UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(
d
) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 30, 2017
Bluerock Residential
Growth REIT, Inc.
(Exact Name of Registrant as Specified in Its
Charter)
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Maryland
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001-36369
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26-3136483
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(State or other jurisdiction of incorporation
or organization)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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712 Fifth Avenue, 9th Floor
New York, NY 10019
(Address of principal executive offices)
(212) 843-1601
(Registrant’s telephone number, including
area code)
None.
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K/A
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined
in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected
not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.
¨
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ITEM 1.01
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ENTRY INTO MATERIAL DEFINITIVE AGREEMENT
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The information in
this Report set forth under Items 2.01 and 2.03 is incorporated herein by reference.
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ITEM 2.01
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COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
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The disclosure below
describes our acquisition of Hunter’s Creek and Metrowest. All figures provided below are approximate.
On October 30, 2017,
Bluerock Residential Growth REIT, Inc., or the Company, through its operating partnership, Bluerock Residential Holdings,
L.P., a Delaware limited partnership, or the Operating Partnership, (i) through BRG Hunters Creek, LLC, a Delaware limited
liability company and a wholly owned subsidiary of the Operating Partnership, or BRG Hunters Creek, through BR Hunters Creek,
LLC, a Delaware limited liability company and a wholly owned subsidiary of BRG Hunters Creek, or Hunter’s Creek Owner,
acquired a 532-unit, apartment community located in Orlando, Florida, known as Arium Hunter’s Creek, or Hunter’s
Creek, and (ii) through BRG Metrowest, LLC, a Delaware limited liability company and a wholly owned subsidiary of the
Operating Partnership, or BRG Metrowest, through BR Metrowest, LLC, a Delaware limited liability company and a wholly owned
subsidiary of BRG Metrowest, or Metrowest Owner, acquired a 510-unit apartment community located in Orlando, Florida, known
as Arium at Metrowest, or Metrowest, and together with Hunter’s Creek, the Portfolio, and each, a Property.
Hunter’s Creek Owner and Metrowest Owner are managed by BRG Hunters Creek Manager, LLC, a Delaware limited liability
company, or Hunter’s Creek Manager, and BRG Metrowest Manager, LLC, a Delaware limited liability company, or Metrowest
Manager, respectively. Each of Hunter’s Creek Manager and Metrowest Manager is a wholly owned subsidiary of the
Operating Partnership.
The total purchase price
paid for Hunter’s Creek and Metrowest was approximately $97.5 million and $86.0 million, respectively, for a total purchase
price of approximately $183.5 million for the Portfolio. The sale was based on arm’s length negotiations with an unaffiliated
seller. In evaluating the Portfolio as a potential investment, a variety of factors were considered, including overall valuation
of net rental income, expected capital expenditures, submarket demographics, community features and amenities, location, price
per unit and occupancy.
Following our acquisition
of the Portfolio, the organizational structure with respect to the ownership of the Portfolio is such that: (i) Hunter’s
Creek is wholly owned by Hunter’s Creek Owner, which is wholly owned by BRG Hunters Creek, and (ii) Metrowest is wholly owned
by Metrowest Owner, which is wholly owned by BRG Metrowest, and each of BRG Hunters Creek and BRG Metrowest is wholly owned by
the Operating Partnership.
The material features of the Purchase and Sale
Agreement by and among (i) CH Realty VII – Carroll MF Orlando Hunter’s Creek, L.L.C., CH Realty VII – Carroll
MF Orlando Metrowest, L.L.C. and, or the Sellers, and Bluerock Real Estate, L.L.C., dated as of September 7, 2017, which was assigned
to Hunter’s Creek Owner and Metrowest Owner, and other information related to the Portfolio and our acquisition of the same
are described in our Current Report on Form 8-K, dated September 20, 2017, such disclosure being incorporated by reference into
this Item 2.01.
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ITEM 2.03
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CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT
OF REGISTRANT
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Senior Loan Financing
for the Acquisition of Hunter’s Creek
The acquisition of Hunter’s
Creek was funded with approximately $28.5 million of gross equity and a senior mortgage loan made by Walker & Dunlop, LLC,
a Delaware limited liability company, on behalf of Freddie Mac, or the Hunter’s Creek Lender, to Hunter’s Creek Owner
in the original principal amount of approximately $72.3 million, or the Hunter’s Creek Loan, which is secured by Hunter’s
Creek.
The Hunter’s
Creek Loan will mature on November 1, 2024 and bears interest at a fixed rate of 3.65%. The first payment on the Hunter’s Creek Loan will be due December 1, 2017. The Hunter’s Creek
Loan requires monthly, interest only payments on the first day of each calendar month from December 1, 2017 up to, but
not including, December 1, 2019.
Thereafter and up to and
including November 1, 2024, principal and accrued interest will be payable by Hunter’s Creek Owner in monthly payments on
the first day of each calendar month. The amount of each monthly installment of principal and interest payable will be $330,715.81.
On November 1, 2024, all remaining indebtedness under the Hunter’s Creek Loan, including all principal and interest, will
be due and payable by Hunter’s Creek Owner.
At
the closing of Hunter’s Creek, we entered into a Guaranty to provide certain standard scope non-recourse carveout guarantees
(and related hazardous materials indemnities) to the Loan which generally call for protection against losses by the Hunter’s
Creek Lender for so-called “bad acts,” such as misrepresentations, and may include full recourse liability for more
significant events such as bankruptcy, or the Guaranty. Our financial obligations under the Loan and the Guaranty, as discussed
in this Item 2.03, arose on October 30, 2017 in connection with the closing of the Loan.
Financing
for the Acquisition of Metrowest
The acquisition of
Metrowest was funded with approximately $55.0 million of gross equity and approximately $32.5 million in borrowings,
pursuant to that certain Credit Agreement by and between the Operating Partnership and KeyBank National Association, or the
Credit Facility Lender, dated as of October 4, 2017. Metrowest Owner became a party to the Credit Agreement as a Subsidiary
Guarantor, pursuant to that certain Joinder Agreement executed by Metrowest Owner and delivered to the Credit Facility Lender
on October 30, 2017. In connection with the Credit Agreement, Metrowest Owner entered into a Subsidiary Guaranty.
Pursuant to the Subsidiary Guaranty, Metrowest Owner agreed to guaranty all payments under the Credit Agreement by the
Operating Partnership and any of its subsidiaries that join in the Credit Agreement.
The material features
of the Credit Agreement are described in our Current Report on Form 8-K, dated October 11, 2017, such disclosure being incorporated
by reference into this Item 2.03.
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ITEM 9.01
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FINANCIAL STATEMENTS AND EXHIBITS
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(a)
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Financial Statements of Real Estate Acquired
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Because it is impracticable
to provide the required financial statements for the acquired real property described in Item 2.01 at the time of this filing and
no financial statements (audited or unaudited) are available at this time, we hereby confirm that we intend to file the required
financial statements on or before January 12, 2018 by amendment to this Current Report on Form 8-K.
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(b)
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Pro Forma Financial Information
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See paragraph (a) above.
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Exhibit
Number
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Description
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10.1
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Multifamily Loan and Security Agreement by and between BR Hunters Creek, LLC and Walker & Dunlop, LLC, dated as of October 30, 2017
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10.2
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Florida – Amended and Restated Multifamily Note by BR Hunters Creek, LLC for the benefit of Walker & Dunlop, LLC, dated as of October 30, 2017
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10.3
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Amended and Restated Multifamily Mortgage, Assignment of Rents and Security Agreement by BR Hunters Creek, LLC for the benefit of Walker & Dunlop, LLC, dated as of October 30, 2017
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10.4
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Guaranty Multistate by Bluerock Residential Growth REIT, Inc. for the benefit of Walker & Dunlop, LLC, dated as of October 30, 2017
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10.5
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Assignment of Management Agreement and Subordination of Management Fees by and among BR Hunters Creek, LLC, Walker & Dunlop, LLC and Carroll Management Group, LLC
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10.6
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Assignment of Security Instrument by and between Walker & Dunlop, LLC and Freddie Mac, dated as of October 30, 2017
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10.7
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Joinder Agreement by BR Metrowest, LLC and delivered to KeyBank National Association, dated as of October 30, 2017
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10.8
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Subsidiary Guaranty by BR Metrowest, LLC in favor of KeyBank National Association, dated as of October 30, 2017
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10.9
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Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing by BR Metrowest, LLC in favor of KeyBank National Association, dated as of October 30, 2017
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10.10
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Collateral Assignment of Leases and Rents by and between BR Metrowest, LLC and KeyBank National Association, dated as of October 30, 2017
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10.11
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Joinder to Environmental Indemnity by BR Metrowest and delivered to KeyBank National Association, dated as of October 30, 2017
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10.12
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Collateral Assignment and Security Agreement in respect of Contracts, Licenses and Permits by BR Metrowest, LLC to KeyBank National Association, dated as of October 30, 2017
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10.13
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Collateral Assignment of Management Agreement by and between BR Metrowest, LLC and KeyBank National Association, dated as of October 30, 2017
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SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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BLUEROCK RESIDENTIAL GROWTH REIT, INC.
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Dated: November 3, 2017
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By:
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/s/ Christopher J. Vohs
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Christopher J. Vohs
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Chief Accounting Officer and Treasurer
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EXHIBIT INDEX
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Exhibit
Number
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Description
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10.1
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Multifamily Loan and Security Agreement by and between BR Hunters Creek, LLC and Walker & Dunlop, LLC, dated as of October 30, 2017
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10.2
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Florida – Amended and Restated Multifamily Note by BR Hunters Creek, LLC for the benefit of Walker & Dunlop, LLC, dated as of October 30, 2017
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10.3
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Amended and Restated Multifamily Mortgage, Assignment of Rents and Security Agreement by BR Hunters Creek, LLC for the benefit of Walker & Dunlop, LLC, dated as of October 30, 2017
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10.4
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Guaranty Multistate by Bluerock Residential Growth REIT, Inc. for the benefit of Walker & Dunlop, LLC, dated as of October 30, 2017
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10.5
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Assignment of Management Agreement and Subordination of Management Fees by and among BR Hunters Creek, LLC, Walker & Dunlop, LLC and Carroll Management Group, LLC
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10.6
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Assignment of Security Instrument by and between Walker & Dunlop, LLC and Freddie Mac, dated as of October 30, 2017
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10.7
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Joinder Agreement by BR Metrowest, LLC and delivered to KeyBank National Association, dated as of October 30, 2017
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10.8
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Subsidiary Guaranty by BR Metrowest, LLC in favor of KeyBank National Association, dated as of October 30, 2017
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10.9
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Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing by BR Metrowest, LLC in favor of KeyBank National Association, dated as of October 30, 2017
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10.10
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Collateral Assignment of Leases and Rents by and between BR Metrowest, LLC and KeyBank National Association, dated as of October 30, 2017
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10.11
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Joinder to Environmental Indemnity by BR Metrowest and delivered to KeyBank National Association, dated as of October 30, 2017
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10.12
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Collateral Assignment and Security Agreement in respect of Contracts, Licenses and Permits by BR Metrowest, LLC to KeyBank National Association, dated as of October 30, 2017
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10.13
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Collateral Assignment of Management Agreement by and between BR Metrowest, LLC and KeyBank National Association, dated as of October 30, 2017
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Exhibit 10.1
Freddie Mac Loan Number: 932896871
Property Name: ARIUM Hunter's Creek
MULTIFAMILY LOAN AND SECURITY AGREEMENT
(Revised 5-5-2017)
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Borrower:
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BR HUNTERS CREEK, LLC
, a Delaware limited liability company
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Lender:
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WALKER & DUNLOP, LLC
, a Delaware limited liability company
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Date:
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As of October 30, 2017
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Loan Amount:
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$72,294,000.00
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Reserve Fund Information
(See Article IV)
Imposition Reserves
(fill in “Collect” or “Deferred” as appropriate for each item)
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Deferred
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Insurance
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Collect
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Taxes
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Deferred
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water/sewer
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N/A
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Ground Rents
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Deferred
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assessments/other charges
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Repairs & Repair Reserve
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Repairs required?
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x
Yes
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¨
No
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If No, is radon testing required?
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¨
Yes
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¨
No
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If Yes, is a Reserve required?
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x
Yes
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¨
No
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Green Improvements required?
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x
Yes
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¨
No
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If Yes, is a Reserve required?
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x
Yes
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¨
No
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If Yes to Repairs and/or Green Improvements, is a Letter of Credit required?
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¨
Yes
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x
No
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Replacement Reserve
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x
Yes
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If Yes:
x
Funded
¨
Deferred
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¨
No
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Rental Achievement Reserve
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¨
Yes
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If Yes:
¨
Cash
¨
Letter of Credit
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x
No
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Rate Cap Agreement Reserve
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¨
Yes
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x
No
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Other Reserve(s)
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¨
Yes
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x
No
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If Yes, specify:_________________________________________________________________
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Lease-Up Transaction
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¨
Yes
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x
No
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If Yes, is a Reserve required?
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¨
Yes
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¨
No
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If Yes, is a Letter of Credit required?
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¨
Yes
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¨
No
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Multifamily Loan and Security Agreement
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Page
i
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Attached Riders
(See Article XIII)
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Name of Rider
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Date Revised
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Rider to Multifamily Loan and Security Agreement - Repair Reserve Fund
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5-5-2017
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Rider to Multifamily Loan and Security Agreement - Replacement Reserve Fund – Immediate Deposits
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7-1-2014
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Rider to Multifamily Loan and Security Agreement – Cooperation with Rating Agencies and Investors
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1-27-2015
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Rider to Multifamily Loan and Security Agreement – Guarantor Requirements
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2-13-2017
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Rider to Multifamily Loan and Security Agreement – Affiliate Transfer
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5-5-2017
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Rider to Multifamily Loan and Security Agreement – Green Improvements
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10-11-2017
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Rider to Multifamily Loan and Security Agreement – Termite or Wood Damaging Insect Control
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3-1-2014
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Exhibit B Modifications
(See Article XIV)
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Are any Exhibit B modifications attached?
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x
Yes
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¨
No
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Multifamily Loan and Security Agreement
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Page
ii
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TABLE
OF CONTENTS
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ARTICLE I DEFINED TERMS; CONSTRUCTION
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1
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1.01
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Defined Terms
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1
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1.02
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Construction
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1
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ARTICLE II LOAN
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2
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2.01
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Loan Terms
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2
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2.02
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Prepayment Premium
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2
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2.03
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Exculpation
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2
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2.04
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Application of Payments
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2
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2.05
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Usury Savings
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2
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2.06
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Floating Rate Mortgage - Third Party Cap Agreement
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2
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ARTICLE III LOAN SECURITY AND GUARANTY
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3
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3.01
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Security Instrument
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3
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3.02
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Reserve Funds
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3
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3.03
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Uniform Commercial Code Security Agreement
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3
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3.04
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Cap Agreement and Cap Collateral Assignment
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4
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3.05
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Guaranty
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4
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3.06
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Reserved
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4
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3.07
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Reserved
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4
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3.08
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Reserved
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4
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ARTICLE IV RESERVE FUNDS AND REQUIREMENTS
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4
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4.01
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Reserves Generally
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4
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4.02
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Reserves for Taxes, Insurance and Other Charges
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5
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4.03
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Repairs; Repair Reserve Fund
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6
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4.04
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Replacement Reserve Fund
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6
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4.05
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Rental Achievement Provisions
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6
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4.06
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Debt Service Reserve
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6
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4.07
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Rate Cap Agreement Reserve Fund
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6
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4.08
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through 4.20 are Reserved
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6
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ARTICLE V REPRESENTATIONS AND WARRANTIES
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6
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5.01
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Review of Documents
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6
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5.02
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Condition of Mortgaged Property
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6
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5.03
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No Condemnation
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6
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5.04
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Actions; Suits; Proceedings
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6
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5.05
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Environmental
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7
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5.06
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Commencement of Work; No Labor or Materialmen’s Claims
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8
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5.07
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Compliance with Applicable Laws and Regulations
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8
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5.08
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Access; Utilities; Tax Parcels
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8
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5.09
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Licenses and Permits
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9
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5.10
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No Other Interests
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9
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5.11
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Term of Leases
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9
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5.12
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No Prior Assignment; Prepayment of Rents
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9
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5.13
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Illegal Activity
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9
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5.14
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Taxes Paid
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9
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5.15
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Title Exceptions
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10
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5.16
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No Change in Facts or Circumstances
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10
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5.17
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Financial Statements
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10
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5.18
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ERISA – Borrower Status
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10
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5.19
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No Fraudulent Transfer or Preference
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11
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5.20
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No Insolvency or Judgment
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11
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5.21
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Working Capital
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11
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Multifamily Loan and Security Agreement
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Page
iii
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5.22
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Cap Collateral
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11
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5.23
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Ground Lease
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11
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5.24
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Purpose of Loan
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11
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5.25
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Through 5.39 are Reserved
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12
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5.40
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Recycled SPE Borrower
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12
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5.41
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Recycled SPE Equity Owner
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12
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5.42
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through 5.50 are Reserved
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12
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5.51
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Survival
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12
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5.52
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through 5.57 are Reserved
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12
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5.58
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Prohibited Parties Lists; Economic Sanctions Laws
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12
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5.59
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through 5.62 are Reserved
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13
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ARTICLE VI BORROWER COVENANTS
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13
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6.01
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Compliance with Laws
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13
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6.02
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Compliance with Organizational Documents
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13
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6.03
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Use of Mortgaged Property
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13
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6.04
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Non-Residential Leases
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14
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6.05
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Prepayment of Rents
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16
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6.06
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Inspection
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16
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6.07
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Books and Records; Financial Reporting
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17
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6.08
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Taxes; Operating Expenses; Ground Rents
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20
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6.09
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Preservation, Management and Maintenance of Mortgaged Property
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21
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6.10
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Insurance
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25
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6.11
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Condemnation
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29
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6.12
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Environmental Hazards
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32
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6.13
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Single Purpose Entity Requirements
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34
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6.14
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Repairs and Capital Replacements
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39
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6.15
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Residential Leases Affecting the Mortgaged Property
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39
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6.16
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Litigation; Government Proceedings
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40
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6.17
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Further Assurances and Estoppel Certificates; Lender’s Expenses
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40
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6.18
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Cap Collateral
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41
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6.19
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Ground Lease
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41
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6.20
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ERISA Requirements
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41
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6.21
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through 6.52 are Reserved
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41
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6.53
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Economic Sanctions Laws
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41
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6.54
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through 6.58 are Reserved
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42
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ARTICLE VII TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER
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42
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7.01
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Permitted Transfers
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42
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7.02
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Prohibited Transfers
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43
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7.03
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Conditionally Permitted Transfers
|
44
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7.04
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Preapproved Intrafamily Transfers
|
48
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7.05
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Lender’s Consent to Prohibited Transfers
|
50
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7.06
|
SPE Equity Owner Requirement Following Transfer
|
52
|
|
7.07
|
Additional Transfer Requirements - External Cap Agreement
|
52
|
|
7.08
|
Reserved
|
53
|
|
7.09
|
Reserved
|
53
|
|
|
|
|
|
ARTICLE VIII SUBROGATION
|
53
|
|
|
|
|
|
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES
|
53
|
|
9.01
|
Events of Default
|
53
|
|
9.02
|
Protection of Lender’s Security; Security Instrument Secures Future Advances
|
56
|
|
9.03
|
Remedies
|
56
|
|
9.04
|
Forbearance
|
57
|
|
9.05
|
Waiver of Marshalling
|
58
|
|
Multifamily Loan and Security Agreement
|
Page
iv
|
|
ARTICLE X RELEASE; INDEMNITY
|
58
|
|
10.01
|
Release
|
58
|
|
10.02
|
Indemnity
|
58
|
|
10.03
|
Reserved
|
62
|
|
|
|
|
|
ARTICLE XI MISCELLANEOUS PROVISIONS
|
63
|
|
11.01
|
Waiver of Statute of Limitations, Offsets and Counterclaims
|
63
|
|
11.02
|
Governing Law; Consent to Jurisdiction and Venue
|
63
|
|
11.03
|
Notice
|
63
|
|
11.04
|
Successors and Assigns Bound
|
64
|
|
11.05
|
Joint and Several (and Solidary) Liability
|
64
|
|
11.06
|
Relationship of Parties; No Third Party Beneficiary
|
64
|
|
11.07
|
Severability; Amendments
|
65
|
|
11.08
|
Disclosure of Information
|
65
|
|
11.09
|
Determinations by Lender
|
65
|
|
11.10
|
Sale of Note; Change in Servicer; Loan Servicing
|
65
|
|
11.11
|
Supplemental Financing
|
65
|
|
11.12
|
Defeasance
|
69
|
|
11.13
|
Lender’s Rights to Sell or Securitize
|
73
|
|
11.14
|
Cooperation with Rating Agencies and Investors
|
73
|
|
11.15
|
Letter of Credit Requirements
|
73
|
|
11.16
|
through 11.18 are Reserved
|
74
|
|
11.19
|
State Specific Provisions
|
74
|
|
11.20
|
Time is of the Essence
|
74
|
|
|
|
|
|
ARTICLE XII DEFINITIONS
|
74
|
|
|
|
|
|
ARTICLE XIII INCORPORATION OF ATTACHED RIDERS
|
89
|
|
|
|
|
ARTICLE XIV INCORPORATION OF ATTACHED EXHIBITS
|
89
|
|
|
|
|
|
ARTICLE XV RESERVED
|
89
|
|
Multifamily Loan and Security Agreement
|
Page
v
|
MULTIFAMILY
LOAN AND SECURITY AGREEMENT
THIS MULTIFAMILY LOAN AND SECURITY AGREEMENT
(“
Loan Agreement
”) is dated as of the 30
th
day of October, 2017 and is made by and between
BR
HUNTERS CREEK, LLC
, a Delaware limited liability company (“
Borrower
”), and
WALKER & DUNLOP, LLC
,
a Delaware limited liability company (together with its successors and assigns, “
Lender
”).
RECITAL
Lender has agreed to make and Borrower
has agreed to accept a loan in the original principal amount of $72,294,000.00 (“
Loan
”). Lender is willing to
make the Loan to Borrower upon the terms and subject to the conditions set forth in this Loan Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of these
promises, the mutual covenants contained in this Loan Agreement and other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties agree as follows:
|
|
ARTICLE I
|
DEFINED TERMS; CONSTRUCTION.
|
|
|
1.01
|
Defined Terms.
Each defined term in this Loan Agreement will have the meaning ascribed to
that term in Article XII unless otherwise defined in this Loan Agreement.
|
|
|
(a)
|
The captions and headings of the Articles and Sections of this Loan Agreement are for convenience
only and will be disregarded in construing this Loan Agreement.
|
|
|
(b)
|
Any reference in this Loan Agreement to an “Exhibit,” an “Article” or a
“Section” will, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit attached
to this Loan Agreement or to an Article or Section of this Loan Agreement.
|
|
|
(c)
|
All Exhibits and Riders attached to or referred to in this Loan Agreement are incorporated by reference
in this Loan Agreement.
|
|
|
(d)
|
Any reference in this Loan Agreement to a statute or regulation will be construed as referring
to that statute or regulation as amended from time to time.
|
|
|
(e)
|
Use of the singular in this Loan Agreement includes the plural and use of the plural includes the
singular.
|
|
|
(f)
|
As used in this Loan Agreement, the term “including” means “including, but not
limited to” and the term “includes” means “includes without limitation.”
|
|
|
(g)
|
The use of one gender includes the other gender, as the context may require.
|
|
|
(h)
|
Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument
or other document in this Loan Agreement will be construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications
set forth in this Loan Agreement), and (ii) any reference in this Loan Agreement to any Person will be construed to include such
Person’s successors and assigns.
|
|
Multifamily Loan and Security Agreement
|
Page
1
|
|
|
(i)
|
Any reference in this Loan Agreement to “Lender’s requirements,” “as required
by Lender,” or similar references will be construed, after Securitization, to mean Lender’s requirements or standards
as determined in accordance with Lender’s and Loan Servicer’s obligations under the terms of the Securitization documents.
|
|
|
2.01
|
Loan Terms.
The Loan will be evidenced by the Note and will bear interest and be paid in
accordance with the payment terms set forth in the Note.
|
|
|
2.02
|
Prepayment Premium.
Borrower will be required to pay a prepayment premium in connection
with certain prepayments of the Indebtedness, including a payment made after Lender’s exercise of any right of acceleration
of the Indebtedness, as provided in the Note.
|
|
|
2.03
|
Exculpation.
Borrower’s personal liability for payment of the Indebtedness and for
performance of the other obligations to be performed by it under this Loan Agreement is limited in the manner, and to the extent,
provided in the Note.
|
|
|
2.04
|
Application of Payments.
If at any time Lender receives, from Borrower or otherwise, any
amount applicable to the Indebtedness which is less than all amounts due and payable at such time, then Lender may apply that payment
to amounts then due and payable in any manner and in any order determined by Lender (unless otherwise required by applicable law),
in Lender’s sole and absolute discretion. Neither Lender’s acceptance of an amount that is less than all amounts then
due and payable, nor Lender’s application of such payment in the manner authorized, will constitute or be deemed to constitute
either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the application of any such amount to the
Indebtedness, Borrower’s obligations under this Loan Agreement, the Note and all other Loan Documents will remain unchanged.
|
|
|
2.05
|
Usury Savings.
If any applicable law limiting the amount of interest or other charges permitted
to be collected from Borrower is interpreted so that any charge provided for in any Loan Document, whether considered separately
or together with other charges levied in connection with any other Loan Document, violates that law, and Borrower is entitled to
the benefit of that law, that charge is reduced to the extent necessary to eliminate that violation. The amounts, if any, previously
paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the principal amount of the Indebtedness.
For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected
from Borrower has been violated, all Indebtedness which constitutes interest, as well as all other charges levied in connection
with the Indebtedness which constitute interest, will be deemed to be allocated and spread ratably over the stated term of the
Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner that the rate
of interest so computed is uniform throughout the stated term of the Note.
|
|
|
2.06
|
Floating Rate Mortgage - Third Party Cap Agreement.
If (a) the Note does not provide for
interest to accrue at a floating or variable interest rate (other than during any Extension Period, if applicable), and (b) a third
party Cap Agreement is not required, then this Section 2.06 and Section 3.04 will be of no force or effect.
|
|
Multifamily Loan and Security Agreement
|
Page
2
|
|
|
(a)
|
So long as there is no Event of Default, Lender or Loan Servicer will remit to Borrower each Cap
Payment received by Lender or Loan Servicer with respect to any month for which Borrower has paid in full the monthly installment
of principal and interest or interest only, as applicable, due under the Note. Alternatively, at Lender’s option, so long
as there is no Event of Default, Lender may apply a Cap Payment received by Lender or Loan Servicer with respect to any month to
the applicable monthly payment of accrued interest due under the Note if Borrower has paid in full the remaining portion of such
monthly payment of principal and interest or interest only, as applicable.
|
|
|
(b)
|
Neither the existence of a Cap Agreement nor anything in this Loan Agreement will relieve Borrower
of its primary obligation to timely pay in full all amounts due under the Note and otherwise due on account of the Indebtedness.
|
|
|
ARTICLE III
|
LOAN SECURITY AND GUARANTY.
|
|
|
3.01
|
Security Instrument.
Borrower will execute the Security Instrument dated of even date with
this Loan Agreement. The Security Instrument will be recorded in the applicable land records in the Property Jurisdiction.
|
|
|
(a)
|
Security Interest
. To secure Borrower’s obligations under this Loan Agreement and
to further secure Borrower’s obligations under the Note and the other Loan Documents, Borrower conveys, pledges, transfers
and grants to Lender a security interest pursuant to the Uniform Commercial Code of the Property Jurisdiction or any other applicable
law in and to all money in the Reserve Funds, as the same may increase or decrease from time to time, all interest and dividends
thereon and all proceeds thereof.
|
|
|
(b)
|
Supplemental Loan
. If this Loan Agreement is entered into in connection with a Supplemental
Loan and if the same Person is or becomes both Senior Lender and Supplemental Lender, then:
|
|
|
(i)
|
Borrower assigns and grants to Supplemental Lender a security interest in the Reserve Funds established
in connection with the Senior Indebtedness as additional security for all of Borrower’s obligations under the Supplemental
Note.
|
|
|
(ii)
|
In addition, Borrower assigns and grants to Senior Lender a security interest in the Reserve Funds
established in connection with the Supplemental Indebtedness as additional security for all of Borrower’s obligations under
the Senior Note.
|
|
|
(iii)
|
It is the intention of Borrower that all amounts deposited by Borrower in connection with either
the Senior Loan Documents, the Supplemental Loan Documents, or both, constitute collateral for the Supplemental Indebtedness secured
by the Supplemental Instrument and the Senior Indebtedness secured by the Senior Instrument, with the application of such amounts
to such Senior Indebtedness or Supplemental Indebtedness to be at the discretion of Senior Lender and Supplemental Lender.
|
|
|
3.03
|
Uniform Commercial Code Security Agreement.
This Loan Agreement is also a security agreement
under the Uniform Commercial Code for any of the Mortgaged Property which, under applicable law, may be subjected to a security
interest under the Uniform Commercial Code, for the purpose of securing Borrower’s obligations under this Loan Agreement
and to further secure Borrower’s obligations under the Note, Security Instrument and other Loan Documents, whether such Mortgaged
Property is owned now or acquired in the future, and all products and cash and non-cash proceeds thereof (collectively, “
UCC
Collateral
”), and by this Loan Agreement, Borrower grants to Lender a security interest in the UCC Collateral.
|
|
Multifamily Loan and Security Agreement
|
Page
3
|
|
|
3.04
|
Cap Agreement and Cap Collateral Assignment.
Reserved.
|
|
|
3.05
|
Guaranty.
Borrower will cause each Guarantor (if any) to execute a Guaranty of all or a
portion of Borrower’s obligations under the Loan Documents effective as of the date of this Loan Agreement.
|
3.06 Reserved.
3.07 Reserved.
3.08 Reserved.
|
|
ARTICLE IV
|
RESERVE FUNDS AND REQUIREMENTS.
|
|
|
(a)
|
Establishment of Reserve Funds; Investment of Deposits
. Unless otherwise provided in Section
4.03 and/or Section 4.04, each Reserve Fund will be established on the date of this Loan Agreement and each of the following will
apply:
|
|
|
(i)
|
All Reserve Funds will be deposited in an Eligible Account at an Eligible Institution or invested
in “permitted investments” as then defined and required by the Rating Agencies.
|
|
|
(ii)
|
Lender will not be obligated to open additional accounts or deposit Reserve Funds in additional
institutions when the amount of any Reserve Fund exceeds the maximum amount of the federal deposit insurance or guaranty. Borrower
acknowledges and agrees that it will not have the right to direct Lender as to any specific investment of monies in any Reserve
Fund. Lender will not be responsible for any losses resulting from investment of monies in any Reserve Fund or for obtaining any
specific level or percentage of earnings on such investment.
|
|
|
(b)
|
Interest on Reserve Funds; Trust Funds
. Unless applicable law requires, Lender will not
be required to pay Borrower any interest, earnings or profits on the Reserve Funds. Any amounts deposited with Lender under this
Article IV will not be trust funds, nor will they operate to reduce the Indebtedness, unless applied by Lender for that purpose
pursuant to the terms of this Loan Agreement.
|
|
|
(c)
|
Use of Reserve Funds
. Each Reserve Fund will, except as otherwise provided in this Loan
Agreement, be used for the sole purpose of paying, or reimbursing Borrower for payment of, the item(s) for which the applicable
Reserve Fund was established. Borrower acknowledges and agrees that, except as specified in this Loan Agreement, monies in one
Reserve Fund will not be used to pay, or reimburse Borrower for, matters for which another Reserve Fund has been established.
|
|
|
(d)
|
Termination of Reserve Funds
. Upon the payment in full of the Indebtedness, Lender will
pay to Borrower all funds remaining in any Reserve Funds.
|
|
Multifamily Loan and Security Agreement
|
Page
4
|
|
|
4.02
|
Reserves for Taxes, Insurance and Other Charges.
|
|
|
(a)
|
Deposits to Imposition Reserve Deposits
. Borrower will deposit with Lender on the day monthly
installments of principal or interest, or both, are due under the Note (or on another day designated in writing by Lender), until
the Indebtedness is paid in full, an additional amount sufficient to accumulate with Lender the entire sum required to pay, when
due, the items marked “Collect” below. Except as provided in Section 4.02(e), Lender will not require Borrower to make
Imposition Reserve Deposits with respect to the items marked “Deferred” below.
|
|
|
[Deferred]
|
Property Insurance premiums or premiums for other Insurance required by Lender under Section 6.10
|
|
|
[Collect]
|
Taxes and payments in lieu of taxes
|
|
|
[Deferred]
|
water and sewer charges that could become a Lien on the Mortgaged Property
|
|
|
[N/A]
|
Ground Rents
|
|
|
[Deferred]
|
assessments or other charges that could become a Lien on the Mortgaged Property, including home owner association dues
|
The amounts deposited pursuant
to this Section 4.02(a) are collectively referred to in this Loan Agreement as the “
Imposition Reserve Deposits
.”
The obligations of Borrower for which the Imposition Reserve Deposits are required are collectively referred to in this Loan Agreement
as “
Impositions
.” The amount of the Imposition Reserve Deposits must be sufficient 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. Lender
will maintain records indicating how much of the monthly Imposition Reserve Deposits and how much of the aggregate Imposition Reserve
Deposits held by Lender are held for the purpose of paying Taxes, Insurance premiums, Ground Rent (if applicable) and each other
Imposition.
|
|
(b)
|
Disbursement of Imposition Reserve Deposits
. Lender will apply the Imposition Reserve Deposits
to pay Impositions so long as no Event of Default has occurred and is continuing. Lender will pay all Impositions from the Imposition
Reserve Deposits held by Lender upon Lender’s receipt of a bill or invoice for an Imposition. If Borrower holds a ground
lessee interest in the Mortgaged Property and Imposition Reserve Deposits are collected for Ground Rent, then Lender will pay the
monthly or other periodic installments of Ground Rent from the Imposition Reserve Deposits, whether or not Lender receives a bill
or invoice for such installments. Lender will have no obligation to pay any Imposition to the extent it exceeds the amount of the
Imposition Reserve Deposits then held by Lender. Lender may pay an Imposition according to any bill, statement or estimate from
the appropriate public office, Ground Lessor (if applicable) or insurance company without inquiring into the accuracy of the bill,
statement or estimate or into the validity of the Imposition.
|
|
|
(c)
|
Excess or Deficiency of Imposition Reserve Deposits
. If at any time the amount of the Imposition
Reserve Deposits held by Lender for payment of a specific Imposition exceeds the amount reasonably deemed necessary by Lender,
the excess will be credited against future installments of Imposition Reserve Deposits. If at any time the amount of the Imposition
Reserve Deposits held by Lender for payment of a specific Imposition is less than the amount reasonably estimated by Lender to
be necessary, Borrower will pay to Lender the amount of the deficiency within 15 days after Notice from Lender.
|
|
Multifamily Loan and Security Agreement
|
Page
5
|
|
|
(d)
|
Delivery of Invoices
. Borrower will promptly deliver to Lender a copy of all notices of,
and invoices for, Impositions.
|
|
|
(e)
|
Deferral of Collection of Any Imposition Reserve Deposits; Delivery of Receipts
. If Lender
does not collect an Imposition Reserve Deposit with respect to an Imposition either marked “Deferred” in Section 4.02(a)
or pursuant to a separate written deferral by Lender, then on or before the earlier of the date each such Imposition is due, or
the date this Loan Agreement requires each such Imposition to be paid, Borrower will provide Lender with proof of payment of each
such Imposition. Upon Notice to Borrower, Lender may revoke its deferral and require Borrower to deposit with Lender any or all
of the Imposition Reserve Deposits listed in Section 4.02(a), regardless of whether any such item is marked “Deferred”
(i) if Borrower does not timely pay any of the Impositions, (ii) if Borrower fails to provide timely proof to Lender of such payment,
(iii) at any time during the existence of an Event of Default or (iv) upon placement of a Supplemental Loan in accordance with
Section 11.11.
|
|
|
(f)
|
through (i) are Reserved.
|
|
|
4.03
|
Repairs; Repair Reserve Fund.
Reserved.
|
|
|
4.04
|
Replacement Reserve Fund.
Reserved.
|
|
|
4.05
|
Rental Achievement Provisions.
Reserved.
|
|
|
4.06
|
Debt Service Reserve.
Reserved.
|
|
|
4.07
|
Rate Cap Agreement Reserve Fund.
Reserved.
|
|
|
4.08
|
through 4.20 are Reserved.
|
|
|
ARTICLE V
|
REPRESENTATIONS AND WARRANTIES.
|
Borrower represents and warrants to Lender
as follows as of the date of this Loan Agreement:
|
|
5.01
|
Review of Documents.
Borrower has reviewed: (a) the Note, (b) the Security Instrument, (c)
the Commitment Letter, and (d) all other Loan Documents.
|
|
|
5.02
|
Condition of Mortgaged Property.
Except as Borrower may have disclosed to Lender in writing
in connection with the issuance of the Commitment Letter, the Mortgaged Property has not been damaged by fire, water, wind or other
cause of loss, or any previous damage to the Mortgaged Property has been fully restored.
|
|
|
5.03
|
No Condemnation.
No part of the Mortgaged Property has been taken in Condemnation or other
like proceeding, and, to the best of Borrower’s knowledge after due inquiry and investigation, no such proceeding is pending
or threatened for the partial or total Condemnation or other taking of the Mortgaged Property.
|
|
|
5.04
|
Actions; Suits; Proceedings.
|
|
|
(a)
|
There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending
or, to the best of Borrower’s knowledge, threatened in writing against or affecting Borrower (and, if Borrower is a limited
partnership, any of its general partners or if Borrower is a limited liability company, any member of Borrower) or the Mortgaged
Property which, if adversely determined, would have a Material Adverse Effect.
|
|
Multifamily Loan and Security Agreement
|
Page
6
|
|
|
5.05
|
Environmental.
Except as previously disclosed by Borrower to Lender in writing (which written
disclosure may be in certain environmental assessments and other written reports accepted by Lender in connection with the funding
of the Indebtedness and dated prior to the date of this Loan Agreement), each of the following is true:
|
|
|
(a)
|
Borrower has not at any time engaged in, caused or permitted any Prohibited Activities or Conditions
on the Mortgaged Property.
|
|
|
(b)
|
To the best of Borrower’s knowledge after due inquiry and investigation, no Prohibited Activities
or Conditions exist or have existed on the Mortgaged Property.
|
|
|
(c)
|
The Mortgaged Property does not now contain any underground storage tanks, and, to the best of
Borrower’s knowledge after due inquiry and investigation, the Mortgaged Property has not contained any underground storage
tanks in the past. If there is an underground storage tank located on the Mortgaged Property that has been previously disclosed
by Borrower to Lender in writing, that tank complies with all requirements of Hazardous Materials Laws.
|
|
|
(d)
|
To the best of Borrower’s knowledge after due inquiry and investigation, Borrower has complied
with all Hazardous Materials Laws, including all requirements for notification regarding releases of Hazardous Materials. Without
limiting the generality of the foregoing, all Environmental Permits required for the operation of the Mortgaged Property in accordance
with Hazardous Materials Laws now in effect have been obtained and all such Environmental Permits are in full force and effect.
|
|
|
(e)
|
To the best of Borrower’s knowledge after due inquiry and investigation, no event has occurred
with respect to the Mortgaged Property that constitutes, or with the passage of time or the giving of notice, or both, would constitute,
noncompliance with the terms of any Environmental Permit.
|
|
|
(f)
|
There are no actions, suits, claims or proceedings pending or, to the best of Borrower’s
knowledge after due inquiry and investigation, threatened in writing, that involve the Mortgaged Property and allege, arise out
of, or relate to any Prohibited Activity or Condition.
|
|
|
(g)
|
Borrower has received no actual or constructive notice of any written complaint, order, notice
of violation or other communication from any Governmental Authority with regard to air emissions, water discharges, noise emissions
or Hazardous Materials, or any other environmental, health or safety matters affecting the Mortgaged Property or any property that
is adjacent to the Mortgaged Property.
|
|
Multifamily Loan and Security Agreement
|
Page
7
|
|
|
5.06
|
Commencement of Work; No Labor or Materialmen’s Claims.
Except as set forth on
Exhibit
E
, prior to the recordation of the Security Instrument, no work of any kind has been or will be commenced or performed upon
the Mortgaged Property, and no materials or equipment have been or will be delivered to or upon the Mortgaged Property, for which
the contractor, subcontractor or vendor continues to have any rights including the existence of or right to assert or file a mechanic’s
or materialmen’s Lien. If any such work of any kind has been commenced or performed upon the Mortgaged Property, or if any
such materials or equipment have been ordered or delivered to or upon the Mortgaged Property, then prior to the execution of the
Security Instrument, Borrower has satisfied each of the following conditions:
|
|
|
(a)
|
Borrower has fully disclosed in writing to both the Lender and the title company issuing the mortgagee
title insurance policy insuring the Lien of the Security Instrument that work has been commenced or performed on the Mortgaged
Property, or materials or equipment have been ordered or delivered to or upon the Mortgaged Property.
|
|
|
(b)
|
Borrower has obtained and delivered to Lender and the title company issuing the mortgagee title
insurance policy insuring the Lien of the Security Instrument Lien waivers from all contractors, subcontractors, suppliers or any
other applicable party, pertaining to all work commenced or performed on the Mortgaged Property, or materials or equipment ordered
or delivered to or upon the Mortgaged Property.
|
Borrower represents and warrants
that all parties furnishing labor and materials for which a Lien or claim of Lien may be filed against the Mortgaged Property have
been paid in full and, except for such Liens or claims insured against by the policy of title insurance to be issued in connection
with the Loan (which Borrower has disclosed pursuant to Section 5.06(a) and which are identified on Exhibit E), there are no mechanics’,
laborers’ or materialmen’s Liens or claims outstanding for work, labor or materials affecting the Mortgaged Property,
whether prior to, equal with or subordinate to the Lien of the Security Instrument.
|
|
5.07
|
Compliance with Applicable Laws and Regulations.
|
|
|
(a)
|
To the best of Borrower’s knowledge after due inquiry and investigation, each of the following
is true:
|
|
|
(i)
|
All Improvements and the use of the Mortgaged Property comply with all applicable statutes, rules
and regulations, including all applicable statutes, rules and regulations pertaining to requirements for equal opportunity, anti-discrimination,
fair housing, environmental protection, zoning and land use (“legal, non-conforming” status with respect to uses or
structures will be considered to comply with zoning and land use requirements for the purposes of this representation).
|
|
|
(ii)
|
The Improvements comply with applicable health, fire, and building codes.
|
|
|
(iii)
|
There is no evidence of any illegal activities relating to controlled substances on the Mortgaged
Property.
|
|
|
5.08
|
Access; Utilities; Tax Parcels.
The Mortgaged Property: (a) has ingress and egress via a
publicly dedicated right of way or via an irrevocable easement permitting ingress and egress, (b) is served by public utilities
and services generally available in the surrounding community or otherwise appropriate for the use in which the Mortgaged Property
is currently being utilized, and (c) constitutes one or more separate tax parcels.
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8
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|
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5.09
|
Licenses and Permits.
|
|
|
(a)
|
Borrower and any operator of the Mortgaged Property, if applicable, and to the best of Borrower’s
knowledge, any commercial tenant of the Mortgaged Property is in possession of all material licenses, permits and authorizations
required for use of the Mortgaged Property, which are valid and in full force and effect as of the date of this Loan Agreement.
|
|
|
(b)
|
through (i) are Reserved.
|
|
|
5.10
|
No Other Interests.
To the best of Borrower’s knowledge after due inquiry and investigation,
no Person has (a) any possessory interest in the Mortgaged Property or right to occupy the Mortgaged Property except under and
pursuant to the provisions of existing Leases by and between tenants and Borrower (a form of residential lease having been previously
provided to Lender together with the material terms of any and all Non-Residential Leases at the Mortgaged Property), or (b) an
option to purchase the Mortgaged Property or an interest in the Mortgaged Property, except as has been disclosed to and approved
in writing by Lender.
|
|
|
5.11
|
Term of Leases.
All Leases for residential dwelling units with respect to the Mortgaged
Property satisfy each of the following conditions:
|
|
|
(a)
|
They are on forms that are customary for similar multifamily properties in the Property Jurisdiction.
|
|
|
(b)
|
They are for initial terms of at least 6 months and not more than 2 years (unless otherwise approved
in writing by Lender).
|
|
|
(c)
|
They do not include any Corporate Leases (unless otherwise approved in writing by Lender).
|
|
|
(d)
|
They do not include options to purchase.
|
|
|
5.12
|
No Prior Assignment; Prepayment of Rents.
Borrower has (a) not executed any prior assignment
of Rents (other than an assignment of Rents securing any prior indebtedness that is being assigned to Lender, or that is being
paid off and discharged with the proceeds of the Loan evidenced by the Note or, if this Loan Agreement is entered into in connection
with a Supplemental Loan, other than an assignment of Rents securing any Senior Indebtedness), and (b) not performed any acts and
has not executed, and will not execute, any instrument which would prevent Lender from exercising its rights under any Loan Document.
At the time of execution of this Loan Agreement, unless otherwise approved by Lender in writing, there has been no prepayment of
any Rents for more than 2 months prior to the due dates of such Rents other than the last month’s rent, if collected at the
time a tenant enters into a Lease.
|
|
|
5.13
|
Illegal Activity.
No portion of the Mortgaged Property has been or will be purchased with
the proceeds of any illegal activity.
|
|
|
5.14
|
Taxes Paid.
Borrower has filed all federal, state, county and municipal tax returns required
to have been filed by Borrower, and has paid all Taxes which have become due pursuant to such returns or to any notice of assessment
received by Borrower, and Borrower has no knowledge of any basis for additional assessment with respect to such Taxes. To the best
of Borrower’s knowledge after due inquiry and investigation, there are not presently pending any special assessments against
the Mortgaged Property or any part of the Mortgaged Property.
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Multifamily Loan and Security Agreement
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5.15
|
Title Exceptions.
To the best of Borrower’s knowledge after due inquiry and investigation,
none of the items shown in the schedule of exceptions to coverage in the title policy issued to and accepted by Lender contemporaneously
with the execution of this Loan Agreement and insuring Lender’s interest in the Mortgaged Property will have a Material Adverse
Effect on the (a) ability of Borrower to pay the Loan in full, (b) ability of Borrower to use all or any part of the Mortgaged
Property in the manner in which the Mortgaged Property is being used on the Closing Date, except as set forth in Section 6.03,
(c) operation of the Mortgaged Property, or (d) value of the Mortgaged Property.
|
|
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5.16
|
No Change in Facts or Circumstances.
|
|
|
(a)
|
All information in the application for the Loan submitted to Lender, including all financial statements
for the Mortgaged Property, Borrower, and any Borrower Principal, and all Rent Schedules, reports, certificates, and any other
documents submitted in connection with the application (collectively, “
Loan Application
”) is complete and accurate
in all material respects as of the date such information was submitted to Lender.
|
|
|
(b)
|
There has been no change in any fact or circumstance since the Loan Application was submitted to
Lender that would make any information submitted as part of the Loan Application materially incomplete or inaccurate.
|
|
|
(c)
|
The organizational structure of Borrower is as set forth in
Exhibit H
.
|
|
|
5.17
|
Financial Statements.
The financial statements of Borrower and each Borrower Principal furnished
to Lender as part of the Loan Application reflect in each case a positive net worth as of the date of the applicable financial
statement.
|
|
|
5.18
|
ERISA – Borrower Status.
Borrower represents as follows:
|
|
|
(a)
|
Borrower is not an “investment company,” or a company under the Control of an “investment
company,” as such terms are defined in the Investment Company Act of 1940, as amended.
|
|
|
(b)
|
Borrower is not an “employee benefit plan,” as defined in Section 3(3) of ERISA, which
is subject to Title I of ERISA or a “plan” to which Section 4975 of the Tax Code applies, and the assets of Borrower
do not constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101, as modified
by Section 3(42) of ERISA.
|
|
|
(c)
|
Borrower is not a "governmental plan" within the meaning of Section 3(32) of ERISA, and
is not subject to state statutes regulating investments or fiduciary obligations with respect to governmental plans.
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Multifamily Loan and Security Agreement
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10
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5.19
|
No Fraudulent Transfer or Preference.
No Borrower or Borrower Principal (a) has made, or
is making in connection with and as security for the Loan, a transfer of an interest in the property of Borrower or Borrower Principal
to or for the benefit of Lender or otherwise as security for any of the obligations under the Loan Documents which is or could
constitute a voidable preference under federal bankruptcy, state insolvency or similar applicable creditors’ rights laws,
or (b) has made, or is making in connection with the Loan, a transfer (including any transfer to or for the benefit of an insider
under an employment contract) of an interest of Borrower or any Borrower Principal in property which is or could constitute a voidable
preference under federal bankruptcy, state insolvency or similar applicable creditors’ rights laws, or (c) has incurred,
or is incurring in connection with the Loan, any obligation (including any obligation to or for the benefit of an insider under
an employment contract) which is or could constitute a fraudulent transfer under federal bankruptcy, state insolvency, or similar
applicable creditors’ rights laws.
|
|
|
5.20
|
No Insolvency or Judgment.
|
|
|
(a)
|
No Pending Proceedings or Judgments
. No Borrower or Borrower Principal is (i) the subject
of or a party to (other than as a creditor) any completed or pending bankruptcy, reorganization or insolvency proceeding, or (ii)
the subject of any judgment unsatisfied of record or docketed in any court located in the United States.
|
|
|
(b)
|
Insolvency
. Borrower is not presently insolvent, and the Loan will not render Borrower insolvent.
As used in this Section, the term “insolvent” means that the total of all of a Person’s liabilities (whether
secured or unsecured, contingent or fixed, or liquidated or unliquidated) is in excess of the value of all of the assets of the
Person that are available to satisfy claims of creditors.
|
|
|
5.21
|
Working Capital.
After the Loan is made, Borrower
intends to have sufficient working capital, including cash flow from the Mortgaged Property or other sources, not only to adequately
maintain the Mortgaged Property, but also to pay all of Borrower’s outstanding debts as they come due (other than any balloon
payment due upon the maturity of the Loan). Lender acknowledges that no members or partners of Borrower or any Borrower Principal
will be obligated to contribute equity to Borrower for purposes of providing working capital to maintain the Mortgaged Property
or to pay Borrower’s outstanding debts except as may otherwise be required under their organizational documents.
|
|
|
5.22
|
Cap Collateral.
Reserved.
|
|
|
5.23
|
Ground Lease.
Reserved.
|
|
|
5.24
|
Purpose of Loan.
The purpose of the Loan is as indicated by the checked boxes below:
|
|
|
¨
|
Refinance Loan
: The Loan is a refinancing of existing indebtedness and, except to the extent
specifically required by Lender, there is to be no change in the ownership of either the Mortgaged Property or Borrower Principals.
The intended use of any cash received by Borrower from Lender, to the extent applicable, in connection with the refinancing has
been fully disclosed to Lender.
|
|
|
x
|
Acquisition Loan – Mortgaged Property
: All of the consideration given or received
or to be given or received in connection with the acquisition of the Mortgaged Property has been fully disclosed to Lender. The
Mortgaged Property was or will be purchased from CH Realty VII-Carroll MF Orlando Hunter’s Creek, L.L.C., a Delaware limited
liability company (“
Property Seller
”). No Borrower or Borrower Principal has or had, directly or indirectly
(through a family member or otherwise), any interest in the Property Seller and the acquisition of the Mortgaged Property is an
arm’s-length transaction. To the best of Borrower’s knowledge after due inquiry and investigation, the purchase price
of the Mortgaged Property represents the fair market value of the Mortgaged Property and Property Seller is not or will not be
insolvent subsequent to the sale of the Mortgaged Property.
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Multifamily Loan and Security Agreement
|
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11
|
|
|
¨
|
Acquisition Loan – Membership Interests
: All of the consideration given or received
or to be given or received in connection with the acquisition of 100% of the membership interests of the Borrower (“
Membership
Interests
”) has been fully disclosed to Lender. The Membership Interests were or will be purchased from _________________________________
(“
Membership Interests Seller
”). No Borrower Principal has or had, directly or indirectly (through a family
member or otherwise), any interest in the Membership Interests Seller and the acquisition of the Membership Interests is an arm’s-length
transaction. To the best of Borrower’s knowledge after due inquiry and investigation, the purchase price of the Membership
Interests represents the fair market value of the Membership Interests and Membership Interest Seller is not or will not be insolvent
subsequent to the sale of the Membership Interest.
|
|
|
¨
|
Supplemental Loan
: The Loan is a Supplemental Loan and, except to the extent specifically
required or approved by Lender, there has been no change in the ownership of either the Mortgaged Property or Borrower Principals
since the date of the Senior Note. The intended use of any cash received by Borrower from Lender, to the extent applicable, in
connection with the Supplemental Loan has been fully disclosed to Lender.
|
|
|
¨
|
Cross-Collateralized/Cross-Defaulted Loan Pool
: The Loan is part of a cross-collateralized/cross-defaulted
pool of loans described as follows:
|
|
|
____
|
being simultaneously made to Borrower and/or Borrower’s Affiliates
|
|
|
____
|
made previously to Borrower and/or Borrower’s Affiliates
|
The intended use of any cash received
by Borrower from Lender, to the extent applicable, in connection with the Loan and the other loans comprising the cross-collateralized/cross-defaulted
loan pool has been fully disclosed to Lender.
|
|
5.25
|
through 5.39 are Reserved.
|
|
|
5.40
|
Recycled SPE Borrower.
Reserved.
|
|
|
5.41
|
Recycled SPE Equity Owner.
Reserved.
|
|
|
5.42
|
through 5.50 are Reserved.
|
|
|
5.51
|
Survival.
The representations and warranties set forth in this Loan Agreement will survive
until the Indebtedness is paid in full; however, the representations and warranties set forth in Section 5.05 will survive beyond
repayment of the entire Indebtedness, to the extent provided in Section 10.02(i).
|
|
|
5.52
|
through 5.57 are Reserved.
|
|
|
5.58
|
Prohibited Parties Lists; Economic Sanctions Laws.
To the best of Borrower’s knowledge,
after due inquiry and investigation, none of (a) Borrower, (b) any Borrower Principal, (c) any Person with a collective
equity interest (whether direct or indirect) in Borrower of 25% or more, or (d) any Non-U.S. Equity Holder, is presently listed
or at any time has been listed on any Prohibited Parties List.
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Multifamily Loan and Security Agreement
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12
|
|
|
5.59
|
through 5.62 are Reserved.
|
|
|
ARTICLE VI
|
BORROWER COVENANTS.
|
|
|
6.01
|
Compliance with Laws.
Borrower will comply with all laws, ordinances, rules, regulations
and requirements of any Governmental Authority having jurisdiction over the Mortgaged Property and all licenses and permits and
all recorded covenants and agreements relating to or affecting the Mortgaged Property, including all laws, ordinances, regulations,
requirements and covenants pertaining to health and safety, construction of improvements on the Mortgaged Property, Repairs, Capital
Replacements, fair housing, disability accommodation, zoning and land use, applicable building codes, special use permits and environmental
regulations, Leases and the maintenance and disposition of tenant security deposits. Borrower will take appropriate measures to
prevent, and will not engage in or knowingly permit, any illegal activities at the Mortgaged Property, including those that could
endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise
materially impair the Lien created by the Security Instrument or Lender’s interest in the Mortgaged Property. Borrower will
at all times maintain records sufficient to demonstrate compliance with the provisions of this Section 6.01.
|
|
|
6.02
|
Compliance with Organizational Documents.
Borrower will at all times comply with all laws,
regulations and requirements of any Governmental Authority relating to Borrower’s formation, continued existence and good
standing in its state of formation and, if different, in the Property Jurisdiction. Borrower will at all times comply with its
organizational documents, including its partnership agreement (if Borrower is a partnership), its by-laws (if Borrower is a corporation
or housing cooperative corporation or association) or its operating agreement (if Borrower is a limited liability company or tenancy-in-common).
If Borrower is a housing cooperative corporation or association, Borrower will at all times maintain its status as a “cooperative
housing corporation” as such term is defined in Section 216(b) of the Internal Revenue Code of 1986, as amended, or any successor
statute thereto.
|
|
|
6.03
|
Use of Mortgaged Property.
|
|
|
(a)
|
Unless required by applicable law, without the prior written consent of Lender, Borrower will not
take any of the following actions:
|
|
|
(i)
|
Allow changes in the use for which all or any part of the Mortgaged Property is being used at the
time this Loan Agreement is executed.
|
|
|
(ii)
|
Convert any individual dwelling units or common areas to commercial use.
|
|
|
(iii)
|
Initiate a change in the zoning classification of the Mortgaged Property or acquiesce to a change
in the zoning classification of the Mortgaged Property.
|
|
|
(iv)
|
Establish any condominium or cooperative regime with respect to the Mortgaged Property beyond any
which may be in existence on the date of this Loan Agreement.
|
|
|
(v)
|
Combine all or any part of the Mortgaged Property with all or any part of a tax parcel which is
not part of the Mortgaged Property.
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|
Multifamily Loan and Security Agreement
|
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13
|
|
|
(vi)
|
Subdivide or otherwise split any tax parcel constituting all or any part of the Mortgaged Property.
|
|
|
(vii)
|
Add to or change any location at which any of the Mortgaged Property is stored, held or located
unless Borrower (A) gives Notice to Lender within 30 days after the occurrence of such addition or change, (B) executes and delivers
to Lender any modifications of or supplements to this Loan Agreement that Lender may require, and (C) authorizes the filing of
any financing statement which may be filed in connection with this Loan Agreement, as Lender may require.
|
|
|
(viii)
|
Convert, in whole or in part, any non-residential income producing units to non-income producing
units.
|
|
|
(c)
|
Notwithstanding anything contained in this Section to the contrary, if Borrower is a housing cooperative
corporation or association, Lender acknowledges and consents to Borrower’s use of the Mortgaged Property as a housing cooperative.
|
|
|
6.04
|
Non-Residential Leases.
|
|
|
(a)
|
Prohibited New Non-Residential Leases or Modified Non-Residential Leases
. Except as set
forth in Section 6.04(b), Borrower will not enter into any New Non-Residential Lease, enter into any Modified Non-Residential Lease
or terminate any Non-Residential Lease (including any Non-Residential Lease in existence on the date of this Loan Agreement) without
the prior written consent of Lender.
|
|
|
(b)
|
New Non-Residential Leases or Modified Non-Residential Leases for which Lender’s Consent
is Not Required
. Lender’s consent will not be required for Borrower to enter into a Modified Non-Residential Lease or
a New Non-Residential Lease, provided that the Modified Non-Residential Lease or New Non-Residential Lease satisfies each of the
following requirements:
|
|
|
(i)
|
The tenant under the New Non-Residential Lease or Modified Non-Residential Lease is not an Affiliate
of Borrower or any Guarantor.
|
|
|
(ii)
|
The terms of the New Non-Residential Lease or Modified Non-Residential Lease are at least as favorable
to Borrower as those customary in the applicable market at the time Borrower enters into the New Non-Residential Lease or Modified
Non-Residential Lease.
|
|
|
(iii)
|
The Rents paid to Borrower pursuant to the New Non-Residential Lease or Modified Non-Residential
Lease are not less than 90% of the rents paid to Borrower pursuant to the Non-Residential Lease, if any, for that portion of the
Mortgaged Property that was in effect prior to the New Non-Residential Lease or Modified Non-Residential Lease.
|
|
|
(iv)
|
The term of the New Non-Residential Lease or Modified Non-Residential Lease, including any option
to extend, is 10 years or less.
|
|
|
(v)
|
Any New Non-Residential Lease must provide that the space may not be used or operated, in whole
or in part, for any of the following:
|
|
Multifamily Loan and Security Agreement
|
Page
14
|
|
|
(A)
|
The operation of a so-called “head shop” or other business devoted to the sale of articles
or merchandise normally used or associated with illegal or unlawful activities such as, but not limited to, the sale of paraphernalia
used in connection with marijuana or controlled drugs or substances.
|
|
|
(B)
|
A gun shop, shooting gallery or firearms range.
|
|
|
(C)
|
A so-called massage parlor or any business which sells, rents or permits the viewing of so-called
“adult” or pornographic materials such as, but not limited to, adult magazines, books, movies, photographs, sexual
aids, sexual articles and sex paraphernalia.
|
|
|
(D)
|
Any use involving the sale or distribution of any flammable liquids, gases or other Hazardous Materials.
|
|
|
(E)
|
An off-track betting parlor or arcade.
|
|
|
(F)
|
A liquor store or other establishment whose primary business is the sale of alcoholic beverages
for off-site consumption.
|
|
|
(G)
|
A burlesque or strip club.
|
|
|
(H)
|
Any illegal activity.
|
|
|
(vi)
|
The aggregate of the income derived from the space leased pursuant to the New Non-Residential Lease
accounts for less than 20% of the gross income of the Mortgaged Property on the date that Borrower enters into the New Non-Residential
Lease.
|
|
|
(vii)
|
Such New Non-Residential Lease is not an oil or gas lease, pipeline agreement or other instrument
related to the production or sale of oil or natural gas.
|
|
|
(c)
|
Executed Copies of Non-Residential Leases
. Borrower will, without request by Lender, deliver
a fully executed copy of each Non-Residential Lease to Lender promptly after such Non-Residential Lease is signed.
|
|
|
(d)
|
Subordination and Attornment Requirements
. All Non-Residential Leases entered into after
the date of this Loan Agreement, regardless of whether Lender’s consent or approval is required, will specifically include
the following provisions:
|
|
|
(i)
|
The tenant will attorn to Lender and any purchaser at a foreclosure sale, such attornment to be
self-executing and effective upon acquisition of title to the Mortgaged Property by any purchaser at a foreclosure sale or by Lender
in any manner.
|
|
|
(ii)
|
The tenant agrees to execute such further evidences of attornment as Lender or any purchaser at
a foreclosure sale may from time to time request.
|
|
|
(iii)
|
The tenant will, upon receipt of a written request from Lender following the occurrence of and
during the continuance of an Event of Default, pay all Rents payable under the Lease to Lender.
|
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Multifamily Loan and Security Agreement
|
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15
|
|
|
6.05
|
Prepayment of Rents.
Borrower will not receive or accept Rent under any Lease (whether a
residential Lease or a Non-Residential Lease) for more than 2 months in advance.
|
|
|
(a)
|
Right of Entry
. Subject to the rights of tenants under Leases, Borrower will permit Lender,
its agents, representatives and designees and any interested Governmental Authority to make or cause to be made entries upon and
inspections of the Mortgaged Property to inspect, among other things: (i) Repairs, (ii) Capital Replacements, (iii) Restorations,
(iv) Property Improvement Alterations, and (v) any other Improvements, both in process and upon completion (including environmental
inspections and tests performed by professional inspection engineers) during normal business hours, or at any other reasonable
time, upon reasonable Notice to Borrower if the inspection is to include occupied residential units (which Notice need not be in
writing). During normal business hours, or at any other reasonable time, Borrower will also permit Lender to examine all books
and records and contracts and bills pertaining to the foregoing. Notice to Borrower will not be required in the case of an emergency,
as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.
|
|
|
(b)
|
Inspection of Mold
. If Lender determines that Mold has or may have developed as a result
of a water intrusion event or leak, Lender, at Lender’s Discretion, may require that a professional inspector inspect the
Mortgaged Property to confirm whether Mold has developed and, if so, thereafter as frequently as Lender determines is necessary
until any issue with Mold and its cause(s) are resolved to Lender’s satisfaction. Such inspection will be limited to a visual
and olfactory inspection of the area that has experienced the Mold, water intrusion event or leak. Borrower will be responsible
for the cost of each such professional inspection and any remediation deemed to be necessary as a result of the professional inspection.
After any issue with Mold is remedied to Lender’s satisfaction, Lender will not require a professional inspection any more
frequently than once every 3 years unless Lender otherwise becomes aware of Mold as a result of a subsequent water intrusion event
or leak.
|
|
|
(c)
|
Certification in Lieu of Inspection
. If Lender or Loan Servicer determines not to conduct
an annual inspection of the Mortgaged Property, and in lieu thereof Lender requests a certification, Borrower will provide to Lender
a factually correct certification, each year that the annual inspection is waived, to the following effect:
|
Borrower has not received any
written complaint, notice, letter or other written communication from any tenant, Property Manager or governmental authority regarding
mold, fungus, microbial contamination or pathogenic organisms (“Mold”) or any activity, condition, event or omission
that causes or facilitates the growth of Mold on or in any part of the Mortgaged Property or, if Borrower has received any such
written complaint, notice, letter or other written communication, that Borrower has investigated and determined that no Mold activity,
condition or event exists or alternatively has fully and properly remediated such activity, condition, event or omission in compliance
with the Moisture Management Plan for the Mortgaged Property.
|
Multifamily Loan and Security Agreement
|
Page
16
|
If Borrower is
unwilling or unable to provide such certification, Lender may require a professional inspection of the Mortgaged Property at Borrower’s
expense.
6.07 Books
and Records; Financial Reporting.
|
|
(a)
|
Delivery of Books and Records
. Borrower will keep and maintain at all times at the Mortgaged
Property, Borrower’s main business office, or the Property Manager’s office, and upon Lender’s request will make
available at the Mortgaged Property (or, at Borrower’s option, at the Property Manager’s office), 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, in accordance with GAAP consistently applied (or such other method which is reasonably acceptable to Lender),
and copies of all written contracts, Leases, and other instruments which affect the Mortgaged Property. The books, records, contracts,
Leases and other instruments will be subject to examination and inspection by Lender at any reasonable time.
|
|
|
(b)
|
Delivery of Statement of Income and Expenses; Rent Schedule and Other Statements
. Borrower
will furnish to Lender each of the following:
|
|
|
(i)
|
Within 25 days after the end of each calendar quarter prior to Securitization and within 35 days
after each calendar quarter after Securitization, each of the following:
|
|
|
(A)
|
A Rent Schedule dated no earlier than the date that is 5 days prior to the end of such quarter.
|
|
|
(B)
|
A statement of income and expenses for Borrower’s operation of the Mortgaged Property that
is either of the following:
|
|
|
(1)
|
For the 12 month period ending on the last day of such quarter.
|
|
|
(2)
|
If at the end of such quarter Borrower or any Affiliate of Borrower has owned the Mortgaged Property
for less than 12 months, for the period commencing with the acquisition of the Mortgaged Property by Borrower or its Affiliate,
and ending on the last day of such quarter.
|
|
|
(C)
|
When requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating
to the Mortgaged Property as of the end of that fiscal quarter.
|
|
|
(ii)
|
Within 90 days after the end of each fiscal year of Borrower, each of the following:
|
|
|
(A)
|
An annual statement of income and expenses for Borrower’s operation of the Mortgaged Property
for that fiscal year.
|
|
Multifamily Loan and Security Agreement
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(B)
|
A balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property
as of the end of that fiscal year and a profit and loss statement for Borrower.
|
|
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(C)
|
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.
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|
|
(iii)
|
Within 30 days after the date of filing, copies of all tax returns filed by Borrower.
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|
|
(c)
|
Delivery of Borrower Financial Statements Upon Request
. Borrower will furnish to Lender
each of the following:
|
|
|
(i)
|
Upon Lender’s request, in Lender’s sole and absolute discretion prior to a Securitization,
and thereafter upon Lender’s request in Lender’s Discretion, a monthly Rent Schedule and a monthly statement of income
and expenses for Borrower’s operation of the Mortgaged Property, in each case within 25 days after the end of each month.
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|
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(ii)
|
Upon Lender’s request in Lender’s sole and absolute discretion prior to a Securitization,
and thereafter upon Lender’s request in Lender’s Discretion, within 10 days after such a request from Lender, each
of the following:
|
|
|
(A)
|
A statement that identifies all owners of any interest in Borrower and any Designated Entity for
Transfers and the interest held by each (unless Borrower or any Designated Entity for Transfers is a publicly-traded entity in
which case such statement of ownership will not be required), and if Borrower or a Designated Entity for Transfers is a corporation
then all officers and directors of Borrower and the Designated Entity for Transfers, and if Borrower or a Designated Entity for
Transfers is a limited liability company then all non-member Managers.
|
|
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(B)
|
To the extent not included in the statement provided under Section 6.07(c)(ii)(A), a statement
that identifies (1) all Persons with a collective equity interest (whether direct or indirect) of 25% or more in Borrower,
and (2) all Non-U.S. Equity Holders.
|
|
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(iii)
|
Upon Lender’s request in Lender’s Discretion, such other financial information or property
management information (including information on tenants under Leases to the extent such information is available to Borrower,
copies of bank account statements from financial institutions where funds owned or controlled by Borrower are maintained, and an
accounting of security deposits) as may be required by Lender from time to time, in each case within 30 days after such request.
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(iv)
|
Upon Lender’s request in Lender’s Discretion, a monthly property management report
for the Mortgaged Property, showing the number of inquiries made and rental applications received from tenants or prospective tenants
and deposits received from tenants and any other information requested by Lender within 30 days after such request. However, Lender
will not require the foregoing more frequently than quarterly except when there has been an Event of Default and such Event of
Default is continuing, in which case Lender may require Borrower to furnish the foregoing more frequently.
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(d)
|
Form of Statements; Audited Financials
. A natural person having authority to bind Borrower
(or the SPE Equity Owner or Guarantor, as applicable), acting in his or her capacity as a manager, general partner or an officer
of Borrower, SPE Equity Owner, or Guarantor and not in his or her individual capacity, will certify each of the statements, schedules
and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) to be complete and accurate. Each of the statements, schedules and
reports required by Sections 6.07(b), 6.07(c) and 6.07(f) will be in such form and contain such detail as Lender may reasonably
require. Lender also may require that any of the statements, schedules or reports listed in Sections 6.07(b), 6.07(c) and 6.07(f)
be audited at Borrower’s expense by independent certified public accountants acceptable to Lender, at any time when an Event
of Default has occurred and is continuing or at any time that Lender, in its reasonable judgment, determines that audited financial
statements are required for an accurate assessment of the financial condition of Borrower or of the Mortgaged Property.
|
|
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(e)
|
Failure to Timely Provide Financial Statements
. If Borrower fails to provide in a timely
manner the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f), Lender will give Notice to Borrower
specifying the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) that Borrower has failed to
provide. If Borrower has not provided the required statements, schedules and reports within 10 Business Days following such Notice,
then (i) Borrower will pay a late fee of $500 for each late statement, schedule or report, plus an additional $500 per month that
any such statement, schedule or report continues to be late, and (ii) Lender will have the right to have Borrower’s books
and records audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain
such statements, schedules and reports, and all related costs and expenses of Lender will become immediately due and payable and
will become an additional part of the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s exercise of
its rights to require an audit will not be required in the case of an emergency, as determined in Lender’s Discretion, or
when an Event of Default has occurred and is continuing.
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|
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(f)
|
Delivery of Guarantor and SPE Equity Owner Financial Statements
. Borrower will cause Guarantor
and/or SPE Equity Owner to deliver each of the following to Lender within 10 Business Days following Lender’s request:
|
|
|
(i)
|
Guarantor’s or SPE Equity Owner’s (as applicable) balance sheet and profit and loss
statement as of the end of (A) the quarter that ended at least 30 days prior to the due date of the requested items, and/or
(B) the fiscal year that ended at least 90 days prior to the due date of the requested items.
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|
|
(ii)
|
Other Guarantor or SPE Equity Owner (as applicable) financial statements as Lender may reasonably
require.
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(iii)
|
Written updates on the status of all litigation proceedings that Guarantor or SPE Equity Owner
(as applicable) disclosed or should have disclosed to Lender as of the Closing Date.
|
|
|
(iv)
|
If an Event of Default has occurred and is continuing, copies of Guarantor’s or SPE Equity
Owner’s (as applicable) most recent filed state and federal tax returns, including any current tax return extensions.
|
|
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(g)
|
Reporting Upon Event of Default
. If an Event of Default has occurred and is continuing,
Borrower will deliver to Lender upon written demand all books and records relating to the Mortgaged Property or its operation.
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|
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(h)
|
Credit Reports
. Borrower authorizes Lender to obtain a credit report on Borrower at any
time.
|
|
|
6.08
|
Taxes; Operating Expenses; Ground Rents.
|
|
|
(a)
|
Payment of Taxes and Ground Rent
. Subject to the provisions of Sections 6.08(c) and (d),
Borrower will pay or cause to be paid (i) all Taxes when due and before the addition of any interest, fine, penalty or cost for
nonpayment, and (ii) if Borrower’s interest in the Mortgaged Property is as a Ground Lessee, then the monthly or other periodic
installments of Ground Rent before the last date upon which each such installment may be made without penalty or interest charges
being added.
|
|
|
(b)
|
Payment of Operating Expenses
. Subject to the provisions of Section 6.08(c), Borrower will
(i) pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including utilities, Repairs and
Capital Replacements) before the last date upon which each such payment may be made without any penalty or interest charge being
added, and (ii) pay Insurance premiums prior to the expiration date of each policy of Insurance, unless applicable law specifies
some lesser period.
|
|
|
(c)
|
Payment of Impositions and Reserve Funds
. If Lender is collecting Imposition Reserve Deposits
pursuant to Article IV, then so long as no Event of Default exists, Borrower will not be obligated to pay any Imposition for which
Imposition Reserve Deposits are being collected, whether Taxes, Insurance premiums, Ground Rent (if applicable) or any other individual
Impositions, but only to the extent that sufficient Imposition Reserve Deposits are held by Lender for the purpose of paying that
specific Imposition and Borrower has timely delivered to Lender any bills or premium notices that it has received with respect
to that specific Imposition (other than Ground Rent). Lender will have no liability to Borrower for failing to pay any Impositions
to the extent that: (i) any Event of Default has occurred and is continuing, (ii) insufficient Imposition Reserve Deposits are
held by Lender at the time an Imposition becomes due and payable, or (iii) Borrower has failed to provide Lender with bills and
premium notices as provided in this Section.
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Multifamily Loan and Security Agreement
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(d)
|
Right to Contest
. Borrower, at its own expense, may contest by appropriate legal proceedings,
conducted diligently and in good faith, the amount or validity of any Imposition other than Insurance premiums and Ground Rent
(if applicable), if: (i) Borrower notifies Lender of the commencement or expected commencement of such proceedings, (ii) the Mortgaged
Property is not in danger of being sold or forfeited, (iii) if Borrower has not already paid the Imposition, Borrower deposits
with Lender reserves sufficient to pay the contested Imposition, if requested by Lender, and (iv) Borrower furnishes whatever additional
security is required in the proceedings or is reasonably requested by Lender, which may include the delivery to Lender of reserves
established by Borrower to pay the contested Imposition.
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|
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6.09
|
Preservation, Management and Maintenance of Mortgaged Property.
|
|
|
(a)
|
Maintenance of Mortgaged Property; No Waste
. Borrower will keep the Mortgaged Property in
good repair, including the replacement of Personalty and Fixtures with items of equal or better function and quality. Borrower
will not commit waste or permit impairment or deterioration of the Mortgaged Property.
|
|
|
(b)
|
Abandonment of Mortgaged Property
. Borrower will not abandon the Mortgaged Property.
|
|
|
(c)
|
Preservation of Mortgaged Property
. Borrower will restore or repair promptly, in a good
and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its original condition, or such other condition
as Lender may approve in writing, whether or not Insurance proceeds or Condemnation awards are available to cover any costs of
such Restoration or repair; provided, however, that Borrower will not be obligated to perform such Restoration or repair if (i)
no Event of Default has occurred and is continuing, and (ii) Lender has elected to apply any available Insurance proceeds and/or
Condemnation awards to the payment of Indebtedness pursuant to Section 6.10(l) or Section 6.11(d).
|
|
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(d)
|
Property Management
. Borrower will provide for professional management of the Mortgaged
Property by the Property Manager at all times under a property management agreement approved by Lender in writing. Borrower will
not surrender, terminate, cancel, modify, renew or extend its property management agreement, or enter into any other agreement
relating to the management or operation of the Mortgaged Property with Property Manager or any other Person, or consent to the
assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of
Lender, which consent will not be unreasonably withheld.
|
|
|
(i)
|
If at any time Lender consents to the appointment of a new Property Manager, such new Property
Manager and Borrower will, as a condition of Lender’s consent, execute an Assignment of Management Agreement in a form acceptable
to Lender.
|
|
|
(ii)
|
If any such replacement Property Manager is an Affiliate of Borrower, and if a nonconsolidation
opinion was delivered on the Closing Date, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance
satisfactory to Lender with regard to nonconsolidation.
|
|
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(e)
|
Alteration of Mortgaged Property
. Borrower will give Notice to Lender of and, unless otherwise
directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property,
Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or
other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal,
demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except that each
of the following is permitted:
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Multifamily Loan and Security Agreement
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|
|
|
(i)
|
Repairs or Capital Replacements in accordance with the terms and conditions of this Loan Agreement.
|
|
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(ii)
|
Any repairs or replacements made in connection with the replacement of tangible Personalty.
|
|
|
(iii)
|
If Borrower is a cooperative housing corporation or association, repairs or replacements to the
extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement.
|
|
|
(iv)
|
Any repairs or replacements in connection with making an individual unit ready for a new occupant
or pursuant to Sections 6.09(a) and (c).
|
|
|
(v)
|
Property Improvement Alterations, provided that each of the following conditions is satisfied:
|
|
|
(A)
|
At least 30 days prior to the commencement of any Property Improvement Alterations, Borrower must
submit to Lender a Property Improvement Notice. The Property Improvement Notice must include all of the following information:
|
|
|
(1)
|
The expected start date and completion date of the Property Improvement Alterations.
|
|
|
(2)
|
A description of the anticipated Property Improvement Alterations to be made.
|
|
|
(3)
|
The projected budget of the Property Improvement Alterations and the source of funding.
|
If any changes to Property Improvement
Alterations as described in the Property Improvement Notice are made that extend beyond the overall scope and intent of the Property
Improvement Alterations set forth in the Property Improvement Notice (
e.g.,
renovations changed to renovate common areas
but Property Improvement Notice only described renovations to the residential dwelling unit bathrooms), then Borrower must submit
a new Property Improvement Notice to Lender in accordance with this Section 6.09(e)(v)(A).
|
|
(B)
|
The Property Improvement Alterations may not be commenced within 12 months prior to the Maturity
Date without prior written consent of the Lender and must be completed at least 6 months prior to the Maturity Date.
|
|
|
(C)
|
Neither the performance nor completion of the Property Improvement Alterations may result in any
of the following:
|
(1) An
adverse effect on any Major Building System.
|
Multifamily Loan and Security Agreement
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|
|
(2)
|
A change in residential dwelling unit configurations on a permanent basis.
|
|
|
(3)
|
An increase or decrease in the total number of residential dwelling units.
|
|
|
(4)
|
The demolition of any existing Improvements.
|
|
|
(5)
|
A permanent obstruction of tenants’ access to units or a temporary obstruction of tenants’
access to units without a reasonable alternative access provided during the period of renovation which causes the obstruction.
|
|
|
(D)
|
The cost of the Property Improvement Alterations made to residential dwelling units during the
term of the Mortgage must not exceed the Property Improvement Total Amount.
|
|
|
(E)
|
The Leases used to calculate Minimum Occupancy for use in Section 6.09(e)(v)(I) must meet all of
the following conditions:
|
|
|
(1)
|
The Leases are with tenants that are not Affiliates of Borrower or Guarantor (except as otherwise
expressly agreed by Lender in writing).
|
|
|
(2)
|
The Leases are on arms’ length terms and conditions.
|
|
|
(3)
|
The Leases otherwise satisfy the requirements of the Loan Documents.
|
|
|
(F)
|
The Property Improvement Alterations must be completed in accordance with Section 6.14 and any
reference to Repairs in Sections 6.06 and 6.14 will be deemed to include Property Improvement Alterations.
|
|
|
(G)
|
Upon completion of the applicable Property Improvement Alterations, Borrower must provide all of
the following to the Lender:
|
|
|
(1)
|
Borrower’s Certificate of Property Improvement Alterations Completion, in the form attached
as
Exhibit O
(“
Certificate of Completion
”).
|
|
|
(2)
|
Any other certificates or approval, acceptance or compliance required by Lender, including certificates
of occupancy, from any Governmental Authority having jurisdiction over the Mortgaged Property and the Property Improvement Alterations
and professional engineers certifications.
|
|
|
(H)
|
Borrower must deliver to Lender within 10 days of Lender’s request a written status update
on the Property Improvement Alterations.
|
|
Multifamily Loan and Security Agreement
|
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|
|
|
(I)
|
While Property Improvement Alterations that result in individual residential dwelling units not
being available for leasing are ongoing, if a Rent Schedule shows that the occupancy of the Mortgaged Property has decreased to
less than the Minimum Occupancy, Borrower must take each of the following actions:
|
|
|
(1)
|
Complete all pending Property Improvement Alterations to such individual residential dwelling units
in a timely manner until the Mortgaged Property satisfies the Minimum Occupancy requirement.
|
|
|
(2)
|
Suspend any additional Property Improvement Alterations which would cause residential dwelling
units to be unavailable for leasing until the Mortgaged Property satisfies the Minimum Occupancy requirement.
|
|
|
(J)
|
If Borrower has commenced Property Improvement Alterations on the Mortgaged Property, then Borrower
will deliver to Lender, upon Lender’s request, and in a timely manner, the Certificate of Completion together with such additional
information as Lender may request.
|
|
|
(K)
|
At no time during the term of the Loan may the Property Improvement Total Amount (including any
amounts expended by Borrower on Property Improvement Alterations for Non-Residential Units) then outstanding for services and/or
materials that are then due and payable exceed 10% of the original principal loan amount; provided that at no time will such amount
exceed the Property Improvement Total Amount
.
|
|
|
(f)
|
Establishment of MMP
. Unless otherwise waived by Lender in writing, Borrower will have or
will establish and will adhere to the MMP. If Borrower is required to have an MMP, Borrower will keep all MMP documentation at
the Mortgaged Property or at the Property Manager’s office and available for review by Lender or the Loan Servicer during
any annual assessment or other inspection of the Mortgaged Property that is required by Lender. At a minimum, the MMP must contain
a provision for: (i) staff training, (ii) information to be provided to tenants, (iii) documentation of the plan, (iv) the appropriate
protocol for incident response and remediation, and (v) routine, scheduled inspections of common space and unit interiors.
|
|
|
(g)
|
No Reduction of Housing Cooperative Charges
. If Borrower is a housing cooperative corporation
or association, until the Indebtedness is paid in full, Borrower will not reduce the maintenance fees, charges or assessments payable
by shareholders or residents under proprietary leases or occupancy agreements below a level which is sufficient to pay all expenses
of Borrower, including all operating and other expenses for the Mortgaged Property and all payments due pursuant to the terms of
the Note and any Loan Documents.
|
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Multifamily Loan and Security Agreement
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|
|
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(h)
|
through (l) are reserved.
|
|
|
6.10
|
Insurance.
At all times during the term of this Loan Agreement, Borrower will maintain at
its sole cost and expense, for the mutual benefit of Borrower and Lender, all of the Insurance specified in this Section 6.10,
as required by Lender and applicable law, and in such amounts and with such maximum deductibles as Lender may require, as those
requirements may change:
|
|
|
(a)
|
Property Insurance
. Borrower will keep the Improvements insured at all times against relevant
physical hazards that may cause damage to the Mortgaged Property as Lender may require (“
Property Insurance
”).
Required Property Insurance coverage may include any or all of the following:
|
|
|
(i)
|
All Risks of Physical Loss
. Insurance against loss or damage from fire, wind, hail, and
other related perils within the scope of a “Special Causes of Loss” or “All Risk” policy, in an amount
not less than the Replacement Cost of the Mortgaged Property.
|
|
|
(ii)
|
Ordinance and Law
. If any part of the Mortgaged Property is legal non-conforming under current
building, zoning or land use laws or ordinances, then “Ordinance and Law Coverage” in the amount required by Lender.
|
|
|
(iii)
|
Flood
. If any of the Improvements are located in an area identified by the Federal Emergency
Management Agency (or any successor to that agency) as a “Special Flood Hazard Area,” flood Insurance in the amount
required by Lender.
|
|
|
(iv)
|
Windstorm
. If windstorm and/or windstorm related perils and/or “named storm”
(collectively, “
Windstorm Coverage
”), are excluded from the “Special Causes of Loss” policy required
under Section 6.10(a)(i), then separate coverage for such risks, either through an endorsement or a separate policy. Windstorm
Coverage will be written in an amount not less than the Replacement Cost of the Mortgaged Property.
|
|
|
(v)
|
Boiler and Machinery/Equipment Breakdown
. If the Mortgaged Property contains a central heating,
ventilation and cooling system (“
HVAC System
”) where steam boilers and/or other pressurized systems are in operation
and are regulated by the Property Jurisdiction, Insurance providing coverage in the amount required by Lender.
|
|
|
(vi)
|
Builder’s Risk
. During any period of construction or Restoration, builder’s
risk Insurance (including fire and other perils within the scope of a policy known as “Causes of Loss – Special Form”
or “All Risk” policy) in an amount not less than the sum of the related contractual arrangements.
|
|
|
(vii)
|
Other
. Insurance for other physical perils applicable to the Mortgaged Property as may be
required by Lender including earthquake, sinkhole, mine subsidence, avalanche, mudslides, and volcanic eruption. If Lender reasonably
requires any updated reports or other documentation to determine whether additional Insurance is necessary or prudent, Borrower
will pay for the updated reports or other documentation at its sole cost and expense.
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Multifamily Loan and Security Agreement
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|
|
|
(b)
|
Business Income/Rental Value
. Business income/rental value Insurance for all relevant perils
to be covered in the amount required by Lender, but in no case less than the effective gross income attributable to the Mortgaged
Property for the preceding 12 months, as determined by Lender in Lender’s Discretion.
|
|
|
(c)
|
Commercial General Liability Insurance
. Commercial general liability Insurance against legal
liability claims for personal and bodily injury, property damage and contractual liability in such amounts and with such maximum
deductibles as Lender may require, but not less than $1,000,000 per occurrence and $2,000,000 in the general aggregate on a per-location
basis, plus excess and/or umbrella liability coverage in such amounts as Lender may require.
|
|
|
(d)
|
Terrorism Insurance
. Insurance required under Section 6.10(a), Section 6.10(b), and
Section 6.10(c) will provide coverage for acts of terrorism. Terrorism coverage may be provided through one or more separate policies,
which will be on terms (including amounts) consistent with those required under Section 6.10(a)(i) and (ii) and Section 6.10(b).
If Insurance against acts of terrorism is not available at commercially reasonable rates and if the related hazards are not at
the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which
the Mortgaged Property is located, then Lender may opt to temporarily suspend, cap or otherwise limit the requirement to have such
terrorism insurance for a period not to exceed one year, unless such suspension or cap is renewed by Lender for additional one
year increments.
|
|
|
(e)
|
Payment of Premiums
. All Property Insurance premiums and premiums for other Insurance required
under this Section 6.10 will be paid in the manner provided in Article IV, unless Lender has designated in writing another
method of payment.
|
|
|
(f)
|
Policy Requirements
. The following requirements apply with respect to all Insurance required
by this Section 6.10:
|
|
|
(i)
|
All Insurance policies will be in a form approved by Lender.
|
|
|
(ii)
|
All Insurance policies will be issued by Insurance companies authorized to do business in the Property
Jurisdiction and/or acting as eligible surplus insurers in the Property Jurisdiction, which have a general policyholder’s
rating satisfactory to Lender.
|
|
|
(iii)
|
All Property Insurance policies will contain a standard mortgagee or mortgage holder’s clause
and a loss payable clause, in favor of, and in a form approved by, Lender.
|
|
|
(iv)
|
If any Insurance policy contains a coinsurance clause, the coinsurance clause will be offset by
an agreed amount endorsement in an amount not less than the Replacement Cost.
|
|
|
(v)
|
All commercial general liability and excess/umbrella liability policies will name Lender, its successors
and/or assigns, as additional insured.
|
|
|
(vi)
|
Professional liability policies will not include Lender, its successors and/or assigns, as additional
insured.
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Multifamily Loan and Security Agreement
|
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|
|
|
(vii)
|
All Insurance policies (with the exception of commercial general liability Insurance policies)
will provide that the insurer will notify Lender in writing of cancelation of policies at least 10 days before the cancelation
of the policy by the insurer for nonpayment of the premium or nonrenewal and at least 30 days before cancelation by the insurer
for any other reason.
|
|
|
(g)
|
Evidence of Insurance; Insurance Policy Renewals
. Borrower will deliver to Lender a legible
copy of each Insurance policy, and Borrower will promptly deliver to Lender a copy of all renewal and other notices received by
Borrower with respect to the policies. Borrower will ensure that the Mortgaged Property is continuously covered by the required
Insurance. Prior to the expiration date of each Insurance policy, Borrower will deliver to Lender evidence acceptable to Lender
in Lender’s Discretion that each policy has been renewed. If the evidence of a renewal does not include a legible copy of
the renewal policy, Borrower will deliver a legible copy of such renewal no later than the earlier of the following:
|
|
|
(i)
|
60 days after the expiration date of the original policy.
|
|
|
(ii)
|
The date of any Notice of an insured loss given to Lender under Section 6.10(i).
|
|
|
(h)
|
Compliance With Insurance Requirements
. Borrower will comply with all Insurance requirements
and will not permit any condition to exist on the Mortgaged Property that would invalidate any part of any Insurance coverage required
under this Loan Agreement.
|
|
|
(i)
|
Obligations Upon Casualty; Proof of Loss
.
|
|
|
(i)
|
If an insured loss occurs, then Borrower will give immediate written notice to the Insurance carrier
and to Lender.
|
|
|
(ii)
|
Borrower authorizes and appoints Lender as attorney in fact for Borrower to make proof of loss,
to adjust and compromise any claims under policies of Property Insurance, to appear in and prosecute any action arising from such
Property Insurance policies, to collect and receive the proceeds of Property Insurance, to hold the proceeds of Property Insurance,
and to deduct from such proceeds Lender’s expenses incurred in the collection of such proceeds. This power of attorney is
coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 6.10 will require Lender
to incur any expense or take any action.
|
|
|
(j)
|
Lender’s Options Following a Casualty
. Lender may, at Lender’s option, take
one of the following actions:
|
|
|
(i)
|
Require a “repair or replacement” settlement, in which case the proceeds will be used
to reimburse Borrower for the cost of restoring and repairing the Mortgaged Property to the equivalent of its original condition
or to a condition approved by Lender (“
Restoration
”). If Lender determines to require a repair or replacement
settlement and to apply Insurance proceeds to Restoration, Lender will apply the proceeds in accordance with Lender’s then-current
policies relating to the Restoration of casualty damage on similar multifamily properties. If Lender, in Lender’s Discretion,
retains a professional inspection engineer or other qualified third party to inspect any Restoration items, Lender may charge Borrower
an amount sufficient to pay all reasonable costs and expenses charged by such third party inspector.
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Multifamily Loan and Security Agreement
|
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|
|
|
(ii)
|
Require an “actual cash value” settlement in which case the proceeds may be applied
to the payment of the Indebtedness, whether or not then due.
|
|
|
(k)
|
Borrower’s Options Following a Casualty
. Subject to Section 6.10(l), Borrower
may take the following actions:
|
|
|
(i)
|
If a casualty results in damage to the Mortgaged Property for which the cost of Repairs will be
less than the Borrower Proof of Loss Threshold, Borrower will have the sole right to make proof of loss, adjust and compromise
the claim and collect and receive any proceeds directly without the approval or prior consent of Lender so long as the Insurance
proceeds are used solely for the Restoration of the Mortgaged Property.
|
|
|
(ii)
|
If a casualty results in damage to the Mortgaged Property for which the cost of Repairs will be
more than the Borrower Proof of Loss Threshold, but less than the Borrower Proof of Loss Maximum, Borrower is authorized to make
proof of loss and adjust and compromise the claim without the prior consent of Lender, and Lender will hold the applicable Insurance
proceeds to be used to reimburse Borrower for the cost of Restoration of the Mortgaged Property and will not apply such proceeds
to the payment of the Indebtedness.
|
|
|
(iii)
|
If a casualty results in damage to the Mortgaged Property for which the cost of Repairs will be
more than the Borrower Proof of Loss Maximum, Borrower must obtain the consent of Lender prior to making any proof of loss or adjusting
or compromising the claim, and Lender will hold the applicable Insurance proceeds to be used to reimburse Borrower for the cost
of Restoration of the Mortgaged Property and will not apply such proceeds to the payment of the Indebtedness.
|
|
|
(l)
|
Lender’s Right to Apply Insurance Proceeds to Indebtedness
. Lender will have the right
to apply Insurance proceeds to the payment of the Indebtedness if Lender determines, in Lender’s Discretion, that any of
the following conditions exist:
|
|
|
(i)
|
An Event of Default (or any event, which, with the giving of Notice or the passage of time, or
both, would constitute an Event of Default) has occurred and is continuing.
|
|
|
(ii)
|
There will not be sufficient funds from Insurance proceeds, anticipated contributions of Borrower
of its own funds or other sources acceptable to Lender to complete the Restoration.
|
|
|
(iii)
|
The rental income from the Mortgaged Property after completion of the Restoration will not be sufficient
to meet all operating costs and other expenses, deposits to Reserve Funds and Loan repayment obligations relating to the Mortgaged
Property.
|
|
|
(iv)
|
The Restoration will be completed less than (A) 6 months prior to the Maturity Date if re-leasing
will be completed prior to the Maturity Date, or (B) 12 months prior to the Maturity Date if re-leasing will not be completed
prior to the Maturity Date.
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|
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|
|
|
(v)
|
The Restoration will not be completed within one year after the date of the loss or casualty.
|
|
|
(vi)
|
The casualty involved an actual or constructive loss of more than 30% of the fair market value
of the Mortgaged Property, and rendered untenantable more than 30% of the residential units of the Mortgaged Property.
|
|
|
(vii)
|
After completion of the Restoration the fair market value of the Mortgaged Property is expected
to be less than the fair market value of the Mortgaged Property immediately prior to such casualty (assuming the affected portion
of the Mortgaged Property is re-let within a reasonable period after the date of such casualty).
|
|
|
(viii)
|
Leases covering less than 35% of the residential units of the Mortgaged Property will remain in
full force and effect during and after the completion of Restoration.
|
|
|
(m)
|
Lender’s Succession to Insurance Policies
. If the Mortgaged Property is sold at a
foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will automatically succeed to all rights of Borrower
in and to any Insurance policies and unearned Insurance premiums and in and to the proceeds resulting from any damage to the Mortgaged
Property prior to such sale or acquisition.
|
|
|
(n)
|
Payment of Installments After Application of Insurance Proceeds
. Unless Lender otherwise
agrees in writing, any application of any Insurance proceeds to the Indebtedness will not extend or postpone the due date of any
monthly installments referred to in the Note, Article IV of this Loan Agreement or change the amount of such installments.
|
|
|
(o)
|
Assignment of Insurance Proceeds
. Borrower agrees to execute such further evidence of assignment
of any Insurance proceeds as Lender may require.
|
|
|
(p)
|
Borrower Acknowledgment of Lender’s Right to Change Insurance Requirements
. Borrower
acknowledges and agrees that Lender’s Insurance requirements may change from time to time throughout the term of the Indebtedness
to include coverage for the kind of risks customarily insured against and in such minimum coverage amounts and maximum deductibles
as are generally required by institutional lenders for properties comparable to the Mortgaged Property.
|
|
|
(a)
|
Rights Generally
. Borrower will promptly notify Lender in writing of any action or proceeding
or notice relating to any proposed or actual condemnation or other taking, or conveyance in lieu thereof, of all or any part of
the Mortgaged Property, whether direct or indirect (“
Condemnation
”). Borrower will appear in and prosecute or
defend any action or proceeding relating to any Condemnation unless otherwise directed by Lender in writing. Borrower authorizes
and appoints Lender as attorney in fact for Borrower to commence, appear in and prosecute, in Lender’s or Borrower’s
name, any action or proceeding relating to any Condemnation and to settle or compromise any claim in connection with any Condemnation,
after consultation with Borrower and consistent with commercially reasonable standards of a prudent lender. This power of attorney
is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 6.11(a) will require Lender
to incur any expense or take any action. Borrower transfers and assigns to Lender all right, title and interest of Borrower in
and to any award or payment with respect to (i) any Condemnation, or any conveyance in lieu of Condemnation, and (ii) any damage
to the Mortgaged Property caused by governmental action that does not result in a Condemnation.
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Multifamily Loan and Security Agreement
|
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|
|
|
(b)
|
Application of Award
. Lender may hold such awards or proceeds and apply such awards or proceeds,
after the deduction of Lender’s expenses incurred in the collection of such amounts (including Attorneys’ Fees and
Costs) at Lender’s option, to the Restoration or repair of the Mortgaged Property or to the payment of the Indebtedness,
with the balance, if any, to Borrower. Unless Lender otherwise agrees in writing, any application of any awards or proceeds to
the Indebtedness will not extend or postpone the due date of any monthly installments referred to in the Note or Article IV of
this Loan Agreement, or change the amount of such installments. Borrower agrees to execute such further evidence of assignment
of any Condemnation awards or proceeds as Lender may require.
|
|
|
(c)
|
Borrower’s Right to Condemnation Proceeds
. Notwithstanding any provision to the contrary
in this Section 6.11, but subject to Section 6.11(e), in the event of a partial Condemnation of the Mortgaged Property, as long
as no Event of Default, or any event which, with the giving of Notice or the passage of time, or both, would constitute an Event
of Default, has occurred and is continuing, in the event of a partial Condemnation resulting in proceeds or awards in the amount
of less than $100,000, Borrower will have the sole right to make proof of loss, adjust and compromise the claim and collect and
receive any proceeds directly without the approval or prior consent of Lender so long as the proceeds or awards are used solely
for the Restoration of the Mortgaged Property.
|
|
|
(d)
|
Right to Apply Condemnation Proceeds to Indebtedness
. In the event of a partial Condemnation
of the Mortgaged Property resulting in proceeds or awards in the amount of $100,000 or more and subject to Section 6.11(e), Lender
will have the right to apply Condemnation proceeds to the payment of the Indebtedness if Lender determines, in Lender’s Discretion,
that any of the following conditions exist:
|
|
|
(i)
|
An Event of Default (or any event, which, with the giving of Notice or the passage of time, or
both, would constitute an Event of Default) has occurred and is continuing.
|
|
|
(ii)
|
There will not be sufficient funds from Condemnation proceeds, anticipated contributions of Borrower
of its own funds or other sources acceptable to Lender to complete the Restoration.
|
|
|
(iii)
|
The rental income from the Mortgaged Property after completion of the Restoration will not be sufficient
to meet all operating costs and other expenses, deposits to Reserve Funds and Loan repayment obligations relating to the Mortgaged
Property.
|
|
|
(iv)
|
The Restoration will not be completed at least one year before the Maturity Date (or 6 months before
the Maturity Date if re-leasing of the Mortgaged Property will be completed within such 6 month period).
|
|
|
(v)
|
The Restoration will not be completed within one year after the date of the Condemnation.
|
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Multifamily Loan and Security Agreement
|
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|
|
|
(vi)
|
The Condemnation involved an actual or constructive loss of more than 15% of the fair market value
of the Mortgaged Property, and rendered untenantable more than 25% of the residential units of the Mortgaged Property.
|
|
|
(vii)
|
After Restoration the fair market value of the Mortgaged Property is expected to be less than the
fair market value of the Mortgaged Property immediately prior to the Condemnation (assuming the affected portion of the Mortgaged
Property is re-let within a reasonable period after the date of the Condemnation).
|
|
|
(viii)
|
Leases covering less than 35% of residential units of the Mortgaged Property will remain in full
force and effect during and after the completion of Restoration.
|
|
|
(e)
|
Right to Apply Condemnation Proceeds in Connection with a Partial Release
. Notwithstanding
anything to the contrary set forth in this Loan Agreement, including this Section 6.11, for so long as the Loan or any portion
of the Loan is included in a Securitization in which the Note is assigned to a REMIC trust, then each of the following will apply:
|
|
|
(i)
|
If any portion of the Mortgaged Property is released from the Lien of the Loan in connection with
a Condemnation and if the ratio of (A) the unpaid principal balance of the Loan to (B) the value of the Mortgaged Property (with
the value of the Mortgaged Property first being reduced by the outstanding principal balance of any Senior Indebtedness or any
indebtedness secured by the Mortgaged Property that is at the same level of priority with the Indebtedness and taking into account
only the related land and buildings and not any personal property or going-concern value), as determined by Lender in its sole
and absolute discretion based on a commercially reasonable valuation method permitted in connection with a Securitization, is greater
than 125% immediately after such Condemnation and before any Restoration or repair of the Mortgaged Property (but taking into account
any planned Restoration or repair of the Mortgaged Property as if such planned Restoration or repair were completed), then Lender
will apply any net proceeds or awards from such Condemnation, in full, to the payment of the principal of the Indebtedness whether
or not then due and payable, unless Lender has received an opinion of counsel (acceptable to Lender if such opinion is provided
by Borrower) that a different application of the net proceeds or awards will not cause such Securitization to fail to meet applicable
federal income tax qualification requirements or subject such Securitization to any tax, and the net proceeds or awards are applied
in the manner specified in such opinion.
|
|
|
(ii)
|
If (A) neither Borrower nor Lender has the right to receive any or all net proceeds or awards as
a result of the provisions of any agreement affecting the Mortgaged Property (including any Ground Lease (if applicable), condominium
document, or reciprocal easement agreement) and, therefore cannot apply the net proceeds or awards to the payment of the principal
of the Indebtedness as set forth above, or (B) Borrower receives any or all of the proceeds or awards described in Section 6.11(e)(ii)(A)
and fails to apply the proceeds in accordance with Section 6.11(e)(i), then Borrower will prepay the Indebtedness in an amount
which Lender, in its sole and absolute discretion, deems necessary to ensure that the Securitization will not fail to meet applicable
federal income tax qualification requirements or be subject to any tax as a result of the Condemnation, unless Lender has received
an opinion of counsel (acceptable to Lender if such opinion is provided by Borrower) that a different application of the net proceeds
or awards will not cause such Securitization to fail to meet applicable federal income tax qualification requirements or subject
such Securitization to any tax, and the net proceeds or awards are applied in the manner specified in such opinion.
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Multifamily Loan and Security Agreement
|
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|
|
|
(f)
|
Succession to Condemnation Proceeds
. If the Mortgaged Property is sold at a foreclosure
sale or Lender acquires title to the Mortgaged Property, Lender will automatically succeed to all rights of Borrower in and to
any Condemnation proceeds and awards prior to such sale or acquisition.
|
|
|
6.12
|
Environmental Hazards.
|
|
|
(a)
|
Prohibited Activities and Conditions
. Except for matters described in this Section 6.12,
Borrower will not cause or permit Prohibited Activities or Conditions. Borrower will comply with all Hazardous Materials Laws applicable
to the Mortgaged Property. Without limiting the generality of the previous sentence, Borrower will: (i) obtain and maintain all
Environmental Permits required by Hazardous Materials Laws and comply with all conditions of such Environmental Permits, (ii) cooperate
with any inquiry by any Governmental Authority, and (iii) subject to Section 6.12(g), comply with any governmental or judicial
order that arises from any alleged Prohibited Activity or Condition.
|
|
|
(b)
|
Employees, Tenants and Contractors
. Borrower will take all commercially reasonable actions
(including the inclusion of appropriate provisions in any Leases executed after the date of this Loan Agreement) to prevent its
employees, agents and contractors, and all tenants and other occupants from causing or permitting any Prohibited Activities or
Conditions. Borrower will not lease or allow the sublease or use of all or any portion of the Mortgaged Property to any tenant
or subtenant for nonresidential use by any user that, in the ordinary course of its business, would cause or permit any Prohibited
Activity or Condition.
|
|
|
(c)
|
O&M Programs
. As required by Lender, Borrower will also have established a written operations
and maintenance program with respect to certain Hazardous Materials. Each such operations and maintenance program and any additional
or revised operations and maintenance programs established for the Mortgaged Property pursuant to this Section 6.12 must be approved
by Lender and will be referred to in this Loan Agreement as an “
O&M Program
.” Borrower will comply in a
timely manner with, and cause all employees, agents, and contractors of Borrower and any other Persons present on the Mortgaged
Property to comply with each O&M Program. Borrower will pay all costs of performance of Borrower’s obligations under
any O&M Program, and Lender’s out of pocket costs incurred in connection with the monitoring and review of each O&M
Program must be paid by Borrower upon demand by Lender. Any such out-of-pocket costs of Lender that Borrower fails to pay promptly
will become an additional part of the Indebtedness as provided in Section 9.02.
|
|
|
(d)
|
Notice to Lender
. Borrower will promptly give Notice to Lender upon the occurrence of any
of the following events:
|
|
|
(i)
|
Borrower’s discovery of any Prohibited Activity or Condition.
|
|
Multifamily Loan and Security Agreement
|
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|
|
|
(ii)
|
Borrower’s receipt of or knowledge of any written complaint, order, notice of violation or
other communication from any tenant, Property Manager, Governmental Authority or other Person with regard to present or future
alleged Prohibited Activities or Conditions, or any other environmental, health or safety matters affecting the Mortgaged Property.
|
|
|
(iii)
|
Borrower’s breach of any of its obligations under this Section 6.12.
|
Any such Notice
given by Borrower will not relieve Borrower of, or result in a waiver of, any obligation under this Loan Agreement, the Note or
any other Loan Document.
|
|
(e)
|
Environmental Inspections, Tests and Audits
. Borrower will pay promptly the costs of any
environmental inspections, tests or audits, a purpose of which is to identify the extent or cause of or potential for a Prohibited
Activity or Condition (“
Environmental Inspections
”), required by Lender in connection with any foreclosure or
deed in lieu of foreclosure, or as a condition of Lender’s consent to any Transfer under Article VII, or required by Lender
following a reasonable determination by Lender that Prohibited Activities or Conditions may exist. Any such costs incurred by Lender
(including Attorneys’ Fees and Costs and the costs of technical consultants whether incurred in connection with any judicial
or administrative process or otherwise) that Borrower fails to pay promptly will become an additional part of the Indebtedness
as provided in Section 9.02. As long as: (i) no Event of Default has occurred and is continuing, (ii) Borrower has actually paid
for or reimbursed Lender for all costs of any such Environmental Inspections performed or required by Lender, and (iii) Lender
is not prohibited by law, contract or otherwise from doing so, Lender will make available to Borrower, without representation of
any kind, copies of Environmental Inspections prepared by third parties and delivered to Lender. Lender reserves the right, and
Borrower expressly authorizes Lender, to make available to any party, including any prospective bidder at a foreclosure sale of
the Mortgaged Property, the results of any Environmental Inspections made by or for Lender with respect to the Mortgaged Property.
Borrower consents to Lender notifying any party (either as part of a notice of sale or otherwise) of the results of any Environmental
Inspections made by or for Lender. Borrower acknowledges that Lender cannot control or otherwise ensure the truthfulness or accuracy
of the results of any Environmental Inspections and that the release of such results to prospective bidders at a foreclosure sale
of the Mortgaged Property may have a material and adverse effect upon the amount that a party may bid at such sale. Borrower agrees
that Lender will have no liability whatsoever as a result of delivering the results of any Environmental Inspections made by or
for Lender to any third party, and Borrower releases and forever discharges Lender from any and all claims, damages or causes of
action arising out of, connected with or incidental to the results of the delivery of any Environmental Inspections made by or
for Lender.
|
|
|
(f)
|
Remedial Work
. If any investigation, site monitoring, containment, clean-up, Restoration
or other remedial work (“
Remedial Work
”) is necessary to comply with any Hazardous Materials Law or order of
any Governmental Authority that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of
the Mortgaged Property, or is otherwise required by Lender as a consequence of any Prohibited Activity or Condition or to prevent
the occurrence of a Prohibited Activity or Condition, Borrower will, by the earlier of (i) the applicable deadline required by
Hazardous Materials Law, or (ii) 30 days after Notice from Lender demanding such action, begin performing the Remedial Work, and
thereafter diligently prosecute it to completion, and must in any event complete the work by the time required by applicable Hazardous
Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at
its option, cause the Remedial Work to be completed, in which case Borrower will reimburse Lender on demand for the cost of doing
so. Any reimbursement due from Borrower to Lender will become part of the Indebtedness as provided in Section 9.02.
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Multifamily Loan and Security Agreement
|
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|
|
|
(g)
|
Borrower Contest of Order
. Notwithstanding Section 6.12(f), Borrower may contest the order
of any Governmental Authority in good faith through appropriate proceedings, provided that (i) Borrower has demonstrated to Lender’s
satisfaction that any delay in completing Remedial Work pending the outcome of such proceedings would not result in damage to the
Mortgaged Property or to persons who use or occupy the Improvements, or otherwise impair Lender’s interest under this Loan
Agreement, and (ii) if any delay in completing the Remedial Work results or may result in a Lien against the Mortgaged Property,
Borrower must promptly furnish to Lender a bond or other security satisfactory to Lender in an amount not less than 150% of the
applicable claim.
|
6.13 Single
Purpose Entity Requirements.
|
|
(a)
|
Single Purpose Entity Requirements
. Until the Indebtedness is paid in full, each Borrower
and any SPE Equity Owner will remain a
“Single Purpose Entity,”
which means at all times since its formation
and thereafter it will satisfy each of the following conditions:
|
|
|
(i)
|
It will not engage in any business or activity, other than the ownership, operation and maintenance
of the Mortgaged Property and activities incidental thereto.
|
|
|
(ii)
|
It will not acquire, own, hold, lease, operate, manage, maintain, develop or improve any assets
other than the Mortgaged Property and such Personalty as may be necessary for the operation of the Mortgaged Property and will
conduct and operate its business as presently conducted and operated.
|
|
|
(iii)
|
It will preserve 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 will do all things necessary to observe
organizational formalities.
|
|
|
(iv)
|
It will not merge or consolidate with any other Person.
|
|
|
(v)
|
It will not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to
sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit
the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than Transfers permitted
under this Loan Agreement; issue additional partnership, membership or other equity interests, as applicable, or seek to accomplish
any of the foregoing.
|
|
|
(vi)
|
It will not, without the prior unanimous written consent of all of Borrower’s partners, members,
or shareholders, as applicable, and, if applicable, the prior unanimous written consent of 100% of the members of the board of
directors or of the board of Managers of Borrower or the SPE Equity Owner, take any of the following actions:
|
|
Multifamily Loan and Security Agreement
|
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|
|
|
(A)
|
File any insolvency, or reorganization case or proceeding, to institute proceedings to have Borrower
or any SPE Equity Owner be adjudicated bankrupt or insolvent.
|
|
|
(B)
|
Institute proceedings under any applicable insolvency law.
|
|
|
(C)
|
Seek any relief under any law relating to relief from debts or the protection of debtors.
|
|
|
(D)
|
Consent to the filing or institution of bankruptcy or insolvency proceedings against Borrower or
any SPE Equity Owner.
|
|
|
(E)
|
File a petition seeking, or consent to, reorganization or relief with respect to Borrower or any
SPE Equity Owner under any applicable federal or state law relating to bankruptcy or insolvency.
|
|
|
(F)
|
Seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian, or any similar official for Borrower or a substantial part of its property or for any SPE Equity Owner or a substantial
part of its property.
|
|
|
(G)
|
Make any assignment for the benefit of creditors of Borrower or any SPE Equity Owner.
|
|
|
(H)
|
Admit in writing Borrower’s or any SPE Equity Owner’s inability to pay its debts generally
as they become due.
|
|
|
(I)
|
Take action in furtherance of any of the foregoing.
|
|
|
(vii)
|
It will not amend or restate its organizational documents if such change would cause the provisions
set forth in those organizational documents not to comply with the requirements set forth in this Section 6.13.
|
|
|
(viii)
|
It will not own any subsidiary or make any investment in, any other Person.
|
|
|
(ix)
|
It will not commingle its assets with the assets of any other Person and will hold all of its assets
in its own name.
|
|
|
(x)
|
It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing
any obligation), other than the following:
|
|
|
(A)
|
The Indebtedness and any further indebtedness as described in Section 11.11 with regard to Supplemental
Instruments.
|
|
|
(B)
|
Customary unsecured trade payables incurred in the ordinary course of owning and operating the
Mortgaged Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum
amount of 2% of the original principal amount of the Indebtedness and are paid within 60 days of the date incurred.
|
|
|
(C)
|
through (H) are reserved.
|
|
Multifamily Loan and Security Agreement
|
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|
|
|
(xi)
|
It will maintain its records, books of account, bank accounts, financial statements, accounting
records and other entity documents separate and apart from those of any other Person and will not list its assets as assets on
the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated
financial statement of its Affiliate provided that (A) appropriate notation will be made on such consolidated financial statements
to indicate the separateness of Borrower from such Affiliate and to indicate that Borrower’s assets and credit are not available
to satisfy the debts and other obligations of such Affiliate or any other Person, and (B) such assets will also be listed on Borrower’s
own separate balance sheet.
|
|
|
(xii)
|
Except for capital contributions or capital distributions permitted under the terms and conditions
of its organizational documents, it will only enter into any contract or agreement with any general partner, member, shareholder,
principal or Affiliate of Borrower or any Guarantor, or any general partner, member, principal or Affiliate thereof, upon terms
and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length
basis with third parties.
|
|
|
(xiii)
|
It will not maintain its assets in such a manner that will be costly or difficult to segregate,
ascertain or identify its individual assets from those of any other Person.
|
|
|
(xiv)
|
It will not assume or guaranty (excluding any guaranty that has been executed and delivered in
connection with the Note) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another
Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other
Person, or hold out its credit as being available to satisfy the obligations of any other Person.
|
|
|
(xv)
|
It will not make or permit to remain outstanding any loans or advances to any other Person except
for those investments permitted under the Loan Documents and will not buy or hold evidence of indebtedness issued by any other
Person (other than cash or investment-grade securities).
|
|
|
(xvi)
|
It will file its own tax returns separate from those of any other Person, except if Borrower (A)
is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law
or (B) is required by applicable law to file consolidated tax returns, and will pay any taxes required to be paid under applicable
law.
|
|
|
(xvii)
|
It will hold itself out to the public as a legal entity separate and distinct from any other Person
and conduct its business solely in its own name, will correct any known misunderstanding regarding its separate identity and will
not identify itself or any of its Affiliates as a division or department of any other Person.
|
|
|
(xviii)
|
It will maintain adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated business operations and will pay its debts and liabilities from its
own assets as the same become due; provided, however, nothing in this Section 6.13(a)(xviii) will require any member or partner
of Borrower or any Borrower Principal to make any equity contribution to Borrower.
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Multifamily Loan and Security Agreement
|
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|
|
|
(xix)
|
It will allocate fairly and reasonably shared expenses with Affiliates (including shared office
space) and use separate stationery, invoices and checks bearing its own name.
|
|
|
(xx)
|
It will pay (or cause the Property Manager to pay on behalf of Borrower from Borrower’s funds)
its own liabilities (including salaries of its own employees) from its own funds; provided, however, nothing in this Section 6.13(a)(xx)
will require any member or partner of Borrower or any Borrower Principal to make any equity contribution to Borrower.
|
|
|
(xxi)
|
It will not acquire obligations or securities of its partners, members, shareholders, or Affiliates,
as applicable.
|
|
|
(xxii)
|
Except as contemplated or permitted by the property management agreement with respect to the Property
Manager, it will not permit any Affiliate or constituent party independent access to its bank accounts.
|
|
|
(xxiii)
|
It will maintain a sufficient number of employees (if any) in light of its contemplated business
operations and pay the salaries of its own employees, if any, only from its own funds; provided, however, nothing in this Section
6.13(a)(xxiii) will require any member or partner of Borrower or any Borrower Principal to make any equity contribution to Borrower.
|
|
|
(xxiv)
|
If such entity is a single member limited liability company, such entity will satisfy each of the
following conditions:
|
|
|
(A)
|
Be formed and organized under Delaware law.
|
|
|
(B)
|
Have either one springing member that is a corporation or two springing members who are natural
persons. If there is more than one springing member, only one springing member will be the sole member of Borrower or SPE Equity
Owner (as applicable) at any one time, and the second springing member will become the sole member only upon the first springing
member ceasing to be a member.
|
|
|
(C)
|
Otherwise comply with all Rating Agencies’ criteria for single member limited liability companies
(including the delivery of Delaware single member limited liability company opinions acceptable in all respects to Lender).
|
|
|
(D)
|
At all times Borrower or SPE Equity Owner (as applicable) will have one and only one member.
|
|
|
(xxv)
|
If such entity is a single member limited liability company that is board-managed, such entity
will have a board of Managers separate from that of Guarantor and any other Person and will cause its board of Managers to keep
minutes of board meetings and actions and observe all other Delaware limited liability company required formalities.
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Multifamily Loan and Security Agreement
|
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|
|
|
(xxvi)
|
If an SPE Equity Owner is required pursuant to this Loan Agreement, if Borrower is (A) a limited
liability company with more than one member, then Borrower has and will have at least one member that is an SPE Equity Owner that
has satisfied and will satisfy the requirements of Section 6.13(b) and such member is its managing member, or (B) a limited partnership,
then all of its general partners are SPE Equity Owners that have satisfied and will satisfy the requirements set forth in Section
6.13(b).
|
|
|
(b)
|
SPE Equity Owner Requirements
. The SPE Equity Owner, if applicable, will at all times since
its formation and thereafter comply in its own right (subject to the modifications set forth below), and will cause Borrower to
comply, with each of the requirements of a Single Purpose Entity. Upon the withdrawal or the disassociation of an SPE Equity Owner
from Borrower, Borrower will immediately appoint a new SPE Equity Owner, whose organizational documents are substantially similar
to those of the withdrawn or disassociated SPE Equity Owner, and deliver a new nonconsolidation opinion to Lender in form and substance
satisfactory to Lender with regard to nonconsolidation by a bankruptcy court of the assets of each of Borrower and SPE Equity Owner
with those of its Affiliates.
|
|
|
(i)
|
With respect to Section 6.13(a)(i), the SPE Equity Owner will not engage in any business or activity
other than being the managing member or general partner, as the case may be, of Borrower and owning at least 0.5% equity interest
in Borrower.
|
|
|
(ii)
|
With respect to Section 6.13(a)(ii), the SPE Equity Owner has not and will not acquire or own any
assets other than its equity interest in Borrower and personal property related thereto.
|
|
|
(iii)
|
With respect to Section 6.13(a)(viii), the SPE Equity Owner will not own any subsidiary or make
any investment in any other Person, except for Borrower.
|
|
|
(iv)
|
With respect to Section 6.13(a)(x), the SPE Equity Owner has not and will not incur any debt, secured
or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) customary unsecured payables incurred
in the ordinary course of owning Borrower provided the same are not evidenced by a promissory note, do not exceed, in the aggregate,
at any time a maximum amount of $10,000 and are paid within 60 days of the date incurred, and (B) in its capacity as general partner
of Borrower (if applicable).
|
|
|
(v)
|
With respect to Section 6.13(a)(xiv), the SPE Equity Owner will not assume or guaranty the debts
or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure
the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit
as being available to satisfy the obligations of any other Person, except for in its capacity as general partner of Borrower (if
applicable).
|
|
|
(c)
|
Effect of Transfer on Single Purpose Entity Requirements
. Notwithstanding anything to the
contrary in this Loan Agreement, no Transfer will be permitted under Article VII unless the provisions of this Section 6.13 are
satisfied at all times.
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Multifamily Loan and Security Agreement
|
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|
|
|
6.14
|
Repairs and Capital Replacements.
|
|
|
(a)
|
Completion of Repairs
. Borrower will commence any Repairs as soon as practicable after the
date of this Loan Agreement and will diligently proceed with and complete such Repairs on or before the Completion Date. All Repairs
and Capital Replacements will be completed in a good and workmanlike manner, with suitable materials, and in accordance with good
building practices and all applicable laws, ordinances, rules, regulations, building setback lines and restrictions applicable
to the Mortgaged Property. Borrower agrees to cause the replacement of any material or work that is defective, unworkmanlike or
that does not comply with the requirements of this Loan Agreement, as determined by Lender.
|
|
|
(b)
|
Purchases
. Without the prior written consent of Lender, no materials, machinery, equipment,
fixtures or any other part of the Repairs or Capital Replacements will be purchased or installed under conditional sale contracts
or lease agreements, or any other arrangement wherein title to such Repairs or Capital Replacements is retained or subjected to
a purchase money security interest, or the right is reserved or accrues to anyone to remove or repossess any such Repairs or Capital
Replacements, or to consider them as personal property.
|
|
|
(c)
|
Lien Protection
. Borrower will promptly pay or cause to be paid, when due, all costs, charges
and expenses incurred in connection with the construction and completion of the Repairs or Capital Replacements, and will keep
the Mortgaged Property free and clear of any and all Liens other than the Lien of the Security Instrument and any other Lien to
which Lender has consented.
|
|
|
(d)
|
Adverse Claims
. Borrower will promptly advise Lender in writing of any litigation, Liens
or claims affecting the Mortgaged Property and of all complaints and charges made by any Governmental Authority that may delay
or adversely affect the Repairs or Capital Replacements.
|
|
|
6.15
|
Residential Leases Affecting the Mortgaged Property.
|
|
|
(a)
|
Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each
residential Lease then in effect.
|
|
|
(b)
|
All Leases for residential dwelling units will satisfy the following conditions:
|
|
|
(i)
|
They will be on forms that are customary for similar multifamily properties in the Property Jurisdiction.
|
|
|
(ii)
|
They will be for initial terms of at least 6 months and not more than 2 years (unless otherwise
approved in writing by Lender).
|
|
|
(iii)
|
They will not include any Corporate Leases (unless otherwise approved in writing by Lender).
|
|
|
(iv)
|
They will not include options to purchase.
|
|
|
(c)
|
If Borrower is a cooperative housing corporation or association, notwithstanding anything to the
contrary contained in this Loan Agreement, so long as Borrower remains a cooperative housing corporation or association and is
not in breach of any covenant of this Loan Agreement, Lender consents to each of the following:
|
|
Multifamily Loan and Security Agreement
|
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39
|
|
|
(i)
|
The execution of Leases for terms in excess of 2 years to a tenant shareholder of Borrower, so
long as such Leases, including proprietary Leases, are and will remain subordinate to the Lien of the Security Instrument.
|
|
|
(ii)
|
The surrender or termination of such Leases where the surrendered or terminated Lease is immediately
replaced or where Borrower makes its best efforts to secure such immediate replacement by a newly-executed Lease of the same apartment
to a tenant shareholder of Borrower. However, no consent is given by Lender to any execution, surrender, termination or assignment
of a Lease under terms that would waive or reduce the obligation of the resulting tenant shareholder under such Lease to pay cooperative
assessments in full when due or the obligation of the former tenant shareholder to pay any unpaid portion of such assessments.
|
|
|
6.16
|
Litigation; Government Proceedings.
Borrower will give prompt Notice to Lender of any litigation
or governmental proceedings pending or, to the best of Borrower’s knowledge, threatened in writing against Borrower or any
Borrower Principal which might have a Material Adverse Effect. As and when requested by Lender, Borrower will provide Lender with
written updates on the status of all litigation proceedings affecting Borrower or any Borrower Principal.
|
|
|
6.17
|
Further Assurances and Estoppel Certificates; Lender’s Expenses.
Within 10 days after
a request from Lender, in Lender’s Discretion, Borrower will take each of the following actions:
|
|
|
(a)
|
Deliver to Lender a written statement, signed and acknowledged by Borrower, certifying to Lender
or any Person designated by Lender, as of the date of such statement: (i) 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), (ii) the unpaid principal balance of the Note, (iii) the date to which interest under the Note has been
paid, (iv) that Borrower is not in default in paying the Indebtedness or in performing or observing any of the covenants or agreements
contained in this Loan Agreement or any of the other Loan Documents (or, if Borrower is in default, describing such default in
reasonable detail), (v) whether there are any then-existing setoffs or defenses known to Borrower against the enforcement of any
right or remedy of Lender under the Loan Documents, and (vi) any additional facts requested by Lender.
|
|
|
(b)
|
Execute, acknowledge and/or deliver, at its sole cost and expense, all further acts, deeds, conveyances,
assignments, estoppel certificates, financing statements or amendments, transfers and assurances as Lender may require from time
to time in order to better assure, grant and convey to Lender the rights intended to be granted, now or in the future, to Lender
under this Loan Agreement and the Loan Documents or in connection with Lender’s consent rights under Article VII.
|
Borrower acknowledges
and agrees that, in connection with each request by Borrower under this Loan Agreement or any Loan Document, Borrower will pay
all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender and Loan Servicer, including any fees charged by
the Rating Agencies, if applicable, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower
under this Loan Agreement will be deemed a part of the Indebtedness, will be secured by the Security Instrument and will bear interest
at the Default Rate if not fully paid within 10 days of written demand for payment.
|
Multifamily Loan and Security Agreement
|
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40
|
|
|
6.18
|
Cap Collateral.
Reserved.
|
|
|
6.19
|
Ground Lease.
Reserved.
|
|
|
(a)
|
Borrower will not engage in any transaction which would cause an obligation, or action taken or
to be taken under this Loan Agreement (or the exercise by Lender of any of its rights under the Note, this Loan Agreement or any
of the other Loan Documents) to be a non-exempt prohibited transaction under ERISA or Section 4975 of the Tax Code.
|
|
|
(b)
|
Borrower will deliver to Lender such certifications or other evidence from time to time throughout
the term of this Loan Agreement, as requested by Lender in Lender’s Discretion, confirming each of the following:
|
|
|
(i)
|
Borrower is not an “employee benefit plan” as defined in Section 3(3) of ERISA, which
is subject to Title I of ERISA, a “plan” to which Section 4975 of the Tax Code applies, or an entity whose underlying
assets constitute “plan assets” of one or more of such plans.
|
|
|
(ii)
|
Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA.
|
|
|
(iii)
|
Borrower is not subject to state statutes regulating investments or fiduciary obligations with
respect to governmental plans.
|
|
|
(iv)
|
One or more of the following circumstances is true:
|
|
|
(A)
|
Equity interests in Borrower are publicly offered securities within the meaning of 29 C.F.R. Section
2510.3-101(b)(2), as amended from time to time or any successor provision.
|
|
|
(B)
|
Less than 25% of each outstanding class of equity interests in Borrower are held by “benefit
plan investors” within the meaning of Section 3(42) of ERISA, as amended from time to time or any successor provision.
|
|
|
(C)
|
Borrower qualifies as either an “operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. Section 2510.3-101(c) or (e), as either may be amended from time to time or
any successor provisions, or is an investment company registered under the Investment Company Act of 1940.
|
6.21 through 6.52 are Reserved.
|
|
6.53
|
Economic Sanctions Laws.
|
|
|
(a)
|
Borrower, each Borrower Principal and each Non-U.S. Equity Holder will at all times comply with
the Economic Sanctions Laws.
|
|
Multifamily Loan and Security Agreement
|
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41
|
|
|
(b)
|
Borrower and each Borrower Principal will have in place practices and procedures to ensure, and
will ensure, that no Person who is listed on any Prohibited Parties List is admitted into the ownership or management of Borrower
or any Borrower Principal.
|
6.54 through 6.58 are Reserved.
|
|
ARTICLE VII
|
TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.
|
Upon the occurrence of a Transfer prohibited
by or requiring Lender’s approval (if applicable) under this Article VII, Lender may, in Lender’s Discretion, by Notice
to Borrower and the proposed transferee(s), modify or render void, any or all of the negotiated modifications to the Loan Documents
(and/or deferral of deposits to Reserve Funds) as a condition to Lender’s consent to the proposed Transfer.
|
|
7.01
|
Permitted Transfers.
The occurrence of any of the following Transfers will not constitute
an Event of Default under this Loan Agreement:
|
|
|
(a)
|
A Transfer to which Lender has consented.
|
|
|
(b)
|
A Transfer that is not a prohibited Transfer pursuant to Section 7.02.
|
|
|
(c)
|
A Transfer that is conditionally permitted pursuant to Section 7.03 upon the satisfaction of all
applicable conditions.
|
|
|
(d)
|
The grant of a leasehold interest in an individual dwelling unit for a term of 2 years or less
(or longer if approved by Lender in writing) not containing an option to purchase.
|
|
|
(e)
|
Entering into any New Non-Residential Lease, or modifying or terminating any Non-Residential Lease,
in each case in compliance with Section 6.04.
|
|
|
(f)
|
A Condemnation with respect to which Borrower satisfies the requirements of Section 6.11.
|
|
|
(g)
|
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, encumbrances and security interests other than those created
by the Loan Documents or consented to by Lender.
|
|
|
(h)
|
The creation of a mechanic’s, materialmen’s, or judgment Lien against the Mortgaged
Property, which is released of record, bonded, or otherwise remedied to Lender’s satisfaction within 60 days of the date
of creation, or is being contested as otherwise provided in this Loan Agreement; provided, however, if Borrower is diligently prosecuting
such release or other remedy and advises Lender that such release or remedy cannot be consummated within such 60-day period, Borrower
will have an additional period of time (not exceeding 120 days from the date of creation or such earlier time as may be required
by applicable law in which the lienor must act to enforce the Lien) within which to obtain such release of record or consummate
such other remedy.
|
|
|
(i)
|
If Borrower is a housing cooperative corporation or association, the Transfer of the shares in
the housing cooperative or the assignment of the occupancy agreements or Leases relating thereto to tenant shareholders of the
housing cooperative or association.
|
|
Multifamily Loan and Security Agreement
|
Page
42
|
|
|
(j)
|
A Supplemental Instrument that complies with Section 11.11(if applicable) or Defeasance that complies
with Section 11.12(if applicable).
|
|
|
(k)
|
If applicable, a Preapproved Intrafamily Transfer that satisfies the requirements of Section 7.04.
|
|
|
7.02
|
Prohibited Transfers.
The occurrence of any of the following Transfers will constitute an
Event of Default under this Loan Agreement:
|
|
|
(a)
|
A Transfer of all or any part of the Mortgaged Property or any interest in the Mortgaged Property,
including the grant, creation or existence of any Lien on the Mortgaged Property, whether voluntary, involuntary or by operation
of law, and whether or not such Lien has priority over the Lien of the Security Instrument, other than the Lien of the Security
Instrument or, if this Loan Agreement is entered into in connection with a Supplemental Loan, the Lien of the Senior Instrument,
or any other Lien to which Lender has consented.
|
|
|
(b)
|
A Transfer or series of Transfers of any legal or equitable interest of any Guarantor which owns
a direct or indirect interest in Borrower that result(s) in such Guarantor no longer owning any direct or indirect interest in
Borrower.
|
|
|
(c)
|
A Transfer or series of Transfers of any legal or equitable interest since the Closing Date that
result(s) in a change of more than 50% of the ownership interests (or beneficial interests, if the applicable entity is a trust)
in Borrower or any Designated Entity for Transfers.
|
|
|
(d)
|
A Transfer of any general partnership interest in a partnership, or any manager interest (whether
a member manager or nonmember manager) in a limited liability company, or a change in the trustee of a trust other than as permitted
in Section 7.04, if such partnership, limited liability company, or trust, as applicable, is Borrower or a Designated Entity for
Transfers. Notwithstanding the foregoing, up to 50% of the general partnership interests in a partnership, or the manager interests
in a limited liability company, existing on the Closing Date in Borrower or any Designated Entity for Transfers, may be converted
to limited partnership interests or non-managing membership interests, as applicable, and then transferred, subject to the provisions
of this Loan Agreement.
|
|
|
(e)
|
If Borrower or any Designated Entity for Transfers is a corporation whose outstanding voting stock
is held by 100 or more shareholders, one or more Transfers by a single transferor within a 12-month period affecting an aggregate
of 10% or more of that stock.
|
|
|
(f)
|
The grant, creation or existence of any Lien, whether voluntary, involuntary or by operation of
law, and whether or not such Lien has priority over the Lien of the Security Instrument, on any ownership interest in Borrower
or any Designated Entity for Transfers, if the foreclosure of such Lien would result in a Transfer prohibited under Sections 7.02(b),
(c), (d), or (e).
|
|
|
(g)
|
If Borrower is a trust (i) the termination or revocation of the trust, or (ii) the removal, appointment
or substitution of a trustee of the trust.
|
|
Multifamily Loan and Security Agreement
|
Page
43
|
|
|
7.03
|
Conditionally Permitted Transfers.
The occurrence of any of the following Transfers will
not constitute a prohibited Transfer under Section 7.02, provided that Borrower has complied with all applicable specified conditions
in this Section.
|
|
|
(a)
|
Transfer by Devise, Descent or Operation of Law
. Upon the death of a natural person, a Transfer
which occurs by devise, descent, or by operation of law to one or more Immediate Family Members of such natural person or to a
trust or family conservatorship established for the benefit of such Immediate Family Members (each a “
Beneficiary
”),
provided that each of the following conditions is satisfied:
|
|
|
(i)
|
The Property Manager continues to be responsible for the management of the Mortgaged Property,
and such Transfer will not result in a change in the day-to-day operations of the Mortgaged Property.
|
|
|
(ii)
|
Lender receives confirmation acceptable to Lender, in Lender’s Discretion, that Borrower
continues to satisfy the requirements of Section 6.13.
|
|
|
(iii)
|
Each Guarantor executes such documents and agreements as Lender requires in Lender’s Discretion
to evidence and effect the ratification of each Guaranty, or in the event of the death of any Guarantor, Borrower causes one of
the following to occur:
|
|
|
(A)
|
One or more Persons acceptable to Lender, in Lender’s Discretion, execute(s) and deliver(s)
to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing
Date, without any cost or expense to Lender.
|
|
|
(B)
|
The estate of the deceased Guarantor immediately ratifies the Guaranty in writing, and within 6
months after the date of the death of the deceased Guarantor one or more Persons, acceptable to Lender in Lender’s Discretion,
execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty
executed on the Closing Date, without any cost or expense to Lender.
|
|
|
(iv)
|
Borrower gives Lender Notice of such Transfer together with copies of all documents effecting such
Transfer not more than 30 calendar days after the date of such Transfer, and contemporaneously with the Notice, takes each of the
following additional actions:
|
|
|
(A)
|
Borrower reaffirms the representations and warranties
under Article V.
|
|
|
(B)
|
Borrower satisfies Lender, in Lender’s Discretion,
that the Beneficiary’s organization, credit and experience in the management of similar properties are appropriate to the
overall structure and documentation of the existing financing.
|
|
Multifamily Loan and Security Agreement
|
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44
|
|
|
(v)
|
Borrower or Beneficiary causes to be delivered to Lender such legal opinions as Lender deems necessary,
in Lender’s Discretion, including a nonconsolidation opinion (if a nonconsolidation opinion was delivered on the Closing
Date and if required by Lender), an opinion that the ratification of the Loan Documents and Guaranty (if applicable) have been
duly authorized, executed, and delivered and that the ratification documents and Guaranty (if applicable) are enforceable as the
obligations of Borrower, Beneficiary or Guarantor, as applicable.
|
|
|
(vi)
|
Borrower (A) pays the Transfer Processing Fee to Lender, and (B) pays or reimburses Lender, upon
demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with such Transfer;
provided, however, that Lender will not be entitled to collect a Transfer Fee.
|
|
|
(b)
|
Easement, Restrictive Covenant or Other Encumbrance
. The grant of an easement, restrictive
covenant or other encumbrance, provided that each of the following conditions is satisfied:
|
|
|
(i)
|
Borrower provides Lender with at least 30 days prior Notice of the proposed grant.
|
|
|
(ii)
|
Prior to the grant, Lender determines, in Lender’s Discretion, that the easement, restrictive
covenant or other encumbrance will not materially affect the operation or value of the Mortgaged Property or Lender’s interest
in the Mortgaged Property.
|
|
|
(iii)
|
Borrower pays or reimburses Lender, upon demand, for all costs and expenses, including all Attorneys’
Fees and Costs, incurred by Lender in connection with reviewing Borrower’s request for Lender’s review of such grant
of easement, restrictive covenant or other encumbrance; provided, however, that Lender will not be entitled to collect a Transfer
Fee.
|
|
|
(iv)
|
If the Note is held by a REMIC trust, Lender may require an opinion of counsel which meets each
of the following requirements:
|
|
|
(A)
|
The counsel providing the opinion is acceptable to Lender.
|
|
|
(B)
|
The opinion is addressed to Lender.
|
|
|
(C)
|
The opinion is paid for by Borrower.
|
|
|
(D)
|
The opinion is in form and substance satisfactory to
Lender in its sole and absolute discretion.
|
|
|
(E)
|
The opinion confirms each of the following:
|
|
|
(1)
|
The grant of such easement has been effected in accordance with the requirements of Treasury Regulation
Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time).
|
|
Multifamily Loan and Security Agreement
|
Page
45
|
|
|
(2)
|
The qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired
as a result of such grant.
|
|
|
(3)
|
That there will be no imposition of a tax under applicable REMIC provisions as a result of such
grant.
|
|
|
(c)
|
Publicly-Held Fund or Publicly-Held Real Estate Investment Trust
. If a Designated Entity
for Transfers is a publicly-held fund or a publicly-held real estate investment trust, either of the following:
|
|
|
(i)
|
The public issuance of common stock, convertible debt, equity or other similar securities (“
Public
Fund/REIT Securities
”) and the subsequent Transfer of such Public Fund/REIT Securities.
|
|
|
(ii)
|
The acquisition by a single Public Fund/REIT Securities holder of an ownership percentage of 10%
or more in the Designated Entity for Transfers, if within 30 days following the acquisition, Borrower does each of the following:
|
|
|
(A)
|
Provides notice to Lender of that acquisition.
|
(B) Complies
with each of the following conditions:
|
|
(1)
|
Borrower delivers to Lender searches confirming that no Person with a collective equity interest
(whether direct or indirect) of 25% or more in Borrower is on any Prohibited Parties List.
|
|
|
(2)
|
Borrower either (a) certifies in writing to Lender that there are no Non-U.S. Equity Holders,
or (b) delivers to Lender searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.
|
|
|
(d)
|
Transaction Specific Transfers
.
|
(i) through (v) are reserved.
|
|
(vi)
|
Limited Partner or Non-Managing Member Transfer
. A Transfer that results in the cumulative
Transfer of more than 50% and up to 100% of the non-managing membership interests in or the limited partnership interests in Borrower
or any Designated Entity for Transfer (“
Investor Interests
”) to third party transferees (“
Investor
Interest Transfer
”), provided that each of the following conditions is satisfied:
|
|
|
(A)
|
Borrower provides Lender with at least 30 days prior Notice of the proposed Investor Interest Transfer.
|
|
|
(B)
|
At the time of the proposed Investor Interest Transfer, no Event of Default has occurred and is
continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or
both, would become an Event of Default.
|
|
|
(C)
|
Following the Investor Interest Transfer, Control and management of the day-to-day operations of
Borrower continue to be held by the Person exercising such Control and management immediately prior to the Investor Interest Transfer
and there is no change in the Guarantor, if applicable.
|
|
Multifamily Loan and Security Agreement
|
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46
|
|
|
(D)
|
The Investor Interest Transfer does not result in a Transfer of the type described in Section 7.02(b).
|
|
|
(E)
|
At any time that one Person acquires 25% or more of the aggregate of direct or indirect Investor
Interests as a result of the Investor Interest Transfer, Borrower must meet the following additional requirements:
|
|
|
(1)
|
Borrower pays to Lender the Transfer Processing Fee at the time the Borrower provides Lender with
the Notice set forth in Section 7.03(d)(vi)(A).
|
|
|
(2)
|
Borrower pays or reimburses Lender, upon demand, for all costs and expenses, including all Attorneys’
Fees and Costs, incurred by Lender in connection with the Investor Interest Transfer.
|
|
|
(3)
|
Lender receives confirmation acceptable to Lender that (X) the requirements of Section 6.13 continue
to be satisfied, and (Y) the term of existence of the holder of 25% or more of the Investor Interests after the Investor Interest
Transfer (exclusive of any unexercised extension options or rights) does not expire prior to the Maturity Date.
|
|
|
(4)
|
Lender receives organizational charts reflecting the structure of Borrower prior to and after the
Investor Interest Transfer and copies of the then-current organizational documents of Borrower and the entity in which Investor
Interests were transferred, if different from Borrower, including any amendments.
|
|
|
(5)
|
Each transferee with an interest of 25% or more delivers to Lender a certification that each of
the following is true:
|
|
|
(X)
|
He/she/it has not been convicted of fraud or a crime involving moral turpitude (or if an entity,
then no principal of such entity has been convicted of fraud or a crime involving moral turpitude).
|
|
|
(Y)
|
He/she/it has not been involved in a bankruptcy or reorganization within the ten years preceding
the date of the Investor Interest Transfer.
|
|
|
(6)
|
Borrower delivers to Lender searches confirming that no Person with a collective equity interest
(whether direct or indirect) in Borrower of 25% or more is on any Prohibited Parties List.
|
|
Multifamily Loan and Security Agreement
|
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47
|
|
|
(7)
|
If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to
the Investor Interest Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower
are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing
Date, Borrower delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender, with regard
to nonconsolidation.
|
|
|
(F)
|
Borrower either (1) certifies that there are no Non-US Equity Holders, or (2) delivers to Lender
searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.
|
(vii) through (x) are reserved.
(e) through (k) are reserved.
|
|
7.04
|
Preapproved Intrafamily Transfers.
The occurrence of a Transfer or a series of Transfers
that result in a change of more than 50% of the limited partner or nonmanaging member interests in Borrower or a Designated Entity
for Transfers as set forth in this Section will be considered to be a “
Preapproved Intrafamily Transfer
” provided
that each of the conditions set forth in Sections 7.04(a) and (b) is satisfied:
|
|
|
(a)
|
Type of Transfer
. The Transfer is one of the following:
|
|
|
(i)
|
A sale or transfer to one or more of the transferor’s Immediate Family Members.
|
|
|
(ii)
|
A sale or transfer to any trust having as its sole beneficiaries the transferor and/or one or more
of the transferor’s Immediate Family Members.
|
|
|
(iii)
|
A sale or transfer from a trust to any one or more of its beneficiaries who are the settlor and/or
Immediate Family Members of the settlor of the trust.
|
|
|
(iv)
|
The substitution or replacement of the trustee of any trust with a trustee who is an Immediate
Family Member of the settlor of the trust.
|
|
|
(v)
|
A sale or transfer from a natural person to an entity owned and under the Control of the transferor
or the transferor’s Immediate Family Members.
|
|
|
(b)
|
Conditions
. The Preapproved Intrafamily Transfer satisfies each of the following conditions:
|
|
|
(i)
|
Borrower must provide Lender with 30 days prior Notice of the proposed Preapproved Intrafamily
Transfer.
|
|
|
(ii)
|
Following the Transfer, Control and management of the day-to-day operations of Borrower continue
to be held by the Person exercising such Control and management immediately prior to the Transfer and there is no change in the
Guarantor, if applicable.
|
|
|
(iii)
|
At the time of the Preapproved Intrafamily Transfer, no Event of Default has occurred and is continuing
and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would
become an Event of Default.
|
|
Multifamily Loan and Security Agreement
|
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48
|
|
|
(iv)
|
At any time that one Person acquires 25% or more of the aggregate of direct or indirect interests
in Borrower or a Designated Entity for Transfers as a result of the Preapproved Intrafamily Transfer, Borrower must meet the following
additional requirements:
|
|
|
(A)
|
Borrower must pay to Lender the Transfer Processing Fee at the time the Borrower provides Lender
with the Notice set forth in Section 7.04(b)(i).
|
|
|
(B)
|
Borrower must pay or reimburse Lender, upon demand, for all costs and expenses, including all Attorneys’
Fees and Costs, incurred by Lender in connection with the Preapproved Intrafamily Transfer.
|
|
|
(C)
|
Borrower must deliver to Lender organizational charts reflecting the structure of Borrower prior
to and after the Preapproved Intrafamily Transfer, together with copies of the then-current organizational documents of Borrower
and any other entity in which interests were transferred, including any amendments made in connection with the Preapproved Intrafamily
Transfer.
|
|
|
(D)
|
Each transferee with an interest of 25% or more must deliver to Lender a certification that each
of the following is true:
|
|
|
(1)
|
He/she/it has not been convicted of fraud or a crime involving moral turpitude (or if an entity,
then no principal of such entity has been convicted of fraud or a crime involving moral turpitude).
|
|
|
(2)
|
He/she/it has not been involved in a bankruptcy or reorganization within the 10 years preceding
the date of the Preapproved Intrafamily Transfer.
|
|
|
(E)
|
Borrower must deliver to Lender searches confirming that no Person with a collective equity interest
(whether direct or indirect) in Borrower of 25% or more is on any Prohibited Parties List.
|
|
|
(F)
|
If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to
the Preapproved Intrafamily Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower
are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing
Date, Borrower must deliver to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender, with regard
to nonconsolidation.
|
|
|
(v)
|
Borrower either (A) certifies that there are no Non-U.S. Equity Holders, or (B) delivers to Lender
searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.
|
|
Multifamily Loan and Security Agreement
|
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49
|
|
|
7.05
|
Lender’s Consent to Prohibited Transfers.
|
|
|
(a)
|
Conditions for Lender’s Consent
. With respect to a Transfer that would otherwise constitute
an Event of Default under this Article VII, Lender will consent, without any adjustment to the rate at which the Indebtedness bears
interest or to any other economic terms of the Indebtedness set forth in the Note, provided that, prior to such Transfer, each
of the following requirements is satisfied:
|
|
|
(i)
|
Borrower has submitted to Lender all information required by Lender to make the determination required
by this Section along with the Transfer Processing Fee.
|
|
|
(ii)
|
No Event of Default has occurred and is continuing and no event or condition has occurred and is
continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default unless such Transfer
would cure the Event of Default.
|
|
|
(iii)
|
Lender in Lender’s Discretion has determined that the transferee meets Lender’s eligibility,
credit, management and other standards (including any standards with respect to previous relationships between Lender and the transferee).
|
|
|
(iv)
|
Lender in Lender’s Discretion has determined that the transferee’s organization, credit
and experience in the management of similar properties to be appropriate to the overall structure and documentation of the Loan.
|
|
|
(v)
|
Lender in Lender’s Discretion has determined that the Mortgaged Property will be managed
by a Property Manager meeting the requirements of Section 6.09(d).
|
|
|
(vi)
|
Lender in Lender’s Discretion has determined that the Mortgaged Property, at the time of
the proposed Transfer, meets all of Lender’s standards as to its physical condition, occupancy, net operating income and
the accumulation of reserves.
|
|
|
(vii)
|
Lender in Lender’s Discretion has determined that the transferee and any SPE Equity Owner
of such transferee meet the requirements of Section 6.13.
|
|
|
(viii)
|
If any Supplemental Instrument is outstanding, Borrower has obtained the consent of each Supplemental
Lender, if different from Lender.
|
|
|
(ix)
|
Borrower and Guarantor execute such additional documents as Lender may require to evidence the
Transfer.
|
|
|
(x)
|
In the case of a Transfer of all or any part of the Mortgaged Property, each of the following conditions
is satisfied:
|
|
|
(A)
|
The transferee executes Lender’s then-standard assumption agreement that, among other things,
requires the transferee to perform all obligations of Borrower set forth in the Note, the Security Instrument, this Loan Agreement
and any other Loan Document, and may require that the transferee comply with any provisions of this Loan Agreement or any other
Loan Document which previously may have been waived or modified by Lender.
|
|
Multifamily Loan and Security Agreement
|
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50
|
|
|
(B)
|
If Lender requires, the transferee causes one or more Persons acceptable to Lender, in Lender’s
Discretion, to execute and deliver to Lender a Guaranty in a form acceptable to Lender.
|
|
|
(C)
|
The transferee executes such additional documentation (including filing financing statements, as
applicable) as Lender may require.
|
|
|
(xi)
|
In the case of a Transfer of any interest in Borrower or a Designated Entity for Transfers, if
a Guarantor requests that Lender release the Guarantor from its obligations under a Guaranty executed and delivered in connection
with the Note, this Loan Agreement or any of the other Loan Documents, then Borrower causes one or more Persons acceptable to Lender,
in Lender’s Discretion, to execute and deliver to Lender a Guaranty in a form acceptable to Lender.
|
|
|
(xii)
|
Lender has received such legal opinions as Lender deems necessary, including a nonconsolidation
opinion (if a nonconsolidation opinion was delivered on the Closing Date and if required by Lender), an opinion that the assignment
and assumption of the Loan Documents has been duly authorized, executed, and delivered and that the assignment documents and the
Loan Documents are enforceable as the obligations of Borrower, transferee and Guarantor, as applicable.
|
|
|
(xiii)
|
Lender collects all costs, including the cost of all title searches, title insurance and recording
costs, and all Attorneys’ Fees and Costs incurred in reviewing the Transfer request and any fees charged by the Rating Agencies,
if applicable.
|
|
|
(xiv)
|
At the time of the Transfer, Borrower pays the Transfer Fee to Lender.
|
|
|
(xv)
|
The Transfer will not occur during any Extension Period, if applicable.
|
|
|
(b)
|
Continuing Liability of Borrower
. If Borrower requests a release of its liability under
the Loan Documents in connection with a Transfer of all of Borrower’s interest in the Mortgaged Property, and Lender approves
the Transfer pursuant to Section 7.05(a), then one of the following will apply:
|
|
|
(i)
|
If Borrower delivers to Lender a current Site Assessment which (A) is dated within 90 days prior
to the date of the proposed Transfer, and (B) evidences no presence of Hazardous Materials on the Mortgaged Property and no other
Prohibited Activities or Conditions with respect to the Mortgaged Property (“
Clean Site Assessment
”), then Lender
will release Borrower from all of Borrower’s obligations under the Loan Documents except for any liability under Section
6.12 or Section 10.02(b) with respect to any loss, liability, damage, claim, cost or expense which directly or indirectly arises
from or relates to any Prohibited Activities or Conditions existing prior to the date of the Transfer.
|
|
|
(ii)
|
If Borrower does not deliver a Clean Site Assessment as described in Section 7.05(b)(i), then Lender
will release Borrower from all of Borrower’s obligations under the Loan Documents except for liability under Section 6.12
or Section 10.02(b).
|
|
Multifamily Loan and Security Agreement
|
Page
51
|
|
|
(c)
|
Continuing Liability of Guarantor
. If Guarantor requests a release of its liability under
the Guaranty in connection with a Transfer which is permitted, preapproved, or approved by Lender pursuant to this Article VII,
and Borrower has provided a replacement Guarantor acceptable to Lender under the terms of Section 7.05(a)(ix)(B), then one
of the following will apply:
|
|
|
(i)
|
If Borrower delivers to Lender a Clean Site Assessment, then Lender will release Guarantor from
all of Guarantor’s obligations except Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12
or Section 10.02(b) with respect to any loss, liability, damage, claim, cost or expense which directly or indirectly arises from
or relates to any Prohibited Activities or Conditions existing prior to the date of the Transfer.
|
|
|
(ii)
|
If Borrower does not deliver a Clean Site Assessment as described in Section 7.05(b)(i), then Lender
will release Guarantor from all of Guarantor’s obligations except for Guarantor’s obligation to guaranty Borrower’s
liability under Section 6.12 or Section 10.02(b).
|
|
|
7.06
|
SPE Equity Owner Requirement Following Transfer.
Following any Transfer pursuant to this
Article VII, Borrower must satisfy the applicable conditions regarding an SPE Equity Owner set forth in Section 6.13(a)(xxvi) of
this Loan Agreement.
|
|
|
7.07
|
Additional Transfer Requirements - External Cap Agreement.
|
|
|
(a)
|
Continuation of Cap Agreement
. If a Transfer of all or part of the Mortgaged Property permitted
by this Loan Agreement occurs, Borrower will ensure that any third-party Cap Agreement is transferred to the applicable transferee
or, if the Cap Agreement is not transferable, Borrower will replace the third-party Cap Agreement in accordance with Lender’s
then-current requirements.
|
|
|
(b)
|
Establishment or Modification of Rate Cap Agreement Reserve Fund
|
|
|
(i)
|
If the third-party Cap Agreement which will be in place immediately following the Transfer is scheduled
to expire prior to the Maturity Date, Lender may require Borrower to establish a Rate Cap Agreement Reserve Fund.
|
|
|
(ii)
|
If Borrower has previously established a Rate Cap Agreement Reserve Fund, then Lender will determine
whether the balance of any existing Rate Cap Agreement Reserve Fund is sufficient under then-current market conditions to purchase
a Replacement Cap Agreement, and may then take any of the following actions:
|
|
|
(A)
|
Lender may require Borrower to make an additional deposit into the Rate Cap Agreement Reserve Fund.
|
|
|
(B)
|
If funding of the Rate Cap Agreement Reserve Fund has been deferred, Lender may require Borrower
to begin making monthly deposits into the Rate Cap Agreement Reserve Fund.
|
|
|
(C)
|
Lender may require Borrower to increase the amount of monthly deposits to the Rate Cap Agreement
Reserve Fund.
|
|
Multifamily Loan and Security Agreement
|
Page
52
|
7.08 Reserved.
|
|
ARTICLE VIII
|
SUBROGATION.
|
If, and to the extent that, the proceeds
of the Loan, or subsequent advances under Section 9.02, are used to pay, satisfy or discharge a Prior Lien, such Loan proceeds
or advances will be deemed to have been advanced by Lender at Borrower’s request, and Lender will automatically, and without
further action on its part, be subrogated to the rights, including Lien priority, of the owner or holder of the obligation secured
by the Prior Lien, whether or not the Prior Lien is released.
|
|
ARTICLE IX
|
EVENTS OF DEFAULT AND REMEDIES.
|
|
|
9.01
|
Events of Default.
The occurrence of any one or more of the following will constitute an
Event of Default under this Loan Agreement:
|
|
|
(a)
|
Borrower fails to pay or deposit when due any amount required by the Note, this Loan Agreement
or any other Loan Document.
|
|
|
(b)
|
Borrower fails to maintain the Insurance coverage required by Section 6.10.
|
|
|
(c)
|
Borrower or any SPE Equity Owner fails to comply with the provisions of Section 6.13 or if any
of the assumptions contained in any nonconsolidation opinions delivered to Lender at any time is or becomes untrue in any material
respect.
|
|
|
(d)
|
Borrower or any SPE Equity Owner, any of its officers, directors, trustees, general partners or
managers or any Guarantor commits fraud or a material misrepresentation or material omission in connection with: (i) the application
for or creation of the Indebtedness, (ii) any financial statement, Rent Schedule, or other report or information provided to Lender
during the term of the Indebtedness, or (iii) any request for Lender’s consent to any proposed action, including a request
for disbursement of funds under this Loan Agreement.
|
|
|
(e)
|
Borrower fails to comply with the Condemnation provisions of Section 6.11.
|
|
|
(f)
|
A Transfer occurs that violates the provisions of Article VII, whether or not any actual impairment
of Lender’s security results from such Transfer.
|
|
|
(g)
|
A forfeiture action or proceeding, whether civil or criminal, is commenced which could result in
a forfeiture of the Mortgaged Property or otherwise materially impair the Lien created by the Security Instrument or Lender’s
interest in the Mortgaged Property.
|
|
|
(h)
|
Borrower fails to perform any of its obligations under this Loan Agreement (other than those specified
in Section 9.01), as and when required, which failure continues for a period of 30 days after Notice of such failure by Lender
to Borrower. However, if Borrower’s failure to perform its obligations as described in this Section 9.01(h) is of the nature
that it cannot be cured within the 30 day cure period after such Notice from Lender but reasonably could be cured within 90 days,
then Borrower will have additional time as determined by Lender in Lender’s Discretion, not to exceed an additional 60 days,
in which to cure such default, provided that Borrower has diligently commenced to cure such default during the initial 30 day cure
period and diligently pursues the cure of such default. However, no such Notice or cure periods will apply in the case of any such
failure which could, in Lender’s judgment, absent immediate exercise by Lender of a right or remedy under this Loan Agreement,
result in harm to Lender, danger to tenants or third parties, or impairment of the Note, the Security Instrument or this Loan Agreement
or any other security given under any other Loan Document.
|
|
Multifamily Loan and Security Agreement
|
Page
53
|
|
|
(i)
|
Borrower fails to perform any of its obligations as and when required under any Loan Document other
than this Loan Agreement which failure continues beyond the applicable cure period, if any, specified in that Loan Document.
|
|
|
(j)
|
The holder of any other debt instrument secured by a mortgage, deed of trust or deed to secure
debt on the Mortgaged Property exercises any right to declare all amounts due under that debt instrument immediately due and payable.
|
|
|
(k)
|
Any of the following occurs:
|
|
|
(i)
|
Borrower or any SPE Equity Owner commences any case, Proceeding or other action under any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or
relief of debtors (A) seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debt, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets.
|
|
|
(ii)
|
Any party other than Lender commences any case, Proceeding, or other action of a nature referred
to in Section 9.01(k)(i) against Borrower or any SPE Equity Owner which (A) results in the entry of an order for relief or any
such adjudication or appointment, or (B) has not been dismissed, discharged or bonded for a period of 90 days.
|
|
|
(iii)
|
Any case, Proceeding or other action is commenced against Borrower or any SPE Equity Owner seeking
issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets
which results in the entry of any order by a court of competent jurisdiction for any such relief which is not vacated, discharged,
or stayed or bonded pending appeal within 90 days from the entry thereof.
|
|
|
(iv)
|
Borrower or any SPE Equity Owner takes any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in Section 9.01(k)(i), (ii) or (iii).
|
|
|
(l)
|
Borrower or any SPE Equity Owner has made any representation or warranty in Article V or any other
Section of this Loan Agreement that is false or misleading in any material respect.
|
|
|
(m)
|
If the Loan is secured by an interest under a Ground Lease, Borrower fails to comply with the provisions
of Section 6.19.
|
|
Multifamily Loan and Security Agreement
|
Page
54
|
|
|
(n)
|
If the Loan is a Supplemental Loan, any Event of Default occurs under (i) the Senior Note, the
Senior Instrument or any other Senior Loan Document, or (ii) any loan document related to another loan in connection with the Mortgaged
Property, regardless of whether Borrower has obtained Supplemental Lender’s approval of the placement of such Lien on the
Mortgaged Property. In addition, if the Loan is a Supplemental Loan, as Borrower under both the Supplemental Instrument and the
Senior Instrument, Borrower acknowledges and agrees that if there is an Event of Default under the Supplemental Note, the Supplemental
Instrument or any other Supplemental Loan Document, such Event of Default will be an Event of Default under the terms of the Senior
Instrument and will entitle Senior Lender to invoke any and all remedies permitted to Senior Lender by applicable law, the Senior
Note, the Senior Instrument or any of the other Senior Loan Documents.
|
|
|
(o)
|
If the Mortgaged Property is subject to any covenants, conditions and/or restrictions, land use
restriction agreements or similar agreements, Borrower fails to perform any of its obligations under any such agreement as and
when required, and such failure continues beyond any applicable cure period.
|
|
|
(p)
|
A Guarantor files for bankruptcy protection under the Bankruptcy Code or a Guarantor voluntarily
becomes subject to any reorganization, receivership, insolvency proceeding or other similar proceeding pursuant to any other federal
or state law affecting debtor and creditor rights, or any creditor (other than Lender) of a Guarantor commences any involuntary
case against a Guarantor pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights, unless
each of the following conditions is satisfied:
|
|
|
(i)
|
Borrower or Guarantor provides Notice of such action to Lender within 30 days after the filing
of such action.
|
|
|
(ii)
|
Either (A) the case is dismissed or discharged within 90 days after filing, or (B) within 90 days
following the date of such filing or commencement, the affected Guarantor is replaced with one or more other Persons acceptable
to Lender, in Lender’s Discretion, each of whom executes and delivers to Lender a replacement Guaranty in form and content
acceptable to Lender, together with such legal opinions as Lender deems necessary.
|
|
|
(iii)
|
If Borrower must provide a replacement Guarantor pursuant to Section 9.01(p)(ii), then Borrower
pays the Transfer Processing Fee to Lender.
|
(q) With
respect to a Guarantor, either of the following occurs:
|
|
(i)
|
The death of any Guarantor who is a natural person, unless within 30 days following the Guarantor’s
death, Borrower causes one of the following to occur:
|
|
|
(A)
|
One or more Persons acceptable to Lender, in Lender’s Discretion, execute(s) and deliver(s)
to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing
Date, without any cost or expense to Lender.
|
|
|
(B)
|
The estate of the deceased Guarantor immediately ratifies the Guaranty in writing, and within 6
months after the date of the death of the deceased Guarantor one or more Persons, acceptable to Lender in Lender’s Discretion,
execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty
executed on the Closing Date, without any cost or expense to Lender.
|
|
Multifamily Loan and Security Agreement
|
Page
55
|
|
|
(ii)
|
The dissolution of any Guarantor who is an entity, unless each of the following conditions is satisfied:
|
|
|
(A)
|
Within 30 days following the dissolution of the Guarantor, Borrower causes one or more Persons
acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a guaranty in a form acceptable to Lender
and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.
|
|
|
(B)
|
Borrower pays the Transfer Processing Fee to Lender.
|
|
|
(r)
|
If a Cap Agreement is required, Borrower fails to provide Lender with a Replacement Cap Agreement
prior to the expiration of the then-existing Cap Agreement.
|
|
|
(s)
|
through (hhh) are Reserved.
|
|
|
9.02
|
Protection of Lender’s Security; Security Instrument Secures Future Advances.
|
|
|
(a)
|
If Borrower fails to perform any of its obligations under this Loan Agreement or any other Loan
Document, or if any action or proceeding is commenced which purports to affect the Mortgaged Property, Lender’s security
or Lender’s rights under this Loan Agreement, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture,
enforcement of Hazardous Materials Laws, fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent,
then Lender, in Lender’s Discretion, may make such appearances, file such documents, disburse such sums and take such actions
as Lender reasonably deems necessary to perform such obligations of Borrower and to protect Lender’s interest, including:
(i) payment of Attorneys’ Fees and Costs, (ii) payment of fees and out-of-pocket expenses of accountants, inspectors and
consultants, (iii) entry upon the Mortgaged Property to make Repairs or secure the Mortgaged Property, (iv) procurement of the
Insurance required by Section 6.10, (v) payment of amounts which Borrower has failed to pay under Section 6.08, (vi) performance
of Borrower’s obligations under Section 6.09, and (vii) advances made by Lender to pay, satisfy or discharge any obligation
of Borrower for the payment of money that is secured by a Prior Lien.
|
|
|
(b)
|
Any amounts disbursed by Lender under this Section 9.02, or under any other provision of this Loan
Agreement that treats such disbursement as being made under this Section 9.02, will be secured by the Security Instrument, will
be added to, and become part of, the principal component of the Indebtedness, will be immediately due and payable and will bear
interest from the date of disbursement until paid at the Default Rate.
|
|
|
(c)
|
Nothing in this Section 9.02 will require Lender to incur any expense or take any action.
|
|
|
(a)
|
Upon an Event of Default, Lender may exercise any or all of its rights and remedies provided under
the Loan Documents and Borrower will pay all costs associated therewith, including Attorneys’ Fees and Costs.
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Multifamily Loan and Security Agreement
|
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56
|
|
|
(b)
|
Each right and remedy provided in this Loan Agreement is distinct from all other rights or remedies
under this Loan Agreement or any other Loan Document or afforded by applicable law or equity, and each will be cumulative and may
be exercised concurrently, independently or successively, in any order. Lender’s exercise of any particular right or remedy
will not in any way prevent Lender from exercising any other right or remedy available to Lender. Lender may exercise any such
remedies from time to time and as often as Lender chooses.
|
|
|
(c)
|
Lender will have all remedies available to Lender under Revised Article 9 of the Uniform Commercial
Code of the Property Jurisdiction, the Loan Documents and under applicable law.
|
|
|
(d)
|
Lender may also retain (i) all money in the Reserve Funds, including interest, and (ii) any Cap
Payment, and in Lender’s sole and absolute discretion, may apply such amounts, without restriction and without any specific
order of priority, to the payment of any and all Indebtedness.
|
|
|
(e)
|
If a claim or adjudication is made that Lender has acted unreasonably or unreasonably delayed acting
in any case where, by law or under this Loan Agreement or the other Loan Documents, Lender has an obligation to act reasonably
or promptly, then Lender will not be liable for any monetary damages, and Borrower’s sole remedy will be limited to commencing
an action seeking injunctive relief or declaratory judgment. Any action or proceeding to determine whether Lender has acted reasonably
will be determined by an action seeking declaratory judgment.
|
|
|
(a)
|
Lender may (but will 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, any Guarantor or other third party obligor,
to take any of the following actions:
|
|
|
(i)
|
Extend the time for payment of all or any part of the Indebtedness.
|
|
|
(ii)
|
Reduce the payments due under this Loan Agreement, the Note or any other Loan Document.
|
|
|
(iii)
|
Release anyone liable for the payment of any amounts under this Loan Agreement, the Note or any
other Loan Document.
|
|
|
(iv)
|
Accept a renewal of the Note.
|
|
|
(v)
|
Modify the terms and time of payment of the Indebtedness.
|
|
|
(vi)
|
Join in any extension or subordination agreement.
|
|
|
(vii)
|
Release any portion of the Mortgaged Property.
|
|
|
(viii)
|
Take or release other or additional security.
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Multifamily Loan and Security Agreement
|
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57
|
|
|
(ix)
|
Modify the rate of interest or period of amortization of the Note or change the amount of the monthly
installments payable under the Note.
|
|
|
(x)
|
Otherwise modify this Loan Agreement, the Note or any other Loan Document.
|
|
|
(b)
|
Any forbearance by Lender in exercising any right or remedy under the Note, this Loan Agreement
or any other Loan Document or otherwise afforded by applicable law, will not be a waiver of or preclude the exercise of any other
right or remedy, or the subsequent exercise of any 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, will 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 will not constitute
an election by Lender of remedies so as to preclude the exercise of any other right available to Lender. Lender’s receipt
of any awards or proceeds under Sections 6.10 and 6.11 will not operate to cure or waive any Event of Default.
|
|
|
9.05
|
Waiver of Marshalling.
Notwithstanding the existence of any other security interests in
the Mortgaged Property held by Lender or by any other party, Lender will have the right to determine the order in which any or
all of the Mortgaged Property will be subjected to the remedies provided in this Loan Agreement or any other Loan Document or applicable
law. Lender will have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the
proceeds realized upon the exercise of such remedies. Borrower and any party who now or in the future acquires a security interest
in the Mortgaged Property and who has actual or constructive notice of the Security Instrument waives any and all right to require
the marshalling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any
of the Mortgaged Property be sold in parcels or as an entirety in connection with the exercise of any of the remedies permitted
by applicable law or provided in this Loan Agreement.
|
|
|
ARTICLE X
|
RELEASE; INDEMNITY.
|
|
|
10.01
|
Release.
Borrower covenants and agrees that, in performing any of its duties under this
Loan Agreement, none of Lender, Loan Servicer or any of their respective agents or employees will be liable for any losses, claims,
damages, liabilities and expenses that may be incurred by any of them as a result of such performance, except that no party will
be released from liability for any losses, claims, damages, liabilities or expenses arising out of the willful misconduct or gross
negligence of such party.
|
|
|
(a)
|
General Indemnity
. Borrower agrees to indemnify, hold harmless and defend Lender, including
any custodian, trustee and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third
parties, any prior owner or holder of the Note, the Loan Servicer, any prior Loan Servicer, the officers, directors, shareholders,
partners, employees and trustees of each of the foregoing, and the heirs, legal representatives, successors and assigns of each
of the foregoing (collectively, “
Indemnitees
”) against any and all losses, claims, damages, liabilities and
expenses including Attorneys’ Fees and Costs, which may be imposed or incurred by any of them directly or indirectly arising
out of, or in any way relating to, or as a result of: (i) any failure of the Mortgaged Property to comply with the laws, regulations,
ordinance, code or decree of any Governmental Authority, including those pertaining to the Americans with Disabilities Act, zoning,
occupancy and subdivision of real property, (ii) any obligation of Borrower under any Lease, and (iii) any accident, injury or
death to any natural person on the Mortgaged Property or any damage to personal property located on the Mortgaged Property, except
that no such party will be indemnified from liability for any losses, claims, damages, liabilities or expenses arising out of the
willful misconduct or gross negligence of such party.
|
|
Multifamily Loan and Security Agreement
|
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58
|
|
|
(b)
|
Environmental Indemnity
. Borrower agrees to indemnify, hold harmless and defend Indemnitees
from and against all proceedings, claims, damages, penalties and costs (whether initiated or sought by Governmental Authorities
or private parties), including Attorneys’ Fees and Costs and remediation costs, whether incurred in connection with any judicial
or administrative process or otherwise, arising directly or indirectly from any of the following:
|
|
|
(i)
|
Any breach of any representation or warranty of Borrower in Section 5.05.
|
|
|
(ii)
|
Any failure by Borrower to perform any of its obligations under Section 6.12.
|
|
|
(iii)
|
The existence or alleged existence of any Prohibited Activity or Condition.
|
|
|
(iv)
|
The presence or alleged presence of Hazardous Materials on or under the Mortgaged Property or in
any of the Improvements.
|
|
|
(v)
|
The actual or alleged violation of any Hazardous Materials Law.
|
|
|
(c)
|
Indemnification Regarding ERISA Covenants
.
BORROWER WILL INDEMNIFY LENDER AND DEFEND
AND HOLD LENDER HARMLESS FROM AND AGAINST ALL CIVIL PENALTIES, EXCISE TAXES, OR OTHER LOSS, COST, DAMAGE AND EXPENSE (INCLUDING
REASONABLE ATTORNEYS’ FEES AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE AND SETTLEMENT OF CLAIMS AND LOSSES INCURRED
IN CORRECTING ANY PROHIBITED TRANSACTION OR IN THE SALE OF A PROHIBITED LOAN, AND IN OBTAINING ANY INDIVIDUAL PROHIBITED TRANSACTION
EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN LENDER’S SOLE AND ABSOLUTE DISCRETION) THAT LENDER MAY INCUR, DIRECTLY OR
INDIRECTLY, AS A RESULT OF DEFAULT UNDER SECTION 6.20. THIS INDEMNITY WILL SURVIVE ANY TERMINATION, SATISFACTION OR FORECLOSURE
OF THE SECURITY INSTRUMENT.
|
|
|
(d)
|
Securitization Indemnification
.
|
|
|
(i)
|
Borrower agrees to indemnify, hold harmless and defend the Indemnified
Parties from and against any and all proceedings, losses, claims, damages, liabilities, penalties, costs and expenses (whether
initiated or sought by Governmental Authorities or private parties), including Attorneys’ Fees and Costs, which may be incurred
by any Indemnified Party (either directly or indirectly), which arise out of, are in any way related to, or are as a result of
a claim that the Borrower Information contains an untrue statement of any material fact or the Borrower Information omits to state
a material fact necessary in order to make the statements therein, in light of the circumstances under which they are made, not
misleading (collectively, the “
Securitization Indemnification
”).
|
|
Multifamily Loan and Security Agreement
|
Page
59
|
|
|
(ii)
|
Borrower will not be liable under the Securitization Indemnification if the claim is based on Borrower
Information which Lender has materially misstated or materially misrepresented in the Disclosure Document.
|
(iii) For
purposes of this Section 10.02(d):
|
|
(A)
|
“
Borrower
Information
” includes any information provided at any time to Lender or Loan Servicer by
Borrower, any SPE Equity Owner, any Guarantor, any Property Manager or any Affiliates of the foregoing with respect to any of the
following:
|
|
|
(1)
|
Any Person listed in Section 10.02(d)(iii)(A).
|
|
|
(3)
|
The Mortgaged Property.
|
Borrower Information includes:
(i) representations and warranties made in the Loan Documents, (ii) financial statements of Borrower, any SPE Equity Owner, any
Designated Entity for Transfers or any Guarantor, and (iii) operating statements and rent rolls with respect to the Mortgaged Property.
Borrower Information does not include any information provided directly to Lender or Loan Servicer by a third party such as an
appraiser or an environmental consultant.
|
|
(B)
|
The term “
Lender
”
includes its officers and directors.
|
|
|
(C)
|
An “
Issuer
Person
” includes all of the following:
|
|
|
(1)
|
Any Person that has filed the registration statement, if any,
relating to the Securitization, and any Affiliate of such Person.
|
|
|
(2)
|
Any Person acting as issuer, depositor, sponsor and/or in a similar
capacity with respect to the Securitization, and any Affiliate of such Person.
|
|
|
(D)
|
The “
Issuer
Group
” includes all of the following:
|
|
|
(1)
|
Each director and officer of any Issuer Person.
|
|
|
(2)
|
Each entity that Controls any Issuer Person within the meaning
of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act.
|
|
|
(E)
|
The “
Underwriter
Group
” includes all of the following:
|
|
|
(1)
|
Each entity which is acting as an underwriter, manager, placement
agent, initial purchaser or in a similar capacity with respect to the Securitization.
|
|
Multifamily Loan and Security Agreement
|
Page
60
|
|
|
(2)
|
Each entity that Controls any such entity described in Section
10.02(d)(iii)(E)(1) within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act and is
acting as an underwriter, manager, placement agent, initial purchaser or in a similar capacity with respect to the Securitization.
|
|
|
(3)
|
The directors and officers of the entities described in Section
10.02(d)(iii)(E)(1) and Section 10.02(d)(iii)(E)(2).
|
|
|
(F)
|
“
Indemnified
Party
” or “
Indemnified Parties
” means
one or more of Lender, Issuer Person, Issuer Group, and Underwriter Group.
|
|
|
(e)
|
Selection and Direction of Counsel
. Counsel selected by Borrower to defend Indemnitees will
be subject to the approval of those Indemnitees. In any circumstances in which the indemnity under this Article X applies, Lender
may employ its own legal counsel and consultants to prosecute, defend or negotiate any claim or legal or administrative proceeding
and Lender, with the prior written consent of Borrower (which will not be unreasonably withheld, delayed or conditioned) may settle
or compromise any action or legal or administrative proceeding. However, unless an Event of Default has occurred and is continuing,
or the interests of Borrower and Lender are in conflict, as determined by Lender in Lender’s Discretion, Lender will permit
Borrower to undertake the actions referenced in this Article X so long as Lender approves such action, which approval will not
be unreasonably withheld or delayed. Borrower will reimburse Lender upon demand for all costs and expenses incurred by Lender,
including all costs of settlements entered into in good faith, consultants’ fees and Attorneys’ Fees and Costs.
|
|
|
(f)
|
Settlement or Compromise of Claims
. Borrower will not, without the prior written consent
of those Indemnitees who are named as parties to a claim or legal or administrative proceeding (“
Claim
”), settle
or compromise the Claim if the settlement (i) results in the entry of any judgment that does not include as an unconditional term
the delivery by the claimant or plaintiff to Lender of a written release of those Indemnitees, satisfactory in form and substance
to Lender, or (ii) may materially and adversely affect Lender, as determined by Lender in Lender’s Discretion.
|
|
|
(g)
|
Effect of Changes to Loan on Indemnification Obligations
. Borrower’s obligation to
indemnify the Indemnitees will not be limited or impaired by any of the following, or by any failure of Borrower or any Guarantor
to receive notice of or consideration for any of the following:
|
|
|
(i)
|
Any amendment or modification of any Loan Document.
|
|
|
(ii)
|
Any extensions of time for performance required by any Loan Document.
|
|
|
(iii)
|
Any provision in any of the Loan Documents limiting Lender’s recourse to property securing
the Indebtedness, or limiting the personal liability of Borrower or any other party for payment of all or any part of the Indebtedness.
|
|
|
(iv)
|
The accuracy or inaccuracy of any representations and warranties made by Borrower under this Loan
Agreement or any other Loan Document.
|
|
Multifamily Loan and Security Agreement
|
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61
|
|
|
(v)
|
The release of Borrower or any other Person, by Lender or by operation of law, from performance
of any obligation under any Loan Document.
|
|
|
(vi)
|
The release or substitution in whole or in part of any security for the Indebtedness.
|
|
|
(vii)
|
Lender’s failure to properly perfect any Lien or security interest given as security for
the Indebtedness.
|
|
|
(h)
|
Payments by Borrower
. Borrower will, at its own cost and expense, do all of the following:
|
|
|
(i)
|
Pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees
in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under
this Article X.
|
|
|
(ii)
|
Reimburse Indemnitees for any expenses paid or incurred in connection with any matters against
which Indemnitees are entitled to be indemnified under this Article X.
|
|
|
(iii)
|
Reimburse Indemnitees for any and all expenses, including Attorneys’ Fees and Costs, paid
or incurred in connection with the enforcement by Indemnitees of their rights under this Article X, or in monitoring and participating
in any legal or administrative proceeding.
|
|
|
(i)
|
Other Obligations
. The provisions of this Article X will be in addition to any and all other
obligations and liabilities that Borrower may have under applicable law or under other Loan Documents, and each Indemnitee will
be entitled to indemnification under this Article X without regard to whether Lender or that Indemnitee has exercised any rights
against the Mortgaged Property or any other security, pursued any rights against any Guarantor, or pursued any other rights available
under the Loan Documents or applicable law. If Borrower consists of more than one Person, the obligation of those Persons to indemnify
the Indemnitees under this Article X will be joint and several. The obligation of Borrower to indemnify the Indemnitees under this
Article X will survive any repayment or discharge of the Indebtedness, any foreclosure proceeding, any foreclosure sale, any delivery
of any deed in lieu of foreclosure, and any release of record of the Lien of the Security Instrument. Notwithstanding the foregoing,
if Lender has never been a mortgagee-in-possession of, or held title to, the Mortgaged Property, Borrower will have no obligation
to indemnify the Indemnitees under this Article X after the date of the release of record of the Lien of the Security Instrument
by payment in full at the Maturity Date or by voluntary prepayment in full.
|
|
Multifamily Loan and Security Agreement
|
Page
62
|
|
|
ARTICLE XI
|
MISCELLANEOUS PROVISIONS.
|
|
|
11.01
|
Waiver of Statute of Limitations, Offsets and Counterclaims.
Borrower waives the right to
assert any statute of limitations as a bar to the enforcement of this Loan Agreement or the Lien of the Security Instrument or
to any action brought to enforce any Loan Document. Borrower waives the right to assert a counterclaim, other than a compulsory
counterclaim, in any action or proceeding brought against it by Lender or otherwise to offset any obligations to make the payments
required by the Loan Documents. No failure by Lender to perform any of its obligations under the Loan Documents will be a valid
defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents.
|
|
|
11.02
|
Governing Law; Consent to Jurisdiction and Venue.
|
|
|
(a)
|
This Loan Agreement, and any Loan Document which does not itself expressly identify the law which
is to apply to it, will be governed by the laws of the Property Jurisdiction.
|
|
|
(b)
|
Borrower agrees that any controversy arising under or in relation to the Note, the Security Instrument,
this Loan Agreement or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal courts and
authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or
in relation to the Note, any security for the Indebtedness or any other Loan Document. Borrower irrevocably consents to service,
jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue
of domicile, habitual residence or otherwise. However, nothing in this Section 11.02 is intended to limit Lender’s right
to bring any suit, action or proceeding relating to matters under this Loan Agreement in any court of any other jurisdiction.
|
|
|
(a)
|
All Notices under or concerning this Loan Agreement will be in writing. Each Notice will be deemed
given on the earliest to occur of: (i) the date when the Notice is received by the addressee, (ii) the first Business Day after
the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next Business
Day delivery, or (iii) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified
mail, return receipt requested. Addresses for Notice are as follows:
|
|
If to Lender:
|
Walker & Dunlop, LLC
7501 Wisconsin Avenue, Suite 1200E
Bethesda, Maryland 20814
Attention: Loan Servicing
|
|
If to Borrower:
|
BR Hunters Creek, LLC
c/o Bluerock Real Estate, L.L.C.
712 Fifth Avenue, 9th Floor
New York, New York 10019
Attention: Michael Konig
|
Lender will endeavor
to provide a courtesy copy of any Notice given to Borrower by Lender to the Person at the following address. However, the failure
to provide such courtesy copy will not affect the validity or sufficiency of any Notice to Borrower, will not affect Lender’s
rights and remedies under this Loan Agreement or any other Loan Document, and will not subject Lender to any claims by or liability
to Borrower or any other Person. No Person listed below will be a third-party beneficiary of any of the Loan Documents.
|
Multifamily Loan and Security Agreement
|
Page
63
|
|
Courtesy
Copy to:
|
Kaplan Voekler Cunningham & Frank PLC
1401 E. Cary Street
Richmond, Virginia 23219
Attention: D. Zachary Grabill
|
|
|
(b)
|
Any party to this Loan Agreement may change the address to which Notices intended for it are to
be directed by means of Notice given to the other party in accordance with this Section 11.03. Each party agrees that it will not
refuse or reject delivery of any Notice given in accordance with this Section 11.03, that it will acknowledge, in writing, the
receipt of any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes
of this Section 11.03 to have been received by the rejecting party on the date so refused or rejected, as conclusively established
by the records of the U.S. Postal Service or the courier service.
|
|
|
(c)
|
Any Notice under the Note and any other Loan Document that does not specify how Notices are to
be given will be given in accordance with this Section 11.03.
|
|
|
11.04
|
Successors and Assigns Bound.
This Loan Agreement will bind the respective successors and
assigns of Borrower and Lender, and the rights granted by this Loan Agreement will inure to Lender’s successors and assigns.
|
|
|
11.05
|
Joint and Several (and Solidary) Liability.
If more than one Person signs this Loan Agreement
as Borrower, the obligations of such Persons will be joint and several. For a Mortgaged Property located in Louisiana, if more
than one Person signs this Loan Agreement as Borrower, the obligations of such Persons with be joint and several and solidary,
and wherever the phrase “joint and several” appears in this Loan Agreement, the phrase is amended to read “joint,
several, and solidary.”
|
|
|
11.06
|
Relationship of Parties; No Third Party Beneficiary.
|
|
|
(a)
|
The relationship between Lender and Borrower will be solely that of creditor and debtor, respectively,
and nothing contained in this Loan Agreement will create any other relationship between Lender and Borrower. Nothing contained
in this Loan Agreement will 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 creditor of any party to this Loan Agreement and no other Person will be a third party beneficiary
of this Loan Agreement or any other Loan Document. Without limiting the generality of the preceding sentence: (i) any arrangement
(“
Servicing Arrangement
”) between Lender and any Loan Servicer for loss sharing or interim advancement of funds
will constitute a contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment
of the Indebtedness, (ii) Borrower will not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by
the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness.
|
|
Multifamily Loan and Security Agreement
|
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64
|
|
|
11.07
|
Severability; Amendments.
|
|
|
(
a)
|
The invalidity or unenforceability of any provision of this Loan Agreement will not affect the
validity or enforceability of any other provision, and all other provisions will remain in full force and effect. This Loan Agreement
contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Loan Agreement.
|
|
|
(b)
|
This Loan Agreement may not be amended or modified except by a writing signed by the party against
whom enforcement is sought.
|
|
|
11.08
|
Disclosure of Information.
Borrower acknowledges that Lender may provide to third parties
with an existing or prospective interest in the servicing, enforcement, evaluation, performance, ownership, purchase, participation
or Securitization of the Loan, including any of the Rating Agencies, any entity maintaining databases on the underwriting and performance
of commercial mortgage loans, as well as governmental regulatory agencies having regulatory authority over Lender, any and all
information which Lender now has or may hereafter acquire relating to the Loan, the Mortgaged Property, Borrower, any SPE Equity
Owner or any Guarantor, as Lender determines necessary or desirable and that such information may be included in disclosure documents
in connection with a Securitization or syndication of participation interests, including a prospectus, prospectus supplement, offering
memorandum, private placement memorandum or similar document (each, a
“Disclosure Document”
) and also may be
included in any filing with the Securities and Exchange Commission pursuant to the Securities Act or the Securities Exchange Act.
To the fullest extent permitted under applicable law, Borrower irrevocably waives all rights, if any, to prohibit such disclosure,
including any right of privacy.
|
|
|
11.09
|
Determinations by Lender.
Unless otherwise provided in this Loan Agreement, in any instance
where the consent or approval of Lender may be given or is required, or where any determination, judgment or decision is to be
rendered by Lender under this Loan Agreement, the granting, withholding or denial of such consent or approval and the rendering
of such determination, judgment or decision will be made or exercised by Lender (or its designated representative) at its sole
and exclusive option and in its sole and absolute discretion.
|
|
|
11.10
|
Sale of Note; Change in Servicer; Loan Servicing.
The Note or a partial interest in the
Note (together with this Loan Agreement and the other Loan Documents) may be sold one or more times without prior Notice to Borrower.
A sale may result in a change of the Loan Servicer. There also may be one or more changes of the Loan Servicer unrelated to a sale
of the Note. If there is a change of the Loan Servicer, Borrower will be given Notice of the change. All actions regarding the
servicing of the Loan evidenced by the Note, including the collection of payments, the giving and receipt of Notice, inspections
of the Mortgaged Property, inspections of books and records, and the granting of consents and approvals, may be taken by the Loan
Servicer unless Borrower receives Notice to the contrary. If Borrower receives conflicting Notices regarding the identity of the
Loan Servicer or any other subject, any such Notice from Lender will govern.
|
|
|
11.11
|
Supplemental Financing.
|
|
|
(a)
|
This Section will apply only if at the time of any application referred to in Section 11.11(b),
Freddie Mac has in effect a product described in its
Multifamily Seller/Servicer Guide
under which it purchases supplemental
mortgages on multifamily properties that meet specified criteria (“
Supplemental Mortgage Product
”). For purposes
of this Section 11.11 only, the term “Freddie Mac” will include any affiliate or subsidiary of Freddie Mac.
|
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Multifamily Loan and Security Agreement
|
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65
|
|
|
(b)
|
After the first anniversary of the date of this Loan Agreement, or, if there are any Supplemental
Loans affecting the Mortgaged Property, after the first anniversary of the date of the Supplemental Note for the most recently-incurred
Supplemental Loan, Freddie Mac will consider an application from an originating lender that is generally approved by Freddie Mac
to sell mortgages to Freddie Mac under the Supplemental Mortgage Product (“
Approved Seller/Servicer
”) for the
purchase by Freddie Mac of a proposed indebtedness of Borrower to the Approved Seller/Servicer to be secured by one or more Supplemental
Instruments on the Mortgaged Property. Freddie Mac will purchase each Supplemental Loan secured by the Mortgaged Property if each
of the following conditions is satisfied:
|
|
|
(i)
|
At the time of the proposed Supplemental Loan, no Event of Default may have occurred and be continuing
and no event or condition may have occurred and be continuing that, with the giving of Notice or the passage of time, or both,
would become an Event of Default.
|
|
|
(ii)
|
Borrower and the Mortgaged Property must be acceptable to Freddie Mac under its Supplemental Mortgage
Product.
|
|
|
(iii)
|
New loan documents must be entered into to reflect each Supplemental Loan, such documents to be
acceptable to Freddie Mac in its discretion.
|
|
|
(iv)
|
No Supplemental Loan may cause the combined debt service coverage ratio of the Mortgaged Property
after the making of that Supplemental Loan to be less than the Minimum DSCR. As used in this Section, the term “combined
debt service coverage ratio” means, with respect to the Mortgaged Property, the ratio of:
|
|
|
(A)
|
the annual net operating income from the operations of the Mortgaged Property at the time of the
proposed Supplemental Loan,
|
to
|
|
(B)
|
the aggregate of the annual principal and interest payable on all of the following:
|
|
|
(I)
|
the Indebtedness under this Loan Agreement (using a 30 year amortization schedule),
|
|
|
(II)
|
any “Indebtedness” as defined in any security instruments recorded against the Mortgaged
Property (using a 30 year amortization schedule for any Supplemental Loans), and
|
|
|
(III)
|
the proposed “Indebtedness” for any Supplemental Loan (using a 30 year amortization
schedule).
|
As used in
this Section, “annual principal and interest” with respect to a floating rate loan will be calculated by Freddie Mac
using an interest rate equal to one of the following:
|
|
(X)
|
If the loan has an internal interest rate cap, the Capped Interest Rate.
|
|
|
(Y)
|
If the loan has an external interest rate cap, the Strike Rate plus the Margin.
|
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|
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|
|
|
(Z)
|
If the loan has no interest rate cap, the greater of (I) 7%, or (II) the then-current LIBOR Index
Rate plus the Margin plus 300 basis points.
|
The annual
net operating income of the Mortgaged Property will be as determined by Freddie Mac in its discretion considering factors such
as income in place at the time of the proposed Supplemental Loan and income during the preceding 12 months, and actual, historical
and anticipated operating expenses. Freddie Mac will determine the combined debt service coverage ratio of the Mortgaged Property
based on its underwriting. Borrower will provide Freddie Mac such financial statements and other information Freddie Mac may require
to make these determinations.
|
|
(v)
|
No Supplemental Loan may cause the combined loan to value ratio of the Mortgaged Property after
the making of that Supplemental Loan to exceed the Maximum Combined LTV, as determined by Freddie Mac. As used in this Section,
“combined loan to value ratio” means, with respect to the Mortgaged Property, the ratio, expressed as a percentage,
of:
|
|
|
(A)
|
the aggregate outstanding principal balances of all of the following:
|
|
|
(I)
|
the Indebtedness under this Loan Agreement,
|
|
|
(II)
|
any “Indebtedness” as defined in any security instruments recorded against the Mortgaged
Property, and
|
|
|
(III)
|
the proposed “Indebtedness” for any Supplemental Loan,
|
|
|
(B)
|
the value of the Mortgaged Property.
|
Freddie Mac
will determine the combined loan to value ratio of the Mortgaged Property based on its underwriting. Borrower will provide Freddie
Mac such financial statements and other information Freddie Mac may require to make these determinations. In addition, Freddie
Mac, at Borrower’s expense, may obtain MAI appraisals of the Mortgaged Property in order to assist Freddie Mac in making
the determinations under this Section. If Freddie Mac requires an appraisal, then the value of the Mortgaged Property that will
be used to determine whether the Maximum Combined LTV has been met will be the lesser of the appraised value set forth in such
appraisal or the value of the Mortgaged Property as determined by Freddie Mac.
|
|
(vi)
|
Borrower’s organizational documents are amended to permit Borrower to incur additional debt
in the form of Supplemental Loans (Lender will consent to such amendment(s)).
|
|
|
(vii)
|
One or more Persons acceptable to Freddie Mac executes and delivers to the Approved Seller/Servicer
a Guaranty in a form acceptable to Freddie Mac with respect to the exceptions to non-recourse liability described in Freddie Mac’s
form promissory note, unless Freddie Mac has elected to waive its requirement for a Guaranty.
|
|
Multifamily Loan and Security Agreement
|
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67
|
|
|
(viii)
|
The loan term of each Supplemental Loan will be coterminous with the Senior Indebtedness or longer
than the Senior Indebtedness, in Freddie Mac’s discretion.
|
|
|
(ix)
|
The Prepayment Premium Period of each Supplemental Loan will be coterminous with the Prepayment
Premium Period or the combined Lockout Period and Defeasance Period, as applicable, of the Senior Indebtedness.
|
|
|
(x)
|
The interest rate of each Supplemental Loan will be determined by Freddie Mac in its discretion.
|
|
|
(xi)
|
Lender enters into an intercreditor agreement (“
Intercreditor Agreement
”) acceptable
to Freddie Mac and to Lender for each Supplemental Loan.
|
|
|
(xii)
|
Borrower’s payment of fees and other expenses charged by Lender, Freddie Mac, the Approved
Seller/Servicer, and the Rating Agencies (including reasonable Attorneys’ Fees and Costs) in connection with reviewing and
originating each Supplemental Loan.
|
|
|
(xiii)
|
Commencing on the date that the first Supplemental Loan is originated and continuing for so long
as any Supplemental Loan is outstanding, the first lien Senior Lender will begin collection of any deferred Monthly Deposit or
Revised Monthly Deposit for Capital Replacements in accordance with Section 4.04(e) (if applicable) as well as Imposition Reserve
Deposits for any of the following Impositions marked ‘Deferred’ in Section 4.02(a):
|
|
|
(A)
|
Property Insurance premiums or premiums for other Insurance required by Lender under Section 6.10.
|
|
|
(B)
|
Taxes and payments in lieu of taxes
|
Such deposits
will be credited to the payment of any such required Imposition Reserve Deposits under any Supplemental Loan.
|
|
(xiv)
|
If any covenants, conditions and restrictions affecting the Mortgaged Property provide for a lien
for any assessments or other unpaid amounts, Borrower will provide satisfactory evidence that such lien will be subordinate to
the lien of the Supplemental Instrument.
|
|
|
(xv)
|
All other requirements of the Supplemental Mortgage Product must be met, unless Freddie Mac has
elected to waive one or more of its requirements.
|
|
Multifamily Loan and Security Agreement
|
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68
|
|
|
(c)
|
No later than 5 Business Days after Lender’s receipt of a written request from Borrower,
Lender will provide the following information to an Approved Seller/Servicer:
|
|
|
(i)
|
The then-current outstanding principal balance of the Senior Indebtedness.
|
|
|
(ii)
|
Payment history of the Senior Indebtedness.
|
|
|
(iii)
|
Whether any Reserve Funds are being collected on the Senior Indebtedness and the amount of each
such Reserve Fund deposit as of the date of the request.
|
|
|
(iv)
|
Whether any Repairs, Capital Replacements or improvements or rental achievement or burn-off guaranty
requirements are existing or outstanding under the terms of the Senior Indebtedness.
|
|
|
(v)
|
A copy of the most recent inspection report for the Mortgaged Property.
|
|
|
(vi)
|
Whether any modifications or amendments have been made to the Loan Documents for the Senior Indebtedness
since origination of the Senior Indebtedness and, if applicable, a copy of such modifications and amendments.
|
|
|
(vii)
|
Whether to Lender’s knowledge any Event of Default exists under the Senior Indebtedness.
|
Lender will only
be obligated to provide this information in connection with Borrower’s request for a Supplemental Loan from an Approved Seller/Servicer.
Notwithstanding anything in this Section to the contrary, if Freddie Mac is the owner of the Note, this Section 11.11(c) is not
applicable.
|
|
(d)
|
Lender will have no obligation to consent to any mortgage or Lien on the Mortgaged Property that
secures any indebtedness other than the Indebtedness, except as set forth in this Loan Agreement.
|
|
|
(e)
|
If a Supplemental Loan is made to Borrower, Borrower agrees that the terms of the Intercreditor
Agreement will govern with respect to any distributions of excess proceeds by Lender to the Supplemental Lender, and Borrower agrees
that Lender may distribute any excess proceeds received by Lender pursuant to the Loan Documents to Supplemental Lender pursuant
to the Intercreditor Agreement.
|
|
|
11.12
|
Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and
if the Note provides for Defeasance)
. This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to
the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a)
and (c), Borrower will have the right to defease the Loan in whole (“
Defeasance
”) and obtain the release of
the Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions:
|
|
|
(a)
|
Borrower will not have the right to obtain Defeasance at any of the following times:
|
|
|
(i)
|
If the Loan is not assigned to a REMIC trust.
|
|
Multifamily Loan and Security Agreement
|
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69
|
|
|
(ii)
|
During the Lockout Period.
|
|
|
(iii)
|
After the expiration of the Defeasance Period.
|
|
|
(iv)
|
After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest
on, and other amounts payable under, the Note pursuant to Section 11 of the Note.
|
|
|
(b)
|
Borrower will give Lender Notice (
“Defeasance Notice”
) specifying a Business
Day (
“Defeasance Closing Date”
) on which Borrower desires to close the Defeasance. The Defeasance Closing Date
specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which Lender receives
the Defeasance Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower of the identity of the
accommodation borrower (“
Successor Borrower
”).
|
|
|
(c)
|
The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“
Defeasance
Fee
”) for Lender’s processing of the Defeasance. If Lender does not receive the Defeasance Fee, then Borrower’s
right to obtain Defeasance pursuant to that Defeasance Notice will terminate.
|
|
|
(d)
|
(i)
|
If Borrower timely pays the Defeasance Fee, but Borrower
fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Fee as liquidated
damages for Borrower’s default and, except as provided in Section 11.12(d)(ii), Borrower will be released from all further
obligations under this Section 11.12. Borrower acknowledges that Lender will incur financing costs in arranging and preparing
for the release of the Mortgaged Property from the Lien of the Security Instrument in reliance on the executed Defeasance Notice.
Borrower agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing
on the date of this Loan Agreement, of the damages Lender will incur by reason of Borrower’s default.
|
|
|
(ii)
|
If the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees
to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 11.12(d)(i)) incurred
by Lender in reliance on the executed Defeasance Notice, within 5 Business Days after Borrower receives a written demand for payment,
accompanied by a statement, in reasonable detail, of Lender’s third party costs and expenses.
|
|
|
(iii)
|
All payments required to be made by Borrower to Lender pursuant to this Section 11.12 will be made
by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance
Notice.
|
|
|
(e)
|
No Event of Default has occurred and is continuing.
|
|
|
(f)
|
Borrower will deliver each of the following documents to Lender, in form and substance satisfactory
to Lender, on or prior to the Defeasance Closing Date, unless Lender has issued a written waiver of its right to receive any such
document:
|
|
Multifamily Loan and Security Agreement
|
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70
|
|
|
(i)
|
One or more opinions of counsel for Borrower confirming each of the following:
|
|
|
(A)
|
Lender has a valid and perfected first Lien and first priority security interest in the Defeasance
Collateral and the proceeds of the Defeasance Collateral.
|
|
|
(B)
|
The Pledge Agreement is duly authorized, executed, delivered and enforceable against Borrower in
accordance with its terms.
|
|
|
(C)
|
If, as of the Defeasance Closing Date, the Note is held by a REMIC trust, then each of the following
is correct:
|
|
|
(1)
|
The Defeasance has been effected in accordance with the requirements of Treasury Regulation Section
1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time).
|
|
|
(2)
|
The qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired
as a result of the Defeasance.
|
|
|
(3)
|
That there will be no imposition of a tax under applicable REMIC provisions as a result of the
Defeasance.
|
|
|
(D)
|
The Defeasance will not result in a “sale or exchange” of the Note within the meaning
of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder.
|
|
|
(ii)
|
A written certificate from an independent certified public accounting firm (reasonably acceptable
to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they
fall due under the Note, including full payment due on the Note on the Maturity Date.
|
|
|
(iii)
|
Lender’s form of a pledge and security agreement (“
Pledge Agreement
”)
and financing statements which pledge and create a first priority security interest in the Defeasance Collateral in favor of Lender.
|
|
|
(iv)
|
Lender’s form of a transfer and assumption agreement (“
Transfer and Assumption Agreement
”),
pursuant to which Borrower and any Guarantor (in each case, subject to satisfaction of all requirements under this Loan Agreement)
will be relieved from liability in connection with the Loan to the extent described in Sections 7.05(b) and 7.05(c), respectively,
and Successor Borrower will assume all remaining obligations.
|
|
|
(v)
|
Forms of all documents necessary to release the Mortgaged Property from the Liens created by the
Security Instrument and related UCC financing statements (collectively, “
Release Instruments
”), each in appropriate
form required by the Property Jurisdiction.
|
|
|
(vi)
|
Any other opinions, certificates, documents or instruments that Lender may reasonably request.
|
|
Multifamily Loan and Security Agreement
|
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71
|
|
|
(g)
|
Borrower will deliver to Lender, on or prior to the Defeasance Closing Date, each of the following:
|
|
|
(i)
|
The Defeasance Collateral, which meets all of the following requirements:
|
|
|
(A)
|
It is owned by Borrower, free and clear of all Liens and claims of third-parties.
|
|
|
(B)
|
It is in an amount sufficient to provide for (1) redemption payments to occur prior, but as close
as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date, and (2) delivery
of redemption proceeds at least equal to the amount of principal and interest due on the Note on each Installment Due Date including
full payment due on the Note on the Maturity Date (“
Scheduled Debt Payments
”).
|
|
|
(C)
|
All redemption payments received from the Defeasance Collateral will be paid directly to Lender
to be applied on account of the Scheduled Debt Payments occurring after the Defeasance Closing Date.
|
|
|
(D)
|
The pledge of the Defeasance Collateral will be effected through the book-entry facilities of a
qualified securities intermediary designated by Lender in conformity with all applicable laws.
|
|
|
(ii)
|
All accrued and unpaid interest and all other sums due under the Note, this Loan Agreement and
under the other Loan Documents, including all amounts due under Section 11.12(i), up to the Defeasance Closing Date.
|
|
|
(i)
|
Borrower will pay all reasonable costs and expenses incurred by Lender in connection with the Defeasance
in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments
and whether or not Defeasance is completed. Such expenses include all fees, costs and expenses incurred by Lender and its agents
in connection with the Defeasance (including Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement
and of the other materials described in this Loan Agreement and any related documentation, Rating Agencies’ fees, or other
costs related to the Defeasance).
|
Lender reserves the right to require
that Borrower post a deposit to cover costs which Lender reasonably anticipates that Lender will incur in connection with the Defeasance.
|
|
(j)
|
No Transfer Fee will be payable to Lender upon a Defeasance made in accordance with this Section
11.12.
|
|
Multifamily Loan and Security Agreement
|
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72
|
|
|
11.13
|
Lender’s Rights to Sell or Securitize.
Borrower acknowledges that Lender, and each
successor to Lender’s interest, may (without prior Notice to Borrower or Borrower’s prior consent), sell or grant participations
in the Loan (or any part of the Loan), sell or subcontract the servicing rights related to the Loan, securitize the Loan or place
the Loan in a trust. Borrower agrees to cooperate with all reasonable requests of Lender in connection with any of the foregoing
including taking the following actions:
|
|
|
(a)
|
Executing any financing statements or other documents deemed necessary by Lender or its transferee
to create, perfect or preserve the rights and interest to be acquired by such transferee.
|
|
|
(b)
|
Delivering revised organizational documents, counsel opinions, and executed amendments to the Loan
Documents satisfactory to the Rating Agencies.
|
|
|
(c)
|
Providing updated financial information with appropriate verification through auditors’ letters,
if required by Lender. (If Lender requires that Borrower’s updated financial information be accompanied by appropriate verification
through auditors’ letters, then Lender will reimburse Borrower for the costs which Borrower reasonably incurs in connection
with obtaining such auditors’ letters.)
|
|
|
(d)
|
Providing updated information on all litigation proceedings affecting Borrower or any Borrower
Principal as required in Section 6.16.
|
|
|
(e)
|
Reviewing information contained in any Disclosure Document and providing a mortgagor estoppel certificate,
written confirmation of Borrower’s indemnification obligations under this Loan Agreement, and such other information about
Borrower, any SPE Equity Owner, any Guarantor, any Property Manager or the Mortgaged Property as Lender may require for Lender’s
offering materials.
|
Notwithstanding anything set
forth above in this Section 11.13, Borrower will not be required to execute any document that changes the interest rate, the stated
maturity date or the amortization of principal set forth in the Note, or that modifies or amends any essential economic terms of
the Loan.
|
|
11.14
|
Cooperation with Rating Agencies and Investors.
Borrower covenants and agrees that if Lender
decides to include the Loan as an asset of a Secondary Market Transaction, Borrower will do all of the following:
|
|
|
(a)
|
At Lender’s request, meet with representatives of the Rating Agencies and/or investors to
discuss the business and operations of the Mortgaged Property.
|
|
|
(b)
|
Permit Lender or its representatives to provide related information to the Rating Agencies and/or
investors.
|
|
|
(c)
|
Cooperate with the reasonable requests of the Rating Agencies and/or investors in connection with
all of the foregoing.
|
|
|
11.15
|
Letter of Credit Requirements.
|
|
|
(a)
|
Any Letter of Credit required under this Loan Agreement must satisfy the following conditions:
|
|
|
(i)
|
It must be a clean, irrevocable, unconditional standby letter of credit.
|
|
|
(ii)
|
It must name Lender as the sole beneficiary and permit Lender to assign the Letter of Credit without
further consent from Issuer.
|
|
|
(iii)
|
It must have an initial term of not less than 12 months.
|
|
Multifamily Loan and Security Agreement
|
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73
|
|
|
(iv)
|
It must be in the form required by Lender.
|
|
|
(v)
|
It must provide that it may be drawn on by Lender or Loan Servicer, in whole or in part, by presentation
to Issuer of a sight draft without any other restrictions on the right to draw.
|
|
|
(vi)
|
It must be issued by an Issuer meeting Lender’s requirements, which Issuer (i) must be an
Eligible Institution, and (ii) may not, unless Lender agrees in writing, be an affiliate of Borrower or Lender.
|
|
|
(vii)
|
It must be obtained on behalf of Borrower by a Person other than Borrower’s general partners
or managing members if Borrower is a general or limited partnership or limited liability company. Neither Borrower nor the general
partners or managing members, if applicable, may have any liability or other obligations under any reimbursement agreement with
respect to the Letter of Credit.
|
|
|
(viii)
|
It may not be secured by a lien on all or any part of the Mortgaged Property or related Personalty.
|
|
|
(ix)
|
When delivered to Lender, it must be accompanied by an opinion acceptable to Lender in Lender’s
Discretion issued by counsel to the Issuer that includes opinions as to Issuer’s power and authority to issue the Letter
of Credit and the enforceability of the Letter of Credit against Issuer and an updated nonconsolidation opinion with regard to
any such Letter of Credit in form and substance satisfactory to Lender.
|
|
|
(b)
|
If at any time the Issuer of a Letter of Credit held by Lender ceases to be an Eligible Institution,
Lender will have the right to immediately draw down the Letter of Credit in full and hold the Proceeds in an escrow account in
accordance with the terms of this Loan Agreement.
|
|
|
(c)
|
Each Letter of Credit held by Lender pursuant to this Loan Agreement provides additional collateral
for the Indebtedness in addition to the lien of the Security Instrument.
|
|
|
11.19
|
State Specific Provisions.
Reserved.
|
|
|
11.20
|
Time is of the Essence.
Time is of the essence with respect to each covenant of this Loan
Agreement.
|
The following terms, when used in this
Loan Agreement (including when used in the recitals), will have the following meanings:
“Affiliate”
of any Person
means:
|
Multifamily Loan and Security Agreement
|
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74
|
|
|
(i)
|
Any other individual or entity that is, directly or indirectly,
one of the following:
|
|
|
(A)
|
In Control of the applicable Person.
|
|
|
(B)
|
Under the Control of the applicable Person.
|
|
|
(C)
|
Under common Control with the applicable Person.
|
|
|
(ii)
|
Any individual that is a director or officer of the applicable Person.
|
|
|
(iii)
|
Any individual that is a director or officer of any entity described in clause (i) of this definition.
|
“
Approved Seller/Servicer
”
is defined in Section 11.11(b).
“
Assignment of Management Agreement
”
means the Assignment of Management Agreement and Subordination of Management Fees, dated the same date as this Loan Agreement,
among Borrower, Lender and Property Manager, including all schedules, riders, allonges and addenda, as such Assignment of Management
Agreement may be amended from time to time, and any future Assignment of Management Agreement and Subordination of Management Fees
executed in accordance with Section 6.09(d).
“
Attorneys’ Fees and Costs
”
means: (i) fees and out of pocket costs of Lender’s and Loan Servicer’s attorneys, as applicable, including costs of
Lender’s and Loan Servicer’s in-house counsel, support staff costs, costs of preparing for litigation, computerized
research, telephone and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process service, videotaping
and similar costs and expenses; (ii) costs and fees of expert witnesses, including appraisers; (iii) investigatory fees; and (iv)
costs for any opinion required by Lender pursuant to the terms of the Loan Documents.
“
Bankruptcy Code
” means
the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq., as amended from time to time.
“
Borrower
” means all
Persons identified as “Borrower” in the first paragraph of this Loan Agreement, together with their successors and
assigns.
“
Borrower Information
”
is defined in Section 10.02(d).
“
Borrower Principal
”
means any of the following:
|
|
(i)
|
Any general partner of Borrower (if Borrower is a partnership).
|
|
|
(ii)
|
Any manager or managing member of Borrower (if Borrower is a limited liability company).
|
|
|
(iii)
|
Any Person (limited partner, member or shareholder) with a collective direct or indirect equity
interest in Borrower equal to or greater than 25%.
|
|
|
(iv)
|
Any Guarantor of all or any portion of the Loan or of any obligations of Borrower under the Loan
Documents.
|
“
Borrower Proof of Loss Threshold
”
means $200,000.00.
“
Borrower Proof of Loss Maximum
”
means $800,000.00.
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Multifamily Loan and Security Agreement
|
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75
|
“
Business Day
” means
any day other than a Saturday, a Sunday, or any other day on which Lender or the national banking associations are not open for
business.
“
Cap Agreement
” means
any interest rate cap agreement, interest rate swap agreement or other interest rate-hedging contract or agreement, in a form acceptable
to Lender, obtained by Borrower from a Cap Provider as a requirement of any Loan Document or as a condition of Lender’s making
the Loan.
“
Cap Collateral
” means
all of the following:
|
|
(iii)
|
All rights of Borrower under any Cap Agreement and all rights of Borrower to all Cap Payments,
including contract rights and general intangibles, whether existing now or arising after the date of this Loan Agreement.
|
|
|
(iv)
|
All rights, liens and security interests or guaranties granted by a Cap Provider or any other Person
to secure or guaranty payment of any Cap Payments whether existing now or granted after the date of this Loan Agreement.
|
|
|
(v)
|
All documents, writings, books, files, records and other documents arising from or relating to
any of the foregoing, whether existing now or created after the date of this Loan Agreement.
|
|
|
(vi)
|
All cash and non-cash proceeds and products of (ii) through (v) of this definition.
|
“
Cap Payment(s)
” means
any and all monies payable pursuant to any Cap Agreement by a Cap Provider.
“
Cap Provider”
means
the third-party financial institution approved by Lender that is the counterparty under any Cap Agreement or Replacement Cap Agreement.
“
Capital Replacement
”
means the replacement of those items listed on
Exhibit F
.
“
Capped Interest Rate
”
is defined in the Note, if applicable.
“
Claim
” is defined in
Section 10.02(f).
“
Clean Site Assessment
”
is defined in Section 7.05(b)(i).
“
Closing Date
” means
the date on which Lender disburses the proceeds of the Loan to or for the account of Borrower.
“
Commitment Letter
”
means the fully executed commitment letter or early rate lock application between Lender and Borrower issued in connection with
the Loan, as such document may have been modified, amended or extended.
“
Completion Date
” means,
with respect to any Repair, the date specified for that Repair in the Repair Schedule of Work (Exhibit C), as such date may be
extended by Lender in writing.
“
Condemnation
” is defined
in Section 6.11(a).
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Multifamily Loan and Security Agreement
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76
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“
Control
” means to possess,
directly or indirectly, the power to direct or cause the direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, including the power to elect a majority of the directors or trustees
of a corporation or trust, as the case may be.
“
Corporate Lease
” means
a Lease for one or more residential units under which one entity will rent all such units from Borrower and will have the right
to sublease such units to individual subtenants.
“
Cut-off Date
” is defined
in the Note, if applicable.
“
Default Rate
” is defined
in the Note.
“
Defeasance
” is defined
in Section 11.12.
“
Defeasance Closing Date
”
is defined in Section 11.12(b).
“
Defeasance Collateral
”
means: (i) a Freddie Mac Debt Security, (ii) a Fannie Mae Debt Security, (iii) U.S. Treasury Obligations, or (iv) FHLB Obligations.
“
Defeasance Fee
” is
defined in Section 11.12(c).
“
Defeasance Notice
”
is defined in Section 11.12(b).
“
Defeasance Period
”
is defined in the Note, if applicable.
“
Designated Entity
for Transfers
” means each entity so identified in
Exhibit I
, and that entity’s successors and permitted
assigns.
“
Disclosure Document
”
is defined in Section 11.08.
“
Economic Sanctions Laws
”
means the foreign assets control regulations, 31 C.F.R. Chapter V, as amended, and any amending legislation or executive order
relating to such legislation, as administered by OFAC.
“
Eligible Account
” means
an identifiable account which is separate from all other funds held by the holding institution that is either (i) an account or
accounts maintained with the corporate trust department of a federal or state-chartered depository institution or trust company
which complies with the definition of Eligible Institution, or (ii) a segregated trust account or accounts maintained with the
corporate trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity
which, in the case of a state chartered depository institution or trust company is subject to regulations substantially similar
to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal and state authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook
or other instrument.
“
Eligible Institution
”
means a federal or state chartered depository institution or trust company insured by the Federal Deposit Insurance Corporation,
the short term unsecured debt obligations or commercial paper of which are rated at least A-1 by Standard & Poor’s Ratings
Services, a division of The McGraw-Hill Companies, Inc., P-1 by Moody’s Investors Service, Inc. and F-3 by Fitch, Inc. in
the case of accounts in which funds are held for 30 days or less or, in the case of letters of credit or accounts in which funds
are held for more than 30 days, the long term unsecured debt obligations of which are rated at least “A” by Fitch,
Inc. and Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and “A2” by Moody’s
Investors Service, Inc. If at any time an Eligible Institution does not meet the required rating, the Loan Servicer must move the
Eligible Account within 30 days of such event to an appropriately rated Eligible Institution.
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Multifamily Loan and Security Agreement
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77
|
“
Environmental Inspections
”
is defined in Section 6.12(e).
“
Environmental Permit
”
means any permit, license, or other authorization issued under any Hazardous Materials Law with respect to any activities or businesses
conducted on or in relation to the Mortgaged Property.
“
ERISA
” means the Employee
Retirement Income Security Act of 1974, as amended.
“
Event of Default
” means
the occurrence of any event listed in Section 9.01.
“Extension Period”
is defined in the Note, if applicable.
“
Fannie Mae Debt Security
”
means any non-callable bond, debenture, note, or other similar debt obligation issued by the Federal National Mortgage Association.
“
FHFA
” means
the Federal Housing Finance Agency.
“
FHLB Obligations
”
mean direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the Federal Home Loan Bank.
“
Fixtures
” means all
property owned by Borrower which is attached to the Land or the Improvements so as to constitute a fixture under applicable law,
including: machinery, equipment, engines, boilers, incinerators and installed building materials; systems and equipment for the
purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits
used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals;
telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems
and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens,
refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances; light fixtures, awnings, storm windows and
storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors; cabinets, paneling, rugs and floor and wall
coverings; fences, trees and plants; swimming pools; and exercise equipment.
“
Freddie Mac
”
means the Federal Home Loan Mortgage Corporation.
“
Freddie Mac Debt Security
”
means any non-callable bond, debenture, note, or other similar debt obligation issued by Freddie Mac.
“
Freddie Mac Web Site
”
means the web site of Freddie Mac, located at www.freddiemac.com.
“
GAAP
” means
generally accepted accounting principles.
“
Governmental Authority
”
means any board, commission, department, agency or body of any municipal, county, state or federal governmental unit, or any subdivision
of any of them, that has or acquires jurisdiction over the Mortgaged Property, or the use, operation or improvement of the Mortgaged
Property, or over Borrower.
“
Guarantor
”
means the Person(s) required by Lender to guaranty all or a portion of Borrower’s obligations under the Loan Documents, as
set forth in the Guaranty. The required Guarantors as of the date of this Loan Agreement are set forth in
Exhibit I
.
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Multifamily Loan and Security Agreement
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78
|
“
Guaranty
” means the
Guaranty executed by Guarantor and/or any replacement or supplemental guaranty executed pursuant to the terms of this Loan Agreement.
“
Hazardous Materials
”
means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives; flammable
materials; radioactive materials; polychlorinated biphenyls (PCBs) and compounds containing them; lead and lead-based paint; asbestos
or asbestos containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether
empty or containing any substance; any substance the presence of which on the Mortgaged Property is prohibited by any Governmental
Authority; any substance that requires special handling and any other material or substance now or in the future that (i) is defined
as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic substance,”
“toxic pollutant,” “contaminant,” or “pollutant” by or within the meaning of any Hazardous
Materials Law, or (ii) is regulated in any way by or within the meaning of any Hazardous Materials Law.
“
Hazardous Materials
Law
” and “
Hazardous Materials Laws
” means any and all federal, state and local laws, ordinances, regulations
and standards, rules, policies and other governmental requirements, administrative rulings and court judgments and decrees in effect
now or in the future, including all amendments, that relate to Hazardous Materials or the protection of human health or the environment
and apply to Borrower or to the Mortgaged Property. Hazardous Materials Laws include the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33 U.S.C. Section
1251, et seq., and the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101 et seq., and their state analogs.
“
HVAC
System
” is defined in Section 6.10(a)(v).
“
Immediate Family Members
”
means a Person’s spouse, parent, child (including stepchild), grandchild (including step-grandchild) or sibling.
“
Imposition Reserve
Deposits
” is defined in Section 4.02(a).
“
Impositions
” is defined
in Section 4.02(a).
“
Improvements
” means
the buildings, structures and improvements now constructed or at any time in the future constructed or placed upon the Land, including
any future alterations, replacements and additions.
“
Indebtedness
” means
the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under,
the Note, this Loan Agreement or any other Loan Document, including prepayment premiums, late charges, default interest, and advances
as provided in Section 9.02 to protect the security of the Security Instrument.
“
Indemnified Party/ies
”
is defined in Section 10.02(d).
“
Indemnitees
”
is defined in Section 10.02(a).
“Installment Due Date”
is defined in the Note.
“
Insurance
”
means Property Insurance, liability insurance and all other insurance that Lender requires Borrower to maintain pursuant to this
Loan Agreement.
“
Intercreditor Agreement
”
is defined in Section 11.11(b).
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Multifamily Loan and Security Agreement
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“
Investor Interest Transfer
”
is defined in Section 7.03(d)(vi).
“
Investor Interests
”
is defined in Section 7.03(d)(vi).
“Issuer”
means the issuer
of any Letter of Credit.
“
Issuer Group
” is defined
in Section 10.02(d).
“
Issuer Person
” is defined
in Section 10.02(d).
“
Land
” means the land
described in
Exhibit A
.
“
Leases
”
means all present and future leases, subleases, licenses, concessions or grants or other possessory interests now or hereafter
in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including
proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions
or renewals.
“
Lender
”
means the entity identified as “Lender” in the first paragraph of this Loan Agreement, or any subsequent holder of
the Note.
“
Lender’s Discretion
”
means Lender’s reasonable discretion unless otherwise set forth in this Loan Agreement.
“
Letter of Credit
”
means any letter of credit required under the terms of this Loan Agreement or any other Loan Document.
“
LIBOR Index Rate
” is
defined in the Note, if applicable.
“
Lien
” means
any mortgage, deed of trust, deed to secure debt, security interest or other lien or encumbrance on the Mortgaged Property.
“
Loan
” is
defined on Page 1 of this Loan Agreement.
“
Loan Agreement
”
means this Multifamily Loan and Security Agreement.
“
Loan Application
” is
defined in Section 5.16(a).
“
Loan Documents
” means
the Note, the Security Instrument, this Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements, UCC
filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any Guarantor or any other
Person in connection with the Loan evidenced by the Note, as such documents may be amended from time to time.
“
Loan Servicer
” means
the entity that from time to time is designated by Lender to collect payments and deposits and receive Notices under the Note,
the Security Instrument, this Loan Agreement and any other Loan Document, and otherwise to service the Loan evidenced by the Note
for the benefit of Lender.
“
Lockout Period,
” if
applicable, is defined in the Note.
“
Major Building System”
means one that is integral to the Improvements, providing basic services to the tenants and other occupants of the Improvements
including:
|
|
·
|
Electrical (electrical lines or power upgrades, excluding
fixture replacement).
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Multifamily Loan and Security Agreement
|
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80
|
|
|
·
|
HVAC (central and unit systems, excluding replacement
of in kind unit systems).
|
|
|
·
|
Plumbing (supply and waste lines, excluding fixture replacement).
|
|
|
·
|
Structural (foundation, framing, and all building support
elements).
|
“
Manager
”
or “
Managers
” means a Person who is named or designated as a manager or managing member or otherwise acts in
the capacity of a manager or managing member of a limited liability company in a limited liability company agreement or similar
instrument under which the limited liability company is formed or operated.
“
Margin
”
is defined in the Note, if applicable.
“
Material Adverse Effect
”
means a significant detrimental effect on: (i) the Mortgaged Property, (ii) the business, prospects, profits, operations or condition
(financial or otherwise) of Borrower, (iii) the enforceability, validity, perfection or priority of the Lien of any Loan Document,
or (iv) the ability of Borrower to perform any obligations under any Loan Document.
“
Maturity Date
” means
the Scheduled Maturity Date, as defined in the Note.
“
Maximum Combined LTV
”
means 75%.
“
Membership Interests
”
is defined in Section 5.24.
“
Membership Interests Seller
”
is defined in Section 5.24.
“
Minimum DSCR
” means,
with respect to a Supplemental Loan, (i) if the Senior Indebtedness bears interest at a fixed rate, 1.25:1, or (ii) if the Senior
Indebtedness bears interest at a floating rate, 1.10:1.
“
Minimum Occupancy
”
means 85% of units at the Mortgaged Property with leases that comply with Section 5.11, Section 6.09(e)(v)(E), and Section 6.15.
“
MMP
” means
a moisture management plan to control water intrusion and prevent the development of Mold or moisture at the Mortgaged Property
throughout the term of this Loan Agreement.
“
Modified Non-Residential
Lease
” means an extension or modification of any Non-Residential Lease, which Non-Residential Lease was in existence
as of the date of this Loan Agreement.
“
Mold
” means
mold, fungus, microbial contamination or pathogenic organisms.
“
Mortgaged Property
”
means all of Borrower’s present and future right, title and interest in and to all of the following:
|
|
(i)
|
The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground
Lease and the Leasehold Estate.
|
|
|
(v)
|
All current and future rights, including air rights, development rights, zoning rights and other
similar rights or interests, easements, tenements, rights of way, strips and gores of land, streets, alleys, roads, sewer rights,
waters, watercourses and appurtenances related to or benefiting the Land or the Improvements, or both, and all rights-of-way, streets,
alleys and roads which may have been or may in the future be vacated.
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Multifamily Loan and Security Agreement
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81
|
|
|
(vi)
|
All proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the
Personalty or any other part of the Mortgaged Property, whether or not Borrower obtained the Insurance pursuant to Lender’s
requirement.
|
|
|
(vii)
|
All awards, payments and other compensation made or to be made by any municipal, state or federal
authority with respect to the Land or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any
other part of the Mortgaged Property, including any awards or settlements resulting from Condemnation proceedings or the total
or partial taking of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property under
the power of eminent domain or otherwise and including any conveyance in lieu thereof.
|
|
|
(viii)
|
All contracts, options and other agreements for the sale of the Land, or the Leasehold Estate,
as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property entered into by Borrower
now or in the future, including cash or securities deposited to secure performance by parties of their obligations.
|
|
|
(ix)
|
All proceeds from the conversion, voluntary or involuntary, of any of the items described in items
(i) through (viii) of this definition, into cash or liquidated claims, and the right to collect such proceeds.
|
|
|
(x)
|
All Rents and Leases.
|
|
|
(xi)
|
All earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements
or any other part of the Mortgaged Property, and all undisbursed proceeds of the Loan.
|
|
|
(xii)
|
All Imposition Reserve Deposits.
|
|
|
(xiii)
|
All refunds or rebates of Impositions by any Governmental Authority or insurance company (other
than refunds applicable to periods before the real property tax year in which this Loan Agreement is dated).
|
|
|
(xiv)
|
All tenant security deposits which have not been forfeited by any tenant under any Lease and any
bond or other security in lieu of such deposits.
|
|
|
(xv)
|
All names under or by which any of the Mortgaged Property may be operated or known, and all trademarks,
trade names and goodwill relating to any of the Mortgaged Property.
|
|
|
(xvi)
|
If required by the terms of Section 4.05 or elsewhere in this Loan Agreement, all rights under
any Letter of Credit and the Proceeds, as such Proceeds may increase or decrease from time to time.
|
|
|
(xvii)
|
If the Note provides for interest to accrue at a floating or variable rate and there is a Cap Agreement,
the Cap Collateral.
|
|
|
(xviii)
|
through (xxv) are Reserved.
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Multifamily Loan and Security Agreement
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“
New Non-Residential Lease
”
is any Non-Residential Lease not in existence as of the date of this Loan Agreement.
“
Non-Residential Lease
”
is a Lease of a portion of the Mortgaged Property to be used for non-residential purposes.
“
Non-U.S. Equity Holder
”
means any Person with a collective equity interest (whether direct or indirect) of 10% or more in Borrower, and which is either
(a) an individual who is not a citizen of the United States, or (b) an entity formed outside the United States.
“
Note
” means
the Multifamily Note or Notes (including any Amended and Restated Note(s), Consolidated, Amended and Restated Note(s), or Extended
and Restated Note(s)) executed by Borrower in favor of Lender and dated as of the date of this Loan Agreement, including all schedules,
riders, allonges and addenda, as such Multifamily Note(s) may be amended, modified and/or restated from time to time.
“
Notice
”
or “
Notices
” means all notices, demands and other communication required under the Loan Documents, provided
in accordance with the requirements of Section 11.03.
“
O&M Program
”
is defined in Section 6.12(c) and consists of the following: Asbestos and Polychlorinated Biphenyls.
“
OFAC
” means
the U.S. Department of the Treasury’s Office of Foreign Assets Control.
“
Person
”
means any natural person, sole proprietorship, corporation, general partnership, limited partnership, limited liability company,
limited liability partnership, limited liability limited partnership, joint venture, association, joint stock company, bank, trust,
estate, unincorporated organization, any federal, state, county or municipal government (or any agency or political subdivision
thereof), endowment fund or any other form of entity.
“
Personalty
”
means all of the following:
|
|
(i)
|
Accounts (including deposit accounts) of Borrower related to the Mortgaged Property.
|
|
|
(ii)
|
Equipment and inventory owned by Borrower, which are used now or in the future in connection with
the ownership, management or operation of the Land or Improvements or are located on the Land or Improvements, including furniture,
furnishings, machinery, building materials, goods, supplies, tools, books, records (whether in written or electronic form) and
computer equipment (hardware and software).
|
|
|
(iii)
|
Other tangible personal property owned by Borrower which is used now or in the future in connection
with the ownership, management or operation of the Land or Improvements or is located on the Land or in the Improvements, including
ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances (other than
Fixtures).
|
|
|
(iv)
|
Any operating agreements relating to the Land or the Improvements.
|
|
|
(v)
|
Any surveys, plans and specifications and contracts for architectural, engineering and construction
services relating to the Land or the Improvements.
|
|
|
(vi)
|
All other intangible property, general intangibles 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
and including subsidy or similar payments received from any sources, including a Governmental Authority.
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Multifamily Loan and Security Agreement
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83
|
|
|
(vii)
|
Any rights of Borrower in or under any Letter of Credit.
|
“
Pledge Agreement
”
is defined in Section 11.12(f)(iii).
“
Preapproved Intrafamily
Transfer
” is defined in Section 7.04.
“
Prepayment Premium
Period
” is defined in the Note.
“
Prior Lien
”
means a pre-existing mortgage, deed of trust or other Lien encumbering the Mortgaged Property.
“
Proceeding
”
means, whether voluntary or involuntary, any case, proceeding or other action against Borrower or any SPE Equity Owner under any
existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors.
“
Proceeds
”
means the cash obtained by a draw on a Letter of Credit.
“
Prohibited Activity
or Condition
” means each of the following:
|
|
(i)
|
The presence, use, generation, release, treatment, processing, storage (including storage in above-ground
and underground storage tanks), handling or disposal of any Hazardous Materials on or under the Mortgaged Property.
|
|
|
(ii)
|
The transportation of any Hazardous Materials to, from or across the Mortgaged Property.
|
|
|
(iii)
|
Any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may
be in violation of Hazardous Materials Laws.
|
|
|
(iv)
|
Any violation of or noncompliance with the terms of any Environmental Permit with respect to the
Mortgaged Property.
|
|
|
(v)
|
Any violation or noncompliance with the terms of any O&M Program.
|
However, the term “Prohibited
Activity or Condition” expressly excludes lawful conditions permitted by an O&M Program or the safe and lawful use and
storage of quantities of: (i) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation
and maintenance of comparable multifamily properties, (ii) cleaning materials, personal grooming items and other items sold in
pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property,
and (iii) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged
Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance
with Hazardous Materials Laws.
“
Prohibited Parties List
”
means any one or more of the following:
|
|
(i)
|
The OFAC Specially Designated Nationals and Blocked Persons
List.
|
|
|
(ii)
|
The OFAC Consolidated Sanctions List.
|
|
|
(iii)
|
FHFA Suspended Counterparty Program List.
|
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Multifamily Loan and Security Agreement
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84
|
“
Property Improvement Alterations
”
means alterations and additions to the Improvements existing at or upon the Mortgaged Property as of the date of this Loan Agreement,
which are being made to renovate or upgrade the Mortgaged Property and are not otherwise permitted under Section 6.09(e). Repairs,
Capital Replacements, Restoration or other work required to be performed at the Mortgaged Property pursuant to Sections 6.10 or
6.11 will not constitute Property Improvement Alterations.
“
Property Improvement Notice
”
means a Notice to Lender that Borrower intends to begin the Property Improvement Alterations identified in the Property Improvement
Notice.
“Property Improvement
Total Amount”
means the aggregate of $14,640,000.00 during the term of the Mortgage.
“
Property Insurance
” is
defined in Section 6.10(a).
“
Property Jurisdiction
”
means the jurisdiction in which the Land is located.
“
Property Manager
”
means Carroll Management Group, LLC, a Georgia limited liability company, or another residential rental property manager which
is approved by Lender in writing.
“
Property Seller
”
is defined in Section 5.24.
“
Public Fund/REIT Securities
”
is defined in Section 7.03(c).
“
Rate Cap Agreement Reserve Fund
”
means the account established pursuant to Section 4.07, if applicable, to pay for the cost of a Replacement Cap Agreement.
“
Rating Agencies
”
means Fitch, Inc., Moody’s Investors Service, Inc., or Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor entity of the foregoing, or any other nationally recognized statistical rating organization.
“
Release Instruments
”
is defined in Section 11.12(f).
“
Remedial Work
”
is defined in Section 6.12(f).
“
Rent(s)
” means all
rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, parking fees,
laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property,
whether now due, past due or to become due, and deposits forfeited by tenants, and, if Borrower is a cooperative housing corporation
or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy
agreements, whether now due, past due or to become due.
“
Rent Schedule
” means
a written 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.
“
Repairs
” means the
repairs to be made to the Mortgaged Property, as described on the Repair Schedule of Work (Exhibit C) or as otherwise required
by Lender in accordance with this Loan Agreement.
“
Replacement Cap Agreement
”
means any Cap Agreement satisfying the provisions of this Loan Agreement, using documentation approved by Lender, and purchased
by Borrower to replace any initial Cap Agreement or subsequent Cap Agreement.
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Multifamily Loan and Security Agreement
|
Page
85
|
“
Replacement Cost
”
means the estimated replacement cost of the Improvements, Fixtures, and Personalty (or, when used in reference to a property that
is not the Mortgaged Property, all improvements, fixtures, and personalty located on such property), excluding any deduction for
depreciation, all as determined annually by Borrower using customary methodology and sources of information acceptable to Lender
in Lender’s Discretion. Replacement Cost will not include the cost to reconstruct foundations or site improvements, such
as driveways, parking lots, sidewalks, and landscaping.
“
Reserve Fund
” means
each account established for Imposition Reserve Deposits, the Replacement Reserve Fund, the Repair Reserve Fund (if any), the Rate
Cap Agreement Reserve Fund (if any), the Rental Achievement Reserve Fund (if any), and any other account established pursuant to
Article IV of this Loan Agreement.
“
Restoration
” is defined
in Section 6.10(j)(i).
“
Scheduled Debt Payments
”
is defined in Section 11.12(g)(i)(B).
“
Secondary Market Transaction”
means: (i) any sale or assignment of this Loan Agreement, the Note and the other Loan Documents to one or more investors as a whole
loan, (ii) a participation of the Loan to one or more investors, (iii) any deposit of this Loan Agreement, the Note and the other
Loan Documents with a trust or other entity which may sell certificates or other instruments to investors evidencing an ownership
interest in the assets of such trust or other entity, or (iv) any other sale, assignment or transfer of the Loan or any interest
in the Loan to one or more investors.
“
Securitization
”
means when the Note or any portion of the Note is assigned to a REMIC or grantor trust.
“Securitization Indemnification”
is defined in Section 10.02(d).
“
Security Instrument
”
means the mortgage, deed of trust, deed to secure debt or other similar security instrument encumbering the Mortgaged Property
and securing Borrower’s performance of its Loan obligations, including Borrower’s obligations under the Note and this
Loan Agreement (including any Amended and Restated Security Instrument, Consolidation, Modification and Extension Agreement, Extension
and Modification Agreement or similar agreement or instrument amending and restating existing security instruments).
“
Senior Indebtedness
”
means, for a Supplemental Loan, if any, the Indebtedness evidenced by each Senior Note and secured by each Senior Instrument for
the benefit of each Senior Lender.
“
Senior Instrument
”
– Not applicable.
“
Senior Lender
”
means each holder of a Senior Note.
“
Senior Loan Documents
”
means, for a Supplemental Loan, if any, all documents relating to each loan evidenced by a Senior Note.
“
Senior Note
”
means, for a Supplemental Loan, if any, each Multifamily Note secured by a Senior Instrument.
“
Servicing Arrangement
”
is defined in Section 11.06(b).
“
Single
Purpose Entity
” is defined in Section 6.13(a).
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Multifamily Loan and Security Agreement
|
Page
86
|
“
Site Assessment
” means
an environmental assessment report for the Mortgaged Property prepared at Borrower’s expense by a qualified environmental
consultant engaged by Borrower, or by Lender on behalf of Borrower, and approved by Lender, and in a manner reasonably satisfactory
to Lender, based upon an investigation relating to and making appropriate inquiries to evaluate the risks associated with Mold
and any existence of Hazardous Materials on or about the Mortgaged Property, and the past or present discharge, disposal, release
or escape of any such substances, all consistent with the most current version of the ASTM 1527 standard (or any successor standard
published by ASTM) and good customary and commercial practice.
“
SPE Equity Owner
”
is not applicable. Borrower will not be required to maintain an SPE Equity Owner in its organizational structure during the term
of the Loan and all references to SPE Equity Owner in this Loan Agreement and in the Note will be of no force or effect
.
“
Successor Borrower
”
is defined in Section 11.12(b).
“
Supplemental Indebtedness
”
the Indebtedness evidenced by the Supplemental Note(s) and secured by the Supplemental Instrument(s) for the benefit of Supplemental
Lender(s), if any.
“
Supplemental Instrument
”
means, for each Supplemental Loan (whether one or more), if any, the Security Instrument executed to secure the Supplemental Note
for that Supplemental Loan.
“
Supplemental Lender
”
means, for each Supplemental Loan (whether one or more), if any, the lender named in the Supplemental Instrument for that Supplemental
Loan and its successors and/or assigns.
“
Supplemental Loan
”
means any loan that is subordinate to the Senior Indebtedness.
“
Supplemental Loan Documents
”
means, for each Supplemental Loan (whether one or more), if any, all documents relating to the loan evidenced by the Supplemental
Note for that Supplemental Loan.
“
Supplemental Mortgage Product
”
is defined in Section 11.11(a).
“
Supplemental Note
”
means, for each Supplemental Loan (whether one or more), if any, the Multifamily Note secured by the Supplemental Instrument for
that Supplemental Loan.
“
Tax Code
”
means the Internal Revenue Code of the United States, 26 U.S.C. Section 1 et seq., as amended from time to time.
“
Taxes
” means
all taxes, assessments, vault rentals and other charges, if any, whether general, special or otherwise, including all assessments
for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority
or quasi-public authority, and which, if not paid, will become a Lien on the Land or the Improvements.
“Total Insurable Value”
means the sum of the Replacement Cost, business income/rental value Insurance and the value of any business personal property.
“
Transfer
” means any
of the following:
|
|
(i)
|
A sale, assignment, transfer or other disposition or divestment of any interest in Borrower, a
Designated Entity for Transfers, or the Mortgaged Property (whether voluntary, involuntary or by operation of law).
|
|
|
(ii)
|
The granting, creating or attachment of a Lien, encumbrance or security interest (whether voluntary,
involuntary or by operation of law).
|
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Multifamily Loan and Security Agreement
|
Page
87
|
|
|
(iii)
|
The issuance or other creation of an ownership interest in a legal entity, including a partnership
interest, interest in a limited liability company or corporate stock.
|
|
|
(iv)
|
The withdrawal, retirement, removal or involuntary resignation of a partner in a partnership or
a member or Manager in a limited liability company.
|
|
|
(v)
|
The merger, dissolution, liquidation, or consolidation of a legal entity or the reconstitution
of one type of legal entity into another type of legal entity.
|
|
|
(vi)
|
A change of the Guarantor.
|
For purposes of defining the
term “Transfer,” the term “partnership” means a general partnership, a limited partnership, a joint venture,
a limited liability partnership, or a limited liability limited partnership and the term “partner” means a general
partner, a limited partner, or a joint venturer.
“Transfer” does not include
any of the following:
|
|
(i)
|
A conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure sale under the
Security Instrument.
|
|
|
(ii)
|
The Mortgaged Property becoming part of a bankruptcy estate by operation of law under the Bankruptcy
Code.
|
|
|
(iii)
|
The filing or recording of a Lien against the Mortgaged Property for local taxes and/or assessments
not then due and payable.
|
“
Transfer and Assumption
Agreement
” is defined in Section 11.12(f)(iv).
“
Transfer Fee
”
means a fee paid when the Transfer is completed. Unless otherwise specified, the Transfer Fee will be equal to the lesser of the
following:
|
|
(i)
|
1% of the outstanding principal balance of the Indebtedness as of the date of the Transfer.
|
“
Transfer Processing
Fee
” means a nonrefundable fee of $15,000 for Lender’s review of a proposed or completed Transfer.
“
U.S. Treasury Obligations
”
means direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the United States of America.
“
UCC Collateral
”
is defined in Section 3.03.
“
Underwriter Group
”
is defined in Section 10.02(d).
“
Uniform Commercial
Code
” means the Uniform Commercial Code as promulgated in the applicable jurisdiction.
“
Windstorm
Coverage
” is defined in Section 6.10(a)(iv).
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Multifamily Loan and Security Agreement
|
Page
88
|
|
|
ARTICLE XIII
|
INCORPORATION OF ATTACHED RIDERS.
|
The Riders listed on Page ii are attached
to and incorporated into this Loan Agreement.
|
|
ARTICLE XIV
|
INCORPORATION OF ATTACHED EXHIBITS.
|
The following Exhibits, if marked with an
“X” in the space provided, are attached to this Loan Agreement:
|
x
|
|
Exhibit A
|
Description of the Land (required)
|
|
|
|
|
|
|
x
|
|
Exhibit B
|
Modifications to Multifamily Loan and Security Agreement
|
|
|
|
|
|
|
x
|
|
Exhibit C
|
Repair Schedule of Work
|
|
|
|
|
|
|
x
|
|
Exhibit D
|
Repair Disbursement Request (required)
|
|
|
|
|
|
|
x
|
|
Exhibit E
|
Work Commenced at Mortgaged Property
|
|
|
|
|
|
|
x
|
|
Exhibit F
|
Capital Replacements (required)
|
|
|
|
|
|
|
x
|
|
Exhibit G
|
Description of Ground Lease
|
|
|
|
|
|
|
x
|
|
Exhibit H
|
Organizational Chart of Borrower as of the Closing Date (required)
|
|
|
|
|
|
|
x
|
|
Exhibit I
|
Designated Entities for Transfers and Guarantor(s) (required)
|
|
|
|
|
|
|
x
|
|
Exhibit J
|
Description of Release Parcel
|
|
|
|
|
|
|
x
|
|
Exhibit K
|
Green Improvements Verification Certification
|
|
|
|
|
|
|
¨
|
|
Exhibit L
|
Reserved
|
|
|
|
|
|
|
¨
|
|
Exhibit M
|
Reserved
|
|
|
|
|
|
|
¨
|
|
Exhibit N
|
Reserved
|
|
|
|
|
|
|
x
|
|
Exhibit O
|
Borrower’s Certificate of Property Improvement Alterations Completion (required)
|
REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURES ON FOLLOWING PAGES
|
Multifamily Loan and Security Agreement
|
Page
89
|
|
|
BORROWER:
|
|
|
|
|
|
BR HUNTERS CREEK, LLC
, a Delaware limited liability company
|
|
|
|
|
|
|
By:
|
/s/ Jordan Ruddy
|
|
|
|
Name: Jordan Ruddy
|
|
|
|
Title: Authorized Signatory
|
SIGNATURES
CONTINUE ON FOLLOWING PAGE
|
Multifamily Loan and Security Agreement
|
Page S-
1
|
|
|
LENDER:
|
|
|
|
|
|
WALKER & DUNLOP, LLC
, a Delaware limited liability company
|
|
|
|
|
|
|
By:
|
/s/ Joyce Velazquez
|
|
|
|
Joyce Velazquez
|
|
|
|
Closing Officer
|
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Multifamily Loan and Security Agreement
|
Page S-
2
|
RIDER TO MULTIFAMILY LOAN AND SECURITY
AGREEMENT
REPAIR RESERVE
FUND
(Revised 5-5-2017)
The following changes are made to the Loan
Agreement which precedes this Rider:
|
|
A.
|
Section 4.03 is deleted and replaced with the following:
|
|
|
4.03
|
Repair Reserve Fund.
|
|
|
(a)
|
Deposits to Repair Reserve Fund
. Lender and Borrower acknowledge that Borrower has established
the Repair Reserve Fund by depositing the Repair Reserve Deposit with Lender on the date of this Loan Agreement, and that Borrower
must complete the Repairs required pursuant to Section 6.14.
|
|
|
(b)
|
Costs Charged by Lender
.
|
|
|
(i)
|
If Lender, in Lender’s Discretion, retains a professional inspection engineer or other qualified
third party to inspect any Repairs pursuant to the terms of Section 6.06, Lender may charge Borrower an amount sufficient to pay
all reasonable costs and expenses charged by such third party inspector.
|
|
|
(ii)
|
Lender will be entitled, but not obligated, to deduct from the Repair Reserve Fund the costs and
expenses set forth in Section 4.03(b)(i). Lender will be entitled to charge Borrower for such costs and expenses and Borrower
will pay the amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).
|
|
|
(iii)
|
If there are insufficient funds to pay for the costs and expenses set forth in Section 4.03(b)(i),
then Lender will be entitled to charge Borrower for the costs and expenses specified in Section 4.03(b)(i), and Borrower will
pay the amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).
|
|
|
(c)
|
Insufficient Amount in Repair Reserve Fund
. If Lender determines, in Lender’s Discretion
that the money in the Repair Reserve Fund is insufficient to pay for the Repairs, Lender will provide Borrower with Notice of such
insufficiency, and as soon as possible (but in no event later than 20 days after such Notice) Borrower will pay to Lender an amount,
in cash, equal to such deficiency, which Lender will deposit in the Repair Reserve Fund.
|
|
Rider to Multifamily Loan and Security Agreement
Repair Reserve Fund
|
Page
1
|
|
|
(d)
|
Disbursements of Repair Reserve Fund
.
|
|
|
(i)
|
Disbursement
. From time to time, as construction and completion of the Repairs progresses,
upon Borrower’s submission of a Repair Disbursement Request in the form attached to this Loan Agreement as
Exhibit D
,
and provided that no Event of Default has occurred and no condition exists which but for the passage of time or giving of Notice,
or both, would constitute an Event of Default, Lender will make disbursements from the Repair Reserve Fund for payment or reimbursement
of the actual costs of the Repairs. In connection with each disbursement, Borrower will take each of the following actions:
|
|
|
(A)
|
Sign Borrower’s Repair Disbursement Request.
|
|
|
(B)
|
Include with each Repair Disbursement Request a report setting out the progress of the Repairs
and any other reports or information relating to the construction of the Repairs that may be reasonably requested by Lender.
|
|
|
(C)
|
Include with each Repair Disbursement Request copies of any applicable invoices and/or bills and
appropriate lien waivers for the prior period for which disbursement was made, executed by all contractors and suppliers supplying
labor or materials for the Repairs.
|
|
|
(D)
|
Include with each Repair Disbursement Request, a report prepared by the professional engineer employed
by Lender as to the status of the Repairs, unless Lender has waived this requirement in writing.
|
|
|
(E)
|
Include with each Repair Disbursement Request, Borrower’s written representation and warranty
that the Repairs as completed to the applicable stage do not violate any laws, ordinances, rules or regulations, or building setback
lines or restrictions, applicable to the Mortgaged Property.
|
Except for the final Repair Disbursement
Request, no Repair Disbursement Request may be for an amount less than the Minimum Repair Disbursement Request Amount.
|
|
(ii)
|
Conditions Precedent
. Lender will not be obligated to make any disbursement from the Repair
Reserve Fund to or for the benefit of Borrower unless at the time of such Repair Disbursement Request all of the following conditions
exist:
|
|
|
(A)
|
There exists no condition, event or act that would constitute a default (with or without Notice
and/or lapse of time) under this Loan Agreement or any other Loan Document.
|
|
|
(B)
|
Borrower is in full compliance with the provisions of this Loan Agreement, the other Loan Documents
and any request or demand by Lender permitted by this Loan Agreement.
|
|
|
(C)
|
No lien or claim based on furnishing labor or materials has been recorded, filed or asserted against
the Mortgaged Property, unless Borrower has properly provided bond or other security against loss in accordance with applicable
law.
|
|
Rider to Multifamily Loan and Security Agreement
Repair Reserve Fund
|
Page
2
|
|
|
(D)
|
All licenses, permits, and approvals of any Governmental Authority required for the Repairs as
completed to the applicable stage have been obtained and submitted to Lender upon Lender’s request.
|
|
|
(iii)
|
Reporting Requirements; Completion
. Prior to the applicable Completion Date, Borrower will
deliver to Lender, in addition to the information required by Section 4.03(d)(i) above, all of the following:
|
|
|
(A)
|
Contractor’s Certificate
. If required by Lender, a certificate signed by each major
contractor and supplier of materials, as reasonably determined by Lender, engaged to provide labor or materials for the Repairs
to the effect that such contractor or supplier has been paid in full for all work completed and that the portion of the Repairs
provided by such contractor or supplier has been fully completed in accordance with the plans and specifications (if any) provided
to it by Borrower and that such portion of the Repairs is in compliance with all applicable building codes and other rules and
regulations promulgated by any applicable regulatory authority or Governmental Authority.
|
|
|
(B)
|
Borrower’s Certificate
. A certificate signed by Borrower to the effect that the Repairs
have been fully paid for and that all money disbursed from the Repair Reserve Fund has been used for the Repairs and no claim exists
against Borrower or against the Mortgaged Property out of which a lien based on furnishing labor or material exists or might ripen.
Borrower may except from the certificate described in the preceding sentence any claim(s) that Borrower intends to contest, provided
that any such claim is described in Borrower’s certificate and Borrower certifies to Lender that the money in the Repair
Reserve Fund is sufficient to make payment of the full amount which might in any event be payable in order to satisfy such claim(s).
If required by Lender, Borrower also must certify to Lender that the Repairs are in compliance with all applicable building codes
and zoning ordinances.
|
|
|
(C)
|
Engineer’s Certificate
. If required by Lender, a certificate signed by the professional
engineer employed by Lender to the effect that the Repairs have been completed in a good and workmanlike manner in compliance with
the Repair Schedule of Work and all applicable building codes, zoning ordinances and other rules and regulations promulgated by
applicable regulatory or Governmental Authorities.
|
|
|
(D)
|
Other Certificates
. Any other certificates of approval, acceptance or compliance required
by Lender from any Governmental Authority having jurisdiction over the Mortgaged Property and the Repairs.
|
|
Rider to Multifamily Loan and Security Agreement
Repair Reserve Fund
|
Page
3
|
|
|
(iv)
|
Inspection
. Prior to and as a condition of the final disbursement of funds from the Repair
Reserve Fund, Lender will have the right to inspect or cause the Repairs and Improvements to be inspected in accordance with the
terms of Section 6.06(a), to determine whether all interior and exterior Repairs have been completed in a manner acceptable to
Lender.
|
|
|
(v)
|
Indirect and Excess Disbursements from Repair Reserve Fund
. Lender, in its sole and absolute
discretion, is authorized to hold, use and disburse funds from the Repair Reserve Fund to pay any and all costs, charges and expenses
whatsoever and howsoever incurred or required in connection with the construction and completion of the Repairs, or, if an Event
of Default has occurred and is continuing, in the payment or performance of any obligation of Borrower to Lender. If Lender, for
purposes specified in this Section 4.03, elects to pay any portion of the money in the Repair Reserve Fund to parties other than
Borrower, then Lender may do so, at any time and from time to time, and the amount of advances to which Borrower will be entitled
under this Loan Agreement will be correspondingly reduced.
|
|
|
(vi)
|
Repair Schedule of Work
. All disbursements from the Repair Reserve Fund will be limited
to the costs of those items set forth on the Repair Schedule of Work. Without the prior written consent of Lender, Borrower will
not make any payments from the Repair Reserve Fund other than for the costs of those items set forth on the Repair Schedule of
Work or alter the Repair Schedule of Work.
|
|
|
(e)
|
Termination of Repair Reserve Fund
. The provisions of this Section 4.03 will cease to be
effective upon the completion of the Repairs in accordance with this Loan Agreement to Lender’s satisfaction, and the full
disbursement by Lender of the Repair Reserve Fund. If there are funds remaining in the Repair Reserve Fund after the Repairs have
been completed in accordance with this Loan Agreement, and provided no Event of Default has occurred and is continuing under this
Loan Agreement or under any of the other Loan Documents, and no condition exists which but for the passage of time or giving of
Notice, or both, would constitute an Event of Default
, and Borrower has spent at least $186,200 on the Green Improvements,
such funds remaining in the Repair Reserve Fund will be refunded by Lender to Borrower.
|
|
|
(f)
|
Right to Complete Repairs
. If Borrower abandons or fails to proceed diligently with the
Repairs or otherwise, or there exists an Event of Default under this Loan Agreement, Lender will have the right (but not the obligation)
to enter upon the Mortgaged Property and take over and cause the completion of the Repairs. Any contracts entered into or indebtedness
incurred upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact
of Borrower, such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any
contracts or agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings
in connection with the Repairs and the payment, settlement, or compromise of all claims for materials and work performed in connection
with the Repairs) and do any and all things necessary or proper to complete the Repairs including signing Borrower’s name
to any contracts and documents as may be deemed necessary by Lender. In no event will Lender be required to expend its own funds
to complete the Repairs, but Lender may, in Lender’s sole and absolute discretion, advance such funds. Any funds advanced
will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower in accordance with the
provisions of the Loan Documents pertaining to the protection of Lender’s security and advances made by Lender. Borrower
waives any and all claims it may have against Lender for materials used, work performed or resultant damage to the Mortgaged Property.
|
|
Rider to Multifamily Loan and Security Agreement
Repair Reserve Fund
|
Page
4
|
|
|
(g)
|
Completion of Repairs
. Lender’s disbursement of monies in the Repair Reserve Fund
or other acknowledgment of completion of any Repair in a manner satisfactory to Lender will not be deemed a certification by Lender
that the Repair has been completed in accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations
or requirements of any Governmental Authority. Borrower will at all times have the sole responsibility for insuring that all Repairs
are completed in accordance with all such governmental requirements.
|
|
|
B.
|
The following definitions are added to Article XII:
|
“
Minimum Repair Disbursement
Request Amount
” means $5,000.00.
“
Repair Disbursement
Request
” means Borrower’s written requests to Lender in the form attached as
Exhibit D
for the disbursement
of money from the Repair Reserve Fund pursuant to Article IV.
“
Repair Reserve Deposit
”
means $926,786.00.
“
Repair Reserve Disbursement
Period
” means the interval between disbursements from the Repair Reserve Fund, which interval will be no shorter than
once every 90 days during the term of this Loan Agreement.
“
Repair Reserve Fund
”
means the account which may be established by this Loan Agreement into which the Repair Reserve Deposit is deposited.
“
Repair Schedule of
Work
” means the Repair Schedule of Work attached as
Exhibit C
.
|
Rider to Multifamily Loan and Security Agreement
Repair Reserve Fund
|
Page
5
|
RIDER TO MULTIFAMILY LOAN AND SECURITY
AGREEMENT
REPLACEMENT
RESERVE FUND – IMMEDIATE DEPOSITS
(Revised 7-1-2014)
The following changes are made to the Loan
Agreement which precedes this Rider:
|
|
A.
|
Section 4.04 is deleted and replaced with the following:
|
|
|
4.04
|
Replacement Reserve Fund.
|
|
|
(a)
|
Deposits to Replacement Reserve Fund
. On the Closing Date, the parties will establish the
Replacement Reserve Fund and Borrower will pay the Initial Deposit to Lender for deposit into the Replacement Reserve Fund. Commencing
on the date the first installment of principal and/or interest is due under the Note and continuing on the same day of each successive
month until the Loan is paid in full, Borrower will pay the Monthly Deposit to Lender for deposit into the Replacement Reserve
Fund, together with its regular monthly payments of principal and/or interest as required by the Note. A transfer of funds into
the Replacement Reserve Fund from the Repair Reserve Fund, pursuant to the terms of Section 4.03(e), if applicable, will not alter
or reduce the amount of any deposits to the Replacement Reserve Fund.
|
|
|
(b)
|
Costs Charged by Lender
.
|
|
|
(i)
|
If Lender, in Lender’s Discretion, retains a professional inspection engineer or other qualified
third party to inspect any Capital Replacements pursuant to the terms of Section 6.06, Lender may charge Borrower an amount sufficient
to pay all reasonable costs and expenses charged by such third party inspector.
|
|
|
(ii)
|
If there are sufficient funds in Replacement Reserve Fund, Lender will be entitled, but not obligated,
to deduct from the Replacement Reserve Fund the costs and expenses set forth in Section 4.04(b)(i). Lender will be entitled
to charge Borrower for such costs and expenses and Borrower will pay the amount of such item(s) to Lender immediately after Notice
from Lender to Borrower of such charge(s).
|
|
|
(iii)
|
If there are insufficient funds in the Replacement Reserve Fund, then Lender will be entitled to
charge Borrower for the costs and expenses specified in Section 4.04(b)(i), and Borrower will pay the amount of such item(s)
to Lender immediately after Notice from Lender to Borrower of such charge(s).
|
|
|
(c)
|
Adjustments to Replacement Reserve Fund
. If the initial term of the Loan is greater than
120 months, then the following provisions will apply:
|
|
|
(i)
|
Lender reserves the right to adjust the amount of the Monthly Deposit based on Lender’s assessment
of the physical condition of the Mortgaged Property, however, Lender will not make such an adjustment prior to the date that is
120 months after the first installment due date, nor more frequently than every 10 years thereafter during the term of the Loan.
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Rider to Multifamily Loan and Security Agreement
Replacement Reserve Fund – Immediate Deposits
|
Page
1
|
|
|
(ii)
|
Borrower will pay the cost of any assessment required by Lender pursuant to Section 4.04(c)(i)
to Lender immediately after Notice from Lender to Borrower of such charge.
|
|
|
(iii)
|
Upon Notice from Lender or Loan Servicer, Borrower will begin paying the Revised Monthly Deposit
on the first monthly payment date that is at least 30 days after the date of Lender’s or Loan Servicer’s Notice.
If Lender or Loan Servicer does not provide Borrower with Notice of a Revised Monthly Deposit, Borrower will continue to pay the
Monthly Deposit or the Revised Monthly Deposit then in effect.
|
|
|
(d)
|
Insufficient Amount in Replacement Reserve Fund
. If Borrower requests disbursement from
the Replacement Reserve Fund for a Capital Replacement in accordance with this Loan Agreement in an amount which exceeds the amount
on deposit in the Replacement Reserve Fund, Lender will disburse to Borrower only the amount on deposit in the Replacement Reserve
Fund. Borrower will pay all additional amounts required in connection with any such Capital Replacement from Borrower’s own
funds.
|
|
|
(g)
|
Disbursements from Replacement Reserve Fund
.
|
|
|
(i)
|
Requests for Disbursement
. Lender will disburse funds from the Replacement Reserve Fund
as follows:
|
|
|
(A)
|
Borrower’s Request
. If Borrower determines, at any time or from time to time, that
a Capital Replacement is necessary or desirable, Borrower will perform such Capital Replacement and request from Lender, in writing,
reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description
of the Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement
has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials
for such Capital Replacement.
|
|
|
(B)
|
Lender’s Request
. If Lender reasonably determines at any time or from time to time,
that a Capital Replacement is necessary for the proper maintenance of the Mortgaged Property, it will so notify Borrower, in writing,
requesting that Borrower obtain and submit to Lender bids for all labor and materials required in connection with such Capital
Replacement. Borrower will submit such bids and a time schedule for completing each Capital Replacement to Lender within 30 days
after Borrower’s receipt of Lender’s Notice. Borrower will perform such Capital Replacement and request from Lender,
in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed
description of the Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital
Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor
or materials for such Capital Replacement.
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Rider to Multifamily Loan and Security Agreement
Replacement Reserve Fund – Immediate Deposits
|
Page
2
|
|
|
(ii)
|
Conditions Precedent
. Disbursement from the Replacement Reserve Fund will be made no more
frequently than once every Replacement Reserve Disbursement Period and, except for the final disbursement, no disbursement will
be made in an amount less than the Minimum Replacement Disbursement Request Amount. Disbursements will be made only if the following
conditions precedent have been satisfied, as determined by Lender in Lender’s Discretion:
|
|
|
(A)
|
Each Capital Replacement has been performed and/or installed on the Mortgaged Property in a good
and workmanlike manner with suitable materials (or in the case of a partial disbursement, performed and/or installed on the Mortgaged
Property to an acceptable stage), in accordance with good building practices and all applicable laws, ordinances, rules and regulations,
building setback lines and restrictions applicable to the Mortgaged Property, and has been paid for by Borrower as evidenced by
copies of all applicable paid invoices or bills submitted to Lender by Borrower at the time Borrower requests disbursement from
the Replacement Reserve Fund.
|
|
|
(B)
|
There is no condition, event or act that would constitute a default (with or without Notice and/or
lapse of time).
|
|
|
(C)
|
No Lien or claim based on furnishing labor or materials has been recorded, filed or asserted against
the Mortgaged Property, unless Borrower has properly provided a bond or other security against loss in accordance with applicable
law.
|
|
|
(D)
|
All licenses, permits and approvals of any Governmental Authority required for the Capital Replacement
as completed to the applicable stage have been obtained and submitted to Lender upon Lender’s request.
|
|
Rider to Multifamily Loan and Security Agreement
Replacement Reserve Fund – Immediate Deposits
|
Page
3
|
|
|
(h)
|
Right to Complete Capital Replacements
. If Borrower abandons or fails to proceed diligently
with any Capital Replacement in a timely fashion or an Event of Default occurs and continues under this Loan Agreement for 30 days
after Notice of such failure by Lender to Borrower, Lender will have the right (but not the obligation) to enter upon the Mortgaged
Property and take over and cause the completion of such Capital Replacement. However, no such Notice or cure period will apply
in the case of such failure which could, in Lender’s sole and absolute discretion, absent immediate exercise by Lender of
a right or remedy under this Loan Agreement, result in harm to Lender, tenants or third parties or impairment of the security given
under this Loan Agreement, the Security Instrument or any other Loan Document. Any contracts entered into or indebtedness incurred
upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact for Borrower,
such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any contracts or
agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings in connection
with the Capital Replacement and the payment, settlement or compromise of all bills and claims for materials and work performed
in connection with the Capital Replacement) and do any and all things necessary or proper to complete any Capital Replacement,
including signing Borrower’s name to any contracts and documents as may be deemed necessary by Lender. In no event will Lender
be required to expend its own funds to complete any Capital Replacement, but Lender may, in Lender’s Discretion, advance
such funds. Any funds advanced will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower
in accordance with the provisions of the Note, this Loan Agreement, the Security Instrument and any other Loan Document pertaining
to the protection of Lender’s security and advances made by Lender.
|
|
|
(i)
|
Completion of Capital Replacements
. Lender’s disbursement of monies from the Replacement
Reserve Fund or other acknowledgment of completion of any Capital Replacement in a manner satisfactory to Lender in Lender’s
Discretion will not be deemed a certification by Lender that the Capital Replacement has been completed in accordance with applicable
building, zoning or other codes, ordinances, statutes, laws, regulations or requirements of any Governmental Authority. Borrower
will at all times have the sole responsibility for ensuring that all Capital Replacements are completed in accordance with all
such requirements of any Governmental Authority.
|
|
|
B.
|
The following definitions are added to Article XII:
|
“
Initial Deposit
”
means $78,204.00
“
Minimum Replacement
Disbursement Request Amount
” means $5,000.00.
“
Monthly Deposit
”
means $11,083.00.
“
Replacement Reserve
Deposit
” means the Initial Deposit, the Monthly Deposit and/or the Revised Monthly Deposit, as appropriate.
“
Replacement Reserve
Disbursement Period
” means the interval between disbursements from the Replacement Reserve Fund, which interval will
be no shorter than once a quarter.
|
Rider to Multifamily Loan and Security Agreement
Replacement Reserve Fund – Immediate Deposits
|
Page
4
|
“
Replacement Reserve
Fund
” means the account established pursuant to this Loan Agreement to defray the costs of Capital Replacements.
“
Revised Monthly Deposit
”
means the adjusted amount per month that Lender determines Borrower must deposit in the Replacement Reserve Fund following any
adjustment determination by Lender pursuant to Section 4.04(c).
|
Rider to Multifamily Loan and Security Agreement
Replacement Reserve Fund – Immediate Deposits
|
Page
5
|
RIDER TO MULTIFAMILY LOAN AND SECURITY
AGREEMENT
COOPERATION WITH RATING AGENCIES AND
INVESTORS
(Revised 1-27-2015)
|
|
A.
|
Section 11.14 is deleted and replaced with the following:
|
|
|
11.14
|
Cooperation with Rating Agencies and Investors.
At the request of Lender and, to the extent
not already required to be provided by Borrower under this Loan Agreement, Borrower must use reasonable efforts to satisfy the
market standards to which Lender customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies
in connection with any Securities secured by or evidencing ownership interests in the Note and this Loan Agreement, including all
of the following:
|
|
|
(a)
|
Borrower will provide financial and other information with respect to the Mortgaged Property, the
Borrower and the Property Manager.
|
|
|
(b)
|
Borrower will perform or permit or cause to be performed or permitted such site inspections and
other due diligence investigations of the Mortgaged Property, as may be requested by Lender in Lender’s Discretion or may
reasonably be requested by the Rating Agencies or as may be necessary or appropriate in connection with the Secondary Market Transaction.
Lender will reimburse Borrower for any third party costs which Borrower reasonably incurs in connection with any such due diligence
investigation.
|
|
|
(c)
|
Borrower will make such representations and warranties as of the closing date of the Secondary
Market Transaction with respect to the Mortgaged Property, Borrower and the Loan Documents as are customarily provided in securitization
transactions and as may be requested by Lender in Lender’s Discretion or may reasonably be requested by the Rating Agencies
and consistent with the facts covered by such representations and warranties as they exist on the date of this Loan Agreement,
including the representations and warranties made in the Loan Documents, together, if customary, with appropriate verification
of and/or consents to the Provided Information through letters of auditors or opinions of counsel of independent attorneys acceptable
to Lender and to the Rating Agencies. Lender will reimburse Borrower for any third party costs which Borrower reasonably incurs
in connection with obtaining such auditors’ letters or opinions of counsel.
|
|
|
(d)
|
Borrower will cause its counsel to render opinions, which may be relied upon by Lender, the Rating
Agencies and their respective counsel, agents and representatives, as to nonconsolidation or any other opinion customary in securitization
transactions with respect to the Mortgaged Property and Borrower and its Affiliates, which counsel and opinions must be satisfactory
to Lender in Lender’s Discretion and be reasonably satisfactory to the Rating Agencies. Lender will reimburse Borrower for
any third party costs which Borrower reasonably incurs in connection with obtaining such opinions of Borrower’s counsel.
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|
Rider to Multifamily Loan and Security Agreement
Cooperation with Rating Agencies and Investors
|
Page
1
|
|
|
(e)
|
Borrower will execute such amendments to the Loan Documents and organizational documents, establish
and fund the Replacement Reserve Fund, if any, and complete any Repairs, if any, as may be requested by Lender or by the Rating
Agencies or otherwise to effect the Secondary Market Transaction; provided, however, that the Borrower will not be required to
modify or amend any Loan Document if such modification or amendment would (i) change the interest rate, the stated maturity or
the amortization of principal set forth in the Note, or (ii) modify or amend any other material economic term of the Loan.
|
|
|
B.
|
The following definitions are added to Article XII:
|
“Provided Information”
means the information provided by Borrower as required by Section 11.14 (a), (b) and (c).
“
Securities
”
means single or multi-class securities.
|
Rider to Multifamily Loan and Security Agreement
Cooperation with Rating Agencies and Investors
|
Page
2
|
RIDER TO MULTIFAMILY LOAN AND SECURITY
AGREEMENT
GUARANTOR REQUIREMENTS
(Revised 2-13-2017)
The following changes are made to the Loan
Agreement which precedes this Rider:
|
|
A.
|
Section 9.01(dd) is deleted and replaced with the following:
|
|
|
(dd)
|
Guarantor fails to comply with the provisions of the Section of the Guaranty entitled “Material
Adverse Change” or “Minimum Net Worth/Liquidity Requirements,
”
as applicable.
|
|
Rider to Multifamily Loan and Security Agreement
Guarantor Requirements
|
Page
1
|
RIDER TO MULTIFAMILY
LOAN AND SECURITY AGREEMENT
AFFILIATE TRANSFER
(Revised 5-5-2017)
The following changes are made to the Loan
Agreement which precedes this Rider:
|
|
A.
|
Section 7.03(d)(i) is deleted and replaced with the following:
|
|
|
(i)
|
Affiliate Transfer
. A Transfer of any direct or indirect interests in Borrower held by an
entity
directly or indirectly
owned and Controlled by
Bluerock Residential Growth REIT, Inc. or Ramin Kamfar
(
“Affiliate Transferor”
) to one or more
“Bluerock Affiliate Transferor’s Affiliates”
of Affiliate Transferor’s Affiliates
(“
Affiliate Transfer
”) provided that each of the
following conditions is satisfied:
|
|
|
(A)
|
Borrower provides Lender with at least 30 days prior Notice of the proposed Affiliate Transfer
and pays to Lender the Transfer Processing Fee.
|
|
|
(B)
|
At the time of the proposed Affiliate Transfer, no Event of Default has occurred and is continuing
and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would
become an Event of Default.
|
|
|
(C)
|
Borrower pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’
Fees and Costs, incurred by Lender in connection with the Affiliate Transfer.
|
|
|
(D)
|
Lender determines, in Lender’s Discretion, that the
Bluerock Affiliate Transferor’s
Affiliate meets Lender’s eligibility, credit, management and other standards.
|
|
|
(E)
|
After the Affiliate Transfer, Control and management of the day-to-day operations of Borrower continue
to be held by the Person exercising such Control and management immediately prior to the Affiliate Transfer and there is no change
in the Guarantor, if applicable.
|
|
|
(F)
|
Lender receives organizational charts reflecting the structure of Borrower prior to and after the
Affiliate Transfer and, if required by Lender, the Loan Agreement is amended to revise
Exhibit H
to reflect the post-Affiliate
Transfer organizational chart.
|
|
|
(G)
|
Lender will not be entitled to collect a Transfer Fee as the result of the Affiliate Transfer.
|
|
|
(H)
|
Lender receives confirmation acceptable to Lender that (1) the requirements of Section 6.13 continue
to be satisfied, and (2) the term of existence of the
Bluerock Affiliate Transferor’s
Affiliate (exclusive
of any unexercised extension options or rights) does not expire prior to the Maturity Date.
|
|
Rider to Multifamily Loan and Security Agreement
Affiliate Transfer
|
Page
1
|
|
|
(I)
|
Borrower delivers to Lender a search confirming that the
Bluerock Affiliate Transferor’s
Affiliate is not on any Prohibited Parties List.
|
|
|
(J)
|
If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to
the Affiliate Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned
by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing Date, Borrower
delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender, with regard to nonconsolidation.
|
|
|
(K)
|
Borrower either (1) certifies that there are no Non-US Equity Holders, or (2) delivers to Lender
searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.
|
|
|
(L)
|
Borrower and Guarantor execute such additional documents as Lender may require to evidence the
Affiliate Transfer.
|
|
|
(M)
|
At Lender’s request, Borrower executes a reaffirmation of its obligations under the
Loan Documents in a form acceptable to Lender.
|
|
|
(N)
|
In the event of a Transfer prohibited by or requiring Lender’s approval under this
Section 7.03, the provisions of this Section 7.03(d)(i) may be modified or rendered void by Lender at Lender’s sole option
by Notice to Borrower and the transferee(s) as a condition to Lender’s consent.
|
|
|
B.
|
The following definition is added to Article XII:
|
“
Affiliate
Transfer
” is defined in Section 7.03(d)(i).
“Affiliate
Transferor”
is defined in Section 7.03(d)(i).
“Bluerock Affiliate
Transferor’s Affiliates” is defined as any entity that is, directly or indirectly, owned or otherwise Controlled by,
or under common Control with, Bluerock Residential Growth REIT, Inc. For purposes hereof, Bluerock Residential Growth REIT, Inc
will be deemed Controlled by Ramin Kamfar, its current Chief Executive Officer, President and Board Chairman as well as the majority
owner of its advisor.
|
Rider to Multifamily Loan and Security Agreement
Affiliate Transfer
|
Page
2
|
RIDER TO MULTIFAMILY LOAN AND SECURITY
AGREEMENT
GREEN IMPROVEMENTS
(Revised 10-11-2017)
The following changes are made to the Loan
Agreement which precedes this Rider:
|
|
A.
|
Section 4.03(i) is deleted and replaced with the following:
|
|
|
(i)
|
Lender and Borrower acknowledge that Borrower has deposited into the Repair Reserve Fund the Green
Improvements Deposit as of the date of this Loan Agreement, and that Borrower must complete the Green Improvements required pursuant
to Sections 4.03 and 6.14. The Green Improvements Deposit must be used solely for the Green Improvements.
|
|
|
(ii)
|
In addition to the Repairs listed in the Repair Schedule of Work, Borrower must complete the Green
Improvements by the Green Improvements Completion Date.
|
|
|
(iii)
|
The Green Improvements must be completed in accordance with Section 6.14 and any reference to Repairs
in Sections 6.06 and 6.14 will be deemed to include the Green Improvements.
|
|
|
(iv)
|
Borrower must use commercially reasonable efforts to avoid disrupting tenants’ access to
and use and enjoyment of the Mortgaged Property while the Green Improvements are in progress or as a result of the Green Improvements.
|
|
|
(v)
|
During the Input Period, Borrower must input and monitor the Benchmarking Data in the Benchmarking
Tool in order to produce Benchmarking Metrics for the Mortgaged Property. The Benchmarking Data must be input for both energy and
water even if the Green Improvements were not intended to benefit a specific utility expense category. Borrowers may use a Green
Consultant to input and monitor the Benchmarking Data. The Green Consultant is not required to be the same Green Consultant that
prepared the Green Assessment.
|
|
|
(vi)
|
Upon completion of the Green Improvements, the Verification Certification must be completed and
delivered to Lender in accordance with Section 4.03(i)(xi).
|
|
|
(vii)
|
Borrower’s obligations under this subsection are in addition to the requirements set forth
in Section 6.07 of this Loan Agreement.
|
|
|
(viii)
|
To the extent any of the Green Improvements is also listed as a Repair in
Exhibit C
or as
a Capital Replacement in
Exhibit F
, the requirements listed in this Section 4.03(i) will control for such Repairs.
|
|
|
(ix)
|
In addition to those inspections required under Section 4.03(d)(iv), Lender may conduct, or cause
to be conducted, such additional inspections of the Green Improvements as may be recommended by a Green Consultant or as otherwise
determined by Lender in Lender’s Discretion at any time while the Green Improvements are being performed and for two years
after the Green Improvements Completion Date.
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|
Rider to Multifamily Loan and Security Agreement
Green Improvements
|
Page
1
|
|
|
(x)
|
Borrower must deliver each of the following to Lender within the stated timeframe:
|
Document or Information
to be Delivered
|
Deadline to Deliver Documentation
|
|
Benchmaking Metrics
|
Benchmarking Metrics Delivery Date
|
|
Verification Certification
|
Within 30 days after the Actual Completed Green Improvements Date
|
|
Supporting Documentation
|
Within 30 days after Lender’s request
|
|
Energy Certification
|
Within 30 days after Borrower’s receipt of Energy Certification
|
|
|
(xi)
|
If Freddie Mac ceases to own the Loan, Borrower must continue to deliver or make available to Lender
any items or information required in this Section 4.03(i). Borrower must also continue to make such items or information available
to Freddie Mac and to the extent Borrower is required to deliver copies of the information to Lender, Borrower must simultaneously
deliver the same information to Freddie Mac. Any request by Freddie Mac for additional information or inspections after Freddie
Mac ceases to own the Loan will have the same effect as if Lender has made the request. Any information to be delivered to Freddie
Mac must be delivered to the following:
|
green_advantage_reporting@freddiemac.com
|
|
B.
|
Section 6.07(j) is deleted and replaced with the following:
|
|
|
(j)
|
Benchmarking Data and Supporting Documentation
. Borrower will provide access to or furnish
(or cause to be furnished) to Lender, Freddie Mac (if Freddie Mac ceases to be the Lender), and their respective third party consultants,
including a Green Consultant, the Benchmarking Data and a copy of the Supporting Documentation in accordance with Section 4.03(i)(v).
|
|
|
C.
|
The following definitions are added to Article XII:
|
“
Actual Completed Green
Improvements Date
” means the date Borrower inserts into the Verification Certification as the date the Green Improvements
have been completed in their entirety.
“
Benchmarking Data
”
means the actual energy and water usage input by the Borrower into the Benchmarking Tool. The Benchmarking Data must include all
owner-paid utilities and at least 10% of tenant-paid utilities at the Mortgaged Property.
“
Benchmarking Metrics
”
means the ENERGY STAR® Score, Water Score (as soon as made available by the EPA), EUI, WUI and Portfolio Manager® property
identification produced through the Benchmarking Tool.
“Benchmarking Metrics
Delivery Date”
means not later than 90 days after the end of each calendar year, commencing with the first full calendar
year after the date of this Loan Agreement and continuing through the remaining calendar year following the 4
th
anniversary
date of this Loan Agreement.
|
Rider to Multifamily Loan and Security Agreement
Green Improvements
|
Page
2
|
“
Benchmarking Tool”
means the Portfolio Manager® or in the event the ENERGY STAR® Score is no longer available, such other benchmarking tool
as identified by Freddie Mac.
“
Energy Certification
”
means any energy certification and/or score of environmental energy savings from applicable local, state or federal agencies or
another nationally recognized building association.
“
ENERGY STAR
®
Score
” means the measure of energy performance provided through the Portfolio Manager® for the Mortgaged Property.
“
EPA”
means
the U.S. Environmental Protection Agency.
“
EUI”
means
the site energy use intensity measured at the Mortgaged Property as defined in Portfolio Manager®.
“
Green Assessment”
means the report that was prepared by a Green Consultant in connection with Borrower’s application for the Loan.
“
Green Consultant
”
means a certified environmental design/inspection or engineering firm that specializes in providing multifamily property owners
energy and water management solutions for overall energy and water reduction and savings at the Mortgaged Property.
“
Green Improvements”
means the repairs, renovations and installation of energy and water savings measures to be made to the Improvements existing at
or upon the Mortgaged Property as of the date of this Loan Agreement, which are being made to improve energy and water efficiency
at the Mortgaged Property, as described on the Repair Schedule of Work under the subcategory “Green Improvements”.
“Green Improvements
Completion Date
” means 2 years after the origination date of the Mortgage.
“Green Improvements
Deposit
” means $232,750.00.
“Input Period”
means the period commencing on the first day of the second full month following the date of this Loan Agreement and continuing
on the first day of each month thereafter through the last day of the calendar year following the 4th anniversary of the date of
this Loan Agreement.
“
Portfolio Manager
®”
means an online tool used to measure and track, among other items, water and energy consumption at the Mortaged Property, located
on the ENERGY STAR® website of the EPA.
“
Supporting Documentation
”
means any utility bills, reports or documentation to which Borrower has access and/or is entitled to receive in connection with
the usage of energy and water at the Mortgaged Property and to the extent available, calculations of any savings to Borrower resulting
from the Green Improvements.
“
Verification Certification
”
means the completed and executed Green Improvements Verification Certification in the form attached to this Loan Agreement as
Exhibit
K.
|
Rider to Multifamily Loan and Security Agreement
Green Improvements
|
Page
3
|
“
Water Score”
means the EPA 1-100 Water Score developed or to be developed by the EPA and provided through the Portfolio Manager® to measure
water usage efficiency for the Mortgaged Property.
“
WUI
” means
the water use intensity for all water sources measured at the Mortgaged Property as defined in Portfolio Manager®.
|
|
D.
|
The following definition in Article XII is revised to
read as follows:
|
“
Repairs
”
means the repairs to be made to the Mortgaged Property, as described on the Repair Schedule of Work (
Exhibit C
) or as otherwise
required by Lender in accordance with this Loan Agreement
,
including those repairs, renovations and improvements listed
in
Exhibit C
as Green Improvements.
|
Rider to Multifamily Loan and Security Agreement
Green Improvements
|
Page
4
|
RIDER TO MULTIFAMILY LOAN AND SECURITY
AGREEMENT
TERMITE OR WOOD
DAMAGING INSECT CONTROL
(Revised 3-1-2014)
The following changes are made to the Loan
Agreement which precedes this Rider:
|
|
A.
|
Section 6.09(k) is deleted and replaced with the following:
|
|
|
(k)
|
Termite or Wood Damaging Insect Control
. Borrower will maintain a contract with a qualified
service provider for control of termites or other wood damaging insects at the Mortgaged Property for so long as the Indebtedness
remains outstanding.
|
|
Rider to Multifamily Loan and Security Agreement
Termite or Wood Damaging Insect Control
|
|
EXHIBIT
A
DESCRIPTION
OF THE LAND
PARCEL 1: (Fee Simple Estate):
Lots 1 and 2, HUNTER'S CREEK TRACT 480, according
to the plat thereof, as recorded in Plat Book 40, Page 120, of the Public Records of Orange County, Florida.
PARCEL 2:
Non-Exclusive easement for ingress and egress
for the benefit of Parcel 1 as set forth and granted by Access Easement recorded May 29, 1998, in Official Records Book 5491, Page
4521, of the Public Records of Orange County, Florida.
PARCEL 3:
Non-Exclusive easement for encroachment and
of use, access and enjoyment in and to the "Common Area" for the benefit of Parcel 1 as defined and more particularly
described in that certain Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's
Creek, filed in Official Records Book 6065, Page 2309, re-recorded in Official Records Book 6108, Page 4653, modified by Supplemental
Declaration to Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek filed
in Official Records Book 6112, Page 1865, Termination of Class "C" Membership filed in Official Records Book 6178, Page
2519, and Supplemental Declaration to Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions
of Hunter's Creek, filed in Official Records Book 6285, Page 5991, and Supplemental Declaration to Second Amended and Restated
Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek filed in Official Records Book 7735, Page 2464,
and further amended by Certificate of First Amendment to the Second Amended and Restated Declaration of Master Covenants, Conditions
and Restrictions of Hunter's Creek recorded in Official Records Book 7964, Page 263, as amended by certificate of Second Amendment
to the Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek, recorded November
30, 2009 in Official Records Book 9968, Page 6699, as affected by Notice, recorded May 28, 2010 in Official Records Book 10052,
Page 5307, as affected by Assignment of Declarant's Rights recorded August 11, 2011 in Official Records Book 10253, Page 934, as
amended by Third Amendment to the Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's
Creek, recorded October 25, 2012 in Official Records Book 10463, Page 1872, as amended by Fourth Amendment to the Second Amended
and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek recorded October 2, 2014 in Official
Records Book 10813, Page 3748 and as affected by Notice of Preservation recorded June 16, 2015 in Official Records Book 10935,
Page 6619, all of the Public Records of Orange County, Florida.
|
Multifamily Loan and Security Agreement
|
Page A-
1
|
PARCEL 4:
Together with those non-exclusive easements
and rights for the benefit of Parcel 1, as set forth and granted by Hunter's Creek Community Association, Inc., a Florida not for
profit Corporation, in favor of Realty Associates Fund VIII L.P., a Delaware limited Partnership, recorded August 11, 2009, in
Official Records Book 9916, Page 140, of the Public Records of Orange County, Florida, for the purpose of signage and access easement
agreement, over, under and across lands as described therein.
Parcel 5:
Together with those non-exclusive easements
and rights for the benefit of Parcel 1, as set forth and granted by Utility Easement for underground sanitary sewer line dated
May 27, 1998 from Westbrook Hunter's Creek, L.P., a Delaware limited partnership in favor of Towne Place
Apartments, LTD., a Florida limited partnership
filed May 29, 1998, in Official Records Book 5491, Page 4526, and Subordination of Encumbrance to Property Rights to Orange County,
filed in Official Records Book 6289, Page 381, both of the Public Records of Orange County, Florida; for the purpose described
therein and access easement agreement, over, under and across lands as described therein.
|
Multifamily Loan and Security Agreement
|
Page A-
2
|
EXHIBIT
B
MODIFICATIONS
TO Multifamily Loan and security AGREEMENT
The following modifications are made to
the text of the Loan Agreement that precedes this Exhibit.
|
|
1.
|
Section 6.12(f) is modified as follows:
|
|
|
(f)
|
Remedial Work
. If any investigation, site monitoring, containment, clean-up, Restoration
or other remedial work (“
Remedial Work
”) is necessary to comply with any Hazardous Materials Law or order of
any Governmental Authority that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of
the Mortgaged Property, or is otherwise required by Lender as a consequence of any Prohibited Activity or Condition or to prevent
the occurrence of a Prohibited Activity or Condition, Borrower will, by the earlier of (i) the applicable deadline required by
Hazardous Materials Law, or (ii) 30 days after Notice from Lender demanding such action
(or such longer period of time
as is specifically allowed under any insurance policy covering such issue with a risk carrier that has accepted coverage responsibility
for same subject to the requirements of Hazardous Materials Law and so long as Lender has determined that immediate action is not
required to protect the residents of, or the value of, the Mortgaged Property)
, begin performing the Remedial Work, and
thereafter diligently prosecute it to completion, and must in any event complete the work by the time required by applicable Hazardous
Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at
its option, cause the Remedial Work to be completed, in which case Borrower will reimburse Lender on demand for the cost of doing
so. Any reimbursement due from Borrower to Lender will become part of the Indebtedness as provided in Section 9.02.
|
|
|
2.
|
Section 6.13(a)(x) is modified as follows:
|
|
|
(x)
|
It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing
any obligation), other than the following
; provided that no member of Borrower will be required to contribute any capital
in excess of that required by Borrower’s organizational documents to satisfy this covenant, but provided further that this
qualification will not be deemed to amend or modify the obligations under the Guaranty of any member of Borrower who is a Guarantor,
if applicable
:
|
|
|
(A)
|
The Indebtedness and any further indebtedness as described in Section 11.11 with regard to Supplemental
Instruments.
|
|
|
(B)
|
Customary unsecured trade payables incurred in the ordinary course of owning and operating the
Mortgaged Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum
amount of 2% of the original principal amount of the Indebtedness and are paid within 60 days of the date incurred.
|
|
|
(C)
|
through (F) are reserved.
|
|
Multifamily Loan and Security Agreement
|
Page B-
1
|
|
|
3.
|
Section 7.03(c) is modified as follows:
|
|
|
(c)
|
Publicly-Held Fund or Publicly-Held Real Estate Investment Trust
. If a Designated Entity
for Transfers is a publicly-held fund or a publicly-held real estate investment trust, either of the following:
|
|
|
(i)
|
The
public
issuance of common stock, convertible debt, equity or other similar
securities (“
Public Fund/REIT Securities
”) and the subsequent Transfer of such Public Fund/REIT Securities.
In the case of Bluerock Residential Growth REIT, Inc (“BR REIT”) such permitted Transfers shall expressly include
Transfers arising out of (A) the sale of the Public Fund/REIT Securities to another publicly traded real estate investment trust
(or an affiliate thereof controlled by the publicly traded real estate investment trust), (B) the merger, roll up, or other
consolidation of BR REIT with another entity so long as BR REIT or another publicly traded real estate investment trust (or an
affiliate thereof controlled by the publicly traded real estate investment trust) is the surviving entity and (C) the
issuance of put options in BR REIT as part of an UPREIT or downREIT transaction.
|
|
|
(ii)
|
The acquisition by a single Public Fund/REIT Securities holder of an ownership percentage of 10%
or more in the Designated Entity for Transfers, if within 30 days following the acquisition, Borrower does each of the following:
|
|
|
(A)
|
Provides notice to Lender of that acquisition.
|
(B) Complies
with each of the following conditions:
|
|
(1)
|
Borrower delivers to Lender searches confirming that no Person with a collective equity interest
(whether direct or indirect) of 25% or more in Borrower is on any Prohibited Parties List.
|
|
|
(2)
|
Borrower either (a) certifies in writing to Lender that there are no Non-U.S. Equity Holders, or
(b) delivers to Lender searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.
|
|
|
4.
|
New Section 7.03(l) is added as follows:
|
|
|
(l)
|
Additional Bluerock Transfer Provisions
. Transfers of interests in any Designated Entity
for Transfers not otherwise permitted or conditionally permitted by the terms of this Loan Agreement resulting from a Transfer
(including by merger or other consolidation) of all of the assets of or interests in Bluerock Residential Holdings, LP or Bluerock
REIT Holdings, LLC (a “
Bluerock Entity Transfer
”) provided that each of the following conditions is satisfied:
|
|
|
(i)
|
Borrower provides Lender with at least 30 days prior Notice of the proposed Bluerock Entity Transfer
and pays to Lender the Transfer Processing Fee.
|
|
Multifamily Loan and Security Agreement
|
Page B-
2
|
|
|
(ii)
|
At the time of the proposed Bluerock Entity Transfer, no Event of Default has occurred and is continuing
and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would
become an Event of Default.
|
|
|
(iii)
|
Borrower pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’
Fees and Costs, incurred by Lender in connection with the Bluerock Entity Transfer.
|
|
|
(iv)
|
After the Bluerock Entity Transfer, Control and management of the day-to-day operations of Borrower
continue to be held, directly or indirectly, by (A) BR REIT, or (B) a publicly held real estate investment trust which is (or to
whose Affiliate is) the transferee of the Bluerock Entity Transfer.
|
|
|
(v)
|
Lender receives organizational charts reflecting the structure of Borrower prior to and after the
Bluerock Entity Transfer.
|
|
|
(vi)
|
Lender will not be entitled to collect a Transfer Fee as the result of the Bluerock Entity Transfer.
|
|
|
(vii)
|
Lender receives confirmation acceptable to Lender that (A) the requirements of Section 6.13 continue
to be satisfied, and (B) the term of existence of the Bluerock Entity Transfer transferee and of the “Replacement Bluerock
Guarantor” described below (exclusive of any unexercised extension options or rights) does not expire prior to the Maturity
Date.
|
|
|
(viii)
|
Borrower delivers to Lender a search confirming that the Bluerock Entity Transfer transferee is
not on any Prohibited Parties List.
|
|
|
(ix)
|
At Lender’s request, Borrower executes a reaffirmation of its obligations under the Loan
Documents in a form acceptable to Lender.
|
|
|
(x)
|
Borrower provides a replacement Guarantor (“
Replacement Guarantor
”) acceptable
to Lender in Lender’s Discretion, and each of the following requirements is met (collectively, the
“Replacement
Requirements”
):
|
|
|
(A)
|
At the time of the Bluerock Entity Transfer, Replacement Guarantor has a net worth of at least
$21,688,200 and liquid assets of at least $7,229,400.
|
|
|
(B)
|
Lender has received all information and organizational documents requested by Lender in Lender’s
Discretion, with respect to Replacement Guarantor.
|
|
|
(C)
|
Replacement Guarantor executes a Guaranty in a form acceptable to Lender and in substantially the
same form as the Guaranty executed on the Closing Date.
|
|
|
(xi)
|
The Mortgaged Property continues to be managed by the initial Property Manager or a successor Property
Manager satisfactory to Lender pursuant to a property management agreement approved by Lender in writing; which approval will not
be unreasonably withheld, provided that such successor Property Manager and Borrower execute an assignment of the management agreement
in form acceptable to Lender.
|
|
Multifamily Loan and Security Agreement
|
Page B-
3
|
EXHIBIT
c
REPAIR
SCHEDULE OF WORK
|
Description of Repair
|
|
Cost
|
|
|
Completion Date
(Days after
Origination)
|
|
Pruning all trees and shrubbery away from the apartment buildings
|
|
$
|
12,200
|
|
|
180
|
|
Routing all sub-surface storm drains and downspouts to facilitate drainage and install extensions on air conditioning condensate drains to divert water away from the buildings
|
|
$
|
15,250
|
|
|
180
|
|
Surveying all buildings and power wash as needed and replace all damaged/rotted wood trim
|
|
$
|
53,200
|
|
|
180
|
|
Inspect secondary clubhouse kitchen hood/stove/grill as the previous inspection has expired
|
|
$
|
1,000
|
|
|
180
|
|
Remediate all expired permits noted by Orange County Development Department and have them properly cleared
|
|
$
|
0
|
|
|
180
|
|
Remediate mold growth identified in the lower corner of the bedroom in Unit 712
|
|
$
|
0
|
|
|
180
|
|
Replace all roof coverings
|
|
$
|
649,779
|
|
|
180
|
|
Miscellaneous Post-Hurricane Repairs including: (1) repairs to fencing where needed throughout; (2) repair drywall and baseboard trim as needed; (3) yard drain addition at Building 10; (4) repair missing soffit and fascia where indicated; and (5) repair loose lap siding at Buildings 4, 12 and 60
|
|
$
|
10,000
|
|
|
180
|
Description of Green
Improvements
|
|
Performance
Specifications
|
|
Cost
|
|
|
Location
|
|
Install low-flow showerheads in 75% of the units
|
|
1.50 GPM
|
|
$
|
8,708
|
|
|
Bathroom
|
|
Install low-flush toilets in 100% of the units
|
|
1.28 GPF
|
|
$
|
103,157
|
|
|
Bathroom
|
|
Replace washing machines with ENERGY STAR rated as needed
|
|
IMEF > 2.06;
IWF < 4.3
|
|
$
|
292,600
|
|
|
Laundry Room/Closet
|
Borrower may replace the washing
machines with ENERGY STAR rated washing machines for fewer than all of the units at the Property, provided that Borrower must spend
at least $186,200 on the Green Improvements.
|
Multifamily Loan and Security Agreement
|
Page C-
1
|
EXHIBIT
d
REPAIR
DISBURSEMENT REQUEST
The undersigned requests from
__________________________________
(“Lender”) the disbursement of funds in the amount of $_________________ (“Disbursement Request”)
from the Repair Reserve Fund established pursuant to the Multifamily Loan and Security Agreement dated
_________________
,
20
by and between Lender and the undersigned ( “Loan Agreement”)
to pay for repairs to the multifamily apartment project known as ______________________________________________
and located in _______________________
.
The undersigned represents and warrants
to Lender that the following information and certifications provided in connection with this Disbursement Request are true and
correct as of the date hereof:
|
|
1.
|
Purpose for which disbursement is requested:
|
|
|
2.
|
To whom the disbursement will be made
(may be the undersigned in the case of reimbursement for advances and payments made or
cost incurred for work done by the undersigned):_______________________________________________
|
|
|
3.
|
Estimated costs of completing the uncompleted
Repairs as of the date of this Disbursement Request: _______________________________________________
|
|
|
4.
|
The undersigned certifies that each of the following is true:
|
|
|
(a)
|
The disbursement requested pursuant to this Disbursement Request will be used solely to pay a cost
or costs allowable under the Loan Agreement.
|
|
|
(b)
|
None of the items for which disbursement is requested pursuant to this Disbursement Request has
formed the basis for any disbursement previously made from the Repair Reserve Fund.
|
|
|
(c)
|
All labor and materials for which disbursements have been requested have been incorporated into
the Improvements or suitably stored upon the Mortgaged Property in accordance with reasonable and standard building practices,
the Loan Agreement and all applicable laws, ordinances, rules and regulations of any governmental authority having jurisdiction
over the Mortgaged Property.
|
|
|
(d)
|
The materials, supplies and equipment furnished or installed for the Repairs are not subject to
any Lien or security interest or that the funds to be disbursed pursuant to this Disbursement Request are to be used to satisfy
any such Lien or security interest.
|
|
|
5.
|
All capitalized terms used in this Disbursement Request without definition will have the meanings
ascribed to them in the Loan Agreement.
|
|
Multifamily Loan and Security Agreement
|
Page D-
1
|
IN WITNESS WHEREOF, the undersigned has
executed this Disbursement Request as of the day and date first above written.
|
Multifamily Loan and Security Agreement
|
Page D-
2
|
EXHIBIT
e
WORK
COMMENCED AT MORTGAGED PROPERTY
NONE
|
Multifamily Loan and Security Agreement
|
Page E-
1
|
EXHIBIT
F
CAPITAL
REPLACEMENTS
|
|
·
|
Roadways/Parking Lots - Asphaltic Concrete; Seal Coat and Striping
|
|
|
·
|
Swimming Pool and/or Spa - Plaster/Liner; Filtration Equipment
|
|
|
·
|
Exterior Wall Maintenance/Painting
|
|
|
·
|
Other items that Lender may approve subject to any conditions that Lender may require, all in Lender’s
sole and absolute discretion.
|
|
Multifamily Loan and Security Agreement
|
Page F-
1
|
EXHIBIT
G
DESCRIPTION
OF GROUND LEASE
Not Applicable
|
Multifamily Loan and Security Agreement
|
Page G-
1
|
EXHIBIT
H
ORGANIZATIONAL
CHART of borrower as of the closing date
|
Multifamily Loan and Security Agreement
|
Page H-
1
|
EXHIBIT
I
DESIGNATED ENTITIES FOR TRANSFERS AND GUARANTOR(S)
Designated Entities for Transfers
BRG Hunters Creek, LLC
Bluerock Residential Holdings, LP
BRG Hunters Creek Manager, LLC
Bluerock Residential Growth REIT, Inc.
Guarantor(s)
Bluerock Residential Growth REIT, Inc.
|
Multifamily Loan and Security Agreement
|
Page I-
1
|
EXHIBIT
J
DESCRIPTION OF RELEASE PARCEL
Not Applicable
|
Multifamily Loan and Security Agreement
|
Page J-
1
|
EXHIBIT
K
GREEN IMPROVEMENTS VERIFICATION CERTIFICATION
THIS GREEN IMPROVEMENTS VERIFICATION CERTIFICATION
(“
Verification Certification
”) is made as of _______ ___, 20___, by ______________, a ________________ (“
Borrower
”)
for the benefit of ________________, a ________________, and it successors and assigns (collectively, “
Lender
”).
All defined terms in this Verification Certification
will have the meaning given to them in the Loan Agreement.
COMPLETION VERIFICATION
(to be delivered
within 30 days following the Actual Completed Green Improvements Date)
In connection with Section 4.03(i)(vi) of
the Loan Agreement, Borrower certifies to Lender as follows:
|
|
·
|
The Actual Completed Green Improvements Date is _____________;
|
|
|
·
|
The Benchmarking Data has been uploaded as of the date of this Verification Certification; and
|
|
|
·
|
The Green Improvements have been completed in accordance with the specifications recommended in the
Green Assessment as follows:
|
Specification Performance for Item as
Noted in Green Assessment
|
Specification Performance for Items as Installed
|
|
ITEM DESCRIPTION
|
QUANTITY
|
ITEM DESCRIPTION
|
QUANTITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[BORROWER SIGNATURE]
|
Multifamily Loan and Security Agreement
|
Page K-
1
|
EXHIBIT
O
BORROWER’S
CERTIFICATE OF
PROPERTY IMPROVEMENT ALTERATIONS COMPLETION
THIS BORROWER’S CERTIFICATE OF PROPERTY
IMPROVEMENT ALTERATIONS COMPLETION (“
Certificate
”) is made as of __________, 20___, by ______________, a ________________
(“
Borrower
”) for the benefit of ________________, a ________________, and it successors and assigns (collectively,
“
Lender
”).
In connection with Section 6.09(e)(v)(G)
of the Loan Agreement, Borrower certifies to Lender as follows:
[INSERT THE APPLICABLE SECTION (a) AND
DELETE THE OTHER:]
[USE THE FOLLOWING IF ALL PROPERTY IMPROVEMENT
ALTERATIONS THAT WERE COMMENCED HAVE BEEN COMPLETED]
|
|
(a)
|
All Property Improvement Alterations described in the Property Improvement Notice that were commenced
have been completed. The completed Property Improvement Alterations and their completion dates are as follows:
|
Description of Property Improvement
Alteration Commenced
|
Completion Date
|
|
|
|
|
|
|
[OR]
[USE THE FOLLOWING IF MINIMUM OCCUPANCY
HAS DECREASED BELOW THE MINIMUM OCCUPANCY REQUIREMENT AND NOT ALL THE PROPERTY IMPROVEMENT ALTERATIONS THAT WERE COMMENCED HAD
BEEN COMPLETED AT SUCH TIME]
|
|
(a)
|
All Property Improvement Alterations described in the Property Improvement Notice that resulted
in individual residential dwelling units not being available for leasing that were commenced have been or will be completed in
a timely manner. Such Property Improvement Alterations that were commenced and their completion dates and/or, if applicable, anticipated
completion dates, are as follows:
|
Description of Property
Improvement Alteration
Commenced
|
Completion
Date
|
Anticipated
Completion
Date
|
Comments
|
|
|
|
|
|
|
|
|
|
|
|
Multifamily Loan and Security Agreement
|
Page O-
1
|
[FOR ALL LOANS:]
|
|
(b)
|
The completed Property Improvement Alterations were completed in a good and workmanlike manner
and in compliance with all laws (including, without limitation, any and all life safety laws, environmental laws, building codes,
zoning ordinances and laws for the handicapped and/or disabled)
|
|
|
(c)
|
Should Borrower intend to contest any claim or claims for labor, materials or other costs, Borrower
agrees to give Lender notice within 30 days of the existence of such claim or claims and certifies to Lender that payment of the
full amount which might in any event be payable in order to satisfy such claim or claims will be made.
|
[INSERT THE FOLLOWING IF MINIMUM OCCUPANCY
HAS DECREASED BELOW THE MINIMUM OCCUPANCY REQUIREMENT]
|
|
(d)
|
Any additional Property Improvement Alterations not yet commenced which would cause residential
dwelling units to be unavailable for leasing have been suspended.
|
[BORROWER SIGNATURE]
|
Multifamily Loan and Security Agreement
|
Page O-
2
|
Exhibit 10.2
Freddie Mac Loan Number: 932896871
Property Name: ARIUM Hunter's Creek
FLORIDA
AMENDED AND RESTATED
MULTIFAMILY NOTE
(Revised 7-17-2014)
THIS FLORIDA AMENDED AND
RESTATED MULTIFAMILY NOTE (“
Note
”) is made and entered into as of the 30
th
day of October, 2017,
from
BR HUNTERS CREEK, LLC
, a Delaware limited liability company (
“Borrower”
) to
WALKER & DUNLOP,
LLC
, a Delaware limited liability company (
“Lender”
).
PRELIMINARY STATEMENTS
|
|
A.
|
A loan was made to CH Realty VII-Carroll MF Orlando Hunter’s Creek, L.L.C., a Delaware limited
liability company (“
Original Borrower
”) in the original principal amount of $57,085,000.00, the repayment of
which is evidenced by a Multifamily Note dated as of December 22, 2015 (
“Original Note”
) from Original Borrower,
as maker, to Jones Lang LaSalle Multifamily, LLC, a Delaware limited liability company (
“Original Payee”
), as
payee.
|
|
|
B.
|
The Original Note is secured by a Multifamily Mortgage, Assignment of Rents and Security Agreement
dated December 22, 2015, and recorded among the Public Records of Orange County, Florida as Doc #20150664766 (
“Original
Mortgage”
), on certain improved real property located in Orange County, Florida.
|
|
|
C.
|
The Original Note was sold and assigned (i) by the Original Payee to the Federal Home Loan Mortgage
Corporation (“
Freddie Mac
”), and (ii) by Freddie Mac to U.S. Bank National Association, as Trustee for the Registered
Holders of Morgan Stanley Capital I Inc., Multifamily Mortgage Pass-Through Certificates, Series 2016-KF17 (the “
Trustee
”).
|
|
|
D.
|
Lender has purchased the Original Note from the Trustee, and Lender is now the holder of the Original
Note.
|
|
|
E.
|
Borrower has assumed the obligations of Original Borrower under the Original Note and Original
Mortgage, and Borrower has confirmed to Lender that Borrower has no defenses or offsets of any kind against any of the indebtedness
due under the Original Note.
|
|
|
F.
|
Borrower has represented to Lender that State of Florida documentary stamp taxes were paid in full
on the Original Mortgage and are payable on this Note to the extent of the full principal amount of this Note. Borrower has represented
to Lender that State of Florida nonrecurring intangible taxes were paid in full on the Original Mortgage and are payable on this
Note to the extent that the original principal amount of this Note exceeds the $57,085,000.00 current outstanding principal balance
of the Original Note.
|
|
|
G.
|
The Original Mortgage is concurrently being consolidated, amended and restated pursuant to the
terms of an Amended and Restated Multifamily Mortgage, Assignment of Rents and Security Agreement dated the same date as this Note
(
“Security Instrument”
).
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
|
NOW, THEREFORE, in consideration of these promises,
the mutual covenants contained in this Note and other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree that the Original Note is consolidated, amended and restated in this Note in its entirety as follows:
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
2
|
Freddie Mac Loan Number: 932896871
Property Name: ARIUM Hunter's Creek
MULTIFAMILY NOTE
FIXED RATE DEFEASANCE
(Revised 5-5-2017)
|
US $72,294,000.00
|
Effective Date: As of October 30, 2017
|
FOR VALUE RECEIVED,
BR HUNTERS CREEK, LLC
,
a Delaware limited liability company (together with such party’s or parties’ successors and assigns, “
Borrower
”)
jointly and severally (if more than one), promises to pay to the order of
WALKER & DUNLOP, LLC
, a Delaware limited liability
company, the principal sum of $72,294,000.00, with interest on the unpaid principal balance, as hereinafter provided.
|
|
(a)
|
As used in this Note:
|
“
Base Recourse
”
means a portion of the Indebtedness equal to 0% of the original principal balance of this Note.
“
Business Day
” means
any day other than a Saturday, a Sunday or any other day on which Lender or the national banking associations are not open for
business.
“
Cut-off Date
” means
the 12
th
Installment Due Date.
“
Defeasance Date
”
means the 2
nd
anniversary of the “startup date” of the last REMIC within the meaning of Section 860G(a)(9)
of the Tax Code which holds all or any portion of the Loan.
“
Default Rate
” means
an annual interest rate equal to 4 percentage points above the Fixed Interest Rate. However, at no time will the Default Rate
exceed the Maximum Interest Rate.
“
Defeasance Period
”
is the period beginning the day after the Defeasance Date until but not including the first day of the Window Period. The Defeasance
Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.
“
First Installment Due Date
”
means December 1, 2017.
“
First Principal and Interest
Installment Due Date
” means December 1, 2019.
“
Fixed Interest Rate
”
means the annual interest rate of 3.650%.
“
Installment Due Date
”
means, for any monthly installment of interest-only or principal and interest, the date on which such monthly installment is due
and payable pursuant to Section 3 of this Note.
“
Lender
” means the
holder from time to time of this Note.
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
3
|
“
Loan
” means the
loan evidenced by this Note.
“
Loan Agreement
”
means the Multifamily Loan and Security Agreement entered into by and between Borrower and Lender, effective as of the effective
date of this Note, as amended, modified or supplemented from time to time.
“
Lockout Period
”
means the period beginning on the day that this Note is assigned to a REMIC trust until and including the Defeasance Date. The
Lockout Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.
“
Maturity Date
”
means the earlier of (i) November 1, 2024 (“
Scheduled Maturity Date
”) and (ii) the date on which the
unpaid principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy under any Loan Document; provided, however, that if the unpaid principal balance of this
Note becomes due and payable by acceleration but such acceleration is rendered null and void and of no further force and effect
by operation of law or agreement by Lender, such acceleration will have no effect on the Maturity Date.
“
Maximum Interest Rate
”
means the rate of interest which results in the maximum amount of interest allowed by applicable law.
“
Prepayment Premium Period
”
means the period during which, if a prepayment of principal occurs, a prepayment premium will be payable by Borrower to Lender.
|
|
(a)
|
If this Note is assigned to a REMIC trust prior to the Cut-off Date, then the Prepayment Premium
Period is the period from and including the date of this Note until but not including the day that this Note is assigned to a REMIC
trust.
|
|
|
(b)
|
If this Note is assigned to a REMIC trust after the Cut-off Date or is not assigned to a REMIC
trust, then the Prepayment Premium Period is the period from and including the date of this Note until but not including the first
day of the Window Period.
|
“
Security Instrument
”
means the multifamily mortgage, deed to secure debt or deed of trust effective as of the effective date of this Note, from Borrower
to or for the benefit of Lender and securing this Note, as amended, modified or supplemented from time to time.
“
Window Period
”
means the 3 consecutive calendar month period prior to the Scheduled Maturity Date.
“
Yield Maintenance Expiration
Date
” means May 1, 2024.
“
Yield Maintenance Period
”
means the period from and including the date of this Note until but not including (i) the day that this Note is assigned to a REMIC
trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the Yield Maintenance Expiration Date, if this
Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.
|
|
(b)
|
Other capitalized terms used but not defined in this Note will have the meanings given to such
terms in the Loan Agreement.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
4
|
|
|
2.
|
Address for Payment.
All payments due under this Note will be payable at 7501 Wisconsin
Avenue, Suite 1200E, Bethesda, Maryland 20814-6531, or such other place as may be designated by Notice to Borrower from or on behalf
of Lender.
|
|
|
(a)
|
Interest will accrue on the outstanding principal balance of this Note at the Fixed Interest Rate,
subject to the provisions of Section 8 of this Note.
|
|
|
(b)
|
Interest under this Note will be computed, payable and allocated on the basis of an actual/360
interest calculation schedule (interest is payable for the actual number of days in each month, and each month’s interest
is calculated by multiplying the unpaid principal amount of this Note as of the first day of the month for which interest is being
calculated by the Fixed Interest Rate, dividing the product by 360, and multiplying the quotient by the number of days in the month
for which interest is being calculated). The portion of the monthly installment of principal and interest under this Note attributable
to principal and the portion attributable to interest will vary based upon the number of days in the month for which such installment
is paid. Each monthly payment of principal and interest will first be applied to pay in full interest due, and the balance of the
monthly installment payment paid by Borrower will be credited to principal.
|
|
|
(c)
|
Unless disbursement of principal is made by Lender to Borrower on the first day of a calendar month,
interest for the period beginning on the date of disbursement and ending on and including the last day of such calendar month will
be payable by Borrower simultaneously with the execution of this Note. If disbursement of principal is made by Lender to Borrower
on the first day of a calendar month, then no payment will be due from Borrower at the time of the execution of this Note. The
Installment Due Date for the first monthly installment payment under Section 3(d) of interest-only or principal and interest,
as applicable, will be the First Installment Due Date set forth in Section 1(a) of this Note. Except as provided in this Section 3(c),
Section 10, and in Section 11, accrued interest will be payable in arrears.
|
|
|
(d)
|
(i)
|
Beginning on the First Installment Due Date, and continuing
until and including the Installment Due Date immediately prior to the First Principal and Interest Installment Due Date, accrued
interest-only will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar
month. The amount of each monthly installment of interest-only payable pursuant to this Section 3(d)(i) on an Installment
Due Date will vary, and will equal $7,329.80833 multiplied by the number of days in the month prior to the Installment Due Date.
|
|
|
(ii)
|
Beginning on the First Principal and Interest Installment Due Date, and continuing until and including
the monthly installment due on the Maturity Date, principal and accrued interest will be payable by Borrower in consecutive monthly
installments due and payable on the first day of each calendar month. The amount of the monthly installment of principal and interest
payable pursuant to this Section 3(d)(ii) on an Installment Due Date will be $330,715.81.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
5
|
|
|
(h)
|
All remaining Indebtedness, including all principal and interest, will be due and payable by Borrower
on the Maturity Date.
|
|
|
(j)
|
All payments under this Note must be made in immediately available U.S. funds.
|
|
|
(k)
|
Any regularly scheduled monthly installment of interest-only or principal and interest payable
pursuant to this Section 3 that is received by Lender before the date it is due will be deemed to have been received on the
due date for the purpose of calculating interest due.
|
|
|
(l)
|
Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may
be added to and become part of the unpaid principal balance of this Note and any reference to “accrued interest” will
refer to accrued interest which has not become part of the unpaid principal balance. Any amount added to principal pursuant to
the Loan Documents will bear interest at the applicable rate or rates specified in this Note and will be payable with such interest
upon demand by Lender and absent such demand, as provided in this Note for the payment of principal and interest.
|
|
|
4.
|
Application of Partial Payments.
If at any time Lender receives, from Borrower or otherwise,
any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, Lender may apply the amount
received to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Borrower
agrees that neither Lender’s acceptance of a payment from Borrower in an amount that is less than all amounts then due and
payable nor Lender’s application of such payment will constitute or be deemed to constitute either a waiver of the unpaid
amounts or an accord and satisfaction.
|
|
|
5.
|
Security.
The Indebtedness is secured by, among other things, the Security Instrument and
reference is made to the Security Instrument and the Loan Agreement for other rights with respect to collateral for the Indebtedness.
|
|
|
6.
|
Acceleration.
If an Event of Default has occurred and is continuing, the entire unpaid principal
balance, any accrued interest, any prepayment premium payable under Section 10 and Section 11, and all other amounts
payable under this Note and any other Loan Document, will at once become due and payable, at the option of Lender, without any
prior Notice to Borrower (except if notice is required by applicable law, then after such notice). Lender may exercise this option
to accelerate regardless of any prior forbearance. For purposes of exercising such option, Lender will calculate the prepayment
premium as if prepayment occurred on the date of acceleration. If prepayment occurs thereafter, Lender will recalculate the prepayment
premium as of the actual prepayment date.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
6
|
|
|
(a)
|
If any monthly installment of interest or principal and interest or other amount payable under
this Note or under the Loan Agreement or any other Loan Document is not received in full by Lender within 10 days after the installment
or other amount is due, counting from and including the date such installment or other amount is due (unless applicable law requires
a longer period of time before a late charge may be imposed, in which event such longer period will be substituted), Borrower must
pay to Lender, immediately and without demand by Lender, a late charge equal to 5% of such installment or other amount due (unless
applicable law requires a lesser amount be charged, in which event such lesser amount will be substituted). If the Loan is not
fully amortizing, the late charge will not be due on the final payment of principal owed on the Maturity Date if such payment is
not timely made.
|
|
|
(b)
|
Borrower acknowledges that its failure to make timely payments will cause Lender to incur additional
expenses in servicing and processing the Loan and that it is extremely difficult and impractical to determine those additional
expenses. Borrower agrees that the late charge payable pursuant to this Section represents a fair and reasonable estimate, taking
into account all circumstances existing on the date of this Note, of the additional expenses Lender will incur by reason of such
late payment. The late charge is payable in addition to, and not in lieu of, any interest payable at the Default Rate pursuant
to Section 8.
|
|
|
(a)
|
So long as (i) any monthly installment under this Note remains past due for 30 days or
more or (ii) any other Event of Default has occurred and is continuing, then notwithstanding anything in Section 3 of
this Note to the contrary, interest under this Note will accrue on the unpaid principal balance from the Installment Due Date of
the first such unpaid monthly installment or the occurrence of such other Event of Default, as applicable, at the Default Rate.
|
|
|
(b)
|
From and after the Maturity Date, the unpaid principal balance will continue to bear interest at
the Default Rate until and including the date on which the entire principal balance is paid in full.
|
|
|
(c)
|
Borrower acknowledges that (i) its failure to make timely payments will cause Lender to incur
additional expenses in servicing and processing the Loan, (ii) during the time that any monthly installment under this Note
is delinquent for 30 days or more, Lender will incur additional costs and expenses arising from its loss of the use of the money
due and from the adverse impact on Lender’s ability to meet its other obligations and to take advantage of other investment
opportunities, and (iii) it is extremely difficult and impractical to determine those additional costs and expenses. Borrower
also acknowledges that, during the time that any monthly installment under this Note is delinquent for 30 days or more or any other
Event of Default has occurred and is continuing, Lender’s risk of nonpayment of this Note will be materially increased and
Lender is entitled to be compensated for such increased risk. Borrower agrees that the increase in the rate of interest payable
under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on
the date of this Note, of the additional costs and expenses Lender will incur by reason of the Borrower’s delinquent payment
and the additional compensation Lender is entitled to receive for the increased risks of nonpayment associated with a delinquent
loan.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
7
|
|
|
9.
|
Limits on Personal Liability.
|
|
|
(a)
|
Except as otherwise provided in this Section 9, none of Borrower, SPE Equity Owner, or any
member or limited partner of Borrower will have any personal liability under this Note, the Loan Agreement or any other Loan Document
for the repayment of the Indebtedness or for the performance of or compliance with any other obligations of Borrower under the
Loan Documents and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations
will be Lender’s exercise of its rights and remedies with respect to the Mortgaged Property and to any other collateral held
by Lender as security for the Indebtedness. This limitation on Borrower’s liability will not limit or impair Lender’s
enforcement of its rights against any Guarantor of the Indebtedness or any Guarantor of any other obligations of Borrower.
|
|
|
(b)
|
Borrower will be personally liable to Lender for the amount of the Base Recourse, plus any other
amounts for which Borrower has personal liability under this Section 9.
|
|
|
(c)
|
In addition to the Base Recourse, Borrower will be personally liable to Lender for the repayment
of a further portion of the Indebtedness equal to any loss or damage suffered by Lender as a result of the occurrence of any of
the following events:
|
|
|
(i)
|
Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender
is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from
tenants then in residence. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i)
if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid
order issued in, or an automatic stay applicable because of, a bankruptcy, receivership, or similar judicial proceeding.
|
|
|
(ii)
|
Borrower fails to apply all Insurance proceeds and Condemnation proceeds as required by the Loan
Agreement. However, Borrower will not be personally liable for any failure described in this Section 9(c)(ii) if Borrower
is unable to apply Insurance or Condemnation proceeds as required by the Loan Agreement because of a valid order issued in, or
an automatic stay applicable because of, a bankruptcy, receivership, or similar judicial proceeding.
|
|
|
(iii)
|
Either of the following occurs:
|
|
|
(A)
|
Borrower fails to deliver the statements, schedules and reports required by Section 6.07 of the
Loan Agreement and Lender exercises its right to audit those statements, schedules and reports.
|
|
|
(B)
|
If an Event of Default has occurred and is continuing, Borrower fails to deliver all books and
records relating to the Mortgaged Property or its operation in accordance with the provisions of Section 6.07 of the Loan Agreement.
|
|
|
(iv)
|
Borrower fails to pay when due in accordance with the terms of the Loan Agreement the amount of
any item below marked “Deferred”; provided however, that if no item is marked “Deferred”, this Section 9(c)(iv)
will be of no force or effect.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
8
|
|
[Deferred]
|
Property Insurance premiums or other Insurance premiums
|
|
[Collect]
|
Taxes or payments in lieu of taxes (PILOT)
|
|
[Deferred]
|
water and sewer charges (that could become a lien on the Mortgaged Property)
|
|
[N/A]
|
Ground Rents
|
|
[Deferred]
|
assessments or other charges (that could become a lien on the Mortgaged Property), including home owner association dues
|
|
|
(v)
|
Borrower engages in any willful act of material waste of the Mortgaged Property.
|
|
|
(vi)
|
Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of
the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of
the Loan Agreement (subject to possible full recourse liability as set forth in Section 9(f)(ii)).
|
|
|
(vii)
|
Any of the following Transfers occurs:
|
|
|
(A)
|
Any Person that is not an Affiliate creates a mechanic’s lien or other involuntary lien or
encumbrance against the Mortgaged Property and Borrower has not complied with the provisions of the Loan Agreement.
|
|
|
(B)
|
A Transfer of property by devise, descent or operation of law occurs upon the death of a natural
person and such Transfer does not meet the requirements set forth in the Loan Agreement.
|
|
|
(C)
|
Borrower grants an easement that does not meet the requirements set forth in the Loan Agreement.
|
|
|
(D)
|
Borrower executes a Lease that does not meet the requirements set forth in the Loan Agreement.
|
|
|
(ix)
|
through (xviii) are Reserved.
|
|
|
(xix)
|
Borrower fails to complete any Property Improvement Alterations that have been commenced in accordance
with Section 6.09(e)(v) of the Loan Agreement.
|
|
|
(xxi)
|
Borrower or any officer, director, partner, member or employee of Borrower makes an unintentional
written material misrepresentation in connection with the application for or creation of the Indebtedness or any action or consent
of Lender; provided that the assumption will be that any written material misrepresentation was intentional and the burden of proof
will be on Borrower to prove that there was no intent.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
9
|
|
|
(d)
|
In addition to the Base Recourse, Borrower will be personally liable to Lender for all of the following:
|
|
|
(i)
|
Borrower will be personally liable for the performance of all of Borrower’s obligations under
Sections 6.12 and 10.02(b) of the Loan Agreement (relating to environmental matters).
|
|
|
(ii)
|
Borrower will be personally liable for the costs of any audit under Section 6.07 of the Loan
Agreement.
|
|
|
(iii)
|
Borrower will be personally liable for any costs and expenses incurred by Lender in connection
with the collection of any amount for which Borrower is personally liable under this Section 9, including Attorneys’
Fees and Costs and the costs of conducting any independent audit of Borrower’s books and records to determine the amount
for which Borrower has personal liability.
|
|
|
(iv)
|
through (viii) are Reserved.
|
|
|
(ix)
|
Borrower will be personally liable for any fees, costs, or expenses incurred by Lender in connection
with Borrower’s termination of any agreement for the provision of services to or in connection with the Mortgaged Property,
including cable, internet, garbage collection, landscaping, security, and cleaning.
|
|
|
(e)
|
All payments made by Borrower with respect to the Indebtedness and all amounts received by Lender
from the enforcement of its rights under the Loan Agreement and the other Loan Documents will be applied first to the portion of
the Indebtedness for which Borrower has no personal liability.
|
|
|
(f)
|
Notwithstanding the Base Recourse, Borrower will become personally liable to Lender for the repayment
of all of the Indebtedness upon the occurrence of any of the following Events of Default:
|
|
|
(i)
|
Borrower fails to comply with Section 6.13(a)(i) or (ii) of the Loan Agreement or any
SPE Equity Owner fails to comply with Section 6.13(b)(i) or (ii) of the Loan Agreement.
|
|
|
(ii)
|
Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of
the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of
the Loan Agreement and 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 Equity Owner
with the assets and liabilities of a debtor pursuant to Title 11 of the Bankruptcy Code.
|
|
|
(iii)
|
A Transfer that is an Event of Default under Section 7.02 of the Loan Agreement occurs other
than a Transfer set forth in Section 9(c)(vii) above (for which Borrower will have personal liability for Lender’s loss
or damage); provided, however, that Borrower will not have any personal liability for a Transfer consisting solely of the involuntary
removal or involuntary withdrawal of a general partner in a limited partnership or a manager in a limited liability company.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
10
|
|
|
(iv)
|
There was fraud or intentional written material misrepresentation by Borrower or any officer, director,
partner, member, or employee of Borrower in either case in connection with the application for or creation of the Indebtedness
or there is fraud in connection with any request for any action or consent by Lender.
|
|
|
(v)
|
Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy
Code.
|
|
|
(vi)
|
Borrower or any SPE Equity Owner voluntarily becomes subject to any reorganization, receivership,
insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights.
|
|
|
(vii)
|
The Mortgaged Property or any part of the Mortgaged Property becomes an asset in a voluntary bankruptcy
or becomes subject to any voluntary reorganization, receivership, insolvency proceeding, or other similar voluntary proceeding
pursuant to any other federal or state law affecting debtor and creditor rights.
|
|
|
(viii)
|
An order of relief is entered against Borrower or any SPE Equity Owner pursuant to the Bankruptcy
Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined
in by a Related Party.
|
|
|
(ix)
|
An involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower
or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use commercially
reasonable efforts to dismiss such proceeding or has consented to such proceeding. “Commercially reasonable efforts”
will not require any direct or indirect interest holders in Borrower or any SPE Equity Owner to contribute or cause the contribution
of additional capital to Borrower or any SPE Equity Owner.
|
|
|
(x)
|
through (xiii) are Reserved.
|
|
|
(g)
|
For purposes of Sections 9(f) and (h), the term “
Related Party
” will include
all of the following:
|
|
|
(i)
|
Borrower, any Guarantor, or any SPE Equity Owner.
|
|
|
(ii)
|
Any Person that holds, directly or indirectly, any ownership interest (including any shareholder,
member or partner) in Borrower, any Guarantor, or any SPE Equity Owner or any Person that has a right to manage Borrower, any Guarantor,
or any SPE Equity Owner.
|
|
|
(iii)
|
Any Person in which Borrower, any Guarantor, or any SPE Equity Owner has any ownership interest
(direct or indirect) or right to manage.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
11
|
|
|
(iv)
|
Any Person in which any partner, shareholder, or member of Borrower, any Guarantor, or any SPE
Equity Owner has an ownership interest or right to manage.
|
|
|
(v)
|
Any Person in which any Person holding an interest in Borrower, any Guarantor, or any SPE Equity
Owner also has any ownership interest.
|
|
|
(vi)
|
Any creditor (as defined in the Bankruptcy Code) of Borrower that is related by blood, marriage
or adoption to Borrower, any Guarantor, or any SPE Equity Owner.
|
|
|
(vii)
|
Any creditor (as defined in the Bankruptcy Code) of Borrower that is related to any partner, shareholder
or member of, or any other Person holding an interest in, Borrower, any Guarantor, or any SPE Equity Owner.
|
|
|
(h)
|
If Borrower, any Guarantor, any SPE Equity Owner, or any Related Party has solicited creditors
to initiate or participate in any proceeding referred to in Section 9(f), regardless of whether any of the creditors solicited
actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related
Party.
|
|
|
(i)
|
To the extent that Borrower has personal liability under this Section 9, Lender may, to the
fullest extent permitted by applicable law, exercise its rights against Borrower personally without regard to whether Lender has
exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any Guarantor, or pursued
any other rights available to Lender under this Note, the Loan Agreement, any other Loan Document, or applicable law. To the fullest
extent permitted by applicable law, in any action to enforce Borrower’s personal liability under this Section 9, Borrower
waives any right to set off the value of the Mortgaged Property against such personal liability.
|
|
|
10.
|
Voluntary and Involuntary Prepayments (Section Applies unless and until Loan is Assigned to
REMIC Trust Prior to the Cut-off Date).
|
|
|
(a)
|
This Section 10 will apply:
|
|
|
(i)
|
Until this Note is assigned to the REMIC trust, if this Note is assigned to a REMIC trust prior
to the Cut-off Date.
|
|
|
(ii)
|
If this Note is assigned to a REMIC trust on or after the Cut-off Date.
|
|
|
(iii)
|
If this Note is not assigned to a REMIC trust.
|
This Section 10 will be of no
effect after this Note is assigned to a REMIC trust, if this Note is assigned to the REMIC trust prior to the Cut-off Date.
|
|
(b)
|
Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal
required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note.
Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security
to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
12
|
|
|
(c)
|
To make a voluntary prepayment of all of the unpaid principal balance of this Note, Borrower must
designate the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment.
Upon receipt of such Notice from Borrower, if a voluntary prepayment is not permitted, Lender will notify Borrower. If a voluntary
prepayment is permitted, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due
Date. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect
to payments made under this Section 10 only, then (A) the term “Installment Due Date” will mean the Business Day
immediately preceding the scheduled Installment Due Date and (B) the calculation of any required prepayment premium will be made
as if the prepayment had actually been made on the scheduled Installment Due Date.
|
|
|
(d)
|
If a voluntary prepayment is permitted, Borrower may voluntarily prepay all of the unpaid principal
balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth
in Section 10(c) and meets the other requirements set forth in this Section 10(d). Borrower acknowledges that Lender
has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender will deem
any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date
immediately following such prepayment and Borrower must pay to Lender all interest and any required prepayment premium that would
have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.
|
|
|
(e)
|
Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay
less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all or any part of the principal of
this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid
interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment, plus (iii) if the
prepayment occurs during the Prepayment Premium Period, any prepayment premium calculated pursuant to Section 10(f).
|
|
|
(f)
|
Except as provided in Section 10(g), a prepayment premium will be due and payable by Borrower
in connection with any prepayment of principal under this Note during the Prepayment Premium Period. The prepayment premium will
be computed as follows:
|
|
|
(i)
|
For any prepayment made during the Yield Maintenance Period, the prepayment premium will be whichever
is the greater of Sections 10(f)(i)(A) and (B) below:
|
|
|
(A)
|
1.0% of the amount of principal being prepaid; or
|
|
|
(B)
|
the product obtained by multiplying:
|
|
|
(1)
|
the amount of principal being prepaid or accelerated,
by
|
|
|
(2)
|
the excess (if any) of the Monthly Note Rate over the Assumed Reinvestment Rate,
by
|
|
|
(3)
|
the Present Value Factor.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
13
|
For purposes of Section 10(f)(i)(B),
the following definitions will apply:
Monthly Note Rate:
1/12 of
the Fixed Interest Rate, expressed as a decimal calculated to 5 digits.
Prepayment Date:
in the case
of a voluntary prepayment, the date on which the prepayment is made; in the case of the application by Lender of collateral or
security to a portion of the principal balance, the date of such application.
Assumed Reinvestment Rate:
1/12 of the yield rate expressed as a decimal to 2 digits, as of the close of the trading session which is 5 Business Days before
the Prepayment Date, found among the Daily Treasury Yield Curve Rates, commonly known as Constant Maturity Treasury (“
CMT
”)
rates, with a maturity equal to the remaining Yield Maintenance Period, as reported on the U.S. Department of the Treasury website.
If no published CMT maturity matches
the remaining Yield Maintenance Period, Lender will interpolate as a decimal to 2 digits the yield rate between (a) the CMT
with a maturity closest to, but shorter than, the remaining Yield Maintenance Period, and (b) the CMT with a maturity closest
to, but longer than, the remaining Yield Maintenance Period, as follows:
|
|
A =
|
yield rate for the CMT with a maturity shorter than
the remaining Yield Maintenance Period
|
|
|
B =
|
yield rate for the CMT with a maturity longer than the remaining Yield Maintenance Period
|
|
|
C =
|
number of months to maturity for the CMT maturity shorter than the remaining Yield Maintenance
Period
|
|
|
D =
|
number of months to maturity for the CMT maturity longer than the remaining Yield Maintenance Period
|
|
|
E =
|
number of months remaining in the Yield Maintenance Period
|
In the event the U.S. Department
of the Treasury ceases publication of the CMT rates, the Assumed Reinvestment Rate will equal the yield rate on the first U.S.
Treasury security which is not callable or indexed to inflation and which matures after the expiration of the Yield Maintenance
Period.
The Assumed Reinvestment Rate may
be a positive number, a negative number or zero.
If the Assumed Reinvestment Rate
is a positive number or a negative number, Lender will calculate the prepayment premium using such positive number or negative
number, as appropriate, as the Assumed Reinvestment Rate in 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
14
|
If the Assumed
Reinvestment Rate is zero, Lender will calculate the prepayment premium twice as set forth in (I) and (II) below and will average
the results to determine the actual prepayment premium.
|
|
(I)
|
Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of one basis point
(+0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.
|
|
|
(II)
|
Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of negative one
basis point (-0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.
|
Present Value Factor:
the
factor that discounts to present value the costs resulting to Lender from the difference in interest rates during the months remaining
in the Yield Maintenance Period, using the Assumed Reinvestment Rate as the discount rate, with monthly compounding, expressed
numerically as follows:
n
= the number of months remaining
in Yield Maintenance Period; provided, however, if a prepayment occurs on an Installment Due Date, then the number of months remaining
in the Yield Maintenance Period will be calculated beginning with the month in which such prepayment occurs and if such prepayment
occurs on a Business Day other than an Installment Due Date, then the number of months remaining in the Yield Maintenance Period
will be calculated beginning with the month immediately following the date of such prepayment.
ARR
= Assumed Reinvestment
Rate
|
|
(ii)
|
For any prepayment made after the expiration of the Yield Maintenance Period but during the remainder
of the Prepayment Premium Period, the prepayment premium will be 1.0% of the amount of principal being prepaid.
|
|
|
(g)
|
Notwithstanding any other provision of this Section 10, no prepayment premium will be payable
with respect to any of the following:
|
|
|
(i)
|
Any prepayment made during the Window Period.
|
|
|
(ii)
|
Any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation
award.
|
|
|
(iii)
|
Any prepayment required under the terms of the Loan Agreement in connection with a Condemnation
proceeding.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
15
|
|
|
(h)
|
Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the
unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or change
the amount of such installments.
|
|
|
(i)
|
Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether
voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including
reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third
parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the
formula for calculating prepayment premiums set forth in this Note represents a reasonable estimate of the damages Lender will
incur because of a prepayment. Borrower further acknowledges that the prepayment premium provisions of this Note are a material
part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result
of the Borrower’s voluntary agreement to the prepayment premium provisions.
|
|
|
11.
|
Voluntary and Involuntary Prepayments During the Lockout Period and During the Defeasance Period
(Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).
|
|
|
(a)
|
This Section 11 will apply in the event this Note is assigned to a REMIC trust prior to the
Cut-off Date. This Section 11 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date
or if this Note is not assigned to a REMIC trust.
|
|
|
(b)
|
Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal
required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note.
Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security
to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.
|
|
|
(c)
|
Borrower may not voluntarily prepay any portion of the principal balance of this Note during the
Lockout Period or during the Defeasance Period; provided, however, any prepayment occurring as a result of the application of any
Insurance proceeds or Condemnation award under the Loan Agreement will be permitted during the Lockout Period and during the Defeasance
Period. If any portion of the principal balance of this Note is prepaid during the Lockout Period or during the Defeasance Period
by reason of the application by Lender of any proceeds of collateral or other security to any portion of the unpaid principal balance
of this Note or following a determination that the prohibition on voluntary prepayments during the Lockout Period or during the
Defeasance Period is in contravention of applicable law, then Borrower must also pay to Lender upon demand by Lender, a prepayment
premium equal to 5.0% of the amount of principal being prepaid.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
16
|
|
|
(d)
|
Notwithstanding any other provision of this Section 11, no prepayment premium will be payable
with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the
application of any Insurance proceeds or Condemnation award under the Loan Agreement.
|
|
|
(e)
|
After the expiration of the Lockout Period and the Defeasance Period, Borrower may voluntarily
prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for
such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment
Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under
this Section 11 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled
Installment Due Date.
|
|
|
(f)
|
Notwithstanding Section 11(e) above, following the end of the Lockout Period and the Defeasance
Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment
Due Date if Borrower provides Lender with the Notice set forth in Section 11(e) and meets the other requirements set forth
in this Section 11(f). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other
than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment
Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower must pay to Lender
all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following
such prepayment.
|
|
|
(g)
|
Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay
less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all or any part of the principal of
this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and
unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment.
|
|
|
(h)
|
Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the
unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or change
the amount of such installments.
|
|
|
(i)
|
Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether
voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including
reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third
parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the
formula for calculating prepayment premiums set forth in Section 11(c) of this Note represents a reasonable estimate of the
damages Lender will incur because of a prepayment. Borrower further acknowledges that the lockout and prepayment premium provisions
of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more
favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
17
|
|
|
(j)
|
If, after the expiration of the Lockout Period, Borrower defeases the Loan as described in Section 11.12
of the Loan Agreement during the Defeasance Period, Borrower will not have the right to voluntarily prepay any of the principal
of this Note at any time.
|
|
|
12.
|
Defeasance
(Section Applies
if Loan is Assigned to REMIC Trust Prior to the Cut-off Date)
.
|
|
|
(a)
|
This Section 12 will apply in the event this Note is assigned to a REMIC trust prior to the
Cut-off Date. This Section 12 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date
or if this Note is not assigned to a REMIC trust.
|
|
|
(b)
|
Section 5 of this Note is amended by adding a new paragraph at the end of the Section as follows:
|
If Borrower obtains
a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement,
the Indebtedness will be secured by the Pledge Agreement and reference will be made to the Pledge Agreement for other rights of
Lender as to collateral for the Indebtedness.
|
|
(c)
|
Section 9 of this Note is amended by adding a new paragraph at the end thereof as follows:
|
If Borrower obtains
a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement,
Borrower will have no personal liability under this Note or the Pledge Agreement for the repayment of the Indebtedness or for the
performance of any other obligations of Borrower under this Note or the Pledge Agreement (other than any liability under Section 6.12
or Section 10.02 of the Loan Agreement for events that occur prior to the Defeasance Closing Date, whether discovered before or
after the Defeasance Closing Date), and Lender’s only recourse for the satisfaction of the Indebtedness and the performance
of such obligations will be Lender’s exercise of its rights and remedies with respect to the collateral held by Lender under
the Pledge Agreement as security for the Indebtedness.
|
|
(d)
|
Section 21(a) of this Note is amended by adding a new paragraph at the end of that subsection
as follows:
|
If Borrower obtains
a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement,
all Notices, demands and other communications required or permitted to be given pursuant to this Note will be given in accordance
with the Pledge Agreement.
|
|
13.
|
Costs and Expenses.
To the fullest extent allowed by applicable law, Borrower must pay all
expenses and costs, including Attorneys’ Fees and Costs incurred by Lender as a result of any default under this Note or
in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents,
including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief
from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding. Borrower acknowledges
and agrees that, in connection with each request by Borrower under this Note or any Loan Document, Borrower must pay all reasonable
Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies (if applicable),
regardless of whether the matter is approved, denied or withdrawn.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
18
|
|
|
14.
|
Forbearance.
Any forbearance by Lender in exercising any right or remedy under this Note,
the Loan Agreement, or any other Loan Document, or otherwise afforded by applicable law, will not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any payment after the due date of such payment, or in
an amount which is less than the required payment, will not be a waiver of Lender’s right to require prompt payment when
due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by
Lender of any security for Borrower’s obligations under this Note will not constitute an election by Lender of remedies so
as to preclude the exercise of any other right or remedy available to Lender.
|
|
|
15.
|
Waivers.
Borrower and all endorsers and Guarantors of this Note and all other third party
obligors waive presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate
payment or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness.
|
|
|
16.
|
Loan Charges.
Neither this Note nor any of the other Loan Documents will be construed to
create a contract for the use, forbearance, or detention of money requiring payment of interest at a rate greater than the Maximum
Interest Rate. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in
connection with the Loan is interpreted so that any interest or other charge provided for in any Loan Document, whether considered
separately or together with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled
to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation. The
amounts, if any, previously paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the unpaid principal
balance of this Note. For the purpose of determining whether any applicable law limiting the amount of interest or other charges
permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges
made in connection with the Indebtedness that constitute interest, will be deemed to be allocated and spread ratably over the stated
term of this Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner
that the rate of interest so computed is uniform throughout the stated term of this Note.
|
|
|
17.
|
Commercial Purpose.
Borrower represents that Borrower is incurring the Indebtedness solely
for the purpose of carrying on a business or commercial enterprise, and not for personal, family, household, or agricultural purposes.
|
|
|
18.
|
Counting of Days.
Any reference in this Note to a period of “days” means calendar
days, not Business Days, except where otherwise specifically provided.
|
|
|
19.
|
Governing Law.
This Note will be governed by the law of the Property Jurisdiction.
|
|
|
20.
|
Captions.
The captions of the Sections of this Note are for convenience only and will
be disregarded in construing this Note.
|
|
|
21.
|
Notices; Written Modifications.
|
|
|
(a)
|
All Notices, demands, and other communications required or permitted to be given pursuant to this
Note will be given in accordance with Section 11.03 of the Loan Agreement.
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
19
|
|
|
(b)
|
Any modification or amendment to this Note will be ineffective unless in writing and signed by
the party sought to be charged with such modification or amendment; provided, however, in the event of a Transfer under the terms
of the Loan Agreement that requires Lender’s consent, any or some or all of the Modifications to Multifamily Note set forth
in
Exhibit A
to this Note may be modified or rendered void by Lender at Lender’s option, by Notice to Borrower
and the transferee, as a condition of Lender’s consent.
|
|
|
22.
|
Consent to Jurisdiction and Venue.
Borrower agrees that any controversy arising under or
in relation to this Note may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction
in the Property Jurisdiction will have jurisdiction over all controversies that will arise under or in relation to this Note. Borrower
irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which
it might be entitled by virtue of domicile, habitual residence, or otherwise. However, nothing in this Note is intended to limit
any right that Lender may have to bring any suit, action, or proceeding relating to matters arising under this Note in any court
of any other jurisdiction.
|
|
|
23.
|
WAIVER OF TRIAL BY JURY
. BORROWER AND LENDER EACH (a) AGREES NOT TO ELECT A TRIAL
BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT
IS TRIABLE OF RIGHT BY A JURY AND (b) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY
SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
|
|
|
24.
|
State-Specific Provisions.
State-specific provisions, if any, are included on Schedule 1
to this Note.
|
|
|
25.
|
Attached Riders.
The following Riders are attached to this Note:
|
|
|
x
|
Primary Access by Easement or Private Road
|
|
|
26.
|
Attached Schedules and Exhibits.
The following Schedules and Exhibits, if marked with an
“X” in the space provided, are attached to this Note:
|
|
|
x
|
Schedule 1
|
State Specific Provisions for Multifamily Note
|
|
|
x
|
Exhibit A
|
Modifications to Multifamily Note
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
20
|
IN WITNESS WHEREOF, and in consideration of
the Lender’s agreement to lend Borrower the principal amount set forth above, Borrower has signed and delivered this Note
under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative.
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
21
|
Florida documentary stamp taxes in the amount
of $199,797.50 were paid on the Mortgage recorded in Official Records Book 11032, Page 8497, of the Public Records of Orange County,
Florida and were also paid in the amount of $53,231.50 on the Amended and Restated Multifamily Mortgage, Assignment of Rents and
Security Agreement dated concurrently herewith and contemporaneously recorded in the Public Records of Orange County, Florida.
|
|
BR HUNTERS CREEK, LLC
, a Delaware limited liability company
|
|
|
|
|
|
|
By:
|
/s/ Jordan Ruddy
|
|
|
|
Name: Jordan Ruddy
|
|
|
|
Title: Authorized Signatory
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
22
|
PAY TO THE ORDER OF
______________________________________,
WITHOUT RECOURSE.
|
WALKER & DUNLOP, LLC
, a Delaware limited liability company
|
|
|
|
|
|
|
By:
|
/s/ Joyce Velazquez
|
|
|
|
Joyce Velazquez
|
|
|
|
Closing Officer
|
|
|
|
|
|
|
Freddie Mac Loan No. 932896871
|
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
23
|
WALKER & DUNLOP, LLC
, a Delaware
limited liability company, holder of the Original Note, signs below to acknowledge its consent to the terms of this Amended and
Restated Multifamily Note.
|
|
WALKER & DUNLOP, LLC
, a Delaware limited liability company
|
|
|
|
|
|
|
By:
|
/s/ Joyce Velazquez
|
|
|
|
Joyce Velazquez
|
|
|
|
Closing Officerr
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
|
Page
24
|
RIDER TO MULTIFAMILY
NOTE
PRIMARY ACCESS BY
EASEMENT OR PRIVATE ROAD
(Revised 3-1-2014)
The following changes are made to the Note
which precedes this Rider:
|
|
A.
|
Section 9(c)(xi) is restated as follows:
|
|
|
(xi)
|
Either of the following occurs:
|
|
|
(A)
|
Any party takes, or threatens to take, any action to deny ingress to or egress from the Land, from
or to the publicly dedicated and maintained right-of-way known as John Young Parkway through the easement established under the
easement agreement dated May 27, 1998 and recorded at Book 5491, Page 4521 in the records of Orange County, Florida, as amended
(“
Access Easement
”).
|
|
|
(B)
|
Any dispute or controversy arises under or with respect to the Access Easement.
|
|
Rider to Multifamily Note
Primary Access by Easement or Private Road
|
|
SCHEDULE 1
STATE SPECIFIC PROVISIONS FOR MULTIFAMILY
NOTE
|
Property Jurisdiction
|
|
State-Specific Provision(s)
|
|
|
|
|
|
Florida
|
|
None
|
|
Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
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EXHIBIT B
MODIFICATIONS
TO NOTE
The following modifications are made
to the text of the Note that precedes this Exhibit:
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1.
|
Section 9(d) is revised by adding the following new subsection:
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(xii)
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the amount of, and any loss or damage suffered
by Lender by reason of, any failure to fully and timely pay all intangible, documentary stamp, recordation, transfer, or similar
taxes, if any, imposed in connection with the Loan or any advances of the Loan, the Original Note, this Note, the Original Mortgage,
the Security Instrument, any default under any Loan Document, or any other transaction relating to or arising out of the Loan,
plus all interest, penalties and fines that may be or may become due as a result of any of the foregoing.
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Florida Amended and Restated Multifamily Note
Fixed Rate Defeasance
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Exhibit 10.3
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THIS INSTRUMENT PREPARED BY,
RECORDED AND RETURN TO:
(Print Name of Attorney)
Brian J. Iwashyna, Esquire
Troutman Sanders LLP
P.O. Box 1122
Richmond, VA 23218
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(Reserved)
|
Florida documentary stamp taxes in the
amount of $199,797.50 and nonrecurring intangible taxes in the amount of $114,170.00 were paid on the Multifamily Mortgage, Assignment
of Rents and Security Agreement recorded in Official Records Book 11032, Page 8497, of the Public Records of Orange County, Florida.
Prior to entering into this Instrument,
BR Hunters Creek, LLC assumed the obligations under the Original Note (as defined herein), which had an outstanding principal balance
of $57,085,000.00, pursuant to an assumption agreement recorded in the Public Records of Orange County, Florida contemporaneously
with this Instrument, and, therefore, documentary stamp taxes due in the amount of $199,797.50 in connection with such assumption
were paid upon the recordation of the assumption agreement. No intangible tax was due on the assumption pursuant to Section 199.145(3),
Florida Statutes.
Florida documentary stamp taxes in the
amount of $53,231.50, and intangible taxes in the amount of $30,418.00, will be paid upon the recording of this Instrument (as
defined herein) in the Public Records of Orange County, Florida, reflecting an additional advance in the amount of $15,209,000.00.
AMENDED AND RESTATED
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
FLORIDA
(Revised 3-1-2014)
Freddie Mac Loan No. 932896871
ARIUM Hunter's Creek
AMENDED AND RESTATED
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
FLORIDA
(Revised 3-1-2014)
THIS AMENDED AND RESTATED MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (“
Instrument
”) is dated as of the 30
th
day of October,
2017, between
BR HUNTERS CREEK, LLC
, a limited liability company organized and existing under the laws of Delaware, whose
address is c/o Bluerock Real Estate, L.L.C., 712 Fifth Avenue, 9th Floor, New York, New York 10019, as mortgagor (“
Borrower
”),
and
WALKER & DUNLOP, LLC
, a limited liability company organized and existing under the laws of Delaware, whose address
is 7501 Wisconsin Avenue, Suite 1200E, Bethesda, Maryland 20814, as mortgagee (“
Lender
”).
RECITALS
A. Lender
is the holder of a Multifamily Note dated December 22, 2015, in the original principal amount of $57,085,000.00 (“
Original
Note
”) made by CH Realty VII-Carroll MF Orlando Hunter’s Creek, L.L.C., a Delaware limited liability company (“
Original
Borrower
”) and payable to the order of Jones Lang LaSalle Multifamily, LLC, a Delaware limited liability company (the
“
Original Payee
”).
B. The
Original Note is secured by a Multifamily Mortgage, Assignment of Rents and Security Agreement dated December 22, 2015, from Original
Borrower to the Original Payee, recorded among the Public Records of Orange County, Florida as Document #20150664766 (“
Original
Mortgage
”) on certain improved real property located in Orange County, Florida.
C. The
Original Note has been sold and assigned (i) by the Original Payee to the Federal Home Loan Mortgage Corporation (“
Freddie
Mac
”), and (ii) by Freddie Mac to U.S. Bank National Association, as Trustee for the Registered Holders of Morgan Stanley
Capital I Inc., Multifamily Mortgage Pass-Through Certificates, Series 2016-KF17 (the “
Trustee
”), and (iii)
by Trustee to Lender.
D. The
Original Mortgage was assigned (i) by the Original Payee to Freddie Mac pursuant to an Assignment of Security Instrument dated
December 22, 2015, and recorded in the Public Records of Orange County, Florida as Document #20150664768, (ii) by Freddie Mac to
the Trustee by Assignment recorded in the Public Records of Orange County, Florida as Document #20160327463, and (iii) by the Trustee
to Lender pursuant to an Assignment of Security Instrument dated as of the date hereof and recorded or intended to be recorded
among the Public Records of Orange County, Florida prior hereto.
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Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
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E. By
its execution and delivery of this Instrument, Borrower assumes and ratifies all of the obligations and agreements of Original
Borrower under the Original Note and the Original Mortgage. By its execution and delivery of this Instrument Lender accepts such
assumption by Borrower and hereby unconditionally and irrevocably, fully and completely releases and discharges Original Borrower,
and each guarantor of the Original Note and the Original Mortgage, from all further liability or obligations under or with respect
to the Original Note and Original Mortgage, with such release being for the benefit of and enforceable by the Original Borrower
and each such guarantor.
F. The
Original Note is being consolidated, amended and restated in its entirety pursuant to a certain Amended and Restated Multifamily
Note dated the same date as this Instrument from Borrower, as maker, to the order of Lender, as payee, to reflect among other things,
a change in the interest rate and terms of payment and an increase in the unpaid principal amount to $72,294,000.00 to evidence
an additional advance in the amount of $15,209,000.00 made by Lender to Borrower on the date hereof.
E. Borrower
and Lender now desire to amend and modify the terms of the Original Mortgage and have agreed, for purposes of convenience, to consolidate,
amend and restate the Original Mortgage in its entirety as follows:
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Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
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2
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Freddie Mac Loan No. 932896871
ARIUM Hunter's Creek
AMENDED AND RESTATED
MULTIFAMILY MORTGAGE,
ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
FLORIDA
(Revised 3-1-2014)
THIS MULTIFAMILY MORTGAGE, ASSIGNMENT OF
RENTS AND SECURITY AGREEMENT (“
Instrument
”) is made to be effective this 30
th
day of October, 2017,
between
BR HUNTERS CREEK, LLC
, a limited liability company organized and existing under the laws of Delaware, whose address
is c/o Bluerock Real Estate, L.L.C., 712 Fifth Avenue, 9th Floor, New York, New York 10019, as mortgagor (“
Borrower
”),
and
WALKER & DUNLOP, LLC
, a limited liability company organized and existing under the laws of Delaware, whose address
is 7501 Wisconsin Avenue, Suite 1200E, Bethesda, Maryland 20814, as mortgagee (“
Lender
”). Borrower’s organizational
identification number, if applicable, is 6511870.
RECITAL
Borrower is indebted to Lender in the principal
amount of $72,294,000.00, as evidenced by Borrower’s Multifamily Note payable to Lender dated as of the date of this Instrument,
and maturing on November 1, 2024 (“
Maturity Date
”).
AGREEMENT
TO SECURE TO LENDER the repayment of the
Indebtedness, and all renewals, extensions and modifications of the Indebtedness, and the performance of the covenants and agreements
of Borrower contained in the Loan Agreement or any other Loan Document, Borrower mortgages, warrants, grants, conveys and assigns
to Lender the Mortgaged Property, including the Land located in Orange County, State of Florida and described in
Exhibit A
attached to this Instrument.
Borrower represents and warrants that Borrower
is lawfully seized of the Mortgaged Property, has the right, power and authority to grant, convey and assign the Mortgaged Property,
and that the Mortgaged Property is unencumbered, except as shown on the schedule of exceptions to coverage in the title policy
issued to and accepted by Lender contemporaneously with the execution and recordation of this Instrument and insuring Lender’s
interest in the Mortgaged Property (“
Schedule of Title Exceptions
”). Borrower covenants that Borrower will warrant
and defend generally the title to the Mortgaged Property against all claims and demands, subject to any easements and restrictions
listed in the Schedule of Title Exceptions.
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Amended and Restated Multifamily Mortgage, Assignment of Rents
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UNIFORM COVENANTS
(Revised 5-5-2017)
Covenants.
In consideration of the
mutual promises set forth in this Instrument, Borrower and Lender covenant and agree as follows:
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1.
|
Definitions.
The following terms, when used in this Instrument (including when used in the
above recitals), will have the following meanings and any capitalized term not specifically defined in this Instrument will have
the meaning ascribed to that term in the Loan Agreement:
|
“
Attorneys’ Fees
and Costs
” means (a) fees and out-of-pocket costs of Lender’s and Loan Servicer’s attorneys, as applicable,
including costs of Lender’s and Loan Servicer’s in-house counsel, support staff costs, costs of preparing for litigation,
computerized research, telephone and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process
service, videotaping and similar costs and expenses; (b) costs and fees of expert witnesses, including appraisers; (c) investigatory
fees; and (d) the costs for any opinion required by Lender pursuant to the terms of the Loan Documents.
“
Borrower
”
means all Persons identified as “Borrower” in the first paragraph of this Instrument, together with their successors
and assigns.
“
Business Day
”
means any day other than a Saturday, a Sunday or any other day on which Lender or the national banking associations are not
open for business.
“
Event of Default
”
means the occurrence of any event described in Section 8.
“
Fixtures
”
means all property owned by Borrower which is attached to the Land or the Improvements so as to constitute a fixture under applicable
law, including: machinery, equipment, engines, boilers, incinerators and installed building materials; systems and equipment for
the purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits
used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals;
telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems
and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens,
refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances; light fixtures, awnings, storm windows and
storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors; cabinets, paneling, rugs and floor and wall
coverings; fences, trees and plants; swimming pools; and exercise equipment.
“
Governmental Authority
”
means any board, commission, department, agency or body of any municipal, county, state or federal governmental unit, or any subdivision
of any of them, that has or acquires jurisdiction over the Mortgaged Property, or the use, operation or improvement of the Mortgaged
Property, or over Borrower.
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Amended and Restated Multifamily Mortgage, Assignment of Rents
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4
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“
Ground Lease
”
means the lease described in the Loan Agreement pursuant to which Borrower leases the Land, as such lease may from time to time
be amended, modified, supplemented, renewed and extended.
“
Improvements
”
means the buildings, structures, improvements now constructed or at any time in the future constructed or placed upon the Land,
including any future alterations, replacements and additions.
“
Indebtedness
”
means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time
under, the Note, this Instrument or any other Loan Document, including prepayment premiums, late charges, default interest, and
advances as provided in Section 7 to protect the security of this Instrument.
“
Land
” means
the land described in
Exhibit A
.
“
Leasehold Estate
”
means Borrower’s interest in the Land and any other real property leased by Borrower pursuant to the Ground Lease, if applicable,
including all of the following:
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(a)
|
All rights of Borrower to renew or extend the term of the Ground Lease.
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(b)
|
All amounts deposited by Borrower with Ground Lessor under the Ground Lease.
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(c)
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Borrower’s right or privilege to terminate, cancel, surrender, modify or amend the Ground
Lease.
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(d)
|
All other options, privileges and rights granted and demised to Borrower under the Ground Lease
and all appurtenances with respect to the Ground Lease.
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“
Leases
” means
all present and future leases, subleases, licenses, concessions or grants or other possessory interests now or hereafter in force,
whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary
leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals.
“
Lender
” means
the entity identified as “Lender” in the first paragraph of this Instrument, or any subsequent holder of the Note.
“
Loan Agreement
”
means the Multifamily Loan and Security Agreement executed by Borrower in favor of Lender and dated as of the date of this Instrument,
as such agreement may be amended from time to time.
“
Loan Documents
”
means the Note, this Instrument, the Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements, UCC filings,
O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any guarantor or any other Person
in connection with the loan evidenced by the Note, as such documents may be amended from time to time.
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Amended and Restated Multifamily Mortgage, Assignment of Rents
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“
Loan Servicer
”
means the entity that from time to time is designated by Lender or its designee to collect payments and deposits and receive Notices
under the Note, this Instrument and any other Loan Document, and otherwise to service the loan evidenced by the Note for the benefit
of Lender. Unless Borrower receives Notice to the contrary, the Loan Servicer is the entity identified as “Lender”
in the first paragraph of this Instrument.
“
Mortgaged Property
”
means all of Borrower’s present and future right, title and interest in and to all of the following:
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(a)
|
The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground
Lease and the Leasehold Estate.
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(e)
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All current and future rights, including air rights, development rights, zoning rights and other
similar rights or interests, easements, tenements, rights of way, strips and gores of land, streets, alleys, roads, sewer rights,
waters, watercourses and appurtenances related to or benefiting the Land or the Improvements, or both, and all rights-of-way, streets,
alleys and roads which may have been or may in the future be vacated.
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(f)
|
All proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the
Personalty or any other part of the Mortgaged Property, whether or not Borrower obtained the insurance pursuant to Lender’s
requirement.
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(g)
|
All awards, payments and other compensation made or to be made by any municipal, state or federal
authority with respect to the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property,
including any awards or settlements resulting from condemnation proceedings or the total or partial taking of the Land, the Improvements,
the Fixtures, the Personalty or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including
any conveyance in lieu thereof.
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(h)
|
All contracts, options and other agreements for the sale of the Land, or the Leasehold Estate,
as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property entered into by Borrower
now or in the future, including cash or securities deposited to secure performance by parties of their obligations.
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(i)
|
All proceeds from the conversion, voluntary or involuntary, of any of the items described in subsections
(a) through (h) inclusive into cash or liquidated claims, and the right to collect such proceeds.
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(j)
|
All Rents and Leases.
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Amended and Restated Multifamily Mortgage, Assignment of Rents
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(k)
|
All earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements
or any other part of the Mortgaged Property, and all undisbursed proceeds of the loan secured by this Instrument.
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(l)
|
All Imposition Reserve Deposits.
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(m)
|
All refunds or rebates of Impositions by Governmental Authority or insurance company (other than
refunds applicable to periods before the real property tax year in which this Instrument is dated).
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(n)
|
All tenant security deposits which have not been forfeited by any tenant under any Lease and any
bond or other security in lieu of such deposits.
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(o)
|
All names under or by which any of the above Mortgaged Property may be operated or known, and all
trademarks, trade names, and goodwill relating to any of the Mortgaged Property.
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(p)
|
If required by the terms of Section 4.05 of the Loan Agreement, all rights under the Letter
of Credit and the Proceeds, as such Proceeds may increase or decrease from time to time.
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(q)
|
If the Note provides for interest to accrue at a floating or variable rate and there is a Cap Agreement,
the Cap Collateral.
|
“
Note
” means
the Multifamily Note or Notes (including any Amended and Restated Note(s), Consolidated, Amended and Restated Note(s), or Extended
and Restated Note(s)) executed by Borrower in favor of Lender and dated as of the date of this Instrument, including all schedules,
riders, allonges and addenda, as such Multifamily Note(s) may be amended, modified and/or restated from time to time.
“
Notice
” or
“
Notices
” means all notices, demands and other communication required under the Loan Documents, provided in
accordance with the requirements of Section 11.03 of the Loan Agreement.
“
Person
” means
any natural person, sole proprietorship, corporation, general partnership, limited partnership, limited liability company, limited
liability partnership, limited liability limited partnership, joint venture, association, joint stock company, bank, trust, estate,
unincorporated organization, any federal, state, county or municipal government (or any agency or political subdivision thereof),
endowment fund or any other form of entity.
“
Personalty
”
means all of the following:
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(a)
|
Accounts (including deposit accounts) of Borrower related to the Mortgaged Property.
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Amended and Restated Multifamily Mortgage, Assignment of Rents
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(b)
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Equipment and inventory owned by Borrower, which are used now or in the future in connection with
the ownership, management or operation of the Land or Improvements or are located on the Land or Improvements, including furniture,
furnishings, machinery, building materials, goods, supplies, tools, books, records (whether in written or electronic form) and
computer equipment (hardware and software).
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(c)
|
Other tangible personal property owned by Borrower which is used now or in the future in connection
with the ownership, management or operation of the Land or Improvements or is located on the Land or in the Improvements, including
ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances (other than
Fixtures).
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(d)
|
Any operating agreements relating to the Land or the Improvements.
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(e)
|
Any surveys, plans and specifications and contracts for architectural, engineering and construction
services relating to the Land or the Improvements.
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(f)
|
All other intangible property, general intangibles 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
and including subsidy or similar payments received from any sources, including a Governmental Authority.
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(g)
|
Any rights of Borrower in or under letters of credit.
|
“
Property Jurisdiction
”
means the jurisdiction in which the Land is located.
“
Rents
” means
all rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, parking
fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged
Property, whether now due, past due or to become due, and deposits forfeited by tenants, and, if Borrower is a cooperative housing
corporation or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases
or occupancy agreements, whether now due, past due, or to become due.
“
Taxes
” means
all taxes, assessments, vault rentals and other charges, if any, whether general, special or otherwise, including all assessments
for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority
or quasi-public authority, and which, if not paid, will become a Lien on the Land or the Improvements.
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2.
|
Uniform Commercial Code Security Agreement.
|
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(a)
|
This Instrument is also a security agreement under the Uniform Commercial Code for any of the Mortgaged
Property which, under applicable law, may be subjected to a security interest under the Uniform Commercial Code, for the purpose
of securing Borrower’s obligations under this Instrument and to further secure Borrower’s obligations under the Note,
this Instrument and other Loan Documents, whether such Mortgaged Property is owned now or acquired in the future, and all products
and cash and non-cash proceeds thereof (collectively, “
UCC Collateral
”), and by this Instrument, Borrower grants
to Lender a security interest in the UCC Collateral. To the extent necessary under applicable law, Borrower hereby authorizes Lender
to prepare and file financing statements, continuation statements and financing statement amendments in such form as Lender may
require to perfect or continue the perfection of this security interest.
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Amended and Restated Multifamily Mortgage, Assignment of Rents
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(b)
|
Unless Borrower gives Notice to Lender within 30 days after the occurrence of any of the following,
and executes and delivers to Lender modifications or supplements of this Instrument (and any financing statement which may be filed
in connection with this Instrument) as Lender may require, Borrower will not (i) change its name, identity, structure or jurisdiction
of organization; (ii) change the location of its place of business (or chief executive office if more than one place of business);
or (iii) add to or change any location at which any of the Mortgaged Property is stored, held or located.
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(c)
|
If an Event of Default has occurred and is continuing, Lender will have the remedies of a secured
party under the Uniform Commercial Code, in addition to all remedies provided by this Instrument or existing under applicable law.
In exercising any remedies, Lender may exercise its remedies against the UCC Collateral separately or together, and in any order,
without in any way affecting the availability of Lender’s other remedies.
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(d)
|
This Instrument also constitutes a financing statement with respect to any part of the Mortgaged
Property that is or may become a Fixture, if permitted by applicable law.
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3.
|
Assignment of Rents; Appointment of Receiver; Lender in Possession.
|
|
|
(a)
|
As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns
and transfers to Lender all Rents.
|
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|
(i)
|
It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment
to Lender of all Rents and to authorize and empower Lender to collect and receive all Rents without the necessity of further action
on the part of Borrower.
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(ii)
|
Promptly upon request by Lender, Borrower agrees to execute and deliver such further assignments
as Lender may from time to time require. Borrower and Lender intend this assignment of Rents to be immediately effective and to
constitute an absolute present assignment and not an assignment for additional security only.
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(iii)
|
For purposes of giving effect to this absolute assignment of Rents, and for no other purpose, Rents
will not be deemed to be a part of the Mortgaged Property. However, if this present, absolute and unconditional assignment of Rents
is not enforceable by its terms under the laws of the Property Jurisdiction, then the Rents will be included as a part of the Mortgaged
Property and it is the intention of Borrower that in this circumstance this Instrument create and perfect a Lien on Rents in favor
of Lender, which Lien will be effective as of the date of this Instrument.
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(b) (i) Until
the occurrence of an Event of Default, Lender hereby grants to Borrower a revocable license to collect and receive all Rents, to
hold all Rents in trust for the benefit of Lender and to apply all Rents to pay the installments of interest and principal then
due and payable under the Note and the other amounts then due and payable under the other Loan Documents, including Imposition
Reserve Deposits, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including
utilities, Taxes and insurance premiums (to the extent not included in Imposition Reserve Deposits), tenant improvements and other
capital expenditures.
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(ii)
|
So long as no Event of Default has occurred and is continuing, the Rents remaining after application
pursuant to the preceding sentence may be retained by Borrower free and clear of, and released from, Lender’s rights with
respect to Rents under this Instrument.
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(iii)
|
After the occurrence of an Event of Default, and during the continuance of such Event of Default,
Borrower authorizes Lender to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all
Rents to, or as directed by, Lender. From and after the occurrence of an Event of Default, and during the continuance of such Event
of Default, and without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly,
or by a receiver, Borrower’s license to collect Rents will automatically terminate and Lender will without Notice be entitled
to all Rents as they become due and payable, including Rents then due and unpaid. Borrower will pay to Lender upon demand all Rents
to which Lender is entitled.
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(iv)
|
At any time on or after the date of Lender’s demand for Rents, Lender may give, and Borrower
hereby irrevocably authorizes Lender to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents
to Lender. No tenant will be obligated to inquire further as to the occurrence or continuance of an Event of Default. No tenant
will be obligated to pay to Borrower any amounts which are actually paid to Lender in response to such a notice. Any such notice
by Lender will be delivered to each tenant personally, by mail or by delivering such demand to each rental unit. Borrower will
not interfere with and will cooperate with Lender’s collection of such Rents.
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(c)
|
If an Event of Default has occurred and is continuing, then Lender will have each of the following
rights and may take any of the following actions:
|
|
|
(i)
|
Lender may, regardless of the adequacy of Lender’s security or the solvency of Borrower and
even in the absence of waste, enter upon and take and maintain full control of the Mortgaged Property in order to perform all acts
that Lender in its discretion determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property,
including the execution, cancellation or modification of Leases, the collection of all Rents, the making of Repairs to the Mortgaged
Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged
Property, for the purposes of enforcing the assignment of Rents pursuant to Section 3(a), protecting the Mortgaged Property
or the security of this Instrument, or for such other purposes as Lender in its discretion may deem necessary or desirable.
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Amended and Restated Multifamily Mortgage, Assignment of Rents
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(ii)
|
Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy
of Lender’s security, without regard to Borrower’s solvency and without the necessity of giving prior notice (oral
or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged
Property to take any or all of the actions set forth in the preceding sentence. If Lender elects to seek the appointment of a receiver
for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of
this Instrument, expressly consents to the appointment of such receiver, including the appointment of a receiver
ex parte
if permitted by applicable law.
|
|
|
(iii)
|
If Borrower is a housing cooperative corporation or association, Borrower hereby agrees that if
a receiver is appointed, the order appointing the receiver may contain a provision requiring the receiver to pay the installments
of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents,
including Imposition Reserve Deposits, it being acknowledged and agreed that the Indebtedness is an obligation of Borrower and
must be paid out of maintenance charges payable by Borrower’s tenant shareholders under their proprietary leases or occupancy
agreements.
|
|
|
(iv)
|
Lender or the receiver, as the case may be, will be entitled to receive a reasonable fee for managing
the Mortgaged Property.
|
|
|
(v)
|
Immediately upon appointment of a receiver or immediately upon Lender’s entering upon and
taking possession and control of the Mortgaged Property, Borrower will surrender possession of the Mortgaged Property to Lender
or the receiver, as the case may be, and will deliver to Lender or the receiver, as the case may be, all documents, records (including
records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property and all
security deposits and prepaid Rents.
|
|
|
(vi)
|
If Lender takes possession and control of the Mortgaged Property, then Lender may exclude Borrower
and its representatives from the Mortgaged Property.
|
Borrower acknowledges and agrees
that the exercise by Lender of any of the rights conferred under this Section 3 will not be construed to make Lender a mortgagee-in-possession
of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and Improvements.
|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
11
|
|
|
(d)
|
If Lender enters the Mortgaged Property, Lender will be liable to account only to Borrower and
only for those Rents actually received. Except to the extent of Lender’s gross negligence or willful misconduct, Lender will
not be liable to Borrower, anyone claiming under or through Borrower or anyone having an interest in the Mortgaged Property, by
reason of any act or omission of Lender under Section 3(c), and Borrower hereby releases and discharges Lender from any such
liability to the fullest extent permitted by law.
|
|
|
(e)
|
If the Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged
Property and collecting the Rents, any funds expended by Lender for such purposes will become an additional part of the Indebtedness
as provided in Section 7.
|
|
|
(f)
|
Any entering upon and taking of control of the Mortgaged Property by Lender or the receiver, as
the case may be, and any application of Rents as provided in this Instrument will not cure or waive any Event of Default or invalidate
any other right or remedy of Lender under applicable law or provided for in this Instrument.
|
|
|
4.
|
Assignment of Leases; Leases Affecting the Mortgaged Property.
|
|
|
(a)
|
As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns
and transfers to Lender all of Borrower’s right, title and interest in, to and under the Leases, including Borrower’s
right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease.
|
|
|
(i)
|
It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment
to Lender of all of Borrower’s right, title and interest in, to and under the Leases. Borrower and Lender intend this assignment
of the Leases to be immediately effective and to constitute an absolute present assignment and not an assignment for additional
security only.
|
|
|
(ii)
|
For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose,
the Leases will not be deemed to be a part of the Mortgaged Property.
|
|
|
(iii)
|
However, if this present, absolute and unconditional assignment of the Leases is not enforceable
by its terms under the laws of the Property Jurisdiction, then the Leases will be included as a part of the Mortgaged Property
and it is the intention of Borrower that in this circumstance this Instrument create and perfect a Lien on the Leases in favor
of Lender, which Lien will be effective as of the date of this Instrument.
|
|
|
(b)
|
Until Lender gives Notice to Borrower of Lender’s exercise of its rights under this Section 4,
Borrower will have all rights, power and authority granted to Borrower under any Lease (except as otherwise limited by this Section or
any other provision of this Instrument), including the right, power and authority to modify the terms of any Lease or extend or
terminate any Lease. Upon the occurrence of an Event of Default, and during the continuance of such Event of Default, the permission
given to Borrower pursuant to the preceding sentence to exercise all rights, power and authority under Leases will automatically
terminate. Borrower will comply with and observe Borrower’s obligations under all Leases, including Borrower’s obligations
pertaining to the maintenance and disposition of tenant security deposits.
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|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
12
|
(c) (i) Borrower
acknowledges and agrees that the exercise by Lender, either directly or by a receiver, of any of the rights conferred under this
Section 4 will not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not
itself entered into actual possession of the Land and the Improvements.
|
|
(ii)
|
The acceptance by Lender of the assignment of the Leases pursuant to Section 4(a) will
not at any time or in any event obligate Lender to take any action under this Instrument or to expend any money or to incur any
expenses.
|
|
|
(iii)
|
Except to the extent of Lender’s gross negligence or willful misconduct, Lender will not
be liable in any way for any injury or damage to person or property sustained by any Person or Persons in or about the Mortgaged
Property.
|
|
|
(iv)
|
Prior to Lender’s actual entry into and taking possession of the Mortgaged Property, Lender
will not be obligated for any of the following:
|
|
|
(A)
|
Lender will not be obligated to perform any of the terms, covenants and conditions contained in
any Lease (or otherwise have any obligation with respect to any Lease).
|
|
|
(B)
|
Lender will not be obligated to appear in or defend any action or proceeding relating to the Lease
or the Mortgaged Property.
|
|
|
(C)
|
Lender will not be responsible for the operation, control, care, management or repair of the Mortgaged
Property or any portion of the Mortgaged Property. The execution of this Instrument by Borrower will constitute conclusive evidence
that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and will be that of
Borrower, prior to such actual entry and taking of possession.
|
|
|
(d)
|
Upon delivery of Notice by Lender to Borrower of Lender’s exercise of Lender’s rights
under this Section 4 at any time after the occurrence of an Event of Default, and during the continuance of such Event of
Default, and without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly,
by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, Lender immediately will
have all rights, powers and authority granted to Borrower under any Lease, including the right, power and authority to modify the
terms of any such Lease, or extend or terminate any such Lease.
|
|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
13
|
|
|
(e)
|
Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each
residential Lease then in effect.
|
|
|
(f)
|
If Borrower is a cooperative housing corporation or association, notwithstanding anything to the
contrary contained in this Instrument, so long as Borrower remains a cooperative housing corporation or association and is not
in breach of any covenant of this Instrument, Lender consents to the following:
|
|
|
(i)
|
Borrower may execute leases of apartments for a term in excess of 2 years to a tenant shareholder
of Borrower, so long as such leases, including proprietary leases, are and will remain subordinate to the Lien of this Instrument.
|
|
|
(ii)
|
Borrower may surrender or terminate such leases of apartments where the surrendered or terminated
lease is immediately replaced or where Borrower makes its best efforts to secure such immediate replacement by a newly-executed
lease of the same apartment to a tenant shareholder of Borrower. However, no consent is given by Lender to any execution, surrender,
termination or assignment of a lease under terms that would waive or reduce the obligation of the resulting tenant shareholder
under such lease to pay cooperative assessments in full when due or the obligation of the former tenant shareholder to pay any
unpaid portion of such assessments.
|
|
|
5.
|
Prepayment Premium.
Borrower will be required to pay a prepayment premium in connection
with certain prepayments of the Indebtedness, including a payment made after Lender’s exercise of any right of acceleration
of the Indebtedness, as provided in the Note.
|
|
|
6.
|
Application of Payments.
If at any time Lender receives, from Borrower or otherwise, any
amount applicable to the Indebtedness which is less than all amounts due and payable at such time, then Lender may apply that payment
to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Neither Lender’s
acceptance of an amount that is less than all amounts then due and payable nor Lender’s application of such payment in the
manner authorized will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.
Notwithstanding the application of any such amount to the Indebtedness, Borrower’s obligations under this Instrument, the
Note and all other Loan Documents will remain unchanged.
|
|
|
7.
|
Protection of Lender’s Security; Instrument Secures Future Advances.
|
|
|
(a)
|
If Borrower fails to perform any of its obligations under this Instrument or any other Loan Document,
or if any action or proceeding is commenced which purports to affect the Mortgaged Property, Lender’s security or Lender’s
rights under this Instrument, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement
of Hazardous Materials Laws, fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent, then Lender
at Lender’s option may make such appearances, file such documents, disburse such sums and take such actions as Lender reasonably
deems necessary to perform such obligations of Borrower and to protect Lender’s interest, including all of the following:
|
|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
14
|
|
|
(i)
|
Lender may pay Attorneys’ Fees and Costs.
|
|
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(ii)
|
Lender may pay fees and out-of-pocket expenses of accountants, inspectors and consultants.
|
|
|
(iii)
|
Lender may enter upon the Mortgaged Property to make Repairs or secure the Mortgaged Property.
|
|
|
(iv)
|
Lender may procure the Insurance required by the Loan Agreement.
|
|
|
(v)
|
Lender may pay any amounts which Borrower has failed to pay under the Loan Agreement.
|
|
|
(vi)
|
Lender may perform any of Borrower’s obligations under the Loan Agreement.
|
|
|
(vii)
|
Lender may make advances to pay, satisfy or discharge any obligation of Borrower for the payment
of money that is secured by a Prior Lien.
|
|
|
(b)
|
Any amounts disbursed by Lender under this Section 7, or under any other provision of this Instrument
that treats such disbursement as being made under this Section 7, will be secured by this Instrument, will be added to, and become
part of, the principal component of the Indebtedness, will be immediately due and payable and will bear interest from the date
of disbursement until paid at the Default Rate.
|
|
|
(c)
|
Nothing in this Section 7 will require Lender to incur any expense or take any action.
|
|
|
8.
|
Events of Default.
An Event of Default under the Loan Agreement will constitute an Event
of Default under this Instrument.
|
|
|
9.
|
Remedies Cumulative.
Each right and remedy provided in this Instrument is distinct from
all other rights or remedies under this Instrument, the Loan Agreement or any other Loan Document or afforded by applicable law
or equity, and each will be cumulative and may be exercised concurrently, independently or successively, in any order. Lender’s
exercise of any particular right or remedy will not in any way prevent Lender from exercising any other right or remedy available
to Lender. Lender may exercise any such remedies from time to time and as often as Lender chooses.
|
|
|
10.
|
Waiver of Statute of Limitations, Offsets, and Counterclaims.
Borrower waives the right
to assert any statute of limitations as a bar to the enforcement of the Lien of this Instrument or to any action brought to enforce
any Loan Document. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action
or proceeding brought against it by Lender or otherwise to offset any obligations to make the payments required by the Loan Documents.
No failure by Lender to perform any of its obligations under this Instrument will be a valid defense to, or result in any offset
against, any payments that Borrower is obligated to make under any of the Loan Documents.
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Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
15
|
|
|
11.
|
Waiver of Marshalling.
|
|
|
(a)
|
Notwithstanding the existence of any other security interests in the Mortgaged Property held by
Lender or by any other party, Lender will have the right to determine the order in which any or all of the Mortgaged Property will
be subjected to the remedies provided in this Instrument, the Note, the Loan Agreement or any other Loan Document or applicable
law. Lender will have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the
proceeds realized upon the exercise of such remedies.
|
|
|
(b)
|
Borrower and any party who now or in the future acquires a security interest in the Mortgaged Property
and who has actual or constructive notice of this Instrument waives any and all right to require the marshalling of assets or to
require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be
sold in parcels or as an entirety in connection with the exercise of any of the remedies permitted by applicable law or provided
in this Instrument.
|
|
|
12.
|
Further Assurances; Lender’s Expenses.
|
|
|
(a)
|
Borrower will deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments,
estoppel certificates, financing statements or amendments, transfers and assurances as Lender may 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
Instrument and the Loan Documents or in connection with Lender’s consent rights under Article VII of the Loan Agreement.
|
|
|
(b)
|
Borrower acknowledges and agrees that, in connection with each request by Borrower under this Instrument
or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including
any fees payable in accordance with any request for further assurances or an estoppel certificate pursuant to the Loan Agreement,
regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower under this Instrument or under
any other Loan Document will be deemed a part of the Indebtedness, will be secured by this Instrument and will bear interest at
the Default Rate if not fully paid within 10 days of written demand for payment.
|
|
|
13.
|
Governing Law; Consent to Jurisdiction and Venue.
This Instrument, and any Loan Document
which does not itself expressly identify the law that is to apply to it, will be governed by the laws of the Property Jurisdiction.
Borrower agrees that any controversy arising under or in relation to the Note, this Instrument or any other Loan Document may be
litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction
will have jurisdiction over all controversies that may arise under or in relation to the Note, any security for the Indebtedness
or any other Loan Document. Borrower irrevocably consents to service, jurisdiction and venue of such courts for any such litigation
and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing
in this Section 13 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under
this Instrument in any court of any other jurisdiction.
|
|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
16
|
|
|
14.
|
Notice.
All Notices, demands and other communications under or concerning this Instrument
will be governed by the terms set forth in the Loan Agreement.
|
|
|
15.
|
Successors and Assigns Bound.
This Instrument will bind the respective successors and assigns
of Borrower and Lender, and the rights granted by this Instrument will inure to Lender’s successors and assigns.
|
|
|
16.
|
Joint and Several Liability.
If more than one Person signs this Instrument as Borrower,
the obligations of such Persons will be joint and several.
|
|
|
17.
|
Relationship of Parties; No Third Party Beneficiary.
|
|
|
(a)
|
The relationship between Lender and Borrower will be solely that of creditor and debtor, respectively,
and nothing contained in this Instrument will create any other relationship between Lender and Borrower. Nothing contained in this
Instrument will 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 creditor of any party to this Instrument and no other Person will be a third party beneficiary
of this Instrument or any other Loan Document. Without limiting the generality of the preceding sentence, (i) any arrangement (“
Servicing
Arrangement
”) between Lender and any Loan Servicer for loss sharing or interim advancement of funds will constitute a
contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness,
(ii) Borrower will not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by the Loan Servicer under
any Servicing Arrangement will reduce the amount of the Indebtedness.
|
|
|
18.
|
Severability; Amendments.
|
|
|
(a)
|
The invalidity or unenforceability of any provision of this Instrument will not affect the validity
or enforceability of any other provision, and all other provisions will remain in full force and effect. This Instrument contains
the entire agreement among the parties as to the rights granted and the obligations assumed in this Instrument.
|
|
|
(b)
|
This Instrument may not be amended or modified except by a writing signed by the party against
whom enforcement is sought; provided, however, that in the event of a Transfer prohibited by or requiring Lender’s approval
under Article VII of the Loan Agreement, some or all of the modifications to the Loan Documents (if any) may be modified or rendered
void by Lender at Lender’s option by Notice to Borrower and the transferee(s).
|
|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
17
|
|
|
(a)
|
The captions and headings of the Sections of this Instrument are for convenience only and will
be disregarded in construing this Instrument. Any reference in this Instrument to a “Section” will, unless otherwise
explicitly provided, be construed as referring to a Section of this Instrument.
|
|
|
(b)
|
Any reference in this Instrument to a statute or regulation will be construed as referring to that
statute or regulation as amended from time to time.
|
|
|
(c)
|
Use of the singular in this Instrument includes the plural and use of the plural includes the singular.
|
|
|
(d)
|
As used in this Instrument, the term “including” means “including, but not limited
to” and the term “includes” means “includes without limitation.”
|
|
|
(e)
|
The use of one gender includes the other gender, as the context may require.
|
|
|
(f)
|
Unless the context requires otherwise any definition of or reference to any agreement, instrument
or other document in this Instrument will be construed as referring to such agreement, instrument or other document as from time
to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications
set forth in this Instrument).
|
|
|
(g)
|
Any reference in this Instrument to any person will be construed to include such person’s
successors and assigns.
|
|
|
20.
|
Subrogation.
If, and to the extent that, the proceeds of the loan evidenced by the Note,
or subsequent advances under Section 7, are used to pay, satisfy or discharge a Prior Lien, such loan proceeds or advances will
be deemed to have been advanced by Lender at Borrower’s request, and Lender will automatically, and without further action
on its part, be subrogated to the rights, including Lien priority, of the owner or holder of the obligation secured by the Prior
Lien, whether or not the Prior Lien is released.
|
|
|
31.
|
Acceleration; Remedies; Waiver Of Permissive Counterclaims.
At any time during the existence
of an Event of Default, Lender, at Lender’s option, may declare the Indebtedness to be immediately due and payable without
further demand, and may foreclose this Instrument by judicial proceeding and may invoke any other remedies permitted by Florida
law or provided in this Instrument, the Loan Agreement or in any other Loan Document. Lender will be entitled to collect all costs
and expenses incurred in pursuing such remedies, including Attorneys’ Fees and Costs and costs of documentary evidence, abstracts
and title reports. Borrower waives any and all rights to file or pursue permissive counterclaims in connection with any legal action
brought by Lender under this Instrument, the Note or any other Loan Document.
|
|
|
32.
|
Release.
Upon payment of the Indebtedness, Lender will release this Instrument. Borrower
will pay Lender’s reasonable costs incurred in releasing this Instrument.
|
|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
18
|
|
|
33.
|
Future Advances.
Lender may from time to time, in Lender’s discretion, make optional
future or additional advances (collectively, “
Future Advances
”) to Borrower, except that at no time will the
unpaid principal balance of all indebtedness secured by the Lien of this Instrument, including Future Advances, be greater than
an amount equal to 200% of the original principal amount of the Note as set forth on the first page of this Instrument plus accrued
interest and amounts disbursed by Lender under Section 7 or any other provision of this Instrument or the other Loan Documents
that treats a disbursement by Lender as being made under Section 7. All Future Advances will be made, if at all, within 20 years
after the date of this Instrument, or within such lesser period that may in the future be provided by law as a prerequisite for
the sufficiency of actual or record notice of Future Advances as against the rights of creditors or subsequent purchasers for value.
Borrower will, immediately upon request by Lender, execute and deliver to Lender a promissory note evidencing each Future Advance
together with a notice of such Future Advance in recordable form. All promissory notes evidencing Future Advances will be secured,
pari passu
, by the Lien of this Instrument, and each reference in this Instrument to the Note will be deemed to be a reference
to all promissory notes evidencing Future Advances.
|
|
|
34.
|
WAIVER OF TRIAL BY JURY.
|
|
|
(a)
|
BORROWER AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY
ISSUE ARISING OUT OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY
A JURY.
|
|
|
(b)
|
BORROWER AND LENDER EACH 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.
|
|
|
35.
|
Attached Riders.
The following Riders are attached to this Instrument: None.
|
|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
19
|
|
|
36.
|
Attached Exhibits.
The following Exhibits, if marked with an “X” in the space
provided, are attached to this Instrument:
|
|
x
|
Exhibit A
|
Description of the Land (required)
|
|
|
|
|
|
x
|
Exhibit B
|
Modifications to Instrument
|
|
|
|
|
|
¨
|
Exhibit C
|
Ground Lease Description (if applicable)
|
IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument
or has caused this Instrument to be signed and delivered by its duly authorized representative.
REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK
|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
20
|
|
WITNESS:
|
|
BR HUNTERS CREEK, LLC
, a Delaware limited liability company
|
|
|
|
|
|
|
/s/ Melissal Merlo Tombs
|
|
|
|
|
Print Name:
|
Melissal Merlo Tombs
|
|
|
|
|
|
|
|
By:
|
/s/ Jordan Ruddy
|
|
|
|
|
|
Name: Jordan Ruddy
|
|
|
|
|
|
Title: Authorized Signatory
|
|
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|
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|
|
|
/s/ Molly Brown
|
|
|
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|
Print Name:
|
Molly Brown
|
|
|
|
STATE OF New York
CITY/COUNTY OF New York, ss:
I HEREBY CERTIFY that
on this day, before me, an officer duly authorized in the state aforesaid and in the county aforesaid to take acknowledgments,
personally appeared Jordan Ruddy, to me known to be the person described in and who executed the foregoing instrument as the Authorized
Signatory of BR Hunters Creek, LLC, a Delaware limited liability company, and acknowledged to me that he/she as such officer,
being authorized to do so, executed the foregoing instrument for the purposes therein contained in the name of such limited liability
company by himself/herself as Authorized Signatory.
Witness my hand and official
seal in the county and state aforesaid, this 25th day of October, 2017.
|
|
/s/ Dale Pozzi
|
|
|
Notary Public
|
|
My Commission Expires:
|
1/28/21
|
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|
Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
|
Page
21
|
Consent to the Amended
and Restated Multifamily Mortgage, Assignment of Rents and Security Agreement is hereby evidenced by Walker & Dunlop, LLC,
a Delaware limited liability company, the holder of the Note.
|
WITNESS:
|
|
|
|
|
|
WALKER & DUNLOP, LLC
, a Delaware limited liability company
|
|
/s/ Debi Michalowski
|
|
|
|
|
Print Name:
|
Debi Michalowski
|
|
|
|
|
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|
|
|
|
|
/s/ C.A. Henderson
|
|
By:
|
/s/ Joyce Velazquez
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Print Name:
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C.A. Henderson
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Joyce Velazquez
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Closing Officer
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STATE OF Texas
CITY/COUNTY OF Dallas, ss:
I HEREBY CERTIFY that
on this day, before me, an officer duly authorized in the state aforesaid and in the county aforesaid to take acknowledgments,
personally appeared Joyce Velazquez, to me known to be the person described in and who executed the foregoing instrument as the
Closing Officer of Walker & Dunlop, LLC, a Delaware limited liability company, and acknowledged to me that she as such officer
of, being authorized to do so, executed the foregoing instrument for the purposes therein contained in the name of such limited
liability company by herself as Closing Officer.
Witness my hand and official
seal in the county and state aforesaid, this 3rd day of October, 2017.
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/s/ Natalie Miller
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Notary Public
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My Commission Expires: 7/11/20
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Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
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Page
22
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EXHIBIT A
DESCRIPTION OF THE LAND
PARCEL 1: (Fee Simple Estate):
Lots 1 and 2, HUNTER'S CREEK TRACT 480, according to the plat
thereof, as recorded in Plat Book 40, Page 120, of the Public Records of Orange County, Florida.
PARCEL 2:
Non-Exclusive easement for ingress and egress for the benefit
of Parcel 1 as set forth and granted by Access Easement recorded May 29, 1998, in Official Records Book 5491, Page 4521, of the
Public Records of Orange County, Florida.
PARCEL 3:
Non-Exclusive easement for encroachment and of use, access and
enjoyment in and to the "Common Area" for the benefit of Parcel 1 as defined and more particularly described in that
certain Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek, filed in Official
Records Book 6065, Page 2309, re-recorded in Official Records Book 6108, Page 4653, modified by Supplemental Declaration to Second
Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek filed in Official Records Book
6112, Page 1865, Termination of Class "C" Membership filed in Official Records Book 6178, Page 2519, and Supplemental
Declaration to Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek, filed
in Official Records Book 6285, Page 5991, and Supplemental Declaration to Second Amended and Restated Declaration of Master Covenants,
Conditions and Restrictions of Hunter's Creek filed in Official Records Book 7735, Page 2464, and further amended by Certificate
of First Amendment to the Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's
Creek recorded in Official Records Book 7964, Page 263, as amended by certificate of Second Amendment to the Second Amended and
Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek, recorded November 30, 2009 in Official
Records Book 9968, Page 6699, as affected by Notice, recorded May 28, 2010 in Official Records Book 10052, Page 5307, as affected
by Assignment of Declarant's Rights recorded August 11, 2011 in Official Records Book 10253, Page 934, as amended by Third Amendment
to the Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek, recorded October
25, 2012 in Official Records Book 10463, Page 1872, as amended by Fourth Amendment to the Second Amended and Restated Declaration
of Master Covenants, Conditions and Restrictions of Hunter's Creek recorded October 2, 2014 in Official Records Book 10813, Page
3748 and as affected by Notice of Preservation recorded June 16, 2015 in Official Records Book 10935, Page 6619, all of the Public
Records of Orange County, Florida.
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Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
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Page A-
1
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PARCEL 4:
Together with those non-exclusive easements and rights for the
benefit of Parcel 1, as set forth and granted by Hunter's Creek Community Association, Inc., a Florida not for profit Corporation,
in favor of Realty Associates Fund VIII L.P., a Delaware limited Partnership, recorded August 11, 2009, in Official Records Book
9916, Page 140, of the Public Records of Orange County, Florida, for the purpose of signage and access easement agreement, over,
under and across lands as described therein.
Parcel 5:
Together with those non-exclusive easements and rights for
the benefit of Parcel 1, as set forth and granted by Utility Easement for underground sanitary sewer line dated May 27, 1998 from
Westbrook Hunter's Creek, L.P., a Delaware limited partnership in favor of Towne Place Apartments, LTD., a Florida limited partnership
filed May 29, 1998, in Official Records Book 5491, Page 4526, and Subordination of Encumbrance to Property Rights to Orange County,
filed in Official Records Book 6289, Page 381, both of the Public Records of Orange County, Florida; for the purpose described
therein and access easement agreement, over, under and across lands as described therein.
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Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
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Page A-
2
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EXHIBIT B
MODIFICATIONS TO INSTRUMENT
The following modifications are made to the text of the Instrument
that precedes this Exhibit:
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I.
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FLORIDA AMENDED AND RESTATED MODIFICATIONS
:
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1.
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In the first paragraph of text on Page 3 starting with “Borrower is indebted to Lender...”,
the words “Multifamily Note” are hereby revised to read “Amended and Restated Multifamily Note”.
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2.
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A new Section 37 is added as follows:
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37.
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NO NOVATION; NO DEFENSES.
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(a)
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Neither this Instrument nor the Note is a substitution or novation of the indebtedness of the Original
Note. Neither this Instrument nor the Note extinguishes the indebtedness of the Original Note or discharges or releases or in any
way adversely affects the lien or lien priorities of the Original Mortgage or any other security for the indebtedness of the Original
Note. In the event that any of the provisions of this Instrument shall be construed by a court of competent jurisdiction as operating
to affect the lien priority of the Original Mortgage over claims which would otherwise be subordinate thereto, then at the sole
option of Lender, Lender may treat such provisions as void and of no force or effect and enforce the provisions of the Original
Mortgage as modified by this Instrument excluding such provisions, or at the sole option of Lender, Lender may enforce the Original
Mortgage pursuant to the terms therein contained, independent of this Instrument to the extent that third persons acquiring an
interest in such real property between the time of recording of the Original Mortgage and the recording hereof are prejudiced by
this Instrument. However, if Lender elects either such option, the parties hereto, as between themselves, shall in all events be
bound by all the terms and conditions of this Instrument and the Note until all Indebtedness owing from Borrower to Lender shall
have been paid in full.
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(b)
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Borrower hereby confirms that it has no defenses or offsets of any kind against any of the indebtedness
due under the Original Note. Borrower hereby waives any claim which it may have with respect to the Original Note or Original Mortgage,
or any other document executed in connection therewith or related thereto, as the same may have been modified, or as hereby or
hereafter modified. Borrower agrees not to raise any such defenses or claims in any civil proceedings or otherwise.
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Florida
Amended and Restated Multifamily Mortgage, Assignment of Rents
and Security Agreement
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Page B-
1
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Exhibit 10.4
Freddie Mac Loan Number: 932896871
Property Name: ARIUM Hunter's Creek
GUARANTY
MULTISTATE
(Revised 5-5-2017)
THIS GUARANTY (“
Guaranty
”)
is entered into to be effective as of October 30, 2017, by
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
, a Maryland corporation
(“
Guarantor
”, collectively if more than one), for the benefit of
WALKER & DUNLOP, LLC
, a Delaware
limited liability company (“
Lender
”).
RECITALS
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A.
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Pursuant to the terms of a Multifamily Loan and Security Agreement dated the same date as this
Guaranty (as amended, modified or supplemented from time to time, the "
Loan Agreement
"), BR Hunters Creek, LLC,
a Delaware limited liability company (“
Borrower
”) has requested that Lender make a loan to Borrower in the amount
of $72,294,000.00 (“
Loan
”). The Loan will be evidenced by one or more Multifamily Note(s) from Borrower to Lender
dated effective as of the effective date of this Guaranty (as amended, modified or supplemented from time to time, and collectively
if applicable, the “
Note
”). The Note will be secured by a Multifamily Mortgage, Deed of Trust, or Deed to Secure
Debt dated effective as of the effective date of the Note (as amended, modified or supplemented from time to time, the “
Security
Instrument
”), encumbering the Mortgaged Property described in the Loan Agreement.
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B.
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As a condition to making the Loan to Borrower, Lender requires that Guarantor execute this Guaranty.
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C.
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Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will
otherwise derive a material benefit from the making of the Loan.
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AGREEMENT
NOW, THEREFORE, in
order to induce Lender to make the Loan to Borrower, and in consideration thereof and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:
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1.
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Defined Terms.
The terms “Indebtedness”, “Loan Documents”, and “Property
Jurisdiction”, and other capitalized terms used but not defined in this Guaranty, will have the meanings assigned to them
in the Loan Agreement.
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(a)
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Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender each of the following:
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(i)
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Guarantor guarantees the full and prompt payment when due, whether at the Maturity Date or earlier,
by reason of acceleration or otherwise, and at all times thereafter, of each of the following:
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(A)
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Guarantor guarantees a portion of the Indebtedness (including interest at the Note rate) equal
to 0% of the original principal balance of the Note (“
Base Guaranty
”).
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(B)
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In addition to the Base Guaranty, Guarantor guarantees all other amounts for which Borrower is
personally liable under Sections 9(c), 9(d) and 9(f) of the Note (provided, however, that Guarantor will have no liability
for failure of Borrower or SPE Equity Owner to comply with (I) Section 6.13(a)(xviii) of the Loan Agreement, and (II) the requirement
in Section 6.13(a)(x)(B) of the Loan Agreement as to payment of trade payables within 60 days of the date incurred).
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(C)
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Guarantor guarantees all costs and expenses, including reasonable Attorneys’ Fees and Costs
incurred by Lender in enforcing its rights under this Guaranty.
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(ii)
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Guarantor guarantees the full and prompt payment and performance of, and compliance with, all of
Borrower’s obligations under Sections 6.12, 10.02(b) and 10.02(d) of the Loan Agreement when due and the accuracy of Borrower’s
representations and warranties under Section 5.05 of the Loan Agreement.
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(iii)
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Guarantor guarantees the full and prompt payment and performance of, and compliance with, Borrower’s
obligations under Section 6.09(e)(v) of the Loan Agreement to the extent Property Improvement Alterations have commenced and remain
uncompleted.
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(iv)
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through (vi) Reserved.
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(b)
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If the Base Guaranty stated in Section 2(a)(i)(A) is 100% of the original principal balance
of the Note, then the following will be applicable:
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(i)
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The Base Guaranty will mean and include, and Guarantor hereby absolutely, unconditionally and irrevocably
guarantees to Lender, the full and complete prompt payment of the entire Indebtedness, the performance of and/or compliance with
all of Borrower’s obligations under the Loan Documents when due, and the accuracy of Borrower’s representations and
warranties contained in the Loan Documents.
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(ii)
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For so long as the Base Guaranty remains in effect (there being no limit to the duration of the
Base Guaranty unless otherwise expressly provided in this Guaranty), the obligations guaranteed pursuant to Sections 2(a)(i)(B)
and 2(a)(i)(C) will be part of, and not in addition to or in limitation of, the Base Guaranty.
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(c)
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If the Base Guaranty stated in Section 2(a)(i)(A) is less than 100% of the original principal
balance of the Note, then Section 2(b) will be completely inapplicable.
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(d)
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If Guarantor is not liable for the entire Indebtedness, then all payments made by Borrower with
respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and
the other Loan Documents (except this Guaranty) will be applied first to the portion of the Indebtedness for which neither Borrower
nor Guarantor has personal liability.
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Guaranty - Multistate
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Page
2
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3.
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Additional Guaranty Relating to Bankruptcy.
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(a)
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Notwithstanding any limitation on liability provided for elsewhere in this Guaranty, Guarantor
hereby absolutely, unconditionally and irrevocably guarantees to Lender the full and prompt payment when due, whether at the Maturity
Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, the entire Indebtedness, in the event that:
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(i)
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Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy
Code.
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(ii)
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Borrower or any SPE Equity Owner voluntarily becomes subject to any reorganization, receivership,
insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights.
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(iii)
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The Mortgaged Property or any part of the Mortgaged Property becomes an asset in a voluntary bankruptcy
or becomes subject to any voluntary reorganization, receivership, insolvency proceeding, or other similar voluntary proceeding
pursuant to any other federal or state law affecting debtor and creditor rights.
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(iv)
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An order of relief is entered against Borrower or any SPE Equity Owner pursuant to the Bankruptcy
Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined
in by a Related Party.
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(v)
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An involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower
or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use commercially
reasonable efforts to dismiss such proceeding or has consented to such proceeding. “Commercially reasonable efforts”
will not require any direct or indirect interest holders in Borrower or any SPE Equity Owner to contribute or cause the contribution
of additional capital to Borrower or any SPE Equity Owner.
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(b)
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For purposes of Section 3(a) the term “
Related Party
” will include all
of the following:
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(i)
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Borrower, any Guarantor or any SPE Equity Owner.
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(ii)
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Any Person that holds, directly or indirectly, any ownership interest (including any shareholder,
member or partner) in Borrower, any Guarantor or any SPE Equity Owner or any Person that has a right to manage Borrower, any Guarantor
or any SPE Equity Owner.
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(iii)
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Any Person in which Borrower, any Guarantor or any SPE Equity Owner has any ownership interest
(direct or indirect) or right to manage.
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Guaranty - Multistate
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Page
3
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(iv)
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Any Person in which any partner, shareholder or member of Borrower, any Guarantor or any SPE Equity
Owner has an ownership interest or right to manage.
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(v)
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Any Person in which any Person holding an interest in Borrower, any Guarantor or any SPE Equity
Owner also has any ownership interest.
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(vi)
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Any creditor (as defined in the Bankruptcy Code) of Borrower that is related by blood, marriage
or adoption to Borrower, any Guarantor or any SPE Equity Owner.
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(vii)
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Any creditor (as defined in the Bankruptcy Code) of Borrower that is related to any partner, shareholder
or member of, or any other Person holding an interest in, Borrower, any Guarantor or any SPE Equity Owner.
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(c)
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If Borrower, any Guarantor, any SPE Equity Owner or any Related Party has solicited creditors to
initiate or participate in any proceeding referred to in Section 3(a), regardless of whether any of the creditors solicited
actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related
Party.
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4.
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Guarantor’s Obligations Survive Foreclosure.
The obligations of Guarantor under this
Guaranty will survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any
release of record of the Security Instrument, and, in addition, the obligations of Guarantor relating to Borrower’s representations
and warranties under Section 5.05 of the Loan Agreement, and Borrower’s obligations under Sections 6.12 and 10.02(b)
of the Loan Agreement will survive any repayment or discharge of the Indebtedness. Notwithstanding the foregoing, if Lender has
never been a mortgagee-in-possession of or held title to the Mortgaged Property, Guarantor will have no obligation under this Guaranty
relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement or Borrower’s obligations
relating to environmental matters under Sections 6.12 and 10.02(b) of the Loan Agreement after the date of the release of record
of the lien of the Security Instrument as a result of the payment in full of the Indebtedness on the Maturity Date or by voluntary
prepayment in full.
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5.
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Guaranty of Payment and Performance.
Guarantor’s obligations under this Guaranty constitute
an unconditional guaranty of payment and performance and not merely a guaranty of collection.
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6.
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No Demand by Lender Necessary; Waivers by Guarantor.
The obligations of Guarantor under
this Guaranty must be performed without demand by Lender and will be unconditional regardless of the genuineness, validity, regularity
or enforceability of the Note, the Loan Agreement, or any other Loan Document, and without regard to any other circumstance which
might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby
waives, to the fullest extent permitted by applicable law, all of the following:
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(a)
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The benefit of all principles or provisions of law, statutory or otherwise, which are or might
be in conflict with the terms of this Guaranty and agrees that Guarantor’s obligations will not be affected by any circumstances,
whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety, a guarantor,
a borrower or a mortgagor.
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Guaranty - Multistate
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Page
4
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(b)
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The benefits of any right of discharge under any and all statutes or other laws relating to a guarantor,
a surety, a borrower or a mortgagor, and any other rights of a surety, a guarantor, a borrower or a mortgagor under such statutes
or laws.
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(c)
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Diligence in collecting the Indebtedness, presentment, demand for payment, protest, all notices
with respect to the Note and this Guaranty which may be required by statute, rule of law or otherwise to preserve Lender’s
rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, 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, and notice of the incurring by Borrower of any obligation or indebtedness.
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(d)
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All rights to cause a marshalling of the Borrower’s assets or to require Lender to do any
of the following:
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(i)
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Proceed against Borrower or any other guarantor of Borrower’s payment or performance under
the Loan Documents (an “
Other Guarantor
”).
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(ii)
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Proceed against any general partner of Borrower or any Other Guarantor if Borrower or any Other
Guarantor is a partnership.
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(iii)
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Proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness.
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(iv)
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Pursue any other remedy it may now or hereafter have against Borrower, or, if Borrower is a partnership,
any general partner of Borrower.
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(e)
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Any right to object to the timing, manner or conduct of Lender’s enforcement of its rights
under any of the Loan Documents.
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(f)
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Any right to revoke this Guaranty as to any future advances by Lender under the terms of the Loan
Agreement to protect Lender’s interest in the Mortgaged Property.
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7.
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Modification of Loan Documents.
At any time or from time to time and any number of times,
without notice to Guarantor and without affecting the liability of Guarantor, all of the following will apply:
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(a)
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Lender may extend the time for payment of the principal of or interest on the Indebtedness or renew
the Indebtedness in whole or in part.
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(b)
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Lender may extend the time for Borrower’s performance of or compliance with any covenant
or agreement contained in the Note, the Loan Agreement or any other Loan Document, whether presently existing or entered into after
the date of this Guaranty, or waive such performance or compliance.
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(c)
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Lender may accelerate the Maturity Date of the Indebtedness as provided in the Note, the Loan Agreement,
or any other Loan Document.
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(d)
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Lender and Borrower may modify or amend the Note, the Loan Agreement, or any other Loan Document
in any respect, including an increase in the principal amount.
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Guaranty - Multistate
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Page
5
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(e)
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Lender may modify, exchange, surrender or otherwise deal with any security for the Indebtedness
or accept additional security that is pledged or mortgaged for the Indebtedness.
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8.
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Joint and Several Liability.
The obligations of Guarantor (and each party named as a Guarantor
in this Guaranty) and any Other Guarantor will be joint and several. Lender, in its sole and absolute discretion, may take any
of the following actions:
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(a)
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Lender may bring suit against Guarantor, or any one or more of the parties named as a Guarantor
in this Guaranty, and any Other Guarantor, jointly and severally, or against any one or more of them.
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(b)
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Lender may compromise or settle with Guarantor, any one or more of the parties named as a Guarantor
in this Guaranty, or any Other Guarantor, for such consideration as Lender may deem proper.
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(c)
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Lender may release one or more of the parties named as a Guarantor in this Guaranty, or any Other
Guarantor, from liability.
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(d)
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Lender may otherwise deal with Guarantor and any Other Guarantor, or any one or more of them, in
any manner.
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No action
of Lender described in this Section 8 will affect or impair the rights of Lender to collect from any one or more of the parties
named as a Guarantor under this Guaranty any amount guaranteed by Guarantor under this Guaranty.
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9.
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Limited Release of Guarantor Upon Transfer of Mortgaged Property.
If Guarantor requests
a release of its liability under this Guaranty in connection with a Transfer which Lender has approved pursuant to Section 7.05(a)
of the Loan Agreement, and Borrower has provided a replacement Guarantor acceptable to Lender, then one of the following will apply:
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(a)
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If Borrower delivers to Lender a Clean Site Assessment, then Lender will release Guarantor from
all of Guarantor’s obligations except Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12
(Environmental Hazards) or Section 10.02(b) (Environmental Indemnification) of the Loan Agreement with respect to any loss,
liability, damage, claim, cost or expense which directly or indirectly arises from or relates to any Prohibited Activities or Conditions
existing prior to the date of the Transfer.
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(b)
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If Borrower does not deliver a Clean Site Assessment as described in Section 7.05(b)(i) of
the Loan Agreement, then Lender will release Guarantor from all of Guarantor’s obligations except for Guarantor’s obligation
to guaranty Borrower’s liability under Section 6.12 (Environmental Hazards) or Section 10.02(b) (Environmental Indemnification)
of the Loan Agreement.
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10.
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Subordination of Borrower’s Indebtedness to Guarantor.
Any indebtedness of Borrower
held by Guarantor now or in the future is and will be subordinated to the Indebtedness and Guarantor will collect, enforce and
receive any such indebtedness of Borrower as trustee for Lender, but without reducing or affecting in any manner the liability
of Guarantor under the other provisions of this Guaranty.
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Guaranty - Multistate
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Page
6
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11.
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Waiver of Subrogation.
Guarantor will have no right of, and hereby waives any claim for,
subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this
Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been
paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with
respect to the Indebtedness could be deemed a preference under the United States Bankruptcy Code.
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12.
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Preference.
If any payment by Borrower is held to constitute a preference under any applicable
bankruptcy, insolvency, or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund
will not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that
Guarantor’s obligations under this Guaranty will not be discharged except by Guarantor’s performance of such obligations
and then only to the extent of such performance.
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13.
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Financial Information and Litigation.
Guarantor will deliver each of the following to Lender
within 10 Business Days following a Notice from Lender requesting such information:
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(a)
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Guarantor’s balance sheet and profit and loss statement as of the end of (A) the quarter
that ended at least 30 days prior to the due date of the requested items, and/or (B) the fiscal year that ended at least
90 days prior to the due date of the requested items.
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(b)
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Other Guarantor financial statements as Lender may
reasonably require.
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(c)
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Written updates on the status of all litigation proceedings that Guarantor disclosed or should
have disclosed to Lender as of the date of this Guaranty.
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(d)
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If an Event of Default has occurred and is continuing, copies of Guarantor’s most recent
filed state and federal tax returns, including any current tax return extensions.
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14.
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Assignment.
Lender may assign its rights under this Guaranty in whole or in part and upon
any such assignment, all the terms and provisions of this Guaranty will inure to the benefit of such assignee to the extent so
assigned. The terms used to designate any of the parties in this Guaranty will be deemed to include the heirs, legal representatives,
successors and assigns of such parties, and the term “Lender” will also include any lawful owner, holder or pledgee
of the Note.
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15.
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Complete and Final Agreement.
This Guaranty and the other Loan Documents represent the final
agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements.
There are no unwritten oral agreements between the parties. All prior or contemporaneous agreements, understandings, representations,
and statements, oral or written, are merged into this Guaranty and the other Loan Documents. Guarantor acknowledges that Guarantor
has received a copy of the Note and all other Loan Documents. Neither this Guaranty nor any of its provisions may be waived, modified,
amended, discharged, or terminated except by a 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 writing.
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16.
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Governing Law.
This Guaranty will be governed by and enforced in accordance with the laws
of the Property Jurisdiction, without giving effect to the choice of law principles of the Property Jurisdiction that would require
the application of the laws of a jurisdiction other than the Property Jurisdiction.
|
|
Guaranty - Multistate
|
Page
7
|
|
|
17.
|
Jurisdiction; Venue.
Guarantor agrees that any controversy arising under or in relation
to this Guaranty may be litigated in the Property Jurisdiction, and that the state and federal courts and authorities with jurisdiction
in the Property Jurisdiction will have jurisdiction over all controversies which may arise under or in relation to this Guaranty.
Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue
to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Guaranty is intended
to limit Lender’s right to bring any suit, action or proceeding relating to matters arising under this Guaranty against Guarantor
or any of Guarantor’s assets in any court of any other jurisdiction.
|
|
|
18.
|
Guarantor’s Interest in Borrower.
Guarantor represents to Lender that Guarantor has
a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit
from the making of the Loan.
|
|
|
25.
|
State-Specific Provisions.
State-specific provisions, if any, are included on Schedule 1
to this Guaranty.
|
|
|
26.
|
Community Property.
If Guarantor (or any Guarantor, if more than one) is a married person,
and the state of residence of Guarantor or his or her spouse (“
Guarantor Spouse
”) is a community property jurisdiction,
then each of the following apply:
|
|
|
(a)
|
Guarantor (or each such married Guarantor, if more than one) agrees that Lender may satisfy Guarantor’s
obligations under this Guaranty to the extent of all of Guarantor’s separate property and against the marital community property
of Guarantor and Guarantor Spouse.
|
|
|
(b)
|
If Guarantor Spouse is not also a Guarantor of the Loan, Guarantor certifies that none of the assets
shown on his or her financial statements submitted to Lender for purposes of underwriting the Loan were either (i) Guarantor Spouse’s
individual property, or (ii) community property under the sole management, control, and disposition of Guarantor Spouse.
|
|
|
(c)
|
If Guarantor or Guarantor Spouse resides in Alaska, Arizona, Idaho, Louisiana, Nevada, New Mexico,
Washington or Wisconsin, Guarantor has caused Guarantor Spouse to acknowledge this Guaranty as required on the signature page of
this Guaranty.
|
|
|
27.
|
WAIVER OF TRIAL BY JURY.
|
|
|
(a)
|
GUARANTOR AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO
ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT
BY A JURY.
|
|
Guaranty - Multistate
|
Page
8
|
|
|
(b)
|
GUARANTOR AND LENDER EACH 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.
|
|
|
28.
|
Notices.
All Notices required under this Guaranty will be provided in accordance with
the requirements of Section 11.03 of the Loan Agreement. Guarantor’s address for Notices is as set forth on the signature
page of this Guaranty unless changed in accordance with this Section 28.
|
|
|
29.
|
Attached Schedules and Riders.
The following Schedules and Riders, if marked with an “X”
in the space provided, are attached to this Guaranty:
|
|
|
x
|
Schedule 1 – State Specific Provisions
|
|
|
¨
|
Material Adverse Change Rider
|
|
|
x
|
Minimum Net Worth/Liquidity Rider
|
|
|
30.
|
Attached Exhibit.
The following Exhibit, if marked with an “X” in the space
provided, is attached to this Guaranty:
|
|
|
¨
|
Exhibit A
|
Modifications
to Guaranty
|
IN WITNESS WHEREOF, Guarantor has signed and
delivered this Guaranty under seal or has caused this Guaranty to be signed and delivered under seal by its duly authorized representative.
Where applicable law provides, Guarantor intends that this Guaranty will be deemed to be signed and delivered as a sealed instrument.
(Remainder of page
intentionally left blank; signature pages follow.)
|
Guaranty - Multistate
|
Page
9
|
|
|
GUARANTOR:
|
|
|
|
|
|
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
, a Maryland corporation
|
|
|
|
|
|
|
By:
|
/s/ Michael L. Konig
|
|
|
|
Name: Michael L. Konig
|
|
|
|
Title: Authorized Signatory
|
|
Guaranty - Multistate
|
Page
10
|
|
|
(a)
|
Guarantor’s Notice Address:
|
|
|
Name:
|
Bluerock Residential Growth REIT, Inc.
|
|
|
Address:
|
c/o Bluerock Real Estate, L.L.C.
|
712 Fifth Avenue, 9th Floor
New York, New York 10019
|
|
(b)
|
Guarantor represents and warrants that Guarantor is:
|
¨
married
¨
single
x
an entity
|
|
(c)
|
If Guarantor is married, then Guarantor represents and warrants that
Guarantor’s state of residence is
N/A
and Guarantor Spouse’s state of residence
is
N/A
.
|
|
|
(d)
|
If Guarantor (i) is married, and (ii) Guarantor Spouse is not also a Guarantor of this Loan, and
(iii) Guarantor or Guarantor Spouse’s state of residence is Alaska, Arizona, Idaho, Louisiana, Nevada, New Mexico, Washington,
or Wisconsin, then Guarantor must cause Guarantor Spouse to sign below in accordance with Section 26 of this Guaranty.
|
Any person
signing this Guaranty solely as a Guarantor Spouse will bind only Guarantor Spouse’s marital community property and will
not bind Guarantor Spouse’s separate property to the payment and performance of the Guarantor’s obligations under this
Guaranty.
|
Guarantor Spouse’s Signature:
|
N/A
|
|
|
|
|
Guarantor Spouse’s Printed Name:
|
N/A
|
|
|
|
|
Guarantor Spouse’s Address:
|
N/A
|
|
Guaranty - Multistate
|
Page
11
|
SCHEDULE 1
STATE SPECIFIC PROVISIONS
|
Guaranty - Multistate
|
Schedule 1 - Page
1
|
RIDER TO GUARANTY
MINIMUM NET WORTH/LIQUIDITY
(Revised 5-5-2017)
The following changes
are made to the Guaranty which precedes this Rider:
|
|
A.
|
Section 20 is deleted and replaced with the following:
|
|
|
20.
|
Minimum Net Worth/Liquidity Requirements.
|
|
|
(a)
|
Guarantor must maintain a minimum net worth of $21,688,200.00 with liquid assets of at least $7,229,400.00
(collectively, “
Minimum Net Worth Requirement
”).
|
|
|
(b)
|
In addition to the financial information that Guarantor is required to provide pursuant to Section 13
of this Guaranty, annually within 90 days after the end of each fiscal year of Guarantor (or at the end of each calendar year
with respect to any Guarantor that is an individual), Guarantor must provide Lender with a written certification (“
Guarantor
Certification
”) of the net worth and liquid assets of Guarantor, derived in accordance with customarily acceptable accounting
practices. The Guarantor must certify the Guarantor Certification under penalty of perjury as true and complete.
|
|
|
(c)
|
Within 30 days of receipt of Notice from Lender that Guarantor has failed to maintain the
Minimum Net Worth Requirement, Guarantor must either:
|
|
|
(i)
|
cause one or more natural persons or entities who individually or collectively, as applicable,
meet the Minimum Net Worth Requirement and is/are acceptable to Lender, in its sole discretion, to execute and deliver to Lender
a guaranty in the same form as this Guaranty, without any cost or expense to Lender; or
|
|
|
(ii)
|
deliver to Lender a letter of credit or other collateral acceptable to Lender in its discretion
meeting the following conditions, as applicable:
|
|
|
(A)
|
If Guarantor supplies a letter of credit, the letter of credit must be in the form required by
Lender and satisfy the requirements for Letters of Credit set forth in Section 11.15 of the Loan Agreement, except that an updated
nonconsolidation opinion will not be required.
|
|
|
(B)
|
The letter of credit or other collateral must be in an amount equal to the greatest of:
|
|
|
(X)
|
the positive difference, if any, obtained by subtracting the net worth identified in the Guarantor
Certification from the minimum net worth required under the Minimum Net Worth Requirement,
|
|
Rider To Guaranty
Minimum Net Worth/Liquidity
|
Page
1
|
|
|
(Y)
|
the positive difference, if any, obtained by subtracting the liquid assets identified in the Guarantor
Certification from the minimum liquid assets required under the Minimum Net Worth Requirement, and
|
|
|
(d)
|
Lender will hold the letter of credit or other collateral until one of the following occurs:
|
|
|
(i)
|
Lender has a claim against the Guarantor, in which case Lender will be entitled to draw on the
letter of credit and apply the proceeds or the other collateral to such claim(s), in Lender’s sole discretion.
|
|
|
(ii)
|
Lender returns the letter of credit or other collateral to Guarantor pursuant to Section 20(e).
|
|
|
(e)
|
Provided no Event of Default then exists, Guarantor will be entitled to request a return of the
unused portion, if any, of the letter of credit or other collateral in the event it delivers to Lender evidence in form and substance
satisfactory to Lender, including a Guarantor Certification, that Guarantor has satisfied the Minimum Net Worth Requirement.
|
|
|
(f)
|
If there is more than one Guarantor, Lender will determine compliance with the Minimum Net Worth
Requirement based on the aggregate net worth and liquid assets of all Guarantors of the Indebtedness. However, each Guarantor will
otherwise satisfy all other requirements of this Section 20 on an individual basis at all times.
|
|
Rider To Guaranty
Minimum Net Worth/Liquidity
|
Page
2
|
Exhibit 10.5
Freddie Mac Loan Number: 932896871
Property Name: ARIUM Hunter's Creek
ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES
(Revised 7-12-2016)
THIS ASSIGNMENT OF MANAGEMENT
AGREEMENT AND SUBORDINATION OF MANAGEMENT FEES (“
Assignment
”) is made effective as of the 30
th
day
of October, 2017, by and among
BR HUNTERS CREEK, LLC
, a Delaware limited liability company (“
Borrower
”),
WALKER & DUNLOP, LLC
, a Delaware limited liability company (“
Lender
”), and
CARROLL MANAGEMENT
GROUP, LLC
, a Georgia limited liability company (“
Property Manager
”).
RECITALS:
|
|
A.
|
Borrower has requested that Lender make a loan to Borrower (“
Loan
”). The Loan
will be evidenced by an Amended and Restated Multifamily Note from Borrower to Lender effective as of the date of this Assignment
(“
Note
”). The Note is secured by, among other things, a Multifamily Loan and Security Agreement (“
Loan
Agreement
”) and an Amended and Restated Multifamily Mortgage, Assignment of Rents and Security Agreement (“
Security
Instrument
”), dated as of the date of this Assignment, which grants Lender a first lien on the property encumbered by
the Security Instrument (“
Mortgaged Property
”). The Note, the Loan Agreement, the Security Instrument, this
Assignment and any of the other documents evidencing the Loan are collectively referred to as the “
Loan Documents
”.
Other capitalized terms used but not defined in this Assignment will have the meanings given to those terms in the Loan Agreement.
|
|
|
B.
|
Pursuant to a Management Agreement between Borrower and Property Manager (“
Management
Agreement
”) (a true and correct copy of which is attached as
Exhibit B
), Borrower employed Property Manager exclusively
to lease, operate and manage the Mortgaged Property, and Property Manager is entitled to certain management fees (“
Management
Fees
”) pursuant to the Management Agreement.
|
|
|
C.
|
Lender requires as a condition to the making of the Loan that Borrower assign the Management Agreement
and that Property Manager subordinate its interest in the Management Fees in lien and payment to the Loan as set forth below.
|
For good and valuable
consideration the parties agree as follows:
|
|
1.
|
Assignment of Management Agreement
. As additional collateral security for the Loan, Borrower
conditionally transfers, sets over, and assigns to Lender all of Borrower’s right, title and interest in and to the Management
Agreement and all extensions and renewals. This transfer and assignment will automatically become a present, unconditional assignment,
at Lender’s option, upon a default by Borrower under the Note, the Loan Agreement, the Security Instrument or any of the
other Loan Documents (each, an “
Event of Default
”), and the failure of Borrower to cure such Event of Default
within any applicable grace period.
|
|
Assignment of Management Agreement and
Subordination of Management Fees
|
|
|
|
2.
|
Subordination of Management Fees.
The Management Fees and all rights and privileges of Property
Manager to the Management Fees are and will at all times continue to be subject and unconditionally subordinate in all respects
in lien and payment to the lien and payment of the Loan Agreement, the Security Instrument, the Note, and the other Loan Documents,
and to any renewals, extensions, modifications, assignments, replacements, or consolidations of the Loan Documents and the rights,
privileges, and powers of Lender under the Note, the Loan Agreement, the Security Instrument, or any of the other Loan Documents.
|
|
|
3.
|
Estoppel.
Property Manager and Borrower represent and warrant that all of the following
are true as of the date of this Assignment:
|
|
|
(a)
|
The Management Agreement is in full force and effect and has not been modified, amended or assigned
other than pursuant to this Assignment.
|
|
|
(b)
|
Neither Property Manager nor Borrower is in default under any of the terms, covenants or provisions
of the Management Agreement and Property Manager knows of no event which, but for the passage of time or the giving of notice or
both, would constitute an event of default under the Management Agreement.
|
|
|
(c)
|
Neither Property Manager nor Borrower has commenced any action or given or received any notice
for the purpose of terminating the Management Agreement.
|
|
|
(d)
|
The Management Fees and all other sums due and payable to the Property Manager under the Management
Agreement have been paid in full.
|
|
|
4.
|
Agreement by Borrower and Property Manager.
Borrower and Property Manager agree that if
there is an Event of Default by Borrower (continuing beyond any applicable grace period) under the Note, the Loan Agreement, the
Security Instrument or any of the other Loan Documents during the term of this Assignment or upon the occurrence of any event which
would entitle Lender to terminate the Management Agreement in accordance with the terms of the Loan Documents, Lender may terminate
the Management Agreement without payment of any cancellation fee or penalty and require Property Manager to transfer its responsibility
for the management of the Mortgaged Property to a management company selected by Lender in Lender’s sole discretion, effective
as of the date set forth in Lender’s notice to Property Manager. Following any such termination, Property Manager agrees
to apply all rents, security deposits, issues, proceeds and profits of the Mortgaged Property in accordance with Lender’s
written directions to Property Manager.
|
|
|
5.
|
Lender’s Right to Replace Property Manager.
If Lender, in Lender’s reasonable
discretion, at any time during the term of this Assignment, determines that the Mortgaged Property is not being managed in accordance
with generally accepted management practices for properties similar to the Mortgaged Property, Lender will deliver written notice
to Borrower and Property Manager, which notice will specify with particularity the grounds for Lender’s determination. If
Lender reasonably determines that the conditions specified in Lender’s notice are not remedied to Lender’s reasonable
satisfaction by Borrower or Property Manager within 30 days from receipt of such notice or that Borrower or Property Manager have
failed to diligently undertake correcting such conditions within such 30-day period, Lender may direct Borrower to terminate Property
Manager as manager of the Mortgaged Property and terminate the Management Agreement without payment of any cancellation fee or
penalty and to replace Property Manager with a management company acceptable to Lender in Lender’s sole discretion pursuant
to a management agreement acceptable to Lender in Lender’s sole discretion.
|
|
Assignment of Management Agreement and
Subordination of Management Fees
|
Page
2
|
|
|
6.
|
Receipt of Management Fees.
Property Manager will not be obligated to return or refund to
Lender any Management Fees or other fee, commission or other amount received by Property Manager prior to the occurrence of the
Event of Default, and to which Property Manager was entitled under the Management Agreement. If the Property Manager receives any
Management Fees after it has received notice of an Event of Default, Property Manager agrees that such Management Fees will be
received and held in trust for Lender, to be applied by Lender to amounts due under the Loan Documents.
|
|
|
7.
|
Consent and Agreement by Property Manager
. Property Manager acknowledges and consents to
this Assignment and agrees that Property Manager will act in conformity with the provisions of this Assignment and Lender’s
rights under this Assignment or otherwise related to the Management Agreement. If the responsibility for the management of the
Mortgaged Property is transferred from Property Manager in accordance with the provisions of this Assignment, then Property Manager
will fully cooperate in transferring its responsibility to a new management company and complete such transfer no later than 30
days from the date the Management Agreement is terminated. Further, Property Manager agrees as follows:
|
|
|
(a)
|
It will not contest or impede the exercise by Lender of any right Lender has under or in connection
with this Assignment.
|
|
|
(b)
|
It will give at least 30 days prior written notice to Lender of its intention to terminate the
Management Agreement or otherwise discontinue its management of the Mortgaged Property, in the manner provided for in this Assignment.
|
|
|
(c)
|
It will not amend any of the provisions or terms of the Management Agreement without the prior
consent of Lender.
|
|
|
8.
|
Termination.
When the Loan is paid in full and the Security Instrument is released or assigned
of record, this Assignment and all of Lender’s right, title and interest hereunder with respect to the Management Agreement
will terminate.
|
|
|
(a)
|
All notices under or concerning this Assignment (
“Notice”
) will be in writing.
Each Notice will be deemed given on the earliest to occur of: (i) the date when the Notice is received by the addressee, (ii) the
first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for payment
of charges for next Business Day delivery, or (iii) the third Business Day after the Notice is deposited in the United States mail
with postage prepaid, certified mail, return receipt requested. Addresses for Notice are as follows:
|
|
If to Lender:
|
Walker & Dunlop, LLC
7501 Wisconsin Avenue, Suite 1200E, Bethesda,
Maryland 20814
Attention: Loan Servicing
|
|
Assignment of Management Agreement and
Subordination of Management Fees
|
Page
3
|
|
If to Borrower:
|
BR Hunters Creek, LLC
c/o Bluerock Real Estate, L.L.C.
712 Fifth Avenue, 9th Floor
New York, New York 10019
Attention: Michael Konig
|
|
If to Property
Manager:
|
Carroll Management Group, LLC
3340 Peachtree Road NE
Atlanta, Georgia 30326
Attention: Josh Champion
|
|
|
(b)
|
Any party to this Assignment may change the address to which Notices intended for it are to be
directed by means of Notice given to the other parties in accordance with this Section 9. Each party agrees that it will not refuse
or reject delivery of any Notice given in accordance with this Section 9, that it will acknowledge, in writing, the receipt of
any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes of this Section
9 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of
the U.S. Postal Service or the courier service.
|
|
|
10.
|
Governing Law; Consent to Jurisdiction and Venue.
|
|
|
(a)
|
This Assignment will be construed in accordance with and governed by the laws of the Property Jurisdiction.
|
|
|
(b)
|
Borrower and Property Manager agree that any controversy arising under or in relation to this Assignment
may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction
will have jurisdiction over all controversies that may arise under or in relation to this Assignment. Borrower and Property Manager
irrevocably consent to service, jurisdiction and venue of such courts for any such litigation and waive any other venue to which
it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 10 is intended
to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Assignment in any court of
any other jurisdiction.
|
|
|
11.
|
Captions, Cross References and Exhibits
. The captions assigned to provisions of this Assignment
are for convenience only and will be disregarded in construing this Assignment. Any reference in this Assignment to an “Exhibit”
or a “Section,” unless otherwise explicitly provided, will be construed as referring, respectively, to an Exhibit attached
to this Assignment or to a section of this Assignment. All Exhibits attached to or referred to in this Assignment are incorporated
by reference into this Assignment.
|
|
|
12.
|
Number and Gender.
Use of the singular in this Assignment includes the plural, use of the
plural includes the singular, and use of one gender includes all other genders, as the context may require.
|
|
|
13.
|
No Partnership.
This Assignment is not intended to, and will not, create a partnership or
joint venture among the parties, and no party to this Assignment will have the power or authority to bind any other party except
as explicitly provided in this Assignment.
|
|
Assignment of Management Agreement and
Subordination of Management Fees
|
Page
4
|
|
|
14.
|
Severability.
The invalidity or unenforceability of any provision of this Assignment will
not affect the validity of any other provision, and all other provisions will remain in full force and effect.
|
|
|
15.
|
Entire Assignment.
This Assignment contains the entire agreement among the parties as to
the rights granted and the obligations assumed in this Assignment.
|
|
|
16.
|
No Waiver; No Remedy Exclusive.
Any forbearance by a party to this Assignment in exercising
any right or remedy given under this Assignment or existing at law or in equity will not constitute a waiver of or preclude the
exercise of that or any other right or remedy. Unless otherwise explicitly provided, no remedy under this Assignment is intended
to be exclusive of any other available remedy, but each remedy will be cumulative and will be in addition to other remedies given
under this Assignment or existing at law or in equity.
|
|
|
17.
|
Third Party Beneficiaries.
Neither any creditor of any party to this Assignment, nor any
other person, is intended to be a third party beneficiary of this Assignment.
|
|
|
18.
|
Further Assurances and Corrective Instruments.
To the extent permitted by law, the parties
will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements
to this Assignment and such further instruments as may reasonably be required for carrying out the intention of or facilitating
the performance of this Assignment.
|
|
|
19.
|
Counterparts.
This Assignment may be executed in multiple counterparts, each of which will
constitute an original document and all of which together will constitute one agreement.
|
|
|
20.
|
Indemnity.
By executing this Assignment Borrower agrees to indemnify and hold harmless Lender
and its successors and assigns from and against any and all losses, claims, damages, liabilities and expenses including Attorneys’
Fees and Costs, which may be imposed or incurred in connection with this Assignment.
|
|
|
21.
|
Costs and Expenses.
Wherever pursuant to this Assignment it is provided that Borrower will
pay any costs and expenses, such costs and expenses will include Lender’s Attorneys’ Fees and Costs.
|
|
|
22.
|
Determinations by Lender.
In any instance where the consent or approval of Lender may be
given or is required, or where any determination, judgment or decision is to be rendered by Lender under this Assignment, the granting,
withholding or denial of such consent or approval and the rendering of such determination, judgment or decision will be made or
exercised by Lender (or its designated representative) at its sole and exclusive option and in its sole and absolute discretion
and will be final and conclusive, except as may be otherwise expressly and specifically provided in this Assignment.
|
|
|
23.
|
Successors and Assigns.
This Assignment will be binding upon and inure to the benefit of
Borrower, Lender and Property Manager and their respective successors and assigns forever.
|
|
Assignment of Management Agreement and
Subordination of Management Fees
|
Page
5
|
|
|
24.
|
Secondary Market.
Lender may sell, transfer and deliver the Note and assign the Loan
Agreement, the Security Instrument, this Assignment and the other Loan Documents to one or more investors in the secondary mortgage
market (“
Investors
”). In connection with such sale, Lender may retain or assign responsibility for servicing
the Loan, including the Note, the Loan Agreement, the Security Instrument, this Assignment and the other Loan Documents, or may
delegate some or all of such responsibility and/or obligations to a servicer including any subservicer or master servicer, on behalf
of the Investors. All references to Lender in this Assignment will refer to and include any such servicer to the extent applicable.
|
|
|
25.
|
Attached Exhibits.
The following Exhibits, if marked with an “X” in the space
provided, are attached to this Assignment:
|
|
X
|
|
Exhibit A
|
Modifications to Assignment
|
|
|
|
|
|
|
X
|
|
Exhibit B
|
Copy of Management Agreement
|
IN WITNESS WHEREOF the
undersigned have executed this Assignment as of the date and year first written above.
|
Assignment of Management Agreement and
Subordination of Management Fees
|
Page
6
|
|
|
BORROWER:
|
|
|
|
|
|
BR HUNTERS CREEK, LLC
, a Delaware limited
liability company
|
|
|
|
|
|
|
By:
|
/s/ Jordan Ruddy
|
|
|
|
Name: Jordan Ruddy
|
|
|
|
Title: Authorized Signatory
|
|
Assignment of Management Agreement and
Subordination of Management Fees
|
Page
7
|
|
|
LENDER:
|
|
|
|
|
|
WALKER & DUNLOP, LLC
, a Delaware limited
liability company
|
|
|
|
|
|
|
By:
|
/s/ Joyce Velazquez
|
|
|
|
Joyce Velazquez
|
|
|
|
Closing Officer
|
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Assignment of Management Agreement and
Subordination of Management Fees
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Page
8
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PROPERTY MANAGER:
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CARROLL MANAGEMENT GROUP, LLC
, a
Georgia limited liability company
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By:
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/s/ Josh Champion
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Name: Josh Champion
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Title: President
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Assignment of Management Agreement and
Subordination of Management Fees
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Page
9
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EXHIBIT A
MODIFICATIONS TO ASSIGNMENT
The following modifications are made to the
text of the Assignment that precedes this Exhibit:
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1.
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Section 2 is deleted in its entirety and replaced with
the following:
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2.
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Subordination of Management Fees.
The Management Fees and all rights and privileges of Property
Manager to the Management Fees are and will at all times continue to be subject and unconditionally subordinate in all respects
in lien and payment to the lien and payment of the Loan Agreement, the Security Instrument, the Note, and the other Loan Documents,
and to any renewals, extensions, modifications, assignments, replacements, or consolidations of the Loan Documents and the rights,
privileges, and powers of Lender under the Note, the Loan Agreement, the Security Instrument, or any of the other Loan Documents.
Notwithstanding anything herein to the contrary, nothing herein shall be construed to limit Property Manager’s termination
rights under the Management Agreement, if any, upon the occurrence of an Event of Default; provided that Property Manager shall
give the Notice as requested by Section 7(b) below
.
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2.
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Section 4 is deleted in its entirety and replaced with
the following:
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4.
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Agreement by Borrower and Property Manager.
Borrower and Property Manager agree that if
there is an Event of Default by Borrower (continuing beyond any applicable grace period) under the Note, the Loan Agreement, the
Security Instrument or any of the other Loan Documents during the term of this Assignment or upon the occurrence of any event which
would entitle Lender to terminate the Management Agreement in accordance with the terms of the Loan Documents, Lender may terminate
the Management Agreement without payment of any cancellation fee or penalty and require Property Manager to transfer its responsibility
for the management of the Mortgaged Property to a management company selected by Lender in Lender’s sole discretion, effective
as of the date set forth in Lender’s notice to Property Manager
; provided,
that Borrower shall pay Property Manager for all management fees, commissions and other amounts due and payable through the date
of termination
. Following any such termination, Property Manager agrees to apply all rents, security deposits, issues,
proceeds and profits of the Mortgaged Property in accordance with Lender’s written directions to Property Manager.
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Assignment of Management Agreement and
Subordination of Management Fees
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Page A-
1
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3.
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Section 5 is deleted in its entirety and replaced with
the following:
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5.
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Lender’s Right to Replace Property Manager.
If Lender, in Lender’s reasonable
discretion, at any time during the term of this Assignment, determines that the Mortgaged Property is not being managed in accordance
with generally accepted management practices for properties similar to the Mortgaged Property, Lender will deliver written notice
to Borrower and Property Manager, which notice will specify with particularity the grounds for Lender’s determination. If
Lender reasonably determines that the conditions specified in Lender’s notice are not remedied to Lender’s reasonable
satisfaction by Borrower or Property Manager within 30 days from receipt of such notice or that Borrower or Property Manager have
failed to diligently undertake correcting such conditions within such 30-day period, Lender may direct Borrower to terminate Property
Manager as manager of the Mortgaged Property and terminate the Management Agreement without payment of any cancellation fee or
penalty
; provided, that Borrower shall pay Property Manager for all management
fees, commissions and other amounts due and payable through the date of termination
,
and to replace Property
Manager with a management company acceptable to Lender in Lender’s sole discretion pursuant to a management agreement acceptable
to Lender in Lender’s sole discretion.
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4.
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Section 6 is deleted in its entirety and replaced with
the following:
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6.
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Receipt of Management Fees.
Property Manager will not be obligated to return or refund to
Lender any Management Fees or other fee, commission or other amount received by Property Manager prior to the occurrence of the
Event of Default, and to which Property Manager was entitled under the Management Agreement. If the Property Manager receives any
Management Fees after it has received notice of an Event of Default, Property Manager agrees that such Management Fees will be
received and held in trust for Lender, to be applied by Lender to amounts due under the Loan Documents
;
provided, that if Property Manager is not otherwise permitted to terminate the Management Agreement, Borrower shall continue to
pay Property Manager all management fees, commissions and other amounts due and payable after the occurrence of the Event of Default
and through the date of termination
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Assignment of Management Agreement and
Subordination of Management Fees
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Page A-
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EXHIBIT B
MANAGEMENT AGREEMENT
See Attached
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Assignment of Management Agreement and
Subordination of Management Fees
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Page B-
1
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Exhibit 10.6
Prepared by, and after recording
return to:
Brian J. Iwashyna, Esquire
Troutman Sanders LLP
Post Office Box 1122
Richmond, Virginia 23218-1122
Freddie Mac Loan No. 932896871
ARIUM Hunter's Creek
ASSIGNMENT OF SECURITY INSTRUMENT
(Revised 12-19-2014)
FOR VALUABLE CONSIDERATION,
WALKER &
DUNLOP, LLC
, a limited liability company organized and existing under the laws of Delaware (“
Assignor
”),
having its principal place of business at 7501 Wisconsin Avenue, Suite 1200E, Bethesda, Maryland 20814, hereby assigns, grants,
sells and transfers to the
FEDERAL HOME LOAN MORTGAGE CORPORATION
, a corporation organized and existing under the laws of
the United States (“
Assignee
”), having its principal place of business at 8200 Jones Branch Drive, McLean, Virginia
22102, and Assignee’s successors, transferees and assigns forever, all of the right, title and interest of Assignor in and
to the Amended and Restated Multifamily Mortgage, Assignment of Rents and Security Agreement, dated as of October 30, 2017, entered
into by
BR HUNTERS CREEK, LLC
, a Delaware limited liability company (“
Borrower
”) for the benefit of Assignor,
securing an indebtedness of Borrower to Assignor in the principal amount of $72,294,000.00 recorded in the land records of Orange
County, Florida prior to this Assignment (“
Instrument
”), which indebtedness is secured by the property described
in
Exhibit A
attached to this Assignment and incorporated into it by this reference.
Together with the Note or other obligation
described in the Instrument and all obligations secured by the Instrument now or in the future.
IN WITNESS WHEREOF, Assignor has executed
this Assignment as of October 30, 2017, to be effective as of the effective date of the Instrument.
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Assignment of Security Instrument
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Page
1
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WITNESS:
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ASSIGNOR:
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/s/
Debi Michalowski
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WALKER
& DUNLOP, LLC
, a Delaware limited liability company
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Print
Name:
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Debi
Michalowski
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/s/
C.A. Henderson
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By:
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/s/
Joyce Velazquez
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Print
Name:
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C.A.
Henderson
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Joyce
Velazquez
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Closing
Officer
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STATE OF Texas
CITY/COUNTY OF Dallas, ss:
I HEREBY CERTIFY that
on this day, before me, an officer duly authorized in the state aforesaid and in the county aforesaid to take acknowledgments,
personally appeared Joyce Velazquez, to me known to be the person described in and who executed the foregoing instrument as the
Closing Officer of Walker & Dunlop, LLC, a Delaware limited liability company, and acknowledged to me that she as such officer
of, being authorized to do so, executed the foregoing instrument for the purposes therein contained in the name of such limited
liability company by herself as Closing Officer.
Witness my hand and official
seal in the county and state aforesaid, this 3rd day of October, 2017.
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/s/
Natalie Miller
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Notary
Public
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My
Commission Expires: 7/11/20
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Assignment of Security Instrument
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Page
2
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EXHIBIT A
DESCRIPTION OF THE PROPERTY
PARCEL 1: (Fee Simple Estate):
Lots 1 and 2, HUNTER'S CREEK TRACT 480, according to the plat
thereof, as recorded in Plat Book 40, Page 120, of the Public Records of Orange County, Florida.
PARCEL 2:
Non-Exclusive easement for ingress and egress for the benefit
of Parcel 1 as set forth and granted by Access Easement recorded May 29, 1998, in Official Records Book 5491, Page 4521, of the
Public Records of Orange County, Florida.
PARCEL 3:
Non-Exclusive easement for encroachment and of use, access and
enjoyment in and to the "Common Area" for the benefit of Parcel 1 as defined and more particularly described in that
certain Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek, filed in Official
Records Book 6065, Page 2309, re-recorded in Official Records Book 6108, Page 4653, modified by Supplemental Declaration to Second
Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek filed in Official Records Book
6112, Page 1865, Termination of Class "C" Membership filed in Official Records Book 6178, Page 2519, and Supplemental
Declaration to Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek, filed
in Official Records Book 6285, Page 5991, and Supplemental Declaration to Second Amended and Restated Declaration of Master Covenants,
Conditions and Restrictions of Hunter's Creek filed in Official Records Book 7735, Page 2464, and further amended by Certificate
of First Amendment to the Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's
Creek recorded in Official Records Book 7964, Page 263, as amended by certificate of Second Amendment to the Second Amended and
Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek, recorded November 30, 2009 in Official
Records Book 9968, Page 6699, as affected by Notice, recorded May 28, 2010 in Official Records Book 10052, Page 5307, as affected
by Assignment of Declarant's Rights recorded August 11, 2011 in Official Records Book 10253, Page 934, as amended by Third Amendment
to the Second Amended and Restated Declaration of Master Covenants, Conditions and Restrictions of Hunter's Creek, recorded October
25, 2012 in Official Records Book 10463, Page 1872, as amended by Fourth Amendment to the Second Amended and Restated Declaration
of Master Covenants, Conditions and Restrictions of Hunter's Creek recorded October 2, 2014 in Official Records Book 10813, Page
3748 and as affected by Notice of Preservation recorded June 16, 2015 in Official Records Book 10935, Page 6619, all of the Public
Records of Orange County, Florida.
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Assignment of Security Instrument
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Page A-
1
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PARCEL 4:
Together with those non-exclusive easements and rights for the
benefit of Parcel 1, as set forth and granted by Hunter's Creek Community Association, Inc., a Florida not for profit Corporation,
in favor of Realty Associates Fund VIII L.P., a Delaware limited Partnership, recorded August 11, 2009, in Official Records Book
9916, Page 140, of the Public Records of Orange County, Florida, for the purpose of signage and access easement agreement, over,
under and across lands as described therein.
Parcel 5:
Together with those non-exclusive easements and rights for
the benefit of Parcel 1, as set forth and granted by Utility Easement for underground sanitary sewer line dated May 27, 1998 from
Westbrook Hunter's Creek, L.P., a Delaware limited partnership in favor of Towne Place Apartments, LTD., a Florida limited partnership
filed May 29, 1998, in Official Records Book 5491, Page 4526, and Subordination of Encumbrance to Property Rights to Orange County,
filed in Official Records Book 6289, Page 381, both of the Public Records of Orange County, Florida; for the purpose described
therein and access easement agreement, over, under and across lands as described therein.
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Assignment of Security Instrument
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Page A-
2
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Exhibit 10.7
JOINDER
AGREEMENT
(Subsidiary Guarantor)
THIS JOINDER AGREEMENT
(“Joinder Agreement”) is executed as of October 30, 2017, by BR METROWEST, LLC, a Delaware limited liability company
(“Joining Party”), and delivered to KeyBank National Association, as Agent, pursuant to §5.5 of the Credit Agreement
dated as of October 4, 2017, as from time to time in effect (the “Credit Agreement”), among
BLUEROCK
RESIDENTIAL HOLDINGS, L.P.
(the “Parent Borrower”), the other Borrowers, KeyBank National Association, for itself
and as Agent, and the other Lenders from time to time party thereto. Terms used but not defined in this Joinder Agreement shall
have the meanings defined for those terms in the Credit Agreement.
RECITALS
A. Joining
Party is required, pursuant to §5.5 of the Credit Agreement, to become an additional Subsidiary Credit Party under the Credit
Agreement; provided however, because the Joining Party is joining the Credit Agreement as a Subsidiary Guarantor, Joining Party
is expressly not joining the Notes and shall have no liability under the Notes except as set forth in any Subsidiary Guaranty as
a guarantor thereof.
B. Joining
Party expects to realize direct and indirect benefits as a result of the availability to Borrowers of the credit facilities under
the Credit Agreement.
NOW, THEREFORE, Joining
Party agrees as follows:
AGREEMENT
Joinder
. By
this Joinder Agreement, Joining Party hereby becomes a “Subsidiary Credit Party” under the Credit Agreement, the Guaranty
and the other Loan Documents (other than the Notes) with respect to all the Obligations of Subsidiary Credit Parties now or hereafter
incurred under the Credit Agreement and the other Loan Documents (other than the Notes). Joining Party agrees that Joining Party
is and shall be bound by, and hereby assumes, all representations, warranties, covenants, terms, conditions, duties and waivers
applicable to a Subsidiary Credit Party under the Credit Agreement, the Guaranty and the other Loan Documents from and after the
Effective Date, including such provisions that apply to any Subsidiary Borrower as the same may be modified to reflect Joining
Party’s status as a Subsidiary Guarantor of, rather than a party to, the Notes.
Representations
and Warranties of Joining Party
. Joining Party represents and warrants to Agent that, as of the Effective Date (as defined
below), except as disclosed in writing by Joining Party to Agent on or prior to the date hereof and approved by the Agent in writing
(which disclosures shall be deemed to amend the Schedules and other disclosures delivered as contemplated in the Credit Agreement),
the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material
respects as applied to Joining Party as a Subsidiary Credit Party and a Subsidiary Guarantor on and as of the Effective Date as
though made on that date. As of the Effective Date, all covenants and agreements in the Loan Documents of the Credit Parties are
true and correct with respect to Joining Party and no Default or Event of Default shall exist or might exist upon the Effective
Date in the event that Joining Party becomes a Subsidiary Credit Party.
Joint and Several
.
Joining Party hereby agrees that, as of the Effective Date, the Credit Agreement, the Guaranty and the other Loan Documents heretofore
delivered to the Agent and the Lenders shall be a joint and several obligation of Joining Party to the same extent as if executed
and delivered by Joining Party (provided however, because the Joining Party is joining the Credit Agreement as a Subsidiary Guarantor,
Joining Party is expressly not joining the Notes and shall have no liability under the Notes except as set forth in any Subsidiary
Guaranty as a guarantor thereof), and upon request by Agent, will promptly become a party to the Credit Agreement, the Guaranty
and the other Loan Documents (excluding the Notes) to confirm such obligation.
Further Assurances
.
Joining Party agrees to execute and deliver such other instruments and documents and take such other action, as the Agent may reasonably
request, in connection with the transactions contemplated by this Joinder Agreement.
GOVERNING LAW
.
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION UNDER, AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Counterparts
.
This Agreement may be executed in any number of counterparts which shall together constitute but one and the same agreement.
The effective date
(the “Effective Date”) of this Joinder Agreement is October 30, 2017.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF,
Joining Party has executed this Joinder Agreement under seal as of the day and year first above written.
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“JOINING PARTY”
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BR METROWEST, LLC,
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a Delaware limited liability company
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By:
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/s/
Jordan
Ruddy
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Name:
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Jordan Ruddy
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Title:
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Authorized Signatory
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[Signatures
Continue on Following Page]
[Signature Page to Joinder Agreement - Metrowest]
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ACKNOWLEDGED:
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KEYBANK NATIONAL ASSOCIATION,
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as Agent
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By:
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/s/ Christopher T. Neil
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Name:
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Christopher T. Neil
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Title:
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Vice President
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[Signature Page to Joinder Agreement - Metrowest]
Exhibit 10.8
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY
(this “
Guaranty
”) dated as of October 30, 2017, executed and delivered by the undersigned BR METROWEST, LLC,
a Delaware limited liability company (the “
Guarantor
”), in favor of (a)
KeyBank
National Association
, in its capacity as Administrative Agent (the “
Agent
”) for the Lenders under that
certain Credit Agreement dated as of October 4, 2017, between and among BLUEROCK RESIDENTIAL HOLDINGS, L.P., a Delaware limited
partnership, and various other Subsidiaries thereof as “Borrower” (collectively, the “
Borrower
”),
the financial institutions party thereto and their assignees in accordance therewith (the “
Lenders
”), and the
Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms,
the “
Credit Agreement
”) and (b) the Lenders.
WHEREAS, pursuant to
the Credit Agreement, the Lenders have made available to the Borrower certain financial accommodations on the terms and conditions
set forth in the Credit Agreement;
WHEREAS, the Borrower
and Guarantor, though separate legal entities, are mutually dependent on each other in the conduct of their respective businesses
as an integrated operation and have determined it to be in their mutual best interests to obtain financing from the Agent and the
Lenders through their collective efforts;
WHEREAS, Guarantor
acknowledges that it will receive direct and indirect benefits from the Agent and the Lenders making such financial accommodations
available to the Borrower under the Credit Agreement and, accordingly, Guarantor is willing to guarantee the Borrower’s obligations
to the Agent and the Lenders on the terms and conditions contained herein;
WHEREAS, Guarantor’s
guarantee of the Borrower’s obligations to Agent and the Lenders under this Guaranty shall be secured by a Mortgage, Assignment
of Leases and Rents, Security Agreement and Fixture Filing (the “
Mortgage
”), and a Collateral Assignment of
Leases and Rents (the “
Assignment of Leases
”), both dated as of October 30, 2017, and executed by Guarantor
in favor of Agent; and
WHEREAS, Guarantor’s
execution and delivery of this Guaranty is one of the conditions precedent to the Agent and the Lenders making, or continuing to
make, such financial accommodations to the Borrower.
NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Guarantor, Guarantor agrees as
follows:
Section 1.
Guaranty
.
Guarantor hereby absolutely and unconditionally guaranties the due and punctual payment and performance of all of the following
when due (collectively referred to as the “
Obligations
”): (a) all indebtedness and obligations owing by the
Borrower to any of the Lenders or the Agent under or in connection with the Credit Agreement and any other Loan Document, including
without limitation, the repayment of all principal of the Loans made by the Lenders to the Borrower under the Credit Agreement
and the payment of all interest, fees, charges, reasonable attorneys fees and other amounts payable to any Lender or the Agent
thereunder or in connection therewith (including any Hedge Obligations but expressly excluding any Excluded Swap Obligations);
(b) any and all extensions, renewals, modifications, amendments or substitutions of the foregoing; and (c) all expenses, including,
without limitation, reasonable attorneys’ fees and disbursements, that are incurred by the Lenders or the Agent in the enforcement
of any of the foregoing or any obligation of Guarantor hereunder.
Section 2.
Guaranty
of Payment and Not of Collection
. This Guaranty is a guaranty of payment, and not of collection, and a debt of Guarantor for
its own account. Accordingly, the Lenders and the Agent shall not be obligated or required before enforcing this Guaranty against
Guarantor: (a) to pursue any right or remedy the Lenders or the Agent may have against the Borrower, any other guarantor or any
other Person or commence any suit or other proceeding against the Borrower, any other guarantor or any other Person in any court
or other tribunal; (b) to make any claim in a liquidation or bankruptcy of the Borrower, any other guarantor or any other Person;
or (c) to make demand of the Borrower, any other guarantor or any other Person or to enforce or seek to enforce or realize upon
any collateral security held by the Lenders or the Agent which may secure any of the Obligations. In this connection, Guarantor
hereby waives, to the extent permitted by applicable law, the right of Guarantor to require any holder of the Obligations to take
action against the Borrower as provided by any legal requirement of any Governmental Authority.
This Guaranty shall
be secured by the Mortgage and Assignment of Leases.
Section 3.
Guaranty
Absolute
. Guarantor guarantees that the Obligations will be paid strictly in accordance with the terms of the documents evidencing
the same, regardless of any legal requirement now or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or the Lenders with respect thereto. The liability of Guarantor under this Guaranty shall be absolute and unconditional
in accordance with its terms and shall remain in full force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (except in accordance with Section 5.6
of the Credit Agreement if all Collateral Properties owned by Guarantor are released in accordance with the terms of the Credit
Agreement), including, without limitation, the following (whether or not Guarantor consents thereto or has notice thereof):
(a) (i)
any change in the amount, interest rate or due date or other term of any of the Obligations; (ii) any change in the time, place
or manner of payment of all or any portion of the Obligations; (iii) any amendment or waiver of, or consent to the departure from
or other indulgence with respect to, the Credit Agreement, any other Loan Document, or any other document or instrument evidencing
or relating to any Obligations; or (iv) any waiver, renewal, extension, addition, or supplement to, or deletion from, or any other
action or inaction under or in respect of, the Credit Agreement, any of the other Loan Documents, or any other documents, instruments
or agreements relating to the Obligations or any other instrument or agreement referred to therein or evidencing any Obligations
or any assignment or transfer of any of the foregoing;
(b) any
lack of validity or enforceability of the Credit Agreement, any of the other Loan Documents, or any other document, instrument
or agreement referred to therein or evidencing any Obligations or any assignment or transfer of any of the foregoing;
(c) any
furnishing to the Agent or the Lenders of any security for the Obligations, or any sale, exchange, release or surrender of, or
realization on, any collateral security for the Obligations;
(d) any
settlement or compromise of any of the Obligations, any security therefor, or any liability of any other party with respect to
the Obligations, or any subordination of the payment of the Obligations to the payment of any other liability of the Borrower;
(e) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to
any other guarantor, the Borrower or any other Person, or any action taken with respect to this Guaranty by any trustee or receiver,
or by any court, in any such proceeding;
(f) any
nonperfection of any security interest or other Lien on any of the collateral securing any of the Obligations;
(g) any
act or failure to act by the Borrower or any other Person which may adversely affect Guarantor’s subrogation rights, if any,
against the Borrower to recover payments made under this Guaranty;
(h) any
application of sums paid by the Borrower or any other Person with respect to the liabilities of the Borrower to the Agent or the
Lenders, regardless of what liabilities of the Borrower remain unpaid;
(i) any
defect, limitation or insufficiency in the borrowing powers of the Borrower or in the exercise thereof; or
(j) any
other circumstance which might otherwise constitute a defense available to, or a discharge of, Guarantor hereunder (other than
payment or satisfaction of such Obligations).
Section 4.
Action
with Respect to Obligations
. The Lenders and the Agent may in accordance with the Credit Agreement, at any time and from time
to time, without the consent of, or notice to, Guarantor, and without discharging Guarantor from its obligations hereunder take
any and all actions described in
Section 3
and may otherwise: (a) amend, modify, alter or supplement the terms of any of
the Obligations, including, but not limited to, extending or shortening the time of payment of any of the Obligations or the interest
rate that may accrue on any of the Obligations; (b) amend, modify, alter or supplement the Credit Agreement or any other Loan Document;
(c) sell, exchange, release or otherwise deal with all, or any part, of any collateral securing any of the Obligations; (d) release
any Person (other than Guarantor) liable in any manner for the payment or collection of the Obligations; (e) exercise, or refrain
from exercising, any rights against the Borrower or any other Person (including, without limitation, any other guarantor); and
(f) apply any sum, by whomsoever paid or however realized, to the Obligations in such order as the Lenders or the Agent shall elect
in accordance with the Credit Agreement.
Section 5.
Representations
and Warranties
. Guarantor hereby makes to the Agent and the Lenders all of the representations and warranties with respect
to or in any way relating to a Subsidiary Credit Party in the Credit Agreement and the other Loan Documents, as if the same were
set forth herein in full.
Section 6.
Covenants
.
Guarantor will comply with all covenants which a Subsidiary Credit Party is to comply with under the terms of the Credit Agreement
or any other Loan Documents.
Section 7.
Waiver
.
Guarantor, to the fullest extent permitted by applicable law, hereby waives notice of acceptance hereof or any presentment, demand,
protest or notice of any kind, and any other act or thing, or omission or delay to do any other act or thing, which in any manner
or to any extent might vary the risk of Guarantor or which otherwise might operate to discharge Guarantor from its obligations
hereunder.
Section 8.
Inability
to Accelerate Loan
. If the Agent and/or the Lenders are prevented from demanding or accelerating payment of any Loan under
the Credit Agreement by reason of any automatic stay or otherwise, the Agent and/or the Lenders shall be entitled to receive from
Guarantor, upon demand therefor, the sums which otherwise would have been due with respect to such Loan had such demand or acceleration
occurred.
Section 9.
Reinstatement
of Obligations
. Subject to Section 5.6 of the Credit Agreement, Guarantor agrees that this Guaranty shall continue to be effective
or be reinstated, as the case may be, with respect to any Obligations if at any time payment of any such Obligations is rescinded
or otherwise must be restored by the Agent and/or the Lenders upon the bankruptcy or reorganization of the Borrower or Guarantor
or otherwise.
Section 10.
Subrogation
.
Subject to Section 5.6 of the Credit Agreement, until all of the Obligations shall have been indefeasibly paid in full, any right
of subrogation Guarantor may have with respect to the Obligations shall be subordinate to the rights of Agent and the Lenders and
Guarantor hereby waives any right to enforce any remedy which the Agent and/or the Lenders now have or may hereafter have against
the Borrower with respect to the Obligations, and, other than with respect to any Collateral Property owned by Guarantor, Guarantor
hereby waives any benefit of, and any right to participate in, any security or collateral given to the Agent and the Lenders to
secure payment or performance of any of the Obligations.
Section 11.
Payments
Free and Clear
. All sums payable by Guarantor hereunder shall be made free and clear of and without deduction for any tax or
other charge;
provided
that if Guarantor shall be required by applicable law to deduct any taxes or other charge from such
payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), the Agent or any Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made; (ii) Guarantor shall make such deductions; and (iii) Guarantor
shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
Section 12.
Set-off
.
Guarantor hereby grants to Agent, on behalf of the Lenders, a security interest in and lien on all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at any time owing by Agent to or for the credit or
the account of Guarantor. In addition to any rights now or hereafter granted under applicable law and not by way of limitation
of any such rights, each Lender is hereby authorized, with the consent of Agent, at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final but
excluding any funds held by the Guarantor on behalf of tenants or other third parties) at any time held and other obligations at
any time owing by such Lender to or for the credit or the account of Guarantor against any of and all the obligations of Guarantor
now or hereafter existing under this Guaranty held by such Lender then due and payable.
Section 13.
Subordination
.
Other than with respect to any Distributions permitted under the Credit Agreement, Guarantor hereby expressly covenants and agrees
for the benefit of the Agent and the Lenders that all obligations and liabilities of the Borrower or any other guarantor to Guarantor
of whatever description, including without limitation, all intercompany receivables of Guarantor from the Borrower or any other
guarantor (collectively, the “Junior Claims”) shall be subordinate and junior in right of payment to all Obligations;
provided, however, that payment thereof may be made so long as no Event of Default shall have occurred and be continuing. Other
than with respect to any Distributions permitted under the Credit Agreement, if an Event of Default shall have occurred and be
continuing, then Guarantor shall not accept any direct or indirect payment (in cash, property, securities by setoff or otherwise)
from the Borrower or any other guarantor on account of or in any manner in respect of any Junior Claim until all of the Obligations
have been indefeasibly paid in full.
Section 14.
Avoidance
Provisions
. It is the intent of Guarantor, the Agent and the Lenders that in any Proceeding, Guarantor’s maximum Obligations
hereunder shall equal, but not exceed, the maximum amount which would not otherwise cause the obligations of Guarantor hereunder
(or any other obligations of Guarantor to the Agent and the Lenders) to be avoidable or unenforceable against Guarantor in such
Proceeding as a result of applicable law, including without limitation, (a) Section 548 of the Bankruptcy Code of 1978, as amended
(the “Bankruptcy Code”) and (b) any state fraudulent transfer or fraudulent conveyance act or statute applied in such
Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or otherwise. The applicable laws under which the possible
avoidance or unenforceability of the obligations of Guarantor hereunder (or any other obligations of Guarantor to the Agent and
the Lenders) shall be determined in any such Proceeding are referred to as the “Avoidance Provisions.” Accordingly,
to the extent that the obligations of Guarantor hereunder would otherwise be subject to avoidance under the Avoidance Provisions,
the maximum Obligations for which Guarantor shall be liable hereunder shall be reduced to that amount which, as of the time any
of the Obligations are deemed to have been incurred under the Avoidance Provisions, would not cause the obligations of Guarantor
hereunder (or any other obligations of Guarantor to the Agent and the Lenders), to be subject to avoidance under the Avoidance
Provisions. This Section is intended solely to preserve the rights of the Agent and the Lenders hereunder to the maximum extent
that would not cause the obligations of Guarantor hereunder to be subject to avoidance under the Avoidance Provisions, and neither
Guarantor nor any other Person shall have any right or claim under this Section as against the Agent and the Lenders that would
not otherwise be available to such Person under the Avoidance Provisions.
Section 15.
Information
.
Guarantor assumes all responsibility for being and keeping itself informed of the financial condition of the Borrower, of any other
guarantors and of all other circumstances bearing upon the risk of nonpayment of any of the Obligations and the nature, scope and
extent of the risks that Guarantor assumes and incurs hereunder, and agrees that none of the Agent or any Lender shall have any
duty whatsoever to advise Guarantor of information regarding such circumstances or risks.
Section 16.
Governing
Law
. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO CONFLICTS OF LAWS PRINCIPLES.
Section 17.
Jurisdiction;
Venue; JURY WAIVER
.
(a)
Jurisdiction;
Venue
. GUARANTOR AND (BY THEIR ACCEPTANCE HEREOF) THE AGENT AND THE LENDERS AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
GUARANTY MAY BE BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK (INCLUDING ANY FEDERAL COURT SITTING THEREIN).
GUARANTOR AND (BY THE ACCEPTANCE HEREOF) THE AGENT AND THE LENDERS FURTHER ACCEPT, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF SUCH COURTS AND ANY RELATED APPELLATE COURT AND IRREVOCABLY (i) AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
WITH RESPECT TO THIS GUARANTY AND (ii) WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION ANY OF THEM MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH A COURT IS AN INCONVENIENT FORUM.
IN ADDITION TO THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN, THE AGENT OR ANY LENDER MAY BRING ACTION(S)
FOR ENFORCEMENT ON A NON-EXCLUSIVE BASIS WHERE ANY ASSETS OF GUARANTOR EXIST AND GUARANTOR CONSENTS TO THE NON-EXCLUSIVE JURISDICTION
OF SUCH COURTS. GUARANTOR EXPRESSLY ACKNOWLEDGES AND AGREES THAT THE FOREGOING CHOICE OF NEW YORK LAW WAS A MATERIAL INDUCEMENT
TO THE AGENT AND THE LENDERS IN ENTERING INTO THE CREDIT AGREEMENT AND IN MAKING THE LOANS THEREUNDER. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(b)
WAIVER
OF JURY TRIAL
. EACH OF GUARANTOR AND (BY THEIR ACCEPTANCE HEREOF) THE AGENT AND THE LENDERS HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS
HEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS AND AGREES THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EACH OF GUARANTOR AND (BY THEIR ACCEPTANCE HEREOF)
THE AGENT AND THE LENDERS HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, INDIRECT,
OR CONSEQUENTIAL DAMAGES AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, PUNITIVE OR ANY DAMAGES OTHER THAN OR IN ADDITION TO ACTUAL
DAMAGES. EACH OF GUARANTOR AND (BY THEIR ACCEPTANCE HEREOF) THE AGENT AND THE LENDERS (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES, BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION. EACH OF GUARANTOR AND (BY THEIR ACCEPTANCE HEREOF) THE AGENT AND THE LENDERS ACKNOWLEDGES THAT IT HAS
HAD AN OPPORTUNITY TO REVIEW THIS SECTION WITH LEGAL COUNSEL AND THAT EACH PARTY AGREES TO THE FOREGOING AS ITS FREE, KNOWING,
AND VOLUNTARY ACT.
Section 18.
Loan
Accounts
. The Agent may maintain books and accounts setting forth the amounts of principal, interest and other sums paid and
payable with respect to the Obligations, and in the case of any dispute relating to any of the outstanding amount, payment or receipt
of Obligation or otherwise, the entries in such account shall be binding upon Guarantor as to the outstanding amount of such Obligations
and the amounts paid and payable with respect thereto absent manifest error. The failure of the Agent to maintain such books and
accounts shall not in any way relieve or discharge Guarantor of any of its obligations hereunder.
Section 19.
Waiver
of Remedies
. No delay or failure on the part of the Agent or the Lenders in the exercise of any right or remedy it may have
against Guarantor hereunder or otherwise shall operate as a waiver thereof, and no single or partial exercise by the Agent or the
Lenders of any such right or remedy shall preclude other or further exercise thereof or the exercise of any other such right or
remedy.
Section 20.
Successors
and Assigns
. Each reference herein to the Agent or the Lenders shall be deemed to include such Person’s respective successors
and assigns (including, but not limited to, any holder of the Obligations) in whose favor the provisions of this Guaranty also
shall inure, and each reference herein to Guarantor shall be deemed to include the Guarantor’s successors and assigns, upon
whom this Guaranty also shall be binding. The Lenders and the Agent may, in accordance with, and subject to the limitations under,
the applicable provisions of the Credit Agreement, assign, transfer or sell any Obligation, or grant or sell participation in any
Obligations, to any Person or entity without the consent of, or notice to, Guarantor and without releasing, discharging or modifying
Guarantor’s obligations hereunder. Subject to the terms of the Credit Agreement, Guarantor hereby consents to the delivery
by the Agent or any Lender to any assignee, transferee or participant of any financial or other information regarding the Borrower
or Guarantor. Guarantor may not assign or transfer its obligations hereunder to any Person.
Section 21.
Amendments
.
This Guaranty may not be amended except as provided in the Credit Agreement.
Section 22.
Payments
.
All payments made by Guarantor pursuant to this Guaranty shall be made in Dollars, in immediately available funds to the Agent
at the place and time provided for in the Credit Agreement on the date one (1) Business Day after written demand therefor to Guarantor
by the Agent.
Section 23.
Notices
.
All notices, requests and other communications hereunder shall be in writing and shall be given as provided in the Loan Agreement.
Guarantor’s address for notice is set forth below its signature hereto.
Section 24.
Severability
.
In case any provision of this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 25.
Headings
.
Section headings used in this Guaranty are for convenience only and shall not affect the construction of this Guaranty.
Section 26.
Definitions
.
(a) For the purposes of this Guaranty:
“
Proceeding
”
means any of the following: (i) a voluntary or involuntary case concerning Guarantor shall be commenced under the Bankruptcy Code
or any other applicable bankruptcy laws; (ii) a custodian (as defined in the Bankruptcy Code or any other applicable bankruptcy
laws) is appointed for, or takes charge of, all or any substantial part of the property of Guarantor; (iii) any other proceeding
under any applicable law, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding-up or composition for
adjustment of debts, whether now or hereafter in effect, is commenced relating to Guarantor; (iv) Guarantor is adjudicated insolvent
or bankrupt; (v) any order of relief or other order approving any such case or proceeding is entered by a court of competent jurisdiction;
(vi) Guarantor makes a general assignment for the benefit of creditors; (vii) Guarantor shall fail to pay, or shall state that
it is unable to pay, or shall be unable to pay, its debts generally as they become due; (viii) Guarantor shall call a meeting of
its creditors with a view to arranging a composition or adjustment of its debts; (ix) Guarantor shall by any act or failure to
act indicate its consent to, approval of or acquiescence in any of the foregoing; or (x) any corporate action shall be taken by
Guarantor for the purpose of effecting any of the foregoing.
(b) Capitalized
terms not otherwise defined herein are used herein with the respective meanings given them in the Credit Agreement.
[Remainder of Page Intentionally
Left Blank]
IN WITNESS WHEREOF,
Guarantor has duly executed and delivered this Guaranty as of the date and year first written above.
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BR METROWEST, LLC,
a Delaware limited liability company
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By:
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/s/ Jordan Ruddy
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Name:
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Jordan Ruddy
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Title:
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Authorized Signatory
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Address for Notices:
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c/o Bluerock Real Estate, L.L.C.
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712 Fifth Avenue
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9
th
Floor
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New York, New York 10019
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Attn: Michael Konig, Esq.
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Fax: (646) 278-4220
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With a copy to:
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Kaplan Voekler Cunningham & Frank PLC
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1401 East Cary Street
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Richmond, VA 23219
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Attn: Richard Cunningham, Esquire
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Fax: (804) 823-4099
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[Signature Page to Subsidiary Guaranty]
Exhibit 10.9
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This Instrument Was Prepared By,
Record and Return To:
Riemer & Braunstein LLP
Three Center Plaza
Boston, Massachusetts 02108
Attention: Kevin J. Lyons, Esq.
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(RESERVED)
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THIS SECURITY INSTRUMENT PARTIALLY SECURES
A GUARANTY OF INDEBTEDNESS MADE OUTSIDE THE STATE OF FLORIDA, WHICH INDEBTEDNESS IS SECURED BY OTHER SECURITY INSTRUMENTS ON PROPERTIES
OUTSIDE THE STATE OF FLORIDA. FLORIDA DOCUMENTARY STAMP TAXES HAVE BEEN COMPUTED PURSUANT TO SECTION 12B4.053(32)(C), FLORIDA ADMINISTRATIVE
CODE, ON $40,625,000.00 BECAUSE THE AMOUNT OF THE GUARANTEED OBLIGATIONS SECURED BY THIS PROPERTY HAS BEEN LIMITED TO THIS AMOUNT.
FLORIDA INTANGIBLE TAXES HAVE BEEN COMPUTED PURSUANT TO SECTION 199.133(2), FLORIDA STATUTES, ON $40,625,000.00 BECAUSE THE AMOUNT
OF THE GUARANTEED OBLIGATIONS SECURED BY THIS PROPERTY HAS BEEN LIMITED TO THIS AMOUNT. THE ABOVE-DESCRIBED DOCUMENTARY STAMP TAXES
OF $142,187.50 AND INTANGIBLE TAXES OF $81,250.00 ARE BEING PAID SIMULTANEOUSLY WITH THE RECORDING OF THIS SECURITY INSTRUMENT.
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
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MORTGAGOR:
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BR METROWEST, LLC, a Delaware limited liability company
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MORTGAGEE:
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KeyBank National Association,
a national banking association, as Agent on behalf of itself and certain other Lenders
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MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
(2450 Lake Debra Drive, Orlando, Florida
32835)
THIS MORTGAGE, ASSIGNMENT
OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “
Mortgage
”) is made as of the 30
th
day of October, 2017, by BR METROWEST, LLC a Delaware limited liability company having an address at c/o Bluerock Real Estate,
L.L.C., 712 Fifth Avenue, 9
th
Floor, New York, New York 10019 (the “
Mortgagor
”) in favor of KEYBANK
NATIONAL ASSOCIATION, a national banking association, as agent under that certain Credit Agreement dated as of October 4, 2017
(hereinafter, as same may be amended, restated, renewed, replaced, or modified, the “
Credit Agreement
”) among
Bluerock Residential Holdings, L.P., a Delaware limited partnership, and various other Affiliates thereof collectively as “
Borrowers
”,
KeyBank National Association and the other lending institutions which become parties to the Credit Agreement (KeyBank National
Association and the other lending institutions which become parties to the Credit Agreement are collectively referred to as the
“
Lenders
” and individually as the “
Lender
”), and KeyBank National Association, as Agent for
the ratable benefit of the Lenders, having a place of business at 225 Franklin Street, Boston, Massachusetts 02110 (hereinafter
called “
Mortgagee
” or “
Agent
”) for the purpose of securing the “Obligations”
as defined in that certain Subsidiary Guaranty entered into by Mortgagor in favor of Agent and the Lenders dated as of the date
hereof (as the same may be modified, amended or supplemented, the “
Subsidiary Guaranty
”).
GRANTING CLAUSE:
NOW, THEREFORE, IN
CONSIDERATION OF TEN AND NO/100 DOLLARS ($10.00) AND OTHER GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency whereof
are hereby acknowledged by Mortgagor and in order to secure the Obligations, Mortgagor has bargained and sold and does hereby grant,
bargain, convey, sell, transfer, assign, mortgage, warrant, and confirm unto Mortgagee, for the ratable benefit of the Lenders
with right of entry and possession and grants a security interest in all of Mortgagor’s right, title and interest in all
of the Mortgaged Property (as defined below) in accordance with the terms hereof.
THIS INSTRUMENT ALSO
IS A UNIFORM COMMERCIAL CODE FINANCING STATEMENT WHICH IS BEING FILED AS A FIXTURE FILING IN ACCORDANCE WITH THE UNIFORM COMMERCIAL
CODE IN EFFECT IN THE STATE OF FLORIDA. MORTGAGOR IS THE RECORD OWNER OF THE REAL ESTATE. THE COLLATERAL IS DESCRIBED IN THIS INSTRUMENT
AND SOME OF THE COLLATERAL DESCRIBED HEREIN IS OR IS TO BECOME FIXTURES ON THE REAL ESTATE DESCRIBED HEREIN. THE SECURED PARTY,
TO WIT, KEYBANK NATIONAL ASSOCIATION, MAY BE CONTACTED AT THE ADDRESS STATED ABOVE FOR INFORMATION REGARDING THE SECURITY INTEREST.
This Mortgage is granted
pursuant to the terms, provisions and conditions of the Credit Agreement, pursuant to which the Agent and the Lenders have extended
to the Borrowers a certain credit facility in the maximum aggregate principal amount of up to TWO HUNDRED FIFTY MILLION DOLLARS
AND ZERO CENTS ($250,000,000.00), lawful money of the United States, or so much thereof as may be outstanding from time to time,
as evidenced by the Credit Agreement and those certain promissory notes (as the same may be amended, restated or replaced from
time to time, individually and collectively, the “
Note
”), made payable by the Borrowers to the order of the
respective Lenders, bearing interest and being payable as set forth therein and in the Credit Agreement.
The term “Mortgagor”
shall include, wherever the context permits, its successors and assigns. The term “Agent”, “Lender(s)”
or the “Mortgagee” shall include, wherever the context permits, their respective successors and assigns as the holders
for the time being of this Mortgage, the Subsidiary Guaranty and other Obligations hereby secured. The term “Obligations”
shall have the meaning ascribed to such term in the Subsidiary Guaranty.
Capitalized terms used herein which are not otherwise
specifically defined shall have the same meaning herein as in the Credit Agreement
.
The term “
Mortgaged
Property
” shall mean and include all of the following described property:
A.
Real
Estate
. The land more particularly described on
Exhibit A
which is annexed hereto and made a part hereof (“
Land
”)
together with the improvements and other structures now or hereafter situated thereon (such improvements and other structures being
sometimes collectively called the “
Improvements
”) commonly known as and numbered 2450 Lake Debra Drive, Orlando,
Orange County, Florida 32835, together with all rights, privileges, tenements, hereditaments, appurtenances, easements, bridges,
rights of way, licenses and permits hereafter belonging to or enuring to the benefit of the Land and all right, title and interest
of Mortgagor in and to the land lying within any street or roadway adjoining any of the Land and all right, title and interest
of Mortgagor in and to any vacated or hereafter vacated streets or roads adjoining any of the Land, any and all reversionary or
remainder rights and including, but not limited to, appurtenant rights and easements for access and egress and utility connections,
and other rights now or hereafter appurtenant thereto (hereinafter, collectively, the “
Real Estate
”);
B.
Fixtures
.
All real estate fixtures or items which by agreement of the parties may be deemed to be such fixtures, now or hereafter owned by
Mortgagor, or in which Mortgagor has or hereafter obtains an interest, and now or hereafter located in or upon the Real Estate,
or now or hereafter attached to, installed in, or used in connection with any of the Real Estate, including, but not limited to,
any and all portable or sectional buildings, bathroom, plumbing, heating, lighting, refrigerating, ventilating and air-conditioning
apparatus and equipment, garbage incinerators and receptacles, elevators and elevator machinery, boilers, furnaces, stoves, tanks,
motors, sprinkler and fire detection and extinguishing systems, doorbell and alarm systems, window shades, screens, awnings, screen
doors, storm and other detachable windows and doors, mantels, partitions, built-in cases, counters and other fixtures to the Real
Estate whether or not included in the foregoing enumeration (“
Fixtures
”);
C.
Additional
Appurtenances
. All bridges, easements, rights of way, licenses, privileges, hereditaments, permits and appurtenances hereafter
belonging to or inuring to the benefit of the Real Estate and all right, title and interest of Mortgagor in and to the land lying
within any street or roadway adjoining any of the Real Estate and all right, title and interest of Mortgagor in and to any vacated
or hereafter vacated streets or roads adjoining any of the Real Estate and any and all reversionary or remainder rights (“
Additional
Appurtenances
”);
D.
Awards
.
All of the right, title and interest of Mortgagor in and to any award or awards heretofore made or hereafter to be made by any
municipal, county, state or federal authorities to the present or any subsequent owners of any of the Real Estate or the Land,
or the Improvements, or the Fixtures, or the Additional Appurtenances, or the Leases or the Personal Property, including, without
limitation, any award or awards, or settlements or payments, or other compensation hereafter made resulting from (x) condemnation
proceedings or the taking of the Real Estate, or the Land, or the Improvements, or the Fixtures, or the Additional Appurtenances,
or the Leases or the Personal Property, or any part thereof, under the power of eminent domain, or (y) the alteration of grade
or the location or discontinuance of any street adjoining the Land or any portion thereof, or (z) any other injury to or decrease
in value of the Mortgaged Property (“
Awards
”);
E.
Leases
.
All leases or subleases now or hereafter entered into of the Real Estate, or any portion thereof, and all rents, issues, profits,
revenues, earnings and royalties therefrom, and all right, title and interest of Mortgagor thereunder, including, without limitation,
cash, letters of credit, or securities deposited thereunder to secure performance by the tenants or occupants of their obligations
thereunder, whether such cash, letters of credit, or securities are to be held until the expiration of the terms of such leases,
subleases or occupancy agreements or applied to one or more of the installments of rent coming due prior to the expiration of such
terms including, without limitation, the right to receive and collect the rents thereunder (“
Leases
”); and
G.
Personal
Property
. All tangible and intangible personal property now owned or at any time hereafter acquired by Mortgagor of every nature
and description, and used in any way in connection with the Real Estate, the Fixtures, the Additional Appurtenances, or any other
portion of the Mortgaged Property, including, without limitation express or implied upon the generality of the foregoing, all Equipment,
Goods, Inventory, Fixtures, Accounts, Instruments, Documents and General Intangibles (as each such capitalized term is defined
in the Uniform Commercial Code in effect in the State where the Real Estate is situated (as amended from time to time, the “
UCC
”))
and further including, without any such limitation, Mortgagor’s right, title and interest in and to the following whether
or not included in the foregoing: materials; supplies; furnishings; chattel paper; money; bank accounts; security deposits; utility
deposits; any insurance or tax reserves deposited with Agent; any cash collateral deposited with Agent; claims to rebates, refunds
or abatements of real estate taxes or any other taxes; contract rights; plans and specifications; licenses, permits, approvals
and other rights; the rights of Mortgagor under contracts with respect to the Real Estate or any other portion of the Mortgaged
Property; signs, brochures, advertising, subject to any restrictions thereon to the extent such name is licensed from a third party,
the name by which the Mortgaged Property is known and any variation of the words thereof, and good will; copyrights, service marks,
and all goodwill associated therewith; and trademarks; all proceeds paid for any damage or loss to all or any portion of the Real
Estate, the Fixtures, the Additional Appurtenances, any other Personal Property or any other portion of the Mortgaged Property
(“
Insurance Proceeds
”); all Awards; all Leases; all books and records; and all proceeds, products, additions,
accessions, substitutions and replacements to any one or more of the foregoing (collectively, the “
Personal Property
”).
Mortgagor and the Agent
and the Lenders hereby acknowledge that the Mortgaged Property does not, and shall not, consist of any Fixtures or Personal Property
of any of the tenants of Mortgagor, except to the extent that Mortgagor has any rights, title, or interest in and to said Fixtures
and Personal Property.
TO HAVE AND TO HOLD
said Mortgaged Property bargained and described, together with all and singular the lands, tenements, privileges, water rights,
hereditaments and appurtenances thereto belonging or in anywise appertaining, and the reversion and reversions, remainder and remainders,
rents, issues and profits thereof, and all of the estate, right, title, claim and demands whatsoever of Mortgagor, either in law
or in equity, of, in and to the above-bargained Mortgaged Property in fee simple forever, as security for the faithful performance
of the Obligations secured hereby and as security for the faithful performance of each and all of the covenants, agreements, terms
and conditions of this Mortgage and to secure payment to the Lenders of the Obligations at the time and in the manner provided
for its payment in the Loan Documents.
PROVIDED HOWEVER, that
notwithstanding anything contained herein to the contrary, until the occurrence of an Event of Default uncured beyond all applicable
grace periods, the Mortgagor shall have the right to remain in quiet and peaceful possession of the Mortgaged Property, and to
collect, receive, retain and disburse all funds, revenues and profits derived from the Mortgaged Property.
PROVIDED ALWAYS, that
this instrument is upon the express condition that, if Mortgagor pays to Agent and the Lenders the Obligations, the interest thereon
and all other sums payable by Mortgagor to Agent as are secured hereby, in accordance with the provisions of the Credit Agreement,
the Subsidiary Guaranty, this Mortgage and the other Loan Documents to which Mortgagor is a party by joinder or otherwise, at the
times and in the manner specified, without deduction, fraud or delay, and if Mortgagor performs and complies with all the agreements,
conditions, covenants, provisions and stipulations contained herein, in the Credit Agreement, the Subsidiary Guaranty and the other
Loan Documents to which Mortgagor is a party by joinder or otherwise, then this Mortgage and the estate hereby granted shall cease
and become void and Agent shall provide and deliver to Mortgagor a discharge of this Mortgage in proper form for recording.
Mortgagor hereby grants
to Agent on behalf of the Lenders, a continuing security interest in all of the Mortgaged Property in which a security interest
may be granted under the UCC including, without limitation, the Fixtures and the Personal Property, together with all proceeds
and products, whether now or at any time hereafter acquired and used in any way in connection with the development, construction,
marketing or operation of the Real Estate, or in connection with the Mortgaged Property, to secure all Obligations.
This instrument is
intended to take effect as a financing statement under the UCC and is to be filed and indexed as a fixture filing pursuant to the
laws of the State of Florida. For that purpose, Mortgagor covenants that the name and address set forth on
Exhibit B
of
this Mortgage is the Mortgagor’s exact, correct, legal name and address.
Mortgagor hereby covenants,
warrants, represents and agrees with Agent, its successors and assigns, that:
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1.
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Title
. Mortgagor has good record and marketable title to the Mortgaged Property and has
good right, full power and lawful authority to grant and convey a mortgage in the same in the manner aforesaid; and that the Mortgaged
Property are free and clear of all encumbrances and exceptions, except for the schedule of exceptions, if any, listed in the title
insurance policy insuring Agent’s interest in the Mortgaged Property (the “
Permitted Title Exceptions
”).
Mortgagor shall make any further assurances of title that Agent may in good faith require including, without limitation, such further
instruments as may be requested by Agent to confirm the assignment to Agent of all Awards.
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2.
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Performance of Obligations
. Mortgagor shall pay the Obligations and interest thereon as
the same shall become due and payable, and pay and perform and observe all of the obligations and conditions set forth in each
of the Subsidiary Guaranty, this Mortgage, the Collateral Assignment of Leases and Rents, the Credit Agreement, and each of the
other Loan Documents to which Mortgagor is a party by joinder or otherwise, or other agreements, if any, executed by Mortgagor
in connection with the Loan.
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3.
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Protection and Maintenance
. Mortgagor shall protect and maintain, or cause to be maintained,
in good, first-class and substantial order, repair and tenantable condition (ordinary wear and tear excepted) at all times, consistent
with the construction of the Improvements contemplated by the Credit Agreement and subject to the requirements of the Credit Agreement
with respect to a casualty occurring on the Mortgaged Property, the buildings and structures now standing or hereafter erected
on the Mortgaged Property, and any additions and improvements thereto, and all Personal Property now or hereafter situated therein,
and the utility services, the parking areas and access roads, and all building fixtures and equipment and articles of personal
property now or hereafter acquired and used in connection with the operation of the Mortgaged Property. Mortgagor shall promptly
replace any of the aforesaid which may become lost, destroyed or unsuitable for use with other property of similar character.
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4.
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Insurance Coverages
. Mortgagor shall insure (or cause to be insured) the Mortgaged Property
and the operation thereof with such coverages and in such amounts as are required by the provisions of the Credit Agreement and
shall at all times keep such insurance in full force and effect and pay all premiums therefor annually, in advance. Mortgagor hereby
irrevocably appoints Agent its true and lawful attorney-in-fact, with full power of substitution, to assign any such policy (other
than any blanket policies) in the event of the foreclosure of this Mortgage or other transfer of title to the Mortgaged Property
in extinguishment, in whole or in part of the Obligations secured hereby.
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5.
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Insurance Proceeds
. Subject to the provisions of the Credit Agreement relating to the application
of insurance proceeds, the proceeds of any hazard insurance shall be applied to or toward the Obligations secured hereby in such
order as Agent may determine. Notwithstanding anything in this Section 5 to the contrary, however, if the insurer denies liability
to Mortgagor, Mortgagor shall not be relieved of any obligation under Section 3 of this Mortgage. If, pursuant to the provisions
hereof and of the Credit Agreement, Agent and the Lenders apply insurance proceeds to the Loan and do not release the same to Mortgagor,
the obligation of Mortgagor to repair, restore or rebuild shall be limited to taking all actions reasonably required to make the
Mortgaged Property safe and in compliance with Requirements and to restore the undamaged portion to an economically functional
unit to the extent that it is reasonably possible to do so.
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6.
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Eminent Domain
. Subject to the provisions of the Credit Agreement relating to the application
of condemnation proceeds, the Awards of damages on account of any condemnation for public use of, or injury to, the Mortgaged Property
shall be paid to Agent; such Awards shall, at the option of Agent, be applied to or toward the Obligations secured hereby in such
order as Agent may determine, or in the case of a partial taking, at Agent’s discretion, may be so applied or released to
Mortgagor upon such conditions as Agent may prescribe to be applied to restoration of that part of the Mortgaged Property which
remains, but not more than such portion of such Awards as may be required to restore or repair such damage or injury shall be so
released; and any balance remaining shall be applied by Agent to or toward the Obligations secured hereby in such order as Agent
may determine. If Agent and the Lenders apply such Awards to the Loan and do not release the same to Mortgagor, the obligation
of Mortgagor to repair, restore or rebuild shall be limited to taking all actions reasonably required to make the Mortgaged Property,
or what remains thereof, safe and in compliance with Requirements and to restore the remaining portion to an economically functional
unit to the extent that it is reasonably possible to do so.
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7.
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No Waste; Compliance With Law
. Mortgagor shall not commit or suffer any physical waste of
the Mortgaged Property, or any portion thereof, or any violation of any law, rule, regulation, ordinance, license or permit, or
the requirements of any licensing authority affecting the Mortgaged Property or any business conducted thereon, and shall not commit
or suffer any demolition, removal or material alteration of any of the Mortgaged Property (except for the replacement of Fixtures
and Personal Property in the ordinary course of business, so long as items of comparable value and quality are installed free and
clear of liens in favor of any other party other than the lien of the Loan Documents), without the express prior written consent
of Agent in each instance which consent shall not be unreasonably withheld or delayed, and shall not violate nor suffer the violation
of the covenants and agreements, if any, of record against the Mortgaged Property, and in all respects Mortgagor shall do all things
necessary to comply with, and keep in full force and effect, all licenses, permits and other governmental authorizations required
for the operation of the Mortgaged Property for its intended purposes, including, without limitation express or implied, the licenses,
permits and authorizations referenced in the Credit Agreement.
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8.
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Environmental and Related Matters; Indemnification
. The Mortgagor shall at all times comply
with all of the terms, conditions and provisions imposed on Mortgagor under the Indemnity Agreements.
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9.
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Payment of Taxes and Prevention of Liens
. Mortgagor shall pay before delinquent or before
any penalty for nonpayment attaches thereto, all taxes, assessments and charges of every nature and to whomever assessed that may
now or hereafter be levied or assessed upon the Mortgaged Property or any part thereof, or upon the rents, issues, income or profits
thereof or upon the lien or estate hereby created, whether any or all of said taxes, assessments or charges be levied directly
or indirectly or as excise taxes or as income taxes (other than any Excluded Taxes). Mortgagor may apply for tax abatements and
prosecute diligently and in good faith claims for refund so long as: (i) no additional taxes, interest thereon or penalties are
incurred thereby, (ii) a sufficient tax reserve fund as determined by Agent in good faith has been deposited with Agent, and (iii)
no proceedings are instituted to divest Mortgagor of title to all or any portion of the Mortgaged Property, or if instituted, Mortgagor
has provided a bond issued by a surety reasonably acceptable to the Agent and sufficient to stay all such proceedings. Mortgagor
shall pay all sums which, if unpaid, may result in the imposition of a lien on the Mortgaged Property before such lien may attach
(except that real estate taxes need not be paid prior to the due date thereof) or which may result in conferring upon a tenant
of any part or all of the Mortgaged Property a right to recover such sums as prepaid rent.
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10.
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Due On Sale; No Other Encumbrances; No Transfer of Ownership Interests; Failure to Comply with
Permitted Title Exceptions
. Except as otherwise specifically provided for in the Credit Agreement, or in this Mortgage, it
shall be an Event of Default under the Credit Agreement, a breach of the conditions of this Mortgage and an event permitting Agent
or any Lender to accelerate all indebtedness secured hereby, if, without Agent’s prior written consent in each instance,
which consent may be granted, withheld or conditionally granted in Agent’s sole discretion: (a) there is any sale, conveyance,
transfer (other than transfers of ownership interests, directly or indirectly, in Borrower or Mortgagor that do not violate the
terms of the Credit Agreement and other than a transfer by a tenant of its interest in a Lease without Mortgagor’s consent,
to the extent permitted by the terms of such Lease) or encumbrance of, or lien imposed upon (and not timely bonded off or resolved
within thirty (30) days), all or any portion of the Mortgaged Property; or (b) there is a failure to comply with the provisions
of, or there is a default under, any of the Permitted Title Exceptions by Mortgagor unless cured within any applicable grace period
provided for in the applicable Permitted Title Exception and such failure results in a Material Adverse Effect.
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11.
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Agent’s and Lenders’ Rights
. If Mortgagor shall neglect or refuse: (a) to maintain
and keep in good repair the Mortgaged Property or any part thereof as required by this Mortgage or the Credit Agreement, or (b)
to maintain and pay the premiums for insurance which may be required by this Mortgage or the Credit Agreement, or (c) to pay and
discharge all taxes of whatsoever nature, assessments and charges of every nature and to whomever assessed, as required by this
Mortgage or the Credit Agreement, or (d) to pay the sums required to be paid by this Mortgage or the Credit Agreement, or (e) to
satisfy any other terms or conditions of this Mortgage, or any instrument secured hereby, Agent may, at its election in each instance,
but without any obligation whatsoever to do so, upon thirty (30) days prior written notice (except in the case of (i) an emergency
where there is danger to person or property, or (ii) required insurance coverage would lapse, or (iii) an Event of Default exists,
in each of which events no notice shall be required), cause such repairs or replacements to be made, obtain such insurance or pay
said taxes, assessments, charges, and sums, incur and pay reasonable amounts in protecting its rights hereunder and the security
hereby granted, pay any balance due under any conditional agreement of sale (or lease) of any property included as a part of the
Mortgaged Property, and pay any amounts as Agent deems reasonably necessary or appropriate to satisfy any term or condition of
this Mortgage, which Mortgagor shall have failed to satisfy, or to remedy any breach of such term or condition, and any amounts
or expenses so paid or incurred, together with interest thereon from the date of payment by Agent or the Lenders at the Default
Rate as provided in the Note or Credit Agreement shall be immediately due and payable by Mortgagor to Agent and the Lenders and
until paid shall be secured hereby equally and ratably, and the same may be collected as part of said principal debt in any suit
hereon or upon the Note or the Subsidiary Guaranty, as applicable. No payment by Agent or the Lenders shall relieve Mortgagor from
any default hereunder or impair any right or remedy of Agent consequent thereon.
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12.
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Certain Expenses
. If any action or proceeding is commenced, including, without limitation,
an action to foreclose this Mortgage or to collect the debt hereby secured, to which action or proceeding Agent or any Lender is
made a party by reason of the execution of this Mortgage, or by reason of any Obligation which it secures, or by reason of entry
or any other action under this Mortgage, or if in Agent’s judgment it becomes necessary in connection with legal proceedings
or otherwise to defend or uphold the mortgage hereby granted or the lien hereby created or any act taken to defend or uphold the
mortgage hereby granted or the lien hereby created or any act taken under this Mortgage, all sums reasonably paid or incurred by
Agent or any Lender for the expense of any litigation or otherwise, in connection with any rights created by this Mortgage or any
other Loan Document, shall be paid by Mortgagor, or may at the option of Agent, if not so paid, be added to the debt secured hereby
and shall be secured hereby equally and ratably and shall bear interest until paid at the Default Rate set forth in the Note or
the Credit Agreement.
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13.
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Regarding Leases
. As to all leases and occupancy agreements, Agent, at its option from time
to time, may require that all security deposits and similar funds or security provided by a lessee or occupant be deposited with
Agent, or with an escrow agent satisfactory to Agent, subject to the rights of the lessee or occupant, but otherwise subject, with
respect to Mortgagor’s rights therein, to a security interest in favor of Agent.
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14.
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Declaration of Subordination
. At the option of Agent, which may be exercised at any time
or from time to time, by written notice to Mortgagor and to any applicable tenant, this Mortgage shall become subject and subordinate,
in whole or in part (but not with respect to priority of entitlement to insurance proceeds or condemnation proceeds), to any and
all leases of all or any part of the Mortgaged Property upon the execution by Agent and recording or filing thereof, at any time
hereafter in the appropriate official records of the county wherein the Mortgaged Property are situated of a unilateral declaration
to that effect.
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15.
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Assignment of Rents.
(i) As further security for the repayment of the Obligations and any
amounts due pursuant to this Mortgage, Mortgagor does hereby sell, assign and transfer to Agent, for the benefit of the Lenders,
all rents, leases, issues, deposits and profits now due and which may hereinafter become due under or by reason of any lease or
any letting of, or any agreement for the use, sale, or occupancy of the Mortgaged Property or any portion thereof (whether written
or verbal), which may have been heretofore or may hereafter be made or agreed to or which may be made or agreed to by Agent under
the powers herein granted, including without limitation sale contracts, leases, escrow and other agreements, it being Mortgagor’s
intention hereby to establish an absolute transfer and assignment of all such leases, contracts, escrows and agreements pertaining
thereto (such leases, contracts, escrows and agreements being collectively referred to hereinbelow as “agreements”
and any such individual lease, contract, escrow or other agreement being referred to hereinbelow as an “agreement”),
and all the avails thereof, to Agent, for the benefit of the Lenders.
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So long as
(i) no Event of Default exists and (ii) no default has occurred and is continuing uncured beyond the applicable notice and grace
period, if any, in the performance of any obligation, covenant or agreement herein, or in the other Loan Documents, contained and
on the part of Mortgagor to be performed (collectively, a “Continuing Default”), Mortgagor shall have the right and
license to manage, lease and operate the Mortgaged Property and to collect at the time of, but not more than one (1) month prior
to, the date provided for the payment thereof, all rents, income and profits arising under the Leases or from the premises described
therein and, subject to the provisions of the other Loan Documents, to retain, use and enjoy the same.
At any time
when a Continuing Default exists, Agent, without in any way waiving such default, may at its option, without notice, and without
regard to the adequacy of the security for the obligations secured hereby revoke the right and license granted above to Mortgagor
and Mortgagor does hereby irrevocably appoint Agent as its true and lawful attorney in its name and stead (with or without taking
possession of the Mortgaged Property) to rent, lease, let, or sell all or any portion of the Mortgaged Property to any party or
parties at such price and upon such term as Agent in its sole and absolute discretion may determine, to exercise any and all rights
including rights of first refusal and options of any Mortgagor to purchase and otherwise acquire title to all or any part of the
Mortgaged Property, and to collect all of such rents, issues, deposits, profits and avails now due or that may hereafter become
due under any and all of such agreements or other tenancies now or hereafter existing on the Mortgaged Property, with the same
rights and powers and subject to the same immunities, exoneration of liability and rights of recourse and indemnity as Agent would
have upon taking possession of the Mortgaged Property pursuant to the provisions set forth hereinbelow.
This assignment
confers upon Agent a power coupled with an interest and it cannot be revoked by Mortgagor.
(ii) Mortgagor
represents and agrees that without the prior written consent of Agent, which consent shall not be unreasonably withheld, no rent
for right of future possession will be paid by any person in possession of any portion of the Mortgaged Property in excess of one
installment thereof paid in advance (other than with respect to security deposits and last month’s rents collected in the
ordinary course of business) and that no payment of rents to become due for any portion of the Mortgaged Property has been or will
be waived, conceded, released, reduced, discounted, or otherwise discharged or compromised by Mortgagor other than in connection
with the grant of market related concessions appropriate to attract tenants. Mortgagor agrees that it will not assign any of such
rents, issues, profits, deposits or avails other than with respect to the Loan or as otherwise expressly permitted pursuant to
the Credit Agreement.
(iii) Mortgagor
further agrees to assign and transfer to Agent, for the benefit of the Lenders, all future leases and agreements pertaining to
all or any portion of the Mortgaged Property and to execute and deliver to Agent, immediately upon demand of Agent, all such further
assurances and assignments pertaining to the Mortgaged Property as Agent may from time to time require.
(iv) Mortgagor
shall, at its own cost: (a) at all times materially perform and observe all of the covenants, conditions and agreements of the
lessor under the terms of any or all Leases or similar agreements affecting all or any part of the Mortgaged Property; (b) at all
times enforce and secure the performance and observance of all of the material covenants, conditions and agreements of the lessees
under the terms of any or all of said Leases or other agreements; (c) appear in and defend any action or other proceeding arising
out of or in any manner connected with said Leases and other agreements, and to pay any and all costs of Agent incurred by reason
of or in connection with said proceedings, including, without limitation, reasonable and actual attorneys’ fees, expenses
and court costs; and (d) promptly furnish Agent with copies of any notices of default either sent or received by Mortgagor under
the terms of or pursuant to any of said Leases or other agreements.
(v) Although
it is the intention of Mortgagor and Agent that the assignment, including, without limitation, the power of attorney appointment,
contained in this
Section 15
is a present assignment, it is expressly understood and agreed, anything herein contained to
the contrary notwithstanding, that Agent shall not exercise any of the rights and powers conferred upon it herein unless and until
an Event of Default has occurred, and is continuing.
(vi) Agent,
in the exercise of the rights and powers conferred upon it herein, shall have full power to use and apply the rents, issues, deposits,
profits and avails of the Mortgaged Property to the payment of or on account of the following, in such order as set forth in the
Credit Agreement or, if not addressed therein, in such order as Agent may, in its sole and absolute discretion determine:
(a) operating
expenses of the Mortgaged Property (including, without limitation, all costs of management, sale and leasing thereof, which shall
include reasonable compensation to Agent and its agents, if management be delegated thereto, reasonable and actual attorneys’
fees, expenses and court costs, and lease or sale commissions and other compensation and expenses of seeking and procuring tenants
or purchasers and entering into leases or sales), establishing any claims for damages, and premiums on insurance authorized hereinabove;
(b) taxes,
special assessments, water and sewer charges on the Mortgaged Property now due or that may hereafter become due;
(c) any
and all repairs, decorating, renewals, replacements, alterations, additions, betterments and improvements of the Mortgaged Property
(including, without limitation, the cost from time to time of installing or replacing personal property therein, and of placing
the Mortgaged Property in such condition as will, in the sole judgment of Agent, make them readily rentable or salable);
(d) any
Obligations or any deficiency that may result from any foreclosure sale pursuant thereto; and
(e) any
remaining funds to Mortgagor or its successors or assigns, as their interests and rights may appear.
(vii) Mortgagor
does further specifically authorize and instruct each and every present and future lessee or purchaser of all or any portion of
the Mortgaged Property to pay all unpaid rentals or deposits agreed upon in any lease or agreement pertaining to the Mortgaged
Property to Agent, for the benefit of the Lenders, upon receipt of demand from Agent to pay the same without any further notice
or authorization by Mortgagor, and Mortgagor hereby waives any rights or claims it may have against any lessee by reason of such
payments to Agent.
(viii) Neither
Agent nor any Lender shall be obligated to perform or discharge, nor does Agent or any Lender hereby undertake to perform or discharge,
any obligation, duty or liability under any Lease or agreement pertaining to the Mortgaged Property, and Mortgagor shall and does
hereby agree to indemnify and hold Agent and the Lenders harmless from and against any and all liability, loss and damage that
Agent or any Lender may or might incur under any such Lease or agreement or under or by reason of the assignment thereof, as well
as any and all claims and demands whatsoever which may be asserted against Agent or any Lender by reason of any alleged obligations
or undertakings on Agent’s or any Lender’s part to perform or discharge any of the terms, covenants or conditions contained
in such Leases or agreements, except to the extent caused by the negligence or omissions of Agent or any of its agents in the exercise
of its rights and remedies. Should Agent or any Lender incur any such liability, loss or damage under any such Lease or agreement,
or under or by reason of the assignment thereof, or in the defense of any claims or demands relating thereto, Mortgagor shall reimburse
Agent and such Lender for the amount thereof (including, without limitation, reasonable attorneys’ fees, expenses and court
costs) immediately upon demand
(ix) Nothing
herein contained shall be construed as making or constituting Agent or any Lender a “mortgagee in possession” in the
absence of the taking of actual possession of the Mortgaged Property by Agent pursuant to the provisions set forth herein. In the
exercise of the powers herein granted Agent, no liability shall be asserted or enforced against Agent or any Lender, all such liability
being expressly waived and released by Mortgagor.
(x) Intentionally
Omitted.
(xi) Without
limitation of the provisions of Section 15 or of the absolute nature of the assignment of the rents, leases, issues, deposits and
profits as set forth hereinabove, Mortgagor and Agent agree that (a) this Mortgage shall constitute a “security agreement”
for purposes of Section 552(b) of the Bankruptcy Code, (b) the security interest created by this Mortgage extends to property of
Mortgagor acquired before the commencement of a case in bankruptcy and to all amounts paid as rents, leases, issues, deposits and
profits, and (c) such security interest shall extend to all rents, leases, issues, deposits and profits acquired by the estate
after the commencement of any case in bankruptcy. Without limitation of the provisions of Section 15 or of the absolute nature
of the assignment of the rents, leases, issues, deposits and profits hereunder, to the extent Mortgagor (or Mortgagor’s bankruptcy
estate) shall be deemed to hold any interest in any such rents, leases, issues, deposits and profits after the commencement of
a voluntary or involuntary bankruptcy case, Mortgagor hereby acknowledges and agrees that all such rents, leases, issues, deposits
and profits are and shall be deemed to be “cash collateral” under Section 363 of the Bankruptcy Code. Mortgagor may
not use the cash collateral without the consent of Agent and/or an order of any bankruptcy court pursuant to 11 U.S.C. 363(c)(2),
and Mortgagor hereby waives any right it may have to assert that such rents, leases, issues, deposits and profits do not constitute
cash collateral. No consent by Agent to the use of cash collateral by Mortgagor shall be deemed to constitute Agent’s approval,
as the case may be, of the purpose for which such cash collateral was expended.
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16.
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Security Agreement; UCC Filing
. (i) This Mortgage shall be deemed a “Security Agreement”
as defined in the UCC, and creates a security interest in favor of Agent, for the benefit of the Lenders, which security interest
Mortgagor hereby grants to Agent, in all property including, without limitation, (a) all sums at any time on deposit for the benefit
of Mortgagor or held by Agent (whether deposited by or on behalf of Mortgagor or anyone else) pursuant to any of the provisions
of this Mortgage or the other Loan Documents, and (b) with respect to any Personal Property included in the granting clauses of
this Mortgage, which Personal Property may not be deemed to be affixed to the Mortgaged Property or may not constitute a “fixture”
(as defined in the UCC) which property is hereinafter referred to as “Personal Property”, and all replacements of,
substitutions for, additions to and the proceeds thereof (all of said Personal Property and the replacements, substitutions and
additions thereto and the proceeds thereof being sometimes hereinafter collectively referred to as “
Collateral
”),
and that a security interest in and to the Collateral is hereby granted to Agent, for the benefit of the Lenders, and the Collateral
and all of Mortgagor’s right, title and interest therein are hereby assigned to Agent, for the benefit of the Lenders, all
to secure payment of the Obligations.
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(ii) Mortgagor
warrants that (a) Mortgagor’s (that is, “Debtor’s”) name, identity or organizational structure and principal
place of business are as set forth in
Exhibit B
attached hereto and by this reference made a part hereof; (b) Mortgagor
(that is, “Debtor”) has been using or operating under said name, identity or organizational structure without change
for the time period set forth in
Exhibit B
attached hereto and by this reference made a part hereof; and (c) the location
of all collateral constituting Fixtures is upon the Land. Mortgagor covenants and agrees that Mortgagor will furnish Agent with
notice of any change in name, identity, organizational structure, or principal place of business within thirty (30) days of the
effective date of any such change and Mortgagor will promptly execute any financing statements or other instruments deemed necessary
by Agent to prevent any filed financing statement from becoming misleading or losing its perfected status. The information contained
in this Paragraph 16 is provided in order that this Mortgage shall comply with the requirements of the UCC for instruments
to be filed as financing statements. The names of the “Debtor” and the “Secured Party”, the identity or
organizational structure and residence or principal place of business of “Debtor”, and the time period for which “Debtor”
has been using or operating under said name and identity or organizational structure without change, are as set forth in Schedule
1 of
Exhibit B
attached hereto and by this reference made a part hereof; the mailing address of the “Secured Party”
from which information concerning the security interest may be obtained, and the mailing address of “Debtor”, are as
set forth in Schedule 2 of said
Exhibit B
attached hereto; and a statement indicating the types, or describing the items,
of collateral is set forth in this Mortgage.
(iii) Mortgagor
upon Agent’s written request shall promptly cause this Mortgage and any required financing statements to be recorded and
re-recorded, registered and re-registered, filed and re-filed at such times and places as may be required by law or reasonably
deemed advisable by Agent to create, preserve or protect the priority hereof and of any lien created hereby upon the Mortgaged
Property or any part thereof; and Mortgagor shall from time to time do and cause to be done all such things as may be reasonably
required by Agent, or required by law, including all things which may from time to time be necessary under the UCC fully to create,
preserve and protect the priority hereof and of any lien created hereby upon said property. Mortgagor hereby irrevocably appoints
Agent, or any agent designated by Agent, the true and lawful attorney-in-fact of Mortgagor, with full power of substitution, to
execute, acknowledge and deliver any such things on behalf of Mortgagor which Mortgagor fails or refuses to do after written notice
from Agent.
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17.
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Right to Deal with Successor
. Agent may, without notice to any person, deal with any successor
in interest of Mortgagor herein regarding this Mortgage and the debt hereby secured in all respects as it might deal with Mortgagor
herein, without in any way affecting the liability hereunder or upon the debt hereby secured of any predecessor in interest of
the person so dealt with; and no foreclosure or sale of the Mortgaged Property hereby encumbered, nor any forbearance on the part
of Agent, nor any extension by Agent of the time for payment of the debt hereby secured, shall operate to release, discharge, modify,
change or affect the original liability of any predecessor in interest of the equity owner at the time of such sale, forbearance
or extension.
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18.
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Acceleration of Debt; Foreclosure of Mortgage
. If there is an Event of Default under the
Note, the Subsidiary Guaranty or the Credit Agreement or if an event occurs which pursuant to the Note, the Subsidiary Guaranty
or the Credit Agreement entitles Agent to accelerate the Loan, then, at the option of Agent, to the extent permitted by applicable
law, all of the Obligations hereby secured shall become immediately due and payable without further notice. Upon an acceleration
of the Obligations secured by this Mortgage, Agent, on behalf of the Lenders, at its option may:
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(i) Institute
a foreclosure action in accordance with the law of the State of Florida or take any other action as may be allowed, at law or in
equity, for the enforcement of the Loan Documents and realization on the Mortgaged Property or any other security afforded by the
Loan Documents. In the case of a judicial proceeding, Agent may proceed to final judgment and execution for the amount of the Obligations
owed as of the date of the judgment, together with all costs of suit, reasonable and actual attorneys’ fees (including those
incurred pursuant to proceedings under 11 U.S.C.) and interest on the judgment at the maximum rate permitted by law from the date
of the judgment until paid;
(ii) To
the extent permitted by, and subject to applicable Florida law, institute a non-judicial foreclosure proceeding in compliance with
applicable law in effect on the date foreclosure is commenced for the Mortgagee to sell the Mortgaged Property either as a whole
or in separate parcels as Agent may determine at public sale or sales to the highest bidder for cash, in order to pay the Obligations.
If the Mortgaged Property is sold as separate parcels, Agent may direct the order in which the parcels are sold. Mortgagee shall
deliver to the purchaser a Mortgagee’s deed or deeds without covenant or warranty, express or implied. Mortgagee may postpone
the sale of all or any portion of the Mortgaged Property by public announcement at the time and place of sale, and from time to
time may further postpone the sale by public announcement in accordance with applicable law.
(iii) To
the extent permitted by, and subject to applicable Florida law, have a receiver appointed to enter into possession of the Mortgaged
Property, lease the Mortgaged Property (in accordance with Section 19.2 below), collect the revenues from any Leases and apply
them as the appropriate court may direct. Agent shall be entitled to the appointment of a receiver without the necessity of proving
either the inadequacy of the security or the insolvency of Mortgagor. Mortgagor shall be deemed to have consented to the appointment
of the receiver. The collections or receipt of any of the revenues by Agent or any receiver shall not affect or cure any Event
of Default.
(iv) In
exercising its power of sale under this instrument, Agent may sell the Personal Property (in accordance with, and subject to Florida
law), or any part thereof, either separately from or together with the Real Estate and the balance of the Mortgaged Property, or
any part thereof, either as one parcel or unit or in such separate parcels or units, all as Agent may in its discretion elect;
and may so sell the Mortgaged Property, or the Real Estate, as one parcel or unit or in such separate parcels or units, all as
Agent may in its discretion elect; and may so sell the Mortgaged Property or any part thereof either separately from or together
with the whole or any part of other collateral which may constitute security for any Obligation secured by the Mortgaged Property,
also as Agent may in its discretion elect. In the event of any separate sale of Personal Property, Agent will give to Mortgagor
reasonable notice of the time and place of any public sale or of the time after which any private sale or other intended disposition
thereof is to be made, and such requirement of reasonable notice shall be met if such notice is mailed postage prepaid to the address
of Mortgagor as provided in this Mortgage at least ten (10) days before the time of the sale or other disposition.
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19.
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Additional Rights of Agent
.
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19.1
Enter
and Perform
. Mortgagor authorizes Agent, in addition to all other rights granted by law or by this Mortgage, or by any of the
other Loan Documents, whenever and as long as any default hereunder shall exist and remain uncured beyond the applicable grace
period, if any, and without notice beyond the notice, if any, required to be given by the terms of the Note, the Subsidiary Guaranty
or the Credit Agreement, or upon the occurrence of an Event of Default under the Credit Agreement, to the extent permitted by applicable
law, to enter and take possession of all or any part of the Mortgaged Property and to use, lease, operate, manage and control the
same and conduct the business thereof, and perform lessor’s obligations under any lease or Mortgagor’s obligations
under any other agreement affecting all or any part of the Mortgaged Property, and collect the rents, profits and all receipts
of every nature therefrom as Agent shall deem best.
19.2
Appointment
of Receiver
. To the maximum extent permitted by law, upon, or at any time prior or after, the filing of any complaint to foreclose
the lien of this Mortgage or instituting any other foreclosure of the liens and security interests provided for in this Mortgage
or any other legal proceedings under this Mortgage, Agent may, at Agent’s sole option, make application to a court of competent
jurisdiction for appointment of a receiver for all or any part of the Mortgaged Property, as a matter of strict right and without
notice to Mortgagor, and Mortgagor does hereby irrevocably consent to such appointment, waives any and all notices of and defenses
to such appointment and agrees not to oppose any application therefor by Agent, but nothing herein is construed to deprive Agent
of any other right, remedy or privilege Agent may now have under the law to have a receiver appointed; provided that the appointment
of such receiver, trustee or other appointee by virtue of any court order, statute or regulation shall not impair or in any manner
prejudice the rights of Agent to receive payment of all of the rents, issues, deposits and profits pursuant to other terms and
provisions set forth in this Mortgage. Such appointment may be made either before or after sale, without notice; without regard
to the solvency or insolvency, at the time of application for such receiver, of the person or persons, if any, liable for the payment
of the Obligations; without regard to the value of the Mortgaged Property at such time and whether or not the same is then occupied
as a homestead; without bond being required of the applicant; and Agent hereunder or any employee or agent thereof may be appointed
as such receiver. Such receiver shall have all powers and duties prescribed by Florida law, including the power to take possession,
control and care of the Mortgaged Property and to collect all rents, issues, deposits, profits and avails thereof during the pendency
of such foreclosure suit and apply all funds received toward the Obligations, and in the event of a sale and a deficiency where
Mortgagor has not waived its statutory rights of redemption, during the full statutory period of redemption, as well as during
any further times when Mortgagor or its devisees, legatees, administrators, legal representatives, successors or assigns, except
for the intervention of such receiver, would be entitled to collect such rents, issues, deposits, profits and avails, and shall
have all other powers that may be necessary or useful in such cases for the protection, possession, control, management and operation
of the Mortgaged Property during the whole of any such period. To the extent permitted by law, such receiver may extend or modify
any then existing Leases and make new Leases of the Mortgaged Property or any part thereof, which extensions, modifications and
new Leases may provide for terms to expire, or for options to lessees to extend or renew terms to expire, beyond the maturity date
of the Loan, it being understood and agreed that any such Leases, and the options or other such provisions to be contained therein,
shall be binding upon Mortgagor and all persons whose interests in the Mortgaged Property are subject to the lien hereof, and upon
the purchaser or purchasers at any such foreclosure sale, notwithstanding any redemption from sale, discharge of indebtedness,
satisfaction of foreclosure decree or issuance of certificate of sale or deed to any purchaser.
19.3
Foreclosure
Sale
. In the event of any foreclosure sale of the Mortgaged Property, the same may be sold in one or more parcels. Agent or
any Lender may be the purchaser at any foreclosure sale of the Mortgaged Property or any part thereof.
19.4
Repairs
and Improvements
. Upon every such entry, Agent may from time to time at the expense of Mortgagor make all such repairs, replacements,
alterations, additions and improvements to the Mortgaged Property as Agent may deem proper, but in no event shall Agent be obligated
to do so, and may, but shall not be obligated to, exercise all rights and powers of Mortgagor, either in the name of Mortgagor,
or otherwise as Agent shall determine. Without limitation express or implied upon the generality of the foregoing, Agent shall
have the right to do all things necessary or desirable in order to keep in full force and effect all applicable licenses, permits
and authorizations and any amendments thereto.
19.5
Pay
Costs and Expenses
. Upon such entry, Agent may, at its option, but without any obligation to do so, do any one or more of the
following: pay and incur all expenses necessary or deemed by it appropriate for the holding and operating of the Mortgaged Property,
the conduct of any business thereon, the maintenance, repair, replacement, alteration, addition and improvement of the Mortgaged
Property, including without limitation payments of taxes, assessments, insurance, wages of employees connected with the Mortgaged
Property or any business conducted thereon, charges and reasonable compensation for services of Agent, its attorneys and accountants
and all other persons engaged or employed in connection with the Mortgaged Property or of any business conducted thereon and, in
addition, Agent, at its option, may, but shall not be obligated to, make payments or incur liability with respect to obligations
arising prior to the date it takes possession.
19.6
Add
to Secured Indebtedness
. All obligations so paid or incurred by Agent shall be reimbursed or paid for by Mortgagor upon demand
and prior to the repayment thereof shall be added to the Obligations secured hereby and shall bear interest at the Default Rate
provided for in the Note, the Subsidiary Guaranty or the Credit Agreement, and shall be secured hereby equally and ratably. Agent
may also reimburse itself therefor from the income or receipts of the Mortgaged Property or any business conducted thereon, or
from the sale of all or any portion of the Mortgaged Property. Agent may also apply toward any of the Obligations any tax or insurance
reserve account, deposit or any sum credited or due from Agent to Mortgagor without first enforcing any other rights of Agent against
Mortgagor or against any endorser or guarantor of any of the Obligations or against the Mortgaged Property.
19.7
State
Specific Provisions
. See
Exhibit C
attached hereto and incorporated herein by reference.
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20.
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Attorney-In-Fact
. Mortgagor hereby irrevocably constitutes and appoints Agent, or any agent
designated by Agent, for so long as this Mortgage remains undischarged of record, as attorney-in-fact of Mortgagor to execute,
acknowledge, seal and deliver all instruments, agreements, deeds, certificates and other documents of every nature and description
in order to carry out or implement the exercise of Agent’s rights hereunder and under the other Loan Documents.
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21.
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Contest of Laws
. Subject always to the additional terms and conditions set forth in the
Credit Agreement, Mortgagor shall have the right to contest by appropriate legal proceedings, but without cost or expense to Agent
or any Lender, the validity of any Requirements affecting the Mortgaged Property subject to the provisions of the Credit Agreement
and the Indemnity Agreements dealing with the right to contest, but only if compliance may be so contested without: (a) the imposition
of any charge, lien or liability against the Mortgaged Property, (b) the loss or suspension of any license, right or permit with
respect to the Mortgaged Property, and (c) causing any Default to exist under the Credit Agreement, the Subsidiary Guaranty or
any other Loan Document. Subject to the foregoing, Mortgagor may postpone compliance therewith until the final determination of
any such proceedings, provided it shall be prosecuted with due diligence and dispatch, and if any lien or charge is incurred, Mortgagor
may, nevertheless, make the contest and delay compliance, provided Agent is furnished with security satisfactory to Agent in its
sole and absolute discretion against any loss or injury by reason of such noncompliance or delay and provided further that the
same is and may be done without causing any Default to exist under the Credit Agreement or any of the other Loan Documents.
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22.
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Notices
. Any demand, notice or request by either party to the other shall be given in the
manner provided therefor in the Credit Agreement.
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23.
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Agent/Lender Not Obligated; Cumulative Rights
. Nothing in this instrument shall be construed
as obligating Agent or any Lender to take any action or incur any liability with respect to the Mortgaged Property or any business
conducted thereon, and all options given to Agent are for its benefit and shall and may be exercised in such order and in such
combination as Agent in its sole discretion may from time to time decide.
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24.
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Severability
. In case any one or more of the provisions of this Mortgage, the Note, the
Collateral Assignment of Leases and Rents, the Subsidiary Guaranty, the Credit Agreement, any of the other Loan Documents, or any
other agreement now or hereafter executed in connection with any one or more of the foregoing are held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof. Each
of the provisions of every such agreement, document or instrument shall be enforceable by Agent to the fullest extent now or hereafter
not prohibited by applicable law.
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25.
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No Waiver
. No consent or waiver, express or implied, by Agent to or of any default by Mortgagor
shall be construed as a consent or waiver to or of any other default at the same time or upon any future occasion.
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26.
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Intentionally Omitted.
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27.
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Waivers By Mortgagor
. Mortgagor, to the fullest extent that Mortgagor may do so, hereby:
(a) agrees that Mortgagor will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or
hereafter in force providing for any appraisement, valuation, stay or extension, or any redemption after foreclosure sale, and
waives and releases all rights of redemption after foreclosure sale, valuation, appraisement, stay of execution, notice of election
to mature or declare due the debt secured hereby; and (b) waives all rights to a marshalling of the assets of Mortgagor, including
the Mortgaged Property, or to a sale in inverse order of alienation in the event of a sale hereunder of the Mortgaged Property,
and agrees not to assert any right under any statute or rule of law pertaining to the marshalling of assets, sale in inverse order
of alienation, or other matters whatever to defeat, reduce or affect the right of Agent under the terms of this Mortgage, the Subsidiary
Guaranty or the Note to a sale of the Mortgaged Property for the collection of the indebtedness evidenced by the Note or the Obligations
under the Subsidiary Guaranty without any prior or different resort for collection, or the right of Agent to the payment of such
Obligations out of the proceeds of sale of the Mortgaged Property in preference to every other claimant whatever.
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28.
|
Business Loan
. Mortgagor represents and warrants to Agent and the Lenders (i) that the proceeds
of the Loan that is the subject of the Subsidiary Guaranty, secured by this Mortgage will be used for business or commercial purposes,
none of the proceeds of the Loan that is the subject of the Subsidiary Guaranty secured hereby shall be used for personal, family
or household purposes, and that no individual liable for the Loan resides or intends to reside in any portion of the Mortgaged
Property, and (ii) that the Loan evidenced by the Note is an exempted transaction under the Truth In Lending Act, 15 U.S.C. §1601
et seq
.
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29.
|
Headings
. Headings and captions in this Mortgage are for convenience and reference only
and the words and phrases contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction
or meaning of any of the provisions hereof.
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30.
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Time of Essence
. Time shall be of the essence of each and every provision of the Credit
Agreement, the Note, the Subsidiary Guaranty, this Mortgage and each of the other Loan Documents.
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31.
|
Adjustable Mortgage Loan Provision
. The Obligations which this Mortgage secures are based
on an adjustable note on which the interest rate may be adjusted from time to time in accordance with the terms and provisions
set forth in the Note.
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32.
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Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial
.
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A.
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Substantial Relationship
. It is understood and agreed that all of the Loan Documents were
delivered in the State of New York, which State the parties agree has a substantial relationship to the parties and to the underlying
transactions embodied by the Loan Documents.
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B.
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Place of Delivery
. Mortgagor agrees to furnish to Agent at Agent’s office in New York,
New York all further instruments, certifications and documents to be furnished hereunder.
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C.
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Governing Law
. This Mortgage, except as otherwise provided in herein, and each of the other
Loan Documents shall in all respects be governed, construed, applied and enforced in accordance with the laws of the State of New
York without regard to principles of conflicts of law as to all matters, except that those matters relating to the enforcement
or exercise of any and all remedies of Mortgagee hereunder and the creation, perfection and validity of the lien of the Mortgage
will be governed by Florida law. Enforcement of any and all remedies of Mortgagee hereunder shall be governed by the internal laws
of the State of Florida.
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D.
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Exceptions
. Notwithstanding the foregoing choice of law:
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1. The
procedures governing the enforcement by Agent of its foreclosure and other remedies against Mortgagor under this Mortgage and under
the other Loan Documents with respect to the Mortgaged Property or other assets situated in the State of Florida, including by
way of illustration, but not in limitation, actions for foreclosure, for injunctive relief or for the appointment of a receiver
shall be governed by the laws of the State of Florida;
2. Agent
shall comply with applicable law in the State of Florida to the extent required by the law of such jurisdiction in connection with
the foreclosure of the security interests and liens created under this Mortgage and the other Loan Documents with respect to the
Mortgaged Property or other assets situated in the State of Florida; and
3. Provisions
of Federal law and the law of the State of Florida shall apply in defining the terms Hazardous Substances, Environmental Laws and
Requirements applicable to the Mortgaged Property as such terms are used in the Credit Agreement, the Indemnity Agreements and
the other Loan Documents.
Nothing contained
herein or any other provisions of the Loan Documents shall be construed to provide that the substantive laws of the State of Florida
shall apply to any parties’ rights and obligations under any of the Loan Documents, which, except as expressly provided in
clauses (1), (2) and (3) of this Section 32(D), are and shall continue to be governed by the substantive law of State of New York,
except as set forth in clauses (1), (2) and (3) of this Section 32(D). In addition, the fact that portions of the Loan Documents
may include provisions drafted to conform to the law of the State of Florida is not intended, nor shall it be deemed, in any way,
to derogate the parties’ choice of law as set forth or referred to in this Mortgage, the Note, the Subsidiary Guaranty, the
Credit Agreement or in the other Loan Documents. The parties further agree that the Agent may enforce its rights under the Loan
Documents including, but not limited to, its rights to sue the Mortgagor or to collect any outstanding indebtedness in accordance
with applicable law.
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33.
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Consent to Jurisdiction
. Mortgagor hereby consents to personal jurisdiction in any state
or Federal court located within the State of New York.
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34.
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Certification
. Mortgagor hereby certifies that it is a duly organized, validly existing
limited liability company organized and in good standing under the laws of the State of Delaware and that the execution and delivery
hereof and of all of the other Loan Documents by the Mortgagor, have been duly authorized and are in full force and effect.
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35.
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JURY TRIAL WAIVER
. MORTGAGOR, AGENT, AND EACH OF THE LENDERS MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS MORTGAGE, ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS MORTGAGE OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION,
ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOAN
OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION
IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, INDIRECT, SPECULATIVE, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. MORTGAGOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THE TRANSACTIONS
CONTEMPLATED HEREBY.
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36.
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Exclusion from Secured Obligations
. Notwithstanding anything to the contrary set forth herein
or in any other document which has been executed in connection with the Obligations, this Mortgage shall not secure the obligations
of Mortgagor under any Indemnity Agreements made by Mortgagor in favor of Beneficiary or the substantial equivalent of the obligations
arising under any such Indemnity Agreements (other than any Obligations under the Subsidiary Guaranty). All of such obligations
(and substantial equivalents thereof (other than any Obligations under the Subsidiary Guaranty)) shall constitute the separate,
unsecured recourse obligations of Mortgagor and/or such guarantors and shall not be deemed to be secured by this Mortgage.
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[
Remainder of Page Intentionally Left
Blank
]
IN WITNESS WHEREOF,
Mortgagor has caused this Mortgage to be duly executed and delivered as of the date first written above.
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MORTGAGOR:
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BR METROWEST, LLC, a Delaware limited liability company
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By:
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/s/ Jordan Ruddy
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Name:
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Jordan Ruddy
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Title:
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Authorized Signatory
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STATE OF NEW YORK
COUNTY OF NEW YORK
On October 20, 2017, before me, Dale
Pozzi, personally appeared Jordan Ruddy, who proved to me on the basis of satisfactory evidence to
be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
He is personally known to me.
I certify under PENALTY OF PERJURY under
the laws of the State of New York that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
/s/
Dale Pozzi
(
Seal
)
[Mortgage Signature Page – Metrowest]
EXHIBIT “A”
LEGAL DESCRIPTION
PARCEL 1: (Fee Simple Estate):
A portion of Tract 1, METROWEST, as recorded
in Plat Book 16, pages 107 through 110 of the public records of Orange County, Florida, lying in Section 2, Township 23 South,
Range 28 East, City of Orlando, Orange County, Florida, being more particularly described as follows:
Commence at the Westernmost corner of Tract
1, Metro West, according to the plat thereof as recorded in Plat Book 16, pages 107 through 110 of the public records of Orange
County, Florida; thence run North 89° 47' 04" East along the most Westerly Southerly line of said Tract 1, also being
the Northerly line of Vetter Isle as recorded in Plat Book Y, page 79 of the public records of said Orange County, Florida for
a distance of 647.22 feet; thence departing said Northerly line continue North 89° 47' 23" East along said Southerly line
for a distance of 646.35 feet to the Point of Beginning; thence departing said Southerly line run North 00° 12' 37" West
for a distance of 192.28 feet; thence run South 54° 15' 28" East for a distance of 94.56 feet; thence run North 55°04'
13" East for a distance of 80.33 feet; thence run North 66° 07' 31" East for a distance of 108.04 feet; thence run
North 62°43' 45" East for a distance of 101.16 feet; thence run North 64°24' 44" East for a distance of 110.07
feet; thence run North 66°51' 29" East for a distance of 103.59 feet; thence run North 64°23' 25" East for a
distance of 111.60 feet; thence run North 87°44' 23' East for a distance of 112.59 feet; thence run South 82°53' 29"
East for a distance of 113.94 feet; thence run North 77°49' 19" East for a distance of 83.90 feet, thence run North 75°33'
14" East for a distance of 92.82 feet; thence run North 69°42' 28" East for a distance of 72.73 feet; thence run
North 45°13' 25" East for a distance of 45.65 feet; thence run North 21°08' 41" East for a distance of 70.44
feet; thence run North 06°56' 11" West for a distance of 93.26 feet; thence run North 21°32' 21" West for a distance
of 93.14 feet; thence run North 19°51' 29" East for a distance of 37.82 feet; thence run North 00°10' 47" East
for a distance of 99.14 feet; thence run North 15°54' 21" East for a distance of 63.32 feet; thence run North 90°00'
00" East for a distance of 75.98 feet to a point on the Westerly right of way line of Lake Debra Drive according to the plat
of MetroWest Tract 1, Lot 7, as recorded in Plat Book 34, pages 50 and 51 of the public records of Orange County, Florida; thence
run South 03° 11' 47" East along said right of way line for a distance of 240.79 feet to a point of curvature of a curve
concave Westerly and having a radius of 930.00 feet; thence continuing along said Westerly right of way line run Southerly along
said curve through a central angle of 03°07' 59" for an arc distance of 50.85 feet to a point of tangency; thence run
South 00°03' 48" East for a distance of 327.81 feet; thence run North 89°56' 12" East for a distance of 35.00
feet to a point on the Westerly boundary of MetroWest Tract 1, Lot 8 according to the plat thereof as recorded in Plat Book 39,
page 27 of the public records of Orange County, Florida; thence run South 00°03' 48" East for a distance of 50.30 feet;
thence run South 06°19' 52" East for a distance of 180.95 feet to a point of curvature of a curve concave Easterly and
having a radius of 1000.00 feet, thence continuing along said Westerly line run Southerly along said curve through a central angle
of 12°53' 28" for an arc distance of 224.99 feet to a point of reverse curvature of a curve concave Westerly and having
a radius of 500.00 feet, thence run Southerly along said curve through a central angle of 22°46' 31" for an arc distance
of 198.75 feet to a point; thence run North 86°26' 49" West for a distance of 27.00 feet to a point on a non-tangent curve
concave Westerly and having a radius of 473.00 feet; thence from a tangent bearing of South 03°33' 03" West run Southerly
along said curve through a central angle of 09°35' 48" for an arc distance of 79.22 feet to a point; thence run South
71°38' 01" West for a distance of 44.93 feet; thence run South 36°22' 41" West for a distance of 149.85 feet;
thence run South 20°05' 36" West for a distance of 102.40 feet; thence run South 16°21' 56" West for a distance
of 382.58 feet; thence run South 00° 14' 29" East for a distance of 953.60 feet to a point on the South line of aforesaid
Section 2, also being a point on the Southerly line of Metro West Tract 1, according to the plat thereof as recorded in Plat Book
16, pages 107 through 110 of the public records of Orange County, Florida; thence run South 89°45' 31" West along said
South line for a distance of 348.71 feet to the Southwesternmost corner of said Metro West Tract 1, also being a point on the Westerly
line of said Metro West Tract 1; thence departing said South line run North 00° 19' 31" West along said Westerly line
for a distance of 887.85 feet; thence departing said Westerly line run the following courses and distances; South 89°45' 09"
West for a distance of 9.08 feet; thence run South 70°15' 39" West for a distance of 22.96 feet; thence run South 44°04'
38" West for a distance of 60.93 feet; thence run South 77°10' 38" West for a distance of 70.28 feet; thence run
South 88°35' 31" West for a distance of 19.31 feet; thence run North 55°25' 15" West for a distance of 106.39
feet; thence run North 38°26' 30" West for a distance of 7.87 feet; thence run South 89°45' 09" West for a distance
of 241.61 feet; thence run North 00°19' 31" West for a distance of 348.77 feet; thence run North 36°11' 35" West
for a distance of 4.78 feet; thence run North 19°26' 25" West for a distance of 62.36 feet; thence run North 24°15'
32" West for a distance of 31.32 feet; thence run South 89°59' 01" West for a distance of 29.91 feet; thence run
North 05°09' 27" West for a distance of 68.03 feet; thence run North 11°27' 19" East for a distance of 109.72
feet; thence run North 06°12' 17" West for a distance of 105.33 feet; thence run North 17°14' 53" West for a
distance of 171.51 feet; thence run North 00°08' 31" West for a distance of 185.59 feet; thence run South 89°47' 23"
West for a distance of 84.11 feet to aforesaid Point of Beginning.
Said land is shown on the plat of ALEXAN
AT METROWEST, according to the plat thereof recorded in Plat Book 47, page 33, public records of Orange County, Florida.
PARCEL 2:
Nonexclusive easement for pedestrian and
vehicular access, ingress and egress purposes for the benefit of Parcel 1 over, through and across the land identified as "Easement
Area - Metrowest Tract 1, Lot 8" in Exhibit C to the Reciprocal Easement Agreement between Debra, Inc. and Windsor Residential
Harbortown, Inc., recorded in Official Records Book 5424, page 1968, Public Records of Orange County, Florida.
PARCEL 3:
Nonexclusive easement for drainage purposes
for the benefit of Parcel 1 reserved in the Drainage Easement Agreement (Tract ID) between Spring Trace, L.L.C. and Metrowest Master
Association, Inc., recorded in Official Records Book 6279, page 3582, as amended by the Amendment to Drainage Easement Agreement
(Tract ID) recorded in Official Records Book 6716, page 4890, Public Records of Orange County, Florida, in, on, upon, over and
through the Drainage Easement Area described in Exhibit "A" to said Amendment, and Second Amendment to Drainage Easement
Agreement (Tract ID), recorded in Official Records Book 7609, page 3588, Public Records of Orange County, Florida.
PARCEL 4:
Nonexclusive easement for sanitary sewer
utility purposes for the benefit of Parcel 1 over, upon and across the land described in Exhibit C to the Sanitary Sewer Easement
and Stormwater Easement Agreement between Metrowest II Limited Partnership and The Northwestern Mutual Life Insurance Company,
recorded in Official Records Book 6279, page 3613, as affected by Affidavit recorded in Official Records Book 7119, Page 3877,
Public Records of Orange County, Florida.
PARCEL 5:
Nonexclusive easements for the benefit
of Parcel 1 as defined and more particularly described in Section 6.1 of that certain Master Declaration of Protective Covenants
and Restrictions for MetroWest recorded March 13, 1986 in Official Records Book 3759, page 2756, as affected by the Agreement Concerning
Transfer of Responsibilities recorded September 17, 1986 in Official Records Book 3820, page 4314 and the Assignment and Assumption
of Declarant's Rights and Obligations recorded October 25, 2000 in Official Records Book 6115, page 4273, and as amended August
10, 1987 in Official Records Book 3913, page 2944, recorded November 17, 1987 in Official Records Book 3936, page 4185, recorded
March 28, 1988 in Official Records Book 3968, page 1279, recorded August 30, 1996 in Official Records Book 5114, page 1077 and
recorded February 8, 2001 in Official Records Book 6189, page 2476, and Certificate of Approval recorded October 22, 2003 in Official
Records Book 7161, page 2831, as amended by Third Amendment, recorded February 8, 2006 in Official Records Book 8471, Page 1428;
Fourth Amendment, recorded January 15, 2010 in Official Records Book 9989, Page 1602, and Fifth Amendment to Master Declaration
of Protective Covenants and Restrictions for Metrowest, recorded September 23, 2014 in Official Records Book 10808, Page 8087,
Public Records of Orange County, Florida.
PARCEL 6:
Nonexclusive easement for access and utilities
for the benefit of Parcel 1 as defined and more particularly described in that certain Utility Easement Agreement recorded in Official
Records Book 6314, Page 5929, as amended by Amendment to Utility Easement Agreement recorded in Official Records Book 7609, Page
3607, Public Records of Orange County, Florida.
EXHIBIT “B”
Schedule 1
(Description of “Debtor”
and “Secured Party”)
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1.
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Name and Identity or Organizational Structure BR METROWEST, LLC a Delaware limited liability company
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2.
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Principal place of business and chief executive office of Debtor in the State of New York is located
at c/o Bluerock Real Estate, L.L.C., 712 Fifth Avenue, 9
th
Floor, New York, New York 10019
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3.
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Debtor has been using or operating under said name and identity or organizational structure without
change since the date of its formation
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B.
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Secured Party
: KEYBANK NATIONAL ASSOCIATION
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*************************************************
Schedule 2
(Notice Mailing Addresses of “Debtor”
and “Secured Party”)
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A.
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The mailing address of Debtor is
:
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c/o Bluerock Real Estate, L.L.C.
712 Fifth Avenue, 9
th
Floor
New York, New York 10019
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B.
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The mailing address of Secured Party is
:
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KeyBank National Association
225 Franklin Street
Boston, Massachusetts 02110
EXHIBIT C
STATE SPECIFIC PROVISIONS
In the event of any conflict between the
provisions of this
Exhibit C
and any other provisions of this Mortgage or any other Loan Document, the provisions of this
Exhibit C
shall control.
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1.
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The maximum guaranteed Obligations which may be secured hereby at any one time is Forty Million
Six Hundred Twenty-Five Thousand and No/100 Dollars ($40,625,000.00), plus interest and any disbursements made for the payment
of taxes, levies or insurance on the Mortgaged Property, with interest on those disbursements, plus any increase in the principal
balance as the result of negative amortization or deferred interest, plus the costs of collection, including reasonable attorney’s
fees. This Mortgage shall secure such future advances as may be made by Mortgagee at its option and for any purpose, until the
final maturity date of the indebtedness secured hereby. All such future advances shall be included within the terms “
Obligations
”,
“
secured indebtedness
” and “
indebtedness secured hereby
”, shall be secured to the same extent
as if made on the date of the execution of this Mortgage, and shall take priority as to third persons without actual notice from
the time this Mortgage is filed for record as provided by law. Without the prior written consent of Mortgagee, which Mortgagee
may grant or withhold in its sole discretion, Mortgagor shall not file for record any notice limiting the maximum guaranteed Obligations
that may be secured by this Mortgage to a sum less than the maximum guaranteed Obligations set forth in this paragraph. To the
extent, if any, provided in the Guaranty, interest or discount will be deferred, accrued or capitalized.
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2.
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Future Advance Mortgage
. This Mortgage is a "Future Advance Mortgage" under Chapter
697.04 Florida Statutes
et seq
. In addition, this Mortgage is intended to be and is a mortgage to secure the payment of
such future or additional advances as may be made by Agent and the Lenders at their option to Borrowers, or their successors in
title, for any purpose, provided that all those advances are to be made within twenty (20) years from the date of this Mortgage
or within such lesser period of time as may be provided hereafter by law as a prerequisite for the sufficiency of actual notice
or record notice of the optional future or additional advances as against the rights of creditors or subsequent purchasers for
valuable consideration. The total amount of Obligations secured by this Mortgage may decrease or increase from time to time, but
the total unpaid balance so secured at any one time shall not exceed twice the principal amount of the Note, plus interest that
may have accrued thereon, together with any disbursements made for the payment of taxes, levies or insurance on the Real Estate
covered by the lien of this Mortgage, including interest on all such disbursements. Nothing herein contained shall be deemed an
obligation on the part of the Agent or any Lender to make any future advances.
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3.
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Conflict of Laws
. Agent on behalf of Lenders shall be entitled to all rights and remedies
that a mortgagee would have under Florida law or in equity during the continuance of an Event of Default in addition to all rights
and remedies it may have hereunder. Where any provision of this Mortgage is inconsistent with any provision of Florida law regulating
the creation, perfection or enforcement of a lien or security interest in real or personal property, the provisions of such Florida
law, as amended from time to time, shall take precedence over the provisions of this Mortgage, but shall not invalidate or render
unenforceable any other provisions of this Mortgage that can be construed in a manner consistent with Florida law. Should applicable
Florida law confer any rights or impose any duties inconsistent with or in addition to any of the provisions of this Mortgage,
the affected provisions of this Mortgage shall be considered amended to conform to such applicable law, but all other provisions
hereof shall remain in full force and effect without modification.
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Exhibit 10.10
THIS INSTRUMENT PREPARED BY
AND AFTER RECORDING RETURN TO:
Riemer & Braunstein LLP
Three Center
Plaza
Boston, MA 02108
Attention: Kevin J. Lyons, Esquire
COLLATERAL ASSIGNMENT OF LEASES AND RENTS
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ASSIGNOR:
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BR METROWEST, LLC, a Delaware limited liability company
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ASSIGNEE:
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KEYBANK NATIONAL ASSOCIATION, a national banking association, as Agent on behalf of itself and
certain other Lenders
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COLLATERAL ASSIGNMENT OF LEASES AND RENTS
(2450 Lake Debra Drive, Orlando, Florida
32835)
This COLLATERAL
Assignment
of Leases and Rents
(this “
Assignment
”) made as of October 30, 2017, by BR METROWEST, LLC a Delaware
limited liability company having an address at c/o Bluerock Real Estate, L.L.C., 712 Fifth Avenue, 9
th
Floor, New York,
New York 10019 (hereinafter called “
Assignor
”, and the term “Assignor” shall include, wherever the
context permits, its successors and assigns) in favor of KEYBANK NATIONAL ASSOCIATION, a national banking association, as agent
for the Lenders (as hereinafter defined) under that certain Credit Agreement dated as of October 4, 2017 (hereinafter, as same
may be amended, restated, renewed, replaced, or modified, the “
Credit Agreement
”) among Bluerock Residential
Holdings, L.P., a Delaware limited partnership, and various other Affiliates thereof as “Borrower” (collectively, the
“
Borrowers
”), KeyBank National Association and the other lending institutions which become parties to the Credit
Agreement (KeyBank National Association and the other lending institutions which become parties to the Credit Agreement are collectively
referred to as the “
Lenders
” and individually as the “
Lender
”), and KeyBank National Association,
as Agent (hereinafter called “
Agent
”), having a place of business at 225 Franklin Street, Boston, Massachusetts
02110, (the term Agent shall include, whenever the context permits, its successors and assigns as the holder of this Assignment
and the Note and other Obligations secured hereby), for the purpose of securing the “Obligations” as defined in that
certain Subsidiary Guaranty entered into by Assignor in favor of Agent and the Lenders dated as of the date hereof (as the same
may be modified, amended, or supplemented, the “
Subsidiary Guaranty
”).
WITNESSETH THAT
:
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1.
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Grant of Assignment
. This Assignment is granted pursuant to the terms, provisions and conditions
of the Credit Agreement. The term “Mortgage” shall mean that certain Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing dated as of the date hereof by Assignor for the benefit of Agent and the Lenders. The term “Obligations”
shall have the meaning ascribed to such term in the Subsidiary Guaranty.
Capitalized terms used herein which are not otherwise
specifically defined shall have the same meaning herein as in the Credit Agreement and the Mortgage.
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Assignor, for good and valuable consideration, receipt of which is hereby acknowledged, hereby
grants, transfers and assigns to Agent and the Lenders, and grants to Agent and the Lenders a continuing pledge of and
security interest in, the entire present and future interest of Assignor in, to and under: (a) all leases, subleases, rental
agreements or other occupancy agreements (“
Leases
”) now or hereafter in existence, with respect to all or
any portion of the real property located at 2450 Lake Debra Drive, Orlando, Orange County, Florida 32835 and commonly
known as ARIUM Metrowest (“
Property
”); (b) all rents, income and profits of any kind arising from such
interests in the Leases and any renewals or extensions thereof for the use and occupation of all or any portion of the
Property; (c) all guaranties of and security for the Leases; and (d) all proceeds of the foregoing.
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Assignor is the owner of the Property. A legal description of the Property is annexed hereto
as
Exhibit A
.
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Assignor covenants and agrees that this Assignment creates and constitutes an equitable and
specific lien upon the aforesaid rents, and that this Assignment does not create or constitute a pledge of or conditional
security interest in such rents. This Assignment is intended to be specific, perfected and choate upon the recording of this
Assignment.
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2.
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Obligations Secured
. This Assignment is made for the purpose of securing the “Obligations”,
as defined in the Subsidiary Guaranty.
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3.
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Warranties and Representations
. ASSIGNOR WARRANTS AND REPRESENTS that it is and shall be
in the future the sole owner of the entire interests described in Section 1 above and that no rent reserved in the Leases has been
or will be in the future otherwise assigned or anticipated, and that no rent for any period subsequent to the date of this Assignment
will be collected more than one (1) month in advance except for security deposits and last month’s rents taken in the usual
course of business pursuant to Leases.
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4.
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Covenants
. Except as may be otherwise provided for or permitted by the Credit Agreement,
ASSIGNOR COVENANTS with Agent: (i) to observe and perform all the obligations imposed upon the lessor under every such Lease and
not to do or permit to be done anything to impair the security thereof; (ii) not to collect any of the rent, income and profits
arising or accruing under the Leases or from the Property more than one (1) month in advance of the time when the same shall become
due; (iii) not to execute any other assignment of lessor’s interest in the Leases or assignment of rents arising or accruing
from the Leases or from the Property; (iv) not to subordinate any Lease to any mortgage or other encumbrance, or permit, consent
or agree to such subordination, without Agent’s prior written consent in each instance; (v) not to convey or transfer
or suffer or permit a conveyance or transfer of the premises demised by any Lease or of any interest therein so as to affect directly
or indirectly a merger of the estates and rights, or a termination or diminution of the obligations, of any lessee thereunder subject
to any rights of tenants under Leases; (vi) at Agent’s request, furnish to Agent true and complete copies of all Leases and
amendments thereto; and (vii) at Agent’s further request (and in confirmation of the assignment and transfer already made
herein of future Leases) to assign and transfer to Agent any and all subsequent Leases upon all or any part of the Property and
to execute and deliver at the request of Agent all such further assurances and assignments in the Property as Agent in good faith
shall from time to time reasonably require.
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5.
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Further Terms, Covenants and Conditions
. This Assignment is made on the following terms,
covenants and conditions:
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5.1
Prior
to Default
. So long as (i) no Event of Default (as defined in the Credit Agreement) exists and (ii) no default has
occurred and is continuing uncured beyond the applicable notice and grace period, if any, in the performance of any
obligation, covenant or agreement herein, or in the other Loan Documents, contained and on the part of Assignor to be
performed (collectively, a “
Continuing Default
”): Assignor shall have the right and license to manage,
lease and operate the Property and to collect all rents, income and profits arising under the Leases or from the premises
described therein and, subject to the provisions of the other Loan Documents, to retain, use and enjoy the same.
5.2
After
Default
. At any time when a Continuing Default exists, Agent, without in any way waiving such default, may at its option, without
notice, and without regard to the adequacy of the security for the Obligations secured hereby and by the Mortgage revoke the right
and license granted above to Assignor and:
(i) Authorize
and direct the lessees named in any existing Leases or any other or future lessees or occupants of the Property, upon receipt from
Agent of written notice to the effect that Agent is or the Lenders are then the holder of the Note and the Mortgage and that a
Continuing Default exists thereunder, to pay over to Agent all rents, income and profits arising or accruing under the Leases or
from the Property and to continue to do so until otherwise notified in writing by Agent. Assignor agrees that every lessee and
occupant shall have the right to rely upon any such statement and request by Agent that lessee or occupant shall pay such rents
to Agent without any obligation or right to inquire as to whether such Continuing Default actually exists notwithstanding any notice
from or claim of Assignor to the contrary and that Assignor shall have no right or claim against lessees or occupants for any such
rent so paid by lessees or occupants to Agent after such notice to the lessee or occupant by Agent;
(ii) Either
in person or by agent, with or without bringing any action or proceedings or by a receiver appointed by a court, take possession
of the Property and have, hold, manage, lease and operate the same on such terms and for such period of time as Agent may deem
proper and, either with or without taking possession of the Property in its own name, demand, sue for, or otherwise collect and
receive, all rents, income and profits of the Property, including those past due and unpaid, with full power to make from time
to time all improvements, alterations, renovations, repairs and replacements thereto or thereof as may seem proper to Agent; and
(iii) Apply
such rents, income and profits to the payment of:
(a) all
reasonable expenses of managing the Property including, without being limited thereto, the salaries, fees and wages of a managing
agent and such other employees as Agent may reasonably deem necessary or desirable, and all expenses of operating and maintaining
the Property, including, without being limited thereto, all taxes, charges, claims, assessments, water rents, sewer rents and other
liens, and premiums for all insurance which Agent may deem necessary or desirable, the payment or refund of security deposits,
or interest thereon, and the cost of all improvements, alterations, renovations, repairs or replacements, and all expenses incident
to taking and retaining possession of the Property; and
(b) all
sums which Assignor is responsible to pay under the Mortgage, and the Obligations secured hereby and by the Mortgage, together
with all reasonable costs and reasonable and actual attorneys’ fees, in such order of priority as to any of the items mentioned
in this clause (b) as set forth in the Credit Agreement or if not addressed in the Credit Agreement then in such order as Agent
in its sole discretion may determine, any statute, law, custom, or use to the contrary notwithstanding.
The exercise by Agent of the option
granted it in this Section 5.2 and the collection of the rents, income and profits and the application thereof as herein provided
shall not be considered a waiver by Agent of any default under the other Loan Documents, or the Leases, or this Assignment.
5.3
Continuing
Effect
. Upon payment in full to Agent and the Lenders of the Obligations secured hereby and by the Mortgage, this Assignment
shall become null and be void and of no effect, but the affidavit of any officer, agent, or attorney of Agent or the Lenders made
in good faith showing any part of said Obligations to remain unpaid shall be and constitute conclusive evidence (absent manifest
error) of the validity, effectiveness and continuing force of this Assignment and any person may, and is hereby authorized to,
rely thereon. The discharge of record of the Mortgage given by Assignor to Agent shall constitute a discharge of this Assignment
and a release of Agent’s and the Lenders’ interest in the Leases and rents assigned hereby and the reassignment thereof
(without recourse to Agent or any Lender) to Assignor and all those claiming of record by, through or under Assignor.
5.4
No
Waiver; Concurrent Rights
. Nothing contained in this Assignment and no act done or omitted by Agent pursuant to the powers
and rights granted it hereunder shall be deemed to be a waiver by Agent of its rights and remedies hereunder or any one or more
of the other Loan Documents, and this Assignment is made and accepted without prejudice to any of the rights and remedies possessed
by Agent under the terms of any of the other Loan Documents. The right of Agent to collect said principal sums, interest and indebtedness
and to enforce any other security therefor held by it may be exercised by Agent either prior to, simultaneously with, or subsequent
to any action taken by it hereunder.
5.5
No
Liability
. Neither Agent nor any Lender shall be liable for any loss sustained by Assignor resulting from Agent’s failure
to let the Property after default or from any other act or omission of Agent in managing the Property after default unless such
loss is caused by the gross negligence or willful misconduct of Agent. Agent shall not be obligated to perform or discharge, nor
does Agent hereby undertake to perform or discharge, any obligation, duty or liability under the Leases, under any ground lease,
or under or by reason of this Assignment, and Assignor shall, and does hereby agree to, indemnify Agent and each of the Lenders
for, and to defend and hold Agent and each of the Lenders harmless from, any and all liability, loss or damage which may or might
be incurred under or by reason of this Assignment and from any and all claims and demands whatsoever which may be asserted against
Agent or any Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms,
covenants or agreements contained in the Leases or any ground lease. Should Agent or any Lender incur any such liability under
the Leases or under or by reason of this Assignment, or in defense of any such claims or demands, the amount thereof, including
costs, expenses and reasonable and actual attorneys’ fees shall be secured hereby and by the Mortgage and by the other collateral
for the Obligations and Assignor shall reimburse Agent and the Lenders therefor immediately upon demand and upon the failure of
Assignor so to do, Agent may, at its option, declare all sums secured hereby immediately due and payable.
It is further understood that this Assignment shall not operate to place responsibility for the control, care, management or repair
of said Property upon Agent, nor for the carrying out of any of the terms and conditions of the Leases or any ground lease; nor
shall it operate to make Agent responsible or liable for any waste committed on the Property by tenants or any other parties, or
for any dangerous or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of
said Property resulting in loss or injury or death to any tenant, licensee, employee or stranger. Notwithstanding the foregoing,
Agent and the Lenders shall not be indemnified on account of, or exculpated from acts of, their own gross negligence or willful
misconduct.
5.6
Effect
of Foreclosure Deed.
Unless Agent otherwise elects in the instance of a Lease which is subordinate to the Mortgage and is thus
terminated by the foreclosure, upon the issuance of any deed or deeds pursuant to a judicial or non-judicial foreclosure of the
Mortgage, all right, title and interest of Assignor in and to the Leases shall, by virtue of this instrument and such deed or deeds,
thereupon vest in and become the absolute property of the grantee or grantees in such deed or deeds without any further act or
assignment by Assignor. Assignor hereby irrevocably appoints Agent and its successors and assigns as its agent and attorney in
fact to execute all instruments of assignment for further assurance in favor of such grantee or grantees in such deed or deeds
as may be necessary or desirable for such purpose.
5.7
Upon
Termination of Lease in Bankruptcy
. In the event any lessee under any of the Leases should be the subject of any proceeding
under the Federal Bankruptcy Code, as amended from time to time, or any other federal, state or local statute which provides for
the possible termination or rejection of the Leases assigned hereby, Assignor covenants and agrees that, if any of the Leases is
so terminated or rejected, no settlement for damages shall be made without the prior written consent of Agent, in each instance,
and any check in payment of damages for termination or rejection of any such Lease will be made payable both to Assignor and Agent.
Assignor hereby assigns any such payment to Agent and further covenants and agrees that upon the request of Agent after an Event
of Default, Assignor will duly endorse to the order of Agent any such check, the proceeds of which will be applied to the indebtedness
secured by this Assignment. Assignor hereby irrevocably appoints Agent and its successors and assigns as its-attorney-in-fact to
so endorse any such checks if Assignor does not do so after written notice from Agent.
5.8
Rights
Contained in Mortgage
. This Assignment is intended to be supplementary to, and not in substitution for, or in derogation of,
any assignment of rents to secure the Obligations contained in the Mortgage or in any other Loan Document. In the event of any
conflict between this Assignment and any of the other Loan Documents, Agent shall have the right from time to time to determine
which provisions shall govern.
5.9
Notices
.
Any notice or communications in connection herewith shall be sufficiently given only if given in the manner provided for in the
Credit Agreement.
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6.
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Governing Law and Consent to Jurisdiction
.
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6.1
Substantial
Relationship
. It is understood and agreed that all of the Loan Documents were delivered in the State of New York, which State
the parties agree has a substantial relationship to the parties and to the underlying transactions embodied by the Loan Documents.
6.2
Place
of Delivery
. Assignor agrees to furnish to Agent at Agent’s office in Boston, Massachusetts all further instruments,
certifications and documents to be furnished hereunder, if any.
6.3
Governing
Law
. This Assignment, except as otherwise provided in Section 6.4, and each of the other Loan Documents shall in all respects
be governed, construed, applied and enforced in accordance with the internal laws of the State of New York without regard to principles
of conflicts of law, except that those matters relating to the enforcement or exercise of any and all remedies of Assignee hereunder
and the creation, perfection and validity of the lien of this Assignment will be governed by Florida law. Enforcement of any and
all remedies of Assignee hereunder shall be governed by the internal laws of the State of Florida
6.4
Exceptions
.
Notwithstanding the foregoing choice of law:
A. The
creation and perfection of the lien and any assignment of rents and security interest hereunder and the procedures governing the
enforcement by Agent and the Lenders of its exercise of its remedies against Assignor under this Assignment, the Mortgage and under
the other Loan Documents with respect to the Mortgaged Property to which any Assignor is a party or other assets situated in the
State of Florida, including by way of illustration, but not in limitation, non-judicial foreclosure and actions for foreclosure,
for injunctive relief, or for the appointment of a receiver, shall be governed by the laws of the State of Florida; and
B. Agent
and the Lenders shall comply with applicable law in the State of Florida to the extent required in connection with the foreclosure
of the security interests and liens created under this Assignment, the Mortgage and the other Loan Documents with respect to the
Mortgaged Property or other assets situated in the State of Florida.
Nothing contained herein or any
other provisions of the Loan Documents shall be construed to provide that the substantive laws of the State of Florida shall apply
to any party’s rights and obligations under any of the Loan Documents, which are and shall continue to be governed by the
substantive law of State of New York, except as expressly set forth in clauses (A) and (B) of this Section 6.4. In addition, the
fact that portions of the Loan Documents may include provisions drafted to conform to the law of the State of Florida is not intended,
nor shall it be deemed, in any way, to derogate the parties’ choice of law as set forth or referred to in this Assignment,
the Mortgage, the Credit Agreement or in the other Loan Documents. The parties further agree that Agent may enforce its rights
under the Loan Documents including, but not limited to, its rights to sue Assignor or to collect any outstanding indebtedness in
accordance with applicable law.
6.5
Consent
to Jurisdiction
. Assignor hereby consents to the nonexclusive personal jurisdiction in any state or Federal court located within
the State of New York and the State of Florida.
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7.
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State-Specific Provisions
. In the event of any inconsistency or disagreement between the
terms and provisions set forth in this
Section 7
and the other terms and provisions of this Assignment, the terms and provisions
of this
Section 7
shall govern, control and supersede such other terms and provisions to the extent of such inconsistency
or disagreement.
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7.1
Florida
Law
. This Assignment is intended to be an absolute assignment of leases, rents and profits under the applicable laws of the
State of Florida. In the event a court of competent jurisdiction construes this Assignment to be collateral that secures the obligations
of Assignor rather than an absolute assignment, this Assignment shall constitute an assignment of rents which grants a security
interest in the collateral as set forth under any applicable laws of the State of Florida.
7.2
Florida
Law Provisions
. The assignments of leases and rents contained in this Assignment and in the Mortgage are intended to provide
Agent on behalf of the Lenders with all of the rights and remedies of mortgagees pursuant to Section 697.07 of the
Florida Statutes
(hereinafter "Section 697.07"), as may be amended from time to time. However, in no event shall this reference diminish,
alter, impair, or affect any other rights and remedies of Agent and the Lenders, including but not limited to, the appointment
of a receiver, nor shall any provision in this section diminish, alter, impair or affect any rights or powers of the receiver in
law or equity or as set forth in the Mortgage or herein. In addition, this Assignment shall be fully operative without regard to
value of the Property or without regard to the adequacy of the Property to serve as security for the obligations owed by Assignor
to Agent and the Lenders, and shall be in addition to any rights arising under Section 697.07. Further, except for the notices
required hereunder or in the Mortgage, if any, Assignor hereby waives any notice of default or demand for turnover of rents by
Agent and the Lenders, together with any rights under Section 697.07 to apply to a court to deposit the rents or any other payments
into the registry of the court or such other depository as the court may designate.
[
Remainder of Page Intentionally Left
Blank
]
IN WITNESS WHEREOF, the Assignor has caused
this Assignment to be duly executed and delivered as of the date first written above.
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ASSIGNOR:
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BR METROWEST, LLC, a Delaware limited
liability company
|
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By:
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/s/ Jordan Ruddy
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Name:
|
Jordan Ruddy
|
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Title:
|
Authorized Signatory
|
STATE OF NEW YORK
COUNTY OF NEW YORK
On October 20, 2017, before me, Dale
Pozzi, personally appeared Jordan Ruddy, who proved to me on the basis of satisfactory evidence to
be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
He is personally known to me.
I certify under PENALTY OF PERJURY under
the laws of the State of New York that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
/s/
Dale Pozzi
(
Seal
)
[Collateral Assignment of Leases and Rents Signature Page - Metrowest]
EXHIBIT A
LEGAL DESCRIPTION
PARCEL 1: (Fee Simple Estate):
A portion of Tract 1, METROWEST, as recorded
in Plat Book 16, pages 107 through 110 of the public records of Orange County, Florida, lying in Section 2, Township 23 South,
Range 28 East, City of Orlando, Orange County, Florida, being more particularly described as follows:
Commence at the Westernmost corner of Tract
1, Metro West, according to the plat thereof as recorded in Plat Book 16, pages 107 through 110 of the public records of Orange
County, Florida; thence run North 89° 47' 04" East along the most Westerly Southerly line of said Tract 1, also being
the Northerly line of Vetter Isle as recorded in Plat Book Y, page 79 of the public records of said Orange County, Florida for
a distance of 647.22 feet; thence departing said Northerly line continue North 89° 47' 23" East along said Southerly line
for a distance of 646.35 feet to the Point of Beginning; thence departing said Southerly line run North 00° 12' 37" West
for a distance of 192.28 feet; thence run South 54° 15' 28" East for a distance of 94.56 feet; thence run North 55°04'
13" East for a distance of 80.33 feet; thence run North 66° 07' 31" East for a distance of 108.04 feet; thence run
North 62°43' 45" East for a distance of 101.16 feet; thence run North 64°24' 44" East for a distance of 110.07
feet; thence run North 66°51' 29" East for a distance of 103.59 feet; thence run North 64°23' 25" East for a
distance of 111.60 feet; thence run North 87°44' 23' East for a distance of 112.59 feet; thence run South 82°53' 29"
East for a distance of 113.94 feet; thence run North 77°49' 19" East for a distance of 83.90 feet, thence run North 75°33'
14" East for a distance of 92.82 feet; thence run North 69°42' 28" East for a distance of 72.73 feet; thence run
North 45°13' 25" East for a distance of 45.65 feet; thence run North 21°08' 41" East for a distance of 70.44
feet; thence run North 06°56' 11" West for a distance of 93.26 feet; thence run North 21°32' 21" West for a distance
of 93.14 feet; thence run North 19°51' 29" East for a distance of 37.82 feet; thence run North 00°10' 47" East
for a distance of 99.14 feet; thence run North 15°54' 21" East for a distance of 63.32 feet; thence run North 90°00'
00" East for a distance of 75.98 feet to a point on the Westerly right of way line of Lake Debra Drive according to the plat
of MetroWest Tract 1, Lot 7, as recorded in Plat Book 34, pages 50 and 51 of the public records of Orange County, Florida; thence
run South 03° 11' 47" East along said right of way line for a distance of 240.79 feet to a point of curvature of a curve
concave Westerly and having a radius of 930.00 feet; thence continuing along said Westerly right of way line run Southerly along
said curve through a central angle of 03°07' 59" for an arc distance of 50.85 feet to a point of tangency; thence run
South 00°03' 48" East for a distance of 327.81 feet; thence run North 89°56' 12" East for a distance of 35.00
feet to a point on the Westerly boundary of MetroWest Tract 1, Lot 8 according to the plat thereof as recorded in Plat Book 39,
page 27 of the public records of Orange County, Florida; thence run South 00°03' 48" East for a distance of 50.30 feet;
thence run South 06°19' 52" East for a distance of 180.95 feet to a point of curvature of a curve concave Easterly and
having a radius of 1000.00 feet, thence continuing along said Westerly line run Southerly along said curve through a central angle
of 12°53' 28" for an arc distance of 224.99 feet to a point of reverse curvature of a curve concave Westerly and having
a radius of 500.00 feet, thence run Southerly along said curve through a central angle of 22°46' 31" for an arc distance
of 198.75 feet to a point; thence run North 86°26' 49" West for a distance of 27.00 feet to a point on a non-tangent curve
concave Westerly and having a radius of 473.00
feet; thence from a tangent bearing of South 03°33' 03" West run Southerly along said curve through a central angle of
09°35' 48" for an arc distance of 79.22 feet to a point; thence run South 71°38' 01" West for a distance of 44.93
feet; thence run South 36°22' 41" West for a distance of 149.85 feet; thence run South 20°05' 36" West for a
distance of 102.40 feet; thence run South 16°21' 56" West for a distance of 382.58 feet; thence run South 00° 14'
29" East for a distance of 953.60 feet to a point on the South line of aforesaid Section 2, also being a point on the Southerly
line of Metro West Tract 1, according to the plat thereof as recorded in Plat Book 16, pages 107 through 110 of the public records
of Orange County, Florida; thence run South 89°45' 31" West along said South line for a distance of 348.71 feet to the
Southwesternmost corner of said Metro West Tract 1, also being a point on the Westerly line of said Metro West Tract 1; thence
departing said South line run North 00° 19' 31" West along said Westerly line for a distance of 887.85 feet; thence departing
said Westerly line run the following courses and distances; South 89°45' 09" West for a distance of 9.08 feet; thence
run South 70°15' 39" West for a distance of 22.96 feet; thence run South 44°04' 38" West for a distance of 60.93
feet; thence run South 77°10' 38" West for a distance of 70.28 feet; thence run South 88°35' 31" West for a distance
of 19.31 feet; thence run North 55°25' 15" West for a distance of 106.39 feet; thence run North 38°26' 30" West
for a distance of 7.87 feet; thence run South 89°45' 09" West for a distance of 241.61 feet; thence run North 00°19'
31" West for a distance of 348.77 feet; thence run North 36°11' 35" West for a distance of 4.78 feet; thence run
North 19°26' 25" West for a distance of 62.36 feet; thence run North 24°15' 32" West for a distance of 31.32
feet; thence run South 89°59' 01" West for a distance of 29.91 feet; thence run North 05°09' 27" West for a distance
of 68.03 feet; thence run North 11°27' 19" East for a distance of 109.72 feet; thence run North 06°12' 17" West
for a distance of 105.33 feet; thence run North 17°14' 53" West for a distance of 171.51 feet; thence run North 00°08'
31" West for a distance of 185.59 feet; thence run South 89°47' 23" West for a distance of 84.11 feet to aforesaid
Point of Beginning.
Said land is shown on the plat of ALEXAN
AT METROWEST, according to the plat thereof recorded in Plat Book 47, page 33, public records of Orange County, Florida.
PARCEL 2:
Nonexclusive easement for pedestrian and
vehicular access, ingress and egress purposes for the benefit of Parcel 1 over, through and across the land identified as "Easement
Area - Metrowest Tract 1, Lot 8" in Exhibit C to the Reciprocal Easement Agreement between Debra, Inc. and Windsor Residential
Harbortown, Inc., recorded in Official Records Book 5424, page 1968, Public Records of Orange County, Florida.
PARCEL 3:
Nonexclusive easement for drainage purposes
for the benefit of Parcel 1 reserved in the Drainage Easement Agreement (Tract ID) between Spring Trace, L.L.C. and Metrowest Master
Association, Inc., recorded in Official Records Book 6279, page 3582, as amended by the Amendment to Drainage Easement Agreement
(Tract ID) recorded in Official Records Book 6716, page 4890, Public Records of Orange County, Florida, in, on, upon, over and
through the Drainage Easement Area described in Exhibit "A" to said Amendment, and Second Amendment to Drainage Easement
Agreement (Tract ID), recorded in Official Records Book 7609, page 3588, Public Records of Orange County, Florida.
PARCEL 4:
Nonexclusive easement for sanitary sewer
utility purposes for the benefit of Parcel 1 over, upon and across the land described in Exhibit C to the Sanitary Sewer Easement
and Stormwater Easement Agreement between Metrowest II Limited Partnership and The Northwestern Mutual Life Insurance Company,
recorded in Official Records Book 6279, page 3613, as affected by Affidavit recorded in Official Records Book 7119, Page 3877,
Public Records of Orange County, Florida.
PARCEL 5:
Nonexclusive easements for the benefit
of Parcel 1 as defined and more particularly described in Section 6.1 of that certain Master Declaration of Protective Covenants
and Restrictions for MetroWest recorded March 13, 1986 in Official Records Book 3759, page 2756, as affected by the Agreement Concerning
Transfer of Responsibilities recorded September 17, 1986 in Official Records Book 3820, page 4314 and the Assignment and Assumption
of Declarant's Rights and Obligations recorded October 25, 2000 in Official Records Book 6115, page 4273, and as amended August
10, 1987 in Official Records Book 3913, page 2944, recorded November 17, 1987 in Official Records Book 3936, page 4185, recorded
March 28, 1988 in Official Records Book 3968, page 1279, recorded August 30, 1996 in Official Records Book 5114, page 1077 and
recorded February 8, 2001 in Official Records Book 6189, page 2476, and Certificate of Approval recorded October 22, 2003 in Official
Records Book 7161, page 2831, as amended by Third Amendment, recorded February 8, 2006 in Official Records Book 8471, Page 1428;
Fourth Amendment, recorded January 15, 2010 in Official Records Book 9989, Page 1602, and Fifth Amendment to Master Declaration
of Protective Covenants and Restrictions for Metrowest, recorded September 23, 2014 in Official Records Book 10808, Page 8087,
Public Records of Orange County, Florida.
PARCEL 6:
Nonexclusive easement for access and utilities
for the benefit of Parcel 1 as defined and more particularly described in that certain Utility Easement Agreement recorded in Official
Records Book 6314, Page 5929, as amended by Amendment to Utility Easement Agreement recorded in Official Records Book 7609, Page
3607, Public Records of Orange County, Florida.
Exhibit 10.11
JOINDER
TO ENVIRONMENTAL INDEMNITY
THIS JOINDER TO ENVIRONMENTAL
INDEMNITY (“Joinder Agreement”) is executed as of October 30, 2017, by
BR Metrowest,
LLC,
a Delaware limited liability company (“Joining Party”), and delivered to
KeyBank
National Association
, as Agent, pursuant to §16 of that certain Environmental Compliance and Indemnity Agreement dated
as of October 19, 2017, as from time to time in effect (the “Environmental Indemnity”), among BLUEROCK RESIDENTIAL
HOLDINGS, L.P., a Delaware limited partnership (the “Parent Borrower”); BLUEROCK RESIDENTIAL GROWTH REIT, INC., a Maryland
corporation (the “Guarantor”), and the SUBSIDIARY CREDIT PARTIES party thereto (the Parent Borrower, Guarantor and
the Subsidiary Credit Parties are hereinafter called collectively, the “Indemnitors”), and KeyBank National Association,
for itself and as Agent for the Lenders from time to time party to that certain Credit Agreement dated October 4, 2017, by and
among Borrowers, Agent and the Lenders (the “Credit Agreement”).
Terms used but not defined in this Joinder Agreement
shall have the meanings defined for those terms in the Environmental Indemnity or if not defined in the Environmental Indemnity
in the Credit Agreement.
RECITALS
A. Joining
Party has entered into that certain Joinder Agreement as of the date hereof and has become a “Subsidiary Credit Party”
as defined by the terms of the Credit Agreement as of the date hereof. Joining Party is required pursuant to the terms of the loan
arrangement to become an additional Indemnitor under the Environmental Indemnity.
B. Joining
Party expects to realize direct and indirect benefits as a result of the availability to Borrowers of the credit facilities under
the Credit Agreement.
NOW, THEREFORE, Joining
Party agrees as follows:
AGREEMENT
1.
Joinder
.
By this Joinder Agreement, Joining Party hereby becomes an “Indemnitor” under the Environmental Indemnity and agrees
that Joining Party is and shall be bound by, and hereby assumes, all obligations, representations, warranties, covenants, terms,
conditions, duties and waivers applicable to an Indemnitor under the Environmental Indemnity. “Exhibit A” of the Environmental
Indemnity is hereby amended to include the Property owned by Joining Party as described on
Exhibit A
attached hereto.
2.
Representations
and Warranties of Joining Party
. Joining Party represents and warrants to Agent that, as of the Effective Date (as defined
below), except as disclosed in writing by Joining Party to Agent on or prior to the date hereof and approved by the Agent in writing,
the representations and warranties contained in the Environmental Indemnity are true and correct in all material respects as applied
to Joining Party as an Indemnitor on and as of the Effective Date as though made on that date. As of the Effective Date, all covenants
and agreements in the Environmental Indemnity of the Joining Party are true and correct with respect to Joining Party and no Default
or Event of Default shall exist or might exist upon the Effective Date in the event that Joining Party becomes a Subsidiary Borrower.
3.
Joint
and Several
. Joining Party hereby agrees that, as of the Effective Date, the Environmental Indemnity and the other Loan Documents
heretofore delivered to the Agent and the Lenders shall be a joint and several obligation of Joining Party to the same extent as
if executed and delivered by Joining Party, and upon request by Agent, will promptly become a party to the Credit Agreement, the
Notes (if a Subsidiary Borrower), the Environmental Indemnity and the other Loan Documents to confirm such obligation.
4.
Further
Assurances
. Joining Party agrees to execute and deliver such other instruments and documents and take such other action, as
the Agent may reasonably request, in connection with the transactions contemplated by this Joinder Agreement.
5.
GOVERNING
LAW
. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION UNDER, AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS
LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6.
Counterparts
.
This Agreement may be executed in any number of counterparts which shall together constitute but one and the same agreement.
[End of Text. Signatures on following page.]
IN WITNESS WHEREOF, Joining
Party has executed this Joinder Agreement under seal as of the day and year first above written.
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JOINING PARTY:
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BR Metrowest, LLC,
a Delaware
limited liability company
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By:
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/s/ Jordan Ruddy
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Name:
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Jordan Ruddy
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Title:
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Authorized Signatory
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[SIGNATURES CONTINUE ON FOLLOWING PAGE]
[Signature Page to Joinder to Environmental
Indemnity – Metrowest]
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ACKNOWLEDGED:
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KEYBANK NATIONAL ASSOCIATION,
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as Agent
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By:
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/s/
Christopher T. Neil
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Name:
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Christopher T. Neil
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Title:
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Vice President
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[Signature Page to Joinder to Environmental
Indemnity – Metrowest]
EXHIBIT A
LEGAL DESCRIPTION OF EACH PROPERTY
MetroWest
(2450 Lake Debra Drive, Orlando, Orange
County, Florida)
PARCEL 1: (Fee Simple Estate):
A portion of Tract 1, METROWEST, as recorded
in Plat Book 16, pages 107 through 110 of the public records of Orange County, Florida, lying in Section 2, Township 23 South,
Range 28 East, City of Orlando, Orange County, Florida, being more particularly described as follows:
Commence at the Westernmost corner of Tract
1, Metro West, according to the plat thereof as recorded in Plat Book 16, pages 107 through 110 of the public records of Orange
County, Florida; thence run North 89° 47' 04" East along the most Westerly Southerly line of said Tract 1, also being
the Northerly line of Vetter Isle as recorded in Plat Book Y, page 79 of the public records of said Orange County, Florida for
a distance of 647.22 feet; thence departing said Northerly line continue North 89° 47' 23" East along said Southerly line
for a distance of 646.35 feet to the Point of Beginning; thence departing said Southerly line run North 00° 12' 37" West
for a distance of 192.28 feet; thence run South 54° 15' 28" East for a distance of 94.56 feet; thence run North 55°04'
13" East for a distance of 80.33 feet; thence run North 66° 07' 31" East for a distance of 108.04 feet; thence run
North 62°43' 45" East for a distance of 101.16 feet; thence run North 64°24' 44" East for a distance of 110.07
feet; thence run North 66°51' 29" East for a distance of 103.59 feet; thence run North 64°23' 25" East for a
distance of 111.60 feet; thence run North 87°44' 23' East for a distance of 112.59 feet; thence run South 82°53' 29"
East for a distance of 113.94 feet; thence run North 77°49' 19" East for a distance of 83.90 feet, thence run North 75°33'
14" East for a distance of 92.82 feet; thence run North 69°42' 28" East for a distance of 72.73 feet; thence run
North 45°13' 25" East for a distance of 45.65 feet; thence run North 21°08' 41" East for a distance of 70.44
feet; thence run North 06°56' 11" West for a distance of 93.26 feet; thence run North 21°32' 21" West for a distance
of 93.14 feet; thence run North 19°51' 29" East for a distance of 37.82 feet; thence run North 00°10' 47" East
for a distance of 99.14 feet; thence run North 15°54' 21" East for a distance of 63.32 feet; thence run North 90°00'
00" East for a distance of 75.98 feet to a point on the Westerly right of way line of Lake Debra Drive according to the plat
of MetroWest Tract 1, Lot 7, as recorded in Plat Book 34, pages 50 and 51 of the public records of Orange County, Florida; thence
run South 03° 11' 47" East along said right of way line for a distance of 240.79 feet to a point of curvature of a curve
concave Westerly and having a radius of 930.00 feet; thence continuing along said Westerly right of way line run Southerly along
said curve through a central angle of 03°07' 59" for an arc distance of 50.85 feet to a point of tangency; thence run
South 00°03' 48" East for a distance of 327.81 feet; thence run North 89°56' 12" East for a distance of 35.00
feet to a point on the Westerly boundary of MetroWest Tract 1, Lot 8 according to the plat thereof as recorded in Plat Book 39,
page 27 of the public records of Orange County, Florida; thence run South 00°03' 48" East for a distance of 50.30 feet;
thence run South 06°19' 52" East for a distance of 180.95 feet to a point of curvature of a curve concave Easterly and
having a radius of 1000.00 feet, thence continuing along said Westerly line run Southerly along said curve through a central angle
of 12°53' 28" for an arc distance of 224.99 feet to a point of reverse curvature of a curve concave Westerly and having a radius of
500.00 feet, thence run Southerly along said curve through a central angle of 22°46' 31" for an arc distance of 198.75
feet to a point; thence run North 86°26' 49" West for a distance of 27.00 feet to a point on a non-tangent curve concave
Westerly and having a radius of 473.00 feet; thence from a tangent bearing of South 03°33' 03" West run Southerly along
said curve through a central angle of 09°35' 48" for an arc distance of 79.22 feet to a point; thence run South 71°38'
01" West for a distance of 44.93 feet; thence run South 36°22' 41" West for a distance of 149.85 feet; thence run
South 20°05' 36" West for a distance of 102.40 feet; thence run South 16°21' 56" West for a distance of 382.58
feet; thence run South 00° 14' 29" East for a distance of 953.60 feet to a point on the South line of aforesaid Section
2, also being a point on the Southerly line of Metro West Tract 1, according to the plat thereof as recorded in Plat Book 16, pages
107 through 110 of the public records of Orange County, Florida; thence run South 89°45' 31" West along said South line
for a distance of 348.71 feet to the Southwesternmost corner of said Metro West Tract 1, also being a point on the Westerly line
of said Metro West Tract 1; thence departing said South line run North 00° 19' 31" West along said Westerly line for a
distance of 887.85 feet; thence departing said Westerly line run the following courses and distances; South 89°45' 09"
West for a distance of 9.08 feet; thence run South 70°15' 39" West for a distance of 22.96 feet; thence run South 44°04'
38" West for a distance of 60.93 feet; thence run South 77°10' 38" West for a distance of 70.28 feet; thence run
South 88°35' 31" West for a distance of 19.31 feet; thence run North 55°25' 15" West for a distance of 106.39
feet; thence run North 38°26' 30" West for a distance of 7.87 feet; thence run South 89°45' 09" West for a distance
of 241.61 feet; thence run North 00°19' 31" West for a distance of 348.77 feet; thence run North 36°11' 35" West
for a distance of 4.78 feet; thence run North 19°26' 25" West for a distance of 62.36 feet; thence run North 24°15'
32" West for a distance of 31.32 feet; thence run South 89°59' 01" West for a distance of 29.91 feet; thence run
North 05°09' 27" West for a distance of 68.03 feet; thence run North 11°27' 19" East for a distance of 109.72
feet; thence run North 06°12' 17" West for a distance of 105.33 feet; thence run North 17°14' 53" West for a
distance of 171.51 feet; thence run North 00°08' 31" West for a distance of 185.59 feet; thence run South 89°47' 23"
West for a distance of 84.11 feet to aforesaid Point of Beginning.
Said land is shown on the plat of ALEXAN
AT METROWEST, according to the plat thereof recorded in Plat Book 47, page 33, public records of Orange County, Florida.
PARCEL 2:
Nonexclusive easement for pedestrian and
vehicular access, ingress and egress purposes for the benefit of Parcel 1 over, through and across the land identified as "Easement
Area - Metrowest Tract 1, Lot 8" in Exhibit C to the Reciprocal Easement Agreement between Debra, Inc. and Windsor Residential
Harbortown, Inc., recorded in Official Records Book 5424, page 1968, Public Records of Orange County, Florida.
PARCEL 3:
Nonexclusive easement for drainage purposes
for the benefit of Parcel 1 reserved in the Drainage Easement Agreement (Tract ID) between Spring Trace, L.L.C. and Metrowest Master
Association, Inc., recorded in Official Records Book 6279, page 3582, as amended by the Amendment to Drainage Easement Agreement
(Tract ID) recorded in Official Records Book 6716, page 4890, Public Records of Orange County, Florida, in, on, upon, over and
through the Drainage Easement Area described in Exhibit "A" to said Amendment, and Second Amendment to Drainage Easement
Agreement (Tract ID), recorded in Official Records Book 7609, page 3588, Public Records of Orange County, Florida.
PARCEL 4:
Nonexclusive easement for sanitary sewer
utility purposes for the benefit of Parcel 1 over, upon and across the land described in Exhibit C to the Sanitary Sewer Easement
and Stormwater Easement Agreement between Metrowest II Limited Partnership and The Northwestern Mutual Life Insurance Company,
recorded in Official Records Book 6279, page 3613, as affected by Affidavit recorded in Official Records Book 7119, Page 3877,
Public Records of Orange County, Florida.
PARCEL 5:
Nonexclusive easements for the benefit
of Parcel 1 as defined and more particularly described in Section 6.1 of that certain Master Declaration of Protective Covenants
and Restrictions for MetroWest recorded March 13, 1986 in Official Records Book 3759, page 2756, as affected by the Agreement Concerning
Transfer of Responsibilities recorded September 17, 1986 in Official Records Book 3820, page 4314 and the Assignment and Assumption
of Declarant's Rights and Obligations recorded October 25, 2000 in Official Records Book 6115, page 4273, and as amended August
10, 1987 in Official Records Book 3913, page 2944, recorded November 17, 1987 in Official Records Book 3936, page 4185, recorded
March 28, 1988 in Official Records Book 3968, page 1279, recorded August 30, 1996 in Official Records Book 5114, page 1077 and
recorded February 8, 2001 in Official Records Book 6189, page 2476, and Certificate of Approval recorded October 22, 2003 in Official
Records Book 7161, page 2831, as amended by Third Amendment, recorded February 8, 2006 in Official Records Book 8471, Page 1428;
Fourth Amendment, recorded January 15, 2010 in Official Records Book 9989, Page 1602, and Fifth Amendment to Master Declaration
of Protective Covenants and Restrictions for Metrowest, recorded September 23, 2014 in Official Records Book 10808, Page 8087,
Public Records of Orange County, Florida.
PARCEL 6:
Nonexclusive easement for access and utilities
for the benefit of Parcel 1 as defined and more particularly described in that certain Utility Easement Agreement recorded in Official
Records Book 6314, Page 5929, as amended by Amendment to Utility Easement Agreement recorded in Official Records Book 7609, Page
3607, Public Records of Orange County, Florida.
Exhibit 10.12
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT
IN RESPECT OF CONTRACTS, LICENSES AND
PERMITS
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1.
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PARTIES
. BR METROWEST, LLC, a Delaware limited liability company, having a place of business
at c/o Bluerock Real Estate, L.L.C., 712 Fifth Avenue, 9
th
Floor, New York, New York 10019 (hereinafter called “
Assignor
”)
as of this 30
th
day of October, 2017, hereby assigns, transfers, sets over, pledges, and, if applicable, delivers, to
KEYBANK NATIONAL ASSOCIATION, a national banking association as agent under a Credit Agreement (hereinafter called the “
Credit
Agreement
”) dated October 4, 2017 among BLUEROCK RESIDENTIAL HOLDINGS, L.P., a Delaware limited partnership (as “
Parent
Borrower
”) and various other Subsidiary Borrowers thereof collectively as “
Borrower
”, KeyBank National
Association and the other lending institutions which become parties to the Credit Agreement (KeyBank National Association and the
other lending institutions which become parties to the Credit Agreement are collectively referred to as the “
Lenders
”
and individually as the “
Lender
”), and KeyBank National Association, as Agent (hereinafter called “
Agent
”),
having a place of business at 225 Franklin Street, Boston, Massachusetts 02110 and hereby grants to Agent a continuing security
interest in the Assigned Contracts and Permits (as defined herein) to secure the Obligations (as defined herein) for the purpose
of securing the “Obligations” as defined in that certain Subsidiary Guaranty entered into by Assignor in favor of Agent
and the Lenders dated as of the date hereof (as the same may be modified, amended or supplemented, the “
Subsidiary Guaranty
”).
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2.
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CREDIT AGREEMENT; DEFINED TERMS
. This collateral assignment and security agreement (“
Assignment
of Contracts
” or “
Collateral Assignment
”) is given pursuant to the terms, provisions and conditions
of the Credit Agreement.
Capitalized terms not otherwise specifically defined herein shall have the same meaning herein as in
the Credit Agreement.
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3.
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ASSIGNED CONTRACTS AND PERMITS
. The term “
Assigned Contracts and Permits
”
shall mean all of the contracts, licenses, permits, approvals, agreements and warranties, and all of Assignor’s right, title
and interest therein, whether now owned or hereafter acquired, and all proceeds and products thereof, and all accounts, contract
rights and general intangibles related thereto, which are in any manner related to the Mortgaged Property (as defined in the associated
Mortgage) owned by Assignor; provided, however, that in no event shall the term “Assigned Contracts and Permits” include
any contract, license, permit, approval, agreement or warranty which is either not assignable by Assignor by its terms or not assignable
without the consent of a third party.
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4.
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OBLIGATIONS
. The term “
Obligations
” shall have the meaning ascribed to
such term in the Subsidiary Guaranty.
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5.
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COVENANTS, WARRANTIES AND REPRESENTATIONS
. Assignor covenants with, and warrants and represents
to, Agent and Lenders that:
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5.1
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Assignor is and shall be the owner of the Assigned Contracts and Permits free and clear of all
pledges, liens, security interests and other encumbrances of every nature whatsoever except in favor of Agent;
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5.2
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Assignor has the full right, power and authority to assign, and to grant the pledge of and security
interest in, the Assigned Contracts and Permits as herein provided;
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5.3
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The execution, delivery and performance of this Collateral Assignment by Assignor does not and
will not result in the violation of any mortgage, indenture, contract, instrument, agreement, judgment, decree, order, statute,
rule or regulation to which Assignor is subject or by which it or any of its property is bound;
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5.4
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Assignor shall not make any other assignment of, or permit any pledge, lien, security interest
or encumbrance to exist with respect to, the Assigned Contracts and Permits except in favor of Agent, and Assignor shall not otherwise
transfer, assign, sell or exchange its interest in the Assigned Contracts and Permits;
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5.5
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A true and complete executed counterpart, or certified copy, of each Assigned Contract and Permit,
the absence of which would have a Material Adverse Effect, which now exists and which is evidenced by a written agreement or document
has been delivered to Agent and a true and complete counterpart, or certified copy, of each Assigned Contract and Permit, the absence
of which would have a Material Adverse Effect, which becomes effective or is issued in the future shall be promptly delivered to
Agent;
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5.6
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Each Assigned Contract and Permit presently in existence is in full force and effect, is valid
and enforceable in accordance with its terms, has not been modified, and to Assignor’s knowledge, no default exists thereunder
on the part of any party thereto. Each Assigned Contract and Permit which comes into existence after the date hereof shall be valid
and enforceable in accordance with its terms as of the date thereof;
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5.7
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No Assigned Contract and Permit shall be amended, modified or changed in any material respect,
have any of its material terms waived by Assignor, or cancelled or terminated, without Agent’s prior written consent in each
instance, such consent not to be unreasonably withheld or delayed; and
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5.8
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Assignor shall pay and perform all of its obligations under or with respect to each Assigned Contract
and Permit and not permit any default by it to exist with respect thereto or if any such default occurs, to promptly cure such
default. Assignor shall exercise all commercially reasonable efforts necessary to enforce or secure performance by any other party
to any Assigned Contract and Permit.
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Notwithstanding
the foregoing provisions of this Section 5: (a) it shall not be a violation or default under this Collateral Assignment unless
a breach of a particular representation, warranty or covenant contained in this Section 5 creates a Material Adverse Effect, as
defined in the Credit Agreement; and (b) Assignor shall be allowed to enter into contracts,
licenses, permits, approvals, and agreements related to the Mortgaged Property and to amend, modify, and otherwise alter existing
contracts, licenses, permits, approvals, and agreements related to the Mortgaged Property without the consent of or notice to Agent
or Lenders, unless required pursuant to the terms of the Credit Agreement or unless it would cause a Material Adverse Effect.
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6.
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RIGHTS OF ASSIGNOR PRIOR TO DEFAULT
. So long as there is no continuing Event of Default,
Assignor shall have and may exercise all rights as the owner or holder of the Assigned Contracts and Permits which are lawful and
are not inconsistent with the provisions of the Loan Documents. Immediately upon the occurrence and during the continuance of any
Event of Default, the right described in the preceding sentence shall cease and terminate, and in such event Agent is hereby expressly
and irrevocably authorized, but not required, to exercise every right, option, power or authority inuring to Assignor under any
one or more of the Assigned Contracts and Permits as fully as Assignor could itself.
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7.
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IRREVOCABLE DIRECTION
. Assignor hereby irrevocably directs the contracting party to, or
grantor or licensor of, any such Assigned Contract and Permit, to the extent not prohibited by either such Assigned Contract and
Permit or applicable law, or to the extent permitted under any recognition or other agreement executed by such grantor or licensor,
upon demand and after notice from Agent of the occurrence of an Event of Default under any of the Loan Documents, to recognize
and accept Agent as the holder of such Assigned Contract and Permit for any and all purposes as fully as it would recognize and
accept Assignor and the performance of Assignor thereunder. Assignor does hereby constitute and appoint Agent, while this Collateral
Assignment remains in force and effect, irrevocably, and with full power of substitution and revocation, its true and lawful attorney
for and in its name, place and stead, after the occurrence and during the continuance of such an Event of Default, to demand and
enforce compliance with all the terms and conditions of the Assigned Contracts and Permits and all benefits accrued thereunder,
whether at law, in equity or otherwise.
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8.
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UCC RIGHTS AND REMEDIES
. Further, and without limitation of the foregoing rights and remedies,
upon and during the continuance of an Event of Default Agent shall have the rights and remedies of a secured party under the Uniform
Commercial Code, as enacted in the State in which the Mortgaged Property is located, with respect to the Assigned Contracts and
Permits, in addition to the rights and remedies otherwise provided for herein or by law or in equity or in any other Loan Document.
The Agent shall give Assignor ten (10) days prior written notice of the time and place of any public sale of any such Assigned
Contract and Permit or the time after which any private sale or any other intended disposition is to be made. After deducting all
expenses incurred in connection with the enforcement of its rights hereunder, Agent shall cause the proceeds of the Assigned Contracts
and Permits to be applied to the Obligations in such order as set forth in the Credit Agreement or, if not addressed in the Credit
Agreement, in order as Agent may determine and Assignor shall remain liable for any deficiency.
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9.
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INDEMNIFICATION
. Assignor hereby agrees to indemnify and to defend and hold Agent and the
Lenders harmless against and from all liability, loss, damage and expense, including reasonable and actual attorneys’ fees,
which it may or shall incur by reason of this Collateral Assignment, or by reason of any commercially reasonable action taken in
good faith by Agent hereunder or with respect to the Assigned Contracts and Permits, and against and from any and all claims and
demands whatsoever which may be asserted against Agent or any Lender by reason of any alleged obligation or undertaking on its
part to perform or discharge any of the terms, covenants and conditions contained in any of the Assigned Contracts and Permits
and except for any loss, damage, or expense arising from the gross negligence or willful misconduct of Agent, Lenders, or the agents
of any of them. Should Agent or any Lender incur any such liability, loss, damage or expense, the amount thereof, together with
interest thereon at the Default Rate of interest under the Credit Agreement, shall be payable by Assignor to Agent and the Lenders
immediately upon demand, or at the option of Agent, Agent may reimburse itself therefor out of any receipts, rents, income or profits
of the Property collected by Agent before the application of such receipts, rents, income or profits to any other Obligations.
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10.
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AGENT/LENDER NOT OBLIGATED
. Nothing contained herein or elsewhere shall operate to obligate,
or be construed to obligate, Agent or any Lender to perform any of the terms, covenants or conditions contained in the Assigned
Contracts and Permits or otherwise to impose any obligation upon Agent or any Lender with respect to the Assigned Contracts and
Permits prior to written notice by Agent to Assignor of Agent’s election to assume Assignor’s obligations under one
or more of the Assigned Contracts and Permits. Prior to written notice from Agent of such election, this Collateral Assignment
shall not operate to place upon Agent any responsibility for the operation, control, care, management or repair of the Property
or for the payment, performance or observance of any obligation, requirement or condition under any such Assigned Contract and
Permit, or under any agreement in respect to any such Assigned Contract and Permit, and the execution of this Collateral Assignment
by Assignor shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair
of the Property as well as the payment, performance or observance of any obligation, requirement or condition under the Assigned
Contracts and Permits is and shall be that of Assignor, prior to written notice from Agent of such election. Even if Agent does
exercise its rights, it shall only be liable to any of the other parties to the Assigned Contracts and Permits only during the
period that it is exercising the rights of Assignor under the Assigned Contracts and Permits, and at all times Assignor retains
the obligation to reimburse Agent promptly upon demand or otherwise pay when due all obligations incurred in connection with the
Assigned Contracts and Permits.
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11.
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FURTHER ASSURANCES; UCC FILINGS
. Assignor agrees to execute and deliver to Agent, at any
time or times during which this Collateral Assignment shall be in effect, such further instruments as Agent in good faith may reasonably
deem necessary to make effective this Collateral Assignment, the security interest created hereby and the covenants of Assignor
herein contained. To evidence such security interest, at the request of Agent, Assignor shall, in a form satisfactory to Agent,
execute and deliver one or more financing statements, and any continuation thereof, pursuant to the provisions of the Uniform Commercial
Code as enacted in the State in which the Mortgaged Property is located and shall pay the cost for filing thereof.
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12.
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NO WAIVER: CUMULATIVE RIGHTS
. Failure of Agent to avail itself of any of the terms, covenants,
and conditions of this Collateral Assignment for any period of time, or at any time or times, shall not be construed or deemed
to be a waiver of any of its rights hereunder. The rights and remedies of Agent under this Collateral Assignment are cumulative
and are not in lieu of, but are in addition to, any other rights and remedies which Agent shall have under or by virtue of the
Obligations and the Loan Documents. The rights and remedies of Agent hereunder may be exercised from time to time and as often
as such exercise is deemed expedient by Agent.
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13.
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AGENT/LENDER: RIGHT TO ASSIGN
. Assignor agrees that upon any sale or transfer by Agent and
the Lenders of the Loan Documents and the indebtedness evidenced thereby in accordance with the Credit Agreement, or upon any person
acquiring the Mortgaged Property or any interest therein, Agent may deliver to the purchaser or transferee the Assigned Contracts
and Permits and may assign to such purchaser or transferee the rights of Agent hereunder, who shall thereupon become vested with
all powers and rights given to Agent and the Lenders in respect thereto (and subject to Agent’s obligations hereunder), and
Agent and the Lenders shall be forever relieved and fully discharged from any liability or responsibility thereafter accruing in
connection therewith, subject to the terms of the Credit Agreement. In no event shall Agent be liable with respect to, or on account
of, the Assigned Contracts and Permits, except for the safekeeping of any instruments delivered to Agent pursuant hereto, and Agent
shall specifically have no obligation to enforce any rights against any contractor, or grantor or issuer.
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14.
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TERMINATION AND REASSIGNMENT
. Upon full payment and performance of the obligations and liabilities
set forth or contained in this Collateral Assignment and the other Loan Documents (excluding only any liabilities which might arise
in the future under the Environmental Indemnity), or upon the earlier release of the Mortgage, this Collateral Assignment shall
become and be void and of no effect and, in that event, upon the request of Assignor, Agent covenants to execute and deliver to
Assignor instruments effective to evidence the termination of this Collateral Assignment and the reassignment (without recourse)
to Assignor of the Assigned Contracts and Permits and the rights, title, interest, power and authority assigned herein; provided,
however, that any affidavit, certificate or other written statement of any officer of Agent stating that any part of said indebtedness
remains unpaid shall be and constitute conclusive evidence (absent manifest error) of the then validity, effectiveness and continuing
force of this Collateral Assignment and any person, firm, or corporation receiving any such affidavit, certificate or statement
may, and is hereby authorized to rely thereon.
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15.
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COPIES OF DEFAULT NOTICES
. Assignor agrees to provide Agent promptly, but in any event within
five (5) Business Days after receipt or knowledge thereof by Assignor, with copies of any and all notices received by Assignor
which allege, either directly or indirectly, that Assignor is in default of, or deficient in the performance of the terms of any
obligation of Assignor under, any Assigned Contract and Permit, or that any fact or circumstance exists which could reasonably
lead to the termination, suspension, revocation or loss of any Assigned Contract and Permit, but the notice under this Section 15
shall only be required if the alleged default, deficiency, fact, or circumstance could reasonably give rise to a Material Adverse
Effect.
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16.
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NO CANCELLATION
. Except as set forth in Section 5 hereof, Assignor covenants and agrees
that without the prior written consent of Agent in each instance, Assignor will not permit or agree to any cancellation, abridgement,
or modification of any of the material terms, covenants and conditions of any Assigned Contract and Permit.
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17.
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NOTICES
. Any notices given pursuant to this Collateral Assignment shall be sufficient only
if given in the manner provided for in the Credit Agreement.
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18.
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SUCCESSORS AND ASSIGNS
. All of the agreements, obligations, undertakings, representations
and warranties herein made by Assignor shall inure to the benefit of Agent, each Lender and their successors and assigns and shall
bind Assignor and its successors and assigns.
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19.
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CAPTIONS AND HEADINGS
. Captions and headings in this Collateral Assignment are intended
solely for the convenience of the parties and shall not be considered in the determination of the meaning of any provision hereof.
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20.
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GRACE PERIODS AND NOTICE
. The cure period and notice provisions set forth in the Credit
Agreement shall be applicable to any default under this Collateral Assignment.
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21.
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COUNTERPARTS
. This Collateral Assignment may be executed in several counterparts, each of
which when executed and delivered is an original, but all of which together shall constitute one instrument. In making proof of
this agreement, it shall not be necessary to produce or account for more than one such counterpart which is executed by the party
against whom enforcement of such collateral assignment is sought.
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22.
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GOVERNING LAW
. This Collateral Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York. Notwithstanding the foregoing choice of law, matters relating to the creation, perfection,
priority and enforcement of the liens on and security interests in the Assigned Contracts and Permits, shall be governed by the
laws of the State in which the Mortgaged Property is located.
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[Signatures appear on next page]
IN WITNESS WHEREOF,
Assignor has caused this Collateral Assignment to be duly executed and delivered as of the date first written above.
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ASSIGNOR:
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BR METROWEST, LLC,
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a Delaware limited liability company
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By:
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/s/ Jordan Ruddy
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Name:
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Jordan Ruddy
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Title:
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Authorized Signatory
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STATE OF NEW YORK
COUNTY OF NEW YORK
On October 20, 2017, before me, Dale
Pozzi, personally appeared Jordan Ruddy, who proved to me on the basis of satisfactory evidence to
be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument, the person, or the entity upon behalf of which the person
acted, executed the instrument.
He is personally known to me.
I certify under PENALTY OF PERJURY under
the laws of the State of New York that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
/s/
Dale Pozzi
(
Seal
)
[Collateral Assignment of Contracts Signature
Page]
Exhibit 10.13
COLLATERAL
ASSIGNMENT OF MANAGEMENT CONTRACT
Date: October 30, 2017
WHEREAS, BR METROWEST,
LLC, a Delaware limited liability company, having an address at c/o Bluerock Real Estate, L.L.C., 712 Fifth Avenue, 9
th
Floor, New York, New York 10019 (“
Assignor
”), has entered into a certain Credit Agreement dated October 4, 2017
(hereinafter, the “
Credit Agreement
”) with KEYBANK NATIONAL ASSOCIATION, having an office at 225 Franklin Street,
Boston, Massachusetts 02110, as agent (in its capacity as agent, hereinafter, the “
Agent
,” which term shall
include, whenever the context permits, its successors and assigns as the holder of this ASSIGNMENT and the Notes and other Obligations
secured hereby), and the other lending institutions which now are or hereafter become parties to the Credit Agreement (KeyBank
National Association and such other lending institutions are collectively referred to as the “
Lenders
” and individually
as the “
Lender
”), pursuant to which the Lenders have agreed to lend to
BLUEROCK
RESIDENTIAL HOLDINGS, L.P.
, a Delaware limited partnership and various other Subsidiary Borrowers thereof collectively as
“Borrower”, subject to the terms and conditions of the Credit Agreement, the aggregate maximum sum of up to Two Hundred
Fifty Million and 00/100 Dollars ($250,000,000). (
All capitalized terms used herein and not defined herein shall have the meanings
set forth in the Credit Agreement
); and
WHEREAS, Assignor has
entered into a certain agreement (hereinafter, as such may be amended from time to time, singly and collectively, the “
Management
Contract
”) with
Carroll Management Group, LLC
, a Georgia limited liability
company (hereinafter, the “
Manager
”), with its principal offices at 3340 Peachtree Rd, NE, Suite 2250, Atlanta,
GA 30326, in connection with the management and operation of the property and related facilities owned by the Assignor, as applicable,
on certain premises located at 2450 Lake Debra Drive, Orlando, Florida 32835 (the “
Facility
”); and
WHEREAS, one of the
conditions of the making a loan pursuant to the Credit Agreement is the collateral assignment of the Management Contract by the
Assignor to the Agent for the benefit of the Lenders, such assignment being given to secure the Assignor’s “Obligations”
as defined in that certain Subsidiary Guaranty entered into by Assignor in favor of Agent and the Lenders dated as of the date
hereof (as the same may be modified, amended or supplemented, the “
Subsidiary Guaranty
”);
NOW THEREFORE and in
consideration of the above, and of mutual covenants contained herein and benefits to be derived herefrom, the parties hereto agree
as follows:
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1.
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To secure the prompt, punctual, and faithful payment and performance of the Obligations (as defined
in the Subsidiary Guaranty) of the Assignor to the Agent and the Lenders arising under the Subsidiary Guaranty, the Assignor hereby
assigns to the Agent, for the benefit of the Lenders, all rights of the Assignor under the Management Contract.
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2.
|
This Assignment is an assignment only of all of the rights which the Assignor may now or at any
time hereafter have under, pursuant to, or in respect of the Management Contract. The Agent shall not be deemed by virtue of this
Assignment to have assumed any of the obligations of the Assignor under the Management Contract, each of which obligations the
Assignor covenants and agrees with the Agent to perform and observe as if this Assignment had not been made. The Agent is not under any liability of any kind to the Manager under, pursuant to, or in respect of the Management Contract or by reason of any services furnished by the Manager to or for the account or benefit of the Assignor. By acceptance hereof, the Agent agrees not to exercise any rights under this Assignment except upon the occurrence and continuance of an Event of Default (as defined in the Credit Agreement). The Assignor or the Manager may rely conclusively upon any written notice given by the Agent to the Assignor or the Manager of the occurrence of such an Event of Default. Upon and after the giving of such notice, and until further written notice from the Agent to the Assignor or the Manager, the Agent may (but shall not be obligated to) exercise all rights granted the Agent under this Assignment.
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3.
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The Assignor and the Manager (by its assent hereto) represent and warrant that the Management Contract
is in full force and effect and that there are no defaults under the Management Contract by any party thereto, and the Assignor
represents and warrants that the Assignor has not made and will not make any other assignment thereof.
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4.
|
Any action or proceedings to enforce this Assignment against the Manager may be taken by the Agent
either in its name or in the name of the Assignor as the Agent may deem necessary.
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5.
|
The Manager has assented to this Assignment and hereby acknowledges this Assignment of the Management
Contract to the Agent and the Lenders and consents thereto. The Manager agrees that it will furnish to the Agent copies of all
written notices given to the Assignor with respect to any default of the Assignor under the Management Contract, simultaneously
with the giving of such notice to the Assignor, and anything in the Management Contract to the contrary notwithstanding, agrees
that the Agent shall have a reasonable opportunity, not to exceed ninety (90) days, to cure any such default. The Manager further
agrees that it will accept any such performance by the Agent which cures such default. So long as the Agent commences to cure or
causes to be cured any such default within thirty (30) days after receipt of written notice of such default by Lender, and the
elimination of any such default is carried on with due diligence, the Manager will continue to fully meet its obligations under
the Management Contract, but in no event longer than ninety (90) days, to the end that there shall be no interruption of the work
called for thereby.
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6.
|
The Manager (by its assent hereto) agrees that unless the Agent expressly assumes the obligations
of the Assignor under the Management Contract, the Agent shall not be deemed to have assumed any of the obligations of Assignor
under the Management Contract, nor shall the Agent or any Lender be under any liability of any kind to Manager under the Management
Contract or by reason of any services furnished by the Manager to or for the account or benefit of the Assignor. This Assignment
does not release or affect in any way the obligations of the Assignor to the Manager.
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7.
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The Manager agrees to promptly, punctually and faithfully perform the responsibilities of the Manager
in accordance with the Management Contract. Notwithstanding the terms and provisions of the Management Contract, in the event the
Assignor defaults thereunder, the Manager shall be obligated to continue to fully meet its obligations under
the Management Contract (other than any obligations to advance any funds of the Manager for the benefit of Facility) without
any further right to any payment for services
rendered in connection with the operation of the Facility; provided, however, if
the Manager is required to so meet its obligations without payment, the Manager may terminate the Management Contract upon
thirty (30) days’ prior written notice to the Assignor and the Agent. Further, regardless of Manager’s
continuing to meet its obligations under the
Management Contract, the Manager agrees that the Agent and the Lenders shall not be under
any liability to the Manager by reason of any services rendered by the Manager to or for the account or benefit of the
Assignor, whether prior to or after the date of any such default by Assignor, unless Agent specifically acknowledges its
liability for such amounts.
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8.
|
The rights of the Agent hereunder may be fully exercised by the Agent’s designee or assignee.
Further, upon the assignment by the Agent of its rights hereunder, the Agent shall be automatically released from any liability
of any nature whatsoever hereunder or under the Management Contract.
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9.
|
If an Event of Default exists and is continuing, the Manager agrees that:
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a.
|
all payments to be made to the Manager under the Management Contract shall cease until the Event
of Default is cured or waived in writing by the Agent and the Manager receives written notice from the Agent that it may resume
receiving said payments; provided, however, if the Manager is required to fully meet its obligations under the Management Contract
without payment, the Manager may terminate the Management Contract upon thirty (30) days’ prior written notice to the Assignor
and the Agent;
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b.
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all of the Manager’s rights to payment (other than reimbursement for expenses incurred on
behalf of Assignor), and all other rights, remedies, powers, privileges and discretions as set forth in the Management Contract
shall be subject to and subordinate to prior payment and satisfaction in full of the Obligations of the Borrower to the Agent and
the Lenders under the Loan Documents; provided, however, as long as no Event of Default exists under the Loan Documents, Manager
may be paid, when due, all fees payable to Manager under the Management Contract and in the case of nonpayment, as contemplated
in Section 9(a) above, Manager may terminate the Management Contract;
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c.
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any and all amounts which are collected, enforced or received by the Manager shall be held by the
Manager as trustee for the Agent and shall be paid over to the Agent on account of the Obligations of the Borrower to the Agent
under the Loan Documents; and
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d.
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the Agent may, upon thirty (30) days written notice, terminate the Management Contract without
being subject to any termination fee, penalty, fine, or assessment, whatsoever.
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10.
|
This Assignment shall be governed by, and construed in accordance with, the laws of the State of
New York.
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[SEE ATTACHED SIGNATURE
PAGES]
It is intended that this
Assignment take effect as a sealed instrument as of the date first above written.
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ASSIGNOR:
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BR METROWEST, LLC,
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a Delaware limited liability company
|
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By:
|
/s/ Jordan Ruddy
|
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Name:
|
Jordan Ruddy
|
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Title:
|
Authorized Signatory
|
[SIGNATURES CONTINUE ON FOLLOWING PAGES]
[Collateral Assignment of Management Contract
Signature Page]
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AGENT:
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KEYBANK NATIONAL ASSOCIATION
|
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By:
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/s/ Christopher T. Neil
|
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Name:
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Christopher T. Neil
|
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Title:
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Vice President
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[SIGNATURES CONTINUE ON
FOLLOWING PAGE]
[Collateral Assignment
of Management Contract Signature Page]
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MANAGER:
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CARROLL MANAGEMENT GROUP, LLC,
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a Georgia limited liability company
|
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By:
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/s/ Josh Champion
|
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Name:
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Josh Champion
|
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Title:
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President
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[Collateral Assignment of Management Contract
Signature Page]