Obligation;  (3) the  application  of  the  proceeds  of  the  Other  Borrower  Secured  Obligation,  by  any  other  Borrower or any other Person, for purposes other than the purposes represented to the Waiving  Borrower by any other Borrower or any other Person, or otherwise intended or understood by the  Waiving Borrower or any other Borrower; (4) any act or omission by Lender which directly or  indirectly results in or contributes to the release of any other Borrower or any other Person or any  collateral for any Other Borrower Secured Obligation; (5) the unenforceability or invalidity of any  Security  Document  or  Loan  Document  (other  than  the  Security  Instrument  executed  by  the  Waiving Borrower that secures the Other Borrower Secured Obligation) or guaranty with respect  to any Other Borrower Secured Obligation, or the lack of perfection or continuing perfection or  lack of priority of any Lien (other than the Lien of the Security Instrument executed by the Waiving  Borrower that secures the Other Borrower Secured Obligation) which secures any Other Borrower  Secured Obligation; (6) any failure of Lender to marshal assets in favor of the Waiving Borrower  or any other Person; (7) any modification of any Other Borrower Secured Obligation, including  any renewal, extension, acceleration, or increase in interest rate; (8) any and all rights and defenses  arising out of an election of remedies by Lender, even though that election of remedies, such as a  nonjudicial  foreclosure  with  respect  to  security  for  a  guaranteed  obligation,  has  destroyed  the  Waiving  Borrower’s  rights  of  subrogation  and  reimbursement  against  the  principal  by  the  operation of Section 580d of the California Code of Civil Procedure or otherwise; (9) any law  which provides that the obligation of a surety or guarantor must neither be larger in amount nor in  other  respects  more  burdensome  than  that  of  the  principal  or  which  reduces  a  surety’s  or  guarantor’s obligation in proportion to the principal obligation; (10) any failure of Lender to file  or enforce a claim in any  bankruptcy or other proceeding with respect to any Person; (11) the  election  by  Lender,  in  any  bankruptcy  proceeding  of  any  Person,  of  the  application  or  non- application of Section 1111(b)(2) of the Bankruptcy Code; (12) any extension of credit or the grant  of  any  lien  under  Section 364  of  the  Bankruptcy  Code;  (13) any  use  of  cash  collateral  under  Section 363  of  the  Bankruptcy  Code;  or  (14) any  agreement  or  stipulation  with  respect  to  the  provision  of  adequate  protection  in  any  bankruptcy  proceeding  of  any  Person.   The  Waiving  Borrower  further  waives  any  and  all  rights  and  defenses  that  it  may  have  because  the  Other  Borrower Secured Obligation is secured by real property; this means, among other things, that:  (A) Lender  may  collect  from  the  Waiving  Borrower  without  first  foreclosing  on  any  real  or  personal property collateral pledged by any other Borrower; (B) if Lender forecloses on any real  property collateral pledged by any  other  Borrower, then (i) the amount of the Other Borrower  Secured  Obligation  may  be  reduced  only  by  the  price  for  which  that  collateral  is  sold  at  the  foreclosure  sale,  even  if  the  collateral  is  worth  more  than  the  sale  price,  and  (ii) Lender  may  foreclose on the real property encumbered by the Security Instrument executed by the Waiving  Borrower  and  securing  the  Other  Borrower  Secured  Obligation,  or  otherwise  collect  from  the  Waiving Borrower, even if Lender, by foreclosing on the real property collateral of any one or  more of the other Borrowers, has destroyed any right the Waiving Borrower may have to collect    Master Credit Facility Agreement    Form 6001.MCFA                       Page 20  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   from  such  other  Borrowers.   Subject  to  the  last  sentence  of Section  3.06  (Joint  and  Several  Obligation; Cross-Guaranty), the foregoing sentence is an unconditional and irrevocable waiver of  any rights and defenses the Waiving Borrower may have because the Other Borrower Secured  Obligation is secured by real property.  These rights and defenses being waived by the Waiving  Borrower include, but are not limited to, any rights or defenses based upon Section 580a, 580b,  580d, or 726 of the California Code of Civil Procedure.  Without limiting the generality of the  foregoing or any other provision hereof, the Waiving Borrower further expressly waives, except  as  provided in Section  3.07(g) (Waivers  with  Respect  to  Other  Borrower  Secured Obligation)  below, to the extent permitted by law any and all rights and defenses that might otherwise be  available to it under California Civil Code Sections 2787 to 2855, inclusive, 2899 and 3433, or  under California Code of Civil Procedure Sections 580a, 580b, 580d, and 726, or any of such  sections;         (c)   the  Waiving  Borrower  hereby  waives  any  and  all  benefits  and  defenses  under  California Civil Code Section 2810 and agrees that by doing so the Security Instrument executed  by the Waiving Borrower and securing the Other Borrower Secured Obligation shall be and remain  in full force and effect even if one or more of the other Borrowers had no liability at the time of  incurring the Other Borrower Secured Obligation, or thereafter ceases to be liable.  The Waiving  Borrower  hereby  waives  any  and  all  benefits  and  defenses  under  California  Civil  Code  Section 2809 and agrees that by doing so the Waiving Borrower’s liability may be larger in amount  and more burdensome than that of any one or more of the other Borrowers.  The Waiving Borrower  hereby waives the benefit of all principles or provisions of law that are or might be in conflict with  the  terms  of  any  of  its  waivers,  and  agrees  that  the  Waiving  Borrower’s  waivers  shall  not  be  affected by any circumstances that might otherwise constitute a legal or equitable discharge of a  surety or a guarantor.  The Waiving Borrower hereby waives the benefits of any right of discharge  and all other rights and defenses under any and all statutes or other laws relating to guarantors or  sureties, to the fullest extent permitted by law, diligence in collecting the Other Borrower Secured  Obligation,  presentment,  demand  for  payment,  protest,  all  notices  with  respect  to  the  Other  Borrower Secured Obligation that may be required by statute, rule of law, or otherwise to preserve  Lender’s rights against the Waiving Borrower hereunder, including notice of acceptance, notice of  any amendment of the Loan Documents evidencing the Other Borrower Secured Obligation, notice  of  the  occurrence  of  any  default  or  Event  of  Default,  notice  of  intent  to  accelerate,  notice  of  acceleration, notice of dishonor, notice of foreclosure, notice of protest, notice of the incurring by  the other Borrower of any obligation or indebtedness and all rights to require Lender to (1) proceed  against  the  other  Borrower,  (2) proceed  against  any  general  partner  of  the  other  Borrower,  (3) proceed against or exhaust any collateral held by Lender to secure the Other Borrower Secured  Obligation, or (4) if the other Borrower is a partnership, pursue any other remedy it may have  against the other Borrower, or any general partner of the other Borrower, including any and all  benefits under California Civil Code Sections 2845, 2849, and 2850;         (d)   the Waiving Borrower understands that the exercise by Lender of certain rights and  remedies contained in a Security Instrument executed by any other Borrower (such as a nonjudicial  foreclosure sale) may affect or eliminate the Waiving Borrower’s right of subrogation against such  other  Borrower  and  that  the  Waiving  Borrower  may  therefore  incur  a  partially  or  totally  nonreimburseable liability.  Nevertheless, the Waiving Borrower hereby authorizes and empowers    Master Credit Facility Agreement    Form 6001.MCFA                       Page 21  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Lender to exercise, in its sole and absolute discretion, any right or remedy, or any combination  thereof, that may then be available, since it is the intent and purpose of the Waiving Borrower that  its waivers shall be absolute, independent and unconditional under any and all circumstances;         (e)   in  accordance  with  Section 2856  of  the  California  Civil  Code,  the  Waiving  Borrower also waives any right or defense based upon an election of remedies by Lender, even  though such election (e.g., nonjudicial foreclosure with respect to any collateral held by Lender to  secure repayment of the Other Borrower Secured Obligation) destroys or otherwise impairs the  subrogation rights of the Waiving Borrower to any right to proceed against one or more of the  other Borrowers for reimbursement by operation of Section 580d of the California Code of Civil  Procedure or otherwise;         (f)   subject to the last sentence of Section 3.06 (Joint and Several Obligation; Cross- Guaranty), in accordance with Section 2856 of the California Civil Code, the Waiving Borrower  waives  any  and  all  other  rights  and  defenses  available  to  the  Waiving Borrower  by  reason  of  Sections 2787 through 2855, inclusive, of the California Civil Code, including any and all rights  or defenses the Waiving Borrower may have by reason of protection afforded to one or more of  the other Borrowers with respect to the applicable Other Borrower Secured Obligation pursuant to  the  antideficiency  or  other  laws  of  the  State  of  California  limiting  or  discharging  such  Other  Borrower  Secured  Obligation,  including  Sections 580a,  580b,  580d,  and  726  of  the  California  Code of Civil Procedure;         (g)   in accordance with Section 2856 of the California Civil Code and pursuant to any  other  Applicable  Law,  the  Waiving  Borrower  agrees  to  withhold  the  exercise  of  any  and  all  subrogation, contribution, and reimbursement rights against all other Borrowers, against any other  Person, and against any collateral or security for the Other Borrower Secured Obligation, including  any such rights pursuant to Sections 2847 and 2848 of the California Civil Code, until the Other  Borrower Secured Obligation has been indefeasibly paid and satisfied in full, all obligations owed  to  Lender  under  the  Loan  Documents  have  been  fully  performed,  and  Lender  has  released,  transferred or disposed of all of its right, title, and interest in such collateral or security;         (h)   each Borrower hereby irrevocably and unconditionally agrees that, notwithstanding  Section 3.07(g) (Waivers with Respect to Other Borrower Secured Obligation) hereof, in the event,  and to the extent, that its agreement and waiver set forth in Section 3.07(g) (Waivers with Respect  to Other Borrower Secured Obligation) is found by a court of competent jurisdiction to be void or  voidable for any reason and such Borrower has any subrogation or other rights against any other  Borrower, any such claims, direct or indirect, that such Borrower may have by subrogation rights  or other form of reimbursement, contribution, or indemnity, against any other Borrower or to any  security or any such Borrower, shall be, and such rights, claims, and indebtedness are hereby,  deferred, postponed, and fully subordinated in time and right of payment to the prior payment,  performance, and satisfaction in full of the Indebtedness.  Until payment and performance in full  with interest (including post-petition interest in any  case under any  chapter of the Bankruptcy  Code) of the Indebtedness, each Borrower agrees not to accept any payment or satisfaction of any  kind of Indebtedness of any other Borrower in respect of any such subrogation rights arising by  virtue of payments made pursuant to this Article 3 (Personal Liability), and hereby assigns such    Master Credit Facility Agreement    Form 6001.MCFA                       Page 22  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   rights or indebtedness to Lender, including (1) the right to file proofs of claim and to vote thereon  in connection with any case under any chapter of the Bankruptcy Code and (2) the right to vote on  any plan of reorganization.  In the event that any payment on account of any such subrogation  rights shall be received by any Borrower in violation of the foregoing, such payment shall be held  in trust for the benefit of Lender, and any amount so collected must be turned over to Lender for,  at Lender’s option, application to the Indebtedness;         (i)   at  any  time  without  notice  to  the  Waiving  Borrower,  and  without  affecting  or  prejudicing the right of Lender to proceed against the Collateral described in any Loan Document  executed by the Waiving Borrower and securing the Other Borrower Secured Obligation, (1) the  time for payment of the principal of or interest on, or the performance of, the Other Borrower  Secured Obligation may be extended or the Other Borrower Secured Obligation may be renewed  in whole or in part; (2) the time for any other Borrower’s performance of or compliance with any  covenant or agreement contained in the Loan Documents evidencing the Other Borrower Secured  Obligation,  whether  presently  existing  or  hereinafter  entered  into,  may  be  extended  or  such  performance  or  compliance  may  be  waived;  (3) the  maturity  of  the  Other  Borrower  Secured  Obligation may be accelerated as provided in the related Note or any other related Loan Document;  (4) the related Note or any other related Loan Document may be modified or amended by Lender  and the applicable other Borrower in any respect, including an increase in the principal amount;  and (5) any security for the Other Borrower Secured Obligation may be  modified, exchanged,  surrendered or otherwise dealt with or additional security may be pledged or mortgaged for the  Other Borrower Secured Obligation; and         (j)   it is agreed among each Borrower and Lender that all of the foregoing waivers are  of the essence of the transaction contemplated by this Master Agreement and the Loan Documents  and that but for the provisions of this Article 3 (Personal Liability) and such waivers Lender would  decline to enter into this Master Agreement.   Section 3.08   No Impairment.         Each Borrower agrees that the provisions of this Article 3 (Personal Liability) are for the  benefit of Lender and its successors and assigns, and nothing herein contained shall impair, as  between any other Borrower and Lender, the obligations of such other Borrower under the Loan  Documents.   Section 3.09   Election of Remedies.         (a)   Lender, in its discretion, may (1) bring suit against any one or more Borrowers,  jointly and severally, without any requirement that Lender first proceed against any other Borrower  or any other Person; (2) compromise or settle with any one or more Borrowers, or any other Person,  for such consideration as Lender may deem proper; (3) release one or more Borrowers, or any  other Person, from liability; and (4) otherwise deal with any Borrower and any other Person, or  any one or more of them, in any manner, or resort to any of the Collateral at any time held by it  for performance of the Indebtedness or any other source or means of obtaining payment of the     Master Credit Facility Agreement    Form 6001.MCFA                       Page 23  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Indebtedness, and no such action shall impair the rights of Lender to collect from any Borrower  any amount guaranteed by any Borrower under this Article 3 (Personal Liability).         (b)   If, in the exercise of any of its rights and remedies, Lender shall forfeit any of its  rights or remedies, including its rights to enter a deficiency judgment against any Borrower or any  other Person, whether because of any Applicable Law pertaining to “election of remedies” or the  like, each Borrower hereby consents to such action by Lender and waives any claim based upon  such action, even if such action by Lender shall result in a full or partial loss of any rights of  subrogation that each Borrower might otherwise have had but for such action by Lender.  Any  election  of  remedies  that  results  in  the  denial  or  impairment  of  the  right  of  Lender  to  seek  a  deficiency judgment against any Borrower shall not impair any other Borrower’s obligation to pay  the full amount of the Indebtedness.  In the event Lender shall bid at any foreclosure or trustee’s  sale or at any private sale permitted by law or any of the Loan Documents, Lender may bid all or  less than the amount of the Indebtedness and the amount of such bid need not be paid by Lender  but shall be credited against the Indebtedness.  The amount of the successful bid at any such sale,  whether Lender or any other party is the successful bidder, shall be conclusively deemed to be the  fair market value of the Collateral and the difference between such bid amount and the remaining  balance of the Indebtedness shall be conclusively deemed to be the amount of the Indebtedness  guaranteed under this Article 3 (Personal Liability), notwithstanding that any present or future law  or court decision or ruling may have the effect of reducing the amount of any deficiency claim to  which Lender might otherwise be entitled but for such bidding at any such sale.   Section 3.10   Subordination of Other Obligations.         (a)   Each  Borrower  hereby  irrevocably  and  unconditionally  agrees  that  all  amounts  payable from time to time to such Borrower by any other Borrower pursuant to any agreement,  whether secured or unsecured, whether of principal, interest, or otherwise, other than the amounts  referred to in this Article 3 (Personal Liability) (collectively, the “Subordinated Obligations”),  shall  be  and  such  rights,  claims,  and  indebtedness  are,  hereby  deferred,  postponed,  and  fully  subordinated in time and right of payment to the prior payment, performance, and satisfaction in  full of the Indebtedness; provided, however, that payments may be received by any Borrower in  accordance with, and only in accordance with, the provisions of Section 3.10 (Subordination of  Other Obligations) hereof.         (b)   Until the Indebtedness has been finally paid in full or fully performed and all the  Loan Documents have been terminated, each Borrower irrevocably and unconditionally agrees it  will  not  ask,  demand,  sue  for,  take,  or  receive,  directly  or  indirectly,  by  set-off,  redemption,  purchase, or in any other manner whatsoever, any  payment with respect to, or any security or  guaranty for, the whole or any part of the Subordinated Obligations, and in issuing documents,  instruments, or agreements of any kind evidencing the Subordinated Obligations, each Borrower  hereby agrees that it will not receive any payment of any kind on account of the Subordinated  Obligations, so long as any of the Indebtedness is outstanding or any of the terms and conditions  of any of the Loan Documents are in effect; provided, however, that, notwithstanding anything to  the contrary contained herein, if no Potential Event of Default or Event of Default has occurred  and is continuing under any of the Loan Documents, then payments may  be received by such    Master Credit Facility Agreement    Form 6001.MCFA                       Page 24  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Borrower in respect of the Subordinated Obligations in accordance with the stated terms thereof.   Except as aforesaid, each Borrower agrees not to accept any payment or satisfaction of any kind  of  indebtedness  of  any  other  Borrower  in  respect  of  the  Subordinated  Obligations  and  hereby  assigns such rights or indebtedness to Fannie Mae, including the right to file proofs of claim and  to vote thereon in connection with any case under any chapter of the Bankruptcy Code, including  the right to  vote  on  any  plan of reorganization.   In the  event that  any  payment on  account of  Subordinated Obligations shall be received by any Borrower in violation of the foregoing, such  payment shall be held in trust for the benefit of Lender, and any amount so collected shall be turned  over to Lender upon demand.   Section 3.11   Insolvency and Liability of Other Borrower.         So long as any of the Indebtedness is Outstanding, if a petition under any chapter of the  Bankruptcy  Code  is  filed  by  or  against  any  Borrower  (the  “Subject  Borrower”),  each  other  Borrower (each, an “Other Borrower”) agrees to file all claims against the Subject Borrower in  any bankruptcy or other proceeding in which the filing of claims is required by law in connection  with indebtedness owed by the Subject Borrower and to assign to Lender all rights thereunder up  to the amount of such indebtedness.  In all such cases, the Person or Persons authorized to pay  such claims  shall  pay to  Lender the full  amount thereof and  Lender agrees  to pay such  Other  Borrower any amounts received in excess of the amount necessary to pay the Indebtedness.  Each  Other Borrower hereby assigns to Lender all of such Other Borrower’s rights to all such payments  to which such Other Borrower would otherwise be entitled but not to exceed the full amount of  the Indebtedness.  In the event that, notwithstanding the foregoing, any such payment shall be  received by any Other Borrower before the Indebtedness shall have been finally paid in full, such  payment shall be held in trust for the benefit of and shall be paid over to Lender upon demand.   Furthermore, notwithstanding the foregoing, the liability of each Borrower hereunder shall in no  way be affected by:         (a)   the  release  or  discharge  of  any  Other  Borrower  in  any  creditors’  receivership,  bankruptcy, or other proceedings; or         (b)   the impairment, limitation, or modification of the liability of any Other Borrower  or the estate of any Other Borrower in bankruptcy resulting from the operation of any present or  future provisions of any chapter of the Bankruptcy Code or other statute or from the decision in  any court.   Section 3.12   Preferences, Fraudulent Conveyances, Etc.         If Lender is required to refund, or voluntarily refunds, any payment received from any  Borrower because such payment is or may be avoided, invalidated, declared fraudulent, set aside,  or determined to be void or voidable as a preference, fraudulent conveyance, impermissible setoff,  or a diversion of trust funds under the Insolvency Laws or for any similar reason, including any  judgment,  order,  or  decree  of  any  court  or  administrative  body  having  jurisdiction  over  any  Borrower or any of its property, or upon or as a result of the appointment of a receiver, intervenor,  custodian, or conservator of, or trustee or similar officer for, any Borrower or any substantial part     Master Credit Facility Agreement    Form 6001.MCFA                       Page 25  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   of its property, or otherwise, or any statement or compromise of any claim effected by Lender with  any  Borrower  or  any  other  claimant  (a  “Rescinded  Payment”),  then  each  Other  Borrower’s  liability to Lender shall continue in full force and effect, or each Other Borrower’s liability to  Lender shall be reinstated and renewed, as the case may be, with the same effect and to the same  extent  as  if  the  Rescinded  Payment  had  not  been  received  by  Lender,  notwithstanding  the  cancellation  or  termination  of  any  of  the  Loan  Documents,  and  regardless  of  whether  Lender  contested the order requiring the return of such payment.  In addition, each Other Borrower shall  pay, or reimburse Lender for, all expenses (including all reasonable attorneys’ fees, court costs,  and related disbursements) incurred by Lender in the defense of any claim that a payment received  by Lender in respect of all or any part of the Indebtedness must be refunded.  The provisions of  this Section 3.12 (Preferences, Fraudulent Conveyances, Etc.) shall survive the termination of the  Loan Documents and any satisfaction and discharge of any Borrower by virtue of any payment,  court order, or any federal or state law.   Section 3.13   Maximum Liability of Each Borrower.         Notwithstanding  anything  contained  in  this  Master  Agreement  or  any  other  Loan  Document to the contrary, if the obligations of any Borrower under this Master Agreement or any  of the other Loan Documents or any Security Instruments granted by any Borrower are determined  to  exceed  the  reasonably  equivalent  value  received  by  such  Borrower  in  exchange  for  such  obligations  or  grant  of  such  Security  Instruments  under  any  Fraudulent  Transfer  Law  (as  hereinafter defined), then the liability of such Borrower shall be limited to a maximum aggregate  amount  equal  to  the  largest  amount  that  would  not  render  its  obligations  under  this  Master  Agreement  or  all  the  other  Loan  Documents  subject  to  avoidance  as  a  fraudulent  transfer  or  conveyance under Section 548 of Title 11 of the United States Code or any applicable provisions  of comparable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving  effect to all other liabilities of such Borrower, contingent or otherwise, that are relevant under the  Fraudulent Transfer Laws (specifically excluding, however, any liabilities of such Borrower in  respect of Indebtedness to any other Borrower or any other Person that is an affiliate of the other  Borrower to the extent that such Indebtedness would be discharged in an amount equal to the  amount paid by such Borrower in respect of the Indebtedness) and after giving effect (as assets) to  the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any  rights to subrogation, reimbursement, indemnification, or contribution of such Borrower pursuant  to  Applicable  Law  or  pursuant  to  the  terms  of  any  agreement  including  the  Contribution  Agreement.   Section 3.14   Liability Cumulative.         The liability of each Borrower under this Article 3 (Personal Liability) is in addition to and  shall be cumulative with all liabilities of such Borrower to Lender under this Master Agreement  and  all  the  other  Loan  Documents  to  which  such  Borrower  is  a  party  or  in  respect  of  any  Indebtedness of any other Borrower.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 26  Article 3                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                                     Article 4                             BORROWER STATUS   Section 4.01   Representations and Warranties.         The  representations  and  warranties  made  by  Borrower  to  Lender  in  this Section  4.01  (Borrower Status – Representations and Warranties) are made as of each Effective Date and are  true and correct except as disclosed on the Exceptions to Representations and Warranties Schedule.         (a)   Due Organization and Qualification; Organizational Agreements.               (1)   Each Borrower is validly existing and qualified to transact business and is        in  good  standing  in  (A)  the  state  in  which  it  is  formed  or  organized,  (B)  the  Property        Jurisdiction and (C) each other jurisdiction that qualification or good standing is required        according  to  Applicable  Law  to  conduct  its  business  with  respect  to  the  Mortgaged        Property, owned by such Borrower, in each case, where the failure to be so qualified or in        good standing would adversely affect Borrower’s operation of its Mortgaged Property or        the validity, enforceability or the ability of Borrower to perform its obligations under this        Master Agreement or any other Loan Document.  The managing member or general partner        of Borrower, as applicable, is validly existing and qualified to transact business and is in        good standing in the state in which it is organized and in each other jurisdiction in which        such qualification and/or standing is necessary to the conduct of its business.               (2)   The members or partners, as applicable, of Borrower and the percentage of        their Ownership  Interests  are  as  set forth in  the Ownership  Interests  Schedule attached        hereto.  True, correct and complete Organizational Documents of each Borrower Entity        and each Identified Party have been delivered to Lender prior to each Effective Date.               (3)   The Organizational Documents of Borrower and SPE Owner, if any, require        Borrower  and  SPE  Owner,  if  any,  to  comply  with  the  provisions  of Section  4.02(d)        (Borrower Status – Covenants – Single Purpose Status) of this Master Agreement.         (b)   Location.   Borrower’s  General  Business  Address  is  Borrower’s  principal  place  of  business  and  principal  office.   Guarantor’s  General  Business  Address  is  Guarantor’s  principal  place  of  business  and  principal office.  Key Principal’s General Business Address is Key Principal’s principal place of  business and principal office.         (c)   Power and Authority.   Each Borrower has the requisite power and authority:               (1)   to own its Mortgaged Property and to carry on its business as now conducted        and as contemplated to be conducted in connection with the performance of its obligations     Master Credit Facility Agreement    Form 6001.MCFA                       Page 27  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         under this Master Agreement and under the other Loan Documents to which it is a party;        and               (2)   to  execute  and  deliver  this  Master  Agreement  and  the  other  Loan        Documents to which it is a party, and to carry out the transactions contemplated by this        Master Agreement and the other Loan Documents to which it is a party.         (d)   Due Authorization.         The execution, delivery, and performance of this Master 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 Master 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 Master Agreement and the other Loan Documents to which it is a party have been  duly executed and delivered by Borrower and constitute the legal, valid, and binding obligations  of Borrower, enforceable against Borrower in accordance with their respective terms, except as  such enforceability may be limited by applicable Insolvency Laws or by the exercise of discretion  by any court.         (f)   Effect of Master Agreement on Financial Condition.         The Loan will not render Borrower Insolvent.  Borrower has sufficient working capital,  including proceeds from the Advances, cash flow from the Mortgaged Properties, or other sources,  not  only  to  adequately  maintain  the  Mortgaged  Properties  currently,  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 any Advance on its Maturity Date.  In connection  with the execution and delivery of this Master Agreement, the Security Instruments 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 Master 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 Master Agreement and the  other  Loan  Documents.   Nothing  contained  in  this  Section  4.01(f)  shall  be  deemed  to  require  additional contributions of capital to Borrower by any direct or indirect partner, member, manager,  shareholder, or any other Person.         (g)   Economic Sanctions, Anti-Money Laundering, and Anti-Corruption.               (1)   No Borrower Entity, nor to Borrower’s knowledge, any Identified Party,        nor any Person Controlled by Borrower Entity that also has a direct or indirect Ownership    Master Credit Facility Agreement    Form 6001.MCFA                       Page 28  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         Interest in any Borrower Entity, is in violation of any applicable civil or criminal laws or        regulations, including those requiring internal controls, intended to prohibit, prevent, or        regulate money laundering, drug trafficking, terrorism, or corruption, of the United States        and the jurisdiction where the Mortgaged Property is located or where the Person resides,        is domiciled, or has its principal place of business.               (2)   No Borrower Entity, nor to Borrower’s knowledge, any Identified Party,        nor any Person Controlled by Borrower Entity that also has a direct or indirect Ownership        Interest in any Borrower Entity, is a Person:                     (A)   against whom proceedings are pending for any alleged violation of              any laws described in Section 4.01(g)(1) (Borrower Status – Representations and              Warranties – Economic Sanctions, Anti-Money Laundering, and Anti-Corruption);                     (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  4.01(g)(1)  (Borrower  Status  –              Representations and Warranties – Economic Sanctions, Anti-Money Laundering,              and Anti-Corruption); or                     (C)   with whom any United States Person, any entity organized under the              laws  of  the  United  States  or  its  constituent  states  or  territories,  or  any  entity,              regardless  of where organized, having  its  principal place of business  within the              United  States  or  any  of  its  territories,  is  a  Sanctioned  Person  or  is  otherwise              prohibited  from  transacting  business  of  the  type  contemplated  by  this  Master              Agreement and the other Loan Documents under any other Applicable Law.               (3)   Each  Borrower  Entity  is  in  compliance  with  all  applicable  Economic        Sanctions laws and regulations.         (h)   Single Purpose Status.         Each Borrower and SPE Owner at all times since its formation:               (1)   has not acquired, held, owned, leased, developed, or improved, and does not        own  or  lease  any  real  property,  personal  property,  or  assets  other  than  the  Mortgaged        Property or, for  any SPE Owner,  equity interests in a Person that owns the Mortgaged        Property;               (2)   has not acquired or owned and does not own, operate, or participate in any        business other than the leasing, ownership, management, operation, and maintenance of        the Mortgaged Property or, for any SPE Owner, equity interests in a Person that owns 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    Master Credit Facility Agreement    Form 6001.MCFA                       Page 29  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         instrument to which Borrower is a party, or by which Borrower is otherwise bound, or to        which the Mortgaged Property is subject or by which it is otherwise encumbered, other        than:                     (A)   unsecured  trade  payables  incurred  in  the  ordinary  course  of  the              operation  of  the  Mortgaged  Property  (exclusive  of  amounts  for  rehabilitation,              restoration,  repairs,  or  replacements  of  the Mortgaged  Property) that  (i)  are not              evidenced by a promissory note, (ii) are payable within sixty (60) days of the date              incurred, and (iii) as of the Effective Date such Mortgaged Property is added to the              Collateral Pool, do not exceed, the lesser of (x) four percent (4%) of the Allocable              Facility Amount for such Mortgaged Property and (y) in the aggregate, when added              to unsecured trade payables for all other Mortgaged Properties in the Collateral              Pool, four percent (4%) of the principal balance of the Advances Outstanding;                     (B)   if  the  Security  Instrument  grants  a  lien  on  a  leasehold  estate,              Borrower’s obligations as lessee under the ground lease creating such leasehold              estate; and                     (C)   obligations under the Loan Documents and obligations secured by              the Mortgaged Property to the extent permitted by the Loan Documents;               (4)   has  maintained  its  financial  statements,  accounting  records,  and  other        partnership, real estate investment trust, limited liability company, or corporate documents,        as the case may be, separate from those of any other Person and has not listed its assets on        the financial statement 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, and        has held all its assets or funds under its own name, unless such assets or funds can easily        be segregated and identified in the ordinary course of business and in such a manner that it        will not be costly or difficult to segregate, ascertain, or identify its individual assets from        those of any other Person;               (6)   has  been  adequately  capitalized  in  light  of  its  contemplated  business        operations;  provided  that  the  foregoing  shall  not  be  deemed  to  require  additional        contributions of capital to Borrower by any direct or indirect partner, member, manager,        shareholder, or any other Person;               (7)   has  not  assumed,  guaranteed,  or  become  obligated  for  the  liabilities  or        obligations of any other Person or pledged its assets for the benefit of any other Person        (except in connection with this Master Agreement 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 (for Mortgaged Properties in New     Master Credit Facility Agreement    Form 6001.MCFA                       Page 30  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         York)  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;               (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 such Borrower Affiliate than would be obtained in a comparable arm’s-length        transaction with an unrelated third party;               (10)  has not acquired obligations or securities of any other Person;               (11)  has paid its own liabilities, including the salaries of its own employees, if        any, from its own funds and maintained a sufficient number of employees in light of its        contemplated business operations;               (12)  has not failed to hold itself out to the public as a legal entity separate and        distinct from any other Person or to conduct its business solely in its own name or failed to        correct any known misunderstanding regarding its separate identity;               (13)  has allocated fairly and reasonably any overhead for shared expenses;               (14)  has maintained its existence as an entity duly organized, validly existing,        and in good standing (if applicable) under the laws of the jurisdiction of its formation or        organization and has done all things necessary to observe organizational formalities;               (15)  has not, other than SPE Owner’s Ownership Interest in Borrower, owned        any subsidiary or made any investment in, any Person without the prior written consent of        Lender;                (16)  without the prior written consent of Lender or unless otherwise required or        permitted  by  a  Cap  Security  Agreement,  has  not  entered  into  or  guaranteed,  provided        security for, or otherwise undertaken any form of contingent obligation with respect to any        Hedging Arrangement; and               (17)  has organizational documents which provide that upon the occurrence of        any event that causes its sole member to cease to be a member while the Advances are        Outstanding,  (x)  at  least  one  of  two  special  members  who  are  natural  Persons  will        automatically be admitted as the sole member of such Borrower and (y) such admittance        will preserve and continue the existence of Borrower without dissolution.         (i)   No Bankruptcies or Judgments.         Neither Borrower nor Borrower’s general partner or sole member is currently:      Master Credit Facility Agreement    Form 6001.MCFA                       Page 31  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (1)   the  subject  of  or  a  party  to  any  completed  or  pending  bankruptcy,        reorganization, including any receivership or other insolvency proceeding;                (2)   preparing or intending to be the subject of a Bankruptcy Event; or               (3)   except for judgments not exceeding $10,000 with respect to CCOP as sole        member of Sole Member, the subject of any judgment unsatisfied of record or docketed in        any court; or               (4)   Insolvent.         (j)   No Actions or Litigation.               (1)   There are no claims, actions, suits, or proceedings at law or in equity by or        before any Governmental Authority now pending against or, to Borrower’s knowledge,        threatened against or affecting Borrower or any Mortgaged Property not otherwise covered        by insurance (except claims, actions, suits, or proceedings regarding fair housing, anti-       discrimination, or equal opportunity, which shall always be disclosed); and               (2)   there are no claims, actions, suits, or proceedings at law or in equity by or        before any Governmental Authority now pending or, to Borrower’s knowledge, threatened        against  or  affecting  Guarantor  or  Key  Principal,  which  claims,  actions,  suits,  or        proceedings, if adversely determined (individually or in the aggregate) reasonably would        be expected to materially adversely affect the financial condition or business of Borrower,        Guarantor, or Key Principal or the condition, operation, or ownership of the Mortgaged        Property  (except  claims,  actions,  suits,  or  proceedings  regarding  fair  housing,  anti-       discrimination, or equal opportunity, which shall always be deemed material).         (k)   Payment of Taxes, Assessments, and Other Charges.         Borrower confirms that:               (1)   it has filed all federal, state, county, and municipal tax returns and reports        required to have been filed by Borrower;               (2)   it has paid, before any fine, penalty, interest, lien, or costs may be added        thereto, all taxes, governmental charges, and assessments due and payable with respect to        such returns and reports;               (3)   there  is  no  controversy  or  objection  pending,  or  to  the  knowledge  of        Borrower, threatened in respect of any tax returns of Borrower; and               (4)   it has made adequate reserves on its books and records for all taxes that have        accrued but which are not yet due and payable.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 32  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (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:               (1)   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               (4)   neither Borrower nor any ERISA Affiliate is subject to any obligation or        liability with respect to any ERISA Plan.         (n)   Default Under Other Obligations.               (1)   The execution,  delivery, and performance of  the  obligations  imposed on        Borrower under this Master Agreement and the Loan Documents to which it is a party will        not cause Borrower to be in default under the provisions of any agreement, judgment or        order to which Borrower is a party or by which Borrower is bound.               (2)   There are no defaults by Borrower or, to the knowledge of Borrower, by        any  other  Person  under  any  contract  to  which  Borrower  is  a  party,  including  any        management, rental, service, supply, security, maintenance or similar contract, other than        defaults which do not have, and are not reasonably expected to have, a Material Adverse        Effect.         (o)   Prohibited Person.         No Borrower Entity is a Prohibited Person, nor to Borrower’s knowledge, is any Person:               (1)   Controlling any Borrower Entity a Prohibited Person; or               (2)   Controlled  by  and  having  a  direct  or  indirect  Ownership  Interest  in  any        Borrower Entity a Prohibited Person.         (p)   No Contravention; No Liens.         Neither  the  execution  and  delivery  of  this  Master  Agreement  and  the  other  Loan  Documents to which Borrower is a party, nor the fulfillment of or compliance with the terms and    Master Credit Facility Agreement    Form 6001.MCFA                       Page 33  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   conditions of this Master Agreement and the other Loan Documents to which Borrower is a party,  nor the performance of the obligations of Borrower under this Master Agreement and the other  Loan Documents:               (1)   does or will conflict with or result in any breach or violation of (A) any        Applicable Law enacted or issued by any Governmental Authority or other agency having        jurisdiction over Borrower, the Mortgaged Properties or any other portion of the Collateral        or other assets of Borrower, or (B) any judgment or order applicable to Borrower or to        which Borrower, the Mortgaged Properties or other assets of Borrower are subject;               (2)   does or will conflict with or result in any breach or violation of, or constitute        a default under, any of the terms, conditions or provisions of Borrower’s Organizational        Documents, any indenture, existing agreement or other instrument to which Borrower is a        party or to which Borrower, the Mortgaged Properties or any other portion of the Collateral        or other assets of Borrower are subject;               (3)   does or will result in or require the creation of any Lien on all or any portion        of the Collateral or the Mortgaged Properties, except for the Permitted Encumbrances; or               (4)   does or will require the consent or approval of any creditor of Borrower,        any Governmental Authority or any other Person except such consents or approvals which        have already been obtained.         (q)   Lockbox Arrangement.         Borrower  is  not  party  to  any  type  of  lockbox  agreement  or  similar  cash  management  arrangement that has not been approved by Lender in writing, and no direct or indirect owner of  Borrower is party to any type of lockbox agreement or similar cash management arrangement with  respect to Rents or other income from the Mortgaged Property that has  not been approved by  Lender in writing.         (r)   No Reliance.         Borrower  acknowledges,  represents,  and  warrants  that  it  understands  the  nature  and  structure  of  the  transactions  contemplated  by  this  Master  Agreement  and  the  other  Loan  Documents to which Borrower is a party (including the cross-collateralization and cross-default of  the Indebtedness), that it is familiar with the provisions of all of the documents and instruments  relating to such transactions; that it understands the risks inherent in such transactions, including  the risk of loss of all or any of the Mortgaged Properties; and that it has not relied on Lender or  Fannie Mae for any guidance or expertise in analyzing the financial or other consequences of the  transactions  contemplated  by  this  Master  Agreement  or  any  other  Loan  Document  to  which  Borrower is a party or otherwise relied on Lender or Fannie Mae in any manner in connection with  interpreting, entering into or otherwise in connection with this Master Agreement, any other Loan  Document or any of the matters contemplated hereby or thereby.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 34  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (s)   Investment Company Act.         Borrower is not (1) an “investment company” or a company “controlled” by an “investment  company,”  within  the  meaning  of  the  Investment  Company  Act  of 1940,  as  amended;  (2)  a  “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of either  a “holding company” or a “subsidiary company” within the meaning of the Energy Policy Act  of 2005, as amended; or (3) subject to any other federal or state law or regulation which purports  to restrict or regulate its ability to borrow money.   Section 4.02   Covenants.         (a)   Maintenance of Existence; Organizational Documents.               (1)   Each of Borrower, Sole Member, or managing member (as applicable), SPE        Owner, Guarantor and Key Principal shall each 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 its Mortgaged Property        and  where  the  failure  to  do  so  would  adversely  affect  Borrower’s  operation  of  its        Mortgaged Property or the validity, enforceability, or the ability of Borrower to perform        its  obligations  under  this  Master  Agreement  or  any  other  Loan  Document.   Neither        Borrower nor any partner, member, manager, officer, or director of Borrower shall:                     (A)   make or allow any material change to the Organizational Documents              or organizational structure of Borrower, including changes relating to the Control              of  Borrower  or  changes  that  could  lead  to  noncompliance  with  the  SPE              Requirements or the provisions of Section 4.02(d) (Borrower Status – Covenants –              Single Purpose Status), or                     (B)   file any action, complaint, petition, or other claim to:                           (i)   divide,  partition,  or  otherwise  compel  the  sale  of  any                    Mortgaged Property, or                           (ii)  otherwise change the Control of Borrower.               (2)   During  the  Term  of  this  Master  Agreement,  each  of  CRI  and  CCI  shall        qualify, and be taxed as, a real estate investment trust under Subchapter M of the Internal        Revenue  Code  and  will  not  be  engaged  in  any  activities  which  would  reasonably  be        anticipated to jeopardize such qualification and tax treatment.         (b)   Economic Sanctions, Anti-Money Laundering, and Anti-Corruption.               (1)   Each Borrower Entity, any Identified Party, or any Person Controlled by        Borrower Entity that also has a direct or indirect Ownership Interest in any Borrower Entity    Master Credit Facility Agreement    Form 6001.MCFA                       Page 35  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         shall  remain  in  compliance  with  any  applicable  civil  or  criminal  laws  or  regulations        (including  those  requiring  internal  controls)  intended  to  prohibit,  prevent,  or  regulate        money laundering, drug trafficking, terrorism, or corruption, of the United States and the        jurisdiction  where  the  Mortgaged  Property  is  located  or  where  the  Person  resides,  is        domiciled, or has its principal place of business.               (2)   At no time shall any Borrower Entity or any Identified Party, or any Person        Controlled by Borrower Entity that also has a direct or indirect Ownership Interest in any        Borrower Entity, be a Person:                     (A)   against whom proceedings are pending for any alleged violation of              any laws described in Section 4.02(b)(1) (Borrower Status – Covenants – Economic              Sanctions, Anti-Money Laundering, and Anti-Corruption);                     (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)(1)  (Borrower  Status  –              Covenants – Economic Sanctions, Anti-Money Laundering, and Anti-Corruption);              or                     (C)   with whom any United States Person, any entity organized under the              laws  of  the  United  States  or  its  constituent  states  or  territories,  or  any  entity,              regardless  of where organized, having  its  principal place of business  within the              United  States  or  any  of  its  territories,  is  a  Sanctioned  Person  or  is  otherwise              prohibited  from  transacting  business  of  the  type  contemplated  by  this  Master              Agreement and the other Loan Documents under any other Applicable Law.               (3)   Borrower,  Guarantor,  and  Key  Principal  shall  at  all  times  remain  in        compliance with any applicable Economic Sanctions laws and regulations.         (c)   Payment of Taxes, Assessments, and Other Charges.         Borrower shall file all federal, state, county, and municipal tax returns and reports required  to be filed by Borrower and shall pay, before any fine, penalty interest, or cost may be added  thereto, all taxes payable with respect to such returns and reports.         (d)   Single Purpose Status.          Borrower:               (1)   shall  not  acquire,  hold,  develop,  lease,  or  improve  any  real  property,        personal property, or assets other than (A) the Mortgaged Property or (B) equity interests        in Borrower, as applicable;      Master Credit Facility Agreement    Form 6001.MCFA                       Page 36  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (2)   shall not acquire, own, operate, or participate in any business other than the        leasing, ownership, management, operation, and maintenance of the Mortgaged Property        or, for any SPE Owner, equity interests in a Person that owns 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, or other agreement or instrument to        which  Borrower  is  a  party  or  by  which  Borrower  is  otherwise  bound,  or  to  which  the        Mortgaged Property is subject or by which it is otherwise encumbered, other than:                     (A)   unsecured  trade  payables  incurred  in  the  ordinary  course  of  the              operation of the Mortgaged Property (exclusive of amounts (i) to be paid out of the              Replacement  Reserve  Account  or  Repairs  Escrow  Account,  or  (ii)  for              rehabilitation, restoration, repairs, or replacements of the Mortgaged Property or              otherwise approved by Lender) so long as such trade payables (1) are not evidenced              by a promissory note, (2) are payable within sixty (60) days of the date incurred,              and (3)  as  of any date, do  not  exceed the  lesser of  (x) four  percent (4%) of the              Allocable Facility Amount for such Mortgaged Property and (y) in the aggregate,              when added to unsecured trade payables for all other Mortgaged Properties in the              Collateral  Pool,  four  percent (4%)  of  the  principal  balance  of  the  Advances              Outstanding;                     (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  the  Contribution              Agreement  and  obligations  secured  by  the  Mortgaged  Property  to  the  extent              permitted by the Loan Documents;               (6)   shall  not  assume,  guaranty,  or  become  obligated  for  the  liabilities  or        obligations of any other Person, or pledge its assets for the benefit of any other Person        (except in connection with this Master Agreement 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 (for Mortgaged Properties in New     Master Credit Facility Agreement    Form 6001.MCFA                       Page 37  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         York)  or  similar  instrument)  or  hold  out  its  credit  as  being  available  to  satisfy  the        obligations of any other Person;               (7)   other than as set forth in the Contribution Agreement, shall not make loans        or advances to any other Person;               (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 such Borrower Affiliate than would be obtained in a comparable arm’s-length        transaction with an unrelated third party;               (9)   shall not acquire obligations or securities of any other Person;               (10)  shall  pay  (or  shall  cause  Property  Manager  on  behalf  of  Borrower  from        Borrower’s  own  funds  to  pay)  its  own  liabilities,  including  the  salaries  of  its  own        employees, if any, from its own funds and maintain a sufficient number of employees in        light  of  its  contemplated  business  operations  (it  being  understood  and  agreed  that  no        additional capital contributions shall be required to ensure compliance with this covenant);               (11)  shall not fail to hold itself out to the public as a legal entity separate and        distinct from any other Person or to conduct its business solely in its own name or fail to        correct any known misunderstanding regarding its separate identity;               (12)  shall allocate fairly and reasonably any overhead for shared expenses;               (13)  shall maintain its existence as an entity duly organized, validly existing, and        in  good  standing  (if  applicable)  under  the  laws  of  the  jurisdiction  of  its  formation  or        organization and shall do all things necessary to observe organizational formalities;               (14)  shall not, other than Sole Member’s ownership interest in Borrower, own        any subsidiary or make any investment in, any Person without the prior written consent of        Lender;               (15)  without the prior written consent of Lender or unless otherwise required or        permitted by a Cap Security Agreement, shall not enter into or guarantee, provide security        for, or otherwise undertake any form of contingent obligation with respect to any Hedging        Arrangement; and               (16)  if Borrower and Sole Member have only one member as of the Effective        Date the applicable Borrower becomes party to this Master Agreement, any such Borrower        and any such Sole  Member shall  maintain  Organizational  Documents  that provide that        upon the occurrence of any event that causes its sole member to cease to be a member while        the Advances are Outstanding, (x) at least one of two special members (if such special        members are natural Persons) or the sole special member (if such special member is an        entity) will automatically be admitted as the sole member of such Borrower and/or such        Sole  Member,  as  applicable,  and  (y)  such  admittance  will  preserve  and  continue  the    Master Credit Facility Agreement    Form 6001.MCFA                       Page 38  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         existence of such Borrower and any such Sole Member without dissolution.  If a limited        liability company Borrower or any limited liability company Sole Member has two or more        members as of the Effective Date the applicable Borrower becomes party to this Master        Agreement, Borrower and any such Sole Member shall maintain at least two members at        all times and at no time shall become a single-member limited liability company.           (e)   ERISA.         Borrower covenants that:               (1)   no asset of Borrower shall constitute “plan assets” (within the meaning of        Section 3(42) of ERISA and Department of Labor Regulation Section 2510.3 101) of an        Employee Benefit Plan;               (2)   no  asset  of  Borrower  shall  be  subject  to  the  laws  of  any  Governmental        Authority governing the assets of an Employee Benefit Plan; and               (3)   neither  Borrower  nor  any  ERISA  Affiliate  shall  incur  any  obligation  or        liability with respect to any ERISA Plan.         (f)   Notice of Litigation or Insolvency.         Borrower shall give immediate written notice to Lender of any claims, actions, suits, or  proceedings at law or in equity (including any insolvency, bankruptcy, or receivership proceeding)  by or before any Governmental Authority pending or, to Borrower’s knowledge, threatened in  writing against or affecting any Borrower Entity or Identified Party 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  any  Borrower  Entity  or  Identified Party 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 Master Agreement, Borrower shall pay, on  demand,  all  of  Lender’s  and  Fannie  Mae’s  out-of-pocket  fees,  costs,  charges,  or  expenses  (including the reasonable fees and expenses of attorneys, accountants, and other experts) incurred  by Lender and Fannie Mae in connection with:               (1)   any  amendment  to,  consent,  or  waiver  required  under,  or  Request  made        pursuant to, this Master Agreement or any of the Loan Documents (whether or not any        such amendment, consent, waiver, or Request is entered into);               (2)   defending  or  participating  in  any  litigation  arising  from  actions  by  third        parties  and  brought  against  or  involving  Lender  with  respect  to  (unless  arising  from        Lender’s or Fannie Mae’s gross negligence or willful misconduct):    Master Credit Facility Agreement    Form 6001.MCFA                       Page 39  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (A)   any Mortgaged Property;                     (B)   any event, act, condition, or circumstance in connection with any              Mortgaged Property; or                     (C)   the relationship between or among Lender, Fannie Mae, Borrower,              Key Principal, and Guarantor in connection with this Master Agreement or any of              the transactions contemplated by this Master Agreement;               (3)   the administration or enforcement of, or preservation of rights or remedies        under, this Master 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 of any Borrower or its Sole Member.         (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 direct Ownership Interest in Borrower or  SPE  Owner  if,  at  the  time  of  such  distribution,  (1)  Borrower  has  knowledge  that  after  such  distribution it will be unable to make monetary payments as and when such payments become due  and payable, (2) an Event of Default has occurred and is continuing, or (3) a Bankruptcy Event  has occurred with respect to any Borrower Entity or any Person having a direct Ownership Interest  in any Borrower Entity.         (i)   Lockbox Arrangement.         Borrower shall not enter into any type of lockbox agreement or similar cash management  arrangement that has not been approved by Lender in writing, and no direct or indirect owner of  Borrower shall enter into any type of lockbox agreement or similar cash management arrangement  with respect to Rents or other income from the Mortgaged Property that has not been approved by  Lender  in  writing.   Lender’s  approval  of  any  such  cash  management  arrangement  may  be  conditioned  upon  requiring  Borrower  to  enter  into  a  lockbox  agreement  or  similar  cash  management arrangement with Lender in form and substance acceptable to Lender with regard to  Rents and other income from the Mortgaged Property.         (j)   Confidentiality of Certain Information.         Borrower shall not disclose, and shall not permit to be disclosed, any terms, conditions,  underwriting requirements, or underwriting procedures of this Master Agreement or any of the  Loan Documents; provided, however, that such information may be disclosed (1) as required by  law  or  pursuant  to  GAAP,  (2)  to  officers,  directors,  employees,  agents,  partners,  attorneys,  accountants, engineers, and other consultants of a Borrower Entity or Identified Party and investors  and potential investors in privately placed debt and equity offerings of securities of CCOP, CCI,  CROP or CRI under Section 4(a)(2) of the Securities Act of 1933, as amended, or Regulation D    Master Credit Facility Agreement    Form 6001.MCFA                       Page 40  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   promulgated thereunder, who need to know such information, provided such Persons are instructed  to treat such information confidentially, (3) to any regulatory authority having jurisdiction over  such Borrower Entity or Identified Party, (4) in connection with any filings or disclosures required  by the Securities and Exchange Commission or other Governmental Authorities, or (5) to any other  Person to which such delivery or disclosure may be necessary or appropriate (A) in compliance  with any law, rule, regulation, or order applicable to such Borrower Entity or Identified Party, or  (B) in response to any subpoena or other legal process or information investigative demand.                                     Article 5                               THE ADVANCES   Section 5.01   Representations and Warranties.         The representations and warranties made by Borrower to Lender in this Section 5.01 (The  Advances – Representations and Warranties) are made as of each 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  Master  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 Borrower or Guarantor, including the defense of usury, nor  would the  operation of  any  of  the  terms  of  the  Loan Documents,  or  the  exercise of  any right  thereunder,  render  the  Loan  Documents  unenforceable  (subject  to  principles  of  equity  and  bankruptcy,  Insolvency  Laws,  and  other  laws  generally  affecting  creditors’  rights  and  the  enforcement of debtors’ obligations), and neither Borrower nor Guarantor has asserted any right  of rescission, set-off, counterclaim, or defense with respect thereto.         (d)   Loan Document Taxes.         All mortgage, mortgage recording, stamp, intangible, or any other similar taxes required to  be paid by any Person under Applicable Law currently in effect in connection with the execution,  delivery,  recordation,  filing,  registration,  perfection,  or  enforcement  of  any  of  the  Loan  Documents,  including  the  Security  Instrument,  have been  paid  or  will  be  paid  in the ordinary  course of the closing of any Advance.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 41  Article 4                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Section 5.02   Covenants.         (a)   Ratification of Covenants; Estoppels; Certifications.         Borrower shall:               (1)   promptly notify Lender in writing upon any violation of any covenant set        forth  in  any  Loan  Document  of  which  Borrower  has  notice  or  knowledge;  provided,        however, any such written notice by Borrower to Lender shall not relieve Borrower of, or        result  in  a  waiver  of,  any  obligation  under  this  Master  Agreement  or  any  other  Loan        Document; and               (2)   within  ten (10)  days  after  a  request  from  Lender,  provide  a  written        statement,  signed  and  acknowledged  by  Borrower,  certifying  to  Lender  or  any  Person        designated by Lender, as of the date of such statement:                     (A)   that the Loan Documents are unmodified and in full force and effect              (or, if there have been modifications, that the Loan Documents are in full force and              effect as modified and setting forth such modifications);                     (B)   the unpaid principal balance of the Advances Outstanding;                     (C)   the date to which interest on the Advances Outstanding has been              paid;                     (D)   that Borrower is not in default in paying the Advances Outstanding              or in performing or observing any of the covenants or agreements contained in this              Master  Agreement  or  any  of  the  other  Loan  Documents  (or,  if  Borrower  is  in              default, describing such default in reasonable detail);                     (E)   whether or not there are then existing any setoffs or defenses known              to Borrower against the enforcement of any right or remedy of Lender under the              Loan Documents; and                     (F)   any additional facts reasonably requested in writing by Lender.         (b)   Further Assurances.               (1)   Other Documents As Lender May Require.         Within ten (10) days after request by Lender, Borrower shall, subject to Section 5.02(d)  (Limitations on Further Acts of Borrower) below, execute, acknowledge, deliver, and, if necessary,  file or record, at its cost and expense, all further acts, deeds, conveyances, assignments, financing  statements, transfers, documents, agreements, assurances, and such other instruments as Lender  may reasonably require from time to time in order to better assure, grant, and convey to Lender  the rights intended to be granted, now or in the future, to Lender under this Master Agreement and     Master Credit Facility Agreement    Form 6001.MCFA                       Page 42  Article 5                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   the other Loan Documents and take such further action as Lender from time to time may reasonably  request as reasonably necessary, desirable, or proper to carry out more effectively the purposes of  this Master Agreement or any of the other Loan Documents.               (2)   Corrective Actions.         Within  ten (10)  days  after  request  by  Lender,  Borrower  shall  provide,  or  cause  to  be  provided, to Lender, at Borrower’s cost and expense, such further documentation or information  reasonably deemed necessary or appropriate by Lender in the exercise of its rights under the related  commitment  letter  between  Borrower  and  Lender  or  to  correct  patent  mistakes  in  the  Loan  Documents, the Title Policy, or the funding of the Advances.               (3)   Compliance with Investor Requirements.         Without limiting the generality of subsections (1) and (2) above, Borrower shall subject to  Section  5.02(d)  (Limitations  on  Further  Acts  of  Borrower)  below,  take  all  reasonable  actions  necessary to comply with the requirements of Lender to enable Lender to sell any MBS backed by  an Advance or achieve or preserve the expected federal income tax treatment of any MBS trust  that directly or indirectly holds an Advance and issues MBS as a fixed investment trust or real  estate  mortgage  investment  conduit,  as  the  case  may  be,  within  the  meaning  of  the  Treasury  Regulations.         (c)   Sale of Advances.         Borrower  shall,  subject  to Section  5.02(d)  (Limitations  on  Further  Acts  of  Borrower)  below:               (1)   comply  with  the  reasonable  requirements  of  Lender  or  any  Investor  or        provide, or cause to be provided, to Lender or any Investor within ten (10) days after the        request,  at  Borrower’s cost and expense, such  further documentation or  information in        Borrower’s possession or control as Lender or Investor may reasonably require in order to:                     (A)   enable Lender to sell the Advance to such Investor;                     (B)   enable Lender to obtain a refund of any commitment fee from any              such Investor;                     (C)   enable any such Investor to further sell or securitize the Advance; or                     (D)   achieve or preserve the expected federal income tax treatment of any              MBS trust that directly or indirectly holds an Advance and issues MBS as a fixed              investment trust or real estate mortgage investment conduit, as the case may be,              within the meaning of the Treasury Regulations.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 43  Article 5                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (2)   ratify and affirm in writing the representations and warranties set forth in        any Loan Document as of such date specified by Lender modified as necessary to reflect        changes that have occurred subsequent to the Effective Date;               (3)   confirm that Borrower is not in default in paying the  Indebtedness or to        Borrower’s knowledge in performing or observing any of the covenants or agreements        contained in this Master Agreement or any of the other Loan Documents (or, if Borrower        is in default, describing such default in reasonable detail); and               (4)   execute  and  deliver  to  Lender  and/or  any  Investor  such  other        documentation,  including  any  amendments,  corrections,  deletions,  or  additions  to  this        Master 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) (Further Assurances) or Section 5.02(c) (Sale of Advances)  shall require Borrower to do any further act that has the effect of changing the economic terms,  imposing on Borrower or Guarantor greater personal liability, or materially changing the rights  and obligations of Borrower or Guarantor, under the Loan Documents, except as may be required  to correct patent mistakes or defects.         (e)   Financing Statements; Record Searches.               (1)   Borrower shall pay all costs and expenses associated with:                     (A)   any  filing or  recording  of  any  financing statements, including all              continuation  statements,  termination  statements,  and  amendments  or  any  other              filings related to security interests in or liens on collateral; and                     (B)   any  record  searches  for  financing  statements  that  Lender  may              require.               (2)   Borrower  hereby  authorizes  Lender  to  file  any  financing  statements,        continuation  statements,  termination  statements,  and  amendments  (including  an  “all        assets” or “all personal property” collateral description or words of similar import) in form        and substance as Lender may require in order to protect and preserve Lender’s lien priority        and security interest in any Mortgaged Property (and to the extent Lender has filed any        such financing statements, continuation statements, or amendments prior to the applicable        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,     Master Credit Facility Agreement    Form 6001.MCFA                       Page 44  Article 5                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   recordation, filing, registration, perfection, or enforcement of any of the Loan Documents or the  Advances.         (g)   Date-Down Endorsements.         In  connection  with  a  Collateral  Event,  Lender  may  obtain,  at  Borrower’s  cost,  an  endorsement to the Title Policy for each Mortgaged Property, amending the effective date of such  Title Policy to the date of the Collateral Event showing no items of record from the initial effective  date of the Title Policy other than Permitted Encumbrances. At any time and from time to time  that Lender has reason to believe that an additional lien may encumber any Mortgaged Property  or in order to protect Lender’s interest in the Collateral, Lender may obtain, at Borrower’s cost, a  search of title with respect to each Mortgaged Property and if such title search uncovers any items  of record that did not exist as of the effective date of such Title Policy and such item is not a  Permitted Encumbrance  or  Liens (or potential Liens) permitted under Section 11.02(a) (Liens;  Encumbrances), Lender may obtain, at Borrower’s cost,  an endorsement to the Title Policy for  each Mortgaged Property, amending the effective date of such Title Policy to the date of the title  search performed in connection with the endorsement showing no items of record from the initial  effective date of the Title Policy other than Permitted Encumbrances or Liens (or potential Liens)  permitted under Section 11.02(a) (Liens; Encumbrances).   Section 5.03   Administrative Matters Regarding Advances.         (a)   Determination of Allocable Facility Amount and Valuations.               (1)   Initial Determinations.               On the  Initial Effective Date, Lender shall determine (A) the Allocable Facility        Amount and Valuation for each Initial Mortgaged Property, and (B) the Aggregate Debt        Service Coverage Ratio and the Aggregate Loan to Value Ratio.  Changes in Allocable        Facility  Amount,  Valuations,  the  Aggregate  Debt  Service  Coverage  Ratio,  and  the        Aggregate Loan to Value Ratio shall be made pursuant to Section 5.03(a)(2) (Subsequent        Monitoring Determinations).               (2)   Subsequent Monitoring Determinations.                     (A)   Once each Calendar Quarter, within twenty (20) Business Days after              Borrower has delivered to Lender the reports required in Section 8.02 (Books and              Records; Financial Reporting – Covenants), Lender shall determine the Aggregate              Debt Service Coverage Ratio, and the Aggregate Loan to Value Ratio, and whether              Borrower is in compliance with the requirements set forth in the Loan Documents              including the Interest Rate Cap requirements set forth in Section 2.03(a)(2)(B)(vi)              (Interest Accrual and Computation; Amortization; Interest Rate Cap) and the Cap              Security  Agreement.   At  any  time,  Lender  may  redetermine  Allocable  Facility              Amounts and Valuations for the Multifamily Residential Properties if, in Lender’s              reasonable  judgment,  changed  market  or  property  conditions  warrant  such              redetermination or any other event has occurred that invalidates the outstanding    Master Credit Facility Agreement    Form 6001.MCFA                       Page 45  Article 5                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               determination.  In connection with any Borrow Up prior to the First Anniversary,              Lender  shall  redetermine  Allocable  Facility  Amounts  and  may  redetermine  the              Valuations  for  the  Multifamily  Residential  Properties.   In  connection  with  all              Collateral Events (including any Borrow Up) occurring after the First Anniversary,              Lender shall redetermine Allocable Facility Amounts and Valuations upon receipt              of a Request for a Collateral Event and immediately upon closing such Collateral              Event, in each case to take account of such Collateral Event.                     (B)   Lender  shall  promptly  disclose  its  determinations  to  Borrower.               Until  redetermined,  the  outstanding  Allocable  Facility  Amounts  and  Valuations              shall remain in effect.  Upon receipt by Borrower of any such new determinations              by Lender, Borrower shall promptly acknowledge such receipt.         Notwithstanding anything in this Master Agreement to the contrary, no change in Allocable  Facility Amounts, Valuations, the Aggregate Loan to Value Ratio, or the Aggregate Debt Service  Coverage Ratio shall (i) result in a Potential Event of Default or Event of Default , (ii) require the  prepayment of any Advance in whole or in part, or (iii) require the addition of Collateral to the  Collateral Pool .                                    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  (Property Use, Preservation and Maintenance – Representations and Warranties) are made as of  each  Effective  Date  and  are  true  and  correct  except  as  disclosed  on  the  Exceptions  to  Representations and Warranties Schedule.         (a)   Compliance with Law; Permits and Licenses.               (1)   To Borrower’s knowledge, all improvements to the Land and the use of the        Mortgaged Properties comply with all Applicable Law, 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 Properties.               (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     Master Credit Facility Agreement    Form 6001.MCFA                       Page 46  Article 5                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         than those permits or approvals which will be timely obtained in the ordinary course of        business.               (4)   All required permits, licenses, and certificates to comply with all Applicable        Law,  and  for  the  lawful  use  and  operation  of  the  Mortgaged  Properties,  including        certificates of occupancy, apartment licenses, or the equivalent, have been obtained and are        in full force and effect.               (5)   No  portion  of  any  Mortgaged  Property  has  been  purchased  with  the        proceeds of any illegal activity.         (b)   Property Characteristics.         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 the sole owner or ground lessee of the Mortgaged Property.  If any Mortgaged  Property is a condominium, Borrower shall be subject to representations and covenants specific to  such Mortgaged Property.         (d)   Condition of the Mortgaged Property.         Borrower represents that:               (1)   Borrower has not made any claims, and to Borrower’s knowledge, no claims        have been made, against any contractor, engineer, architect, or other party with respect to        the construction or condition of any Mortgaged Property or the existence of any structural        or other material defect therein;               (2)   except with respect to a Release Mortgaged Property that is the subject of a        Release Request, no Mortgaged Property 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; and               (3)   except as disclosed in any third party report delivered to Lender prior to the        date on which any Mortgaged Property is added to the Collateral Pool, to the knowledge        of Borrower, the Mortgaged Properties are in good condition, order, and repair, and there        exist no structural or other material defects in any Mortgaged Property (whether patent,        latent, or otherwise), and Borrower has not received written notice from any insurance        company or bonding company of any defects or inadequacies in any Mortgaged Property,        or any part of it, which would adversely affect the insurability of such Mortgaged Property        or  cause  the  imposition  of  extraordinary  premiums  or  charges  for  insurance  or  of  any        termination or threatened termination of any policy of insurance or bond.    Master Credit Facility Agreement    Form 6001.MCFA                       Page 47  Article 6                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (e)   Personal Property.         Borrower  owns  (or,  to  the  extent  disclosed  on  the  Exceptions  to  Representation  and  Warranties Schedule, leases) all of the Personal Property and all of the Personalty (as defined in  the  UCC)  that  is  material  to  and  is  used  in  connection  with  the  management,  ownership,  and  operation of its respective Mortgaged Property.   Section 6.02   Covenants.         (a)   Use of Property.         From and after the Effective Date, Borrower shall not, unless required by Applicable Law  or Governmental Authority:               (1)   change the use of all or any part of its Mortgaged Property;               (2)   convert any individual dwelling units or common areas to commercial use,        or convert any common area or commercial use to individual dwelling units;               (3)   initiate or acquiesce in a change in the zoning classification of the Land;               (4)   establish  any  condominium  or  cooperative  regime  with  respect  to  its        Mortgaged Property;               (5)   subdivide the Land; or               (6)   suffer, permit, or initiate the joint assessment of any Mortgaged Property        with any other real property constituting a tax lot separate from such Mortgaged Property        which could cause the part of the Land to be included or assessed under or as part of another        tax lot or parcel, or any part of any other property to be included or assessed under or as        part of the tax lot or parcels for the Land.         (b)   Property Maintenance.         Borrower shall:               (1)   pay  the  expenses  of  operating,  managing,  maintaining,  and  repairing  its        Mortgaged Property (including insurance premiums, utilities, Repairs, and Replacements)        before the last date upon which each such payment may be made without any penalty or        interest charge being added;               (2)   keep  its  Mortgaged  Property  in  good  repair  and  marketable  condition        (ordinary wear and tear excepted) (including the replacement of Personalty and Fixtures        with  items  of  equal  or  better  function  and  quality)  and  subject  to Section  9.03(b)(3)        (Application  of  Proceeds  on  Event  of  Loss)  and Section  10.03(d)  (Preservation  of        Mortgaged Property) restore or repair promptly, in a good and workmanlike manner, any     Master Credit Facility Agreement    Form 6001.MCFA                       Page 48  Article 6                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         damaged part of such Mortgaged Property to the equivalent of its original condition or        condition immediately prior to the damage (if improved after the Effective Date), whether        or not any insurance proceeds or amounts received in connection with a Condemnation        Action are available to cover any costs of such restoration or repair;               (3)   commence all Required Repairs, Additional Lender Repairs, and Additional        Lender Replacements as follows:                     (A)   with  respect  to  any  Required  Repairs,  promptly  following  the              Effective Date (subject to Force Majeure, if applicable), in accordance with the              timelines set forth on the Required Repair Schedule, or if no timelines are provided,              as soon as practical following the Effective Date;                     (B)   with respect to Additional Lender Repairs, in the event that Lender              determines  that  Additional  Lender  Repairs  are  necessary  from  time  to  time  or              pursuant  to  Section  6.03  (Administration  Matters  Regarding  the  Property),              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; and                     (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  (Administration  Matters  Regarding  the              Property), 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 (x) Permitted Encumbrances and              (y) mechanics’ or materialmen’s liens which attach automatically under the laws of              any  Governmental  Authority  upon  the  commencement  of  any  work  upon,  or              delivery of any materials to, the Mortgaged Property and for which Borrower is not              delinquent in the payment for any such work or materials and (z) liens (or potential              liens) permitted under Section 11.02(a) (Liens; Encumbrances));                     (B)   in accordance with all Applicable Law;                     (C)   in  accordance  with  all  applicable  insurance  and  bonding              requirements; and     Master Credit Facility Agreement    Form 6001.MCFA                       Page 49  Article 6                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (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);               (5)   subject to the terms of Section 6.03(a) (Property Management), provide for        professional  management  of  the  Mortgaged  Property  by  a  residential  rental  property        manager satisfactory to Lender under a contract approved by Lender in writing;               (6)   give written notice to Lender of, and, unless otherwise directed in writing        by  Lender,  appear  in  and  defend  any  action  or  proceeding  purporting  to  affect  any        Mortgaged  Property,  Lender’s  security  for the  Advances, or  Lender’s  rights  under  this        Master Agreement; and               (7)   upon  Lender’s  written  request,  submit  to  Lender  any  contracts  or  work        orders described in Section 13.02 (Administration Matters Regarding Reserves).         (c)   Property Preservation.         Borrower shall:               (1)   not commit waste or abandon or (ordinary wear and tear excepted) permit        impairment or deterioration of any Mortgaged Property;               (2)   subject to the provisions of Section 6.02(f) (Alterations to any Mortgaged        Property), not (nor permit any other Person to) demolish, make any change in the unit mix,        otherwise alter any Mortgaged Property or any part of any Mortgaged Property , or remove        any  Personalty  or  Fixtures  from  the  Mortgaged  Property,  except  for:  (A)alterations        required in connection with Repairs and Replacements; or (B)the replacement of tangible        Personalty or Fixtures, provided (i)such Personalty or Fixtures are replaced with items of        equal  or  better  function  and  quality,  and  (ii)such  replacement  does  not  result  in  any        disruption in occupancy (other than in connection with the routine re-leasing of units);               (3)   not engage in or knowingly permit, and shall take appropriate measures to        prevent and abate or cease and desist, any illegal activities at any Mortgaged Property that        could endanger tenants or visitors, result in damage to such Mortgaged Property, result in        forfeiture  of  the  Land  or  otherwise  materially  impair  the  lien  created  by  the  Security        Instrument or Lender’s interest in such Mortgaged Property;               (4)   not permit any condition to exist on any Mortgaged Property that would        invalidate any part of any insurance coverage required by this Master Agreement; or     Master Credit Facility Agreement    Form 6001.MCFA                       Page 50  Article 6                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (5)   not  subject  any  Mortgaged  Property  to  any  voluntary,  elective,  or  non-       compulsory tax lien or assessment (or opt in to any voluntary, elective, or non-compulsory        special tax district or similar regime).         (d)   Property Inspections.         Borrower shall:               (1)   permit Lender, its agents, representatives, and designees to enter upon and        inspect the Mortgaged Properties (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        Properties (subject to the rights of tenants under the Leases):                     (A)   during normal business hours;                     (B)   at such other reasonable time upon reasonable notice of not less than              one (1) Business Day;                     (C)   at any time when exigent circumstances exist; or                     (D)   at any time after an Event of Default has occurred and is continuing;              and               (2)   pay for reasonable costs or expenses incurred by  Lender or its agents in        connection with any such inspections.         (e)   Compliance with Laws.         Borrower shall:               (1)   comply in all material respects with Applicable Law and all recorded lawful        covenants and agreements relating to or affecting any Mortgaged Property, including all        laws, ordinances, statutes, rules and regulations, and covenants pertaining to construction        of improvements on the Land, fair housing, and requirements for equal opportunity, anti-       discrimination, and Leases;               (2)   procure and maintain all required permits, licenses, charters, registrations,        and certificates necessary to comply with all zoning and land use statutes, laws, ordinances,        rules and regulations, and all applicable health, fire, safety, and building codes and for the        lawful use and operation of each Mortgaged Property, including certificates of occupancy,        apartment licenses, or the equivalent;               (3)   comply  with  all  Applicable  Law  that  pertain  to  the  maintenance  and        disposition of tenant security deposits;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 51  Article 6                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (4)   at all times maintain records sufficient to demonstrate compliance with the        provisions of this Section 6.02(e) (Compliance with Laws);               (5)   promptly after receipt or notification thereof, provide Lender copies of any        building code or zoning violation from any Governmental Authority with respect to any        Mortgaged Property; and               (6)   cooperate  fully  with  Lender  with  respect  to  any  proceedings  before  any        court, board, or other Governmental Authority which may in any way affect the rights of        Lender hereunder or any rights obtained by Lender under any of the other Loan Documents        and,  in  connection  therewith,  permit  Lender,  at  its  election,  to  participate  in  any  such        proceedings.         (f)   Alterations to any Mortgaged Property.         No  alteration,  improvement,  demolition,  removal,  or  construction  (collectively,  “Alterations”)  shall  be  made  to  any  Mortgaged  Property  without  the  prior  written  consent  of  Lender if:               (1)   such Alteration could reasonably be expected to adversely affect the value        of  such  Mortgaged  Property  or  its  operation  as  a  Multifamily  Residential  Property  in        substantially  the  same  manner  in  which  it  is  being  operated  on  the  date  such  property        became Collateral;               (2)   the construction of such Alteration could reasonably be expected to result        in interference to the occupancy of tenants of such Mortgaged Property such that tenants        in occupancy with respect to five percent (5%) or more of the tenants under the Leases        would be displaced or permitted to terminate their Leases or to abate the payment of all or        any portion of their rent; or               (3)   such Alteration will be completed in more than twelve (12) months from        the date of commencement or in the last year of the Term of this Master Agreement.         In addition, Borrower must obtain Lender’s prior written consent to construct Alterations  with  respect  to  any  Mortgaged  Property  costing  in  excess  of,  with  respect  to  any  Mortgaged  Property, the number of units in such Mortgaged Property multiplied by $10,000, but in any event,  costs in excess of $500,000, Borrower must give prior written notice to Lender of its intent to  construct Alterations at  any time with respect to any Mortgaged Property costing in excess of  $100,000;  provided,  however,  that  the  preceding  requirements  shall  not  be  applicable  to  Alterations  made,  conducted,  or  undertaken  by  Borrower  as  part  of  Borrower’s  routine  maintenance and repair of the Mortgaged Properties as required by the Loan Documents (including  any Repair or Replacement).       Master Credit Facility Agreement    Form 6001.MCFA                       Page 52  Article 6                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (g)   Flood Zone Designation.         As of the Initial Effective Date a portion of the Mortgaged Property known as LUMA West  Palm (“West Palm”) has been designated as a Special Flood Hazard Area (the “AE Zone”) per  the Federal Emergency Management Agency Flood Insurance Rate Map (the “FIRM”).  From and  after  the  Initial  Effective  Date,  Borrower  shall  use  diligent  efforts  to  complete  the  Federal  Emergency Management Agency’s Letter of Map Amendment process (the “LOMA”) to change  the AE Zone designation to moderate flood hazard or minimal flood hazard pursuant to the FIRM.   Upon Borrower’s successful change of the AE Zone’s designation, Borrower shall promptly notify  Lender of the change and provide Lender with evidence thereof.  If the LOMA does not result in  a change of the AE Zone’s designation by the date that is 180 days after the Initial Effective Date,  Borrower  shall  procure  excess  flood  insurance  in  a  form  and  coverage  amount  satisfactory  to  Lender.     Section 6.03   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.  In the event that the Management Agreement expires or  is  terminated  (without  limiting  any  obligation  of  Borrower  to  obtain  Lender’s  consent  to  any  termination  or  modification  of  the  Management  Agreement  in  accordance  with  the  terms  and  provisions  of  the  Loan  Documents),  Borrower  shall  promptly  enter  into  a  replacement  management  agreement  consented  to  in  writing  by  Lender  with  a  property  manager  that  is  approved  in  advance  by  Lender  in  writing.   If  Lender  waives  in  writing  the  requirement  that  Borrower enter into a written contract for management of a Mortgaged Property, and Borrower  later elects to enter into a written contract or change the management of such 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 a Mortgaged Property must enter into an assignment of management agreement or  other agreement with Lender, in a form approved by Lender, providing for subordination of those  fees and such other provisions as Lender may require.         (c)   Property Condition Assessment.         If, in connection with any inspection of any Mortgaged Property, Lender determines that  the condition of such Mortgaged Property has deteriorated (ordinary wear and tear excepted) since  the Effective Date that such Mortgaged Property was added to the Collateral Pool, Lender may  obtain,  at  Borrower’s  expense,  a  property  condition  assessment  of  each  Mortgaged  Property.   Lender’s right to obtain a property condition assessment pursuant to this Section 6.03(c) (Property    Master Credit Facility Agreement    Form 6001.MCFA                       Page 53  Article 6                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Condition  Assessment)  shall  be  in  addition  to  any  other  rights  available  to  Lender  under  this  Master 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)  (Additional  Lender  Replacements and Additional Lender Repairs).                                     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  (Leases and Rents – Representations and Warranties) are made as of each 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 Initial Advance or a Future Advance); or               (2)   instrument which would prevent Lender from exercising its rights under this        Master 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:               (1)   comply with and observe Borrower’s material obligations under all Leases,        including Borrower’s obligations pertaining to the maintenance and disposition of tenant        security deposits;               (2)   surrender possession of the applicable 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 such Mortgaged        Property, as applicable;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 54  Article 6                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (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,  Residential  Leases  with        terms of less than six (6) months (but in no case less than one (1) month) (x) if customary        in the applicable market for properties comparable to the applicable Mortgaged Property,        may  be  permitted  with  Lender’s  prior  written  consent,  and  (y)  are  permitted  without        Lender’s consent provided that Residential Leases for no more than ten percent (10%) of        the total number of residential units at a Mortgaged Property are for a term of less than six        (6) months); 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) (Commercial Leases)), and, upon Lender’s written request, promptly        provide Lender a copy of any Residential Lease then in effect.         (b)   Commercial Leases.               (1)   With respect to Material Commercial Leases, Borrower shall not:                     (A)   enter  into  any  Material  Commercial  Lease  except  with  the  prior              written consent of Lender; or                     (B)   modify the terms of, extend, or terminate any Material Commercial              Lease  (including  any  Material  Commercial  Lease  in  existence  on  the  Effective              Date) without the prior written consent of Lender.               (2)   With respect to any non-Material Commercial Lease, Borrower shall not:                     (A)   enter into any non-Material Commercial Lease that materially alters              the use and type of operation of the premises subject to the Lease in effect as of the              Effective Date or reduces the number or size of residential units at a 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 a Mortgaged Property, or results in such non-             Material Commercial Lease being deemed a Material Commercial Lease.               (3)   With  respect  to  any  Material  Commercial  Lease  or  non-Material        Commercial Lease, Borrower shall cause the applicable tenant to provide within ten (10)        days after a request by Borrower, a certificate of estoppel, or if not provided by tenant        within  such  ten (10)  day  period,  Borrower  shall  provide  such  certificate  of  estoppel,        certifying:     Master Credit Facility Agreement    Form 6001.MCFA                       Page 55  Article 7                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (A)   that such Material Commercial Lease or non-Material Commercial              Lease is unmodified and in full force and effect (or if there have been modifications,              that such Material Commercial Lease or non-Material Commercial Lease is in full              force and effect as modified and stating the modifications);                     (B)   the term of the Lease including any extensions thereto;                     (C)   the dates to which the Rent and any other charges hereunder have              been paid by tenant;                     (D)   the  amount  of  any  security  deposit  delivered  to  Borrower  as              landlord;                     (E)   to Borrower’s knowledge, whether or not Borrower is in default (or              whether  any  event  or  condition  exists  which,  with  the  passage  of  time,  would              constitute an event of default) under such Lease;                     (F)   the address to which notices to tenant should be sent; and                     (G)   any other information as may be reasonably required by Lender.         (c)   Payment of Rents.         Borrower shall:               (1)   pay to Lender upon demand all Rents after receipt of written notice from        Lender that 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; provided, however, that Rents        for up to 5% of the residential units may be paid more than two (2) months but not in excess        of six (6) months prior to the due date of such Rents.         (d)   Assignment of Rents.         Borrower shall not:               (1)   perform any  acts  nor  execute  any instrument  that  would prevent  Lender        from exercising its rights under the assignment of Rents granted in the Security Instrument        or in any other Loan Document; nor               (2)   interfere with Lender’s collection of such Rents.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 56  Article 7                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (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   Administration Regarding Leases and Rents.         (a)   Material Commercial Lease Requirements.         Each  Material  Commercial  Lease,  including  any  renewal  or  extension  of  any  Material  Commercial Lease in existence as of the Effective Date, shall provide, directly or pursuant to a  subordination, non-disturbance and attornment agreement approved by Lender, that:               (1)   the tenant shall, upon written notice from Lender after the occurrence of an        Event of Default, pay all Rents payable under such Lease to Lender;               (2)   such Lease and all rights of the tenant thereunder are expressly subordinate        to the lien of the Security Instrument;               (3)   the tenant shall attorn to Lender and any purchaser at a Foreclosure Event        (such  attornment  to  be  self-executing  and  effective  upon  acquisition  of  title  to  the        Mortgaged Property by any purchaser at a Foreclosure Event or by Lender in any manner);               (4)   the tenant agrees to execute such further evidences of attornment as Lender        or any purchaser at a Foreclosure Event may from time to time request; and               (5)   such  Lease shall  not terminate  as  a result  of a  Foreclosure Event  unless        Lender or any other purchaser at such Foreclosure Event affirmatively elects to terminate        such  Lease  pursuant to  the terms  of  the  subordination, non-disturbance and attornment        agreement.         (b)   Residential Lease Form.         All Residential Leases entered into from and after the Effective Date shall be on forms  approved by Lender.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 57  Article 7                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                                     Article 8             BOOKS AND RECORDS; FINANCIAL REPORTING   Section 8.01   Representations and Warranties.         The  representations  and  warranties  made  by  Borrower  to  Lender  in  this Section  8.01  (Books and Records; Financial Reporting – Representations and Warranties) are made as of each  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 Properties:               (1)   are true, complete, and correct in all material respects as of their respective        dates; and               (2)   accurately represent the financial condition of the Mortgaged Properties and        present  fairly  the  financial  condition  of  Borrower  and  Guarantor  as  of  their  respective        dates.         (b)   No Change in Facts or Circumstances.         All information in the Loan Application and in all financial statements, rent rolls, reports,  certificates, and other documents submitted in connection with the Loan Application are complete  and accurate in all material respects.  There has been no material adverse change in any fact or  circumstance that would make any such information incomplete or inaccurate.   Section 8.02   Covenants.         (a)   Obligation to Maintain Accurate Books and Records; Access; Discussions with              Officers and Accountants.               (1)   Borrower shall keep and maintain at all times at the Mortgaged Property or        the property management agent’s offices or Borrower’s General Business Address and,        upon Lender’s written request, shall make available at the Land:                     (A)   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                     (B)   copies  of  all  written  contracts,  Leases  and  other  instruments  that              affect Borrower or the Mortgaged Property.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 58  Article 8                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (2)   To the extent permitted by Applicable Law and subject to the provisions of        Section 6.02(d) (Property Inspections), Borrower shall permit Lender to:                     (A)   inspect, make copies and abstracts of, and have reviewed, such of              Borrower’s books and records as may relate to the obligations of Borrower under              this Master Agreement and the other Loan Documents or the Mortgaged Properties;                     (B)   at any time discuss Borrower’s affairs, finances, and accounts with              a Person holding a Management Position of CRI or CROP, or property manager or              asset managers and independent public accountants;                     (C)   discuss  the  Mortgaged  Properties’  conditions,  operation,  or              maintenance with the Property Manager, the officers, and employees of Borrower,              Guarantor, and Key Principal; and                     (D)   receive  any  other  information  that  Lender  reasonably  deems              necessary or relevant in connection with any Loan Document or the obligations of              Borrower under this Master Agreement from the officers and employees of such              Borrower.               (3)   Borrower shall promptly inform Lender in writing of:                     (A)   the occurrence of any act, omission, change, or event that has, or              would have, a Material Adverse Effect, subsequent to the date of the most recent              financial  statements  of  Borrower  delivered  to  Lender  pursuant  to Section  8.02              (Books and Records; Financial Reporting – Covenants); and                     (B)   any material change in Borrower’s accounting policies or financial              reporting practices.         (b)   Items to Furnish to Lender.         Borrower shall furnish to Lender the following, certified as true, complete, and accurate,  in  all  material  respects,  by  an  individual  having  authority  to  bind  Borrower  (or  Guarantor,  as  applicable), in such form and with such detail as Lender reasonably requires:               (1)   within  forty-five (45)  days  after  the  end  of  each  first,  second,  and  third        Calendar Quarter, a statement of income and expenses for Borrower on a year-to-date basis        as of the end of each Calendar Quarter;               (2)   within one hundred twenty (120) days after the end of each Calendar Year:                     (A)   for  any  Borrower  that  is  an  entity,  a  statement  of  income  and              expenses and a statement of cash flows for such Calendar Year;      Master Credit Facility Agreement    Form 6001.MCFA                       Page 59  Article 8                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (B)   for  any  Borrower  that  is  an  individual,  or  a  trust  established  for              estate-planning purposes, a personal financial statement for such Calendar Year;                     (C)   when requested in writing by Lender, balance sheet(s) showing all              assets and liabilities of Borrower and a statement of all contingent liabilities as of              the end of such Calendar Year;                     (D)   if  an  energy  consumption  metric  for  the  Mortgaged  Property  is              required to be reported to any Governmental Authority, the Fannie Mae Energy              Performance Metrics report, as generated by ENERGY STAR® Portfolio Manager,              for the Mortgaged Property for such Calendar Year, which report must include the              ENERGY STAR score, the Source Energy Use Intensity (EUI), the month and year              ending  period  for  such  ENERGY  STAR  score  and  such  Source  Energy  Use              Intensity,  and  the  ENERGY  STAR  Portfolio  Manager  Property  Identification              Number; provided that, if the Governmental Authority does not require the use of              ENERGY STAR Portfolio Manager for the reporting of the energy consumption              metric  and  Borrower  does  not  use  ENERGY  STAR  Portfolio  Manager,  then              Borrower  shall  furnish  to  Lender  the  Source  Energy  Use  Intensity  for  the              Mortgaged Property for such Calendar Year;                     (E)   an  Annual  Certification  (Borrower)  in  the  form  attached  as              Exhibit G;                     (F)   an  Annual  Certification  (Guarantor)  in  the  form  attached  as              Exhibit H;                     (G)   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;                     (H)   written confirmation of:                           (i)   any changes occurring since the Effective Date (or that no                    such  changes  have  occurred  since  the  Effective  Date)  in  (1)  the  direct                    owners  of  Borrower,  (2)  the  indirect  owners  (and  any  non-member                    managers) of Borrower that Control Borrower or the indirect owners that                    are required to own a minimum indirect Ownership Interest in Borrower as                    set forth in the definition of Restricted Ownership Interest (excluding any                    Publicly-Held  Corporations  or  Publicly-Held  Trusts),  or  (3)  the  indirect                    owners  of  Borrower  that  hold  twenty-five  percent (25%)  or  more  of  the                    Ownership  Interests  in  Borrower  (excluding  any  Publicly-Held                    Corporations or Publicly-Held Trusts), and their respective interests;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 60  Article 8                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                           (ii)  the names of all officers and directors of (1) any Borrower                    which is a corporation, (2) any corporation which is a general partner of any                    Borrower  which  is  a  partnership,  or  (3)  any  corporation  which  is  the                    managing member or non-member manager of any Borrower which is a                    limited liability company; and                           (iii) the names of all managers who are not members of (1) any                    Borrower  which  is  a  limited  liability  company,  (2)  any  limited  liability                    company which is a general partner of any Borrower which is a partnership,                    or (3) any limited liability company which is the managing member or non-                   member manager of any Borrower which is a limited liability company;                     (I)   if not already provided pursuant to Section 8.02(b)(2)(A) (Items to              Furnish  to  Lender)  above,  a  statement  of  income  and  expenses  for  Borrower’s              operation of the Mortgaged Property on a year-to-date basis as of the end of each              Calendar Year;               (3)   within  forty-five (45)  days  after  the  end  of  each  first,  second,  and  third        calendar quarter and within one hundred twenty (120) days after the end of each Calendar        Year,  and  at  any  other  time  upon  Lender’s  written  request,  a  rent  schedule  for  the        Mortgaged  Property  showing  the  name  of  each  tenant  and  for  each  tenant,  the  space        occupied, the lease expiration date, the rent payable for the current month, the date through        which rent has been paid, and any related information requested by Lender;               (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)(1)  or Section  8.02(b)(2)              (Items to Furnish to Lender) for Borrower, certified as true, complete, and accurate              by an individual having authority to bind Borrower;                     (B)   a  property  management  or  leasing  report  for  the  Mortgaged              Property,  showing  the  number  of  rental  applications  received  from  tenants  or              prospective tenants and deposits received from tenants or prospective tenants, and              any other information requested by Lender;                     (C)   a statement of income and expenses for Borrower’s operation of the              Mortgaged Property on a year-to-date basis as of the end of each month for such              period as requested by Lender, which statement shall be delivered within thirty (30)              days after the end of such month requested by Lender;                     (D)   a statement of real estate owned directly or indirectly by Borrower              and Guarantor for such period as requested by Lender, which statement shall be              delivered within thirty (30) days after the end of such month requested by Lender;              and     Master Credit Facility Agreement    Form 6001.MCFA                       Page 61  Article 8                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (E)   for  any  Guarantor,  by  the  later  of  thirty (30)  days  after  the  date              requested by Lender and the date one hundred twenty (120) days after the end of              the most recent Calendar Year:                           (i)   that is an entity, a statement of income and expenses and a                    statement of cash flows for such Calendar Year;                           (ii)  that is an individual, or a trust established for estate-planning                    purposes, a personal financial statement for such Calendar Year; and                           (iii) balance  sheet(s)  showing  all  assets  and  liabilities  of                    Guarantor and a statement of all contingent liabilities as of the end of such                    Calendar Year; and                     (F)   a statement that identifies:                           (i)   the direct owners of Borrower and their respective interests;                           (ii)  the  indirect  owners  (and  any  non-member  managers)  of                    Borrower that Control Borrower or the indirect owners that are required to                    own a minimum indirect Ownership Interest in Borrower as set forth in the                    definition of Restricted Ownership Interest (excluding any Publicly-Held                    Corporations or Publicly-Held Trusts) and their respective interests; and                           (iii) the  indirect  owners  of  Borrower  that  hold  twenty-five                    percent (25%) or more of the Ownership Interests in Borrower (excluding                    any  Publicly-Held  Corporations  or  Publicly-Held  Trusts)  and  their                    respective interests.               (5)   Intentionally Deleted.    Notwithstanding anything to the contrary in this Agreement and/or in any other Loan Document,  after a Public Listing of CCOP (or its successor) or CCI (or its successor) in accordance with the  terms of this Agreement, and for so long as no Event of Default has occurred and is continuing,  the following provisions shall apply:   So  long  as  Key  Principal’s  or  Guarantor’s  shares  are  publicly  traded,  Key  Principal  and/or  Guarantor  shall  file  with  the  Securities  and  Exchange  Commission  such  annual  and  quarterly  reports (which may consist of Form 10Ks and Form 10Qs), at the times specified for such filing  under the applicable sections of the Securities Exchange Act of 1934, as amended, and shall deliver  to  Lender  such  reports  promptly  upon  the  filing  thereof  with  the  Securities  and  Exchange  Commission, and in any event within 120 days of the end of Key Principal's or Guarantor’s fiscal  year, in the case of annual reports, or within 90 days of the end of each of the first three quarters  of Key Principal's or Guarantor’s fiscal year.  So long as no Event of Default has occurred and is  continuing, delivery of such reports to the Lender as and when required by the terms hereof shall  be deemed to satisfy the reporting requirements with respect to the Key Principal and/or Guarantor    Master Credit Facility Agreement    Form 6001.MCFA                       Page 62  Article 8                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   required  under  this  Section  8.02(b)  (Items  to  furnish  to  the  Lender)  and  8.02(c)(Audited  Financials).          (c)   Audited Financials.         In the event Borrower, Key Principal 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) (Items to Furnish to Lender), Borrower shall deliver or cause to be delivered to Lender the  audited versions of such financial statements.         (d)   Delivery of Books and Records.         If an Event of Default has occurred and is continuing, Borrower shall deliver to Lender,  upon written demand, all books and records relating to the Mortgaged Property or its operation.   Section 8.03   Administration  Matters  Regarding  Books  and  Records  and  Financial                 Reporting.         (a)   Lender’s Right to Obtain Audited Books and Records.         Lender  may  require  that  Borrower’s  or  Guarantor’s  books  and  records  be  audited,  at  Borrower’s expense, by an independent certified public accountant selected by Lender in order to  produce or audit any statements, schedules, and reports of Borrower, Guarantor, or the Mortgaged  Property required by Section 8.02 (Books and Records; Financial Reporting – Covenants), if               (1)   Borrower or Guarantor fails to provide in a timely manner the statements,        schedules, and reports required by Section 8.02 (Books and Records; Financial Reporting        –  Covenants)  and,  thereafter,  Borrower  or  Guarantor  fails  to  provide  such  statements,        schedules  and  reports  within  the  cure  period  provided  in Section  14.01(c)  (Events  of        Default Subject to Extended Cure Period or Release);               (2)   the  statements,  schedules,  and  reports  submitted  to  Lender  pursuant  to        Section 8.02 (Books and Records; Financial Reporting – Covenants) are not full, complete,        and accurate in all material respects as determined by Lender and, thereafter, Borrower or        Guarantor fails to provide such statements, schedules, and reports within the cure period        provided  in Section  14.01(c)  (Events  of  Default  Subject  to  Extended  Cure  Period  or        Release); or               (3)   an Event of Default has occurred and is continuing.         Notwithstanding  the  foregoing,  the  ability  of  Lender  to  require  the  delivery  of  audited  financial statements shall be limited to not more than once per Borrower’s fiscal year so long as  no Event of Default has occurred during such fiscal year (or any event which, with the giving of  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) (Lender’s Right to Obtain Audited Books and Records).  All related costs and    Master Credit Facility Agreement    Form 6001.MCFA                       Page 63  Article 8                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   expenses of Lender shall become due and payable by Borrower within ten (10) Business Days  after demand therefor.         (b)   Credit Reports; Credit Score.         No more often than once in any twelve (12) month period, Lender is authorized to obtain  a credit report (if applicable) on Borrower or Guarantor, the cost of which report shall be paid by  Borrower.  Lender is authorized to obtain a Credit Score (if applicable) for Borrower or Guarantor  at any time at Lender’s expense.                                     Article 9                                  INSURANCE   Section 9.01   Representations and Warranties.         The  representations  and  warranties  made  by  Borrower  to  Lender  in  this Section  9.01  (Insurance – Representations and Warranties) are made as of each 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.  With respect to each Mortgaged Property, Borrower has delivered to  Lender certificates of insurance and copies of the Insurance Policies currently in effect as of the  date such Mortgaged Property was added to the Collateral Pool.         (b)   Property Condition.               (1)   No Mortgaged Property has been damaged by fire, water, wind, or other        cause of loss; or               (2)   if previously damaged, any previous damage to any Mortgaged Property        has been repaired and such Mortgaged Property has been fully restored.   Section 9.02   Covenants.         (a)   Insurance Requirements.         As required by Lender and Applicable Law, and as may be modified from time to time,  Borrower shall:               (1)   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    Master Credit Facility Agreement    Form 6001.MCFA                       Page 64  Article 8                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         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, terrorism        insurance,  windstorm  insurance  and,  if  any  Mortgaged  Property  does  not  conform  to        applicable building, zoning, or land use laws, ordinance and law coverage;               (2)   maintain  at  all  times  commercial  general  liability  insurance,  workmen’s        compensation  insurance,  and  such  other  liability,  errors  and  omissions,  and  fidelity        insurance coverage; and               (3)   maintain builder’s risk and public liability insurance, and other insurance in        connection with completing the Repairs or Replacements, as applicable.   Notwithstanding the provisions of Section 9.02(a)(1) above and/or Section 9.03(a) to the contrary,  Lender  hereby  agrees  that  it  will  not  require  Borrower  to  obtain  terrorism  insurance  for  any  Mortgaged Property unless it is available for the Mortgaged Property at commercially reasonable  rates as determined by Lender.         (b)   Delivery of Policies, Renewals, Notices, and Proceeds.         Borrower shall:               (1)   cause all insurance policies (including any policies not otherwise required        by  Lender)  which  can  be  endorsed  with  standard  non-contributing,  non-reporting        mortgagee clauses making loss payable to Lender (or Lender’s assigns) to be so endorsed;               (2)   promptly deliver to Lender a copy of all renewal and other notices received        by Borrower with respect to the policies and all receipts for paid premiums;               (3)   deliver  evidence,  in  form  and  content  acceptable  to  Lender,  that  each        Insurance Policy required under this Article 9 (Insurance) has been renewed not less than        fifteen (15) days prior to the applicable expiration date, and (if such evidence is other than        an  original  or  duplicate  original  of  a  renewal  policy)  deliver  the  original  or  duplicate        original of each renewal policy (or such other evidence of insurance as may be required by        or acceptable to Lender) in form and content acceptable to Lender within ninety (90) days        after the applicable expiration date of the original Insurance Policy;               (4)   provide immediate written notice to the insurance company and to Lender        of any event of loss;               (5)   execute such further evidence of assignment of any insurance proceeds as        Lender may require; and               (6)   provide immediate written notice to Lender of Borrower’s receipt of any        insurance proceeds under any Insurance Policy required by Section 9.02(a)(1) (Insurance     Master Credit Facility Agreement    Form 6001.MCFA                       Page 65  Article 9                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         Requirements) 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 (Insurance).   Section 9.03   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 Master Agreement  shall be:               (1)   in the form and with the terms required by Lender;               (2)   in  such  amounts,  with  such  maximum  deductibles  and  for  such  periods        required by Lender; and               (3)   issued by insurance companies satisfactory to Lender.         BORROWER  ACKNOWLEDGES  THAT  ANY  FAILURE  OF  BORROWER  TO  COMPLY  WITH  THE  REQUIREMENTS  SET  FORTH  IN      SECTION  9.02(a)  (Insurance  Requirements) OR SECTION 9.02(b) (Delivery of Policies, Renewals, Notices, and Proceeds)  ABOVE SHALL PERMIT LENDER TO PURCHASE THE APPLICABLE INSURANCE AT  BORROWER’S  COST.   SUCH  INSURANCE  MAY,  BUT  NEED  NOT,  PROTECT  BORROWER’S INTERESTS.  THE COVERAGE THAT LENDER PURCHASES MAY NOT  PAY  ANY  CLAIM  THAT  BORROWER  MAKES  OR  ANY  CLAIM  THAT  IS  MADE  AGAINST  BORROWER  IN  CONNECTION  WITH  ANY  MORTGAGED  PROPERTY.   IF  LENDER  PURCHASES  INSURANCE  FOR  ANY  MORTGAGED  PROPERTY  AS  PERMITTED HEREUNDER, BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF  THAT INSURANCE, INCLUDING INTEREST AT THE DEFAULT RATE AND ANY OTHER  CHARGES LENDER MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE  INSURANCE  UNTIL  THE  EFFECTIVE  DATE  OF  THE  CANCELLATION  OR  THE  EXPIRATION  OF  THE  INSURANCE.   THE  COSTS  OF  THE  INSURANCE  SHALL  BE  ADDED TO BORROWER’S TOTAL OUTSTANDING BALANCE OR OBLIGATION AND  SHALL CONSTITUTE ADDITIONAL INDEBTEDNESS.  THE COSTS OF THE INSURANCE  MAY  BE  MORE  THAN  THE  COST  OF  INSURANCE  BORROWER  MAY  BE  ABLE  TO  OBTAIN  ON  ITS  OWN.   BORROWER  MAY  LATER  CANCEL  ANY  INSURANCE  PURCHASED  BY  LENDER,  BUT  ONLY  AFTER  PROVIDING  EVIDENCE  THAT  BORROWER  HAS  OBTAINED  INSURANCE  AS  REQUIRED  BY  THIS  MASTER  AGREEMENT AND THE OTHER LOAN DOCUMENTS.         (b)   Application of Proceeds on Event of Loss.               (1)   Upon an event of loss, Lender may, at Lender’s option:      Master Credit Facility Agreement    Form 6001.MCFA                       Page 66  Article 9                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (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  require  Restoration  pursuant  to Section              9.03(b)(1)(A) (Application of Proceeds on Event of Loss) if all of the following              conditions are met:                           (i)   no  Potential  Event  of  Default  or  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 after completion of the Restoration                    (1) the Net Cash Flow generated by the applicable Mortgaged Property will                    be sufficient to support the Debt Service Coverage Ratio set forth in the                    definition of Individual Property Coverage and LTV Tests (on a pro forma                    basis), and (2) the Loan to Value Ratio of such Mortgaged Property will be                    no greater than the Loan to Value Ratio immediately prior to the event of                    loss, but in no event greater than seventy percent (70%);                           (iv)  Lender  determines  that  the  Restoration  will  be  completed                    before  the earlier of  (1) one  year  before the  latest  Maturity Date of  any                    Advance Outstanding, or (2) one year after the date of the loss or casualty;                    and                           (v)   Borrower provides Lender, upon written request, evidence                    of the availability during and after the Restoration of the insurance required                    to be maintained by Borrower pursuant to this Master 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 $250,000, Lender shall not exercise its rights and remedies as power        of  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:      Master Credit Facility Agreement    Form 6001.MCFA                       Page 67  Article 9                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (A)   Borrower shall immediately notify Lender of the casualty giving rise              to the claim;                     (B)   no Potential Event of Default or Event of Default has occurred and              is continuing;                     (C)   the Restoration will be completed before the earlier of (i) one year              before the Termination Date, or (ii) one year after the date of the loss or casualty;                     (D)   Lender determines that the combination of insurance proceeds and              amounts provided by Borrower will be sufficient funds to complete the Restoration;                     (E)   all  proceeds  of  property  damage  insurance  shall  be  issued  in  the              form of joint checks to Borrower and Lender;                     (F)   all proceeds of property damage insurance shall be applied to the              Restoration;                     (G)   Borrower shall deliver to Lender evidence satisfactory to Lender of              completion of the Restoration and obtainment of all lien releases;                     (H)   Borrower  shall  have  complied  to  Lender’s  satisfaction  with  the              foregoing requirements on any prior claims subject to this provision, if any; and                     (I)   Lender  shall  have  the  right  to  inspect  the  applicable  Mortgaged              Property (subject to the rights of tenants under the Leases).               (3)   If  Lender  elects  to  apply  insurance  proceeds  to  the  Indebtedness  in        accordance with the terms of this Master Agreement, Borrower shall not be obligated to        restore or repair the applicable Mortgaged Property.  Rather, Borrower shall restrict access        to the damaged portion of such Mortgaged Property and, at its expense and regardless of        whether  such  costs  are  covered  by  insurance,  clean  up  any  debris  resulting  from  the        casualty event, and, if required or otherwise permitted by Lender, demolish or raze any        remaining part of the damaged Mortgaged Property to the extent necessary to keep and        maintain the Mortgaged Property in a safe, habitable and marketable condition.  Nothing        in  this Section  9.03(b)  (Application  of  Proceeds  on  Event  of  Loss)  shall  affect  any  of        Lender’s remedial rights against Borrower in connection with a breach by Borrower of any        of its obligations under this Master 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 Master 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  Master    Master Credit Facility Agreement    Form 6001.MCFA                       Page 68  Article 9                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   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  an  entire  Mortgaged  Property,  then  Lender  shall  permit  an  adjustment  to  the  Monthly  Debt  Service  Payments  that  become  due  and  owing  thereafter,  based  on  the  Underwriting  and  Servicing  Requirements.         (d)   Foreclosure Sale.         If a Mortgaged Property is transferred pursuant to a Foreclosure Event or Lender otherwise  acquires title to a 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 such Mortgaged Property and in and to the proceeds resulting from any  damage to such 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) (Appointment of Lender as Attorney-In-Fact).                                     Article 10                               CONDEMNATION   Section 10.01  Representations and Warranties.         The  representations  and  warranties  made  by  Borrower  to  Lender  in  this Section  10.01  (Condemnation – Representations and Warranties) are made as of each 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 any Mortgaged Property has been taken in connection with a Condemnation  Action.         (b)   Pending Condemnation Actions.         Except  with  respect  to  a  Release  Mortgaged  Property  that  is  the  subject  of  a  Release  Request, no Condemnation Action is pending nor, to Borrower’s knowledge, is threatened for the  partial or total condemnation or taking of any Mortgaged Property.   Section 10.02  Covenants.         (a)   Notice of Condemnation.         Borrower shall:      Master Credit Facility Agreement    Form 6001.MCFA                       Page 69  Article 9                               04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (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  any  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  Administration Matters Regarding Condemnation.         (a)   Application of Condemnation Awards.         Lender may apply any awards or proceeds of a Condemnation Action, after the deduction  of Lender’s expenses incurred in the collection of such amounts, to:               (1)   the restoration or repair of the applicable 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 any 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 Master 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) (Appointment of Lender as Attorney-In-Fact).         (d)   Preservation of Mortgaged Property.         If a Condemnation Action results in or from damage to any 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 Master Agreement, Borrower shall not be obligated to restore or    Master Credit Facility Agreement    Form 6001.MCFA                       Page 70  Article 10                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   repair  such  Mortgaged  Property.   Rather,  Borrower  shall  restrict  access  to  any  portion  of  the  Mortgaged Property which has been damaged or destroyed in connection with such Condemnation  Action and, at Borrower’s expense and regardless of whether such costs are covered by insurance,  clean  up  any  debris  resulting  in  or  from  the  Condemnation  Action,  and,  if  required  by  any  Governmental Authority or otherwise permitted by Lender, demolish or raze any remaining part  of the damaged Mortgaged Property to the extent necessary to keep and maintain the Mortgaged  Property  in  a  safe,  habitable,  and  marketable  condition.   Nothing  in  this Section  10.03(d)  (Preservation  of  Mortgaged  Property)  shall  affect  any  of  Lender’s  remedial  rights  against  Borrower in connection with a breach by Borrower of any of its obligations under this Master  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 Master 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  (Liens,  Transfers,  and  Assumptions  –  Representations  and  Warranties)  are  made  as  of  each  Effective Date and are true and correct except as disclosed on the Exceptions to Representations  and Warranties Schedule.         (a)   No Labor or Materialmen’s Claims.         All parties furnishing labor and materials on behalf of Borrower have been, or will be in  the ordinary course of business, 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  other  than  customary  work  to  the  units  to  make  in  rent  ready  condition  and  normal  and  customary maintenance work which will be paid in the ordinary course of business) affecting any  Mortgaged  Property,  whether  prior  to,  equal  with,  or  subordinate  to  the  lien  of  the  Security  Instrument.         (b)   No Other Interests.         No Person:               (1)   other  than  Borrower  has  any  possessory  ownership  or  interest  in  any        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 any Mortgaged Property, or any interest in any Mortgaged        Property.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 71  Article 10                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Section 11.02  Covenants.         (a)   Liens; Encumbrances.         Borrower shall not permit the grant, creation, or existence of any Lien, whether voluntary,  involuntary, or by operation of law, on all or any portion of any Mortgaged Property (including  any voluntary, elective, or non-compulsory tax lien or assessment pursuant to a voluntary, elective,  or non-compulsory special tax district or similar regime) other than:               (1)   Permitted Encumbrances;               (2)   the creation of:                     (A)   any  tax  lien,  municipal  lien,  utility  lien,  mechanics’  lien,              materialmen’s lien, or judgment lien against any 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, any Mortgaged Property and for which              Borrower is not delinquent in the payment for any such work or materials; and               (3)   the lien created by the Loan Documents.   Notwithstanding the foregoing, nothing herein shall require Borrower to pay any Lien so long as  Borrower  in  good  faith  and  at  its  own  expense  and  by  proper  legal  proceedings  is  diligently  contesting the validity, amount or application of such Lien and at the time of commencement of  the proceeding and during the pendency thereof (i) the Mortgaged Property will not be in material  danger of being sold, forfeited or lost, as determined by Lender; (ii) Borrower shall furnish such  security as may be required in such proceeding or as may be requested by Lender to insure the  payment of the amounts contested (after taking into account any reserves held by Lender for such  purpose); and (iii) such contest operates to suspend collection or enforcement of the contested  amount, as applicable.         (b)   Transfers.               (1)   Mortgaged Property.               A Transfer as described in clause (b) of the definition of Transfer of all or any part        of any Mortgaged Property (including any interest in any Mortgaged Property) shall not        occur other than:                     (A)   a Transfer to which Lender has consented in writing;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 72  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (B)   Leases permitted pursuant to the Loan Documents;                     (C)   [reserved];                     (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 Borrower has paid to Lender, upon demand, all costs              and expenses incurred by Lender in connection with reviewing Borrower’s request,              including reasonable attorneys’ fees and the Review Fee;                     (F)   a  lien  permitted  pursuant  to Section  11.02  (Liens,  Transfers,  and              Assumptions – Covenants) of this Master Agreement; or                     (G)   the conveyance of any Mortgaged Property following a Foreclosure              Event.               (2)   No Transfers of Interests in Borrower, Key Principal, or Guarantor.               Subject to the provisions of this Article 11 (Liens, Transfers, and Assumptions), a        Transfer as described in clause (a) of the definition of Transfer, a Change of Control, or a        Transfer of the Restricted Ownership Interest shall not occur.         Notwithstanding  the  restrictions  on  Control  and  Restricted  Ownership  Interests,  to  the  extent a Restricted Ownership Interest is held by a Publicly-Held Corporation or a Publicly-Held  Trust, a Transfer of any Ownership Interests in such Publicly-Held Corporation or Publicly-Held  Trust shall not be prohibited under this Master Agreement as long as (A) such Transfer does not  result in a conversion of such Publicly-Held Corporation or Publicly-Held Trust to a privately held  entity, and (B) Borrower provides written notice to Lender not later than thirty (30) days thereafter  of any such Transfer that results in any Person owning ten percent (10%) or more of the Ownership  Interests in such Publicly-Held Corporation or Publicly-Held Trust.               (3)   Name Change or Entity Conversion.               Lender shall consent to a 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 such Borrower both prior to and subsequent to such name change              or entity conversion;      Master Credit Facility Agreement    Form 6001.MCFA                       Page 73  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (B)   such Transfer is not otherwise prohibited under the provisions of              Section  11.02(b)(2)  (No  Transfers  of  Interests  in  Borrower,  Key  Principal,  or              Guarantor);                     (C)   Borrower executes an amendment to this Master Agreement and any              other Loan Documents required by Lender documenting the name change or entity              conversion;                     (D)   Borrower agrees and acknowledges, at Borrower’s expense, that (i)              Borrower will execute and record in the land records any instrument required by              the Property Jurisdiction to be recorded to evidence such name change or entity              conversion (or provide Lender with written confirmation from the title company              (via electronic mail or letter) that no such instrument is required), (ii) Borrower will              execute any additional documents required by Lender, including the amendment to              this Master Agreement, and allow such documents to be recorded or filed in the              land records of the Property Jurisdiction, (iii) 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 (10) days subsequent to such name change or entity              conversion,  Borrower  shall  provide  Lender  (i)  the  documentation  filed with the              appropriate  office  in  such  Borrower’s  state  of  formation  evidencing  such  name              change or entity conversion, (ii) copies of the Organizational Documents of such              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 such Borrower.               (4)   No Delaware Statutory Trust or Series LLC Conversion.               Notwithstanding any provisions herein to the contrary, no Borrower Entity shall        convert to a Delaware Statutory Trust or a series limited liability company.               Notwithstanding the foregoing, Borrower shall provide Lender prompt notice of        any name change or entity conversion of any other Borrower Entity or Identified Party.         (c)   No Other Indebtedness.         Other than the Advances, 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 Master  Agreement),  including  any  indebtedness  secured  by  a  Lien  on,  or  the  cash  flows  from,  the  Mortgaged Property.    Master Credit Facility Agreement    Form 6001.MCFA                       Page 74  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (d)   No Mezzanine Financing or Preferred Equity.         Neither  Borrower  nor  any  direct  or  indirect  owner  of  Borrower  shall:  (1)  incur  any  Mezzanine Debt other than Permitted Mezzanine Debt; (2) issue any Preferred Equity other than  Permitted Preferred Equity; or (3) incur any similar indebtedness or issue any similar equity.   Section 11.03  Administration Matters Regarding Liens, Transfers, and Assumptions.         (a)   Transfer of Collateral Pool.         Lender shall consent to a Transfer of the entire Collateral Pool to and an assumption of the  Loan Documents by a new borrower if each of the following conditions is satisfied prior to the  Transfer:               (1)   Borrower has submitted to Lender all information required by Lender to        make the determination required by this Section 11.03(a) (Transfer of Collateral Pool);               (2)   no Event of Default has occurred and is continuing, and no Potential Event        of Default has occurred 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 borrower, new key principal, new guarantor, and any Person              in Control of them, and the organization of the new borrower, new key principal,              and new guarantor (if applicable), and (ii) the operating and financial performance              of the Mortgaged Property, including physical condition and occupancy;                     (B)   any  proposed  new  borrower  and  its  sole  or  managing  member              (whether designated as a member or a manager) or general partner, as applicable,              is a Single Purpose entity);                     (C)   none of the proposed new borrower, new key principal, and any new              guarantor, or any owners of the proposed new borrower, new key principal, and              any new guarantor, are a Prohibited Person; and                     (D)   none of the proposed new borrower, new key principal, and any new              guarantor  (if  any  of  such  are  entities)  shall  have  an  organizational  existence              termination date that ends before the Termination Date;               (4)   [reserved];               (5)   the proposed new borrower has:     Master Credit Facility Agreement    Form 6001.MCFA                       Page 75  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (A)   executed  an  assumption  agreement  acceptable  to  Lender  that,              among other things, requires the proposed new borrower to assume and perform all              obligations of Borrower (or any other transferor), and that may require that the new              borrower comply with any provisions of any Loan Document which previously may              have been waived by Lender for Borrower, subject to the terms of Section 11.03(g)              (Further Conditions on Transfers Requiring Lender’s Consent);                     (B)   if required by Lender, delivered to the Title Company for filing or              recording in all applicable jurisdictions, all applicable Loan Documents including              the  assumption  agreement  to  correctly  evidence  the  assumption  and  the              confirmation, continuation, perfection, and priority of the Liens created hereunder              and under the other Loan Documents; and                     (C)   delivered to Lender a “date-down” endorsement to the Title Policy              acceptable to Lender (or a new title insurance policy if a “date-down” endorsement              is not available);               (6)   one or more individuals or entities acceptable to Lender as new guarantors        have executed and delivered to Lender:                     (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 Loan Documents; or                     (B)   a substitute Non-Recourse Guaranty and other substitute guaranty              in a form acceptable to Lender;               (7)   Lender has reviewed and approved the Transfer documents;               (8)   Lender shall be the servicer of the Loan Documents;               (9)   Borrower has satisfied the applicable provision of Section 11.03(g) (Further        Conditions on Transfers Requiring Lender’s Consent) including Lender’s receipt of the        fees described in Section 11.03(g) (Further Conditions on Transfers Requiring Lender’s        Consent), provided however that in the event of a Transfer to an affiliate of CROP which        does not cause a Change in Control of Borrower and preserves and maintains all rights of        Key Principal to Control Borrower as existed prior to such Transfer, the Transfer Fee set        forth in Section 11.03(g)(2)(A) will not be due or owed; and                (10)  if any MBS is Outstanding, the Transfer shall not result in a “significant        modification,” as defined under applicable Treasury Regulations, of any Advance that has        been securitized in an MBS.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 76  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (b)   Permitted Transfers of Ownership Interests.          Notwithstanding  the  provisions  of Section  11.02(b)(2)  (No  Transfers  of  Interests  in        Borrower, Key Principal, or Guarantor), the following Transfers are permitted without the        consent of Lender (“Permitted Transfers”) provided that 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):               (1)   a Transfer of any direct or indirect Ownership Interest in Borrower, any        Borrower Entity, or any Identified Party; provided, however, that no Change of Control        and no Transfer of the Restricted Ownership Interest occurs as the result of such Transfer;               (2)   the  issuance  by  CRI,  CROP,  CCMI,  CCI,  or  CC  Investor  of  additional        membership interests, partnership interests, or stock (including by creation of a new class        or series of interests or stock), as the case may be, and the subsequent direct or indirect        Transfer of such interests or stock; provided, however, that no Change of Control and no        Transfer of the Restricted Ownership Interest occurs as the result of such Transfer;               (3)   a merger with or acquisition of another entity by CRI, CROP, CCMI, CCI,        or CC Investor LLC, as applicable, provided that (A) no Change of Control or Transfer of        the Restricted Ownership Interest occurs, and (B) such merger or acquisition does not result        in an Event of Default;               (4)   a Transfer of any direct or indirect Ownership Interest in a subsidiary of        CRI, CROP, CCMI or CC Investor LLC, provided that no Change of Control or Transfer        of the Restricted Ownership Interest occurs;                (5)   any  conversion  of  CRI,  CROP,  CCMI,  CCI,  or  CC  Investor  LLC  (the        "Conversion Entities") from one type of entity to another type of entity or any amendment,        modification,  or  any  other  change  in  the  governing  instrument  or  instruments  of  any        Conversion Entity; provided, however, that                           no  Change  of  Control  or  Transfer  of  the  Restricted  Ownership              Interest occurs as a result of any such Transfer;                           the decision-making powers and rights of the board of directors of              any  Conversion  Entity  are  not  eliminated,  materially  impaired,  or  materially              reduced as a result of such Transfer (provided, however, that the creation of new              committees of the board of directors of any Conversion Entity that are delegated              certain powers and authority of the board of directors of any Conversion Entity (as              applicable)  will  not  be  deemed  to  be  an  elimination,  material  impairment,  or              material reduction of the decision-making powers of the board of directors of any    Master Credit Facility Agreement    Form 6001.MCFA                       Page 77  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               Conversion Entity, so long as the board of directors of any Conversion Entity, as              applicable, Controls the composition of any such committee and has the right to              rescind any such delegation); and                           the board of directors of CRI, CCMI or CCI, as applicable remains              unchanged  from  the  board  of  directors  serving  prior  to  such  conversion  and              continues to Control CRI, CCMI or CCI, as applicable;               (6)   a  Public  Listing  of  CRI,  CROP,  or  CCI,  and  the  resulting  Transfer  of        publicly traded stock of such newly created publicly traded entity (any such Transfer, a        “Public Transfer”), provided that in the case of a Public Listing, the following conditions        are satisfied (in which case, a “Permitted Public Transfer”):                           Borrower provides Lender with at least thirty (30) days prior written              notice of the Public Transfer which notice is accompanied by a payment of the              Public Listing Fee;                           at the time of the proposed Transfer, no Event of Default or Potential              Event of Default has occurred and is continuing;                           Lender receives organizational charts and organizational documents               reflecting the structure of the Borrower, CRI, CROP, or CCI, as applicable, prior              to and after such Public Transfer (which may be in draft form until the same are              completed  in  form  acceptable  to  Lender)  and  Lender  receives  any  certificates,              financial  statements,  underwriting  documentation,  or  other  documentation              requested by Lender with respect to the Public Transfer in a form acceptable to              Lender together with copies of all documents effectuating the Transfer;                           the newly created public entity or, if none, CRI, CROP, or CCI, as              applicable (“Public Co”), has a board of directors that (i) remains unchanged from              the  board  of  directors  serving  prior  to  the  Public  Listing,  or  has  its  members              appointed or selected by the outgoing members of the board of directors of CRI,              CROP, or CCI, as applicable (ii) initially has Daniel Shaeffer and Chad Christensen              as members of the board of directors; provided, however, the death or incapacity of              Daniel  Shaeffer  and/or  Chad  Christensen  will  not  constitute  a  violation  of  this              condition  if  Lender  provides  its  written  consent  to  a  replacement  director  or              replacement  directors,  as  the  case  may  be;  and  (iii)  has  no  member  who  is  a              Prohibited Person;                            at  least  two  of  the  three  Management  Executives  retain  a              Management Position in Public Co or CROP, if CROP is not Public Co;                           there is no change in the ownership of any direct or indirect owners              of Borrower below the level of CCI that results in a Change of Control or a Transfer              of the Restricted Ownership Interests;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 78  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                           the Mortgaged Property is and will continue to be managed either              by (x) the initial property manager, or (y) a successor property manager satisfactory              to Lender pursuant to a property management agreement approved by Lender in              writing, which successor property manager, together with Borrower, shall execute              an assignment of the management agreement in form acceptable to Lender; and                           Borrower submits to Lender all information reasonably required by              Lender to make the determination required hereunder.               (7)   The acquisition by CRI or CROP of 100% of the Ownership Interests of        CCOP or CC Holding, or the merger of CRI or CROP with CCOP or CCI, so long as:                           no Event of Default or Potential Event of Default has occurred and              is continuing at the time of the proposed transfer;                           Borrower provides Lender with at least thirty (30) days prior written              notice  of  the  transfer  which  notice  is  accompanied  by  a  payment  of  a  $50,000              Review Fee;                            Lender receives organizational charts and organizational documents               reflecting the new organizational structure of the Borrower, prior to and after such              transfer  (which  may  be  in  draft  form  until  the  same  are  completed  in  form              acceptable to Lender) and Lender receives any certificates, financial statements,              underwriting  documentation,  or  other  documentation  requested  by  Lender  with              respect to such transfer in a form acceptable to Lender together with copies of all              documents effectuating such transfer; and                            ;the definitions of “Change of Control” and “Restricted Ownership              Interests” contained in this Master Agreement are modified in a manner acceptable              to  Lender  to  reflect  the  new  organizational  structure  consistent  with  the              Underwriting and Servicing Requirements;         If  the  conditions  set  forth  in  this  Section  11.03(b)  (Permitted  Transfers  of  Ownership  Interests) are satisfied, the Transfer Fee shall be waived provided Borrower shall pay the Review  Fee  and  out-of-pocket  costs  set  forth  in  Section  11.03(g)(2)  (Further  Conditions  on  Transfers  Requiring Lender’s Consent).         (c)   Estate Planning.         Notwithstanding  the  provisions  of Section  11.02(b)(2)  (No  Transfers  of  Interests  in  Borrower, Key Principal, or Guarantor), so long as (1) the Transfer does not cause a Change of  Control and (2) Key Principal or Guarantor, as applicable, maintains 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:     Master Credit Facility Agreement    Form 6001.MCFA                       Page 79  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (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 (whether or not such Immediate Family              Member  has  reached  the  legal  age  of  majority)  of  the  transferor,  and  provided              further that the trustee of any such trust may be an Immediate Family Member 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)  all  Immediate  Family  Members  (each  of  whom  must  have              obtained  the  legal  age  of  majority)  of  such  transferor,  or  (iii)  United  States              domiciled trusts established for the benefit of the transferor or Immediate Family              Members of the transferor.         If  the  conditions  set  forth  in  this Section  11.03(c)  (Estate  Planning)  are  satisfied,  the  Transfer Fee shall be waived provided Borrower shall pay the Review Fee and out-of-pocket costs  set forth in Section 11.03(g) (Further Conditions on Transfers Requiring Lender’s Consent).         (d)   Termination or Revocation of Trust.         If  any  of Borrower, Guarantor, or Key Principal is  a  trust (other than a REIT), or if  a  Restricted Ownership Interest would be violated, or if Control of Borrower, Guarantor, or Key  Principal would be Transferred due to the termination or revocation of a trust, the termination or  revocation of such trust is an unpermitted Transfer; provided that the termination or revocation of  the trust due to the death of an individual trustor shall not be considered an unpermitted Transfer  so long as:               (1)   Lender is notified within thirty (30) days of the death; and               (2)   such Borrower, Guarantor, Key Principal, or other Person, as applicable, is        replaced  with  an  individual  or  entity  acceptable  to  Lender,  in  accordance  with  the        provisions of Section 11.03(a) (Transfer of Collateral Pool) 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) (Termination or Revocation of Trust) are  satisfied, the Transfer Fee shall be waived; provided Borrower shall pay the Review Fee and out- of-pocket costs set forth in Section 11.03(g) (Further Conditions on Transfers Requiring Lender’s  Consent).      Master Credit Facility Agreement    Form 6001.MCFA                       Page 80  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (e)   Death  of  Key   Principal  or  Guarantor;   Restricted  Ownership              Interest/Controlling Interest Transfer Due to Death.               (1)   If a Key Principal or Guarantor that is a natural person dies, or if a Transfer        of the Restricted Ownership Interest or a Change of Control occurs, in either case as a result        of the death of a Person (except in the case of trusts which is addressed in Section 11.03(d)        (Termination  or  Revocation  of  Trust)),  Borrower  must  notify  Lender  in  writing  within        ninety (90)  days  in  the  event  of  such  death.   Unless  waived  in  writing  by  Lender,  the        deceased shall be replaced by an individual or entity within one hundred eighty (180) days,        subject to Borrower’s satisfaction of the following conditions:                     (A)   Borrower  has  submitted  to  Lender  all  information  required  by              Lender to make the determination required by this Section 11.03(e) (Death of Key              Principal or Guarantor; Restricted Ownership Interest/Controlling Interest Transfer              Due to Death);                     (B)   Lender determines that, if applicable:                           (i)   any proposed new key principal and any other new guarantor                    (or  Person  Controlling  such  new  key  principal  or  new  guarantor)  fully                    satisfies  all  of  Lender’s  then-applicable  key  principal  or  guarantor                    eligibility,  credit,  management,  and  other  loan  underwriting  standards                    (including  any  standards  with  respect  to  previous  relationships  between                    Lender and the proposed new key principal and new guarantor (or Person                    Controlling such new key principal or new guarantor) and the organization                    of the new key principal and new guarantor);                           (ii)  none  of  any  proposed  new  key  principal  or  any  new                    guarantor, or  any owners of the proposed new key principal or any new                    guarantor, is a Prohibited Person; and                           (iii) none  of  any  proposed  new  key  principal  or  any  new                    guarantor (if any of such are entities) shall have an organizational existence                    termination date that ends before the Maturity Date; and                     (C)   if  applicable,  one  or  more  individuals  or  entities  acceptable  to              Lender as new guarantors have executed and delivered to Lender:                           (i)   an assumption agreement acceptable to Lender that requires                    the new guarantor to assume and perform all obligations of Guarantor under                    any Guaranty given in connection with this Master Agreement; or                           (ii)  a  substitute  Non-Recourse  Guaranty  and  other  substitute                    guaranty in a form acceptable to Lender.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 81  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (2)   In  the  event  a  replacement  Key  Principal,  Guarantor,  or  other  Person  is        required  by  Lender  due  to  the  death  described  in  this Section  11.03(e)  (Death  of  Key        Principal or Guarantor; Restricted Ownership Interest/Controlling Interest Transfer Due to        Death),  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 11.03(e) (Death of Key Principal or Guarantor;  Restricted  Ownership  Interest/Controlling  Interest  Transfer  Due  to  Death)  are  satisfied,  the  Transfer Fee shall be waived, provided Borrower shall pay the Review Fee and out-of-pocket costs  set forth in Section 11.03(g) (Further Conditions on Transfers Requiring Lender’s Consent).         (f)   [Intentionally Deleted.]         (g)   Further Conditions on Transfers Requiring Lender’s Consent.               (1)   In connection with any Transfer for which Lender’s approval is required        under this Master Agreement including any Transfer under Section 11.02(b)(1)(A) (Liens,        Transfers, and Assumptions – Covenants – Transfers – Mortgaged Property) and Section        11.03(a) (Transfer of Collateral Pool), 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              any Mortgaged Property;                     (B)   amendment  of  the  Loan  Documents  to  delete  or  modify  any              specially negotiated terms or provisions previously granted for the exclusive benefit              of  original  Borrower,  Key  Principal,  or  Guarantor  and  to  restore  the  original              provisions of the standard Fannie Mae form multifamily loan documents, to the              extent such provisions were previously modified;                     (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)              (Adjustment of Deposits – Transfers);     Master Credit Facility Agreement    Form 6001.MCFA                       Page 82  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (D)   in connection with any assumption of the Loan Documents, after              giving effect to the assumption, the provisions of the General Conditions Schedule              shall be satisfied;                     (E)   delivery to the Title Company for filing or recording in all applicable              jurisdictions, all applicable Loan Documents including assumption documents and              any other appropriate documents in form and substance reasonably satisfactory to              Lender in form proper for recordation as may be necessary in the opinion of Lender              to  correctly  evidence  the  assumptions  and  the  confirmation  of  Liens  created              hereunder; or                     (F)   if  any  MBS  is  Outstanding,  the  Transfer  shall  not  result  in  a              “significant modification,” as defined under applicable Treasury Regulations, of              any Advance that has been securitized in an MBS.               (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.                                     Article 12                                 IMPOSITIONS   Section 12.01  Representations and Warranties.         The  representations  and  warranties  made  by  Borrower  to  Lender  in  this Section  12.01  (Impositions – Representations and Warranties) are made as of each 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 Properties        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;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 83  Article 11                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (2)   paid all Taxes for the Mortgaged Properties 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 Properties, or any presently pending special assessments against        Borrower; and               (5)   not  received  any  written  notice  of  any  contemplated  special  assessment        against  any  Mortgaged  Property,  or  any  contemplated  special  assessment  against        Borrower.   Section 12.02  Covenants.         (a)   Imposition Deposits, Taxes, and Other Charges.         Borrower shall:               (1)   deposit the Imposition Deposits with Lender on each Payment Date (or on        another day designated in writing by Lender) in amount sufficient, in Lender’s discretion,        to enable Lender to pay each Imposition before the last date upon which such payment may        be made without any penalty or interest charge being added, plus an amount equal to no        more than one-sixth (1/6) (or the amount permitted by Applicable Law) of the Impositions        for the trailing twelve (12) months (calculated based on the aggregate annual Imposition        costs divided by twelve (12) and multiplied by two (2));               (2)   deposit with Lender, within ten (10) days after written notice from Lender        (subject to Applicable Law), such additional amounts estimated by Lender to be reasonably        necessary to cure any deficiency in the amount of the Imposition Deposits held for payment        of a specific Imposition;               (3)   except as set forth in Section 12.03(c) (Payment of Impositions; Sufficiency        of Imposition Deposits) 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 any Mortgaged Property or Borrower.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 84  Article 12                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Section 12.03  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 Master Agreement.  For the purposes of §9-104(a)(3) of the  UCC, Lender is the owner of the Imposition Deposits and shall be deemed a “customer” with sole  control of the account holding the Imposition Deposits.         (c)   Payment of Impositions; Sufficiency of Imposition Deposits.         Lender  may  pay  an  Imposition  according  to  any  bill,  statement,  or  estimate  from  the  appropriate public office or insurance company without inquiring into the accuracy of the bill,  statement, or estimate or into the validity of the Imposition.  Imposition Deposits shall be required  to be used by Lender to pay Taxes, insurance premiums and any other individual Imposition only  if:               (1)   no Event of Default exists;               (2)   Borrower has timely delivered to Lender  all applicable bills or premium        notices that it has received; and               (3)   sufficient Imposition Deposits are held by Lender for each Imposition at the        time such Imposition becomes due and payable.         Lender  shall  have  no  liability  to  Borrower  or  any  other  Person  for  failing  to  pay  any  Imposition if any of the conditions are not satisfied.  If at any time the amount of the Imposition  Deposits  held  for  payment  of  a  specific  Imposition  exceeds  the  amount  reasonably  deemed  necessary by Lender to be held in connection with such Imposition, the excess may be credited  against future installments of Imposition Deposits for such Imposition.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 85  Article 12                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (d)   Imposition Deposits Upon Event of Default.         If an Event of Default has occurred and is continuing, Lender may apply any Imposition  Deposits, in such amount and in such order as Lender determines, to pay any Impositions or as a  credit against the Indebtedness.         (e)   Contesting Impositions.         Other than insurance premiums, Borrower may contest, at its expense, by appropriate legal  proceedings, the amount or validity of any Imposition if:               (1)   Borrower  notifies  Lender  of  the  commencement  or  expected        commencement of such proceedings;               (2)   Lender determines that the applicable 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  Master  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 REPAIRS   Section 13.01  Covenants.         (a)   Initial  Deposits  to  Replacement  Reserve  Account  and  Repairs  Escrow              Account.         On the Effective Date, Borrower shall pay to Lender:               (1)   the Initial Replacement Reserve Deposit for deposit into the Replacement        Reserve Account; and    Master Credit Facility Agreement    Form 6001.MCFA                       Page 86  Article 12                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (2)   the Repairs Escrow Deposit for deposit into the Repairs Escrow Account.         (b)   Monthly Replacement Reserve Deposits.         Borrower  shall  deposit  the  applicable  Monthly  Replacement  Reserve  Deposit  into  the  Replacement Reserve Account on each Payment Date.         (c)   Payment for Replacements and Repairs.         Borrower shall:               (1)   pay all invoices for the Replacements and Repairs, regardless of whether        funds on deposit in the Replacement Reserve Account or the Repairs Escrow Account, as        applicable,  are  sufficient,  prior  to  any  request  for  disbursement  from  the  Replacement        Reserve Account or the Repairs Escrow Account, as applicable (unless Lender has agreed        to issue joint checks in connection with a particular Replacement or Repair);               (2)   pay  all  applicable  fees  and  charges  of  any  Governmental  Authority  on        account of the Replacements and Repairs, as applicable; and               (3)   provide evidence satisfactory to Lender of completion of the Replacements        and any Required Repairs (within the Completion Period, subject to Force Majeure, 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  (Additional  Lender  Rights;  Forbearance) due to Borrower’s failure to timely commence or complete any Replacements or  Repairs, Borrower shall indemnify and hold Lender harmless for, from and against any and all  actions, suits, claims, demands, liabilities, losses, damages, obligations, and costs or expenses,  including litigation costs and reasonable attorneys’ fees, arising from or in any way connected with  the performance by Lender of the Replacements or Repairs or investment of the Reserve/Escrow  Account Funds; provided that Borrower shall have no indemnity obligation if such actions, suits,  claims,  demands,  liabilities,  losses,  damages,  obligations,  and  costs  or  expenses,  including  litigation costs and reasonable attorneys’ fees, arise as a result of the willful misconduct or gross  negligence of Lender, Lender’s agents, employees, or representatives as determined by a court of  competent jurisdiction pursuant to a final non-appealable court order.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 87  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (f)   Amendments to Loan Documents.         Subject to Section 5.02 (Advances – Covenants) Borrower shall execute and deliver to  Lender, upon written request, an amendment to this Master Agreement, the Security Instrument,  any other Loan Document deemed necessary or desirable to perfect Lender’s lien upon any portion  of each Mortgaged Property for which Reserve/Escrow Account Funds were expended.         (g)   Administrative Fees and Expenses.         Borrower shall pay to Lender:               (1)   by the date specified in the applicable invoice, the Repairs Escrow Account        Administrative  Fee  and  the  Replacement  Reserve  Account  Administration  Fee  for        Lender’s services in administering the Repairs Escrow Account and Replacement Reserve        Account  and  investing  the  funds  on  deposit  in  the  Repairs  Escrow  Account  and  the        Replacement Reserve Account, respectively;               (2)   upon  demand,  a  reasonable  inspection  fee,  not  exceeding  the  Maximum        Inspection Fee, for each inspection of a Mortgaged Property by Lender in connection with        a  Repair  or  Replacement,  plus  all  other  reasonable  costs  and  out-of-pocket  expenses        relating to such inspections; and               (3)   upon  demand,  all  reasonable  fees  charged  by  any  engineer,  architect,        inspector or other person inspecting a Mortgaged Property on behalf of Lender for each        inspection of such 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  Administration Matters Regarding Reserves.         (a)   Accounts, Deposits, and Disbursements.               (1)   Custodial Accounts.                     (A)   The  Replacement  Reserve  Account  shall  be  an  interest-bearing              account that meets the standards for custodial accounts as required by Lender from              time  to time.   Lender shall not  be  responsible  for any losses  resulting from the              investment of the Replacement Reserve Deposits or for obtaining any specific level              or percentage of earnings on such investment.  All interest, if any, earned on the              Replacement  Reserve  Deposits  shall  be  added  to  and  become  part  of  the              Replacement Reserve Account; provided, however, if Applicable Law requires, and              so long as no Event of Default has occurred and is continuing under any of the Loan              Documents, Lender shall pay to Borrower the interest earned on the Replacement              Reserve  Account  not  less  frequently  than  the  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.    Master Credit Facility Agreement    Form 6001.MCFA                       Page 88  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (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)(7) (Conditions to Disbursement), disbursements shall only be        made upon Borrower request and after satisfaction of all conditions for disbursement.               (3)   Adjustment to Deposits.                     (A)   Mortgaged Properties in Collateral Pool over Ten (10) Years.                     If any Mortgaged Property is part of the Collateral Pool for ten (10) years              or  more,  a  property  condition  assessment  shall  be  ordered  by  Lender  for  such              Mortgaged Property at the expense of Borrower (which expense may be paid out              of the Replacement Reserve Account if excess funds are available).  The property              condition assessment shall be performed no earlier than the sixth (6th) month and              no later than the ninth (9th) month of the tenth (10th) year after such Mortgaged              Property  was  added  to  the  Collateral  Pool  (and  of  the  twentieth (20th)  year  if              applicable).  After review of the property condition assessment, the amount of the              Monthly  Replacement  Reserve  Deposit  may  be  adjusted  by  Lender  for  the              remaining  Facility  Year  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 any Mortgaged Property in connection              with an assumption, or any Transfer of Ownership Interest(s) in a Borrower Entity              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  for  the  applicable  Mortgaged              Property(ies) and the likely repairs and replacements required by such Mortgaged              Property(ies), and the related contingencies which may arise during the remaining              Term of this Master Agreement.  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.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 89  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (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) (Replacements and        Repairs Other than Required Replacements or Required Repairs), 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 Master Agreement shall not be affected by        the  insufficiency  of  any  balance  in  the  Replacement  Reserve  Account  or  the  Repairs        Escrow Account, as applicable.               (5)   Disbursements for Replacements and Repairs.                     (A)   Disbursement requests may only be made after completion of the              applicable Replacements and only to  reimburse the applicable Borrower for the              actual approved costs of the Replacements.  Lender shall not disburse from the              Replacement Reserve Account the costs of routine maintenance to any 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 for such Mortgaged Property.  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 for such Mortgaged Property.                     (B)   Disbursement requests may only be made after completion of the              applicable Repairs and only to reimburse the applicable Borrower for the actual              cost of the Repairs, up to the Maximum Repair Cost for such Mortgaged Property.               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 any 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 for such Mortgaged Property.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 90  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (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) (Replacements and Repairs Other than Required Replacements or Required        Repairs)), 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 connection              with a particular Repair or Replacement as provided in this Master 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 Law, and otherwise in accordance with the              provisions of this Master 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) (Replacements and        Repairs Other than Required Replacements or Required Repairs)):                     (A)   an inspection by Lender of the applicable Mortgaged Property and              the applicable Replacement or Repair;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 91  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (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  applicable  Mortgaged  Property                    effective to the date of disbursement; or                           (ii)  a “date-down” endorsement to  Lender’s Title Policy (or  a                    new Lender’s Title Policy if a “date-down” is not available) extending the                    effective date of such policy to the date of disbursement, and showing no                    Liens other than (1) Permitted Encumbrances, (2) liens which Borrower is                    diligently  contesting  in  good  faith  that  have  been  bonded  off  to  the                    satisfaction  of  Lender,  or  (3)  mechanics’  or  materialmen’s  liens  which                    attach automatically under the laws of any Governmental Authority upon                    the commencement of any work upon, or delivery of any materials to, the                    Mortgaged  Property  and  for  which  Borrower  is  not  delinquent  in  the                    payment for any such work or materials; and                     (D)   an acknowledgement of payment, waiver of claims, and release of              lien for work performed and materials supplied from each contractor, subcontractor              or  materialman  in  accordance  with  the  requirements  of  Applicable  Law  and              covering  all  work  performed  and  materials  supplied  (including  equipment  and              fixtures) for the applicable 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 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, for such Mortgaged Property and              the contractor performing such Replacement or Repair requires periodic payments              pursuant to the terms of the applicable written contract;                     (B)   the contract for such Repair or Replacement requires payment upon              completion of the applicable portion of the work;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 92  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     (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  applicable  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  or  Borrower  Requested  Repair.   The              disbursement  request  must  be  in  writing  and  include  an  explanation  for  such              request.  Lender shall make disbursements for Borrower Requested Replacements              or Borrower Requested Repairs if:                           (i)   they  are  of  the  type  intended  to  be  covered  by  the                    Replacement  Reserve  Account  or  the  Repairs  Escrow  Account,  as                    applicable;                           (ii)  the costs are commercially reasonable;                           (iii) the amount of funds in the Replacement Reserve Account or                    Repairs Escrow Account, as applicable, is sufficient to pay such costs and                    the  then-current  estimated  cost  of  completing  all  remaining  Required                    Replacements  or  Required  Repairs  (at  the  Maximum  Repair  Cost),  as    Master Credit Facility Agreement    Form 6001.MCFA                       Page 93  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

                     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 Master 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) (Property Maintenance),              Section 6.03(c) (Property Condition Assessment), 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  Borrower  Requested  Replacements,  Borrower                    Requested Repairs, Additional Lender Replacements or Additional Lender                    Repairs that have been previously approved by Lender; and                           (iii) all  conditions  for  disbursement  from  the  Replacement                    Reserve  Account  or  Repairs  Escrow  Account,  as  applicable,  have  been                    satisfied.   Nothing in this Master Agreement shall limit Lender’s right to require an additional deposit to the  Replacement Reserve Account or an increase to the Monthly Replacement Reserve Deposit for  any such Additional Lender Replacements or an additional deposit to the Repairs Escrow Account  for any such Additional Lender Repair.               (10)  Excess Costs.               In the event any Replacement or Repair exceeds the approved cost set forth on the        Required  Replacement  Schedule  for  Replacements,  or  the  Maximum  Repair  Cost  for    Master Credit Facility Agreement    Form 6001.MCFA                       Page 94  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         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 Master 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)  (Appointment of Lender as Attorney-In-Fact).         (c)   Delays and Workmanship.         If any work for any Replacement or Repair has not timely commenced, has not been timely  performed in a workmanlike manner, or has not been timely completed in a workmanlike manner,  Lender may, without notice to Borrower:               (1)   withhold disbursements from the Replacement Reserve Account or Repairs        Escrow Account for such unsatisfactory Replacement or Repair, as applicable;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 95  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (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 Master        Agreement or any other Loan Document, including any remedies otherwise available upon        an Event of Default pursuant to the terms of Section 14.02 (Remedies).   To facilitate Lender’s completion or making of such Replacements or Repairs, Lender shall have  the right to enter onto each Mortgaged Property and perform any and all work and labor necessary  to  make  or  complete  the  Replacements  or  Repairs  and  employ  watchmen  to  protect  such  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 Master 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) (Appointment of Lender as Attorney-In-Fact).         (e)   No Lender Obligation.         Nothing in this Master 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 any 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     Master Credit Facility Agreement    Form 6001.MCFA                       Page 96  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations  or requirements of any Governmental Authority, such responsibility being at all times exclusively  that of Borrower.                                     Article 14                            DEFAULTS/REMEDIES   Section 14.01  Events of Default.         The  occurrence  of  any  one  or  more  of  the  following  in  this Section  14.01  (Events  of  Default) shall constitute an Event of Default under this Master 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 Master 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)        (Borrower Status – Covenants – Single Purpose Status) relating to its single asset status;               (4)   if any warranty, representation, certification, or statement of Borrower or        Guarantor  in  this  Master  Agreement  or  any  of  the  other  Loan  Documents  is  false,        inaccurate, or misleading in any material respect when made;               (5)   fraud, gross negligence, willful misconduct or material misrepresentation or        material omission by or on behalf of Borrower, Guarantor or Key Principal or any of their        officers, directors, trustees, partners, members, or managers in connection with:                     (A)   the application for, or creation of, the Indebtedness;                     (B)   any  financial  statement,  rent  roll,  or  other  report  or  information              provided to Lender during the Term of this Master Agreement; 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 of Borrower or its Sole Member;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 97  Article 13                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (8)   the commencement of a forfeiture action or proceeding, whether civil or        criminal,  which,  in  Lender’s  reasonable  judgment,  could  result  in  a  forfeiture  of  any        Mortgaged  Property  or  otherwise  materially  impair  the  lien  created  by  this  Master        Agreement or the Security Instrument or Lender’s interest in any Mortgaged Property;               (9)   if Borrower, Guarantor or Key Principal is a trust (other than a REIT), or if        a Transfer of the Restricted Ownership Interest or a Change of Control occurs due to the        termination or revocation of a trust, the termination or revocation of such trust, except as        set forth in Section 11.03(d) (Termination or Revocation of Trust);               (10)  any failure by Borrower to complete any Repair related to fire, life or safety        issues  in  accordance  with  the  terms  of  this  Master  Agreement  within  the  Completion        Period,  subject  to  Force  Majeure  (or  such  other  date  set  forth  on  the  Required  Repair        Schedule or otherwise required by Lender in writing for such Repair);               (11)  any  exercise  by  the  holder  of  any  other  debt  instrument  secured  by  a        mortgage, deed of trust, or deed to secure debt on any Mortgaged Property of a right to        declare all amounts due under that debt instrument immediately due and payable; and               (12)  a  dissolution  or  liquidation  for  any  reason  (whether  voluntary  or        involuntary) of Borrower Entity or any general partner, managing member, or sole member        of any Borrower Entity.         (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:               (1)   if  Key  Principal  or  Guarantor  is  a  natural  Person,  the  death  of  such        individual,  unless  all  requirements  of Section  11.03(e)  (Death  of  Key  Principal  or        Guarantor; Restricted Ownership Interest/Controlling Interest Transfer Due to Death) are        met;               (2)   [intentionally deleted;]               (3)   any failure by Borrower, Key Principal, or Guarantor to comply with the        provisions of Section 5.02(b) (Further Assurances) and Section 5.02(c) (Sale of Advances);        and               (4)   any  failure  by  Borrower  to  perform  any  obligation  under  this  Master        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.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 98  Article 14                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (c)   Events of Default Subject to Extended Cure Period or Release.         The following shall constitute an Event of Default if the existence of such condition or  event, or such failure to perform or default in performance continues for a period of thirty (30)  days after written notice by Lender to Borrower of the existence of such condition or event, or of  such failure to perform or default in performance; provided, however, such period may be extended  for  up  to  an  additional  thirty (30)  days  if  Borrower,  in  the  discretion  of  Lender,  is  diligently  pursuing  a  cure  of  such;  provided  further,  however,  no  such  written  notice,  grace  period  or  extension shall apply if, in Lender’s discretion, immediate exercise by Lender of a right or remedy  under  this  Master  Agreement  or  any  Loan  Document  is  required  to  avoid  harm  to  Lender  or  impairment of the Indebtedness, the Mortgaged Property or any other security given to secure the  Indebtedness:               (1)   any failure by Borrower to perform any of its obligations under this Master        Agreement  or  any  Loan  Document  (other  than  those  specified  in Section  14.01(a)        (Automatic  Events  of  Default)  or Section  14.01(b)  (Events  of  Default  Subject  to  a        Specified Cure Period)) as and when required.         Notwithstanding anything to the  contrary herein or in any  other Loan Document, if  an  Event  of  Default  shall  occur  hereunder  or  under  any  other  Loan  Document  because  a  representation, warranty, affirmative covenant, negative covenant, or other provision hereunder or  thereunder  shall be breached  or  violated  that  in  Lender’s sole and  exclusive  judgment  is  with  respect to a particular Mortgaged Property (other than any misappropriation of funds collected in  respect thereof) (each, a “Property-Specific Event of Default”), such Event of Default shall be  deemed cured if Borrower shall satisfy all of the conditions set forth in Section 2.10(b) (Right to  Obtain Releases of Mortgaged Property) of this Master Agreement relating to the Release of such  Mortgaged  Property  from  the  Collateral  Pool  within  thirty (30)  days  of  Borrower  acquiring  knowledge  of  such  Event  of  Default  (the  “Release  Cure  Period”).   During  the  Release  Cure  Period, Lender agrees that it shall not have the right to exercise the remedy set forth in Section  14.02 (Remedies) of this Master Agreement; provided, however, that the foregoing shall not impair  Lender’s right to exercise the remedies available to Lender under any of the other Loan Documents  or at law or in equity or under Section 14.03(b) (No Waiver of Rights or Remedies) during such  Release Cure Period.  If Lender shall elect to exercise any such remedies during such period, and  if  Borrower  releases  such  Mortgaged  Property  pursuant  to  the  provisions  of  the  Mortgaged  Property Release Schedule as described in the preceding sentence and at the time of such release  no  other  Event  of  Default  has  occurred  and  is  continuing,  Lender  shall  cease  exercising  such  remedies with respect to the applicable Property-Specific Event of Default and discontinue any  proceedings it may have initiated in connection therewith, and the parties shall be restored to their  former positions and rights hereunder; provided, however, that if Borrower shall fail to satisfy all  of the conditions set forth in the Mortgaged Property Release Schedule relating to the release of  such Mortgaged Property from the Collateral Pool during the Release Cure Period, Lender may  thereafter exercise any and all remedies available to Lender under Article 14 (Defaults/Remedies)  of this Master Agreement, including, without limitation, the remedies set forth in Section 14.02  (Remedies).     Master Credit Facility Agreement    Form 6001.MCFA                       Page 99  Article 14                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   Section 14.02  Remedies.         (a)   Acceleration; Foreclosure.               (1)   If  an  Event of Default  has  occurred and is  continuing, the  entire unpaid        principal balance of the Advances Outstanding, any Accrued Interest, interest accruing at        the Default Rate, the Prepayment Premium (if applicable), and all other Indebtedness, at        the option of Lender, shall immediately become due and payable, without any prior written        notice to Borrower, unless Applicable Law requires otherwise (and in such case, after any        required written notice has been given).  Lender  may exercise this option to accelerate        regardless of any prior forbearance.  In addition, Lender shall have all rights and remedies        afforded to Lender hereunder and under the other Loan Documents, including, foreclosure        on and/or the power of sale of any or all of the Mortgaged Properties, 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  Master  Agreement.   Notwithstanding  the  foregoing,  the        occurrence  of  any  Bankruptcy  Event  of  Borrower  shall  automatically  accelerate  the        Indebtedness, which Indebtedness shall be immediately due and payable without written        notice or further action by Lender.               (2)   Lender may Accelerate any Note without the obligation, but the right to        accelerate any other Note (if more than one).  In the exercise of its rights and remedies        under the Loan Documents, Lender may, except as provided in this Master Agreement,        exercise and perfect any and all of its rights in and under the Loan Documents with regard        to  any  Mortgaged  Property  without  the  obligation  (but  with  the  right)  to  exercise  and        perfect its rights and remedies with respect to any other Mortgaged Property.  Any such        exercise  shall  be  without  regard  to  the  Allocable  Facility  Amount  assigned  to  such        Mortgaged Property.  Lender may recover an amount equal to the full amount Outstanding        in respect of any of the Notes in connection with such exercise.  Any such amount shall be        applied to the Obligations as determined by Lender.         (b)   Loss of Right to Disbursements from Collateral Accounts.         If an Event of Default has occurred and is continuing, Borrower shall immediately lose all  of  its  rights  to  receive  disbursements  from  the  Reserve/Escrow  Accounts  and  any  Collateral  Accounts.   During  the  continuance  of  any  such  Event  of  Default,  Lender  may  use  the  Reserve/Escrow Account Funds and any Collateral Account Funds (or any portion thereof) for any  purpose, including:               (1)   repayment  of  the  Indebtedness,  including  principal  prepayments  and  the        Prepayment Premium applicable to such full or partial prepayment, as applicable (however,        such application of funds shall not cure or be deemed to cure any Event of Default);      Master Credit Facility Agreement    Form 6001.MCFA                      Page 100  Article 14                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (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 a 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 Master Agreement        or under any of the other Loan Documents.         Nothing in this Master 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 Master Agreement is distinct from all other rights  or remedies under this Master 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.   Section 14.03  Additional Lender Rights; Forbearance.         (a)   No Effect Upon Obligations.         Lender may, but shall not be obligated to, agree with Borrower, from time to time, and  without giving notice to, or obtaining the consent of, or having any effect upon the obligations of,  Guarantor, Key Principal, or other third party obligor, to take any of the following actions:               (1)   the time for payment of the principal of or interest on the Indebtedness may        be extended, or the Indebtedness may be renewed in whole or in part;               (2)   the  rate  of  interest  on  or  period  of  amortization  of  the  Advances  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 Master Agreement or any other Loan        Document may be reduced;      Master Credit Facility Agreement    Form 6001.MCFA                      Page 101  Article 14                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (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 Advances;               (6)   any amounts under this Master Agreement or any  other  Loan Document        may be released;               (7)   any security for the Indebtedness may be modified, exchanged, released,        surrendered, or otherwise dealt with, or additional security may be pledged or mortgaged        for the Indebtedness;               (8)   the payment of the Indebtedness or any security for the Indebtedness, or        both, may be subordinated to the right to payment or the security, or both, of any other        present or future creditor of Borrower; or               (9)   any other terms of the Loan Documents may be modified.         (b)   No Waiver of Rights or Remedies.         Any waiver of an Event of Default or forbearance by Lender in exercising any right or  remedy  under  this  Master  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 proceeds or amounts in  connection with a Condemnation Action shall not operate to cure or waive any Event of Default.         (c)   Appointment of Lender as Attorney-In-Fact.         Borrower hereby irrevocably makes, constitutes, and appoints Lender (and any officer of  Lender or any Person designated by Lender for that purpose) as Borrower’s true and lawful proxy  and attorney-in-fact (and agent-in-fact) in Borrower’s name, place, and stead, with full power of  substitution, to:               (1)   use  any  of  the  funds  in  the  Replacement  Reserve  Account  or  Repairs        Escrow Account for the purpose of making or completing the Replacements or Repairs;               (2)   make  such  additions,  changes,  and  corrections  to  the  Replacements  or        Repairs as shall be necessary or desirable to complete the Replacements or Repairs;               (3)   employ such contractors, subcontractors, agents, architects, and inspectors        as shall be required for such purposes;     Master Credit Facility Agreement    Form 6001.MCFA                      Page 102  Article 14                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

               (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 Master Agreement and any other Loan Document, subject only to        Borrower’s rights under this Master Agreement;               (6)   appear in and prosecute any action arising from any insurance policies;               (7)   collect  and  receive  the  proceeds  of  insurance,  and  to  deduct  from  such        proceeds Lender’s expenses incurred in the collection of such proceeds;               (8)   commence, appear in, and prosecute, in Lender’s or Borrower’s name, any        Condemnation Action;               (9)   settle  or  compromise  any  claim  in  connection  with  any  Condemnation        Action;               (10)  execute all applications and certificates in the name of Borrower which may        be required by any of the contract documents;               (11)  prosecute  and  defend  all  actions  or  proceedings  in  connection  with  any        Mortgaged Property or the rehabilitation and repair of any Mortgaged Property;               (12)  take such actions as are permitted in this Master Agreement and any other        Loan Documents;               (13)  execute such financing statements and other documents and to do such other        acts as Lender may require to perfect and preserve Lender’s security interest in, and to        enforce such interests in, the collateral; and               (14)  carry out any remedy provided for in this Master Agreement and any other        Loan Documents, including endorsing Borrower’s name to checks, drafts, instruments, and        other items of payment and proceeds of the collateral, executing change of address forms        with  the  postmaster  of  the  United  States  Post  Office  serving  the  address  of  Borrower,        changing the address of Borrower to that of Lender, opening all envelopes addressed to        Borrower, and applying any payments contained therein to the Indebtedness.         Borrower hereby acknowledges that the constitution and appointment of such proxy and  attorney-in-fact are coupled with an interest and are irrevocable and shall not be affected by the  disability or incompetence of Borrower.  Borrower specifically acknowledges and agrees that this  power of attorney granted to Lender may be assigned by Lender to Lender’s successors or assigns  as holder of the Note (and the other Loan Documents).  The foregoing powers conferred on Lender  under this Section 14.03(c) (Appointment of Lender as Attorney-In-Fact) shall not impose any  duty upon Lender to exercise any such powers and shall not require Lender to incur any expense    Master Credit Facility Agreement    Form 6001.MCFA                      Page 103  Article 14                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   or take any action.  Borrower hereby ratifies and confirms all that such attorney-in-fact may do or  cause  to  be  done  by  virtue  of  any  provision  of  this  Master  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) (Appointment  of  Lender  as  Attorney-In-Fact) unless:  (A) an Event of  Default has occurred and is continuing or (B) Lender determines, in its discretion, that exigent  circumstances exist or that such exercise is necessary or prudent in order to protect and preserve  the Mortgaged Property, or Lender’s lien priority and security interest in the Mortgaged Property.         (d)   Borrower Waivers.         If more than one Person signs this Master Agreement as Borrower, each Borrower, with  respect to any other Borrower, hereby agrees that Lender, in its discretion, may:               (1)   bring suit against Borrower, or any one or more of Borrower, jointly and        severally, or against any one or more of them;               (2)   compromise  or  settle  with  any  one  or  more  of  the  persons  constituting        Borrower, for such consideration as Lender may deem proper;               (3)   release one or more of the persons constituting Borrower, from liability; or               (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 Properties  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 Properties (or any part thereof) shall be subjected to the remedies  provided in this Master 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 any Mortgaged Property and who has actual or constructive  notice of this Master Agreement waives any and all right to require the marshaling of assets or to  require that any of the Mortgaged Properties be sold in the inverse order of alienation or that any  of the Mortgaged Properties 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 Master 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    Master Credit Facility Agreement    Form 6001.MCFA                      Page 104  Article 14                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR REPRESENTATIVES  SHALL  BE  RESPONSIBLE  TO  BORROWER  (a) FOR  ANY  ACT  OR  FAILURE  TO  ACT  UNDER  ANY  POWER  OF  ATTORNEY  OR  OTHERWISE,  EXCEPT  IN  RESPECT  OF  DAMAGES  ATTRIBUTABLE  SOLELY  TO  THEIR  OWN  GROSS  NEGLIGENCE  OR  WILLFUL MISCONDUCT AS FINALLY DETERMINED PURSUANT TO A FINAL, NON- APPEALABLE  COURT  ORDER  BY  A  COURT  OF  COMPETENT  JURISDICTION,  OR  (b) FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.   Section 14.05  Severed Loan Documents.         Lender  shall  have  the  right  from  time  to  time  to  sever  the  Note  and  the  other  Loan  Documents  into  one  or  more  separate  notes,  mortgages,  and  other  security  documents  (the  “Severed Loan Documents”) in such denominations as Lender shall determine in its discretion  for purposes of evidencing and enforcing its rights and remedies provided hereunder, provided  that:         (a)   the amount of Advances Outstanding immediately after the effective date of such  modification equals the amount of Advances Outstanding immediately prior to such modification;         (b)   the weighted average of the interest rates for Advances Outstanding immediately  after the effective date of such modification equals the weighted average of the interest rates for  Advances Outstanding immediately prior to such modification;         (c)   each future principal payment shall be ratably allocated to each Advance based on  the Outstanding principal balance of such Advance at the time of such modification and each future  amortization payment shall be ratably paid in accordance with such allocation at all times;         (d)   there shall be no other change to the economic and/or other material terms, rights  and obligations of Borrower under the Loan Documents; and         (e)   the Collateral and the revenue therefrom shall continue to secure, and be available  to be applied against, the total Advances Outstanding.         Borrower shall execute and deliver to Lender from time to time, promptly after the request  of Lender, a severance agreement and such other documents as Lender shall request in order to  effect the severance described above, all in form and substance reasonably satisfactory to Lender.   Borrower  hereby  absolutely  and  irrevocably  appoints  Lender  as  its  true  and  lawful  attorney,  coupled with an interest, in its name and stead to make and execute all documents necessary or  desirable to effect the aforesaid severance, Borrower ratifying all that its said attorney shall do by  virtue thereof; provided, however, Lender shall not make or execute any such documents under  such power until three (3) days after notice has been given to Borrower by Lender of Lender’s  intent to exercise its rights under such power.  Borrower shall be obligated to pay any costs or  expenses incurred in connection with the preparation, execution, recording, or filing of the Severed  Loan  Documents,  and  the  Severed  Loan  Documents  shall  not  contain  any  representations,  warranties, or covenants not contained in the Loan Documents and any such representations and     Master Credit Facility Agreement    Form 6001.MCFA                      Page 105  Article 14                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   warranties contained in the Severed Loan Documents will be given by Borrower only as of the  date last given.                                     Article 15                              MISCELLANEOUS   Section 15.01  Choice of Law; Consent to Jurisdiction.         Notwithstanding anything in the Notes, the Security Documents, or any of the other Loan  Documents  to  the  contrary,  each  of  the  terms  and  provisions,  and  rights  and  obligations  of  Borrower under this Master Agreement and the Notes and the other Loan Documents, shall be  governed by, interpreted, construed, and enforced pursuant to and in accordance with the laws of  the District of Columbia (excluding the law applicable to conflicts or choice of law) except to the  extent  of  procedural  and  substantive  matters  relating  only  to  the  creation,  perfection,  and  foreclosure of liens and security interests, and enforcement of the rights and remedies, against the  Mortgaged Properties, which matters shall be governed by the laws of the jurisdiction in which a  Mortgaged  Property  is  located,  the  perfection,  the  effect  of  perfection  and  non-perfection  and  foreclosure of security interests on personal property, which matters shall be governed by the laws  of the jurisdiction determined by the choice of law provisions of the Uniform Commercial Code  in  effect  for  the  jurisdiction  in  which  any  Borrower  is  organized.   Borrower  agrees  that  any  controversy  arising  under  or  in  relation  to  the  Notes,  the  Security  Documents  (other  than  the  Security Instruments), or any other Loan Document shall be, except as otherwise provided herein,  litigated in the District of Columbia.  The local and federal courts and authorities with jurisdiction  in the District of Columbia shall, except as otherwise provided herein, have jurisdiction over all  controversies  which  may  arise  under  or  in  relation  to  the  Loan  Documents,  including  those  controversies relating to the execution, jurisdiction, breach, enforcement, or compliance with the  Notes, the Security Documents (other than the Security Instruments), or any other issue arising  under,  relating  to,  or  in  connection  with  any  of  the  Loan  Documents.   Borrower  irrevocably  consents to service, jurisdiction, and venue of such courts for any litigation arising from the Notes,  the Security Documents, or any of the other Loan Documents, and waives any other venue to which  it might be entitled by virtue of domicile, habitual residence, or otherwise.  Nothing contained  herein, however, shall prevent Lender from bringing any suit, action, or proceeding or exercising  any rights against Borrower and against the collateral in any other jurisdiction.  Initiating such suit,  action, or proceeding or taking such action in any other jurisdiction shall in no event constitute a  waiver of the agreement contained herein that the laws of the District of Columbia shall govern  the rights and obligations of Borrower and Lender as provided herein or the submission herein by  Borrower to personal jurisdiction within the District of Columbia.   Section 15.02  Waiver of Jury Trial.         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 MASTER 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    Master Credit Facility Agreement    Form 6001.MCFA                      Page 106  Article 14                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   (b) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE  EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.  THIS WAIVER  OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY  AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL   Section 15.03  Notice.         (a)   Process of Serving Notice.         Except as otherwise set forth herein or in any other Loan Document, all notices under this  Master Agreement and any other Loan Document shall be:               (1)   in writing and shall be:                     (A)   delivered, in person;                     (B)   mailed, postage prepaid, either by registered or certified delivery,              return receipt requested;                     (C)   sent by overnight courier; or                     (D)   sent by electronic mail with originals to follow by overnight courier;               (2)   addressed  to  the  intended  recipient  at  Borrower’s  Notice  Address  and        Lender’s Notice Address, as applicable; and               (3)   deemed given on the earlier to occur of:                     (A)   the date when the notice is received by the addressee; or                     (B)   if  the  recipient  refuses  or  rejects  delivery,  the  date  on  which  the              notice is so refused or rejected, as conclusively established by the records of the              United States Postal Service or such express courier service.         (b)   Change of Address.         Any party to this Master 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  Master Terms in accordance with this Section 15.03 (Notice).         (c)   Default Method of Notice.         Any required notice under this Master Agreement or any other Loan Document which does  not  specify  how  notices  are  to  be  given  shall  be  given  in  accordance  with  this Section  15.03  (Notice).     Master Credit Facility Agreement    Form 6001.MCFA                      Page 107  Article 15                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (d)   Receipt of Notices.         Neither  Borrower  nor  Lender  shall  refuse  or  reject  delivery  of  any  notice  given  in  accordance with this Master Agreement.  Each party is required to acknowledge, in writing, the  receipt of any notice upon request by the other party.   Section 15.04  Successors and Assigns Bound; Sale of Advances.         (a)   Binding Agreement.         This Master Agreement shall bind, and the rights granted by this Master Agreement shall  inure  to,  the  successors  and  assigns  of  Lender  and  the  permitted  successors  and  assigns  of  Borrower.  However, a Transfer not permitted by this Master Agreement shall be an Event of  Default and shall be void ab initio.         (b)   Sale of Advances; Change of Servicer.         Nothing  in  this  Master  Agreement  shall  limit  Lender’s  (including  its  successors  and  assigns) right to sell or transfer the Advances or any interest in the Advances.  The Advances or a  partial  interest  in  the  Advances  (together  with  this  Master  Agreement  and  the  other  Loan  Documents) may be sold one or more times without prior written notice to Borrower.  A sale may  result in a change of the Loan Servicer.   Section 15.05  Counterparts.         This Master 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 15.06  [Intentionally Deleted.]   Section 15.07  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 Master Agreement shall create any other relationship  between  Lender  and  Borrower.   Nothing  contained  in  this  Master  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 party to this Master Agreement and no other Person shall be a third party  beneficiary  of  this  Master Agreement or any  other  Loan Document or  any  account created  or  contemplated under this Master Agreement or any other Loan Document.  Nothing contained in     Master Credit Facility Agreement    Form 6001.MCFA                      Page 108  Article 15                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   this Master 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 Master Agreement.  Without limiting the foregoing:               (1)   any Servicing Arrangement between Lender and any Loan Servicer shall        constitute  a  contractual  obligation  of  such  Loan  Servicer  that  is  independent  of  the        obligation of Borrower for the payment of the Indebtedness;               (2)   Borrower  shall  not  be  a  third  party  beneficiary  of  any  Servicing        Arrangement; and               (3)   no payment by the Loan Servicer under any Servicing Arrangement will        reduce the amount of the Indebtedness.   Section 15.08  Severability; Entire Agreement; Amendments.         The invalidity or unenforceability of any provision of this Master Agreement or any other  Loan Document shall not affect the validity or enforceability of any other provision of this Master  Agreement or of any other Loan Document, all of which shall remain in full force and effect,  including  the  Guaranty.   This  Master  Agreement  contains  the  complete  and  entire  agreement  among the parties as to the matters covered, rights granted and the obligations assumed in this  Master Agreement.  This Master Agreement may not be amended or modified except by written  agreement signed by the parties hereto.   Section 15.09  Construction.         (a)   The captions and headings of the sections of this Master Agreement and the Loan  Documents are for convenience only and shall be disregarded in construing this Master Agreement  and the Loan Documents.         (b)   Any  reference  in  this  Master  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 Master Agreement or to a Section or Article  of this Master Agreement.         (c)   Any reference in this Master 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 Master Agreement includes the plural and use of the  plural includes the singular.         (e)   As used in this Master Agreement, the term “including” means “including, but not  limited to” or “including, without limitation,” and is for example only and not a limitation.         (f)   Whenever Borrower’s knowledge is implicated in this Master Agreement or the  phrase  “to  Borrower’s  knowledge”  or  a  similar  phrase  is  used  in  this  Master  Agreement,    Master Credit Facility Agreement    Form 6001.MCFA                      Page 109  Article 15                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   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  Master  Agreement,  if  Lender’s  approval,  designation,  determination,  selection,  estimate,  action,  or  decision  is  required,  permitted,  or  contemplated hereunder, such approval, designation, determination, selection, estimate, action, or  decision shall be made in Lender’s sole and absolute discretion.         (h)   All references in this Master 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.   Section 15.10  Loan Servicing.         All actions regarding the servicing of the Advances, including the collection of payments,  the giving and receipt of notice, inspections of the Mortgaged Properties, 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 notice from Lender shall govern.  The  Loan  Servicer  may  change  from  time  to  time  (whether  related  or  unrelated  to  a  sale  of  the  Advances).  If there is a change of the Loan Servicer, Borrower will be given written notice of the  change.   Section 15.11  Disclosure of Information.         Lender may furnish information regarding Borrower, Key Principal or Guarantor or the  Mortgaged  Properties  to  third  parties  with  an  existing  or  prospective  interest  in  the  servicing,  enforcement,  evaluation,  performance,  purchase,  or  securitization  of  the  Advances,  including  trustees,  master  servicers,  special  servicers,  rating  agencies,  and  organizations  maintaining  databases  on  the  underwriting  and  performance  of  multifamily  mortgage  loans.   Borrower  irrevocably waives any and all rights it may have under Applicable Law to prohibit such disclosure,  including any right of privacy.   Section 15.12  Waiver; Conflict.         No specific waiver of any of the terms of this Master Agreement shall be considered as a  general waiver.  If any provision of this Master Agreement is in conflict with any provision of any  other Loan Document, the provision contained in this Master Agreement shall control.   Section 15.13  [Intentionally Deleted.]   Section 15.14  No Reliance.         Borrower acknowledges, represents, and warrants that:    Master Credit Facility Agreement    Form 6001.MCFA                      Page 110  Article 15                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

         (a)   it  understands  the  nature  and  structure  of  the  transactions  contemplated  by  this  Master 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 any 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 Master 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 Master Agreement, any other Loan Document,  or any of the matters contemplated hereby or thereby.   Section 15.15  Subrogation.         If, and to the extent that, the proceeds of any Advance are used to pay, satisfy, or discharge  any obligation of Borrower for the payment of money that is secured by a pre-existing mortgage,  deed of trust, or other lien encumbering any Mortgaged Property, such proceeds shall be deemed  to  have  been  advanced  by  Lender  at  Borrower’s  request,  and  Lender  shall  be  subrogated  automatically, and without further action on its part, to the rights, including lien priority, of the  owner or holder of the obligation secured by such prior lien, whether or not such prior lien is  released.   Section 15.16  Counting of Days.         Except where otherwise specifically provided, any reference in this Master Agreement to  a period of “days” means calendar days, not Business Days.  If the date on which Borrower is  required to perform an obligation under this Master Agreement is not a Business Day, Borrower  shall be required to perform such obligation by the Business Day immediately preceding such date;  provided, however, in respect of any Payment Date, or if the Maturity Date is other than a Business  Day,  Borrower  shall  be  obligated  to  make  such  payment  by  the  Business  Day  immediately  following such date.   Section 15.17  Revival and Reinstatement of Indebtedness.         If the payment of all or any part of the Indebtedness by Borrower, Guarantor, or any other  Person,  or  the  transfer  to  Lender  of  any  collateral  or  other  property  should  for  any  reason  subsequently be declared to be void or voidable under any state or federal law relating to creditors’  rights, including provisions of the Insolvency Laws relating to a Voidable Transfer, and if Lender  is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so  upon the advice of its counsel, then the amount of such Voidable Transfer or the amount of such  Voidable Transfer that Lender is required or elects to repay or restore, including all reasonable    Master Credit Facility Agreement    Form 6001.MCFA                      Page 111  Article 15                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

   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 15.18  Time is of the Essence.         Borrower agrees that, with respect to each and every obligation and covenant contained in  this Master Agreement and the other Loan Documents, time is of the essence.   Section 15.19  Final Agreement.         THIS  MASTER  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 Master Agreement and the other Loan Documents.  This Master 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 15.20  Survival.         The  representations,  warranties,  and  covenants  made  by  Borrower  in  this  Master  Agreement shall survive the execution and delivery of this Master Agreement and other  Loan  Documents, regardless of any investigation made by Lender or Fannie Mae.   Section 15.21  Assignments; Third Party Rights.         Lender may assign its rights and/or obligations under this Master Agreement separately or  together,  without  Borrower’s  consent,  only  to  Fannie  Mae.   Upon  assignment  to  Fannie  Mae,  Fannie Mae shall be permitted to further assign its rights under this Master Agreement separately  or together, without Borrower’s consent.  Fannie Mae shall have the right to hold, sell, or securitize  the Advances made hereunder without Borrower’s consent.   Section 15.22  Interpretation.         The  parties  hereto  acknowledge  that  each  party  and  their  respective  counsel  have  participated  in  the  drafting  and  revision  of  this  Master  Agreement  and  the  Loan  Documents.   Accordingly, the parties agree that any rule of construction that disfavors the drafting party shall  not  apply  in  the  interpretation  of  this  Master  Agreement  and  the  Loan  Documents  or  any  amendment or supplement or Exhibit hereto or thereto.                        [Remainder of Page Intentionally Blank]    Master Credit Facility Agreement    Form 6001.MCFA                      Page 112  Article 15                              04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

 

 

 

 

                             SCHEDULES & EXHIBITS    Schedules    Schedule 1   Definitions Schedule – General                   Schedule 2   Summary of Master Terms                          Schedule 3.1 Schedule of Advance Terms                        Schedule 4.1 Prepayment Premium Schedule                   Form 6104.01                                                              [modified] [08-13]    Schedule 5   Required Replacement Schedule                    Schedule 6   Required Repair Schedule                         Schedule 7   General Conditions Schedule                      Schedule 8   Property-Related Documents Schedule              Schedule 9   Conversion Schedule                              Schedule 10  Mortgaged Property Release Schedule              Schedule 11  Mortgaged Property Addition Schedule             Schedule 12  INTENTIONALLY DELETED                            Schedule 13  Ownership Interests Schedule                     Schedule 14  Future Advance Schedule                          Schedule 15  Letter of Credit Schedule                        Schedule 16  Exceptions to Representations and Warranties Schedule    Schedule 17  SPE Requirements Schedule                        Schedule 18  INTENTIONALLY DELETED                            Schedule 19  Replacement Reserve Waiver                    Form 6220 [modified]                                                              [08-14]   Schedule  19- Addenda to Schedule 2 Replacement Reserve Waiver Form 6102.04 [04-12]   A                                                                 Exhibits    Exhibit A    Mortgaged Properties                             Exhibit B    Conversion Request                               Exhibit C    Release Request                                  Exhibit D    Addition Request                                 Exhibit E    Future Advance Request                           Exhibit F    Termination Request                              Exhibit G    Annual Certification (Borrower)                  Exhibit H    Annual Certification (Guarantor)                 Exhibit I    Confirmation of Guaranty                         Exhibit J    Confirmation of Environmental Indemnity Agreement    Exhibit K-1  Organizational Certificate (Borrower)             Exhibit K-2  Organizational Certificate (Guarantor)            Exhibit L    Confirmation of Obligations                       Exhibit M    Contribution Agreement     Master Credit Facility Agreement    Form 6001.MCFA                         Sch.­1  Signature Page                          04-18                    © 2018 Fannie Mae  Cottonwood Communities             (Last Rev. 09/13/18)                            

 

 

 

                                   SCHEDULE 1                  TO MASTER CREDIT FACILITY AGREEMENT                                 Definitions Schedule         Capitalized terms used in this Master Agreement have the meanings given to such terms in  this Definitions Schedule.   “Accrued Interest” means unpaid interest, if any, on the Advances Outstanding that has not been  added to the unpaid principal balance of the Advances pursuant to Section 2.03(b) (Capitalization  of Accrued But Unpaid Interest) of this Master Agreement.    “Actual Strike Rate” means for each Variable Advance the actual strike rate for the Interest Rate  Cap purchased with respect to such Variable Advance, as further set forth in the Cap Security  Agreement applicable to such Variable Advance.   “Addition”  has  the  meaning set  forth  in Section 2.10(c)  (Right  to  Add Additional  Mortgaged  Properties as Collateral).   “Addition Request” means a written request, substantially in the form of Exhibit D to this Master  Agreement, to add Additional Mortgaged Properties to the Collateral Pool as set forth in Section  2.10(c) (Right to Add Additional Mortgaged Properties as Collateral).   “Additional Borrower” means the owner of an Additional Mortgaged Property, which entity has  been approved by Lender and becomes a Borrower under this Master Agreement and the applicable  Loan Documents, and its permitted successors and assigns, which owner must demonstrate to the  satisfaction of Lender that:         (a)   Additional Borrower complies with the SPE Requirements;         (b)   the ownership structure of Additional Borrower satisfies the definition of Restricted  Ownership Interests and Additional Borrower is Controlled and managed, directly and indirectly,  by the same Person or group of Persons as Initial Borrower; and         (c)   Additional Borrower is not a Prohibited Person.   “Additional Due Diligence Fee Deposit” means the deposit made by Borrower to Lender with  respect  to  each  proposed  Additional  Mortgaged  Property  in  an  amount  equal  to  $24,500  per  Additional Mortgaged Property.  On or prior to the applicable Effective Date, Lender shall notify  Borrower of the actual amount of the Additional Due Diligence Fees and Borrower shall, on the  Effective Date, pay to Lender the remainder of such Additional Due Diligence Fees (if the actual  amount of the Additional Due Diligence Fees exceeds the deposit and the other amounts previously  paid to Lender by Borrower) or Lender shall promptly refund to Borrower any amounts paid to  Lender by Borrower in excess of the Additional Due Diligence Fees (if the actual amount of the  Additional Due Diligence Fees is less than the deposit and the other amounts previously paid to  Lender by Borrower).     Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Additional Due Diligence Fees” means with respect to each proposed Additional Mortgaged  Property  an  amount  equal  to  the  actual  costs  of  Lender’s  due  diligence  for  such  Additional  Mortgaged Properties, including but not limited to third party reports required by Lender plus a  non-refundable $4,850 processing fee per Additional Mortgaged Property payable by Borrower to  Lender.  Borrower shall pay the Additional Due Diligence Fee Deposit towards the Additional  Due Diligence Fees.   “Additional Lender Repairs” means repairs of the type listed on the Required Repair Schedule  but not otherwise identified thereon that are determined advisable by Lender to keep the Mortgaged  Property  in  good  order  and  repair  (ordinary  wear  and  tear  excepted)  and  in  good  marketable  condition or to prevent deterioration of the Mortgaged Property.   “Additional  Lender  Replacements”  means  replacements  of  the  type  listed  on  the  Required  Replacement  Schedule  but  not  otherwise  identified  thereon  that  are  determined  advisable  by  Lender to keep the Mortgaged Property in good order and repair (ordinary wear and tear excepted)  and in good marketable condition or to prevent deterioration of the Mortgaged Property.   “Additional  Mortgaged  Property”  means  each  Multifamily  Residential  Property  owned  by  Borrower or an Additional Borrower (either in fee simple or as tenant under a ground lease meeting  all of the Underwriting and Servicing Requirements) and added to the Collateral Pool after the  Initial Effective Date in connection with an Addition or a Substitution pursuant to Section 2.10(c)  (Right  to  Add  Additional  Mortgaged  Properties  as  Collateral)  or Section  2.10(d)  (Right  to  Substitutions).   “Additional Origination Fee” means an origination fee equal to a minimum of 40 basis points  and a maximum of 60 basis points, as determined by Lender at the time of funding of such Future  Advance multiplied by the amount of such Future Advance.   “Adjustable Rate” has the meaning set forth in the applicable Schedule of Advance Terms.   “Advance” means a Variable Advance and/or a Fixed Advance.   “Advance Year” has the meaning set forth in the applicable Schedule of Advance Terms.   “Advisor Member” means Cottonwood Communities Advisors, LLC, a Delaware limited liability  company.   “Aggregate Debt Service Coverage Ratio” means, for any specified period, the ratio (expressed  as a percentage) of –         (a)   the  Net  Cash  Flow  for  the  Mortgaged  Properties  for  the  preceding  number  of  months as determined pursuant to the Underwriting and Servicing Requirements;         to         (b)   the Facility Debt Service for the specified period.      Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Aggregate  Loan  to  Value  Ratio”  means,  for  any  specified  date,  the  ratio  (expressed  as  a  percentage) of –         (a)   the Advances Outstanding on the specified date,         to         (b)   the sum of (1) the aggregate of the Valuations most recently obtained prior to the  specified date for all of the Mortgaged Properties, plus (2) any Substitution Deposit being held by  Lender as of such specified date.   “Allocable Facility Amount” means the most recently determined amount of the then Advances  Outstanding  allocated  to  a  particular  Mortgaged  Property  by  Lender  in  accordance  with  the  Underwriting and Servicing Requirements and as required by this Master Agreement.   “Alterations”  has  the  meaning  set  forth  in Section  6.02(f)  (Alterations  to  any  Mortgaged  Property).   “Alternate Coverage and LTV Tests” means:         (a)   the Aggregate Debt Service Coverage Ratio is not less than 1.55:1.0 with respect  to all Advances; and         (b)   the Aggregate Loan to Value Ratio does not exceed fifty-five percent (55%).    “Amortization Period” means the period of thirty (30) years.   “Amortization Type” has the meaning set forth in the applicable Schedule of Advance Terms.   “Applicable Index” means (a) with respect to any Variable Structured ARM Advance, either One  Month LIBOR or Three Month LIBOR as set forth in the applicable Schedule of Advance Terms,  or (b) with respect to any other Variable Advance, the index pursuant to which the Adjustable Rate  is determined, as set forth in the applicable Schedule of Advance Terms.   “Applicable  Law”  means  (a) all  applicable  provisions  of  all  constitutions,  statutes,  rules,  regulations and orders of all governmental bodies, all Governmental Approvals and all orders,  judgments and decrees of all courts and arbitrators, (b) all zoning, building, environmental and  other laws, ordinances, rules, regulations and restrictions of any Governmental Authority affecting  the ownership, management, use, operation, maintenance or repair of the Mortgaged Properties,  including the Americans with Disabilities Act (if applicable), the Fair Housing Amendment Act  of 1988 and Environmental Laws, (c) any building permits or any conditions, easements, rights- of-way, covenants, restrictions of record or any recorded or unrecorded agreement affecting or  concerning any Mortgaged Property, planned development permits, condominium declarations,  and reciprocal easement and regulatory agreements with any Governmental Authority, (d) all laws,  ordinances,  rules  and  regulations,  whether  in  the  form  of  rent  control,  rent  stabilization  or  otherwise, that limit or impose conditions on the amount of rent that may be collected from the      Master Credit Facility Agreement    Form 6001.MCFA                        Page 3  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   units  of  a  Mortgaged  Property,  and  (e) requirements  of  insurance  companies  or  similar  organizations, affecting the operation or use of any Mortgaged Property or the consummation of  the transactions to be effected by this Master Agreement or any of the other Loan Documents.   “Appraisal”  means  an  appraisal  of  Multifamily  Residential  Property  conforming  to  the  Underwriting and Servicing Requirements.   “Appraised Value” means the value set forth in an Appraisal.   “Bank  Secrecy  Act”  means  the  Bank  Secrecy  Act  of 1970,  as  amended  (e.g.,  31 U.S.C.  Sections 5311-5330).   “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy” as now and  hereafter in effect, or any successor statute.   “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 any Person seeking to take advantage of any other laws,  domestic or foreign, relating to bankruptcy, insolvency, reorganization, debt adjustment, winding  up or composition or adjustment of debts;         (b)   the acknowledgment in writing by any Person (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 any Person;         (d)   the commencement, filing or continuation  of  an  involuntary  case  or  proceeding  under one or more Insolvency Laws against any Person;         (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 any Person; or         (f)   any action by a Person for the purpose of effecting any of the foregoing; provided,  however, that any proceeding or case under (d) or (e) above shall not be a Bankruptcy Event until  the ninetieth (90th) day after filing (if not earlier dismissed) so long as such proceeding or case  occurred  without  the  consent,  encouragement,  active  participation  or  the  failure  to  object  in  a  timely and appropriate manner by any Person (in which event such case or proceeding shall be a  Bankruptcy Event immediately).   “Borrow Up” has the meaning set forth in Section 2.02(c)(2) (Future Advances).       Master Credit Facility Agreement    Form 6001.MCFA                        Page 4  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Borrower” means individually (and jointly and severally if more than one), the Initial Borrower  and any Additional Borrower becoming a party to this Master Agreement and any other Loan  Documents, together with their permitted successors and assigns.   “Borrower Affiliate” means:         (a)   any  Person  that  owns  any  direct  Ownership  Interest  in  any  Borrower  Entity  or  Identified  Party  but  excluding  any  Person  directly  or  indirectly  owning  any  public  stock  of  Guarantor with no other direct or indirect Ownership Interest in Borrower;         (b)   any Person that indirectly owns, with the power to vote, twenty percent (20%) or  more of the Ownership Interests in any Borrower Entity or Identified Party;         (c)   any Person Controlled by, under common Control with, or which Controls, any  Borrower Entity or Identified Party;         (d)   any entity in which any Borrower Entity or Identified Party 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 any Borrower Entity or Identified Party.   “Borrower Agent” means Cottonwood Communities, Inc., a Maryland corporation.   “Borrower Entity” means, individually and collectively, Borrower, Guarantor and Key Principal.   “Borrower  Requested  Repairs”  means  repairs  not  listed  on  the  Required  Repair  Schedule  requested  by  Borrower  to  be  reimbursed  from  the  Repairs  Escrow  Account   and  determined  advisable  by  Lender  to  keep  the  Mortgaged  Property  in  good  order  and  repair  and  in  a  good  marketable condition or to prevent deterioration of the Mortgaged Property.   “Borrower  Requested  Replacements”  means  replacements  not  listed  on  the  Required  Replacement Schedule requested by Borrower to be reimbursed from the Replacement Reserve  Account  and determined advisable by Lender to keep the Mortgaged Property in good order and  repair and in a good marketable condition or to prevent deterioration of the Mortgaged Property.   “Borrower’s General Business Address” has the meaning set forth in the Summary of Master  Terms.   “Borrower’s Notice Address” has the meaning set forth in the Summary of Master 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.      Master Credit Facility Agreement    Form 6001.MCFA                        Page 5  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Calendar  Quarter”  means,  with  respect  to  any  year,  any  of  the  following  three (3)  month  periods:  (a) January-February-March;  (b) April-May-June;  (c) July-August-September;  and  (d) October-November-December.   “Calendar  Year”  means  the  twelve (12)  month  period  from  the  first  day  of  January  to  and  including the last day of December, and each twelve (12) month period thereafter.   “Cap Security Agreement” means, individually and collectively, with respect to any Interest Rate  Cap, a reserve, hedge assignment and security agreement between Borrower and Lender, for the  benefit of Lender in the form required by Fannie Mae from time to time, which will be issued by  Borrower to Lender concurrently with the funding of a Variable Advance requiring an Interest  Rate Cap.   “Capitalization Rate” means, for each Mortgaged Property, a rate selected by Lender for use in  determining the Valuations.   “Cash Collateral Account” means the cash collateral account established pursuant to the Cash  Collateral Agreement.   “Cash Collateral Agreement” means a cash collateral pledge, security and custody agreement in  the form approved by Fannie Mae by and among Fannie Mae, Borrower and a collateral agent for  Fannie Mae, as the same may be amended, modified or supplemented from time to time.   “CC Advisors” means CC Advisors III, LLC, a Delaware limited liability company.   “CC Investor LLC” means Cottonwood Communities Investor LLC, a Delaware limited liability  company.   “CCI” means Cottonwood Communities Inc., a Maryland corporation.    “CCMI” means Cottonwood Capital Management, Inc., a Delaware corporation.   “CCOP” means Cottonwood Communities O.P., LP, a Delaware limited partnership.    “Change of Control” see “Control.”   “Collateral” means the Mortgaged Properties and other collateral from time to time or at any time  encumbered by the Security Instruments, or any other property securing Borrower’s obligations  under the Loan Documents.   “Collateral Account” means any account designated by Lender as such pursuant to a Collateral  Agreement or as established pursuant to this Master Agreement, including the Reserve/Escrow  Account and any Cash Collateral Account.   “Collateral  Account  Funds”  means,  collectively,  the  funds  on  deposit  in  any  or  all  of  the  Collateral Accounts, including the Reserve/Escrow Account Funds and any funds in any Cash  Collateral Account.     Master Credit Facility Agreement    Form 6001.MCFA                        Page 6  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “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 Advance.   “Collateral Event” means, individually and collectively, a Release, Substitution, Addition, Future  Advance, and/or Conversion.   “Collateral Pool” means all of the Collateral.   “Completion Period” has the meaning set forth in the Summary of Master Terms.   “Condemnation Action” has the meaning set forth in the Security Instrument.   “Confirmation  of  Environmental  Indemnity  Agreement”  means  a  confirmation  of  the  Environmental Indemnity Agreement executed by Borrower in connection with any Request after  the Initial Effective Date, substantially in the form of Exhibit J to this Master Agreement.   “Confirmation of Guaranty” means a confirmation of the Guaranty executed by Guarantor in  connection with any Request after the Initial Effective Date, substantially in the form of Exhibit I  to this Master Agreement.   “Confirmation of Obligations” means a Confirmation of Obligations executed by Borrower and  Guarantor  in  connection  with  any  Request  after  the  Initial  Effective  Date,  pursuant  to  which  Borrower and Guarantor confirm their obligations under the Loan Documents substantially in the  form of Exhibit L to this Master Agreement.   “Contribution Agreement” means the Contribution Agreement by and among Initial Borrower  and each Additional Borrower, required by Lender and satisfying Lender’s requirements, as the  same may be amended, restated, modified or supplemented from time to time.   “Control”  (including  with  correlative  meanings,  such  as  “Controlling,”  “Controlled  by”  and  “under  common  Control  with”)  means,  as  applied  to  any  entity,  the  possession,  directly  or  indirectly, of the power to direct or cause the direction of the management and operations of such  entity, whether through the ownership of voting securities or other Ownership Interests, by contract  or otherwise.           As used herein, a “change of Control” or “Change of Control” means only the occurrence  of any of the following events:         (a)   Sole Member ceases to Control Borrower.         (b)   CCOP ceases to Control Sole Member.         (c)   CCI ceases to be the general partner of and Control CCOP.         (d)   CC Advisors ceases to be the advisor of CCI with substantially the same scope of  rights, obligations and responsibilities it has as of the Initial Effective Date.      Master Credit Facility Agreement    Form 6001.MCFA                        Page 7  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

         (e)   Advisor Member ceases to be the sole member of and Control CC Advisors.         (f)   CCMI ceases to be the manager of and Control Advisor Member.         (g)   CROP ceases to be the sole member of and Control CCMI.          (h)   CRI and Cottonwood Residential, Inc., until it is liquidated and dissolved, cease to  collectively  own  100%  of  the  general  partnership  interests  in  and  Control,  CROP;  provided  however  that  once  Cottonwood  Residential,  Inc.  is  liquidated  and  dissolved,  of  a  Change  of  Control shall occur if CRI ceases to own 100% of the general partnership interests in, and Control,  CROP.          (i)   Except  as  permitted  in  Section  11.03(b)(6)(D)  in  connection  with  a  Permitted  Public Transfer, Daniel Shaeffer, Chad Christensen and Gregg Christensen cease to be on and  constitute  the  majority  of  the  board  of  directors  of  CRI  and  Cottonwood  Residential,  Inc.;  provided, however, the death or incapacity of one of these directors will not constitute a Change  of Control if Lender provides its written consent to a replacement director.         (j)   As of the Initial Effective Date, with respect to CCI (i) Daniel Shaeffer and Chad  Christensen  cease  to  be  members  of  the  board  of  directors;  provided,  however,  the  death  or  incapacity of one of these directors will not constitute a Change of Control if Lender provides its  written consent to a replacement director and (ii) with respect to the independent directors of, the  replacement (other than solely by reason of retirement at age fifty-five (55) or older, death or  disability) of more than fifty percent (50%) (or such lesser percentage as is required for decision- making by the board of directors or an equivalent governing body) of the members of the board of  directors (or an equivalent governing body) of CCI, over a one-year period from the directors who  constituted such board of directors at the beginning of such period and such replacement shall not  have been approved by a vote of at least a majority of the board of directors of CCI, then still in  office who either were members of such board of directors at the beginning of such one-year period  or  whose  election  as  members  of  the  board  of  directors  was  previously  so  approved  (it  being  understood and agreed that in the case of any entity governed by a trustee, board of managers, or  other similar governing body, the foregoing shall apply thereto by substituting such governing  body and the members thereof for the board of directors and members thereof, respectively);         (k)   Subsequent to a Permitted Public Transfer pursuant to Section 11.03(b)(6), (i) the  Ownership  Interests of  CRI, CROP, or CCI,  as  applicable, cease to be publicly traded; (ii) an  Acquiring  Person  becomes  (by  acquisition,  consolidation,  merger  or  otherwise),  directly  or  indirectly, the beneficial owner of more than twenty-five percent (25%) of the total Ownership  Interest of CRI, CROP, or CCI, as applicable; or (iii) the replacement (other than solely by reason  of retirement at age fifty-five (55) or older, death or disability) of more than fifty percent (50%)  (or  such  lesser  percentage  as  is  required  for  decision-making  by  the  board  of  directors  or  an  equivalent governing body) of the members of the board of directors (or an equivalent governing  body)  of  CRI,  CROP,  or  CCI,  as  applicable,  over  a  one-year  period  from  the  directors  who  constituted such board of directors at the beginning of such period and such replacement shall not  have been approved by a vote of at least a majority of the board of directors of CRI, CROP, or      Master Credit Facility Agreement    Form 6001.MCFA                        Page 8  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   CCI, as applicable, then still in office who either were members of such board of directors at the  beginning of such one-year period or whose election as members of the board of directors was  previously so approved (it being understood and agreed that in the case of any entity governed by  a trustee, board of managers, or other similar governing body, the foregoing clause (iii) shall apply  thereto by substituting such governing body and the members thereof for the board of directors  and members thereof, respectively).   “Conversion” means the conversion of all or a portion of a Variable Note to a Fixed Note pursuant  to the Conversion Schedule.   “Conversion Amendment” means an amendment to this Master Agreement and the appropriate  Schedules reflecting the Conversion of all or any portion of a Variable Note to a Fixed Note as set  forth in Section 2.10(a) (Conversion from Variable Note to Fixed Note).   “Conversion Availability Period” means with respect to a Conversion of any applicable Variable  Advance, the date beginning on the first day of the month following the end of the Prepayment  Lockout Period in respect of such Variable Advance and ending on the earlier of (a) the first day  of the third month prior to the Maturity Date of such Variable Advance or (b) the first day of the  month following the date ten (10) years after the Initial Effective Date.     “Conversion Documents” means the Conversion Amendment, together with an amendment to  each Security Document if required by Lender and other applicable Loan Documents, in form and  substance satisfactory to Lender, reflecting the Conversion of a Variable Note to a Fixed Note  pursuant to Section 2.10(a) (Conversion from Variable Note to Fixed Note).   “Conversion Fee” means $20,000 per each Request for Conversion.   “Conversion Request”  means  a  written request,  substantially  in the form of Exhibit B  to this  Master Agreement, to convert all or any portion of a Variable Note to a Fixed Note pursuant to  Section 2.10(a) (Conversion from Variable Note to Fixed Note).   “Conversion Schedule” means Schedule 9 attached to this Master Agreement.   “Coverage and LTV Tests” means, for any specified date from the Initial Effective Date until  Borrower elects the Elected Coverage and LTV Tests, each of the following financial tests:          (1)  The Aggregate Debt Service Coverage Ratio is not less than 1.35:1.0 with respect  to the amount of the Fixed Advances, and 1.10:1.0 with respect to the amount of the Variable  Advances; and          (2)   The Aggregate Loan to Value Ratio does not exceed sixty five percent (65%).     “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.      Master Credit Facility Agreement    Form 6001.MCFA                        Page 9  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “CRI”  means  Cottonwood  Residential  II,  Inc.,  a  Maryland  corporation,  and  its  permitted  successors and assigns.   “CROP” means Cottonwood Residential O.P., LP, a Delaware limited partnership.   “Current Index” has the meaning set forth in applicable Schedule of Advance Terms.   “Debt  Service  Amounts”  means  the  Monthly  Debt  Service  Payments  and  all  other  amounts  payable  under  this  Master  Agreement,  the  Note,  the  Security  Instrument  or  any  other  Loan  Document.   “Debt Service Coverage Ratio” means, for any Mortgaged Property for any specified period, the  ratio (expressed as a percentage) of –         (a)   the Net Cash Flow for the specified period for the preceding number of months as  determined pursuant to the Underwriting and Servicing Requirements;         to         (b)   the Facility Debt Service for the specified  period, assuming,  for the  purpose of  calculating the Facility Debt Service of this definition, that Advances Outstanding shall be the  Allocable Facility Amount, in each case, for the subject Mortgaged Property.   “Default Rate” means an interest rate equal to the lesser of:         (a)   the sum of the Interest Rate plus four (4) percentage points; or         (b)   the maximum interest rate which may be collected from Borrower under Applicable  Law.   “Definitions Schedule” means this Schedule 1 (Definitions Schedule – General) to this Master  Agreement.   “Economic Sanctions” means any economic or financial sanction administered or enforced by the  United  States  Government  (including,  without  limitation,  those  administered  by  OFAC  at  http://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets- Control.aspx), the United States Department of Commerce, or the United States Department of  State.   “Effective Date” means the Initial Effective Date and each date after the Initial Effective Date on  which the funding or other transaction requested in a Request takes place.   “Elected Coverage and LTV Tests” means, for any specified date after Borrower has provided  Lender with the notice required in Section 2.10(g), each of the following financial tests:       Master Credit Facility Agreement    Form 6001.MCFA                       Page 10  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

               (1)   the Aggregate Debt Service Coverage Ratio is not less than 1.55:1.0 with        respect to the amount of the Fixed Advances, and 1.30:1.0 with respect to the amount of        the Variable Advances; and               (2)   the Aggregate Loan to Value Ratio does not exceed fifty five percent (55%).   “Employee Benefit Plan” means a plan described in Section 3(3) of ERISA, regardless of whether  the plan is subject to ERISA.   “Enforcement Costs” has the meaning set forth in the Security Instrument.   “Environmental  Indemnity  Agreement”  means  that  certain  Environmental  Indemnity  Agreement dated as of the Effective Date made by Borrower to and for the benefit of Lender, as  the same may be amended, restated, replaced, supplemented, or otherwise modified from time to  time.   “Environmental  Inspections”  has  the  meaning  set  forth  in  the  Environmental  Indemnity  Agreement.   “Environmental Laws” has the meaning set forth in the Environmental Indemnity Agreement.   “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time  to time and the regulations promulgated thereunder.   “ERISA Affiliate” shall mean, with respect to Borrower, any entity that, together with Borrower,  would be treated as a single employer under Section 414(b) or (c) of the Internal Revenue Code,  or Section 4001(a)(14) of ERISA, or the regulations thereunder.     “ERISA Plan” means any employee pension benefit plan within the meaning of Section 3(2) of  ERISA (or related trust) that is subject to the requirements of Title IV of ERISA, Sections 430 or  431 of the Internal Revenue Code, or Sections 302, 303, or 304 of ERISA, which is maintained or  contributed to by Borrower or its ERISA Affiliates.   “Event of Default” means the occurrence of any event listed in Section 14.01 (Events of Default).   “Exceptions  to  Representations  and  Warranties  Schedule”  means  that  certain Schedule  16  (Exceptions to Representations and Warranties) to this Master Agreement.   “Facility  Debt  Service”  means,  as  of  any  date,  for  all  purposes  other  than  determining  the  Maximum Calculated Strike Rate, the sum of the amount of interest and principal amortization  that would be payable during the applicable period determined by Lender immediately succeeding  the date of determination, except that:               (a)   each Variable Structured ARM Advance to be obtained shall be deemed to        require payments equal to the sum of (1) level monthly payments of principal and interest,        with the interest rate calculated as (A) the Applicable Index, plus (B) the Margin (or until      Master Credit Facility Agreement    Form 6001.MCFA                       Page 11  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

         rate  locked,  the  indicative  pricing,  as  determined  pursuant  to  the  Underwriting  and        Servicing  Requirements),  plus  (C) a  stressed  underwriting  margin  of  300 basis  points        (3.00%)  or  such  lower  stressed  underwriting  margin  determined  pursuant  to  the        Underwriting and Servicing Requirements, in an amount necessary to fully amortize the        original principal amount of the Variable Structured ARM Advance over the Amortization        Period, plus (2) the Monthly Cap Escrow Payment;                (b)  with respect to each Variable Structured ARM Advance Outstanding:                      (1)   where an amortizing Interest Rate Cap has been purchased and is              then effective, such Advance shall be deemed to require payments equal to the sum              of  (A)  level  monthly  payments  of  principal  and  interest,  with  the  interest  rate              calculated as (i) the higher of the Facility Minimum Underwriting Strike Rate or              the Actual Strike Rate applicable to such Advance, plus (ii) the Margin applicable              to such Advance, in an amount necessary to fully amortize the original principal              amount of the Variable Structured ARM Advance over the Amortization Period,              plus (B) any Monthly Cap Escrow Payment applicable to such Advance; and                     (2)   where an interest-only Interest Rate Cap has been purchased and is              then effective, such Advance shall be deemed to require payments equal to the sum              of (A) level monthly payments of interest, with the interest rate calculated as (i) the              higher of the Facility Minimum Underwriting Strike Rate or the Actual Strike Rate              applicable to such Advance, plus (ii) the Margin applicable to such Advance, plus              (B) any Monthly Cap Escrow Payment applicable to such Advance;               (c)   intentionally deleted;               (d)   each Fixed Advance to be obtained or Variable Advance to be converted        shall be deemed to require level monthly payments of principal and interest, at an interest        rate equal to the sum of (1) the base United States Treasury Index Rate for securities having        a maturity substantially similar to the maturity of the Fixed Advance, plus (2) the Fixed        Fee  (or  until  rate  locked,  the  estimated  Fixed  Fee  as  determined  pursuant  to  the        Underwriting and Servicing Requirements), in an amount necessary to fully amortize the        original principal amount of the Fixed Advance over the Amortization Period; and               (e)   each Fixed Advance Outstanding shall be deemed to require level monthly        payments of principal and interest, at the Interest Rate for such Fixed Advance as set forth        in the Schedule of Advance Terms, in an amount necessary to fully amortize the original        principal amount of such Fixed Advance over the Amortization Period.   “Facility Minimum Underwriting Strike Rate” means the percentage determined by  Lender  pursuant to the Underwriting and Servicing Requirements as set forth on the Summary of Master  Terms,  as  such  percentage  may  be  changed  by  Lender  from  time  to  time  pursuant  to  the  Underwriting and Servicing Requirements.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 12  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Facility Year” means the twelve (12) month period from the first day of the first calendar month  after the Initial Effective Date to and including the last day before the first anniversary of the Initial  Effective Date, and each twelve (12) month period thereafter.   “Fannie Mae” means the corporation duly organized and existing under the laws of the United  States.   “Fifth Anniversary” means the date that is the first day of the month following the date five (5)  years after the Initial Effective Date.   “First Anniversary” means the date that is the first day of the month following the date one (1)  year after the Initial Effective Date.   “First Payment Date” has the meaning set forth in the applicable Schedule of Advance Terms.   “First  Principal  and  Interest  Payment  Date”  has  the  meaning  set  forth  in  the  applicable  Schedule of Advance Terms.   “Fixed  Advance”  means  a  fixed  rate  loan  made  by  Lender  to  Borrower  under  this  Master  Agreement evidenced by a Fixed Note.   “Fixed Fee” means, subject to the provisions of the Conversion Schedule, if applicable, for any  Fixed Advance, the number of basis points per annum determined at the time of funding of such  Fixed Advance by Lender as the Fixed Fee for such Fixed Advance.   “Fixed Note” means the promissory note (together with all schedules, riders, allonges, addenda,  renewals, extensions, amendments and modifications thereto), which will be issued by Borrower  to Lender, concurrently with the funding of each Fixed Advance, and which promissory note will  be the same or substantially similar in form to the then current form of promissory note utilized by  Fannie Mae for fixed rate loans with the applicable type of loan execution.   “Fixed Monthly Principal Component” has the meaning set forth in the applicable Schedule of  Advance Terms.   “Fixed Rate” has the meaning set forth in the applicable Schedule of Advance 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;     Master Credit Facility Agreement    Form 6001.MCFA                       Page 13  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

         (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 Note and/or the  Security  Instrument, as  a result  of  which  Lender (or  its  designee or nominee) or a third  party  purchaser becomes owner of a Mortgaged Property;         (c)   delivery by Borrower to Lender (or its designee or nominee) of a deed or other  conveyance of Borrower’s interest in a Mortgaged Property in lieu of any of the foregoing; or         (d)   in Louisiana, any dation en paiement.    “Future Advance” means an Advance made after the Initial Effective Date pursuant to Section  2.02(c)(2) (Future Advances) including any Borrow Up and any refinance of an Advance.   “Future Advance Request” means a written request for a Future Advance, substantially in the  form of Exhibit E to this Master Agreement.   “Future Advance Schedule” means Schedule 14 attached to this Master Agreement.   “GAAP” means generally accepted accounting principles in the United States in effect from time  to time, consistently applied.   “General Conditions” means those conditions set forth on Schedule 7 attached hereto.   “General Conditions Schedule” means that certain Schedule 7 (General Conditions Schedule) to  this Master Agreement.    “Goods” has the meaning set forth in the Security Instrument.   “Governmental  Approval”  means  an  authorization,  permit,  consent,  approval,  license,  registration  or  exemption  from  registration  or  filing  with,  or  report  to,  any  Governmental  Authority.   “Governmental  Authority” means  any court,  board, commission,  department  or body  of  any  municipal,  county,  state  or  federal  governmental  unit,  or  any  subdivision  of  any  court,  board,  commission, department or body of any municipal, county, state or federal governmental unit, that  has or acquires jurisdiction over  Borrower or the Mortgaged Property or  the use, operation or  improvement of the Mortgaged Property.   “Gross  Revenues”  means,  for  any  specified  period,  all  income  in  respect  of  each  Mortgaged  Property as reflected on the certified operating statement for such specified period as adjusted to  exclude unusual income (e.g., temporary or nonrecurring income), income not allowed by Lender  pursuant to the Underwriting and Servicing Requirements (e.g., interest income, furniture income,  etc.), and the value of any unreflected concessions.   “Guarantor” means, individually and collectively, any guarantor of the Indebtedness or any other  obligation of Borrower under any Loan Document which must be a Key Principal.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 14  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Guarantor’s General Business Address” has the meaning set forth in the Summary of Master  Terms.   “Guarantor’s Notice Address” has the meaning set forth in the Summary of Master Terms.   “Guaranty”  means,  individually  and  collectively,  any  Payment  Guaranty,  Non-Recourse  Guaranty or other guaranty executed by Guarantor in connection with this Master Agreement.   “Hedging Arrangement” means any interest rate swap, interest rate cap or other arrangement,  contractual or otherwise, which has the effect of an interest rate swap or interest rate cap or which  otherwise (directly or indirectly, derivatively or synthetically) hedges interest rate risk associated  with being a debtor of variable rate debt or any agreement or other arrangement to enter into any  of the above on a future date or after the occurrence of one or more events in the future.   “Identified  Party”  means,  individually  and  collectively,  (a) Borrower’s  general  partners,  sole  member,  managing  members  and  managers  (if  non-member  managed),  and  (b) any  Person  Controlling Borrower, Guarantor, Key Principal or Borrower’s general partners, sole members,  managing  members  or  managers  (if  non-member  managed)  but  excluding  the  individuals  comprising the Board of Managers of Borrower (if any) or any Person Controlling Borrower and  any Persons directly or indirectly owning any public stock of Key Principal with no other direct  or indirect Ownership Interest in Borrower.     “Immediate Family Members” means a child, stepchild, grandchild, spouse, sibling, or parent,  each of whom is not a Prohibited Person.   “Imposition Deposits” has the meaning set forth in the Security Instrument.   “Impositions” has the meaning set forth in the Security Instrument.   “Improvements” has the meaning set forth in the Security Instrument.   “Indebtedness” has the meaning set forth in the Security Instrument.   “Index” has the meaning set forth in the applicable Schedule of Advance Terms.   “Individual Property Coverage and LTV Tests” means each of the following tests:         (a)   the Debt Service Coverage Ratio is not less than 1.25:1.0 with respect to any Fixed  Advance and 1.00:1.0 with respect to any Variable Advance; and         (b)   the Loan to Value Ratio does not exceed seventy percent (70%).   “Initial Adjustable Rate” for an Advance has the meaning set forth in the applicable Schedule of  Advance Terms.   “Initial Advance” means the Fixed Advance made on the Initial Effective Date in the aggregate  amount of $35,995,000.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 15  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Initial Allocable Facility Amount” means the initial Allocable Facility Amount for each of the  Initial Mortgaged Properties as set forth in Exhibit A to this Master Agreement.   “Initial Borrower” means each Borrower under this Master Agreement as of the Initial Effective  Date.   “Initial Effective Date” means the date of this Master Agreement.   “Initial Monthly Debt Service Payment” has the meaning set forth in the applicable Schedule of  Advance Terms.   “Initial  Mortgaged  Properties”  means  the  Multifamily  Residential  Properties  described  on  Exhibit A to this Master Agreement and which represent the Mortgaged Properties that are made  part of the Collateral Pool on the Initial Effective Date.   “Initial Replacement Reserve Deposit” has the meaning set forth in the Summary of Master  Terms.   “Initial  Valuation”  means,  when  used  with  reference  to  specified  Collateral,  the  Valuation  initially  performed  for  the  Collateral  as  of  the  date  on  which  the  Collateral  was  added  to  the  Collateral Pool.  The Initial Valuation for each of the Initial Mortgaged Properties is as set forth  in Exhibit A to this Master Agreement.   “Insolvency  Laws”  means  the  Bankruptcy  Code,  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 (provided that for the purposes of determining liability for each Borrower under this  definition, liability for the Advances Outstanding under this Master Agreement shall mean the then  current  Allocable  Facility  Amount  attributable  to  the  Mortgaged  Property  owned  by  each  Borrower); or         (b)   such Person’s inability to pay its debts as they become due (provided that for the  purposes of determining debt for each Borrower under this definition, liability for the Advances  Outstanding under this Master Agreement shall mean the then current Allocable Facility Amount  attributable to the Mortgaged Property owned by each Borrower).       Master Credit Facility Agreement    Form 6001.MCFA                       Page 16  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Insurance Policy” means, with respect to any Mortgaged Property, the insurance coverage and  insurance certificates evidencing such insurance required to be maintained pursuant to this Master  Agreement.   “Intended  Prepayment  Date”  means  the  date  upon  which  Borrower  intends  to  make  a  prepayment on an Advance, as set forth in the Prepayment Notice, which date must be a Permitted  Prepayment Date; provided, however, that Lender may approve prepayment of an Advance on an  Intended Prepayment Date that is not a Permitted Prepayment Date pursuant to Section 2.04(c)  (Prepayment; Prepayment Lockout; Prepayment Premium).   “Interest Accrual Method” has the meaning set forth in the  applicable Schedule of Advance  Terms.   “Interest Only Term” has the meaning set forth in the applicable Schedule of Advance Terms.   “Interest  Rate”  means  with respect  to  a  Fixed  Advance, the Fixed  Rate, or with  respect  to a  Variable Advance, the Initial Adjustable Rate and the Adjustable Rate, each as set forth in the  applicable Schedule of Advance Terms.   “Interest Rate Cap” has the meaning set forth in Section 2.03(a)(2)(B)(vi) (Interest Accrual and  Computation; Amortization; Interest Rate Cap).   “Interest  Rate  Cap  Documents”  means  the  Cap  Security  Agreement  and  any  and  all  other  documents required pursuant thereto or hereto or as  Lender shall require from time to time in  connection with Borrower’s obligation to maintain an Interest Rate Cap when a Variable Advance  is Outstanding.   “Interest Rate Type” has the meaning set forth in the applicable Schedule of Advance 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  Advances in the secondary mortgage market or (b) sell an MBS backed by the Advances.   “Issuer” means a financial institution satisfactory to Fannie Mae issuing a Letter of Credit.   “Key Principal” means, collectively:         (a)   the natural Person(s) or entity that Controls Borrower that Lender determines is  critical to the successful operation and management of Borrower and the Mortgaged Property, as  identified as such in the Summary of Master Terms; or         (b)   any natural Person or entity who becomes a Key Principal after the date of this  Master Agreement and is identified as such in an assumption agreement, or another amendment or  supplement to this Master Agreement.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 17  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Key  Principal’s  General  Business  Address”  has  the  meaning  set  forth  in  the  Summary  of  Master Terms.   “Key Principal’s Notice Address” has the meaning set forth in the Summary of Master 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  applicable Schedule  of  Advance Terms.   “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 this Master 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  Master  Terms.   “Lender’s Notice Address” has the meaning set forth in the Summary of Master Terms.   “Lender’s Payment Address” has the meaning set forth in the Summary of Master Terms.   “Letter of Credit” means a letter of credit issued by an Issuer satisfactory to Fannie Mae naming  Fannie Mae as beneficiary, in form and substance approved by Lender and Fannie Mae.   “Letter of Credit Schedule” means Schedule 15 attached to this Master Agreement.   “LIBOR” means One Month LIBOR or Three Month LIBOR, as specified by the Current Index  set forth in the applicable Schedule of Advance Terms.   “Lien” has the meaning set forth in the Security Instrument.    “Loan Application” means the application for the Advances submitted by Borrower to Lender.   “Loan Document Taxes” has the meaning set forth in Section 5.02(f) (Loan Document Taxes).   “Loan  Documents”  means  the  Note,  this  Master  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 Advances, as such documents may be amended, restated, replaced, supplemented or otherwise  modified from time to time.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 18  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “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, this Master Agreement, the Security  Instrument and any other Loan Document, and otherwise to service the Advances for the benefit  of Lender.  Unless Borrower receives notice to the contrary, the Loan Servicer shall be Lender  originally named on the Summary of Master Terms.   “Loan  to  Value  Ratio”  means,  for  a  Mortgaged  Property,  for  any  specified  date,  the  ratio  (expressed as a percentage) of –         (a)   the Allocable Facility Amount of the subject Mortgaged Property on the specified  date,         to         (b)   the  Valuation  most  recently  obtained  prior  to  the  specified  date  for  the  subject  Mortgaged Property.   “Management Agreement” means that certain Property Management Agreement by and between  Borrower  and  Cottonwood  Communities  Management,  LLC,  a  Delaware  limited  liability  company,  effective as  of the date hereof, and  any  future management  agreement  approved by  Lender.   “Management Executives” means Daniel Shaeffer, Chad Christensen and Gregg Christensen.   “Management Position” means each of the Chief Executive Officer, President, Executive Vice  President, and Chief Financial Officer.   “Margin” means the “Margin” set forth in the applicable Schedule of Advance Terms, which  includes the Variable Fee.   “Master  Agreement”  means  this  Master  Credit  Facility  Agreement,  as  it  may  be  amended,  restated, supplemented or otherwise modified from time to time, including all Recitals, Schedules  and Exhibits to this Master Agreement, each of which is hereby incorporated into this Master  Agreement by this reference.   “Material Adverse Effect” means, with respect to any circumstance, act, condition or event of  whatever  nature  (including  any  adverse  determination  in  any  litigation,  arbitration,  or  governmental investigation or proceeding), whether singularly or in conjunction with any other  event or events, act or acts, condition or conditions, or circumstance or circumstances, whether or  not related, a material adverse change in or a materially adverse effect upon any of         (a)   the  business,  operations,  property  or  condition  (financial  or  otherwise)  of  any  Borrower Entity, to the extent specifically referred to in the applicable provision of the applicable  Loan Document;       Master Credit Facility Agreement    Form 6001.MCFA                       Page 19  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

         (b)   the present or future ability of Borrower to perform the obligations of Borrower  under  this  Master  Agreement  and  the  other  Loan  Documents,  or  of  Guarantor  to  perform  its  obligations under the Guaranty, as the case may be, to the extent specifically referred to in the  applicable provision of the applicable Loan Document;         (c)   the validity, priority, perfection or enforceability of this Master Agreement or any  other Loan Document or the rights or remedies of Lender under any Loan Document; or         (d)   the value of, or Lender’s ability to have recourse against, any Mortgaged Property.   “Material Commercial Lease” means:         (a)   any Lease that is not a Residential Lease and which comprises five percent (5%) or  more of the total gross income at any Mortgaged Property on an annualized basis; or         (b)   regardless of the percentage of the total gross income at any Mortgaged Property  that it comprises, any Lease relating to:               (1)   solar power, thermal power generation, or co-power generation, or for the        installation of solar panels or any other electrical power generation equipment, and any        related power purchase agreement;               (2)   mineral rights or rights relating to subsurface oil and/or natural gas;               (3)   telecommunications or a cell tower; or               (4)   any  dwelling  unit  at  the  Mortgaged  Property  leased  to  Guarantor,  Key        Principal, or another Borrower Affiliate.   “Maturity Date” for any Advance has the meaning set forth in the applicable Schedule of Advance  Terms.   “Maximum Calculated Strike Rate” means:         (a)   In determining the Maximum Calculated Strike Rate for new Interest Rate Caps  (other than replacement Interest Rate Caps) purchased in connection with Future Advances that  are Variable Advances made under this Master Agreement, the Maximum Calculated Strike Rate  shall  be  the  maximum  percentage  set  forth  in  the  Cap  Security  Agreement  applicable  to  such  Variable Advance, which shall be the percentage derived by taking:               (1)   the Net Cash Flow for all Mortgaged Properties, minus                     (A)   the product of (i) 1.35 (or 1.55 if Borrower has elected the Elected              Coverage  and  LTV  Tests)  and  (ii) the  payment  due  on  each  Fixed  Advance              provided that:      Master Credit Facility Agreement    Form 6001.MCFA                       Page 20  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

                           (1)   each Fixed Advance to be obtained or Variable Advance to                    be converted shall be deemed to require level monthly payments of principal                    and interest, at an interest rate equal to the sum of (A) the base United States                    Treasury Index Rate for securities having a maturity substantially similar to                    the maturity of the Fixed Advance, plus (B) the Fixed Fee  (or until rate                    locked, the estimated Fixed Fee as determined pursuant to the Underwriting                    and Servicing Requirements), in an amount necessary to fully amortize the                    original  principal  amount  of  the  Fixed  Advance  over  the  Amortization                    Period;  provided,  however,  if  there  are  no  principal  payments  due  on  a                    Fixed Advance during the Interest Rate Cap term for which the Maximum                    Calculated Strike Rate is being calculated, then  the payments relating to                    such Fixed Advance shall not be required to include principal amortization                    for purposes of this calculation;                           (2)   each Fixed Advance Outstanding shall be deemed to require                    level monthly payments of principal and interest, at the Interest Rate for                    such Fixed Advance as set forth in the Schedule of Advance Terms, in an                    amount necessary to fully amortize the original principal amount of such                    Fixed Advance over the Amortization Period; provided, however, if there                    are no principal payments due on a Fixed Advance during the Interest Rate                    Cap  term  for  which  the  Maximum  Calculated  Strike  Rate  is  being                    calculated, then the payments relating to such Fixed Advance shall not be                    required to include principal amortization for purposes of this calculation);         minus                     (B)   the product of (i) 1.10 (or 1.30 if Borrower has elected the Elected              Coverage and LTV Tests) and (ii) the payment due on each Variable Structured              ARM Advance Outstanding, provided that each Variable Structured ARM Advance              Outstanding shall be deemed to require payments equal to the sum of (1) monthly              payments  of  principal  and  interest,  with  the  interest  rate  calculated  as  (A)  the              weighted average of the higher of the Facility Minimum Underwriting Strike Rate              or the Actual Strike Rate for all outstanding Interest Rate Caps plus (B) the Margin              applicable to such non-replacement Interest Rate Caps, in an amount necessary to              fully  amortize  the  original  principal  amount  of  the  Variable  Structured  ARM              Advance over the Amortization Period, and the principal component of the Variable              Structured  ARM  Advance  payment(s)  equal  to  the  Fixed  Monthly  Principal              Component as set forth in the Schedule of Advance Terms, plus (2) the Monthly              Cap  Escrow  Payments,  if  any,  for  the  succeeding  twelve  (12)  month  period;              provided, however, if there are no principal payments due on a Variable Structured              ARM  Advance  during  the  Interest  Rate  Cap  term  for  which  the  Maximum              Calculated  Strike  Rate  is  being  calculated,  then  the  payments  relating  to  such              Variable  Structured  ARM  Advance  shall  not  be  required  to  include  principal              amortization for purposes of this calculation.  Notwithstanding the foregoing, if              there are Variable Structured ARM Advances Outstanding for which there are no     Master Credit Facility Agreement    Form 6001.MCFA                       Page 21  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

               Interest Rate Caps outstanding at the time of the calculation, then such Variable              Advances shall be included in (3) below;         divided by               (2)   1.10 (or 1.30 if Borrower has elected the Elected Coverage and LTV Tests)         divided by               (3)   the  total  of  all  Variable  Advances  to  be  obtained  or  Variable  Advances        Outstanding,  that  were  not  included  in  (a)(1)(B),  at  the  time  of  the  calculation  of  the        Maximum Calculated Strike Rate          minus               (4)   the amortization factor for all Variable Advances to be obtained or Variable        Advances Outstanding if principal is to be paid during the Interest Rate Cap term         minus               (5)   the Margin (or for Variable Structured ARM Advances to be obtained, until        rate  locked,  the  indicative  pricing  as  determined  pursuant  to  the  Underwriting  and        Servicing Requirements)         minus               (6)   the cap cost factor.         (b)   The  Maximum  Calculated  Strike  Rate  for  any  replacement  Interest  Rate  Cap  purchased in connection with this Master Agreement pursuant to the Cap Security Agreement shall  be the maximum percentage set forth in the Cap Security Agreement applicable to such Variable  Advance, which shall be the percentage derived by taking:               (1)   the Net Cash Flow for all Mortgaged Properties, minus                     (A)   the product of (i) 1.35 (or 1.55 if Borrower has elected the Elected              Coverage  and  LTV  Tests)  and  (ii)  the  payment  due  on  each  Fixed  Advance              provided that each Fixed Advance Outstanding shall be deemed to require level              monthly  payments  of  principal  and  interest,  at  the  Interest  Rate  for  such  Fixed              Advance as set forth in the Schedule of Advance Terms, in an amount necessary to              fully  amortize  the  original  principal  amount  of  such  Fixed  Advance  over  the              Amortization Period; provided, however, if there are no principal payments due on              a  Fixed  Advance  during  the  Interest  Rate  Cap  term  for  which  the  Maximum              Calculated Strike Rate is being calculated, then the payments  relating to such Fixed              Advance shall not be required to include principal amortization for purposes of this              calculation      Master Credit Facility Agreement    Form 6001.MCFA                       Page 22  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

         minus                     (B)   the product of (i) 1.10 (or 1.30 if Borrower has elected the Elected              Coverage and LTV Tests) and (ii) the payment due on each Variable Structured              ARM Advance Outstanding where the applicable Interest Rate Cap is not being              replaced in connection with the calculation of the Maximum Calculated Strike Rate,              provided  that  each  Variable  Structured  ARM  Advance  Outstanding  shall  be              deemed to require payments equal to the sum of (1) monthly payments of principal              and interest, with the interest rate calculated as (A) the weighted average of the              higher of the Underwritten Strike Rate and the Actual Strike Rate for all outstanding              Interest Rate Caps plus (B) the Margin applicable to such non-replacement Interest              Rate Caps, in an amount necessary to fully amortize the original principal amount              of the Variable Structured ARM Advance over the Amortization Period, and the              principal component of the Variable Structured ARM Advance payment(s) equal              to the Fixed Monthly Principal Component as set forth in the Schedule of Advance              Terms,  plus  (2)  the  Monthly  Cap  Escrow  Payments,  if  any,  for  the  succeeding              twelve (12) month period; provided, however, if there are no principal payments              due on a Variable Structured ARM Advance during the Interest Rate Cap term for              which the Maximum Calculated Strike Rate is being calculated, then the payments              relating to such Variable Structured ARM Advance shall not be required to include              principal  amortization  for  purposes  of  this  calculation.   Notwithstanding  the              foregoing, if there are Variable Structured ARM Advances Outstanding for which              there are no Interest Rate Caps outstanding at the time of the calculation, then such              Variable Advances shall be included in (3) below         divided by               (2)   1.10 (or 1.30 if Borrower has elected the Elected Coverage and LTV Tests)         divided by               (3)   the total of all Variable Advances Outstanding, that were not included in        (b)(1)(B), at the time of the calculation         minus               (4)   the amortization factor for all Variable Advances to be obtained or Variable        Advances Outstanding if principal is to be paid during the Interest Rate Cap term         minus               (5)   the Margin (or for Variable Structured ARM Advances to be obtained, until        rate  locked,  the  indicative  pricing  as  determined  pursuant  to  the  Underwriting  and        Servicing Requirements)         minus     Master Credit Facility Agreement    Form 6001.MCFA                       Page 23  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

               (6)   the cap cost factor.   “Maximum Inspection Fee” has the meaning set forth in the Summary of Master 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 Master  Terms.   “Maximum  Replacement  Reserve  Disbursement  Interval”  has  the  meaning  set  forth  in  the  Summary of Master 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 Master  Terms.   “Minimum  Replacement  Reserve  Disbursement  Amount”  has  the  meaning  set  forth  in  the  Summary of Master Terms.   “Monthly Cap Escrow Payment” shall have the same meaning as the term “Monthly Deposit”  in the Cap Security Agreement.   “Monthly  Debt  Service  Payment”  has  the  meaning  set  forth  in  the  applicable  Schedule  of  Advance Terms.   “Monthly Replacement Reserve Deposit” has the meaning set forth in the Summary of Master  Terms.   “Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing under  the laws of the State of Delaware, and its successors and assigns, if such successors and assigns  shall continue to perform the functions of a securities rating agency.   “Mortgaged  Property”  individually  has  the  meaning  set  forth  in the Security  Instrument  and  collectively means the Initial Mortgaged Properties and the Additional Mortgaged Properties, but  excluding  each  Release  Mortgaged  Property  from  and  after  the  date  of  its  Release  from  the  Collateral Pool.   “Mortgaged  Property  Addition  Schedule”  means Schedule  11  attached  to  this  Master  Agreement.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 24  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Mortgaged Property Release Schedule” means Schedule 10 attached to this Master Agreement.   “Multiemployer Plan” shall mean a multiemployer plan within the meaning of Section 4001(a)(3)  or Section 3(37) of ERISA (a) to which Borrower or any ERISA Affiliate is making or accruing  an obligation to make contributions; (b) to which Borrower or any ERISA Affiliate has in the past  made contributions; or (c) with respect to which Borrower or any ERISA Affiliate could incur  liability.   “Multifamily Project Address” has the meaning set forth in the Summary of Master Terms.   “Multifamily Residential Property” means a residential property located in the United States  and conforming to the Underwriting and Servicing Requirements.   “Net  Cash  Flow”  means,  for  any  specified  period  determined  by  Lender  with  respect  to  any  Mortgaged  Property,  the  net  income during such period equal to  Gross  Revenues  during  such  period less the aggregate Operating Expenses during such period.    “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, individually and collectively, each Fixed Note and/or each Variable Note.   “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.   “One  Month  LIBOR”  means  the  ICE  Benchmark  Administration  Limited  (or  any  successor  administrator) fixing of the London Inter-Bank Offered Rate for 1-month United States Dollar- denominated deposits as reported by Reuters through electronic transmission.  If the foregoing  index is no longer posted through electronic transmission, is no longer available or, in Lender’s  determination, is no longer widely accepted or has been replaced as the index for similar financial  instruments (regardless of whether the index continues to be posted electronically or available),  Lender will choose a new Index taking into account general comparability to the previous Index  and other factors and provide notice thereof to Borrower.   “Operating Expenses” means, for any period, all expenses in respect of any Mortgaged Property,  as determined pursuant to the Underwriting and Servicing Requirements based on the certified  operating statement for such specified period, as may be adjusted by Lender in its sole and absolute  discretion to provide for the following:         (a)   all appropriate  types  of  expenses,  including  a  management  fee, deposits  for the  Replacements (whether funded or not), and deposits for Repairs are included in the total operating  expense figure;      Master Credit Facility Agreement    Form 6001.MCFA                       Page 25  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

         (b)   upward adjustments to individual line item expenses to reflect market norms or  actual costs and to correct any unusually low expense items, which could not be replicated by a  different owner or manager (e.g., a market rate management fee will be included regardless of  whether or not a management fee is charged, market rate payroll will be included regardless of  whether shared payroll provides for economies, etc.); and         (c)   downward adjustments to individual line item expenses to reflect unique or aberrant  costs (e.g., non-recurring capital costs, non-operating borrower expenses, etc.).   “Organizational Certificate” means, collectively, certificates from Borrower and Guarantor to  Lender, in the form of Exhibits K-1 and K-2 to this Master Agreement, certifying as to certain  organizational matters with respect to each Borrower and Guarantor.   “Organizational  Documents”  means  all  certificates,  instruments,  other  documents  and  any  amendments  thereto  in  effect  on  the  Initial  Effective  Date  and  the  applicable  Effective  Date  pursuant to which any Person is organized, operates or is governed, including (a) with respect to a  corporation, its articles of incorporation and bylaws, (b) with respect to a limited partnership, its  limited partnership certificate and partnership agreement, (c) with respect to a general partnership  or joint venture, its partnership or joint venture agreement, (d) with respect to a limited liability  company,  its  articles  of  organization  and  operating  agreement,  in  each  case  all  amendments,  supplements and modifications thereto, and (e) any other document that affects the Control of, or  the ability to oversee the management and day-to-day operations of such Person.   “Outstanding” or “outstanding” means, when used in connection with promissory notes, other  debt instruments or the Advances, for a specified date, promissory notes or other debt instruments  which have been issued, or Advances which have been made, to the extent not repaid in full as of  the specified date.   “Ownership  Interests”  means,  with  respect  to  any  entity,  any  direct  or  indirect  ownership  interests in the entity and any economic rights (such as a right to distributions, net cash flow or net  income) to which the owner of such ownership interests is entitled.   “Ownership Interests Schedule” means Schedule 13 attached to this Master Agreement.   “Payment Change Date” has the meaning set forth in the applicable Schedule of Advance Terms.   “Payment Date” means the First Payment Date and the first day of each month thereafter until the  applicable Advance is fully paid.   “Payment Guaranty” means, if applicable, that certain Guaranty (Payment) of even date herewith  executed by Guarantor to and for the benefit of Lender, as the same may be amended, restated,  replaced, supplemented or otherwise modified from time to time.   “Permitted Encumbrance” has the meaning set forth in the Security Instrument.       Master Credit Facility Agreement    Form 6001.MCFA                       Page 26  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

    “Permitted Mezzanine Debt” means Mezzanine Debt incurred by a direct or indirect owner or  owners of Borrower where the exercise of any of the rights and remedies by the holder or holders  of the Mezzanine Debt would not in any circumstance cause (a) a change in Control in Borrower  Entity, or (b) a Transfer of a direct or indirect Restricted Ownership Interest in Borrower Entity.   “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 this Master Agreement and the payment of all applicable fees and expenses as set  forth in Section 11.03(g) (Further Conditions on Transfers Requiring Lender’s Consent) of this  Master 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  the  Goods,  accounts,  choses  of  action,  chattel  paper,  documents,  general intangibles (including Software), payment intangibles, instruments, investment property,  letter of credit rights, supporting obligations, computer information, source codes, object codes,  records  and  data,  all  telephone  numbers  or  listings,  claims  (including  claims  for  indemnity  or  breach of warranty), deposit accounts and other property or assets of any kind or nature related to  the Land or the Improvements, including operating agreements, surveys, plans and specifications  and contracts for architectural, engineering and construction services relating to the Land or the  Improvements, and all other intangible property and rights relating to the operation of, or used in  connection with, the Land or the Improvements, including all governmental permits relating to any  activities on the Land.   “Personalty” has the meaning set forth in the Security Instrument.   “Potential Event of Default” means any event or circumstance that, with the giving of notice or  the passage of time, or both, would constitute an Event of Default.   “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”  for  any  Advance  has  the  meaning  set  forth  in  the  applicable  Schedule of Advance Terms.   “Prepayment Notice” means the written notice that Borrower is required to provide to Lender in  accordance with Section 2.04 (Prepayment; Prepayment Lockout; Prepayment Premium) in order      Master Credit Facility Agreement    Form 6001.MCFA                       Page 27  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   to make a prepayment on an Advance, which shall include, at a minimum, the Intended Prepayment  Date.   “Prepayment Premium” means, individually, the amount payable by  Borrower in connection  with a prepayment of an Advance, as provided in Section 2.04 (Prepayment; Prepayment Lockout;  Prepayment  Premium)  and  calculated  in  accordance  with  the  Prepayment  Premium  Schedule  applicable to such Advance for such Advance, and, collectively, all amounts payable pursuant to  all Prepayment Premium Schedules.   “Prepayment Premium Period End Date” or “Yield Maintenance Period End Date” for any  Advance has the meaning set forth in the applicable Schedule of Advance Terms.   “Prepayment Premium Period Term” or “Yield Maintenance Period Term” for any Advance  has the meaning set forth in the applicable Schedule of Advance Terms.   “Prepayment Premium Schedule” means, individually and collectively, Schedule 4 (Prepayment  Premium) to this Master Agreement for each Advance.   “Prepayment  Premium  Term”  for  any  Advance  has  the  meaning  set  forth  in  the  applicable  Schedule of Advance Terms.   “Prior  Note”  means  that  certain  Promissory  Note  in  the  original  principal  amount  of  $5,040,000.00  dated  April  7,  2015  and  effective  April  13,  2015,  executed  by  CMSJR  Development,  LLC,  a  Florida  limited  liability  company  and  delivered  in  favor  of  Florida  Community Bank, now known as Synovus Bank.   “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 Delivery Deadline” has the meaning set forth in the Mortgaged Property Addition  Schedule.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 28  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Property Jurisdiction” has the meaning set forth in the Security Instrument.   “Property Manager” means Cottonwood Communities Management LLC, a Delaware limited  liability company or any other property manager approved by Lender.    “Property-Related Documents” has the meaning set forth on Schedule 8 attached to this Master  Agreement.   “Property-Related Documents Schedule” means Schedule 8 attached to this Master Agreement.   “Public Listing” means the listing of the shares of stock of an entity on a public stock exchange.   “Public Listing Fee” means a fee in an amount equal to $25,000 if CRI, CROP, or CCI undergoes  a Public Listing, provided however that if CCI is the Key Principal in another credit facility with  Fannie Mae, only one Public Listing Fee is due and payable to Lender in conjunction with the  Fannie Mae credit facilities.   “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.   “Rate Change Date” has the meaning set forth in the applicable Schedule of Advance Terms.   “Release” has the meaning set forth in Section 2.10(b) (Right to Obtain Releases of Mortgaged  Property).   “Release Documents” mean instruments releasing the applicable Security Instrument as a Lien on  a  Mortgaged  Property,  and  UCC-3  Termination  Statements  terminating  the  UCC-1  Financing  Statements, and such other documents and instruments to evidence the Release of such Mortgaged  Property from the Collateral Pool.   “Release Fee” means with respect to any Release effected in accordance with Section 2.10(b)  (Right to Obtain Releases of Mortgaged Property), a fee in the amount of $20,000 per Release  Mortgaged Property.     “Release Mortgaged Property” means the Mortgaged Property to be released pursuant to Section  2.10(b) (Right to Obtain Releases of Mortgaged Property).   “Release Price” has the meaning set forth in the Mortgaged Property Release Schedule.   “Release Request” means a written request, substantially in the form of Exhibit C to this Master  Agreement, to obtain a Release of Mortgaged Property from the Collateral Pool pursuant to Section  2.10(b) (Right to Obtain Releases of Mortgaged Property).      Master Credit Facility Agreement    Form 6001.MCFA                       Page 29  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Remaining  Amortization  Period”  has  the  meaning  set  forth  in  the  applicable  Schedule  of  Advance Terms.   “Remaining Mortgaged Properties” has the meaning set forth in the Mortgaged Property Release  Schedule.   “Rent Roll” means, with respect to any Mortgaged Property, a rent roll prepared and certified by  the owner of such Mortgaged Property, on a form approved by Lender.   “Rents” has the meaning set forth in the Security Instrument.   “Repair Threshold” has the meaning set forth in the Summary of Master 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  Master Terms.   “Repairs Escrow Deposit” has the meaning set forth in the Summary of Master Terms.   “Replacement  Reserve  Account”  means  the  account  established  by  Lender  into  which  the  Replacement Reserve Deposits are deposited to fund the Replacements.   “Replacement Reserve Account Administration Fee” has the meaning set forth in the Summary  of Master Terms.   “Replacement Reserve Account Interest Disbursement Frequency” has the meaning set forth  in the Summary of Master 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 this Master Agreement.   “Replacement Threshold” has the meaning set forth in the Summary of Master Terms.   “Replacements”  means,  individually  and  collectively,  the  Required  Replacements,  Borrower  Requested Replacements and Additional Lender Replacements.   “Request”  means  a  Future  Advance  Request,  an  Addition  Request,  a  Release  Request,  or  a  Conversion Request.   “Request Opinion” means a favorable opinion of counsel (including local counsel, as applicable)  to  Borrower,  as  to  the  due  organization  and  qualification  of  Borrower,  the  due  authorization,     Master Credit Facility Agreement    Form 6001.MCFA                       Page 30  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   execution, delivery and enforceability of each Loan Document executed in connection with the  applicable Request and such other matters as Lender may reasonably require, each dated as of the  Effective Date for the Request, in form and substance satisfactory to Lender in all respects.   “Required Repair Schedule” means that certain Schedule 6 (Required Repair Schedule) to this  Master Agreement.   “Required Repairs” means those items listed on the Required Repair Schedule.   “Required  Replacement  Schedule”  means  that  certain Schedule  5  (Required  Replacement  Schedule) to this Master Agreement.   “Required Replacements” means those items listed on the Required Replacement Schedule.   “Rescinded  Payment”  has  the  meaning  set  forth  in Section  3.12  (Preferences,  Fraudulent  Conveyances, Etc.) of this Master Agreement.   “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 applicable Mortgaged Property to the equivalent  of its physical condition immediately prior to the casualty or to a condition approved by Lender  following a casualty.   “Restricted Ownership Interest” means the requirement that:         (a)   Sole Member owns 100% of the Ownership Interests of Borrower.         (b)   CCOP,  directly  or  indirectly,  owns  at  least  a  majority  of  the  interests  in  Sole  Member and Borrower .         (c)   CCI directly or indirectly, owns at least a majority of the interests in CCOP, Sole  Member and Borrower .    “Re-Underwriting Fee” means a non-refundable fee of $4,850 per Mortgaged Property then in  the Collateral Pool in connection with any Borrow Up.    “Review Fee” means the non-refundable fee of $6,000 payable to Lender.   “S&P”  means  Standard  &  Poor’s  Credit  Markets  Services,  a  division  of  The  McGraw-Hill  Companies, Inc., a New York corporation, and its successors and assigns, if such successors and  assigns shall continue to perform the functions of a securities rating agency.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 31  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Sanctioned Country” means a country subject to either a targeted or comprehensive country- wide sanctions program administered and enforced by OFAC, which list is updated from time to  time.   “Sanctioned Person” means (a) a Person named on the list of “Specially Designated Nationals  and  Blocked  Persons”  maintained  by  OFAC,  available  at  http://www.treasury.gov/resource- center/sanctions/SDN-List/Pages/default.aspx,  or  as  otherwise  published  from  time  to  time;  (b) (1) an agency of the government of a Sanctioned Country, (2) an organization controlled by a  Sanctioned Country, or (3) a Person resident in a Sanctioned Country, to the extent any Person  described in clauses (1), (2) or (3) is the subject of a sanctions program administered by OFAC;  and, (c) a Person whose property and interests in property are blocked pursuant to an Executive  Order or regulations administered by OFAC consistent with the guidance issued by OFAC.   “Schedule of Advance Terms” means, individually and collectively as the context may require  the Schedule(s) of Advance Terms attached to this Master Agreement as Schedule 3 as of the  Initial Effective Date and as such Schedule shall be amended or supplemented with respect to any  Future Advance.   “Security  Documents”  means the Security  Instruments and  any other documents executed by  Borrower or Guarantor from time to time to secure any of Borrower’s or Guarantor’s obligations  under the Loan Documents, as the same may be amended, restated, modified or supplemented  from time to time.   “Security Instrument” means for each Mortgaged Property, a Multifamily Mortgage, Deed of  Trust or Deed to Secure Debt, Assignment of Leases and Rents and Security Agreement given by  a Borrower to or for the benefit of Lender to secure the obligations of Borrower under the Loan  Documents.   With  respect  to  each  Mortgaged  Property  owned  by  a  Borrower,  the  Security  Instrument shall be substantially in the form published by Fannie Mae for use in the state in which  the Mortgaged Property is located.  The amount secured by the Security Instrument shall be equal  to the aggregate original principal amount of all Advances Outstanding in effect from time to time.   “Selected Advance” has the meaning set forth in Section (d) (Application of Release Price) of the  Mortgaged Property Release Schedule.   “Servicing Arrangement” means any arrangement between Lender and the Loan Servicer for loss  sharing or interim advancement of funds.   “Single Purpose” means compliance with Section 4.01(h) (Borrower Status – Representations and  Warranties – Single Purpose Status) and Section 4.02(d) (Borrower Status – Covenants – Single  Purpose Status) of this Master Agreement.   “SPE Owner” means the entities identified on the Ownership Interests Schedule that comply with  the provisions of Section 4.02(d) (Borrower Status – Covenants – Single Purpose Status) and the  SPE Requirements, as such schedule may be updated with the Addition of new Borrowers to this  Master Agreement.  At the time of the Initial Effective Date, there are no SPE Owners other than  Borrowers.     Master Credit Facility Agreement    Form 6001.MCFA                       Page 32  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “SPE Requirements” means those provisions set forth on the SPE Requirements Schedule.   “SPE Requirements Schedule” means Schedule 17 attached to this Master Agreement.   “Sole Member” means  the entity which directly owns 100% of the Ownership  Interest in the  applicable Borrower.     “Staggered Substitution” means a Substitution of Additional Mortgaged Property that occurs  subsequent to the release of the Release Mortgaged Property.   “Substitution” has the meaning set forth in Section 2.10(d) (Right to Substitutions).   “Substitution  Cost  Deposit”  has  the  meaning  set  forth  in  the  Mortgaged  Property  Release  Schedule.   “Substitution Costs” has the meaning set forth in the Mortgaged Property Release Schedule.   “Substitution Deposit” has the meaning set forth in the Mortgaged Property Release Schedule.   “Substitution Fee” means with respect to any Substitution effected in accordance with Section  2.10(d)  (Right  to  Substitutions),  a  fee  in  the  amount  which  is  the  greater  of  (a) 50  basis  points (0.50%)  multiplied  by  the  Allocable  Facility  Amount  of  the  Mortgaged  Property  being  added in connection with the Substitution, and (b) $50,000.   “Summary of Master Terms” means that certain Schedule 2 (Summary of Master Terms) to this  Master Agreement.   “Survey” means the as-built survey of each Mortgaged Property prepared in accordance with the  Underwriting and Servicing Requirements.   “Taxes” has the meaning set forth in the Security Instrument.   “Tenth Anniversary” means the date that is the first day of the month following the date ten (10)  years after the Initial Effective Date   “Term of this Master Agreement” means the period beginning on the Initial Effective Date and  ending on the Termination Date.   “Termination  Date”  means  the  earlier  of  (a) the  date  this  Master  Agreement  is  terminated  pursuant to a Termination Request and (b) at any time during which Advances are Outstanding,  the latest Maturity Date for any Advance Outstanding.   “Termination Documents” means the instruments releasing the Security Instruments as liens on  the  Mortgaged  Properties,  UCC-3  Termination  Statements  terminating  the  UCC-1  Financing  Statements in favor of Lender, and such other documents and instruments necessary to evidence  the  release  of  the  Collateral  from  any  Lien  securing  the  Indebtedness,  and  the  Notes,  all  in      Master Credit Facility Agreement    Form 6001.MCFA                       Page 33  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   connection with the termination of this Master Agreement pursuant to Section 2.11 (Termination  of Master Agreement).   “Termination Request” means a written request, substantially in the form of Exhibit F to this  Master Agreement, to terminate this Master Agreement pursuant to Section 2.11 (Termination of  Master Agreement).   “Three Month LIBOR” means the ICE Benchmark Administration Limited (or any successor  administrator) fixing of the London Inter-Bank Offered Rate for 3-month United States Dollar- denominated deposits as reported by Reuters through electronic transmission.  If the foregoing  index is no longer posted through electronic transmission, is no longer available or, in Lender’s  determination, is no longer widely accepted or has been replaced as the index for similar financial  instruments (regardless of whether the index continues to be posted electronically or available),  Lender will choose a new Index taking into account general comparability to the previous Index  and other factors and provide notice thereof to Borrower.   “Title  Company”  means  the  title  company  which  provides  title  insurance  for  the  Mortgaged  Property.   “Title Policy” means, individually and collectively, the mortgagee’s loan policies of title insurance  issued by the Title Company from time to time in connection with the Advances and insuring the  lien  of  the  Security  Instrument  as  set  forth  therein,  as  approved  by  Lender,  including  any  endorsements attached thereto.   “Transfer” means:         (a)   as used with respect to Ownership Interests, (1) a sale, assignment, pledge, grant or  creation  of  a  lien,  encumbrance  or  security  interest,  transfer  or  other  disposition  (whether  voluntary, involuntary, or by operation of law) in any right, title or interest in any Ownership  Interest  in  a  Borrower  Entity  or  Identified  Party,  or  (2) the  issuance  or  other  creation  of  new  Ownership Interests in a Borrower Entity, or (3) a merger or consolidation of Borrower Entity or  Identified Party into another entity or of another entity into Borrower Entity or Identified Party as  the case may be, or (4) the conversion of a Borrower Entity or Identified Party from one type of  entity to another type of entity, or (5) the amendment, modification or any other change in the  governing instrument or instruments of Borrower Entity or Identified Party which has the effect of  changing  the  relative  powers,  rights,  privileges,  voting  rights  or  economic  interests  of  the  Ownership Interests in such Borrower Entity or Identified Party; or (6) the withdrawal, removal or  involuntary resignation of any owner or manager of any Borrower Entity or Identified Party;         (b)   as used with respect to a Mortgaged Property, (1) a sale, assignment, lease, pledge,  transfer or other disposition (whether voluntary or by operation of law) other than Residential  Leases, Material Commercial Leases or non-Material Commercial Leases permitted by this Master  Agreement,  or  (2) a  grant,  pledge,  creation  or  attachment  of  a  lien  (other  than  a  Permitted  Encumbrance), encumbrance or security interest (whether voluntary, involuntary, or by operation  of law) in, any estate, rights, title or interest in the Mortgaged Property, or any portion thereof.      Master Credit Facility Agreement    Form 6001.MCFA                       Page 34  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Transfer Fee” means  a fee equal to one percent (1%) of the unpaid principal balance of the  Advances Outstanding (or such lesser amount as determined by Lender) payable to Lender.   “Transfer of  the  Restricted  Ownership  Interest” means  a  Transfer  that  causes  any  Person  required to own a minimum percentage of the Ownership Interests of an entity, as set forth in the  definition  of  Restricted  Ownership  Interest,  to  cease  to  own  such  minimum  percentage  of  Ownership Interests.   “Treasury Regulations” means regulations, revenue rulings and other public interpretations of  the  Internal  Revenue  Code  by  the  Internal  Revenue  Service,  as  such  regulations,  rulings  and  interpretations may be amended or otherwise revised from time to time.   “UCC” has the meaning set forth in the Security Instrument.   “UCC Collateral” has the meaning set forth in the Security Instrument.   “Underwriting  and  Servicing  Requirements”  means  Lender’s  overall  requirements  for  Multifamily Residential Properties in connection with similar loans sold or anticipated to be sold  to Fannie Mae, pursuant to Fannie Mae’s then current guidelines, including, requirements relating  to appraisals, property condition assessments, environmental site assessments, and servicing and  asset  management,  as  such  requirements  may  be  amended,  modified,  updated,  superseded,  supplemented or replaced from time to time.   “Valuation” means, for any specified date, with respect to a Multifamily Residential Property,  (a) if an Appraisal of the Multifamily Residential Property was more recently obtained by Lender  than a Capitalization Rate for the Multifamily Residential Property, the Appraised Value of such  Multifamily Residential Property, or (b) if a Capitalization Rate for the Multifamily Residential  Property was more recently obtained by Lender than an Appraisal of the Multifamily Residential  Property, the value derived by dividing—               (1)   the Net Cash Flow of such Multifamily Residential Property, by               (2)   the most recent Capitalization Rate determined by Lender.   Notwithstanding the foregoing, any Valuation for a Multifamily Residential Property calculated  for a date occurring before the first anniversary of the date on which the Multifamily Residential  Property becomes a part of the Collateral Pool shall equal the Appraised Value of such Multifamily  Residential  Property,  unless  Lender  determines  that  changed  market  or  property  conditions  warrant that the value be determined as set forth in the preceding sentence.  “Variable Advance”  means any variable rate execution approved by Lender evidenced by a Variable Note.   “Variable  Fee”  means  for  any  Variable  Advance,  the  number  of  basis  points  per  annum  determined at the time of funding of such Variable Advance by Lender as the Variable Fee for  such Variable Advance.       Master Credit Facility Agreement    Form 6001.MCFA                       Page 35  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

   “Variable  Note”  means  the  promissory  note  (together  with  all  schedules,  riders,  allonges,  addenda, renewals, extensions, amendments and modifications thereto), which will be issued by  Borrower  to  Lender,  concurrently  with  the  funding  of  each  Variable  Advance,  and  which  promissory  note  will  be  the  same  or  substantially  similar  in  form  to  the  then  current  form  of  promissory note utilized by Fannie Mae for variable rate loans with the applicable type of loan  execution.   “Variable  Structured  ARM  Advance”  means  a  loan  made  by  Lender  to  Borrower  that  is  anticipated to be sold to Fannie Mae under the Fannie Mae Structured Adjustable Rate Mortgage  Program.   “Voidable  Transfer”  means  any  fraudulent  conveyance,  preference  or  other  voidable  or  recoverable payment of money or transfer of property.   “Yield Maintenance Period End Date” or “Prepayment Premium Period End Date” for any  Advance has the meaning set forth in the applicable Schedule of Advance Terms.   “Yield Maintenance Period Term” or “Prepayment Premium Period Term” for any Advance  has the meaning set forth in the applicable Schedule of Advance Terms.                        [Remainder of Page Intentionally Blank]      Master Credit Facility Agreement    Form 6001.MCFA                       Page 36  Schedule 1 (Definitions Schedule)       04-18                    © 2018 Fannie Mae  Cottonwood Communities   

 

                                   SCHEDULE 2                  TO MASTER CREDIT FACILITY AGREEMENT                              Summary of Master Terms       I.    GENERAL PARTY AND MULTIFAMILY PROJECT INFORMATION                                   CC  West  Palm,  LLC,  a  Delaware  limited  liability  Borrower                                  company   Lender                          Berkadia Commercial Mortgage LLC                                   Cottonwood   Communities,  Inc.,  a  Maryland                                  corporation  Key Principal                                  Cottonwood Communities O.P., LP, a Delaware limited                                  partnership   Guarantor                       N/A   Multifamily Project             LUMA West Palm Beach                                    ADDRESSES   Borrower’s   General   Business 6340 South 3000 East, Suite 500  Address                         Salt Lake City, UT 84121                                  Gregg Christensen                                  c/o Cottonwood Residential, Inc.                                  6340 South 3000 East, Suite 500  Borrower’s Notice Address                                  Salt Lake City, Utah 84121                                  gchristensen@cottonwoodres.com                                  Facsimile: 801-278-0756                                  LUMA West Palm Beach  Multifamily Project Address     7130 Okeechobee Blvd.                                   West Palm Beach, FL, 33411                                  Gregg Christensen  Key  Principal’s  General  Business c/o Cottonwood Residential, Inc.  Address                         6340 South 3000 East, Suite 500                                  Salt Lake City, Utah 84121                                  Gregg Christensen  Key Principal’s Notice Address  c/o Cottonwood Residential, Inc.                                  6340 South 3000 East, Suite 500      Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 2 (Summary of Master Terms)    04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

                                   Salt Lake City, Utah 84121                                  gchristensen@cottonwoodres.com                                  Facsimile: 801-278-0756  Guarantor’s   General  Business                                  NOT APPLICABLE  Address   Guarantor’s Notice Address      NOT APPLICABLE                                   323 Norristown Road, Suite 300  Lender’s General Business Address Ambler, PA 19002                                  Attn: Servicing – Executive Vice President                                  323 Norristown Road, Suite 300  Lender’s Notice Address         Ambler, PA 19002                                  Attn: Servicing – Executive Vice President                                  323 Norristown Road, Suite 300  Lender’s Payment Address        Ambler, PA 19002                                  Attn: Servicing – Accounting Manager  Facility  Minimum  Underwriting                                  N/A  Strike Rate                            II.   RESERVE INFORMATION                                   Within twelve (12) months after the Effective Date or as                                  otherwise  shown  on  the  Required  Repair  Schedule                                  (provided  that  life  safety  Repairs  shall  be  completed                                  prior  to  the  Effective  Date  unless  the  Mortgaged  Completion Period                                  Property is being acquired in an arm’s-length transaction                                  with an unrelated third party, in which case life safety                                  Repairs shall be completed within one (1) month of the                                  Effective Date).   Initial  Replacement   Reserve                                  As set forth on the Required Replacement Schedule  Deposit   Maximum Inspection Fee          $500   Maximum  Repair  Disbursement                                  One time per calendar quarter  Interval   Maximum  Replacement  Reserve                                  One time per calendar quarter  Disbursement Interval      Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 2 (Summary of Master Terms)    04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

   Minimum  Repairs  Disbursement                                  $10,000  Amount   Minimum  Replacement  Reserve                                  $5,000  Disbursement Amount   Monthly  Replacement  Reserve                                  As set forth on the Required Replacement Schedule   Deposit   Repair Threshold                $10,000   Repairs     Escrow     Account                                  $100, payable one time   Administrative Fee   Repairs Escrow Deposit          As set forth on the Required Repair Schedule   Replacement  Reserve  Account                                  $100, payable annually  Administration Fee   Replacement  Reserve  Account                                  quarterly  Interest Disbursement Frequency   Replacement Threshold           $5,000                         [Remainder of Page Intentionally Blank]       Master Credit Facility Agreement    Form 6001.MCFA                        Page 3  Schedule 2 (Summary of Master Terms)    04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

                                   SCHEDULE 3.1                  TO MASTER CREDIT FACILITY AGREEMENT                              Schedule of Advance Terms   FIXED ADVANCES               III.  INFORMATION FOR $ 35,995,000 FIXED ADVANCE                               MADE MAY 30, 2019    Advance Amount                 $ 35,995,000    Advance Term                   120 months                                   The period beginning on the Effective Date and ending   Advance Year                   on  the  last  day  of  May,  2020,  and  each  successive                                  twelve (12) month period thereafter.                                   [Select only one:]   Amortization Type                    Amortizing                                        Full Term Interest Only                                        Partial Interest Only    Effective Date                 May 30, 2019    First Payment Date             The first day of July, 2019.    First  Principal  and  Interest                                  N/A   Payment Date    Fixed Rate                     3.93%                                   [Select only one:]                                        30/360  (computed  on  the  basis  of  a  three                                  hundred sixty (360) day year consisting of twelve (12)                                  thirty (30) day months).   Interest Accrual Method                                   or                                        Actual/360  (computed  on  the  basis  of  a  three                                  hundred sixty (360) day year and the actual number of                                  calendar days during the applicable month, calculated      Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 3.1 (Schedule of Advance Terms) 04-18                   © 2018 Fannie Mae  Cottonwood Communities  

 

                                   by  multiplying  the  unpaid  principal  balance  of  the                                  Advance 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             120 months    Interest Rate                  The Fixed Rate    Interest Rate Type             Fixed Rate    Last Interest Only Payment Date N/A                                   The first day of June, 2029, or any earlier date on which   Maturity Date                  the unpaid principal balance of the Advance becomes                                  due and payable by acceleration or otherwise.                                    (i)   $117,883.63 for the First Payment Date; and                                   (ii)  for  each  Payment  Date  thereafter  until  the                                         Advance is fully paid:                                         (a)   $110,024.72  if  the  prior  month  was  a                                               28-day month;   Monthly Debt Service Payment          (b)   $113,954.17  if  the  prior  month  was  a                                               29-day month;                                         (c)   $117,883.63  if  the  prior  month  was  a                                               30-day month; and                                         (d)   $121,813.08  if  the  prior  month  was  a                                               31-day month.    Prepayment Lockout Period      0     Remaining Amortization Period  N/A       Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 3.1 (Schedule of Advance Terms) 04-18                   © 2018 Fannie Mae  Cottonwood Communities  

 

                           IV.   YIELD MAINTENANCE   Yield  Maintenance  Period  End   Date                          The last day of November, 2028.       Yield Maintenance Period Term                                 114 months                          [Remainder of Page Intentionally Blank]      Master Credit Facility Agreement    Form 6001.MCFA                        Page 3  Schedule 3.1 (Schedule of Advance Terms) 04-18                   © 2018 Fannie Mae  Cottonwood Communities  

 

                                   SCHEDULE 4.1                  TO MASTER CREDIT FACILITY 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 this Master Agreement.   2.    Prepayment Premium.         Any Prepayment Premium payable under Section 2.04 (Prepayment; Prepayment Lockout;  Prepayment Premium) of this Master Agreement shall be computed as follows:         (a)   If the prepayment is made at any time after the Effective Date and before the Yield  Maintenance Period End Date, the Prepayment Premium shall be the greater of:               (1)   one percent (1%) of the amount of principal being prepaid; or               (2)   the product obtained by multiplying:                     (A)   the amount of principal being prepaid,                     by                     (B)   the difference obtained by subtracting from the Fixed Rate on the              Advance, the Yield Rate (as defined below) on the twenty-fifth (25th) Business              Day preceding (i) the Intended Prepayment Date, or (ii) the date Lender accelerates              the  Advance  or  otherwise  accepts  a  prepayment  pursuant  to  Section 2.06              (Application of Collateral) of this Master Agreement,                     by                     (C)   the present value factor calculated using the following formula:                                       1 - (1 + r)-n/12                                             r                           [r =  Yield Rate                           n =   the number of months  remaining between  (i) either of the                                following: (x) in the case of a voluntary prepayment, the last                                day of the month in which the prepayment is made, or (y) in     Master Credit Facility Agreement     Form 6104.11                         Page 1  Schedule 4.1 (Prepayment Premium        01-11                    © 2011 Fannie Mae  Schedule)  Cottonwood Communities  

 

                                 any  other  case,  the  date  on  which  Lender  accelerates  the                                unpaid principal balance of the Advance and (ii) the Yield                                Maintenance Period End Date.                                 For purposes of this clause (2), the “Yield Rate” means the                                yield  calculated  by  interpolating  the  yields  for  the                                immediately  shorter  and  longer  term  United  States                                “Treasury  constant  maturities”  (as  reported  in  the  Federal                                Reserve Statistical Release H.15 Selected Interest Rates (the                                “Fed  Release”)  under  the  heading  “United  States                                government securities”) closest to the remaining term of the                                Yield  Maintenance  Period  Term,  as  follows  (rounded  to                                three (3) decimal places):                                        (a − b)                                              × (z − y) + b                                        (x − y)                                    a =   the  yield  for  the  longer  United  States  Treasury                                      constant maturity                                 b =   the  yield  for  the  shorter  United  States  Treasury                                      constant maturity                                 x =  the  term  of  the  longer  United  States  Treasury                                      constant maturity                                 y =  the  term  of  the  shorter  United  States  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 United States “Treasury constant                                maturities” subheading in the Fed Release, the yield for such                                term shall be used, and interpolation shall not be necessary.                                 If  publication  of  the  Fed  Release  is  discontinued  by  the                                Federal  Reserve  Board,  Lender  shall  determine  the  Yield                                Rate  from  another  source  selected  by  Lender.   Any                                determination of the Yield Rate by Lender will be binding                                absent manifest error.]         (b)   If the prepayment is made on or after the Yield Maintenance Period End Date but  before the last calendar day of the fourth (4th) month prior to the month in which the Maturity      Master Credit Facility Agreement     Form 6104.11                         Page 2  Schedule 4.1 (Prepayment Premium        01-11                    © 2011 Fannie Mae  Schedule)  Cottonwood Communities  

 

   Date occurs, the Prepayment Premium shall be one percent (1%) of the amount of principal being  prepaid.         (c)   Notwithstanding the provisions of Section 2.04 (Prepayment; Prepayment Lockout;  Prepayment Premium) of this Master 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.                        [Remainder of Page Intentionally Blank]       Master Credit Facility Agreement     Form 6104.11                         Page 3  Schedule 4.1 (Prepayment Premium        01-11                    © 2011 Fannie Mae  Schedule)  Cottonwood Communities  

 

                                   SCHEDULE 5                  TO MASTER CREDIT FACILITY AGREEMENT                            Required Replacement Schedule                                                 Mortgaged Property    Initial Replacement Reserve  Monthly Replacement                                     Deposit                Reserve Deposit  LUMA West Palm Beach      $0                        $4,083                         [Remainder of Page Intentionally Blank]       Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 5 (Required Replacement        04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

                                           SCHEDULE 6                       TO MASTER CREDIT FACILITY AGREEMENT                                     Required Repair Schedule   Mortgaged Property Name:  LUMA West Palm Beach    Immediate Repairs                                           Cost      Escrow     Escrow     Completion                                                                         %          $          Deadline   Life-Safety Issues    None Noted                                                                                            Critical Repairs    Long Term Radon Sampling: Radon is a colorless, odorless,   $600      125%       $750         6 Months   naturally occurring, radioactive, inert, gaseous element formed   by  radioactive  decay  of  radium  atoms.  Limited  sampling   consisting  of  eight  canisters  for  approximately  48  hours  was   performed. Analytical results indicate seven of the eight devices   placed  in  the  units  tested  above  the  EPA  Action  Level  of  4.0   pCi/L. The device from Building 5 Unit 5106 was not returned   due  to  inadvertent  tenant  tampering  but  Partner  was  able  to   obtain a result from Building 5. Based on the elevated results   from  the  samples  obtained,  long-term  radon  sampling  for  no   less than 91-days is recommended in a total of six units: 3108,   2101, 6108, 5104, 4106, and 1104.   Radon Mitigation System: Should the long-term tests continue $21,000  125%       $26,250      6 Months   to  reflect  elevated  radon  gas  concentrations;  Partner   recommends  a  mitigation  system  be  installed  within  the   elevated units to reduce concentrations to an acceptable level.   The mitigation system will consist of either an in-unit fan system   or a sub-slab system.   Deferred Maintenance   Item  of  Note: Regulatory  Compliance  (Banner):  One  open $0                  $0         6 Months   code case for “banners” was reported. The property is now in   compliance  and  is  no  longer  accruing  fines.  The  property   currently has a lien of $4,000 for this violation. Subsequently,   the lien was paid. Partner recommends clearing of the issue with   the city. Due to the limited scope and low anticipated cost, this   issue can be addressed as part of routine maintenance.   Item of Note: Regulatory Compliance (Fire):   No violations $0                   $0         6 Months   reported. However, subsequent to the issuance of our report it   was  reported  that  issues  were  identified  during  the  annual   inspection. Issues included a bell not sounding when the 2nd   floor  is  activated  building  1  and  3.  Empire  Electric  has  since   repaired the issues; however, a reinspection by the city has not   been performed. Partner recommends clearing of the issue with   the city. Due to the limited scope and low anticipated cost, this   issue can be addressed as part of routine maintenance.   TOTAL                                                       $21,600              $27,000        Master Credit Facility Agreement             Form 6001.MCFA                                  Page 1  Schedule 6 (Required Repair Schedule)              04-18                         © 2018 Fannie Mae  Cottonwood Communities  

 

                              [Remainder of Page Intentionally Blank]    Master Credit Facility Agreement             Form 6001.MCFA                                  Page 2  Schedule 6 (Required Repair Schedule)              04-18                         © 2018 Fannie Mae  Cottonwood Communities  

 

                                   SCHEDULE 7                  TO MASTER CREDIT FACILITY AGREEMENT                             General Conditions Schedule         Borrower’s right to close any transaction requested in a Request (other than a Termination  Request) shall be subject to satisfaction of the following General Conditions precedent, in addition  to any other applicable conditions precedent contained in this Master Agreement:         (a)   No Material Adverse Effect.         There has been no Material Adverse Effect since the later of the Initial Effective Date and  the date of the last amendment to this Master Agreement.         (b)   No Default.         There shall exist no Event of Default or Potential Event of Default (that is not otherwise  cured by the closing of such Request).  The closing of such Request shall not result in an Event of  Default or Potential Event of Default.         (c)   No Insolvency.         Receipt by Lender on the Effective Date for the Request of evidence satisfactory to Lender  that neither Borrower nor any general partner or sole member of Borrower is Insolvent or will be  rendered Insolvent by the transactions contemplated by the Loan Documents or, after giving effect  to such transactions, will be left with an unreasonably small capital with which to engage in its  business  or  undertakings,  or will  have intended  to incur, or believe that  it has  incurred, debts  beyond its ability to pay such debts as they mature or will have intended to hinder, delay or defraud  any existing or future creditor.         (d)   Representations and Warranties.         All  representations  and  warranties  made  by  Borrower  and  Guarantor  in  the  Loan  Documents shall be true and correct on the Effective Date for the Request with the same force and  effect as if such representations and warranties had been made on and as of the Effective Date for  the Request.         (e)   Payment of Expenses.         The payment by Borrower of Lender’s and Fannie Mae’s reasonable third party out-of- pocket fees and expenses payable in accordance with this Master Agreement, including the legal  fees and expenses described in Section 4.02(g) (Payments of Costs, Fees, and Expenses) of this  Master Agreement whether or not the Request closes; provided, however, if Borrower makes a  Request and fails to close on a Request for any reason other than the default by  Lender, then  Borrower shall also pay to Lender and Fannie Mae all actual damages incurred by Lender and  Fannie Mae in connection with the failure to close.     Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 7 (General Conditions Schedule) 04-18                   © 2018 Fannie Mae  Cottonwood Communities  

 

         (f)   No Untrue Statements.         The Loan Documents shall not contain any untrue or misleading statement of a material  fact and shall not fail to state a material fact necessary to make the information contained therein  not misleading.         (g)   Covenants.         Borrower and Guarantor are in full compliance with each of the covenants contained in the  Loan Documents, without giving effect to any notice and cure rights of Borrower and Guarantor.         (h)   Delivery of Closing Documents.         The receipt by Lender of the following, each dated as of the Effective Date for the Request,  in form and substance satisfactory to Lender in all respects:               (1)   the Loan Documents relating to such Request including an Organizational        Certificate; and               (2)   such other documents, instruments, approvals (and, if requested by Lender,        certified duplicates of executed copies thereof) and opinions as Lender may reasonably        request.         (i)   Limitation.         Borrower has not submitted more than four (4) Requests during the then current Calendar  Year, provided however that the foregoing shall not apply to any Addition Request and provided  further that Borrower may not submit more than two (2) Requests in any Calendar Quarter.                         [Remainder of Page Intentionally Blank]       Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 7 (General Conditions Schedule) 04-18                   © 2018 Fannie Mae  Cottonwood Communities  

 

                                   SCHEDULE 8                  TO MASTER CREDIT FACILITY AGREEMENT                         Property-Related Documents Schedule         With  respect  to  any  Additional  Mortgaged  Property  or  Future  Advance,  it  shall  be  a  condition precedent that Lender receive from Borrower each of the documents and reports required  by Lender in connection with the addition of such Mortgaged Property to the Collateral Pool or  making  of  such  Future  Advance  and,  each  of  the  following,  each  dated  as  of  the  applicable  Effective Date, in form and substance satisfactory to Lender in all respects (the “Property-Related  Documents”):               (a)   a commitment for the Title Policy applicable to each Mortgaged Property        being added and a pro forma Title Policy based on the commitment in the amount of title        insurance afforded by the Title Policy for each Mortgaged Property being added to the        Collateral Pool (1) if tie-in endorsements are available for all or a portion of the Mortgaged        Properties, in an aggregate amount equal to the combined Allocable Facility Amounts for        all  of  the  Mortgaged  Properties  covered  by  the  tie-in  endorsements,  not  to  exceed  the        amount of the aggregate original principal amount of all Advances Outstanding, or (2) if a        tie-in endorsement is not available for any Mortgaged Property, then with respect to such        Mortgaged Properties not subject to the tie-in endorsement an amount equal to one hundred        twenty-five percent (125%) of the Valuation of such Mortgaged Property not subject to the        tie-in  endorsement  (or  such  lesser  amount  that  is  the  maximum  allowed  by  law  or        regulation);               (b)   a Security Instrument for each Additional Mortgaged Property.  The amount        secured  by  each  Security  Instrument  shall  be  equal  to  the  aggregate  original  principal        amount of all Advances Outstanding in effect from time to time;               (c)   a title instruction letter directing the Title Company to file and/or record in        all applicable jurisdictions, all applicable Loan Documents required by Lender to be filed        or  recorded,  including  duly  executed  and  delivered  original  copies  of  the  Security        Instruments  covering  the  applicable  Mortgaged  Properties  and  UCC-1  Financing        Statements covering the portion of the Collateral comprised of personal property, and other        appropriate instruments, in form and substance satisfactory to Lender and in form proper        for recordation, as may be necessary in the opinion of Lender to perfect the Liens created        by the applicable Security Instruments and any other Loan Documents creating a Lien in        favor of Lender, and the payment of all taxes, fees and other charges payable in connection        with such execution, delivery, recording and filing;               (d)   if the Title Policy for an Additional Mortgaged Property contains a tie-in        endorsement  (as  available),  an  endorsement  to  each  Title  Policy  for  each  Mortgaged        Property in the Collateral Pool containing a tie-in endorsement, adding a reference to the        Additional Mortgaged Property;     Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 8 (Property-Related Documents  04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

               (e)   if required by Lender, amendments to this Master Agreement, the Notes and        the existing Security Instruments, reflecting any Addition, Substitution or Future Advance        and increase in the secured amount of each Security Instrument, if applicable, and, as to        any Security Instrument or Note so amended or if Lender determines that such endorsement        is necessary to maintain the priority of the Lien created in favor of Lender with respect to        the Outstanding Indebtedness or to maintain the validity of any Title Policy, the receipt by        Lender of an endorsement to each Title Policy insuring the amended Security Instruments,        amending the effective date of each Title Policy to the Effective  Date and showing no        additional exceptions to coverage other than the exceptions shown on the initial Effective        Date  for  such  Mortgaged  Property,  Permitted  Encumbrances  and  other  exceptions        approved by Lender, together with any reinsurance agreements required by Lender;               (f)   clean UCC searches, judgment searches and tax lien searches on Borrower,        Guarantor, and SPE Owner and other Identified Parties.               (g)   the Insurance Policy (or a certified copy of the Insurance Policy) applicable        to the Additional Mortgaged Property;               (h)   unless  waived  by  Lender,  the  Survey  applicable  to  the  Additional        Mortgaged Property and approved by Lender (which shall be last revised no more than        forty-five (45) days prior to the applicable Effective Date);               (i)   either  (1) (A) letters  or  other  evidence  with  respect  to  the  Additional        Mortgaged Property from the appropriate Governmental Authority concerning applicable        zoning and building laws, and (B) a zoning endorsement to the Title Policy, (2) a zoning        opinion letter, in each case in substance satisfactory to Lender or (3) a zoning report;               (j)   a Guaranty or Confirmation of Guaranty by each party providing a Guaranty        to Lender;               (k)   a Contribution Agreement or an amendment thereto;               (l)   an  Environmental  Indemnity  Agreement,  amendment  thereto  or        Confirmation of Environmental Indemnity Agreement, as required by Lender;               (m)   an  Assignment  of  Management  Agreement  or  an  amendment  thereto        applicable to the Additional Mortgaged Property, on the standard form required by Lender;               (n)   an assignment of leases and rents applicable to the Additional Mortgaged        Property, if Lender determines one to be necessary or desirable;               (o)   any  required  subordination,  non-disturbance  and  attornment  agreements        and/or estoppel certificates with respect to any commercial leases, master leases and/or        ground lease (if any) affecting the Additional Mortgaged Property; and      Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 8 (Property-Related Documents  04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

               (p)   such  other  documents,  instruments  and  approvals  (and  if  requested  by        Lender, certified duplicates of executed copies thereof) as Lender may reasonably request.                        [Remainder of Page Intentionally Blank]      Master Credit Facility Agreement    Form 6001.MCFA                        Page 3  Schedule 8 (Property-Related Documents  04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

                                   SCHEDULE 9                  TO MASTER CREDIT FACILITY AGREEMENT                                 Conversion Schedule         The  procedure  for  converting  all  or  any  portion  of  a  Variable  Note  to  a  Fixed  Note  contained in this Conversion Schedule shall apply to all Conversion of Variable Notes to Fixed  Notes which are permitted during the Conversion Availability Period.         (a)   Request.         Borrower shall deliver a Conversion Request to Lender.  Each Conversion Request shall  designate the amount of the Variable Note Outstanding to be converted.  Each Conversion Request  shall be in the minimum amount of $5,000,000 or such other amount permitted by Lender.         (b)   Underwriting and Terms of Conversion.               (1)   Coverage and LTV Tests; Failure to Underwrite.               After giving effect to the requested Conversion, the Coverage and LTV Tests, or        Elected Coverage and LTV Tests if previously elected by Borrower, shall be satisfied.  In        the  event  that  the  Coverage  and  LTV  Tests  or  Elected  Coverage  and  LTV  Tests,  as        applicable, would not be satisfied after the proposed Conversion, if Borrower continues to        elect the Conversion, Borrower shall prepay such Advances or a portion of an Advance to        meet the Coverage and LTV Tests or Elected Coverage and LTV Tests, as applicable, and        shall pay all Prepayment Premiums and other fees associated with such prepayment.               (2)   Maturity Date of Converted Advances.               Upon Conversion, such converted Note shall have a Maturity Date specified by        Borrower, provided that such Maturity Date shall be subject to Section 2.03(a)(5) (Maturity        Dates).               (3)   Interest Rate for Converted Note; Guaranty and Servicing Fee.               The Interest Rate for such converted Note shall be determined by Lender at the time        of the Conversion.  The guaranty and servicing fee applicable to such converted Note shall        be determined by Lender prior to such Conversion.         (c)   Conditions Precedent.         The Conversion of all or a portion of a Variable Note to a Fixed Note on the applicable  Effective Date shall be subject to satisfaction of the following conditions precedent:               (1)   satisfaction  of  the  tests  set  forth  in (b)  (Underwriting  and  Terms  of        Conversion) of this Conversion Schedule;     Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 9 (Conversion Schedule)        04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

               (2)   receipt by Lender of:                     (A)   if  required  by  Lender,  an  endorsement  to  each  Title  Policy,              amending the effective date of the Title Policy to the Effective Date and showing              no  additional  exceptions  to  coverage  other  than  the  exceptions  shown  on  the              Effective Date when each Title Policy was issued, Permitted Encumbrances and              other exceptions approved by Lender;                     (B)   clean  UCC  searches,  judgment  searches  and  tax  lien  searches  on              Borrower, Guarantor, and SPE Owner and other Identified Parties;                     (C)   the Conversion Fee;                     (D)   a Request Opinion; and                     (E)   one (1) or more executed, original counterparts  of all Conversion              Documents, dated as of the Effective Date, each of which shall be in full force and              effect and in form and substance satisfactory to Lender in all respects; and               (3)   satisfaction of all General Conditions.         (d)   Closing.         The Effective Date shall occur during the Conversion Availability Period and in connection  with  a  Variable  Structured  ARM  Advance  on  a  Rate  Change  Date.   The  Effective  Date  of  a  Conversion  shall  not  be  earlier  than  thirty (30)  Business  Days  after  Lender’s  receipt  of  the  Conversion Request (or on such other date as Borrower and Lender may agree).  At the closing,  Lender and Borrower shall execute and deliver, at the sole cost and expense of Borrower, in form  and substance satisfactory to Lender, the Conversion Documents.                        [Remainder of Page Intentionally Blank]       Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 9 (Conversion Schedule)        04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

                                   SCHEDULE 10                  TO MASTER CREDIT FACILITY AGREEMENT                         Mortgaged Property Release Schedule         Any  Mortgaged  Property  released  from  the  Collateral  Pool  pursuant  to Section  2.10  (Collateral  Events)  of  this  Master  Agreement  shall  be  subject  to  the  terms  of  this  Master  Agreement including this Mortgaged Property Release Schedule.         (a)   Request.               (1)   To  obtain  a  Release  of  a  Mortgaged  Property  from  the  Collateral  Pool,        Borrower shall deliver a Release Request to Lender.  Borrower shall not be permitted to        re-borrow  any  amounts  that  will  be  prepaid  in  connection  with  the  Release  and  any        prepayments  associated  with  such  release  shall  automatically  result  in  a  permanent        reduction of the Advances Outstanding.               (2)   In connection with a Substitution, Borrower shall simultaneously deliver to        Lender both a completed and executed Release Request and Addition Request pursuant to        the Mortgaged Property Addition Schedule (unless the substitute Additional Mortgaged        Property has not been identified by Borrower, in which case Borrower shall submit the        Addition  Request  not  less  than  sixty (60)  Calendar  Days  prior  to  the  date  on  which        Borrower desires to add such Additional Mortgaged Property, but not later than sixty (60)        Calendar  Days  prior  to  the  Property  Delivery  Deadline).   The  Release  Request  shall        indicate  whether  Borrower  is  requesting  a  simultaneous  Substitution  or  a  Staggered        Substitution  (as  described  in  Section (e)(2)(B)  (Closing)  of  the  Mortgaged  Property        Addition Schedule).         (b)   Underwriting.         Lender shall release a Released Mortgaged Property pursuant to a Release Request if all of  the following conditions are satisfied:               (1)   the resulting Collateral Pool satisfies the Coverage and LTV Tests, or the        Elected Coverage and LTV Tests if previously elected by Borrower; and               (2)   unless the Borrower has previously elected the Elected Coverage and LTV        Tests, the Aggregate Debt Service Coverage Ratio will not be reduced and the Aggregate        Loan to Value Ratio will not be increased as a result of such Release.         Notwithstanding the foregoing, after the Fifth Anniversary, if Borrower has not previously  elected the Elected Coverage and LTV Tests and either of the tests set forth in Section (b)(2) above  are not satisfied after the Release of a Mortgaged Property, such Release shall be permitted if after  giving effect to such Release the Collateral Pool satisfies the Alternate Coverage and LTV Tests  and all other conditions in this Mortgaged Property Release Schedule are satisfied.       Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 10 (Mortgaged Property Release 04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

         (c)   Release Price.               (1)   The “Release Price” for each Release Mortgaged Property means the greater        of                     (A)   one hundred percent (100%) of the Allocable Facility Amount for              the Release Mortgaged Property; and                     (B)   one  hundred  percent (100%)  of  the  amount,  if  any,  of  Advances              Outstanding that are required to be repaid by Borrower to Lender in connection              with the proposed Release of the Release Mortgaged Property from the Collateral              Pool  so  that,  immediately  after  the  Release,  the  provisions  of  Section (b)              (Underwriting) of this Mortgaged Property Release Schedule shall be satisfied.               (2)   In addition to the Release Price, Borrower shall pay to Lender all associated        Prepayment Premiums and other amounts due under the Notes evidencing the Advances        being  repaid.   In  connection  with  a  Staggered  Substitution,  Borrower  shall  post  a        Substitution Deposit (which shall include the Release Price) pursuant to the terms of this        Mortgaged Property Release Schedule.         (d)   Application of Release Price.               (1)   The Release Price for the Release Mortgaged Property shall be applied in        reduction of the principal amounts of the Advances Outstanding in the order selected by        Borrower, provided that (A) any amount of the Note that Borrower elects to prepay must        be prepaid in full or, if the Release Price is not sufficient to do so, the Note shall be the        only  Note  partially  prepaid;  (B)  prepayment  is  permitted  under  such  Note;  (C)  any        Prepayment Premium due and owing is paid; and (D) interest is paid through the end of the        month.  If Borrower does not give Lender direction with respect to the application of the        Release Price or if the selected Note does not comply with the provisions of (A) and (B)        above, then the Release Price shall be applied:                           (i)   first against any Variable Advances Outstanding so long as                    the prepayment is permitted under the Variable Note (and any Prepayment                    Premium due and owing is paid), until any Variable Advance is no longer                    Outstanding  (provided  that,  in  the  event  there  are  multiple  Variable                    Advances Outstanding, Lender shall determine the order of application of                    the Release Price taking into account factors including the unpaid principal                    balances of the Variable Notes, and which Variable Note Outstanding has                    the lowest prepayment costs or highest interest rate);                           (ii)  then  against  any  Fixed  Advances  Outstanding,  so  long  as                    prepayment  is  permitted  under  the  applicable  Fixed  Note  (and  any                    Prepayment Premium due and owing is paid) (provided that, in the event                    there are multiple Fixed Advances Outstanding, Lender shall determine the     Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 10 (Mortgaged Property Release 04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

                     order  of  application  of  the  Release  Price  taking  into  account  factors                    including the unpaid principal balances of the Fixed Notes, and which Fixed                    Note Outstanding has the lowest prepayment costs or the highest interest                    rate).         The  Note  to  be  prepaid  or  partially  prepaid  as  determined  pursuant  to  this  Section (d)        (Application of Release Price), shall be referred to as the “Selected Advance”.               (2)   In connection with a Substitution, Borrower may substitute a Mortgaged        Property that has an estimated Allocable Facility Amount that is less than the Allocable        Facility Amount of the Release Mortgaged Property so long as Borrower pays the Release        Price associated with the difference between such Allocable Facility Amounts.         (e)   Conditions Precedent.         The Release of a Mortgaged Property from the Collateral Pool is subject to the satisfaction  of the following conditions precedent on or before the Effective Date:               (1)   the Selected Advance must be prepayable as of the Effective Date of the        Release of such Mortgaged Property;               (2)   receipt by Lender of the fully executed Release Request;               (3)   immediately after giving effect to the requested Release, the provisions of        Section (b) (Underwriting) of this Mortgaged Property Release Schedule are satisfied;               (4)   receipt by Lender of the Release Price and all amounts owing under Section        (c) (Release Price) of this Mortgaged Property Release Schedule, or, in connection with a        Staggered  Substitution,  receipt  by  Lender  of  the  Substitution  Deposit  (inclusive  of  the        Substitution Cost Deposit) to the extent necessary under Section (g)(1) (The Substitution        Deposit) of this Mortgaged Property Release Schedule;               (5)   receipt by Lender of the Release Fee, or in connection with a Substitution,        receipt by Lender of the Substitution Fee;               (6)   receipt by Lender of all legal fees and expenses in connection with a Release        Request;               (7)   receipt by Lender of one (1) or more executed, original counterparts of all        Release Documents, dated as of the Effective Date, each of which shall be in full force and        effect, in form and substance satisfactory to Lender in all respects;               (8)   if required by Lender, amendments to this Master Agreement, the Notes and        the Security Instruments, reflecting the release of the Release Mortgaged Property from the        Collateral  Pool  and,  as  to  any  Security  Instrument  or  Note  so  amended  or  if  Lender      Master Credit Facility Agreement    Form 6001.MCFA                        Page 3  Schedule 10 (Mortgaged Property Release 04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

         determines that such endorsement is necessary to maintain the priority of the Lien created        in favor of Lender with respect to the Outstanding Indebtedness or to maintain the validity        of any Title Policy, the receipt by Lender of an endorsement to each Title Policy insuring        the Security Instruments, amending the effective date of each Title Policy to the Effective        Date and showing no additional exceptions to coverage other than the exceptions shown        on the initial Effective Date for such Mortgaged Property, Permitted Encumbrances and        other exceptions approved by Lender;               (9)   satisfaction of all applicable General Conditions;               (10)  if the Release Mortgaged Property is one phase of a project, and one or more        other phases of the project are Mortgaged Properties which will remain in the Collateral        Pool (“Remaining Mortgaged Properties”), the Remaining Mortgaged Properties must        be  able  to  be  operated  separately  from  the  Release  Mortgaged  Property  and  any  other        phases of the project which are not Mortgaged Properties, taking into account any cross        use  agreements  or  easements,  access,  utilities,  marketability,  community  services,        ownership and operation of the Remaining Mortgaged Properties and any other relevant        factors pursuant to the Underwriting and Servicing Requirements.  Borrower shall deliver        to Lender evidence satisfactory to Lender that this condition precedent is satisfied prior to        the closing of the transaction that is the subject of the Request.  Borrower acknowledges        that none of the Initial Mortgaged Properties are part of a phase of a project;               (11)  after the Release no Borrower owns the Release Mortgaged Property or any        portion thereof, and any remaining SPE Owner continues to satisfy the SPE Requirements;               (12)  receipt by Lender of endorsements to the tie-in endorsements of the Title        Policies, if deemed necessary by Lender, to reflect the Release.  Notwithstanding anything        to the contrary herein, no Release of any Mortgaged Property in the Collateral Pool shall        be made unless Borrower has confirmed that each remaining Mortgaged Property in the        Collateral Pool has title insurance to Lender (taking into account title insurance coverage        provided by any tie-in endorsements) in an amount equal to or greater than one hundred        twenty-five percent (125%) of the Initial Valuation of such Mortgaged Properties (e.g., any        Mortgaged Property that is not tied to another Mortgaged Property by a tie-in endorsement        shall  have  title  insurance  coverage  equal  to  or  greater  than  one  hundred  twenty-five        percent (125%) of the Initial Valuation of such Mortgaged Properties); and               (13)  receipt by Lender on the Effective Date of a Confirmation of Obligations        and a Confirmation of Guaranty.         (f)   Closing.         If all conditions precedent contained in this Master Agreement are satisfied, Lender shall  cause the Release Mortgaged Property to be Released on an Effective Date selected by Lender,  and occurring within thirty (30) days after Lender’s receipt of the Release Request (or on such  other  date  as  Borrower  and  Lender  may  agree),  by  executing  and  delivering,  and  causing  all     Master Credit Facility Agreement    Form 6001.MCFA                        Page 4  Schedule 10 (Mortgaged Property Release 04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

   applicable parties to execute and deliver, all at the sole cost and expense of Borrower, the Release  Documents.  If approved by Lender, Borrower may prepare the Release Documents and submit  them to Lender for its review.         (g)   Staggered Substitution Specific Terms.         The following provisions are applicable to Staggered Substitutions only:               (1)   The Substitution Deposit.               If a Substitution is a Staggered Substitution, on or before the Effective Date of the        Release  of  the  Release  Mortgaged  Property,  Borrower  shall  deposit  with  Lender  the        “Substitution  Deposit”  described  below  in  the  form  of  cash  in  a  non-interest  bearing        account held by Lender as additional Collateral.  In lieu of (or in addition to) depositing        cash  for  the  Substitution  Deposit,  Borrower  may  post  a  Letter  of  Credit  as  additional        Collateral issued by a financial institution reasonably acceptable to Lender in accordance        with the Letter of Credit Schedule, with a face amount available to be drawn equal to the        Substitution Deposit (less any amount deposited in cash) as additional Collateral.               (2)   Substitution Deposit Amount.                     (A)   The  “Substitution  Deposit”  for  each  proposed  Staggered              Substitution shall be an amount equal to the sum of:                           (i)   the  Release  Price  relating  to  the  Release  Mortgaged                    Property; plus                           (ii)  any  and  all  Prepayment  Premiums,  as  applicable,  for  the                    Selected Advance determined in accordance with the conditions set forth in                    Section (d)  (Application  of  Release  Price)  of  this  Mortgaged  Property                    Release Schedule, as the Advance(s) that shall be prepaid if the Substitution                    fails to take place.  The Prepayment Premium shall be calculated as of the                    end of the month in which the Property Delivery Deadline occurs, as if the                    Selected Advance were to be prepaid in such month; plus                           (iii) estimated  costs,  expenses  and  fees  of  Lender  and  Fannie                    Mae  pertaining  to  the  Substitution  (such  costs,  fees  and  expenses,  the                    “Substitution Cost Deposit”); plus                           (iv)  without  duplication  to  any  other  amounts  included  in  the                    definition of Substitution Deposit, in the event that (1) at the time of the                    Release no Note is prepayable (i.e., all Notes are subject to a lockout period)                    or (2) the Release Price is in excess of all Notes that are open to prepayment,                    all scheduled principal and interest due and owing through the end of the                    lockout period with respect to such Selected Advance.     Master Credit Facility Agreement    Form 6001.MCFA                        Page 5  Schedule 10 (Mortgaged Property Release 04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

                           The  amount  of  the  required  Substitution  Deposit  shall  be                    recalculated  by  Lender  in  the  event  the  Property  Delivery  Deadline  is                    extended  pursuant  to  Section (e)  (Closing)  of  the  Mortgaged  Property                    Addition Schedule, and in the event a Substitution is partially satisfied by                    the Addition of an Additional Mortgaged Property, as further set forth in                    Section (f)(2) (Substitution Deposit Disbursement and Recalculation) of the                    Mortgaged Property Addition Schedule.                     (B)   The Substitution Cost Deposit shall be used by Lender to cover all              reasonable out-of-pocket costs and expenses incurred by Lender and Fannie Mae,              including any out-of-pocket legal fees and expenses incurred by Fannie Mae and              Lender  in  connection  with  such  Substitution  whether  such  Substitution  actually              closes (the “Substitution Costs”).               (3)   Continued Obligations; Restriction on Borrowings.                     (A)   Borrower  shall  continue  to  be  obligated  to  make  any  regularly              scheduled  payments  of  principal  and  interest  due  under  all  Notes  Outstanding              during the Staggered Substitution period.  Until the completion of the Staggered              Substitution, no Future Advances will be permitted unless and until the provisions              of Section (f)(1) (Failure to Close Substitution) of the Mortgaged Property Addition              Schedule are satisfied.                     (B)   In connection with a Staggered Substitution, until the Addition of              the  Additional  Mortgaged  Property  to  the  Collateral  Pool  and  closing  of  the              Substitution  occurs,  no  Future  Advances  or  other  Requests  will  be  permitted,              provided that a Termination Request shall be permitted subject to satisfaction of              the  conditions  in Section  2.11  (Termination  of  Master  Agreement),  and  a              Conversion  pursuant  to  a  Conversion  Request  shall  be  permitted  subject  to              satisfaction  of  the  conditions  in  the  Conversion  Schedule;  provided  further,              however,  with  respect  to  any  Conversion,  the  Substitution  Deposit  shall  be              recalculated based on the provisions in Section (g) (Staggered Substitution Specific              Terms) of this Mortgaged Property Release Schedule and Borrower shall deposit              with  Lender  as  additional  Collateral  all  increases,  if  any,  in  such  Substitution              Deposit within five (5) days after receipt of notice of the same).                     (C)   Notwithstanding anything to the contrary in this Master Agreement,              no Staggered Substitution shall be permitted unless immediately after the Release              of the Release Mortgaged Property the requirements in Section 2.10(e) (Limitation              on Collateral Events) are satisfied.         (h)   Release of Borrower and Guarantor.         Except for any provisions of this Master Agreement and the other Loan Documents that  are expressly stated to survive any release or termination or for any liabilities or obligations of     Master Credit Facility Agreement    Form 6001.MCFA                        Page 6  Schedule 10 (Mortgaged Property Release 04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

   such Borrower or Guarantor which arose prior to the Effective Date of such Release, upon the  Release of a Mortgaged Property, Borrower that is the owner of such Release Mortgaged Property  (assuming Borrower owns no other Mortgaged Property in the Collateral Pool) shall be released  automatically  of  all  obligations  under  the  Loan  Documents,  and  Guarantor  shall  be  released  automatically of all obligations solely related to the Release Mortgaged Property as set forth in  this Master Agreement and the other Loan Documents.  Notwithstanding anything to the contrary  in the foregoing, after such Release, if the applicable Borrower is dissolved, such Borrower shall  have no outstanding obligations under this Master Agreement and the other Loan Documents.                         [Remainder of Page Intentionally Blank]      Master Credit Facility Agreement    Form 6001.MCFA                        Page 7  Schedule 10 (Mortgaged Property Release 04-18                    © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

                                   SCHEDULE 11                  TO MASTER CREDIT FACILITY AGREEMENT                         Mortgaged Property Addition Schedule         Any  Mortgaged  Property  (including  a  Mortgaged  Property  added  in  connection  with  a  Substitution)  added  to  the  Collateral  Pool  pursuant  to Section  2.10  (Collateral  Events)  of  this  Master Agreement shall be subject to the terms of this Master Agreement including this Mortgaged  Property Addition Schedule.         (a)   Request.               (1)   From time to time, Borrower may deliver to Lender an Addition Request to        add one (1) or more Additional Mortgaged Properties to the Collateral Pool.               (2)   Any  Addition  Request  shall  be  accompanied  by  the  Additional  Due        Diligence  Fees  and  Additional  Due  Diligence  Fee  Deposits.   Borrower  shall  provide        Lender  information  similar  to  the  property-related  information  required  by  Lender  in        connection  with  the  Initial  Advances  made  hereunder  and  any  additional  information        Lender may reasonably request.         (b)   Underwriting.                 (1)   The following tests shall be satisfied as of the Effective Date:                     (A)   the proposed Additional Mortgaged Property satisfies the Individual              Property Coverage and LTV Tests;                     (B)   immediately  after  such  Addition,  the  Collateral  Pool  satisfies  the              Coverage and LTV Tests or the Elected Coverage and LTV Tests, if previously              elected by Borrower;                     (C)   in  connection  with  a  Substitution,  unless  the  Borrower  has              previously  elected  the  Elected  Coverage  and  LTV  Tests,  the  Aggregate  Debt              Service Coverage Ratio of the Collateral Pool will not be less than the Aggregate              Debt  Service  Coverage  Ratio  of  the  Collateral  Pool  immediately  prior  to  the              Release (taking into account any paydown Borrower may make in order to comply              with such ratio, subject to the terms of this Master Agreement); and                     (D)   in  connection  with  a  Substitution,  unless  the  Borrower  has              previously elected the Elected Coverage and LTV Tests, the Aggregate Loan to              Value Ratio of the Collateral Pool will not be greater than the Aggregate Loan to              Value Ratio of the Collateral Pool immediately prior to the Release (taking into              account  any  paydown  Borrower  may  make  in  order  to  comply  with  such  ratio,              subject to the terms of this Master Agreement).     Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 11 (Mortgaged Property Addition 04-18                   © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

   Notwithstanding the foregoing, after the Fifth Anniversary, if Borrower has not previously elected  the Elected Coverage and LTV Tests and either of the tests set forth above in Sections (b)(1)(C)  or (b)(1)(D)  (Underwriting)  are  not  satisfied  after  the  Addition  of  a  proposed  Additional  Mortgaged Property, such Substitution shall be permitted if after giving effect to such Substitution,  the Collateral Pool satisfies the Alternate Coverage and LTV Tests and all other conditions in this  Mortgaged Property Addition Schedule are satisfied.   Notwithstanding anything to the contrary in this Master Agreement, no Collateral Event shall be  permitted  unless  immediately  after  such  Collateral  Event  the  provisions  of Section  2.10(e)  (Limitation on Collateral Events) shall be satisfied.               (2)   Lender  shall  evaluate  the  proposed  Additional  Mortgaged  Property  in        accordance with the Underwriting and Servicing Requirements.  Lender shall determine        the Loan to Value Ratio of the proposed Additional Mortgaged Property and the Aggregate        Loan to Value Ratio applicable to the Collateral Pool on the basis of the lesser of:                     (A)   the  acquisition  price  of  the  proposed  Additional  Mortgaged              Property,  if  purchased  by  Borrower  within  twelve (12)  months  of  the  related              Addition Request, and                     (B)   a  Valuation  made  with  respect  to  the  proposed  Additional              Mortgaged Property.               (3)   After  receipt  of  the  Addition  Request  and  all  reports,  certificates  and        documents  required  by  Lender  to  determine  compliance  with  this  Mortgaged  Property        Addition  Schedule,  Lender  shall  notify  Borrower  whether  the  proposed  Additional        Mortgaged  Property  meets  the  requirements  for  Additions  set  forth  in  this  Mortgaged        Property Addition Schedule.               (4)   If  the  proposed  Additional  Mortgaged  Property  meets  the  conditions  set        forth in this Mortgaged Property Addition Schedule, Lender shall notify Borrower of the        Aggregate  Debt  Service  Coverage  Ratio,  the  Aggregate  Loan  to  Value  Ratio,  and  (in        connection with any Future Advance made in connection with an Addition) the Advance        amount that shall result from the Addition.         (c)   Additional Borrower.         On the Effective Date of the Addition of an Additional Mortgaged Property, the owner of  such Additional Mortgaged Property, if such owner is an Additional Borrower, shall become a  party to the Contribution Agreement in a manner satisfactory to Lender.  Any Additional Borrower  shall join into this Master Agreement and other Loan Documents and shall execute and deliver to  Lender an amendment adding such Additional Borrower as a party to this Master Agreement and  revising the  Schedules  and Exhibits  hereto,  as  applicable, to  reflect  the  Additional  Mortgaged  Property and Additional Borrower, in each case satisfactory to Lender.  Any Additional Borrower  and any related general partner, sole member, managing member (unless such sole member or     Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 11 (Mortgaged Property Addition 04-18                   © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

   managing  member  is  CROP)  or  SPE  Owner  must  comply  with  the  provisions  of  this  Master  Agreement,  including  the  Single  Purpose  requirements  of Section  4.01(h)  (Borrower  Status  –  Representations and Warranties – Single Purpose Status) unless otherwise waived by Lender.         (d)   Conditions Precedent.         The Addition of an Additional Mortgaged Property to the Collateral Pool on the applicable  Effective Date is subject to the satisfaction of the following conditions precedent:               (1)   satisfaction  of  the  provisions  of  Section (b)  (Underwriting)  of  this        Mortgaged Property Addition Schedule;               (2)   receipt by Lender of the Additional Due Diligence Fee and the Additional        Due Diligence Fee Deposit;               (3)   satisfaction of all General Conditions;               (4)   receipt by Lender of all Property-Related Documents; and               (5)   receipt by Lender of a Request Opinion.         (e)   Closing.               (1)   Additions.               Other than in connection with a Substitution, if the proposed Additional Mortgaged        Property meets the conditions set forth in this Mortgaged Property Addition Schedule, and        Borrower timely elects to add the proposed Additional Mortgaged Property to a Collateral        Pool, the proposed Additional Mortgaged Property shall be added to the Collateral Pool on        an Effective Date selected by Lender, occurring within thirty (30) calendar days after all        of the conditions for an Addition have been satisfied (or on such other date as Borrower        and Lender may agree).               (2)   Substitutions.               In connection with a Substitution, if the Additional Mortgaged Property satisfies        the conditions set forth herein and Borrower timely elects to proceed with the Substitution,        the  proposed  Additional  Mortgaged  Property  shall  be  added  in  replacement  of  the        Mortgaged Property being released on an Effective Date selected by Lender and occurring:                     (A)   if the Substitution of the proposed Additional Mortgaged Property              is  to  occur  simultaneously  with  the  release  of  the  Release  Mortgaged  Property,              within  sixty (60)  days  after  Lender’s  receipt  of  Borrower’s  Release  Request              indicating there is to be a Substitution (or on such other date to which Borrower              and Lender may agree); or      Master Credit Facility Agreement    Form 6001.MCFA                        Page 3  Schedule 11 (Mortgaged Property Addition 04-18                   © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

                     (B)   if  the  Substitution  is  a  Staggered  Substitution,  within  ninety (90)              days after the release of such Release Mortgaged Property (provided such date shall              be  extended  an  additional  ninety (90)  days  if  Borrower  provides  reasonable              evidence of Borrower’s diligent efforts in finding a suitable proposed Additional              Mortgaged Property) (the “Property Delivery Deadline”) in accordance with the              terms of the Mortgaged Property Release Schedule and this Mortgaged Property              Addition Schedule.         (f)   Staggered Substitutions.               (1)   Failure to Close Substitution.               If the Substitution of the proposed Additional Mortgaged Property does not occur        by the Property Delivery Deadline, then such Borrower shall have irrevocably waived its        right  to  substitute  such  Release  Mortgaged  Property  with  the  proposed  Additional        Mortgaged Property, and the release of the Release Mortgaged Property shall be deemed        to be a Release pursuant to the terms of the Mortgaged Property Release Schedule and shall        trigger payment pursuant to the terms of the Mortgaged Property Release Schedule, plus        the Release Fee.               (2)   Substitution Deposit Disbursement and Recalculation.                     (A)   On or prior to the Effective Date of the Substitution, Lender shall              notify Borrower of the actual amount of the Substitution Costs incurred by Lender              and  Fannie  Mae  in  connection  with  the  Substitution  and  Borrower  shall,  on  or              before the Effective Date of the Substitution, pay to Lender the remainder of such              Substitution  Costs  (if  the  actual  amount  of  the  Substitution  Costs  exceed  the              Substitution  Cost  Deposit  (as  defined  in  Section (g)  (Staggered  Substitution              Specific  Terms)  of  the  Mortgaged  Property  Release  Schedule)  and  the  other              amounts previously deposited with Lender by Borrower) or Lender shall promptly              refund  to  Borrower  any  Substitution  Cost  Deposit  deposited  with  Lender  by              Borrower  in  excess  of  the  Substitution  Costs  (if  the  actual  amount  of  the              Substitution Costs is less than the Substitution Cost Deposit deposited with Lender              by Borrower).                     (B)   At closing of the Substitution, Lender shall disburse or return the              Substitution  Deposit  (as  defined  in  Section (g)  (Staggered  Substitution  Specific              Terms)  of  the  Mortgaged  Property  Release  Schedule),  as  applicable  (less  any              portion of the Substitution Cost Deposit used by Lender to cover all reasonable out-             of-pocket costs and expenses incurred by Lender and Fannie Mae, including any              out-of-pocket  legal  fees  and  expenses  incurred  by  Fannie  Mae  and  Lender  in              connection  with  such  Substitution),  directly  to  Borrower  at  such  time  as  the              conditions precedent for the Substitution have been satisfied, which must occur no              later than the Property Delivery Deadline.      Master Credit Facility Agreement    Form 6001.MCFA                        Page 4  Schedule 11 (Mortgaged Property Addition 04-18                   © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

                     (C)   If,  pursuant  to  Section (b)  (Underwriting)  of  this  Mortgaged              Property Addition Schedule, Borrower substitutes a Mortgaged Property that has              an  estimated  Allocable  Facility  Amount  that  is  less  than  the  Allocable  Facility              Amount of the Release Mortgaged Property and Borrower notifies Lender that no              further property will be substituted or Borrower fails to timely identify an additional              replacement  Mortgaged  Property,  then  Lender  shall  disburse  to  Borrower  that              portion  of  the  Substitution  Deposit  (less  any  portion  of  the  Substitution  Cost              Deposit used by Lender to cover all reasonable out-of-pocket costs and expenses              incurred by Lender and Fannie Mae, including any out-of-pocket legal fees and              expenses incurred by Fannie Mae and Lender in connection with such Substitution)              equal to the Allocable Facility Amount of such substitute Mortgaged Property and              apply  the  remainder  of  the  Substitution  Deposit  pursuant  to  Section (d)              (Application of Release Price) of the Mortgaged Property Release Schedule.                     (D)   Notwithstanding  the  foregoing,  in  the  event  that  (i)  the  Property              Delivery  Deadline  is  extended  pursuant  to  Section (e)(2)(B)  (Closing)  of  this              Mortgaged  Property  Addition  Schedule  or  (ii)  Borrower  adds  an  Additional              Mortgaged Property to the Collateral Pool prior to the Property Delivery Deadline              but the addition of such Additional Mortgaged  Property has not in and of itself              satisfied the requirements of this Mortgaged Property Addition Schedule, Lender              shall recalculate the Substitution Deposit.  Any reduction, if any, in the Substitution              Deposit shall be returned to Borrower, or in the case of a Letter of Credit, such              Letter of Credit shall be reduced by such reduction in the Substitution Deposit.  Any              increase, if any, in the Substitution Deposit shall be paid by Borrower to Lender              within three (3) Business Days of notice from Lender.                        [Remainder of Page Intentionally Blank]       Master Credit Facility Agreement    Form 6001.MCFA                        Page 5  Schedule 11 (Mortgaged Property Addition 04-18                   © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

                                           SCHEDULE 12                       TO MASTER CREDIT FACILITY AGREEMENT                                  INTENTIONALLY DELETED.       Master Credit Facility Agreement             Form 6001.MCFA                                  Page 1  Schedule 12 (Additional Collateral                 04-18                         © 2018 Fannie Mae  Schedule)  Cottonwood Communities  

 

                                           SCHEDULE 13                       TO MASTER CREDIT FACILITY AGREEMENT                                   Ownership Interests Schedule                                                                                                   Master Credit Facility Agreement             Form 6001.MCFA                                  Page 1  Schedule 13 (Ownership Interests Schedule)         04-18                         © 2018 Fannie Mae  Cottonwood Communities  

 

                                   SCHEDULE 14                  TO MASTER CREDIT FACILITY AGREEMENT                               Future Advance Schedule         Any Future Advance made under this Master Agreement shall be subject to the terms of  this Master Agreement including this Future Advance Schedule.         (a)   Request.         Borrower shall deliver a Future Advance Request to Lender.  Any Future Advance Request  for  a  Future  Advance  shall  be  in  the  minimum  amount  of  $5,000,000  or  such  other  amount  permitted by Lender; provided however that any Borrow Up shall be in the minimum amount of  $3,000,000.          (b)   Underwriting.         Any Future Advance shall be subject to satisfaction of the following tests:               (1)   if the Future Advance is being made in connection with a Future Advance        pursuant to Section 2.02(c)(2)(B) (Making Advances), the Coverage and LTV Tests, or the        Elected Coverage and LTV Tests if previously elected, would be satisfied and all of the        Underwriting and Servicing Requirements shall be satisfied; or               (2)   if the Future Advance is being made in connection with the Addition of an        Additional  Mortgaged  Property,  the  conditions  of  Section (b)  (Underwriting)  of  the        Mortgaged Property Addition Schedule would be satisfied; or               (3)   if  the  Future  Advance  is  a  refinance  of  an  Outstanding  Advance,  such        Advance  may  be  for  an  amount  that  is  greater  than  the  than  the  applicable  Advance        Outstanding provided that both (a) the Coverage and LTV Tests would be satisfied, or the        Elected Coverage and LTV Test, if previously triggered by Borrower would be satisfied,        as applicable, and (b) the other terms and conditions of this Future Advance Schedule are        satisfied. A refinance of an Advance Outstanding is not a Borrow-Up under this Master        Agreement.         (c)   Conditions Precedent.         The  funding  of  any  Future  Advance  on  the  applicable  Effective  Date  is  subject  to  the  satisfaction of the following conditions precedent:               (1)   satisfaction of the underwriting tests set forth in (b) (Underwriting) above;               (2)   Lender’s  determination  that  the  proposed  borrower,  key  principal,  and        guarantor  meet  all  of  Lender’s  eligibility,  credit,  management  and  other  standards        customarily applied by Lender in connection with the origination or purchase of similar     Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 14 (Future Advance Schedule)   04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

         mortgage finance structures on similar Multifamily Residential Properties at the time of        the Future Advance Request for the Future Advance;               (3)   if required by Lender, if the Future Advance is a Variable Advance, receipt        by Lender at least five (5) days prior to the applicable Effective Date of the confirmation        of an  Interest  Rate  Cap  commitment, in  accordance  with the Cap  Security  Agreement,        effective as of the Effective Date;               (4)   if required by Lender, if the Future Advance is a Variable Advance, receipt        by Lender, within fifteen (15) days after the applicable Effective Date, of Interest Rate Cap        Documents, in accordance with the Cap Security Agreement, effective as of the Effective        Date;               (5)   if the Future Advance is a Fixed Advance, delivery of one or more Fixed        Notes, duly executed by Borrower, in the amount and reflecting all of the terms of the Fixed        Advance;               (6)   if  the  Future  Advance  is  a  Variable  Advance,  delivery  of  one  or  more        Variable Notes, duly executed by Borrower, in the amount and reflecting all of the terms        of the Variable Advance;               (7)   receipt  by  Lender  of  the  completed  Schedule  of  Advance  Terms  and        Prepayment Premium Schedule, in each case applicable to the Future Advance, together        with an amendment to this Master Agreement in form and substance acceptable to Lender        incorporating such Schedules in their entirety to this Master Agreement;               (8)   if  the  Future  Advance  is  made  in  connection  with  the  Addition  of  a        Mortgaged  Property,  satisfaction  of  the  conditions  set  forth  in  the  Mortgaged  Property        Addition Schedule including payment receipt by Lender of all fees required pursuant to the        Mortgaged Property Addition Schedule;               (9)   receipt by Lender of the Additional Origination Fee;               (10)  if  the  Future  Advance  is  a  Borrow  Up,  receipt  by  Lender  of  the  non-       refundable Re-Underwriting Fee;               (11)  receipt by Lender of any other costs and expenses including all legal fees        incurred by Lender and Fannie Mae;               (12)  satisfaction of all General Conditions;               (13)  receipt by Lender of a Request Opinion; and               (14)  receipt  by  Lender  of  all  applicable  Property-Related  Documents,  if        applicable.      Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 14 (Future Advance Schedule)   04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

         (d)   Closing of Future Advance.         If the conditions set forth in Section 2.02 (Advances) for a Future Advance are satisfied,  Lender shall make the requested Future Advance on an Effective Date selected by Lender (or on  such other date as Borrower and Lender may agree).                        [Remainder of Page Intentionally Blank]       Master Credit Facility Agreement    Form 6001.MCFA                        Page 3  Schedule 14 (Future Advance Schedule)   04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

                                   SCHEDULE 15                  TO MASTER CREDIT FACILITY AGREEMENT                               Letter of Credit Schedule         Any  Letter of Credit  required or permitted pursuant to this Master Agreement shall be  subject to the terms of this Master Agreement and this Letter of Credit Schedule.  Any Letter of  Credit must be issued by a financial institution satisfactory to Fannie Mae (“Issuer”).         (a)   Issuer; Letter of Credit Requirements.         The Letter of Credit shall be in form and substance satisfactory to Lender and Lender shall  be entitled (pursuant to Section (b) (Draws Under Letter of Credit) below) to draw under such  Letter of Credit solely upon presentation of a sight draft to the Issuer.  Any Letter of Credit shall  be for a term of at least three hundred sixty-four (364) days (provided that in connection with a  Substitution, the term of any Letter of Credit shall be no earlier than the date ten (10) Business  Days after the Property Delivery Deadline).         (b)   Draws Under Letter of Credit.         Lender shall have the right to draw monies under the Letter of Credit:               (1)   upon the occurrence of an Event of Default;               (2)   if thirty (30) days prior to the expiration of the Letter of Credit, either the        Letter of Credit has not been extended for a term of at least three hundred sixty-four (364)        days (provided that in connection with a Substitution, the term of any Letter of Credit shall        be at least until the date ten (10) Business Days after the Property Delivery Deadline) or        Borrower has not replaced the Letter of Credit with substitute cash collateral in the amount        required by Lender;               (3)   upon the downgrading of the ratings of the long-term or short-term debt        obligations of the Issuer below a level satisfactory to Fannie Mae, the failure of Borrower        within five (5) days after notice of such downgrading to deliver to Lender either (A) an        acceptable  replacement  Letter  of  Credit  or  (B)  substitute  cash  collateral  in  the  amount        required by Lender; or               (4)   upon the failure to close a Substitution pursuant to Section (f)(1) (Failure to        Close Substitution) of the Mortgaged Property Addition Schedule.         (c)   Deposit to Cash Collateral Agreement.         If Lender draws under the Letter of Credit pursuant to this Master Agreement or Section  (b) (Draws Under Letter of Credit) above for reasons other than an Event of Default, Lender shall  deposit such draw monies into a Cash Collateral Account until the earliest of the following events  occurs:     Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 15 (Letter of Credit Schedule) 04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

               (1)   Borrower presents an acceptable replacement Letter of Credit and Lender        agrees to accept such Letter of Credit (provided that any agreement by Lender to accept a        replacement  Letter  of  Credit  will  be  conditioned  upon  Borrower’s  payment  of  all        administrative and legal costs incurred by Lender and Fannie Mae in connection with the        replacement of the Letter of Credit);               (2)   the applicable provisions of this Master Agreement pursuant to which the        Letter of Credit was provided are satisfied;               (3)   Borrower pays all amounts due and payable under the Loan Documents and        Lender releases the liens of all Security Instruments;               (4)   Lender consents to Borrower’s request to apply the funds to the principal        balance  of  a  Note  specified  by  Borrower  and  to  any  Prepayment  Premium  due  in        connection with such application; or               (5)   an  Event  of  Default  occurs  and  Lender  elects  to  apply  the  proceeds  as        described below in Section (d) (Default Draws) of this Letter of Credit Schedule.         (d)   Default Draws.         If Lender draws under the Letter of Credit pursuant to Section (b) (Draws Under Letter of  Credit) of this Letter of Credit Schedule as a result of an Event of Default, Lender shall have the  right to use monies drawn under the Letter of Credit for any of the following purposes:               (1)   to  pay  any  amounts  required  to  be  paid  by  Borrower  under  the  Loan        Documents (including, without limitation, any amounts required to be paid to Lender under        this Master Agreement);               (2)   to prepay any Note (on Borrower’s behalf, or on its own behalf, if Lender        becomes  the  owner  of  any  Mortgaged  Property)  in  whole  or  in  part,  including  any        Prepayment Premium;               (3)   to deposit monies into the Cash Collateral Account; or               (4)   to exercise any other remedies available to Lender pursuant to this Master        Agreement.         (e)   Legal Opinion.         Prior to or simultaneous with the delivery of any new Letter of Credit (but not the extension  of  any  existing  Letter  of  Credit),  Borrower  shall  cause  the  Issuer’s  counsel  to  deliver  a  legal  opinion satisfactory in form and substance to Lender.                        [Remainder of Page Intentionally Blank]      Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 15 (Letter of Credit Schedule) 04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

                                           SCHEDULE 16                       TO MASTER CREDIT FACILITY AGREEMENT                     Exceptions to Representations and Warranties Schedule   None.                                          [Remainder of Page Intentionally Blank]      Master Credit Facility Agreement             Form 6001.MCFA                                  Page 1  Schedule 16 (Exceptions to Representations         04-18                         © 2018 Fannie Mae  and Warranties Schedule)  Cottonwood Communities  

 

                                   SCHEDULE 17                  TO MASTER CREDIT FACILITY AGREEMENT                             SPE Requirements Schedule         Each Borrower under this Master Agreement is required to comply with the terms of this  SPE Requirements Schedule.  Borrowers may not be general partnerships, individuals or trusts.  If  a  Borrower  is  a  corporation  or  multi-member  limited  liability  company  (whose  beneficial  ownership interests are not ultimately held by a single entity), then none of the shareholders or  members  are  required  to  be  SPE  Owners.   If  an  entity  Controlling  Borrower  is  a  trust,  the  beneficiaries are not required to be SPE Owners in compliance with the terms hereof.  If Borrower  satisfies the terms below, no other direct or indirect entity Controlling Borrower are required to be  SPE Owners.  Otherwise, all other entities Controlling Borrower, directly or indirectly, must be  SPE Owners as set forth below until the requirements herein are satisfied.         As  used  herein,  SPE  Owner  shall  mean  a  corporation,  limited  partnership  or  limited  liability company that complies with the following requirements:         (a)   since the date of its formation and at all times on and after the date thereof, has  complied  with Section  4.01(h)  (Borrower  Status  –  Representations  and  Warranties  –  Single  Purpose Status) of this Master Agreement;         (b)   at all times on and after the date the applicable Borrower becomes party to this  Master  Agreement,  shall  comply  with  the  requirements  in Section 4.02(d)  (Borrower Status  –  Covenants – Single Purpose Status) of this Master Agreement;         (c)   if such entity is a limited partnership, it has and shall have at least one general  partner and has and shall have, as its only general partners, SPE Owners each of which is a (1)  corporation, (2) single-member limited liability company in compliance with the requirements of  (d) below, or (3) a limited partnership in compliance with (c)(1) and (c)(2) above.  General partners  may not be individuals or trusts; and         (d)   if such entity is a single-member limited liability company:               (1)   it shall have two (2) natural persons or one (1) entity that is not a member        of the company, that has signed its limited liability company agreement and that, under the        terms of such limited liability company agreement, becomes a member of the company        immediately prior to the withdrawal or dissolution of the last remaining member of the        company;               (2)   it  shall  include  in  its  limited  liability  agreement  or  operating  agreement        requisite  language  under  Applicable  Law  (if  any)  to  prevent  premature  dissolution  or        liquidation; and               (3)   for  non-Delaware  single-member  limited  liability  companies,  Borrower        shall provide an opinion of counsel (acceptable to Lender) that the provisions of the limited     Master Credit Facility Agreement    Form 6001.MCFA                        Page 1  Schedule 17 (SPE Requirements Schedule) 04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

         liability  company  agreement  or  operating  agreement  relating  to  the  springing  member        provisions  in (d)(1)  and  dissolution  provisions  in (d)(2)  above  are  consistent  with        Applicable Law and enforceable against Borrower and its sole member.         The sole member of an entity may be an individual provided the provisions of this Section  (d) are satisfied.                         [Remainder of Page Intentionally Blank]       Master Credit Facility Agreement    Form 6001.MCFA                        Page 2  Schedule 17 (SPE Requirements Schedule) 04-18                    © 2018 Fannie Mae  Cottonwood Communities  

 

                                           SCHEDULE 18                       TO MASTER CREDIT FACILITY AGREEMENT                                        Intentionally Deleted.        Master Credit Facility Agreement           Form 6228 [modified]                              Page 1  Schedule 18 (Waiver of Imposition                  04-12                         © 2012 Fannie Mae  Deposits)  Cottonwood Communities  

 

                                   SCHEDULE 19                  TO MASTER CREDIT FACILITY AGREEMENT                             Replacement Reserve Waiver         The foregoing Master Agreement is hereby modified as follows:         1.    Capitalized terms used and not specifically defined herein have the meanings given  to such terms in this Master Agreement.         2.    The  Definitions  Schedule  is  hereby  amended  by  adding  the  following  new  definition in the appropriate alphabetical order:         “Reduced Monthly Replacement Reserve Deposit” has the meaning set forth in        the Summary of Master Terms.         3.    Section  13.01(b)  (Monthly  Replacement  Reserve  Deposits)  of  this  Master  Agreement is hereby amended by adding the following provisions to the end thereof:               (1)   Partial  or  Full  Waiver  of  Monthly  Replacement  Reserve                    Deposit.               Notwithstanding the foregoing or anything in this Master Agreement to the        contrary, on the Effective Date, Lender has agreed to partially reduce, defer or fully        waive Borrower’s obligation to make full Monthly Replacement Reserve Deposits.         Subject  to  the  provisions  of  Section  13.01(b)(2)  (Reinstatement  of  Monthly        Replacement  Reserve  Deposit),  Borrower  shall  deposit  the  applicable  Reduced        Monthly Replacement Reserve Deposit into the Replacement Reserve Account on        each Payment Date.               (2)   Reinstatement of Monthly Replacement Reserve Deposit.               In the event that (A) at any time during the Term of this Master Agreement        Lender  provides  written  notice  to  Borrower  that  the  Mortgaged  Property  is  not        being  maintained  in  accordance  with  the  requirements  set  forth  in  the  Loan        Documents, or (B) an Event of Default has occurred and is continuing under any of        the Loan Documents, then upon the earlier of (i) the date specified by Lender in        such written notice to Borrower or (ii) the first day of the first calendar month after        the occurrence of such Event of Default, Borrower shall commence paying the full        Monthly  Replacement  Reserve  Deposits  throughout  the  remaining  Term  of  this        Master Agreement.                        [Remainder of Page Intentionally Blank]       Master Credit Facility Agreement   Form 6220 [modified]                   Page 1  Schedule 19 (Replacement Reserve Waiver) 08-14                   © 2014 Fannie Mae  Cottonwood Communities  

 

                                  SCHEDULE 19-A                  TO MASTER CREDIT FACILITY AGREEMENT            ADDENDA TO SCHEDULE 2 – SUMMARY OF MASTER TERMS                             Replacement Reserve Waiver                     V.    REPLACEMENT RESERVE – DEPOSITS     Reduced  Monthly  Replacement                                  $0   Reserve Deposit                        [Remainder of Page Intentionally Blank]              Master Credit Facility Agreement  Form 6102.04 [modified]                 Page 1  Schedule 19-A (Addenda to Schedule 2 -  04-12                    © 2012 Fannie Mae  Replacement Reserve Waiver)  Cottonwood CommunitiesLAND PURCHASE AND SALE AGREEMENT 

This Purchase and Sale Agreement (“Agreement”) dated as of June 3, 2019 is entered into by and between Yaxi International Inc. (“Seller”) and Chang Cheng-Sung (“Buyer”) concerning the approximately 37,273.68 square meters of land in Darong Section, Taichung City, Beitun District, Taiwan (R.O.C.), (the “Land”), which Land is more particularly described in Exhibit A attached and incorporated into this Agreement. 

NOW, THEREFORE, for good and valuable consideration, the adequacy of which is hereby acknowledged, the parties hereto agree as follows: 

ARTICLE 1 

DEFINITIONS 

1.1 Defined Terms: For purposes of this Agreement, the following terms shall have the following meanings: 

A. Closing: The term “Closing” shall mean the date upon which the Property is conveyed to Buyer, as evidenced by the Land Office’s issuance of the Land Ownership Certificate evidencing transfer of the property from Seller to Buyer. 

B. Intangible Property. The term “Intangible Property” means all of Seller’s interests in and to any and all licenses, approvals, certificates, permits, warranties, guaranties, indemnities and claims that relate to the Real Property. 

C. Official Records: The term “Official Records” shall mean the official records of the appropriate Land Office to which the land transfer is reported and duly recorded. 

D. Permitted Exceptions: The term “Permitted Exceptions” shall mean only the following: 

 

	 

	(i)

	real property taxes not yet due and payable; 

 

	 

	(ii)

	supplemental taxes applicable to the sale of the Property to Buyer; 

 

	 

	(iii)

	any other encumbrance of the Property claimed through Buyer or its successors and assigns or which arise out of the Buyer’s entry onto the Property prior to the Closing; and 

 

	 

	(iv)

	any other exceptions to title approved in writing by Buyer. 

The provisions of the above subparagraph notwithstanding, the term “Permitted Exceptions” shall not include (i) any lien for payment of delinquent real property taxes or assessments, (ii) any supplemental taxes imposed as a consequence of events occurring prior to the Closing Date, (iii) any deed of trust, and (iv) any property assessments (other than those identified in writing and agreed between the parties as permitted exceptions), mortgage, judgment or other lien encumbering the Property (other than those claimed through Buyer). 

E. Property: The term “Property” means the Real Property and the Intangible Property. 

F. Real Property: The term “Real Property” means the Land together with all improvements located thereon, if any, and all rights, privileges, easements and appurtenances to the Land, if any. 

G. Land Office: The term “Land Office” shall mean a governmental authority which has an exclusive jurisdiction over the registration of real property in Taichung City, Taiwan (R.O.C.). 

ARTICLE 2 

TERMS OF PURCHASE 

2.1 Agreement to Purchase and Sell: Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to purchase from Seller, the Property on the terms and conditions set forth in this Agreement. 

1

2.2 Purchase Price: The “Purchase Price” for the Property shall be TWD 31,646,915. The Purchase Price for the Property shall be paid by the Buyer to Seller by transferring to Seller the 1,068,091 shares of common stock in San Lotus Holding Inc., par value US$1 at Closing.  

2.3 Possession of Property; As-Is Purchase: Subject to the terms and conditions of this Agreement, (A) possession of the Property shall be delivered to Buyer at Closing, in its then existing condition, “as-is,” without implied or express warranty or representation and with all patent and latent defects; (B) Buyer acknowledges that Buyer will have had the opportunity to conduct any studies and investigations of the Property as fully as Buyer desires; and (C) Buyer will have had the right to observe the physical characteristics and condition of the Property to the extent it desires. Buyer acknowledges that neither Seller nor any of Seller’s employees, agents or representatives have made any representations, warranties or agreements by or on behalf of Seller not contained in this Agreement as to any matters concerning the Property, the present use or condition thereof, or the suitability of the Property for Buyer’s intended use thereof. 

ARTICLE 3 

COVENANTS AND REPRESENTATIONS 

3.1 Representations of Seller: Seller individually makes the following representations to Buyer, which representations are accurate as of the Effective Date and which will be accurate on the date of Closing: 

A. This Agreement and all documents executed by Seller which are to be delivered to Buyer at the Closing are duly authorized, executed and delivered by the Seller or the duly authorized representatives of Seller, are legal, valid and binding obligations of Seller enforceable against Seller in accordance with their respective terms, are sufficient to convey title (if they purport to do so), and do not violate any provision of any agreement or judicial order to which Seller or the Property is subject. 

B. The documents made available by Seller for inspection by Buyer with respect to the Property (i) constitute all written documents which are in the possession or under the control of Seller pertaining to the Property requested by Buyer or material to the sale of the Property to Buyer, and (ii) are either complete originals thereof or are complete and correct copies of the originals. 

C. There is no litigation, condemnation, legal proceeding, action or other proceeding pending or, to Seller’s knowledge, threatened against Seller or the Property before any court or administrative agency which does or will materially affect the Property, or the use or value thereof. 

D. No hazardous, toxic or other material regulated by any governmental authority as a danger to human health or the environment has been placed on or about the Property by Seller or any of its agents, employees or contractors in violation of applicable laws, rules, regulations, codes or legal orders. 

 

E. There are no service contracts, maintenance contracts, management contracts, construction contracts, architectural or design contracts or similar agreements to which Seller is a party and which relate to the Real Property that will survive the Closing and be binding upon Buyer. 

The foregoing representations and warranties shall survive the Closing. 

3.2 Covenant of Seller: So long as the Agreement is in full force and effect: Seller shall not do any of the following without Buyer’s prior written consent: (i) enter into any contract relating to the maintenance, operation, or development of the Property that will survive the Closing; (ii) grant any easement, lease any part of the Property, or encumber the Property.

3.3 Covenant of Buyer: Buyer shall keep confidential (in the same manner as for its other confidential information) the Seller’s records and documents concerning the Property, if Buyer does not acquire the Property; provided, however, that (i) so long as this Agreement remains in effect Buyer may disclose such information to its advisors, consultants, representatives, investors and prospective lenders who agree to abide by the confidentiality provisions of this Agreement, (ii) Buyer and its advisors, consultants, representatives, investors and prospective lenders may disclose such information as may be required by law or court order, and (iii) if Buyer acquires the Property, Buyer shall be free to thereafter use such information and to disclose it to other parties. In the event that this Agreement terminates for any reason prior to the Closing, Buyer shall, 

2

within ten (10) business days following a request by Seller, deliver to Seller all documentation, studies, investigations and reports prepared for Buyer by third parties which relate to the condition or legal compliance (or non-compliance) of the Property, provided that in no event shall Buyer be required to provide internal analyses, any proprietary information or any materials which are subject to the attorney-client privilege. Such items shall be delivered without representation or recourse of any kind. 

 

ARTICLE 4 

TRANSFER OF TITLE

4.1 Transfer of Title: At Closing, Buyer and Seller shall go to the Land Office where the Buyer shall be registered as the owner and Buyer shall obtain Land Ownership Certificates from Seller. 

4.2 Delivery of Documents: 

A. By Seller: On the Closing Date, Seller shall deliver to Buyer the following documents: 

 

	 

	1.

	The Grant Deed, duly executed and acknowledged by Seller for recording in the Official Records; 

 

	 

	2.

	A Statement of Deed Tax Due and Request that Amount of Tax not be Made a Part of the Permanent Record in the Official Records; 

 

	 

	3.

	Such other documents as may be required to close in accordance with this Agreement.

 

 

B. By Buyer: On the Required Closing Date, Buyer shall deliver to Seller all documents as may be required to close in accordance with this Agreement. 

	 

 4.3 Prorations: At Closing: 

A. All real property taxes, if not exclusively imposed on either the Buyer or the Seller, shall be prorated to the date of Closing. 

B. The interest on any assessments secured by the Property shall be prorated to the date of Closing. 

C. The principal balance of any assessments secured by the Property that are Permitted Exceptions shall be assumed by Buyer, without credit to the Purchase Price, at Closing. 

D. The principal balance of any assessments secured by the Property that are not Permitted Exceptions shall be paid by Seller on or before Closing. 

E. All tax liens against Seller encumbering the Property shall be paid by Seller on or before Closing. 

 

ARTICLE 5

GENERAL PROVISIONS 

5.1 Risk of Loss. Seller shall bear all risk of loss related to the Property, whether by casualty, condemnation or otherwise, prior to the Closing. If, prior to the Closing, all or any portion of the Real Property is taken by eminent domain (or is the subject of a pending taking which has not yet been consummated) or is the subject of a casualty, then (i) Seller shall notify Buyer in writing of such fact promptly after obtaining knowledge thereof, (ii) if the event is a casualty that is reasonably expected to cost more than $250,000 in excess of the insurance proceeds that will be available to Buyer for the restoration or if the event is an eminent domain proceeding, Buyer may elect to terminate this Agreement by giving written notice to Seller on or before to the Closing Date. The failure by Buyer to so elect in writing to terminate this Agreement prior to the Closing Date shall be deemed an election not to terminate this Agreement. If Buyer elects or is deemed to have elected not to terminate this Agreement, then no adjustment shall be made to the Purchase Price for any damage or condemnation prior to the Closing, but at the Closing, Seller shall assign to Buyer all of its right, title and interest (a) in the proceeds of any casualty insurance policy for damage to the Property prior to the Closing, and (b) in any condemnation proceeds with respect to the Property. If Buyer is permitted to terminate pursuant to this Section and timely elects to terminate this Agreement, then the Deposit shall be 

3

returned to Buyer and the parties shall have no further obligations under this Agreement except for those obligations which expressly survive any termination of this Agreement. 

5.2 Brokerage Commissions: Each party hereto represents to the other that it has not incurred, directly or indirectly, any liability on behalf of the other party for the payment of any real estate brokerage commissions, finder’s fees or other compensation to any agents, brokers, salesmen, or finders by reason of the consummation of the transaction contemplated by this Agreement.

5.3 Attorneys’ Fees: Should any litigation be commenced between the parties hereto concerning the Property, this Agreement, or the rights and duties of either Seller or Buyer in relation thereto, whether it be an action for damages, equitable or declaratory relief, the prevailing party (or parties) in such litigation shall be entitled, in addition to all other relief as may be granted by a court of law, reasonable sums as and for attorneys’ fees in the discretion of the court. 

 

5.4 Notices: Any communication, notice or demand of any kind whatsoever which either party may be required or may desire to give to or serve upon the other shall be in writing and delivered by personal service, by an express delivery (such as Federal Express) or courier service that provides receipted delivery service, delivery charges prepaid, by electronic email communication (and, if the communication, notice or demand seeks to declare a default under or terminate this Agreement, confirmed in writing sent by a written communication by one of the other permitted methods, addressed to the recipient in accordance with the notice information beneath its signature to this Agreement. Any party may change its address for notice by written notice given to the other in the manner provided in this Section 5.4. Any such communication, notice or demand shall be deemed to have been duly given or served (i) on the date personally served, if by personal service, or (ii) on the date of confirmed delivery, if by express delivery or courier service, or electronic email communication, provided, however, that any communication, notice or demand received by courier delivery or electronic communication that is received after 5:00 p.m. (local time for the addressee) shall be deemed to have been received on the next business day. 

5.5 Assignment: This Agreement shall be binding upon and shall inure to the benefit of the parties and their successors and assigns. 

5.6 Mutual Cooperation: Each party hereto agrees to execute and deliver such other and further instruments and documents as may reasonably be requested by the other to carry out this Agreement. Each party hereto covenants to exercise good faith in fulfilling its obligations under this Agreement. 

5.7 Authority and Execution: Each person executing this agreement on behalf of a party represents and warrants, on behalf of the entity it represents, that (i) such person is duly and validly authorized to do so on behalf of the entity it purports to so bind, and (ii) if such entity is a partnership, corporation or trustee, that such partnership, corporation or trust, such entity has full right and authority to enter into this Agreement and perform all of its obligations hereunder. 

5.8 Entire Agreement; Modification; Interpretation: This Agreement and the attachments hereto constitute the entire agreement between the parties and shall supersede all other agreements respecting the subject matter of this Agreement. This Agreement shall not be modified by either party by oral-representation or agreement made before or after the execution of this Agreement. All modifications to this Agreement must be in writing signed by both Seller and Buyer. The headings contained in this Agreement are for the purpose of reference only and shall not limit or define the meaning thereof. This Agreement shall be interpreted in accordance with the laws of Taiwan and, in the event that any provision of this Agreement is adjudged to be, for any reason, unenforceable or invalid, it is the specific intent of the parties that the remainder hereof shall subsist and be and remain in full force and effect. Each party has engaged legal counsel and understands all terms of this Agreement. Any rule of construction that would interpret this Agreement, for or against any party, shall have no effect. 

5.9 Time: Time is of the essence for the performance of each and every covenant and for the satisfaction of each and every condition contained in this Agreement. 

 

5.10 No Other Negotiations. Seller, for itself and its successors and assigns, agree that they will not solicit or accept any offer from, enter into any negotiations with, or supply any information to, any 

4

prospective purchaser, ground lessor, lender, or tenant of the Property, unless and until this Agreement terminates in accordance with its terms. 

5.11 Buyer’s Liability. No present or future partner, member, director, officer, shareholder, employee, advisor, affiliate or agent of or in Buyer or any affiliate of Buyer (“Buyer Parties”), shall have any personal liability, directly or indirectly, under or in connection with this Agreement or any agreement made or entered into under or in connection with the provisions of this Agreement, or any amendment or amendments to any of the foregoing made at any time or times, heretofore or hereafter, and Seller and their successors and assigns and, without limitation, all other persons and entities, shall look solely to Buyer and Buyer’s assets, respectively, for the payment of any claim or for any performance, and Seller hereby waives any and all such personal liability of such Buyer Parties. For purposes of this Section 6.11, no negative capital account or any contribution or payment obligation of any partner or member in Buyer shall constitute an asset of Buyer. The limitations of liability contained in this Section 5.11 shall survive the Closing or any earlier termination of this Agreement. 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of June 3, 2019. 

 

	Buyer: 

	 

 

 

/s/ Chang Cheng-Sung

Chang Cheng-Sung

	 

 

Seller: 

	 

	 

 

/s/ Chien Yang, Yu

Chien Yang, Yu, Director

Yaxi International Inc.

                                                                                                                                                            Exhibit A

DRAFT LAND TRANSFER REPORT

 

	Land Seller

	Location

	Land Lot #

	Area of Registered Land(m2)

	Value of Interest(TWD)

	 

Yaxi International Inc.

 

 

	 

Darong Section, Taichung City, Beitun District, Taiwan (R.O.C.)

	 

0233

0163

0164

	 

10,263.45

12,417.08

14,593.15

37,273.68 Total

	 

31,646,915

5

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