RESOLUTION 19-020 RE FIRSTBANK-ROSE TERRACE LETTER OF LOAN INTEREST.PDF

FirstBank
1559 North Litchfield Road, Goodyear, Arizona 85395
August 8, 2019
Rose Terrace Development Partnership, LLC
8910 N 78th Ave
Peoria, AZ 85345
RE: Rose Terrace Apartments
Avondale, AZ
Dear Mr. Mario Aniles:
FirstBank (“Bank”) is pleased to provide this Letter of Loan Interest (not a loan commitment) to
Rose Terrace Development Partnership, LLC (“Borrower”) related to the proposed financing of
Rose Terrace Apartments. Quotes of interest rates and margins represent FirstBank’s rates in
effect as of the date of this letter. Rates and margins are subject to change.
GENERAL TERMS
Borrower: Rose Terrace Development Partnership, LLC
Guarantor(s): Rose Terrace Development Partnership, LLC
Collateral: 1st Deed of Trust on real property and improvements,
existing or to be constructed on the Property named
below, Assignment of Leases and Rents, UCC-1,
developer’s agreement and general partner’s interest,
ancillary rights, agreements and privileges.
525 E Harrison Drive
Avondale, Arizona 85323
Rev. 9/2014 Page 1 of 6

Loan Amount: The loan amount will not exceed the lesser of $6,600,000,
70% of the as-is appraised value with market rents, or 80%
of the as-is appraised value with restricted rents
Loan Terms: Payments will be based on a 35-year amortization with a
loan maturity of 10 years.
Interest Rate: The rate will be fixed at 4.35% for the entire term of the
loan.
Interest on the loan will accrue using an Actual/360
accounting method.
Rate Lock: This rate is not locked. Rates are subject to change at any
time. The rate is subject to change in the event changes
are made to the current tax code. The rate may be locked
upon the execution of a FirstBank Commercial Rate Lock
Agreement and the receipt of the loan fee or a rate lock
fee. This fee is refundable at loan closing; however, if the
Borrower elects not to pursue the closing of this loan with
the Bank, the fee will be deemed nonrefundable and will
be retained by the Bank. The loan must close within 90
days of the rate lock date.
Improvement Funds Account: The Borrower will maintain the $1,100,000 portion of the
loan proceeds in an account at the Bank to be used for the
sole purpose of exterior renovations on the property,
including landscaping, painting, and roof repair.
Deposit Accounts: The quoted rates assume the Borrower and or related
parties will establish or maintain primary banking and all
operating accounts with the Bank.
Loan Fee: 1.00% of the loan amount
1.00% of the loan fee is due and payable upon acceptance
of the terms contained in this Letter of Loan Interest.
Should a loan commitment be provided by Bank on terms
generally consistent with this loan proposal, the 1.00%
loan fee shall be deemed earned and non-refundable.
Should Bank not issue a loan commitment for the
proposed financing on terms generally consistent with this
loan proposal, the funds paid to Bank shall be refunded to
the Borrower, less all reasonable out of pocket costs
incurred in connection with this loan proposal.
Expenses: In addition to the above loan fee, Borrower shall be
responsible for payment of all reasonable costs including,
but not limited to: appraisal, title insurance,
Rev. 9/2014 Page 2 of 6

environmental investigation/insurance, filing fees,
attorney fees, third-party inspection fees, and survey.
FirstBank will use Lewis Roca Rothgerber Christie as legal
counsel for this transaction. The borrower will be
responsible for all legal fees and reimbursements
associated with counsel’s work related to the loan
transactions and delivery of required opinions for each
loan.
Recourse: The loan will be structured as a full-recourse obligation of
the Borrower. The Borrower will indemnify Bank over
environmental matters, fraud, waste, payment of property
taxes and insurance premiums, and diversions of rents,
insurance or sales proceeds or other revenue assigned to
Bank as security for the Loan.
Loan Documents: The Bank’s obligation to close the Loan shall be
conditioned upon delivery and execution by Borrower to
Bank of loan documents satisfactory to Bank. Such
documents will contain conditions to borrowing,
representations and warranties, covenants, events of
default, indemnification, payment of expenses, and other
provisions normal and customary for loans of this type.
Documentation Requirements: The following will be required prior to closing:
1. Acceptable appraisal
2. Acceptable environmental report
3. Acceptable insurance policy, tax certificate, and title
insurance commitment
4. Bank requires receipt of a commitment for lender’s
title insurance in an amount equal to the maximum
loan amount, issued by a title company reasonably
acceptable to Bank, listing the Bank as the insured
mortgagee. Bank will reserve the right to require
certain endorsements to lender’s and owner’s policies
based on its review of the title commitment.
5. Bank requires receipt of an ALTA/ACSM survey of the
property(ies), in a form and content reasonably
acceptable to Bank.
6. Financial information as requested by Bank.
7. Partnership or Operating agreements and bylaws for
all borrowing entities.
8. Other matters to be proved, confirmed or evidenced,
including, without limitation: zoning, receipt of
building permits, utility will serve letters, proof of
insurance, environmental condition of the property,
flood zone verification, final building plans and
specifications, guarantor financial statements, and
lien/judgment searches.
Rev. 9/2014 Page 3 of 6

9. Bank requires a legal opinion of Borrower’s counsel in
accordance with standard practice and confirming
that loan documents are valid, enforceable and in
accordance with intended terms, and do not violate
any laws.
10. Any other documents reasonably required by Bank or
its legal counsel
Credit Information: Borrower authorizes Bank, its employees, agents,
successors, assigns and affiliates to:
1. Make whatever investigation Bank deems appropriate
concerning Borrower, Borrower’s request for credit,
and in the collection and periodic review of the loan
2. Share information obtained with prospective
purchasers of assignments and participation in the
loan and as otherwise permitted by law. Without
limiting the foregoing, Bank may information
regarding Borrower’s deposit accounts, income and
banking credit, business and employment
relationships and may verify such information.
Representations: Borrower affirms that all financial information provided in
conjunction with this request for credit is true, accurate,
and complete. Borrower has read and understands this
loan application and warrants to be true and correct all of
the information contained herein (including any
supplemental pages attached to and made a part hereof)
and all other documents submitted to Bank herewith.
Borrower expressly warrants to have the authority to act
on behalf of other principals, if any, connected with the
subject property, and is in all respects qualified to accept
such financing if offered.
Patriot Act: Pursuant to the requirements of the USA PATRIOT ACT,
Bank may be required to obtain, verify and record
information that identifies you, which information
includes your name and address, date of birth and other
information that will allow Bank to identify you in
accordance with the Act. The Bank may ask to see and
copy your Driver’s License and other identity documents.
OTHER CONDITIONS – COMMERCIAL REAL ESTATE LOANS
Pre-payment: This note may not be prepaid, in whole or in part, except
pursuant to the terms and conditions of this paragraph.
Borrower shall have the right to prepay all [or any
portion] of the unpaid principal balance on this Note upon
and subject to the following terms and conditions: (a)
Borrower shall give Lender not less than thirty (30) days
Rev. 9/2014 Page 4 of 6

prior written notice (the “Prepayment Notice”) specifying
the scheduled payment date on which such prepayment is
to be made (“Prepayment Date”), (b) Borrower shall pay
to Lender on the Prepayment Date the sum of the
following: (i) the prepayment fee (the “Prepayment Fee”)
in an amount equal to [(A)] one percent (1%) of the
Prepaid Principal Amount, plus (ii) fees and costs of
lender, plus (iii) default interest and late charges, plus (iv)
accrued and unpaid interest, plus (v) the then unpaid
principal balance of this Note [or so much thereof as
Borrower elected to prepay as set forth in the
Prepayment Notice] (the “Prepaid Principal Amount”).
No Prepayment Fee shall be due if the Prepayment Date is
within 180 days of the maturity of this note. If a
Prepayment Notice is given, such notice shall be
irrevocable, and the sums required to be paid as set forth
in clauses (i) through (v) of this Paragraph shall be due and
payable on the Prepayment Date. Without limiting any of
the provisions of this Paragraph, Lender shall not be
obligated to accept any prepayment of the principal
balance of this Note unless it is accompanied by the
Prepayment Fee, if applicable, due in connection
therewith.
Debt Service Ratio: The loan will require an on-going minimum debt service
coverage ratio (DSR) of 1.15. The DSR will be calculated by
dividing the actual annual net operating income, before
depreciation and interest expense, by the annual loan
payments. Bank will monitor compliance on an annual
basis for each previous 12 month period. Should the DSR
be less than a 1.15 during the test period, the borrower
will have 60 days to provide a written plan for bringing the
properties into compliance by the next test period. If an
annual test shows the DSR for the properties falls below a
1.10, we will re-test the DSR after six months. If the
properties are still below a 1.10 after six months, we will
require that the Borrower right-size the loan.
Reserves for Taxes and Insurance: Bank will not be collecting reserves for taxes and
insurance. Borrower will be responsible for the payment
of property taxes and hazard insurance. Borrower will be
responsible for ensuring the collateral is fully insured in an
amount equal to the full replacement cost of the property
for the entire term of the loan
Financial Reporting: On an annual basis: Borrower prepared financial
statements shall be submitted to the Bank for the
Borrower and Guarantors within 120 days of fiscal year-
end, Guarantor financial statements are to include a
detailed real estate schedule, financial projections for
project for the ensuing year within 60 days of fiscal year-
Rev. 9/2014 Page 5 of 6

end, Borrower and Guarantor tax returns due annually 60
days after filing, all other financial statements for
Borrower and Guarantor that Bank may reasonably
request.
If the terms outlined are acceptable, please sign below and return an executed copy of this Letter
of Loan Interest, along with the $66,000 loan fee. If you would like to simultaneously lock the
interest rate, please also return an executed FirstBank Commercial Rate Lock Agreement.
Upon receipt, FirstBank will immediately proceed with the formal underwriting and approval of
the proposed loan. This letter and the terms disclosed herein are confidential for the exclusive
use of the Borrower and should not be shared with any third parties, including any financial
institution or intermediary, without FirstBank’s prior written consent. The terms outlined in this
letter will expire unless the Letter of Loan Interest is fully executed and returned, along with the
loan fee, no later than August 16, 2019.
Please contact me directly with any questions at 623.536.4381. Thank you very much for
providing FirstBank the opportunity to participate in this project.
Sincerely,
Sebastian Porchini
Vice President – Phoenix Metro
APPROVED AND ACCEPTED by me this ____ day of August, 2019.
BY: Rose Terrace Development Partnership, LLC
_______________________________________
By __________________ as _____________ of Rose Terrace Development Partnership, LLC
Rev. 9/2014 Page 6 of 6