Contract analysis

Section 1.1 — Defined Terms As used in this Agreement, the following terms shall have the meanings set forth below: "Account Control Agreement" means each tri-party account control agreement executed by the applicable SPE Borrower (or Borrower, as applicable), Lender, and Cash Management Bank with respect to a Lockbox Account, the Cash Management Account, a Reserve Account, the Operating Expense Account, or the Exces

Section 1.2 — Rules of Construction (a) Unless otherwise specified, all references in this Agreement to "Articles," "Sections," "Exhibits," and "Schedules" are to Articles, Sections, Exhibits, and Schedules of this Agreement. (b) The words "hereof," "herein," "hereto," "hereunder," and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of

Section 1.3 — Incorporation of Loan Agreement Provisions (a) All capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. In the event that a term is defined both in this Agreement and in the Loan Agreement, the definition set forth in this Agreement shall control for purposes of this Agreement unless the context clearly requires otherwis

ARTICLE II — ESTABLISHMENT OF ACCOUNTS; LOCKBOX ARRANGEMENTS

Section 2.1 — Establishment of Lockbox Accounts (a) On or prior to the date of the initial disbursement of the Loan, Borrower shall establish and maintain, at the Cash Management Bank, fourteen (14) separate Lockbox Accounts, one for each SPE Borrower and corresponding Property, for the collection and deposit of Rents. The Lockbox Accounts shall be designated as follows: (i) Lockbox Account No. 1: Fairwater Sun Belt

Section 2.2 — Establishment of Cash Management Account (a) On or prior to the date of the initial disbursement of the Loan, Borrower shall establish and maintain at the Cash Management Bank a single Cash Management Account in the name of Borrower (or a designated SPE Borrower, as agreed by the Parties and directed by Lender), which shall serve as the central repository for all funds swept from the Lockbox Accounts in

Section 2.3 — Establishment of Reserve Accounts (a) Tax and Insurance Reserve Account. On or prior to the date of the initial disbursement of the Loan, Borrower shall establish and maintain at the Cash Management Bank a Tax and Insurance Reserve Account for the purpose of receiving and holding monthly escrow deposits for real estate taxes and insurance premiums payable with respect to all fourteen (14) Properties. Th

Section 2.4 — Establishment of Operating Expense Account (a) Borrower shall establish and maintain an Operating Expense Account at the Cash Management Bank (or, subject to Lender's prior written consent, at Borrower's existing depository institution) for the payment of budgeted property-level operating expenses in accordance with the Approved Annual Budget, including, without limitation, Property Management Fees paya

Section 2.5 — Cash Management Period; Springing Lockbox Mechanics (a) Outside a Cash Management Period. At all times when no Cash Management Period is in effect, the following cash management procedures shall apply: (i) Tenants at each Property shall direct Rent payments to the applicable Lockbox Account (or to the post office box or electronic payment address associated therewith), and Borrower and the Property Mana

Section 2.6 — Tenant Direction Letters (a) Upon the commencement of a Cash Management Period, or at any time following the occurrence and during the continuance of an Event of Default under the Loan Agreement, Borrower shall, within five (5) Business Days of Lender's written request, cause the Property Manager to distribute Tenant Direction Letters (in the form attached hereto as Exhibit C) to all Tenants at each Pro

Section 2.7 — Account Control Agreements (a) As a condition precedent to the initial disbursement of the Loan, Borrower shall execute and deliver, and shall cause the Cash Management Bank to execute and deliver, Account Control Agreements (each substantially in the form attached hereto as Exhibit D, or in such other form as may be required by the Cash Management Bank and approved by Lender) with respect to each of th

ARTICLE III — DEPOSITS AND COLLECTIONS

Section 3.1 — Deposit of Rents (a) All Rents and other income from the Properties shall be deposited into the applicable Lockbox Account no later than two (2) Business Days after receipt thereof by Borrower, the Property Manager, or any agent, employee, or representative of Borrower or the Property Manager. For purposes of this Section 3.1, "receipt" shall be deemed to occur on the date that the applicable Rent payme

Section 3.2 — Sweep of Lockbox Accounts (a) Funds deposited in each Lockbox Account shall be swept daily (on each Business Day) into the Cash Management Account. The Cash Management Bank shall perform each such sweep automatically, in accordance with standing instructions established at the time of account opening and as documented in the Account Control Agreements, without the need for individual instructions from B

Section 3.3 — Deposits from Other Sources (a) Insurance proceeds and condemnation awards received in connection with any Property shall be deposited into the Cash Management Account (or such other account as may be designated under the Loan Agreement for the receipt of such proceeds) and shall be applied in accordance with the Loan Agreement, including, as applicable, for the restoration of the affected Property or f

Section 3.4 — Investment of Funds (a) Funds on deposit in the Cash Management Account and each of the Reserve Accounts may be invested in Permitted Investments as follows: (i) Outside a Cash Management Period, Borrower shall have the right to direct the investment of such funds in Permitted Investments, provided that Borrower shall have delivered written investment instructions to the Cash Management Bank and Lender

ARTICLE IV — APPLICATION OF FUNDS; WATERFALL

Section 4.1 — Priority of Application (a) All funds in the Cash Management Account shall be applied on each Monthly Payment Date (and at such other times as may be expressly provided herein or in the Loan Agreement) in the order of priority set forth in Section 4.2 hereof (the "Waterfall"). (b) No disbursement or allocation shall be made to any lower-priority item in the Waterfall until all higher-priority items have

Section 4.2 — Waterfall of Funds On each Monthly Payment Date, funds in the Cash Management Account shall be applied in the following order of priority: First — to the Cash Management Bank, payment of all fees and expenses then due and payable to the Cash Management Bank under this Agreement and the Account Control Agreements, including, without limitation, account maintenance fees, wire transfer fees, and any other

Section 4.3 — REIT Distribution Carve-Out (a) Notwithstanding anything to the contrary contained in this Agreement, at all times (including during a Cash Management Period and at all times when Excess Cash Flow is being trapped by Lender pursuant to the Eighth priority of the Waterfall), Borrower shall be entitled to receive distributions from the Cash Management Account (or, as applicable, the Excess Cash Flow Sub-A

Section 4.4 — Application During Event of Default (a) Following the occurrence of an Event of Default under the Loan Agreement that has resulted in the acceleration of the maturity of the Loan (or if Lender has otherwise exercised its right to accelerate the Loan), Lender may, in its sole and absolute discretion, apply all funds on deposit in the Cash Management Account, the Reserve Accounts, the Excess Cash Flow Sub