8-K

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):

January 26, 2012

Steadfast Income REIT, Inc.

(Exact Name of Registrant as Specified in Charter)

Maryland	333-160748	27-0351641
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

18100 Von Karman Avenue, Suite 500

Irvine, California 92612

(Address of Principal Executive Offices, including Zip Code)

Registrant’s telephone number, including area code: (949) 852-0700

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Property Acquisition

The information set forth under Items 2.01 and 2.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.

Item 2.01 Completion of Acquisition or Disposition of Assets.

Property Acquisition

On January 26, 2012 (the “Closing Date”), Steadfast Income REIT, Inc. (the “Company”) acquired a fee simple interest in a 424-unit multifamily residential property located in Cedar Rapids, Iowa commonly known as the Windsor on the River Apartments (the “Windsor Property”) through SIR Windsor on the River, LLC (“SIR Windsor”), a wholly-owned subsidiary of Steadfast Income REIT Operating Partnership, L.P., the Company’s operating partnership (the “Operating Partnership”), from Windsor On The River, LLC, a third party seller (the “Seller”).

SIR Windsor acquired the Windsor Property from Seller for an aggregate purchase price of $33,000,000, exclusive of closing costs. SIR Windsor financed the payment of the purchase price for the Windsor Property with (1) proceeds from the Company’s public offering and (2) the assumption of an existing loan from the Iowa Finance Authority (the “Issuer”) to the Seller in the original principal amount of $24,000,000 (the “Windsor Loan”). For additional information on the terms of SIR Windsor’s assumption of the Windsor Loan, see Item 2.03 below.

The Windsor Property contains 424 units consisting of 244 one-bedroom units, 174 two-bedroom units and 6 three-bedroom units. The units at the Windsor Property range in size from 563 to 1,519 square feet with rents ranging from $657 to $1,005 per month. The Windsor Property was originally built in 1982 and received a $2.4 million renovation in 2007. Unit amenities include newly appointed interiors, with oak cabinetry, wood flooring and new carpeting, full-sized appliances, some with washers and dryers, vaulted ceilings, wood burning fireplaces, private patios and balconies and walk-in closets. Property amenities include a fitness center, night-lighted tennis courts, indoor racquetball courts, an Olympic-sized pool and a clubhouse. Occupancy at the Windsor Property was 95% as of January 24, 2012.

An acquisition fee of approximately $666,353 was earned by Steadfast Income Advisor, LLC, the Company’s external affiliated advisor (the “Advisor”), in connection with the acquisition of the Windsor Property, which acquisition fee is expected to be paid to the Advisor subject to the terms of the advisory agreement between the Company, the Advisor and the Operating Partnership.

Management of Property

On the Closing Date, SIR Windsor and Steadfast Management Company, Inc. (the “Property Manager”), an affiliate of the Company’s advisor, entered into a Property Management Agreement (the “Management Agreement”), pursuant to which the Property Manager will serve as the exclusive leasing agent and manager of the Windsor Property. Pursuant to the Management Agreement, SIR Windsor will pay the Property Manager a monthly management fee in an amount equal to 3.5% of the Windsor Property’s gross collections (as defined in the Management Agreement) for each month. The Management Agreement has an initial term of one year and will continue thereafter on a month-to-month basis unless either party gives 60 days’ prior notice of its desire to terminate the Management Agreement. SIR Windsor may terminate the Management Agreement at any time upon thirty (30) days’ prior written notice to the Property Manager in the event of the gross negligence, willful misconduct or bad acts of the Property Manager or any of the Property Manager’s employees.

The material terms of the Management Agreement described herein are qualified in their entirety by the Management Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Assumption of Windsor Loan

The Windsor Loan was originally funded with proceeds from the issuance of Iowa Finance Authority Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A in the original aggregate principal amount of $24,000,000 (the “Bonds”) pursuant to an Indenture of Trust dated May 1, 2007 (the “Indenture”) by and between the Issuer and The Bank of New York Mellon Trust Company, N.A. (the “Trustee”), as trustee for the holders of the Bonds. As of the Closing Date the aggregate outstanding principal amount of the Bonds was $23,500,000.

In connection with the acquisition of the Windsor Property, SIR Windsor, the Seller and the Trustee entered into an Assumption Agreement dated the Closing Date (the “Assumption Agreement”). The Assumption Agreement provided for SIR Windsor’s assumption of the Windsor Loan and all of the Seller’s indebtedness and obligations under the Loan Agreement, dated as of May 1, 2007, by and between the Seller and Issuer, the Promissory Note (Series 2007A), dated February 1, 2008, by Seller in favor of the Trustee, the Remarketing Agreement, by and between Stern Brothers & Co. (the “Remarketing Agent”) and Seller (the “Remarketing Agreement”), the Land Use Restriction Agreement by and between the Issuer, the Seller and the Trustee (the “Land Use Agreement”), and the other loan documents related to the Windsor Loan (collectively, the “Loan Documents”).

The entire unpaid principal balance of the Windsor Loan and all accrued and unpaid interest thereon is due and payable in full on May 1, 2042. Pursuant to the Loan Documents, SIR Windsor is required to pay, or cause to be paid, to the Trustee on each date on which any payment of the principal of, premium, if any, or interest on the Bonds is due (whether on an interest payment date, at maturity or upon redemption or acceleration), an amount which, together with the funds held by the Trustee in the Bond Fund (as defined below), will be sufficient to enable the Trustee to pay the principal of, premium, if any, and interest on the Bonds due on such date. The Windsor Loan will bear interest at a rate equal to the interest rate borne from time to time by the Bonds, calculated on the same basis and to be paid by SIR Windsor at the same time as interest on the Bonds is calculated and paid from time to time. Interest on the Bonds is calculated by the Remarketing Agent and is equal to the interest rate per annum, which in the professional judgment of the Remarketing Agent having due regard for prevailing market conditions, would be the minimum interest rate necessary to cause the sale of the Bonds on the first day of an interest period at a price equal to 100% of the principal amount of the Bonds plus accrued interest. The Remarketing Agent will establish the interest rate for the Bonds for weekly, semi-annual or annual periods (the “Interest Rate Period”) as provided under the Indenture. The Bonds currently bear interest at a weekly rate. SIR Windsor may change the Interest Rate Period applicable to the Bonds upon 25 days prior written notice to the Issuer, the Trustee, the Credit Provider and the Remarketing Agent.

Pursuant to the Loan Documents, SIR Windsor is to pay the Trustee amounts sufficient to pay the purchase price of Bonds tendered for purchase by the Trustee pursuant to the Indenture, provided that SIR Windsor will receive a credit for all proceeds from draws on the Letter of Credit (as defined below) in the Bond Fund available for such purposes.

During any period when the Interest Rate Period applicable to the Bonds is weekly, the holders of the Bonds have the option to tender Bonds for purchase by the Trustee on any business day at a purchase price equal to the principal amount of the tendered Bond plus any accrued interest thereon. Upon 20 days prior written notice by the Trustee to the Bond holders, the Bonds are subject to mandatory tender for purchase by the Trustee at a purchase price equal to the principal amount thereof plus any accrued interest thereon (1) on each date that SIR Windsor converts the Interest Rate Period for the Bonds, (2) on the business day following the last day of any semi-annual or annual Interest Rate Period; and (3) on the interest payment date prior to the expiration or termination of the Letter of Credit (or any replacement thereto) subject to an extension to the term of the Letter of Credit which complies with the terms of the Indenture. In certain circumstances, the Bonds are subject to optional and mandatory redemption.

If SIR Windsor defaults on any payment due under the Windsor Loan, SIR Windsor will pay interest, to the maximum extent permitted by law, on the amount of such payment at a rate equal to the rate borne by the Bonds from time to time until such payment is paid in full. So long as any Bond is outstanding, SIR Windsor is to pay, or cause to be paid, all amounts required to prevent any deficiency or default in the payment of the principal or purchase price of, premium, if any, or interest on the Bonds, including any deficiency caused by the action or failure to act of the Trustee, the Issuer or any other person. SIR Windsor may prepay all or any part of the amounts payable under the Loan Documents at the times that Bonds are subject to redemption pursuant to the Indenture, provided that during the term of the Letter of Credit, such prepayment may only be made with the prior written consent of the Credit Provider (as defined below). In the event of a mandatory redemption of the Bonds pursuant to the Indenture, SIR Windsor agrees to prepay, or cause to be prepaid, all amounts necessary for such mandatory redemption.

Pursuant to the Indenture, the Trustee has established a fund (the “Bond Fund”) into which the Trustee deposits, as and when received: (1) all payments and prepayments by SIR Windsor with respect to the Bonds pursuant to the Loan Documents, (2) proceeds from draws by the Trustee on the Letter of Credit, and (3) all other funds received by the Trustee under the Loan Documents or the Indenture that are required to be deposited into the Bond Fund. All amounts in the Bond Fund will be used to pay the principal of, premium, if any, and interest on the Bonds as such amounts become due and payable (whether on an interest payment date, at maturity or upon redemption or acceleration of the bonds). At any time the amount held by the Trustee in the Bond Fund is sufficient to pay on the dates due the principal of, premium, if any, and interest on the Bonds then remaining unpaid, the Borrower will not be obligated to make any further payments to the Trustee under the Loan Documents.’

The Land Use Agreement imposes certain restrictions upon the use, and requirements for the operation, of the Windsor Property.

Letter of Credit

On the Closing Date, pursuant to a Reimbursement and Credit Agreement (the “Reimbursement Agreement”) by and between SIR Windsor and PNC Bank, National Association (the “Credit Provider”), the Credit Provider issued an Irrevocable Letter of Credit to the Trustee (the “Letter of Credit”). The Letter of Credit authorizes the Trustee to make one or more draws on the Letter of Credit up to an aggregate of $23,789,727 (as reduced and reinstated from time to time in accordance with the terms of the Letter of Credit, the “Letter of Credit Amount”), of which initially (1) $23,500,000 will be in respect of the principal of the Bonds and (2) $289,727 will be in respect of accrued interest on the Bonds. The purpose of the Letter of Credit is to provide the Trustee with funds for the payment of principal of and interest on the Bonds and the purchase price of Bonds that have been tendered pursuant to the tender provisions of the Indenture to the extent remarketing proceeds or other funds are not available for such purposes. The Letter of Credit will expire on January 25, 2017, unless the Credit Provider, at its option, upon written request of SIR Windsor, grants an extension to the Letter of Credit for an additional period. The Credit Provider is under no obligation to grant any such extensions.

SIR Windsor paid the Credit Provider a nonrefundable fee in connection with the origination of the Letter of Credit in the amount of $118,950. In addition, SIR Windsor will pay the Credit Provider an annual fee based upon a fixed percentage of the Letter of Credit Amount (the “Facility Fee”). The Facility Fee will be: (1) for the period commencing on the Closing Date and ending on the day immediately preceding the first anniversary of the Closing Date, 2.0% per annum; (2) for the period commencing on the first anniversary of the Closing Date and ending on the day immediately preceding the third anniversary of the Closing Date 2.25% per annum; and (3) for the period commencing on the third anniversary of the Closing Date and thereafter, 2.50% per annum. In addition, SIR Windsor will pay all reasonable transaction charges that the Credit Provider may charge for draws under the Letter of Credit and any and all other reasonable charges and expenses which the Credit Provider may pay or incur relative to the Letter of Credit.

Except with respect to draws on the Letter of Credit by the Trustee to fund the purchase of Bonds tendered for repurchase pursuant to the Indenture (“Tender Draws”), SIR Windsor will reimburse the Credit Provider for all amounts paid by the Credit Provider to the Trustee pursuant to a draw on the Letter of Credit on the day that the Credit Provider pays such amounts to the Trustee. The amount of any Tender Draw will be due and payable by SIR Windsor within five days of the date the Tender Draw is paid by the Credit Provider to the Trustee, subject to certain exceptions as set forth in the Reimbursement Agreement. Interest on any amounts due under the Reimbursement Agreement will accrue from the date such amounts become due and payable until paid in full at a rate per annum equal to a fluctuating rate established by the Reimbursement Agreement plus 3.0%, subject to certain exceptions with respect to amounts payable with respect to Tender Draws.

SIR Windsor’s obligations under the Reimbursement Agreement are secured by (1) a Mortgage, Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing by SIR Windsor in favor of the Credit Provider with respect to the Windsor Property, (2) a Pledge and Security Agreement by and among SIR Windsor, the Trustee and the Credit Provider, pursuant to which SIR Windsor pledged, assigned, transferred and delivered to Credit Provider all of SIR Windsor’s right, title and interest in, and granted Credit Provider a first-priority lien upon, all Bonds repurchased by the Trustee from the holders thereof pursuant to the Indenture using proceeds from a draw on the Letter of Credit, and (3) an irrevocable and unconditional guarantee of the due and punctual payment and performance of SIR Windsor’s obligations under the Reimbursement Agreement by the Company in favor of the Credit Provider.

Pursuant to a Hazardous Materials Indemnity Agreement (the “Environmental Indemnity”), the Company and SIR Windsor (collectively, the “Indemnitors”) have agreed to defend, indemnify and hold harmless the Credit Provider and its affiliates, and each of their respective directors, officers, employees, agents, successors and assigns from and against any and all losses, damages, liabilities, claims, actions, judgments costs or expenses (including, without limitation, reasonable attorneys’ fees and expenses) which any such party may directly or indirectly incur as a result of, among other things, (1) the use, storage, treatment, release, discharge, disposal or transportation of Hazardous Materials (as defined in the Environmental Indemnity) in, on or under the Windsor Property in violation of Hazardous Materials Laws (as defined in the Environmental Indemnity) or (2) the breach of any covenant or representation or warranty of any Indemnitor under the Environmental Indemnity.

The material terms of the agreements described herein are qualified in their entirety by the agreements attached as Exhibits 10.2 through 10.11 to this Current Report on Form 8-K and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On February 1, 2012, the Company distributed a press release announcing the completion of the acquisition of the Windsor Property. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 7.01.

The information furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

Because it is impracticable to provide the required financial statements for the acquisition of the real property described above at the time of this filing, and no financial statements (audited or unaudited) are available at this time, the Company hereby confirms that the required financial statements will be filed as an amendment to this Current Report on Form 8-K no later than 71 days after the deadline for filing this Current Report on Form 8-K.

(b) Pro Forma Financial Information.

See Paragraph (a) above.

(d) Exhibits.

Exhibit	Description
10.1	Property Management Agreement, dated as of January 26, 2012, by and between SIR Windsor On The River, LLC and Steadfast Management Company, Inc.
10.2	Assumption Agreement, dated as of January 26, 2012, by and among Windsor on the River, LLC, SIR Windsor On The River, LLC and The Bank Of New York Mellon Trust Company, N.A.
10.3	Loan Agreement, dated as of May 1, 2007, by and between Iowa Finance Authority and Windsor On The River, LLC
10.4	Promissory Note (Series 2007A), dated as of February 1, 2008, by Windsor On The River, LLC in favor of The Bank Of New York Mellon Trust Company, N.A.
10.5	Reimbursement and Credit Agreement, dated as of January 26, 2012, by and between SIR Windsor on the River, LLC and PNC Bank, National Association
10.6	Mortgage with Absolute Assignment of Leases and Rents, Security Agreement and Fixture filing, dated as of January 26, 2012, by SIR Windsor on the River, LLC in favor of PNC Bank, National Association
10.7	Pledge and Security Agreement, dated as of January 26, 2012, by and among SIR Windsor on the River, LLC, The Bank Of New York Trust Company, N.A. and PNC Bank, National Association

10.8	Guaranty Agreement, dated as of January 26, 2012, by Steadfast Income REIT, Inc. in favor of PNC Bank, National Association
10.9	Hazardous Materials Indemnity Agreement, dated as of January 26, 2012, by SIR Windsor on the River, LLC and Steadfast Income REIT, Inc. in favor of PNC Bank, National Association
10.10	Land Use Restriction Agreement, dated as of November 1, 2007, by and between Iowa Finance Authority, Windsor On The River, LLC and The Bank Of New York Trust Company, N.A.
10.11	Remarketing Agreement, dated as of May 1, 2007, between Stern Brothers & Co. and Windsor on the River, LLC
99.1	Press Release, dated February 1, 2012

SIGNATURES

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.

	STEADFAST INCOME REIT, INC.
Date: February 1, 2012	By:	/s/ Rodney F. Emery
		Rodney F. Emery
		Chief Executive Officer and President

EXHIBIT INDEX

Exhibit	Description
10.1	Property Management Agreement, dated as of January 26, 2012, by and between SIR Windsor on the River, LLC and Steadfast Management Company, Inc.
10.2	Assumption Agreement, dated as of January 26, 2012, by and among Windsor on the River, LLC, SIR Windsor On The River, LLC and The Bank Of New York Mellon Trust Company, N.A.
10.3	Loan Agreement, dated as of May 1, 2007, by and between Iowa Finance Authority and Windsor On The River, LLC
10.4	Promissory Note (Series 2007A), dated as of February 1, 2008, by Windsor On The River, LLC in favor of The Bank Of New York Mellon Trust Company, N.A.
10.5	Reimbursement and Credit Agreement, dated as of January 26, 2012, by and between SIR Windsor on the River, LLC and PNC Bank, National Association
10.6	Mortgage with Absolute Assignment of Leases and Rents, Security Agreement and Fixture filing, dated as of January 26, 2012, by SIR Windsor On The River, LLC in favor of PNC Bank, National Association
10.7	Pledge and Security Agreement, dated as of January 26, 2012, by and among SIR Windsor on the River, LLC, The Bank Of New York Trust Company, N.A. and PNC Bank, National Association
10.8	Guaranty Agreement, dated as of January 26, 2012, by Steadfast Income REIT, Inc. in favor of PNC Bank, National Association
10.9	Hazardous Materials Indemnity Agreement, dated as of January 26, 2012, by SIR Windsor on the River, LLC and Steadfast Income REIT, Inc. in favor of PNC Bank, National Association
10.10	Land Use Restriction Agreement, dated as of November 1, 2007, by and between Iowa Finance Authority, Windsor On The River, LLC and The Bank Of New York Trust Company, N.A.
10.11	Remarketing Agreement, dated as of May 1, 2007, between Stern Brothers & Co. and Windsor on the River, LLC
99.1	Press Release, dated February 1, 2012

EX-10.1

Exhibit 10.1

PROPERTY MANAGEMENT AGREEMENT

THIS PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of January 26, 2012 (the “Effective Date”), by and between SIR WINDSOR ON THE RIVER, LLC, a Delaware limited liability company (“Owner”), and STEADFAST MANAGEMENT COMPANY, INC., a California corporation (“Manager”).

ARTICLE 1

DEFINITIONS

Section 1.1 Definitions. The following terms shall have the following meanings when used in this Agreement:

“Agreement” has the meaning given in the introductory paragraph.

“Annual Business Plan” has the meaning given in Section 3.11(a).

“Capital Budget” has the meaning given in Section 3.11(a).

“Compliance Fee” has the meaning given in Section 4.1.

“Depository” means such bank or federally-insured or other financial institution as Owner shall designate in writing.

“Effective Date” has the meaning given in the introductory paragraph.

“Fiscal Year” means the calendar year beginning January 1 and ending December 31 of each calendar year, or such other fiscal year as determined by Owner and of which Manager is notified in writing; provided that the first Fiscal Year of this Agreement shall be the period beginning on the Effective Date and ending on December 31 of the calendar year in which the Effective Date occurs.

“Governmental Requirements” has the meaning given in Section 3.14.

“Gross Collections” means all amounts actually collected as rents or other charges for use and occupancy of apartment units and from users of garage spaces (if any), leases of other non-dwelling facilities in the Property and concessionaires (if any) in respect of the Property, including furniture rental, parking fees, forfeited security deposits, application fees, late charges, income from coin-operated machines, proceeds from rental interruption insurance, and other miscellaneous income collected at the Property; excluding, however, all other receipts, including but not limited to, income derived from interest on investments or otherwise, proceeds of claims on account of insurance policies (other than rental interruptions insurance), abatement of taxes, franchise fees, and awards arising out of eminent domain proceedings, discounts and dividends on insurance policies.

“Hazardous Materials” means any material defined as a hazardous substance under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act, or any state or local statute regulating the storage, release,

transportation or other disposition of hazardous material, as any of those laws may have been amended to the date hereof, and the administrative regulations promulgated thereunder prior to the date hereof, and, whether or not defined as hazardous substances under the foregoing Governmental Requirements, petroleum products (other than petroleum products used in accordance with Governmental Requirements by Owner or its tenants in the usual and ordinary course of their activities), PCBs and radon gas.

“Major Capital Improvements” has the meaning given in Section 3.6.

“Management Fee” has the meaning given in Section 4.1.

“Manager” has the meaning given in the introductory paragraph.

“Operating Budget” has the meaning given in Section 3.11(a).

“Owner” has the meaning given in the introductory paragraph.

“Owner’s Representative” has the meaning given in Section 2.2.

“Pass-Through Amounts” means fees and/or reimbursements for services provided to the Property but not covered by the Management Fee and Compliance Fee, as described in Exhibit A attached hereto and made a part hereof.

“Property” means the multifamily apartment project listed and described on Exhibit B attached hereto and made a part hereof.

“Regulatory Agreement” has the meaning given in Section 3.14.

“Security Deposit Account” has the meaning given in Section 2.3.

“State” means the state in which the Property is located.

ARTICLE 2

APPOINTMENT OF AGENCY AND RENTAL RESPONSIBILITY

Section 2.1 Appointment. Owner hereby appoints Manager and Manager hereby accepts appointment as the sole and exclusive leasing agent and manager of the Property on the terms and conditions set forth herein. Owner warrants and represents to Manager that Owner owns fee simple title to the Property with all requisite authority to hereby appoint Manager and to enter into this Agreement.

Section 2.2 Owner’s Representative. Owner shall from time to time designate one or more persons to serve as Owner’s representative (“Owner’s Representative”) in all dealings with Manager hereunder. Whenever the approval, consent or other action of Owner is called for hereunder, such approval, consent or action shall be binding on Owner if specified in writing and signed by Owner’s Representative. The initial Owner’s Representative shall be Kyle Winning, Chief Investment Officer. Any Owner’s Representative may be changed at the discretion of Owner, at any time, and shall be effective upon Manager’s receipt of written notice identifying the new Owner’s Representative.

Section 2.3 Leasing. Manager shall perform all promotional, leasing and management activities required to lease apartment units in the Property. Throughout the term of this Agreement, Manager shall use its diligent efforts to lease apartment units in the Property. Manager shall advertise the Property, prepare and secure advertising signs, space plans, circulars, marketing brochures and other forms of advertising. Owner hereby authorizes Manager pursuant to the terms of this Agreement to advertise the Property in conjunction with institutional advertising campaigns and allocate costs on a pro rata basis among the Properties being advertised (to the extent authorized by the Annual Business Plan). All inquiries for any leases or renewals or agreements for the rental of the Property or portions thereof shall be referred to Manager and all negotiations connected therewith shall be conducted solely by or under the direction of Manager. Manager is hereby authorized to execute, deliver and renew residential tenant leases on behalf of Owner. Manager is authorized to utilize the services of apartment locator services and the fees of such services shall be operating expenses of the Property and, to the extent paid by Manager, reimbursable by Owner. If applicable, Manager will prepare and verify tenant eligibility, eligibility certifications and recertification in accordance with the Regulatory Agreement and Owner’s procedures.

Section 2.4 Manager’s Standard of Care. Manager shall perform its duties under this Agreement in a manner consistent with professional property management services. In no event shall the scope or quality of services provided by Manager for the Property hereunder be less than those generally performed by professional property managers of similar properties in the market area where the Property is located. Manager shall make available to Owner the full benefit of the judgment, experience, and advice of the members and employees of Manager’s organization with respect to the policies to be pursued by Owner in operating the Property, and will perform the services set forth herein and such other services as may be requested by Owner in managing, operating, maintaining and servicing the Property.

ARTICLE 3

SERVICES TO BE PERFORMED BY MANAGER

Section 3.1 Expense of Owner. All acts performed by Manager in the performance of its obligations under this Agreement shall be performed as an independent contractor of Owner, and all obligations or expenses incurred thereby, shall be for the account of, on behalf of, and at the expense of Owner, except as otherwise specifically provided in this Article 3, provided Owner shall be obligated to reimburse Manager only for the following:

(a) Costs and Expenses. All costs and expenses incurred by Manager on behalf of Owner in connection with the management and operation of the Property, including but not limited to all compensation, including the cost of benefits, payable to the employees at the Property and identified in the Operating Budget and taxes and assessments payable in connection therewith and reasonable training, travel and expenses associated therewith, all marketing costs, all collection and lease enforcement costs, all maintenance and repair costs incurred in accordance with Section 3.5 hereof, all utilities and related services, all on-site overhead costs and all other costs reasonably incurred by Manager in the operation and management of the

Property, excluding, however, all of Manager’s general overhead costs, including without limitation, all expenses incurred at Manager’s corporate headquarters and other Manager office sites other than the property management office located at the Property (i.e., office expenses, long distance phone calls, postage, copying, supplies, electronic data processing and accounting expenses), general accounting and reporting expenses for services included among Manager’s duties under the Agreement; and

(b) Other. All sums otherwise due and payable by Owner as expenses of the Property authorized to be incurred by Manager under the terms of this Agreement and the Operating Budget, including compensation payable under Section 4.1 hereof to Manager for its services hereunder.

Manager may use employees normally assigned to other work centers or part-time employees to properly staff the Property, reduced, increased or emergency work load and the like including the property manager, business manager, assistant managers, leasing directors, or other administrative personnel, maintenance employees or maintenance supervisors whose wages and related expenses shall be reimbursed on a pro rata basis for the time actually spent at the Property. A property manager or business manager at the Property and any other persons performing functions substantially similar to those of a business manager, including but not limited to assistant managers, leasing directors, leasing agents, sales directors, sales agents, bookkeepers, and other administrative and/or maintenance personnel performing work at the site, and on-site maintenance personnel, shall not be considered executive employees of Manager. All reimbursable payments made by Manager hereunder shall be reimbursed from funds deposited in an account established pursuant to Section 5.2 of this Agreement. Manager shall not be obligated to make any advance to or for the account of Owner nor shall Manager be obligated to incur any liability or obligation for the account of Owner without assurance that the necessary funds for the discharge thereof will be provided by Owner. In the performance of its duties as agent and manager of the Property, Manager shall act solely as an independent contractor of Owner. All debts and liabilities to third persons incurred by Manager in the course of its operation and management of the Property shall be the debts and liabilities of Owner only, and Manager shall not be liable for any such debt or liabilities, except to the extent Manager has exceeded its authority hereunder.

Section 3.2 Covenants Concerning Payment of Operating Expenses. Owner covenants to pay all sums for reasonable operating expenses in excess of gross receipts required to operate the Property upon written notice and demand from Manager within five days after receipt of written notice for payment thereof.

Section 3.3 Employment of Personnel. Manager shall use its diligent efforts to investigate, hire, pay, supervise and discharge the personnel necessary to be employed by it to properly maintain, operate and lease the Property, including without limitation a property manager or business manager at the Property. Such personnel shall in every instance be deemed agents or employees, as the case may be, of Manager. Owner has no right of supervision or direction of agents or employees of Manager whatsoever; however, Owner shall have the right to require the reassignment or termination of any employee. All Owner directives shall be communicated to Manager’s senior level management employees. Manager and all personnel of Manager who handle or who are responsible for handling Owner’s monies shall be bonded in

favor of Owner. Manager agrees to obtain and keep in effect fidelity insurance in an amount not less than Two Hundred Fifty Thousand Dollars ($250,000). All reasonable salaries, wages and other compensation of personnel employed by Manager, including so-called fringe benefits, worker’s compensation, medical and health insurance and the like, shall be deemed to be reimbursable expenses of Manager. Manager may allow its employees who work at the Property and provide services to the Property after normal business hours, to reside at the Property for reduced rents (or rent fee as provided in the Operating Budget) in consideration of their benefit to Owner and the Property, provided such reduced rents are reflected in the Annual Business Plan.

Section 3.4 Utility and Service Contracts. Manager shall, at Owner’s expense and in Owner’s name or in Manager’s name as agent for Owner, enter into contracts for water, electricity, gas, fuel, oil, telephone, vermin extermination, trash removal, cable television, security protection and other services deemed by Manager to be necessary or advisable for the operation of the Property. Manager shall also, in Owner’s name or in Manager’s name as agent for Owner and at Owner’s expense, place orders for such equipment, tools, appliances, materials, and supplies as are reasonable and necessary to properly maintain the Property. Owner agrees to pay or reimburse Manager for all expenses and liabilities incurred by reason of this Section provided that such amounts are in accordance with the Operating Budget.

Section 3.5 Maintenance and Repair of Property. Manager shall use diligent efforts to maintain, at Owner’s expense, the buildings, appurtenances and grounds of the Property in good condition and repair, including interior and exterior cleaning, painting and decorating, plumbing, carpentry and such other normal maintenance and repair work as may be necessary or reasonably desirable taking into consideration the amount allocated therefor in the Annual Business Plan. With respect to any expenditure not contemplated by the Annual Business Plan, Manager shall not incur any individual item of repair or replacement in excess of Five Thousand Dollars ($5,000.00) unless authorized in writing by Owner’s Representative, except, however, that emergency repairs immediately necessary for the preservation and safety of the Property or to avoid the suspension of any service to the Property or danger of injury to persons or damage to property may be made by Manager without the approval of Owner’s Representative. Owner shall not establish standards of maintenance and repair that violate or may violate any laws, rules, restrictions or regulations applicable to Manager or the Property or that expose Manager to risk of liability to tenants or other persons. Manager shall not be obligated by this Section to perform any Major Capital Improvements.

Section 3.6 Supervision of Major Capital Improvements or Repairs. When requested by Owner in writing or as set forth in an Approved Business Plan, Manager or an affiliate thereof, including Pacific Coast Land & Development, Inc., shall, at Owner’s expense and in Owner’s name or in Manager’s name as agent for Owner, supervise the installation and construction of all Major Capital Improvements to the Property where such work constitutes other than normal maintenance and repair, for additional compensation as set forth in a separate agreement. If Owner and Manager fail to reach an agreement for Manager’s additional compensation as provided in this Agreement, Section 3.6, Owner may contract with a third party to supervise installation or construction of Major Capital Improvements. In such events, Manager may negotiate contracts with all necessary contractors, subcontractors, materialmen, suppliers, architects, and engineers on behalf of, and in the name of, Owner, and may

compromise and settle any dispute or claim arising therefrom on behalf of and in the name of Owner; provided only that Manager shall act in good faith and in the best interest of Owner at all times and Owner shall approve all contracts for such work. Manager will furnish or will cause to be furnished all personnel necessary for proper supervision of the work and may assign personnel located at the Property where such work is being performed to such supervisory work (and such assignment shall not reduce or abate any other fees or compensation owed to Manager under this Agreement). For the purposes of this Agreement, the term “Major Capital Improvements” shall mean work having an estimated cost of $25,000 or more.

Owner acknowledges that Manager, or an affiliate of Manager, may bid on any such work, and that Manager, or an affiliate of Manager, may be selected to perform part or all of the work; provided that if Manager desires to select itself, or its affiliate to do any work, it shall first notify Owner of the terms upon which it, or its affiliate, proposes to contract for the work, and terms upon which the independent contractors have offered to perform, and shall state the reasons for preferring itself, or its affiliate, over independent contractors and Owner shall have fifteen days to disapprove Manager, or its affiliate, and to request performance by an independent contractor. Only Owner shall have the power to compromise or settle any dispute or claim arising from work performed by Manager, or its affiliate; and it is expressly understood that the selection of Manager, or its affiliate, will not affect any fee or other compensation payable to Manager hereunder.

Section 3.7 Insurance.

(a) Owner Requirements. Owner agrees to maintain all forms of insurance required by law or by any loan requirements for the Property and as otherwise deemed by Owner to be reasonable and necessary to adequately protect Owner and Manager, including but not limited to public liability insurance, boiler insurance, fire and extended coverage insurance, and burglary and theft insurance. All insurance coverage shall be placed with such companies, in such amounts and with such beneficial interest appearing therein as shall be reasonably acceptable to Owner. Public liability insurance shall be maintained in such amounts as Owner determines as commercially reasonable or as otherwise required by its lenders or investors, but in no case in an amount less than $5,000,000.

Owner agrees to timely provide evidence of required insurance to Manager, and acknowledges that if evidence of insurance coverage is not timely furnished, Manager may, but shall not be obligated to, obtain such coverage on Owner’s behalf. Manager shall be named an additional insured on all Owner obtained insurance.

(b) Manager Requirements. Manager agrees to maintain, at its own expense, public liability insurance in an amount not less than Two Million Dollars ($2,000,000) and all other forms of insurance required by law and as otherwise deemed by Owner and Manager to be reasonable and necessary to adequately protect Owner and Manager, including but not limited to workers compensation insurance, professional liability, employee practices, and fidelity insurance. Manager agrees to timely provide evidence of required insurance to Owner and to name Owner as an additional insured on appropriate policies.

Manager shall use its diligent efforts to investigate and make a written report to the insurance company as to all accidents, claims for damage relating to the ownership, operation and maintenance of the Property, any damage or destruction to the Property and the estimated cost of repair thereof, and shall prepare any and all reports for any insurance company in connection therewith. All such reports shall be timely filed with the insurance company as required under the terms of the insurance policy involved. With the prior written approval of Owner, Manager is authorized to settle any and all claims against insurance companies arising out of any policies, including the execution of proofs of loss, the adjustment of losses, signing of receipts and collection of monies (no approval by Owner shall be required for the settlement of claims of $5,000 or less). Manager is further authorized to contract for the maintenance and repair of any damage or casualty in accordance with Section 3.6 above. Manager shall receive as an additional fee for such services that fee designated in the loss adjustment as a general contractor’s fee, provided that insurance proceeds that exceed the cost of repairing the damage or restoring the loss are available to pay such fees. In such event Manager shall be responsible for all costs incurred by Manager in adjusting such loss and contracting for repairs.

(c) Loss or Liability Claims. Owner and Manager mutually agree for the benefit of each other to look only to the appropriate insurance coverages in effect pursuant to this Agreement in the event any demand, claim, action, damage, loss, liability or expense occurs as a result of injury to person or damage to property, regardless whether any such demand, claim, action, damage, loss, liability or expense is caused or contributed to, by or results from the negligence of Owner or Manager or their respective subsidiaries, affiliates, employees, directors, officers, agents or independent contractors and regardless whether the injury to person or damage to property occurs in and about the Property or elsewhere as a result of the performance of this Agreement. Except for claims that are covered by the indemnity contained in Section 3.7(d) below, Owner agrees that Owner’s insurance shall be primary without right of subrogation against Manager with respect to all claims, actions, damage, loss or liability in or about the Property. Nevertheless, in the event such insurance proceeds are insufficient to satisfy (or such insurance does not cover) the demand, claim, action, loss, liability or expense, Owner agrees, at its expense, to indemnify and hold Manager and its subsidiaries, affiliates, officers, directors, employees, agents or independent contractors harmless to the extent of excess liability. For purposes of this Section 3.7(c), any deductible amount under any policy of insurance shall not be deemed to be included as part of collectible insurance proceeds.

(d) Indemnification. Notwithstanding anything contained in this Agreement to the contrary, Owner shall defend, indemnify, and hold harmless Manager and its representative subsidiaries, affiliates, officers, directors, employees, agents or independent contractors from and against all claims, demands, or legal proceedings (including expenses and reasonable attorney’s fees incurred in connection with the defense of any such matter) (each a “Claim”) that are brought against Manager arising out of the operation or management of the Project, except with respect to claims arising out of Manager’s gross negligence or willful misconduct. Manager shall defend, indemnify, and hold harmless Owner and its representative subsidiaries, affiliates, officers, directors, employees, agents or independent contractors from all Claims arising out of (he gross negligence or willful misconduct of Manager. The indemnification obligations under this Section 3.7(d) shall survive termination of this Agreement.

(e) Acts of Tenants and Third Parties. In no event shall Manager have any liability to Owner or others for any acts of vandalism, trespass or criminal activity of any kind by tenants or third parties on or with respect to the Property and Owner’s insurance shall be primary insurance without right of subrogation against Manager regarding claims arising out of or resulting from acts of vandalism, trespass or criminal activity.

Section 3.8 Collection of Monies. Manager shall use its diligent efforts to collect all rents and other charges due from tenants, users of garage spaces, carports, storage spaces (if any), commercial lessees (if any) and concessionaires (if any) in respect of the Property and otherwise due Owner with respect to the Property in the ordinary course of business, provided that Manager does not guarantee the creditworthiness of any tenants, users, lessees or concessionaires or collectability of accounts receivable from any of the foregoing. Owner authorizes Manager to request, demand, collect, receive and receipt for all such rent and other charges and to institute legal proceedings in the name of Owner, and at Owner’s expense, for the collection thereof, and for the dispossession of tenants and other persons from the Property or to cancel or terminate any lease, license or concession agreement for breach or default thereunder, and such expense may include the engaging of legal counsel for any such matter. All monies collected by Manager shall be deposited in the separate bank account referred to in Section 5.2 herein.

Section 3.9 Manager Disbursements.

(a) Manager’s Compensation and Reimbursements. From Gross Collections, Manager shall be authorized to retain and pay (1) Manager’s compensation, together with all sales or other taxes (other than income) which Manager is obligated, presently or in the future, to collect and pay to the State or any other governmental authority with respect to the Property or employees at the Property, (2) the amounts reimbursable to Manager under this Agreement, (3) the amount of all real estate taxes and other impositions levied by appropriate authorities with respect to the Property which, if not escrowed with any mortgagee, shall be paid upon specific written direction of Owner before interest begins to accrue thereon; and (4) amounts otherwise due and payable as operating expenses of the Property authorized to be incurred under the terms of this Agreement.

(b) Debt Service. The provisions of this Section 3.9 regarding disbursements shall include the payment of debt service related to any mortgages of the Property, unless otherwise instructed in writing by Owner.

(c) Third Parties. All costs, expenses, debts and liabilities owed to third persons that are incurred by Manager pursuant to the terms of this Agreement and in the course of managing, leasing and operating the Property shall be the responsibility of Owner and not Manager. Owner agrees to provide sufficient working capital funds to Manager so that all amounts due and owing may be promptly paid by Manager. Manager is not obligated to advance any funds. If at any time there is not sufficient cash in the account available to Manager pursuant to Section 5.2 with which to promptly pay the bills due and owing, Manager will request that the necessary additional funds be deposited by Owner in an amount sufficient to meet the shortfall. Owner will deposit the additional funds requested by Manager within five days.

(d) Other Provisions. The provisions of this Section 3.9 regarding reimbursements to Manager shall not limit Manager’s rights under any other provision of this Agreement.

Section 3.10 Use and Maintenance of Premises. Manager agrees that it will not knowingly permit the use of the Property for any purpose that might void any insurance policy held by Owner or that might render any loss thereunder uncollectible, or that would be in violation of Governmental Requirements, or any covenant or restriction of any lease of the Property. Manager shall use its good faith efforts to secure substantial compliance by the tenants with the terms and conditions of their respective leases. All costs of correcting or complying with, and all fines payable in connection with, all orders or violations affecting the Property placed thereon by any governmental authority or Board of Fire Underwriters or other similar body shall be at the cost and expense of Owner.

Section 3.11 Annual Business Plan.

(a) Submission. On or before November 1 of each Fiscal Year during the term of this Agreement, or such earlier date as reasonably requested by Owner, its lenders or investors, Manager shall prepare and submit to Owner for Owner’s approval, an Annual Business Plan for the promotion, leasing, operations, repair and maintenance of the Property for the succeeding Fiscal Year during which this Agreement is to remain in effect (the “Annual Business Plan”). The Annual Business Plan shall include a detailed budget of projected income and expenses for the Property for such Fiscal Year (the “Operating Budget”) and a detailed budget of projected capital improvements for the Property for such Fiscal Year (the “Capital Budget”).

(b) Approval. Manager shall meet with Owner to discuss the proposed Annual Business Plan and Owner shall approve the proposed Annual Business Plan within 20 days of its submission to Owner, or as soon thereafter as commercially practicable. To be effective, any notice which disapproves a proposed Annual Business Plan must contain specific objections in reasonable detail to individual line items. If Owner fails to provide an effective notice disapproving a proposed Annual Business Plan within such 20-day period, the proposed Annual Business Plan shall be deemed to be approved. Owner acknowledges that the Operating Budget is intended only to be a reasonable estimate of the income and expenses of the Property for the ensuing Fiscal Year. Manager shall not be deemed to have made any guarantee, warranty or representation whatsoever in connection with the Operating Budget.

(c) Revision. Manager may revise the Operating Budget from time to time, as necessary, to reflect any unpredicted significant changes, variables or events or to include significant additional, unanticipated items of revenue and expense. Any such revision shall be submitted to Owner for approval, which approval shall not be unreasonably withheld, delayed or conditioned.

(d) Implementation. Manager agrees to use diligence and to employ all reasonable efforts to ensure that the actual costs of maintaining and operating the Property shall not exceed the Operating Budget either in total or in any one accounting category. Any expense causing or likely to cause a variance of greater than ten percent (10%) or $25,000, whichever is

greater, in any one accounting category for the current month cumulative year-to-date total shall be promptly explained to Owner by Manager in the next operating statement submitted by Manager to Owner.

Section 3.12 Records, Reporting. Manager shall maintain at the regular business office of Manager or at such other address as Manager shall advise Owner in writing, separate books and journals and orderly files, containing rental records, insurance policies, leases, correspondence, receipts, bills and vouchers, and all other documents and papers pertaining directly to the Property and the operation thereof. All corporate statements, receipts, invoices, checks, leases, contracts, worksheets, financial statements, books and records, and all other instruments and documents relating to or arising from the operation or management of the Property shall be and remain the property of Owner and the Owner shall have the right to inspect such records at any reasonable time upon prior notice; Manager shall have the right to request and maintain copies of all such matters, at Manager’s cost and expense, at all reasonable times during the term of this Agreement, and for a reasonable time thereafter not to exceed three years. All on-site records, including leases, rent rolls, and other related documents shall remain at the respective Property for which such records are maintained as the property of Owner.

Section 3.13 Financial Reports.

(a) Monthly Reports. On or before the fifteenth (15^th) day of each month during the term of this Agreement, Manager shall deliver or cause to be delivered to Owner’s Representative a statement of cash flow for the Property (on a cash and not an accrual basis) for the preceding calendar month. All notices from any mortgagee claiming any default in any mortgage on the Property, and any other notice from any mortgagee not of a routine nature, shall be promptly delivered by Manager to Owner’s Representative.

(b) Annual Reports. Within 45 days after the end of each Fiscal Year, Manager shall deliver to Owner’s Representative a statement of cash flow showing the results of operations for the Fiscal Year or portion thereof during which the provisions of this Agreement were in effect.

(c) Employee Files. Manager shall execute and file punctually when due all forms, reports and returns required by law relating to the employment of personnel.

Section 3.14 Compliance with Governmental Requirements. Manager shall comply with all laws, ordinances and regulations relating to the management, leasing and occupancy of the Property, including any regulatory or use agreements. Manager acknowledges the regulatory or land use agreement(s) listed on Exhibit C attached to this Agreement (the “Regulatory Agreement”), and agrees to comply with such agreement and to promptly provide Owner with all notices and communications from governmental agencies with respect to the Regulatory Agreement. Owner acknowledges that Manager does not hold itself out to be an expert or consultant with respect to, or represent that, the Property currently complies with applicable ordinances, regulations, rules, statutes, or laws of governmental entities having jurisdiction over the Properties or the requirements of the Board of Fire Underwriters or other similar bodies or with the Regulatory Agreement (collectively, “Governmental Requirements”). Manager shall take such action as may be reasonably necessary to comply with any Governmental

Requirements applicable to Manager, including the collection and payment of all sales and other taxes (other than income taxes) that may be assessed or charged by the State or any governmental entities in connection with Manager’s compensation. If Manager discovers that the Property does not comply with any Governmental Requirements, Manager shall take such action as may be reasonably necessary to bring the Property into compliance with such Governmental Requirements, subject to the limitation contained in Section 3.5 of this Agreement regarding the making of alterations and repairs. Manager, however, shall not take any such action as long as Owner is contesting or has affirmed its intention to contest and promptly institute proceedings contesting any such order or requirement. If, however, failure to comply promptly with any such order or requirement would or might expose Manager to civil or criminal liability, Manager shall have the right, but not the obligation, to cause the same to be complied with and Owner agrees to indemnify and hold Manager harmless for taking such actions and to promptly reimburse Manager for expenses incurred thereby. Manager shall promptly, and in no event later than 72 hours from the time of receipt, notify Owner’s Representative in writing of all such orders or notices. Manager shall not be liable for any effort or judgment or for any mistake of fact or of law, or for anything that it may do or refrain from doing, except in cases of willful misconduct or gross negligence of Manager.

ARTICLE 4

MANAGER’S COMPENSATION, TERM

Section 4.1 Fees Paid to Manager. Commencing on the date hereof, Owner shall pay to Manager a fee (the “Management Fee”), payable monthly in arrears, in an amount equal to Three Percent (3.0%) of Gross Collections for such month and “Compliance Fee”, payable monthly in arrears, in an amount equal to One-Half Percent (0.5%) of Gross Collections for such month. The Management Fee and Compliance Fee shall not be subject to off-sets and charges unless agreed upon by the parties. Pass-Through Amounts shall be collected monthly by Manager, as applicable.

Section 4.2 Term. This Agreement shall commence on the Effective Date, and shall thereafter continue for a period of one (1) year from the Effective Date, unless otherwise terminated as provided herein. Thereafter, if neither party gives written notice to the other at least 60 days prior to the expiration date hereof that this Agreement is to terminate, then this Agreement shall be automatically renewed on a month-to-month basis.

Section 4.3 Termination Rights. Notwithstanding anything that may be contained herein to the contrary, Owner may terminate this Agreement at any time by giving Manager thirty (30) days written notice thereof upon a determination of gross negligence, willful misconduct or bad acts of Manager or any of its employees. If Owner or Manager shall materially breach its obligations hereunder, and such breach remains uncured for a period of 30 days after written notification of such breach, the party not in breach hereunder may terminate this Agreement by giving written notice to the other. Any notice given pursuant to this Article 4, shall be sent by certified mail.

Section 4.4 Duties on Termination. Upon any termination of this Agreement as contemplated in Section 4.4, Manager shall be entitled to receive all compensation and reimbursements, if any, due to Manager through the date of termination. Within 30 days after

any termination, Manager shall deliver to Owner’s Representative, the report required by Section 3.13(a) for any period not covered by such a report at time of termination, and within 30 days after any such termination, Manager shall deliver to Owner’s Representative, as required by Section 3.13(b), the statement of cash flow for the Fiscal Year or portion thereof ending on the date of termination. In addition, upon termination of this Agreement for any reason, Manager will submit to Owner within 30 days after termination any reports required hereunder, all of the cash and bank accounts of the Property, including, without limitation, the Security Deposit Account, investments and records. Manager will, within 30 days after termination, turn over to Owner all copies of all books and records kept for the Property. If Manager desires to retain records of the Property, Manager must reproduce them at its own expense.

ARTICLE 5

PROCEDURES FOR HANDLING RECEIPTS AND OPERATING CAPITAL

Section 5.1 Security Deposits. Manager shall collect, deposit, hold, disburse and pay security deposits as required by applicable State law and all other applicable laws, and in accordance with the terms of each tenant’s lease. The amount of each security deposit will be specified in the tenant’s lease. Security deposits shall be deposited into a separate non-interest-bearing account unless otherwise required by law (the “Security Deposit Account”) at a Depository selected by Manager and approved by Owner. The Security Deposit Account shall be established in the name of the Manager and held separate from all other of Manager’s funds and accounts, unless the Owner informs Manager, in writing that it intends to hold the Security Deposit Account. If such account is held by Manager, only representatives of Manager will be signatories to this account. To the extent possible, the Security Deposit Account shall be fully insured by the Federal Deposit Insurance Corporation (FDIC). Owner agrees to indemnify and hold harmless Manager, and Manager’s representatives, officers, directors and employees for any loss or liability with respect to any use by Owner of the tenant security deposits that is inconsistent with the terms of tenant leases and applicable laws.

Section 5.2 Separation of Owner’s Monies. Manager shall deliver all collected rents, charges and other amounts received in connection with the management and operation of the Property (except for tenants’ security deposits, which will be handled as specified in this Agreement) to a Depository selected by Manager and approved by Owner.

Section 5.3 Depository Accounts. Except to the extent that Manager has not complied with its obligations under Section 2.3(c), Owner and Manager agree that Manager shall have no liability for loss of funds of Owner contained in the bank accounts for the Property maintained by Owner or Manager pursuant to this Agreement due to insolvency of the bank or financial institution in which its accounts are kept, whether or not the amounts in such accounts exceed the maximum amount of federal or other deposit insurance applicable with respect to the financial institution in question.

Section 5.4 Working Capital. In addition to the funds derived from the operation of the Property, Owner shall furnish and maintain in the operating accounts of the Property such other funds as may be necessary to discharge financial commitments required to efficiently operate the Property and to meet all payrolls and satisfy, before delinquency, and to discharge all accounts payable. Manager shall have no responsibility or obligation with respect to the

furnishing of any such funds. Nevertheless, Manager shall have the right, but not the obligation, to advance funds or contribute property on behalf of Owner to satisfy obligations of Owner in connection with this Agreement and the Property. Manager shall keep appropriate records to document all reimbursable expenses paid by Manager, which records shall be made available for inspection by Owner or its agents on request. Owner agrees to reimburse Manager upon demand for money paid or property contributed in connection with the Property and this Agreement.

Section 5.5 Authorized Signatures. Any persons from time to time designated by Manager shall be authorized signatories on all bank accounts established by Manager pursuant to this Agreement and shall have authority to make disbursements from such accounts. Funds may be withdrawn from all bank accounts established by Manager, in accordance with this Article 5, only upon the signature of an individual who has been granted that authority by Manager and funds may not be withdrawn from such accounts by Owner unless Manager is in default hereunder.

ARTICLE 6

MISCELLANEOUS

Section 6.1 Assignment. Upon 30 days written notification, Owner may assign its rights and obligations to any successor in title to the Property and upon such assignment shall be relieved of all liability accruing after the effective date of such assignment. This Agreement may not be assigned or delegated by Manager without the prior written consent of Owner, which Owner may withhold in its sole discretion. Any unauthorized assignment shall be null and void ab initio, and shall not in any event release Manager from any liabilities hereunder.

Section 6.2 Notices. All notices required or permitted by this Agreement shall be in writing and shall be sent by registered or certified mail, addressed in the case of Owner to SIR Windsor on the River, LLC, 18100 Von Karman Avenue, Suite 500, Irvine, CA 92612, Attention: Kevin Keating; and in the case of Manager to Steadfast Management Company, Inc. 18100 Von Karman Avenue, Suite 500, Irvine, CA 92612, Attention: Christopher Hilbert, or to such other address as shall, from time to time, have been designated by written notice by either party given to the other party as herein provided.

Section 6.3 Entire Agreement. This Agreement shall constitute the entire agreement between the parties hereto and no modification thereof shall be effective unless in writing executed by the parties hereto.

Section 6.4 No Partnership. Nothing contained in this Agreement shall constitute or be construed to be or create a partnership or joint venture between Owner, its successors or assigns, on the one part, and Manager, its successors and assigns, on the other part.

Section 6.5 No Third Party Beneficiary. Neither this Agreement nor any part hereof nor any service relationship shall inure to the benefit of any third party, to any trustee in bankruptcy, to any assignee for the benefit of creditors, to any receiver by reason of insolvency, to any other fiduciary or officer representing a bankrupt or insolvent estate of either party, or to the creditors or claimants of such an estate. Without limiting the generality of the foregoing sentence, it is specifically understood and agreed that such insolvency or bankruptcy of either party hereto shall, at the option of the other party, void all rights of such insolvent or bankrupt party hereunder (or so many of such rights as the other party shall elect to void).

Section 6.6 Severability. If any one or more of the provisions of this Agreement, or the applicability of any such provision to a specific situation, shall be held invalid or unenforceable, such provision should be modified to the minimum extent necessary to make it or its application valid and enforceable, and the validity and enforceability of all other provisions of this Agreement and all other applications of such provisions shall not be affected thereby.

Section 6.7 Captions, Plural Terms. Unless the context clearly requires otherwise, the singular number herein shall include the plural, the plural number shall include the singular and any gender shall include all genders. Titles and captions herein shall not affect the construction of this Agreement.

Section 6.8 Attorneys’ Fees. Should either party employ an attorney to enforce any of the provisions of this Agreement, or to recover damages for breach of this Agreement, the non-prevailing party in any action agrees to pay to the prevailing party all reasonable costs, damages and expenses, including reasonable attorneys’ fees, expended or incurred by the prevailing party in connection therewith.

Section 6.9 Signs. Manager shall have the right to place signs on the Property in accordance with applicable Governmental Requirements stating that Manager is the manager and leasing agent for the Property.

Section 6.10 Survival of Indemnities. The indemnification obligations of the parties to this Agreement shall survive the termination of this Agreement to the extent of any claim or cause of action based on an event occurring prior to the date of termination.

Section 6.11 Governing Law. This Agreement shall be construed under and in accordance with the laws of the State and is fully performable with respect to the Property in the county in which the Property is located.

Section 6.12 Competitive Properties. Manager may, individually or with others, engage or possess an interest in any other project or venture of every nature and description, including but not limited to, the ownership, financing, leasing, operation, management, brokerage and sale of real estate projects including apartment projects other than the Property, whether or not such other venture or projects are competitive with the Property and Owner shall not have any claim as to such project or venture or to the income or profits derived therefrom.

Section 6.13 Set Off. Without prejudice to Manager’s right to terminate this Agreement in accordance with the terms of this Agreement, Manager may at any time and without notice to Owner, set off or transfer any sums held by Manager for or on behalf of Owner in the accounts (other than the Security Deposit Account) maintained pursuant to this Agreement in or towards satisfaction of any of Owner’s liabilities to Manager in respect of any sums due to Manager under this Agreement.

Section 6.14 Notice of Default. Manager shall not be deemed in default under this Agreement, and Owner’s right to terminate Manager as a result of such default shall not accrue, until Owner has delivered written notice of default to Manager and Manager has failed to cure same within 30 days from the date of receipt of such notice.

Section 6.15 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original.

This Property Management Agreement is hereby executed by duly authorized representatives of the parties hereto as of the Effective Date.

OWNER:	SIR WINDSOR ON THE RIVER, LLC,
	a Delaware limited liability company
	By:	Steadfast Income Advisor, LLC, its Manager
		By:	/s/ Ana Marie del Rio
			Ana Marie del Rio, Secretary
MANAGER:	STEADFAST MANAGEMENT COMPANY. INC.,
	a California corporation
	By:	/s/ Rodney F. Emery
		Rodney F. Emery, Chief Executive Officer

EXHIBIT A

ESTIMATED PASS-THROUGH AMOUNTS

Benefits Administration		3% of total employee costs
IT Infrastructure, Licenses and Support		At cost and expense
Marketing/Training/Continuing Educations	$	20.00 p.u.p.y.

EXHIBIT B

THE PROPERTY

Legal Description: 2200 Buckingham Drive, Cedar Rapids, IA 52405

The real property situated in the City of Cedar Rapids, County of Linn, State of Iowa, and described as follows:

The Property consists of 244 one-bedroom, 174 two-bedroom, and 6 three-bedroom apartments. Site amenities include laundry rooms, clubhouse, fitness center, swimming pool, and two tennis courts. It is comprised of 30.22 acres and it was built in 1982 and renovated in 2007.

EXHIBIT C

REGULATORY AGREEMENT

EX-10.2

EXHIBIT 10.2

Upon recordation return to:

Patra Geroulis, Esq.

Ice Miller LLP

200 West Madison

Suite 3500

Chicago, IL 60606

ASSUMPTION

AGREEMENT

ASSUMPTION AGREEMENT

THIS ASSUMPTION AGREEMENT (this “Agreement”) is made and entered into as of the 26th day of January, 2012, by and among SIR Windsor on the River, LLC, a Delaware limited liability company, having its principal place of business at c/o: Steadfast Companies, 18100 Von Karman Ave., Suite 500, Irvine, CA 92612 (the “Assuming Borrower”), Windsor on the River, LLC, a Delaware limited liability company, having its principal place of business at 5400 West Elm Street, Suite 110, McHenry, Illinois 60050 (the “Borrower”), The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee (the “Trustee”), for Holders of the Iowa Finance Authority Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A in the principal amount of $24,000,000 (the “Bonds”).

Recitals

A. The Iowa Finance Authority, a public instrumentality and agency of the State of Iowa (the “Issuer”) issued the Bonds pursuant to an Indenture of Trust, dated as of May 1, 2007, between the Issuer and the Trustee (the “Indenture”) for the purpose of providing a loan to Borrower in the original principal amount of Twenty Four Million and 00/100 Dollars ($24,000,000) (the “Loan”). The Loan is evidenced by the documents executed by Borrower, as all such documents are set forth on Exhibit A (the “Documents”).

B. In connection with the Bonds, the Borrower executed and delivered that certain Land Use Restriction Agreement dated as of November 1, 2007 (the “Land Use Restriction Agreement”) with the Issuer and the Trustee and the other Documents listed in Exhibit A herein.

C. As of the date hereof and immediately prior to the consummation of the transactions described herein, Borrower is the owner of the real property described in Exhibit B and all improvements and personal property located thereon (the “Subject Property”).

D. The Borrower plans to transfer the Subject Property to Assuming Borrower subject to the satisfaction of certain conditions specified therein.

E. Trustee is willing to consent to the assumption by Assuming Borrower of the Loan and the obligations of Borrower under the Documents, on and subject to the terms and conditions set forth in this Agreement, the Land Use Restriction Agreement and in the other Documents.

F. Trustee, Borrower and Assuming Borrower, by their respective executions hereof, evidence their consent to the assumption of the Land Use Restriction Agreement and the assumption of the other Documents, as hereinafter set forth.

G. Capitalized terms used herein and not defined shall have the meaning given such terms in the Land Use Restriction Agreement.

Statement of Agreement

In consideration of the mutual covenants and agreements set forth herein, the parties hereto hereby agree as follows:

1. Representations, Warranties, and Covenants of Borrower.

(a) The Borrower hereby represents to Trustee, as of the date hereof, that: (i) contemporaneously with the execution and delivery hereof, it has conveyed and transferred all of the Subject Property to Assuming Borrower; (ii) contemporaneously with the execution and delivery hereof, it has assigned and transferred to Assuming Borrower all leases with respect to the Subject Property retaining no rights therein or thereto; and (iii) no default by it has occurred and is presently continuing under the provisions of the Documents.

2. Representations, Warranties, and Covenants of Assuming Borrower.

(a) Assuming Borrower hereby covenants and agrees that from and after the date the Assuming Borrower acquires title and rights to the Subject Property (the “Effective Date”), it: (i) hereby assumes all of the obligations and covenants of the Borrower and all restrictions applicable to the Project contained in the Land Use Restriction Agreement; (ii) hereby assumes the obligations of the Borrower contained in the other Documents in accordance with the terms of the Documents and this Agreement; (iii) shall pay when and as due all sums due under the Documents; and (iv) shall perform all obligations imposed upon Borrower under the Documents. Assuming Borrower has no knowledge that any of the representations and warranties made by Borrower herein are untrue, incomplete, or incorrect.

(b) Assuming Borrower is a limited liability company duly organized and validly existing under the laws of the State of Delaware. Assuming Borrower’s registered office is as set forth in its Articles of Organization or most recent amendment thereto. Assuming Borrower has full power and authority to enter into and carry out the terms of this Agreement and to assume and carry out the terms of the Documents. Assuming Borrower is in good standing under the laws of the State of its formation.

(c) This Agreement and the Documents constitute legal, valid and binding obligations of Assuming Borrower, enforceable in accordance with their respective terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the rights of creditors generally or general principles of equity. Neither the entry into nor the performance of and compliance with this Agreement or any of the Documents has resulted or will result in any violation of, or a conflict with or a default under, any judgment, decree, order, mortgage, indenture, contract, agreement or lease by which Assuming Borrower or any property of Assuming Borrower is bound or any statute, rule or regulation applicable to Assuming Borrower.

(d) Neither the execution of this Agreement nor the assumption and performance of the obligations hereunder has resulted or will result in any violation of, or a conflict with or a default under, any judgment, decree, order, mortgage, indenture, contract, agreement or lease by which Assuming Borrower or any property of Assuming Borrower is bound or any statute, rule or regulation applicable to Assuming Borrower.

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(e) There is no action, proceeding or investigation pending or threatened which questions, directly or indirectly, the validity or enforceability of this Agreement or any of the Documents, or any action taken or to be taken pursuant hereto or thereto, or which might result in any material adverse change in the condition (financial or otherwise) or business of Assuming Borrower.

(f) No representation or warranty of Assuming Borrower made in this Agreement contains any untrue statement of material fact or omits to state a material fact necessary in order to make such representations and warranties not misleading in light of the circumstances under which they are made.

3. Assumption of Obligations. Assuming Borrower hereby assumes the Loan and all of the obligations of the Borrower of every type and nature set forth in Documents in accordance with their respective terms and conditions. Assuming Borrower further agrees from and after the Effective Date, to abide by and be bound by all of the terms of the Documents, including but not limited to, the representations, warranties, covenants, assurances and indemnifications therein, all as though each of the Documents had been made, executed, and delivered by Assuming Borrower. Assuming Borrower agrees from and after the Effective Date, to pay, perform, and discharge each and every obligation of payment and performance under, pursuant to and as set forth in the Documents at the time, in the manner and otherwise in all respects as therein provided. Assuming Borrower hereby acknowledges, agrees and warrants that there are no rights of set-off or counterclaim, nor any defenses of any kind, whether legal, equitable or otherwise, which would enable Assuming Borrower to avoid or delay timely performance of its obligations under the Documents, as applicable.

4. Default.

(a) Breach. Any breach by Assuming Borrower of any of the representations, warranties and covenants of this Agreement shall constitute a default under this Agreement.

(b) Failure to Comply. Assuming Borrower’s failure to fulfill any one of the covenants, conditions and agreements set forth in this Agreement shall constitute a default under this Agreement.

5. Incorporation of Recitals. Each of the Recitals set forth above in this Agreement are incorporated herein and made a part hereof.

6. Captions. The headings to the Sections of this Agreement have been inserted for convenience of reference only and shall in no way modify or restrict any provisions hereof or be used to construe any such provisions.

7. Partial Invalidity. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement.

8. Entire Agreement. This Agreement and the documents contemplated to be executed herewith constitutes the entire agreement among the parties hereto with respect to the

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assumption of the Documents and shall not be amended unless such amendment is in writing and executed by each of the parties. The Agreement supersedes all prior negotiations regarding the subject matter hereof.

9. Binding Effect. This Agreement and the documents contemplated to be executed in connection herewith shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

10. Multiple Counterparts. This Agreement may be executed in multiple counterparts, each of which will be an original, but any of which, taken together, will constitute one and the same Agreement.

11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois.

12. Effective Date. This Agreement shall be effective as of January 26th, 2012.

[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have executed this Agreement to be effective as of the date first aforesaid.

BORROWER:
WINDSOR ON THE RIVER, LLC, a Delaware limited liability company
By:	/s/ Brian G. Cunant
Its:	Manager

STATE OF ILLINOIS	)
	)	SS:
COUNTY OF	)

On this 23rd day of January, 2012, before me appeared Brian G. Cunant , to me personally known, who being by me duly sworn did say that he is the Manager of Windsor on the River, LLC, and that he is the person who executed the foregoing instrument as such officer in behalf of said Windsor on the River, LLC, and acknowledge that he executed the same as his free act and deed as such Manager of Windsor on the River, LLC.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal, the day and year last above written.

/s/ Joyce M. Hung

(Signature)

Joyce M. Hung

(Printed Name)

Notary Public in and for said County and State

[SEAL]

My Commission Expires: 8/19/12.

My County of Residence: McHenry.

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ASSUMING BORROWER:
SIR WINDSOR ON THE RIVER, LLC, a Delaware limited liability company, as Borrower
By:	/s/ Rodney F. Emery
Its:	CEO and President

STATE OF	)
	)	SS:
COUNTY OF	)

On this      day of January, 2012, before me appeared                     , to me personally known, who being by me duly sworn did say that he/she is the              of SIR Windsor on the River, LLC, and that he/she is the person who executed the foregoing instrument as such officer in behalf of said SIR Windsor on the River, LLC, and acknowledge that he executed the same as his/her free act and deed as such              of SIR Windsor on the River, LLC.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal, the day and year last above written.

(Signature)

(Printed Name)

Notary Public in and for said County and State

[SEAL]

My Commission Expires:                     .

My County of Residence:                     .

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TRUSTEE:
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Joan Blume
Its:	Vice President

STATE OF ILLINOIS	)
	)	SS:
COUNTY OF COOK	)

On this 25th day of January, 2012, before me appeared Joan Blume, to me personally known, who being by me duly sworn did say that Joan is a Vice President of The Bank of New York Mellon Trust Company, N.A., a national banking association, and acknowledged said instrument to be the free act and deed of said banking association.

IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal, the day and year last above written.

/s/ Diane Mary Wuertz

(Signature)

Diane Mary Wuertz

(Printed Name)

Notary Public in and for said County and State

[SEAL]

My Commission Expires:                     .

My County of Residence:                     .

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EXHIBIT A

1. Land Use Restriction Agreement dated as of November 1, 2007, among the Borrower, the Issuer and the Trustee.

2. Loan Agreement dated as of May 1, 2007, by and between the Issuer and the Borrower.

3. Remarketing Agreement dated as of May 1, 2007 between the Borrower and Stern Brothers & Co.

4. Note dated February 1, 2008 of the Borrower.

5. Certificate of the Issuer Re: Arbitrage dated November 15, 2007, as amended and supplemented by a Supplement to Certificate of Issuer re Arbitrage dated February 1, 2008, each between the Issuer and the Borrower.

6. Tax Representation Certificate dated November 15, 2007, as amended and supplemented by a Supplement to Tax Representation Certificate dated February 1, 2008, of the Borrower.

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EXHIBIT B

Legal Description of Real Subject Property

(Attached hereto)

EX-10.3

Exhibit 10.3

LOAN AGREEMENT

dated as of May 1, 2007

between

IOWA FINANCE AUTHORITY

and

WINDSOR ON THE RIVER, LLC

with respect to:

To be Issued

Iowa Finance Authority

Variable Rate Demand Multifamily Housing Revenue Bonds

(Windsor on the River, LLC Project),

Series 2007A

and

$24,000,000

Original Issued Amount

Iowa Finance Authority

Taxable Variable Rate Demand Multifamily Housing Revenue Bonds

(Windsor on the River, LLC Project),

Series 2007B

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS			2
ARTICLE II. REPRESENTATIONS			4
Section 2.1.	Representations of the Issuer		4
Section 2.2.	Representations of the Borrower		5
ARTICLE III.	ISSUANCE OF BONDS		8
ARTICLE IV.	THE PROJECT		9
Section 4.1.	Rehabilitation of Project		9
Section 4.2.	Disbursements from the Project Fund		9
Section 4.3.	Establishment of Completion Date		10
Section 4.4.	Investment of Moneys		12
Section 4.5.	Operation of the Project		12
Section 4.6.	Issuer’s and Trustee’s Right of Access to the Project		13
Section 4.7.	Maintenance and Repair; Insurance		13
Section 4.8.	Annual Information for Audit		13
Section 4.9.	No Warranty by Issuer		13
ARTICLE V.	PAYMENTS		14
Section 5.1.	Repayment		14
Section 5.2.	Additional Payments		15
Section 5.3.	Prepayments		16
Section 5.4.	Obligations of Borrower Unconditional		16
Section 5.5.	Letter of Credit		16
ARTICLE VI.	SPECIAL COVENANTS AND AGREEMENTS		17
Section 6.1.	Maintenance of Existence		17
Section 6.2.	Reports		17
Section 6.3.	Payment of Taxes		17
Section 6.4.	Arbitrage		17
Section 6.5.	Borrower Obligation with Respect to Exclusion of Interest Paid on the Series 2007A Bonds		18
Section 6.6.	Recording and Maintenance of Liens		18
Section 6.7.	Compliance with Laws		18
Section 6.8.	Continuing Disclosure		19
ARTICLE VII.	NO RECOURSE TO ISSUER; INDEMNIFICATION		20
Section 7.1.	No Recourse to Issuer		20

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Section 7.2.	Indemnification	20
ARTICLE VIII.	ASSIGNMENT	23
Section 8.1.	Assignment by Borrower	23
Section 8.2.	Assignment by Issuer	23
ARTICLE IX.	DEFAULTS AND REMEDIES	24
Section 9.1.	Events of Default	24
Section 9.2.	Remedies on Default	25
Section 9.3.	Agreement to Pay Attorneys’ Fees and Expenses	26
Section 9.4.	No Remedy Exclusive	26
Section 9.5.	No Additional Waiver Implied by One Waiver	26
ARTICLE X.	MISCELLANEOUS	27
Section 10.1.	Notices	27
Section 10.2.	Binding Effect	27
Section 10.3.	Severability	27
Section 10.4.	Amendments	27
Section 10.5.	Right of Borrower to Perform Issuer’s Agreements	27
Section 10.6.	Expiration of Rights of Credit Provider	27
Section 10.7.	Limitation of Liability	28
Section 10.8.	Indenture Provisions	28
Section 10.9.	Applicable Law	28
Section 10.10.	Captions; References to Sections	29
Section 10.11.	Complete Agreement	29
Section 10.12.	Termination	29
Section 10.13.	Counterparts	29
Section 10.14.	Non-Recourse	29
EXHIBIT A	DESCRIPTION OF THE PROJECT	A-1
EXHIBIT B	FORM OF COMPLETION CERTIFICATE	B-1
EXHIBIT C	PROMISSORY NOTE (SERIES 2007A)	C-1
EXHIBIT D	PROMISSORY NOTE (SERIES 2007B)	D-1

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LOAN AGREEMENT dated as of May 1, 2007, between IOWA FINANCE AUTHORITY, a public instrumentality and agency of the State of Iowa (the “Issuer”) and WINDSOR ON THE RIVER, LLC, a Delaware limited liability company (the “Borrower”).

WHEREAS, pursuant to Chapter 16 of the Code of Iowa Code, as amended (the “Act”), the Issuer has the power to issue revenue bonds for the purpose of financing projects as defined in the Act; and

WHEREAS, in order to further the purposes of the Act, the Issuer plans to undertake the refinancing of certain existing indebtedness in connection with the acquisition and the financing of the rehabilitation of, approximately 424 units of multifamily housing in Cedar Rapids, Linn County, Iowa (the “Project”), as further described in Exhibit A attached hereto, by authorizing the issuance of its Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A, in an aggregate principal amount of up to $24,000,000 (when, and if, issued, the “Series 2007A Bonds”) and its Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007B, originally issued in the aggregate principal amount of $24,000,000 (the “Series 2007B Bonds” and together with the Series 2007A Bonds, the “Bonds”); and

WHEREAS, the Bonds will be issued under the terms of an Indenture of Trust (the “Indenture”) of even date herewith between the Issuer and The Bank of New York Trust Company, N.A., as trustee (the “Trustee”); and

WHEREAS, the Borrower’s obligation to repay the loan is evidenced by this Agreement and the Borrower’s execution and delivery to the Trustee of their promissory notes (collectively, the “Notes”) concurrent herewith; and

WHEREAS, the Bonds are secured by (i) an assignment and pledge by the Issuer to the Trustee of this Agreement, (ii) the Notes, and (iii) an irrevocable, transferable, direct pay letter of credit issued by Wells Fargo Bank, N.A., Chicago, Illinois (the “Initial Credit Provider” and together with any bank issuing an Alternate Credit Facility, the “Credit Provider”), in favor of the Trustee for the benefit of the owners from time to time of the Bonds, and any other letter of credit issued in substitution therefor in accordance with the terms hereof and thereof (the “Letter of Credit”);

NOW, THEREFORE, in consideration of the respective representations and agreements herein contained, the parties hereto agree as follows (provided, that in the performance of the agreements of the Issuer herein contained, any obligation it may thereby incur shall not constitute a debt, liability or obligation of the State of Iowa (the “State”), or any political subdivision thereof, including, without limitation, the Issuer and shall never be payable from tax revenues or other public or general funds or assets of the State or the Issuer, except to the extent the Bonds shall be a limited obligation of the Issuer payable solely out of the revenues and receipts derived from this Agreement, the Notes, the sale of the Bonds, the income from the temporary investment thereof and moneys derived from drawings under the Letter of Credit, all as herein provided):

ARTICLE I.

DEFINITIONS

For all purposes of this Agreement, unless the context clearly requires otherwise, all terms defined in Article I of the Indenture have the same meanings in this Agreement.

“Completion Date” means the date the rehabilitation of the Project is certified to be complete in accordance with the provisions of Section 4.3 hereof.

“Construction Period” means the period between the beginning of the rehabilitation or the date on which Bonds are first delivered to the purchasers thereof, whichever is earlier, and the Completion Date.

“Cost of the Project” means the sum of the items authorized to be paid from the Project Fund pursuant to the provisions of Section 4.2 hereof.

“Indenture” means the Indenture of Trust relating to the Bonds, dated as of the date of this Agreement, between the Issuer and The Bank of New York Trust Company, N.A., as Trustee, as such Indenture of Trust may be amended or supplemented from time to time in accordance with its terms.

“Issuance Costs” means all costs and expenses of issuance of the Bonds, including, but not limited to:

(i) underwriter’s fees;

(ii) counsel fees and expenses, including Bond Counsel, Issuer’s counsel, Credit Provider’s counsel, underwriter’s counsel and Borrower’s counsel, as well as any other specialized counsel;

(iii) financial advisor fees;

(iv) rating agency fees;

(v) Trustee fees and Trustee’s counsel fees;

(vi) paying agent and certifying and authenticating agent fees related to issuance of the Bonds;

(vii) accountant fees;

(viii) printing costs of the Bonds and of any official statement;

(ix) publication costs associated with the financing proceedings.

“Loan” means the Loan made pursuant to Article III of the Agreement.

“Notes” means collectively, the Series 2007A Note and the Series 2007B Note.

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“Qualified Costs of Construction” means that portion of the Cost of the Project which is chargeable to the Project’s capital account for Federal income tax purposes or which would be so chargeable either with a proper election by the Borrower under the Code or but for a proper election by the Borrower to deduct such amount and which were incurred and paid, or are to be incurred and paid, after sixty (60) days prior to March 14, 2007.

“Series 2007A Note” means when, and if, issued, the promissory note given by the Borrower in connection with the Series 2007A Bonds pursuant to Section 5.1 of this Agreement, substantially in the form of Exhibit C attached hereto.

“Series 2007B Note” means the promissory note given by the Borrower in connection with the Series 2007B Bonds pursuant to Section 5.1 of this Agreement, substantially in the form of Exhibit D attached hereto.

“Tax Certificate” means the Tax Representation Certificate of the Borrower delivered in connection with the initial issuance and delivery of the Bonds.

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ARTICLE II.

REPRESENTATIONS

Section 2.1. Representations of the Issuer. The Issuer makes the following representations and warranties as the basis for the undertakings on its part herein contained:

(a) The Issuer is a public instrumentality and agency of the State of Iowa and is authorized to enter into the transactions contemplated by this Agreement, the Indenture, the Land Use Restriction Agreement and the Bond Purchase Agreement, and to carry out its obligations hereunder and thereunder. By proper action the Issuer has duly authorized the execution and delivery of the Bonds, this Agreement, the Indenture, the Land Use Restriction Agreement and the Bond Purchase Agreement and the performance of its obligations under this Agreement, the Indenture, the Land Use Restriction Agreement, the Bond Purchase Agreement and the Bonds.

(b) Neither the execution and delivery of the Bonds, this Agreement, the Indenture, the Land Use Restriction Agreement or the Bond Purchase Agreement, the consummation of the transactions contemplated hereby and thereby nor the fulfillment of or compliance with the terms and conditions or provisions of the Bonds, this Agreement, the Indenture or the Bond Purchase Agreement conflicts with or results in the breach of any of the terms, conditions or provisions of any constitutional provision or statute of the State or of any agreement or instrument or judgment, order or decree to which the Issuer is now a party or by which it or its property is bound or constitutes a default under any of the foregoing or results in the creation or imposition of any prohibited lien, charge or encumbrance of any nature upon any property or assets of the Issuer under the terms of any instrument or agreement.

(c) The Issuer is issuing the Bonds to enable the Borrower to obtain moneys which will be used, together with certain other moneys of the Borrower, to (i) finance a portion of the costs of rehabilitation of the Project, (ii) refinance certain existing indebtedness incurred in connection with the Project and (iii) pay certain expenses incurred in connection with the issuance of the Bonds.

(d) There is no action, suit, proceeding, inquiry or investigation pending or, to the knowledge of the Issuer, threatened against the Issuer by or before any court, governmental agency or public board or body, which (i) affects or questions the existence or the territorial jurisdiction of the Issuer or the title to the office of any officer or member of the governing body of the Issuer; (ii) affects or seeks to prohibit, restrain or enjoin the execution and delivery of this Agreement, the Indenture or the Bond Purchase Agreement or the issuance, execution or delivery of the Bonds; (iii) affects or questions the validity or enforceability of this Agreement, the Indenture, the Bond Purchase Agreement or the Bonds; or (iv) questions the power or authority of the Issuer to perform its obligations under the Bonds, this Agreement, the Indenture or the Bond Purchase Agreement.

(e) The Issuer has taken all action and has complied with all provisions of law with respect to the execution, delivery and performance of this Agreement, the Bonds, the

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Indenture and the Bond Purchase Agreement and the due authorization of the consummation of the transactions contemplated hereby and thereby, and this Agreement, the Bonds, the Indenture and the Bond Purchase Agreement have been duly executed and delivered by, the Issuer.

(f) The Issuer has not pledged and will not pledge or grant any security interest in its interest in, to or under this Agreement and the payments made hereunder and thereunder, or the revenues or income to be derived by the Issuer hereunder and thereunder for any purpose other than to secure the Bonds.

(g) The Issuer will not knowingly engage in any activity which will result in the interest on any Series 2007A Bonds issued becoming taxable to the holders thereof under Federal or State income tax laws.

Section 2.2. Representations of the Borrower. The Borrower makes the following representations and warranties as the basis for the undertakings on its part herein contained:

(a) The Borrower is a limited liability company duly organized and validly existing under the laws of the State of Delaware and is authorized to conduct business in the State and every other state in which the nature of its business requires such authorization and has full power to enter into this Agreement, the Notes, the Reimbursement Agreement, the Bond Purchase Agreement, the Remarketing Agreement and the Tax Certificate.

(b) The Bond Documents to which the Borrower is a party have each been duly executed and delivered by the Borrower, and, assuming due authorization, execution and delivery by the other party or parties hereto and thereto, the Bond Documents to which the Borrower is a party are each legal, valid and binding obligations of the Borrower enforceable against the Borrower, in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws or equitable principles relating to, or limiting creditors’ rights or contractual obligations generally.

(c) The execution and delivery of the Bond Documents, the compliance with the terms, conditions and provisions hereof and thereof, and the consummation of the transactions herein and therein contemplated do not and will not violate any existing law or any existing regulation, order, writ, injunction or decree of any court or governmental instrumentality applicable to the Borrower, or result in a breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the creation or imposition of any material mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Borrower (except as contemplated by the Indenture) in violation of the terms of any mortgage, indenture, agreement or instrument to which the Borrower is a party or by which it or any of its properties is bound.

(d) Except as disclosed in writing to the Issuer and the Credit Provider, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of the Borrower, threatened against or

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affecting the Borrower wherein an unfavorable decision, ruling or finding could have a material adverse effect on the properties, business, condition (financial or otherwise) or results of operations of the Borrower or would adversely affect the validity or enforceability of, or the authority or ability of the Borrower to perform its obligations under, the Bond Documents.

(e) All necessary authorizations, approvals, consents and other orders of any governmental authority or agency for the execution and delivery by the Borrower of the Bond Documents have been obtained and are in full force and effect.

(f) In the rehabilitation of the Project, the Borrower will, and at no expense to Issuer, comply in all material respects with all applicable building, zoning and land use, environmental protection, sanitary and safety and other laws, rules and regulations. It shall not be a breach of this paragraph, however, if the Borrower fails to comply with such laws, rules and regulations during any period in which it shall in good faith diligently contest the validity or applicability thereof and no proceeding shall have been commenced or unstayed binding order issued which has a material adverse effect on the operations (financial or otherwise), business or properties of the Borrower arising out of such contest.

(g) The Borrower shall duly pay or cause to be paid all taxes and governmental charges of any kind that may at any time be lawfully assessed or levied against or with respect to the Project, all utility and other charges incurred in the operation, maintenance and upkeep of the Project and all assessments and charges lawfully made by any governmental body for public improvements that may be secured by a lien on the Project. However, the Borrower may contest in good faith any such event and may permit the taxes, assessments or other charges so contested to remain unpaid during any period, including appeals, when the Borrower is in good faith contesting the same, provided that such non-payment does not have a material adverse effect on the operations (financial or otherwise), business or properties of the Borrower.

(h) All necessary orders, consents, authorizations, permits, licenses and approvals legally required by governmental authorities to be obtained on the date hereof in connection with the operation, ownership, maintenance and construction of the Project and of other facilities of the Borrower have been obtained and are in full force and effect, and the Borrower knows of no reason why it cannot obtain all other necessary orders, consents, authorizations, permits, licenses and approvals legally required by governmental authorities to be obtained after the date hereof in connection with the completion of the construction and the operation of the Project.

(i) No event has occurred and no condition exists which, upon the issuance of the Bonds, would constitute a material violation of, breach of, or default under any of the Bond Documents or any material agreement or instrument to which the Borrower is a party and which is used or contemplated for use in consummation of the transactions contemplated hereby or thereby, or constitute an Event of Default under the Indenture, the Reimbursement Agreement or this Agreement or which, with the lapse of time or with the giving of notice or both, would become or constitute such an Event of Default or such a violation, breach or default.

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(j) The information furnished by the Borrower and filed by the Issuer with the Internal Revenue Service pursuant to Section 149(e) of the Code is true and correct in all material respects.

(k) Neither this Agreement nor any other document, certificate or written statement furnished to the Issuer by or on behalf of the Borrower in connection with the transactions contemplated hereby or thereby or by the Indenture, contains, to the best of the Borrower’s knowledge, any untrue statement.

(1) The Borrower agrees to comply with the requirements of Section 148 of the Code as described in the Tax Certificate regarding the payment of certain investment earnings to the United States.

(m) None of the proceeds of the Bonds shall be used in such a manner as to cause the Bonds to be “federally guaranteed” within the meaning of Section 147(b) of the Code.

(n) No event has occurred and no condition exists with respect to the Borrower that would constitute an “Event of Default” under this Agreement or that, with the lapse of time or the giving of notice or both, would become an “Event of Default” under this Agreement.

(o) The Credit Provider does not control, either directly or indirectly through one or more intermediaries, the Borrower or any of its members. Likewise, neither the Borrower or its members control, either directly or indirectly through one or more intermediaries, the Credit Provider. “Control” for this purpose has the meaning given to such term in Section 2(a)(9) of the Investment Company Act of 1940. The Borrower agrees to provide written notice to the Trustee, the Remarketing Agent and the Bondholders at least thirty days prior to its consummation of any transaction that would result in the Borrower controlling or being controlled by the Credit Provider or any provider of an alternate Credit Facility.

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ARTICLE III.

ISSUANCE OF BONDS

In order to provide funds to refinance certain existing indebtedness incurred in connection with the acquisition of the Project and to finance the rehabilitation of the Project, the Issuer agrees that it will issue under the Indenture, sell and cause to be delivered, the Bonds, bearing interest and maturing as set forth in the Indenture. The Issuer will thereupon direct the proceeds received from the sale of the Bonds to be deposited in accordance with Section 301 of the Indenture and such deposits shall constitute a loan equal to the initial principal amount of the Bonds to the Borrower. The Loan shall be evidenced by the Notes. Any moneys held in the Project Fund (including earnings on any investment thereof) and pending application as provided in Article IV hereof, are subject to a lien in favor of the holders of the Bonds as provided in the Indenture.

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ARTICLE IV.

THE PROJECT

Section 4.1. Rehabilitation of Project. The Borrower represents, warrants and covenants that it will complete the rehabilitation of the Project in accordance with this Article IV, substantially in accordance with the plans and specifications, if any, therefor prepared by it, including any and all supplements, amendments and additions (or deletions) thereto (or therefrom); provided, however, that such other facilities and property contemplated by such supplements, amendments, additions or deletions to the plans and specifications shall not disqualify the Project as a “project” within the meaning of the Act or result in the interest on any Series 2007A Bonds becoming includable in the gross income of the owners of the Series 2007A Bonds for Federal income tax purposes.

In the event that Exhibit A hereto is to be amended or supplemented in accordance with the provisions of Section 1101 of the Indenture, the Issuer may enter into, and may instruct the Trustee to consent to, an amendment of or supplement to Exhibit A hereto upon receipt of:

(i) a copy of the proposed form of amendment or supplement to Exhibit A hereto, and

(ii) the written approving opinion of Bond Counsel to the effect that such amendment or supplement will not have the effect of disqualifying the Project as a “project” within the meaning of the Act or result in the interest on any Series 2007A Bonds becoming includable in the gross income of the owners of the Series 2007A Bonds for Federal income tax purposes.

Section 4.2. Disbursements from the Project Fund. The Issuer authorizes and directs the Trustee upon compliance with Section 308 of the Indenture to disburse the moneys in the Project Fund to or on behalf of the Borrower, for the following purposes:

(a) Payment to the Borrower of such amounts, if any, as shall be necessary to reimburse the Borrower for advances and payments made by it prior to or after the delivery of the Bonds for expenditures in connection with the preparation of plans and specifications for the Project (including any preliminary study or planning of the Project or any aspect thereof) and the rehabilitation of the Project or to enable the Borrower to pay off certain existing indebtedness incurred in connection with the acquisition of the Project.

(b) Payment of the initial or acceptance fee of the Trustee, fees of the Trustee and any paying agent incurred during the Construction Period, fees relating to the underwriting or placement of the Bonds, legal, financial and accounting fees and expenses, printing and engraving costs incurred in connection with the authorization, sale and issuance of the Bonds, the execution and filing of the Indenture and the preparation of all other documents in connection therewith, and payment of all fees, costs and expenses for the preparation of this Agreement, the Indenture, the Bonds and all related agreements and instruments.

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(c) Payment for labor, services, materials and supplies used or furnished in the rehabilitation or installing of the Project, all as provided in the plans, specifications and work orders therefor, payment for the cost of the acquisition and installation of utility services or other facilities, and acquisition and installation of all real and personal property deemed necessary in connection with the Project and payment for the miscellaneous capitalized expenditures incidental to any of the foregoing items.

(d) Payment of the fees, if any, for architectural, engineering, legal, printing, underwriting and supervisory services with respect to the Project.

(e) To the extent not paid by a contractor for construction with respect to any part of the Project, payment of the premiums on all insurance required to be taken out and maintained during the Construction Period.

(f) Payment of the taxes, assessments and other charges, if any, that may become payable during the Construction Period with respect to the Project, or reimbursement thereof if paid by the Borrower.

(g) Payment of expenses incurred in seeking to enforce any remedy against any contractor or subcontractor in respect of any default under a contract relating to the Project.

(h) Interest on the Bonds during the Construction Period (or reimbursement of the Credit Provider for draws under the Letter of Credit to pay such interest).

(i) Fees of the Credit Provider during the Construction Period for the issuance of the Letter of Credit and any other fees of the Credit Provider under the Reimbursement Agreement.

(j) Payment of any other costs permitted by the Act which will not adversely affect the exclusion from Federal income taxation of interest on the Series 2007A Bonds.

All moneys remaining in the Project Fund after the Completion Date and after payment or provisions for payment of all other items provided for in the preceding subsections (a) to (c), of this Section, shall at the direction of the Borrower Representative with the consent of the Credit Provider be used in accordance with Section 4.3 hereof.

Each of the payments referred to in this Section shall be made upon receipt by the Trustee of a written order complying with the requirements of Section 308 of the Indenture signed by the Borrower Representative and consented to by the Credit Provider.

Section 4.3. Establishment of Completion Date. The Completion Date shall be evidenced to the Trustee mad the Credit Provider by a certificate signed by the Borrower Representative substantially in the form set forth in Exhibit B hereto. Notwithstanding the foregoing, such certificate may state that it is given without prejudice to any rights against third parties which exist at the date of such certificate or which may subsequently come into being. It shall be the duty of the Borrower to cause such certificate to be furnished to the Trustee and the Credit Provider within sixty (60) days after the Project shall have been completed.

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Moneys (including investment proceeds) remaining in the Project Fund on the date of such certificate may be used, at the direction of the Borrower Representative with the consent of the Credit Provider, to the extent indicated, for one or more of the following purposes:

(1) for the payment, in accordance with the provisions of this Agreement, of any Cost of the Project not theretofore paid, as specified in the above-mentioned completion certificate, or

(2) for transfer to the Bond Fund, but only if, and to the extent that, the Trustee and the Issuer have been furnished with an opinion of Bond Counsel to the effect that such transfer is lawful under the Act and does not adversely affect the exclusion from Federal gross income of interest on any of the Series 2007A Bonds.

Any moneys (including investment proceeds) remaining in the Project Fund on the date of the aforesaid certificate and not set aside for the payment of Costs of the Project as specified in (1) above or transferred to the Bond Fund pursuant to (2) above shall on such date be deposited by the Trustee in a separate escrow account and used to pay all or part of the redemption price of Bonds at the earliest redemption date or dates on which Bonds may be redeemed without the payment of a premium or, at the option of the Borrower, with the consent of the Credit Provider, at an earlier redemption date or dates; provided that, until so used such moneys may also be used, at the direction of the Borrower Representative, with the consent of the Credit Provider, for one or more of the following purposes:

(a) to pay all or part of the price of purchasing Bonds on tender, in the open market or at private sale, at a purchase price not in excess of 100% of the principal amount of such Bonds plus accrued interest to the date of such purchase for the purpose of cancellation;

(b) for the payment of qualifying costs of any additional improvements to be installed or constructed on the Project site, provided that such use of funds is permitted under the Act; or

(c) for any other purpose permitted by the Act;

provided, that the earnings on the investment of the moneys on deposit in such escrow account shall be transferred on each interest payment date on the Bonds to the Bond Fund and shall be used to pay interest on the Bonds coming due on each interest payment date on the Bonds (or to reimburse the Credit Provider for draws under the Letter of Credit to pay interest on the Bonds), but no moneys on deposit in such escrow account may be used for any of the purposes specified in this paragraph (including the redemption of Bonds) unless and until the Trustee and the Issuer have been furnished with an opinion of Bond Counsel to the effect that such use is lawful under the Act and does not adversely affect the exclusion from gross income for Federal income tax purposes of the interest on any of the Series 2007A Bonds; and provided further that, until used for one or more of the foregoing purposes, moneys on deposit in such escrow account may be invested in investments authorized by Section 4.4 of this Agreement, but may not be invested to produce a yield on such moneys (computed from the Completion Date and taking into account any investment of such moneys during the period from the Completion Date until such moneys were deposited in such escrow account) greater than the yield on the Bonds from which such proceeds were derived, all as such terms are used in and determined in accordance with the code and regulations promulgated thereunder.

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In the event the moneys in the Project Fund available for payment of the Costs of the Project should not be sufficient to pay the costs thereof in full, the Borrower agrees, to pay directly, or to deposit in the Project Fund moneys sufficient to pay, the costs of completing the Project as may be in excess of the moneys available therefor in the Project Fund. THE ISSUER DOES NOT MAKE ANY WARRANTY, EITHER EXPRESS OR IMPLIED, THAT THE MONEYS WHICH WILL BE PAID INTO THE PROJECT FUND AND WHICH, UNDER THE PROVISIONS OF THIS AGREEMENT, WILL BE AVAILABLE FOR PAYMENT OF THE COSTS OF THE PROJECT, WILL BE SUFFICIENT TO PAY ALL THE COSTS WHICH WILL BE INCURRED IN THAT CONNECTION. The Borrower agrees that if after exhaustion of the moneys in the Project Fund the Borrower should pay or deposit moneys in the Project Fund for the payment of any portion of the said Costs of the Project pursuant to the provisions of this Section, it shall not be entitled to any reimbursement therefor from the Issuer, the Trustee, the Credit Provider, or from the owners of any of the Bonds, nor shall the Borrower be entitled to any diminution of the amounts payable under Article V hereof.

Section 4.4. Investment of Moneys. Any moneys held as a part of the Bond Fund or the Project Fund shall be invested or reinvested by the Trustee, at the direction of the Borrower Representative as provided in Section 314 of the Indenture and in the Tax Certificate, to the extent permitted by taw, in Qualified Investments. Any such investment may be purchased at the offering or market price thereof at the time of such purchase. The Trustee may make any and all such investments through its own investment department or through any of the Trustee’s affiliates or subsidiaries.

The investments so purchased shall be held by the Trustee and shall be deemed at all times a part of the fund, account or subaccount for which they were made and the interest accruing thereon and any profit realized therefrom shall be credited to such fund, account or subaccount and any net losses resulting from such investment shall be charged to such fund, account or subaccount.

Section 4.5. Operation of the Project. The Borrower will not, nor will it allow any lessee, sublessee or other user of the Project to, make any material change in its use of the Project unless the Trustee and the Issuer receive an opinion of Bond Counsel to the effect that such change will not impair the exclusion of interest on any Series 2007A Bonds issued from the gross income of holders of the Series 2007A Bonds for Federal income tax purposes.

The Borrower agrees to operate the Project, or cause any lessee, sublessee or other user of the Project to operate the Project, as a “project” as contemplated by the Act and in such a manner that it will not impair the exclusion of interest on any Series 2007A Bonds issued from gross income of the holders of the Series 2007A Bonds for Federal income tax purposes.

Upon a transfer, sale or sublease of all or any portion of the Borrower’s interest in the Project (to the extent permitted hereunder and under the Reimbursement Agreement), the Borrower will obtain the agreement of the purchaser, transferee or sublessee of the Project or any interest therein to comply with the provisions of this Agreement, regardless of whether such purchaser, transferee or sublessee assumes the obligations of the Borrower under this Agreement generally.

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Section 4.6. Issuer’s and Trustee’s Right of Access to the Project. The Borrower agrees that during the term of this Agreement the Issuer, the Trustee, the Credit Provider, and their duly authorized agents shall have the right during regular business hours, with reasonable notice, to enter upon the premises and examine and inspect the Project. The Borrower agrees that the Issuer, the Trustee, the Credit Provider and their duly authorized agents shall have, subject to such limitations, restrictions and requirements as the Borrower may reasonably prescribe, such rights of access to the Project.

Section 4.7. Maintenance and Repair; Insurance. The Borrower will maintain the Project in a reasonably safe and sound operating condition, making from time to time all reasonably needed material repairs thereto, and shall maintain reasonable amounts of insurance coverage with respect to the Project and shall pay all costs of such maintenance, repair and insurance.

Section 4.8. Annual Information for Audit. The Borrower agrees that it will annually on or before August 15 of each year furnish the Iowa Finance Authority with a statement of the amount of the Outstanding Bonds as of the immediately preceding June 30. In addition, the Borrower shall provide the Iowa Finance Authority with any other information which may from time to time be requested concerning the Bonds according to the rules and interpretations of the Governmental Accounting Standards Board required to be disclosed concerning conduit debt obligations.

Section 4.9. No Warranty by Issuer. THE BORROWER RECOGNIZES THAT THE ISSUER HAS NOT MADE AN INSPECTION OF THE PROJECT OR OF ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, AND THE ISSUER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO THE SAME OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR ANY PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS TO THE ISSUER’S OR BORROWER’S TITLE THERETO OR OWNERSHIP THEREOF OR OTHERWISE, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY THE BORROWER. IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE PROJECT OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER PATENT OR LATENT, THE ISSUER SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION 4.9 HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR REPRESENTATIONS BY THE ISSUER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROJECT OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OF THE STATE OF IOWA OR ANOTHER LAW NOW OR HEREAFTER IN EFFECT OR OTHERWISE.

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ARTICLE V.

PAYMENTS

Section 5.1. Repayment. (a) Principal, Premium and Interest. As evidence of its obligation to repay the Loan made hereunder by the Issuer, the Borrower will issue its Series 2007B Note in the original principal amount of $24,000,000. When and if the Series 2007A Bonds are issued, the Borrower will issue its Series 2007A Note in a principal amount equal to the principal amount of any Series 2007A Bonds issued. At such time, the Borrower’s Series 2007B Note will be reduced in a like principal amount. The Notes shall be dated the date of their respective issuance and delivery and shall mature on May I, 2042, except as the provisions hereinafter set forth with respect to prepayment may become applicable thereto. The Notes shall bear interest on the unpaid principal amount thereof from the date of the Notes at such rates equal to the interest rates from time to time borne by the Bonds, calculated on the same basis and to be paid at the same times as interest on the Bonds is calculated and paid from time to time. The Notes shall be subject to prepayment as herein provided. Payments of the principal of and premium, if any, and interest on the Notes shall be made in lawful money of the United States of America in federal or other immediately available funds. The Notes shall be in substantially the same forms as Exhibit C and Exhibit D attached hereto and made a part hereof. The Issuer and the Borrower agree that the Notes shall be payable to the Trustee. The Borrower covenants and agrees that the payments of principal of, premium, if any, and interest on the Notes shall at all times be sufficient to pay when due the principal of, premium, if any, and interest on the Bonds; provided, that the Excess Amount (as hereinafter defined) held by the Trustee in the Bond Fund on a payment date shall be credited against the payment due on such date; and provided further, that, subject to the provisions of the immediately following sentence, if at any time the amount held by the Trustee in the Bond Fund should be sufficient (and remain sufficient) to pay on the dates required the principal of, premium, if any, and interest on the Bonds then remaining unpaid, the Borrower shall not be obligated to make any further payments under the provisions of this Section 5.1(a) or on the Notes. Notwithstanding the provisions of the preceding sentence, if on any date the Excess Amount held by the Trustee in the Bond Fund is insufficient to make the then required payments of principal (whether at maturity or upon redemption prior to maturity or acceleration), premium, if any, and interest on the Bonds on such date, the Borrower shall forthwith pay such deficiency. The term “Excess Amount” as of any interest payment date shall mean the amount in the Bond Fund on such date in excess of the amount required for the payment of the principal of the Bonds which theretofore has matured at maturity or on a date fixed for redemption and premium, if any, on such Bonds in all cases where Bonds have not been presented for payment and paid, or for the payment of interest which has theretofore come due in all cases where interest checks have not been presented for payment and paid.

If the Borrower shall fail to pay any installment of principal of, premium, if any, or interest on the Notes or under this Section 5.1 (a), the installment so in default shall continue as an obligation of the Borrower until the amount so in default shall have been fully paid, and the Borrower agrees to pay the same with interest thereon until paid (to the extent legally enforceable) at a rate equal to the rate borne by the Bonds from time to time from the due date thereof until paid. If the Borrower defaults in any payment required by this Section, the Borrower will pay interest (to the extent allowed by law) on such amount until paid at the rate provided for in the Bonds.

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(b) Purchase Price. The Borrower agrees to pay to the Tender Agent (or if the Bonds are in the Book Entry System, the Trustee) amounts sufficient to pay the purchase price of Bonds on each Purchase Date and Mandatory Tender Date pursuant to the Indenture, provided the Borrower shall receive a credit for the amount of remarketing or Letter of Credit proceeds available for such purpose in the Bond Fund on each such date.

(c) Borrower to Make up Deficiencies. In furtherance of the foregoing, so long as any Bonds are outstanding, the Borrower agrees to pay, or cause to be paid, all amounts required to prevent any deficiency or default in any payment of the principal or purchase price of, premium, if any, or interest on the Bonds, including any deficiency caused by an act or failure to act by the Trustee, the Borrower, the Issuer or any other person.

(d) Assignment. All amounts payable under this Section by the Borrower are assigned by the Issuer to the Trustee pursuant to the Indenture for the benefit of the Bondholders. The Borrower consents to such assignment. Accordingly, the Borrower will pay, or cause to be paid, directly to the Trustee (or in the case of the purchase price of Bonds when the Bonds are not in a Book Entry System, to the Tender Agent) at its principal corporate trust office all payments payable by the Borrower pursuant to this Section without defense or set-off by reason of any dispute between the Borrower and the Issuer or the Trustee.

(e) Payments under Reimbursement Agreement. The Borrower will pay all amounts owing to the Credit Provider under the Reimbursement Agreement directly to the Credit Provider when due and no such payment shall be made to the Trustee.

(f) Credit. In the event that the Trustee is authorized and directed to draw moneys under the Letter of Credit in accordance with the provisions of the Indenture to the extent necessary to pay the principal of, premium, if any, and interest on the Bonds and the purchase price of Bonds if and when due, any moneys derived from a drawing under the Letter of Credit shall constitute a credit against the obligations of the Borrower to make corresponding payments on the Notes and under subsections (a) and (b) of this Section 5.1.

Section 5.2. Additional Payments. The Borrower agrees to pay the following within 30 days after receipt of a bill therefor:

(a) The reasonable fees and expenses of the Issuer, including attorneys’ fees and expenses, in connection with this Agreement and the Bonds, such fees and expenses to be paid directly to the Issuer or as otherwise directed in writing by the Issuer.

(b) (i) The reasonable fees and expenses of the Trustee, the Tender Agent and all other fiduciaries and agents serving under the Indenture (including any expenses in connection with any redemption of the Bonds), and (ii) all reasonable fees and expenses, including attorneys’ fees, of the Trustee for any extraordinary services rendered by it under the Indenture. All such fees and expenses are to be paid directly to the Trustee or other fiduciary or agent for its own account as and when such fees and expenses become due and payable.

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(c) The fees and expenses of the Remarketing Agent in accordance with the terms of the Remarketing Agreement.

(d) All other reasonable fees and expenses incurred in connection with the issuance of the Bonds.

Section 5.3. Prepayments. The Borrower may (and during the term of the Letter of Credit, only with the prior written consent of the Credit Provider) prepay to the Trustee all or any part of the amounts payable under Section 5.1 at the times and subject to the conditions that Bonds are subject to redemption as described in the Bonds and the Indenture. A prepayment shall not relieve the Borrower of its obligations under this Agreement until all the Bonds have been paid or provision for the payment of all the Bonds has been made in accordance with the Indenture. In the event of a mandatory redemption of the Bonds, the Borrower agrees to prepay, or cause to be prepaid, all amounts necessary for such redemption.

Section 5.4. Obligations of Borrower Unconditional. The obligations of the Borrower to make the payments required by Sections 5.1 and 5.3 and to perform its other agreements contained in this Agreement and the Notes shall be absolute and unconditional. Until the principal of and interest on the Bonds shall have been fully paid or provision for the payment of the Bonds made in accordance with the Indenture, the Borrower (a) will not suspend or discontinue any payments provided for in Section 5.1 hereof, (b) will perform all its other agreements in this Agreement and the Notes and (c) will not terminate this Agreement for any cause including any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Project, commercial frustration of purpose, any change in the laws of the United States or of the State or any political subdivision of either or any failure of the Issuer to perform any of its agreements, whether express or implied, or any duty, liability or obligation arising from or connected with this Agreement or the Notes.

Section 5.5. Letter of Credit. The Borrower shall provide for the delivery of a Letter of Credit meeting the requirements of Section 401(a) of the Indenture to the Trustee simultaneously with the original issuance and delivery of the Bonds. The Borrower may provide for the delivery of an Alternate Credit Facility in substitution or replacement for the then current Letter of Credit but only in accordance with Section 401 of the Indenture. The Borrower agrees that, after the issuance of the Bonds, it will not at any time pledge, or grant a lien on or security interest in, any property as security for its reimbursement obligations under the Reimbursement Agreement to the Credit Provider or the issuer or provider of the Letter of Credit unless the Borrower has furnished to the Trustee and the Issuer an opinion of Bond Counsel stating that such action will not adversely affect the exclusion of interest on any Series 2007A Bonds issued from gross income for Federal income tax purposes.

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ARTICLE VI.

SPECIAL COVENANTS AND AGREEMENTS

Section 6.1. Maintenance of Existence. Subject to additional conditions set forth in the Reimbursement Agreement, the Borrower agrees that during the term of this Agreement and so long as any Bond is outstanding, that it will maintain its existence as a limited liability company, will continue to be a limited liability company in good standing under the laws of the State, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another legal entity or permit one or more other legal entities to consolidate with or merge into it, or sell or otherwise transfer to another legal entity all or substantially all its assets as an entirety and dissolve, unless (a)(i) in the case of any merger or consolidation, the Borrower is the surviving entity and (ii) no event which constitutes, or which with the giving of notice or the lapse of time or both would constitute an Event of Default shall have occurred and be continuing immediately after such merger or consolidation, or (b)(i) the surviving, resulting or transferee legal entity is organized and existing under the laws of the United States, a state thereof or the District of Columbia, and (if not the Borrower) assumes in writing all the obligations of the Borrower under this Agreement, (ii) no event which constitutes, or which with the giving of notice or the lapse of time or both would constitute an Event of Default shall have occurred and be continuing immediately after such merger, consolidation or transfer, and (iii) the Borrower shall cause such other entity, if not an Iowa entity, to qualify to do business as a foreign entity in the State and to remain so qualified continuously during the term hereof.

Section 6.2. Reports. No later than ninety (90) days after written request by the Trustee, the Borrower shall provide copies of its financial statements and any and all records relating to the Project to the Trustee.

Section 6.3. Payment of Taxes. The Borrower will pay and discharge promptly all lawful taxes, assessments and other governmental charges or levies imposed upon the Project, or upon any part thereof, as well as all claims of any kind (including claims for labor, materials and supplies) which, if unpaid, might by law become a lien or charge upon the Project; provided that the Borrower shall not be required to pay any such tax, assessment, charge, levy or claim (i) if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings promptly initiated and diligently conducted, (ii) if the Borrower shall have set aside on its books reserves (segregated to the extent required by generally accepted accounting principles) with respect thereto deemed adequate by the Borrower; and (iii) if failure to make such payment will not impair the use of the Project by the Borrower.

Section 6.4. Arbitrage. The Borrower covenants with the Issuer and for and on behalf of the purchasers and owners of any Series 2007A Bonds issued from time to time outstanding that so long as any of the Series 2007A Bonds remain outstanding, moneys on deposit in any fund in connection with the Series 2007A Bonds, whether or not such moneys were derived from the proceeds of the sale of the Bonds or from any other sources, will not be used in a manner which will cause the Series 2007A Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code, and any lawful regulations promulgated thereunder, as the same exist on this date, or may from time to time hereafter be amended, supplemented or revised. The Borrower also covenants for the benefit of the Bondholders to comply with all of the provisions of the Tax Certificate. The Borrower reserves the right, however, to make any investment of such moneys

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permitted by State law, if, when and to the extent that said Section 148 or regulations promulgated thereunder shall be repealed or relaxed or shall be held void by final judgment of a court of competent jurisdiction, but only if any investment made by virtue of such repeal, relaxation or decision would not, in the written opinion of Bond Counsel, result in making the interest on the Series 2007A Bonds includable in the federal gross income of the owners of the Series 2007A Bonds.

Section 6.5. Borrower Obligation with Respect to Exclusion of Interest Paid on the Series 2007A Bonds. Promptly after the Borrower first becomes aware of a determination of taxability as provided in Section 601(c) of the Indenture with respect to any Series 2007A Bonds issued, the Borrower shall give written notice thereof to the Issuer, the Trustee, the Remarketing Agent and the Credit Provider.

This Section 6.5 shall survive any assignment or termination of this Agreement.

Section 6.6. Recording and Maintenance of Liens. The Borrower will, at its own expense, take all necessary action to maintain and preserve the liens and security interest of this Agreement and the Indenture so long as any principal installment of, premium, if any, or interest on the Bonds remains unpaid.

The Borrower will, forthwith after the execution and delivery of this Agreement, the Notes and Indenture, and thereafter from time to time, cause the Indenture (including any amendments thereof and supplements thereto), and any financing statements in respect thereof to be filed, registered and recorded in such manner and in such places as may be required by law in order to publish notice of and fully to perfect and protect the lien and security interest therein granted to the Trustee to the rights of the Issuer assigned under the Indenture, and from time to time will perform or cause to be performed any other act as provided by law and will execute or cause to be executed any and all continuation statements and further instruments necessary for such publication, perfection and protection. Except to the extent it is exempt therefrom, the Borrower will pay or cause to be paid all filing, registration and recording fees incident to such filing, registration and recording, and all expenses incident to the preparation, execution, filing and acknowledgement of such instruments of further assurance, and all federal or state fees and other similar fees, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of this Agreement, the Notes and Indenture and such instruments of further assurance.

The Issuer shall have no responsibility for the preparation, filing or recording of any instrument, document or financing statement or for the maintenance of any security interest intended to be perfected thereby. At the request of the Borrower, the Issuer will execute such instruments as may be reasonably necessary in connection with such filing or recording.

Section 6.7. Compliance with Laws. The Borrower shall, through the term of this Agreement and at no expense to the Issuer, promptly comply or cause compliance with all laws, ordinances, orders, rules, regulations and requirements of duly constituted public authorities which may be applicable to the Project or to the repair and alteration thereof, or to the use or manner of use of the Project. It shall not be a breach of this covenant, however, if the Borrower fails to comply with such laws, rules and regulations during any period in which it shall in good faith diligently contest the validity or applicability thereof and no proceeding shall have been

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commenced or unstayed binding order issued which has a material adverse effect on the operations (financial or otherwise), business or properties of the Borrower arising out of such contest.

Section 6.8. Continuing Disclosure. The Borrower hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Requirements (as defined in the Indenture). Notwithstanding any other provision of this Agreement, failure of the Borrower to comply with the Continuing Disclosure Requirements shall not be considered an Event of Default; however, any Bondholder or the Trustee may (and, at the request of any underwriter of the Bonds required to comply with Securities and Exchange Commission Rule 15c2-12(b)(5) or the Holders of at least 25% aggregate principal amount in Outstanding Bonds, the Trustee shall, to the extent indemnified to its satisfaction) take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the Borrower to comply with its obligations under this Section 6.8.

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ARTICLE VII.

NO RECOURSE TO ISSUER; INDEMNIFICATION

Section 7.1. No Recourse to Issuer. The Bonds constitute special obligations of the Issuer, payable solely from the revenues pledged to the payment thereof pursuant to this Agreement and the Indenture, and do not now and shall never constitute an indebtedness or a loan of the credit of the Issuer, the State of Iowa or any political subdivision thereof within the meaning of any constitutional or statutory provision whatsoever. The Issuer has no taxing power. Neither the Issuer, nor any commissioner, member, director, officer, employee or agent of the Issuer nor any person executing the Bonds shall be liable personally for the Bonds or be subject to any personal liability or accountability by reason of the issuance of the Bonds. No recourse shall be had for the payment of the principal of, premium, if any, and interest on any of the Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in any of the Bond Documents against any past, present or future member, officer, agent or employee of the Issuer, or any incorporator, commissioner, member, officer, employee, director or trustee of any successor corporation, as such, either directly or through the Issuer or any successor corporation, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such incorporator, commissioner, member, officer, employee, director, agent or trustee as such is hereby expressly waived and released as a condition of and consideration for the execution of the Bond Documents to which the Issuer is a party and the issuance of the Bonds.

Section 7.2. Indemnification.

(a) The Borrower will, to the fullest extent permitted by law, protect, indemnify and save the Issuer, the State and the Trustee and their officers, agents, and employees and any person who controls the Issuer within the meaning of the Securities Act of 1933, harmless from and against all liabilities, losses, damages, costs, expenses (including attorneys’ fees and expenses of the Issuer), taxes, causes of action, suits, claims, demands and judgments in connection with the transaction contemplated by this Agreement or arising from or related to the issuance or sale of the Bonds, including but not limited to:

(i) any injury to or death of any person or damage to property in or upon the Project or growing out of or connected with the use, non-use, condition or occupancy of the Facilities or any part thereof, including any and all acts or operations relating to the acquisition or installation of property or improvements. The foregoing indemnification obligations shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for the Borrower, customers, suppliers or affiliated organizations under any Workers’ Compensation Acts, Disability Benefit Acts or other employee benefit acts;

(ii) violation of any agreement, provision or condition of this Agreement, the Bonds or the Indenture, except a violation by the party seeking indemnification;

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(iii) violation by the Borrower of any contract, agreement or restriction which shall have existed at the commencement of the Term of this Agreement or shall have been approved by the Borrower;

(iv) violation by the Borrower of any law, ordinance, court order or regulation affecting the Project or a part thereof or the ownership, occupancy or use thereof;

(v) any statement or information relating to the expenditure of the proceeds of the Bonds contained in the Tax Certificate or similar document furnished by the Borrower to the Issuer or Trustee which, at the time made, is misleading, untrue or incorrect in any material respect;

(vi) any untrue statement or alleged untrue statement of a material fact contained in any offering material relating to the sale of the Bonds (as from time to time amended or supplemented) or arising out of or based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or failure to properly register or otherwise qualify the sale of the Bonds or failure to comply with any licensing or other law or regulation which would affect the manner whereby or to whom the Bonds could be sold; and

(vii) with respect to the Trustee, from and against any and all costs, claims, liabilities, losses or damages whatsoever (including reasonable costs and fees of counsel, auditors or other experts), asserted or arising out of or in connection with the acceptance or administration of the trusts established pursuant to the Indenture, except costs, claims, liabilities, losses or damages resulting from the negligence or willful misconduct of the Trustee, including the reasonable costs and expenses (including the reasonable fees and expenses of its counsel) of defending itself against any such claim or liability in connection with its exercise or performance of any of its duties hereunder and of enforcing this indemnification provision.

(b) Promptly after receipt by the Issuer or any such other indemnified person, as the case may be, of notice of the commencement of any action with respect to which indemnity may be sought against the Borrower under this Section, such person will notify the Borrower in writing of the commencement thereof, and, subject to the provisions hereinafter stated, the Borrower shall assume the defense of such action (including the employment of counsel, who shall be counsel subject to the approval of the Issuer, which approval shall not be unreasonably withheld, and the payment of expenses). Insofar as such action shall relate to any alleged liability with respect to which indemnity may be sought against the Borrower, the Issuer or any such other indemnified person shall have the right to employ separate counsel of their own choice in any such action and to participate in the defense thereof, and the fees and expenses of such counsel shall be at the expense of the Borrower. The Borrower shall not be liable to indemnify any person for any settlement of any such action effected without its consent.

(c) Notwithstanding the fact that it is the intention of the parties hereto that the Issuer shall not incur any pecuniary liability by reason of the terms of this Agreement or the undertakings required of the Issuer hereunder, by reason of the issuance of the

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Bonds, by reason of the execution of the Indenture or by reason of the performance of any act requested of the Issuer by the Borrower, including all claims, liabilities or losses arising in connection with the violation of any statutes or regulation pertaining to the foregoing; nevertheless, if the Issuer should incur any such pecuniary liability, then in such event the Borrower shall indemnify and hold the Issuer harmless against all claims, demands or causes of action whatsoever, by or on behalf of any person, firm or corporation or other legal entity arising out of the same or out of any offering statement or lack of offering statement in connection with the sale or resale of the Bonds and all costs and expenses incurred in connection with any such claim or in connection with any action or proceeding brought thereon, and upon notice from the Issuer, the Borrower shall defend the Issuer in any such action or proceeding. All references to the Issuer in this Section 7.2 shall be deemed to include its commissioners, directors, members, officers, employees, and agents.

The obligations of the Borrower under this Section 7.2 shall survive any assignment or termination of this Agreement, the resignation or removal of the Trustee and the payment and discharge of the Bonds.

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ARTICLE VIII.

ASSIGNMENT

Section 8.1. Assignment by Borrower. This Agreement may not be assigned by the Borrower without consent of the Issuer and the Trustee, except that the Borrower may without any consent assign to any surviving, resulting or transferee entity its rights under this Agreement as provided by Section 6.1 of this Agreement.

Section 8.2. Assignment by Issuer. As security for the payment of the Bonds, the Issuer will assign and pledge to the Trustee all right, title and interest of the Issuer in and to this Agreement, including the right to receive payments hereunder (except the rights, including, without limitation, the right to receive payment of expenses, fees, indemnification and the rights to make determinations and receive notices, and as herein provided under Sections 5.2, 7.1, 7.2,9.3 and 10.7 hereof), and hereby directs the Borrower to make said payments directly to the Trustee. The Borrower hereby assents to such assignment and pledge and will make payments directly to the Trustee without defense or set-off by reason of any dispute between the Borrower and the Issuer or the Trustee, and hereby agrees that its obligation to make payments hereunder and to perform its other agreements contained herein are absolute and unconditional.

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ARTICLE IX.

DEFAULTS AND REMEDIES

Section 9.1. Events of Default. The occurrence and continuation of any one of the following shall constitute an Event of Default hereunder:

(a) failure by the Borrower to pay any amounts required to be paid as principal, premium, if any, or interest under this Agreement or the Notes, including, without limitations, Section 5.1(a) or Section 5.2(b) hereof, on the dates and in the manner specified therein or herein; or

(b) failure by the Borrower to observe or perform any material covenant, condition or agreement on its part to be observed or performed in this Agreement, other than as referred to in subsection (a) above, for a period of sixty (60) days after written notice, specifying such failure and requesting that it be remedied, is given to the Borrower by the Issuer, the Trustee or the Credit Provider, unless the Trustee and the Credit Provider shall agree in writing to an extension of such time prior to expiration; or

(c) the dissolution or liquidation of the Borrower or the filing by the Borrower of a voluntary, petition in bankruptcy, or failure of the Borrower to promptly lift any execution, garnishment or attachment of such consequence as wilt impair its ability to carry on its obligations hereunder, or an order for relief under Title 7, 11 or 13 of the United States Bankruptcy Code, as amended from time to time, is entered against the Borrower, or a petition or answer proposing the entry of an order for relief against the Borrower under Title 7, 11 or 13 of the United States Bankruptcy Code, as amended from time to time, or reorganization, arrangement or debt readjustment under any present or future federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged within sixty (60) days after the filing thereof, or the Borrower shall fail generally to pay its debts as they become due, or a custodian (including without limitation a receiver, trustee, assignee for the benefit of creditors or liquidator of the Borrower) shall be appointed for or take possession of all or a substantial part of its properties and shall not be discharged within sixty (60) days after such appointment or taking possession, or the Borrower shall consent to or acquiesce in such appointment or taking possession, or assignment by the Borrower for the benefit of its creditors, or the entry by the Borrower into an agreement of composition with its creditors, for its reorganization, arrangement or debt readjustment under any present or future federal bankruptcy act or any similar federal or state laws; provided, that the term “dissolution or liquidation of the Borrower,” as used in this subsection (c), shall not be construed to include the cessation of the limited liability company existence of the Borrower resulting either from a merger or consolidation of the Borrower into or with another domestic limited liability company or a dissolution or liquidation of the Borrower following a transfer of all or substantially all of its assets as an entirety, under the conditions permitting such actions contained in Section 6.1 hereof; or

(d) any warranty, representation or other statement made by or on behalf of the Borrower contained herein, or in any document or certificate furnished by the Borrower in compliance with or in reference hereto, is false or misleading in any material respect; or

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(e) an “Event of Default” shall occur and be continuing under the Indenture.

Section 9.2. Remedies on Default. Whenever any Event of Default shall have occurred and be continuing hereunder, the Issuer or the Trustee may take any one or more of the following remedial steps:

(a) The Issuer or the Trustee with the written consent of the Credit Provider (provided the Credit Provider is not in default of its obligation under the Letter of Credit) may exercise any right, power or remedy permitted to it by law as a holder of the Notes, and shall have in particular, without limiting the generality of the foregoing, the right to declare the entire principal and all unpaid interest accrued on the Notes to the date of such declaration and any premium the Borrower shall have become obligated to pay to be immediately due and payable, if concurrently with or prior to such notice the unpaid principal of and all unpaid accrued interest and premium on the Bonds have been declared to be due and payable under the Indenture, and upon such declaration the Notes and the unpaid accrued interest thereon and such premium shall thereupon become forthwith due and payable in an amount sufficient to pay the principal of, premium, if any, and interest on the Bonds under Section 802 of the Indenture, without presentment, demand or protest, all of which is hereby expressly waived. The Borrower shall forthwith pay to the Trustee the entire principal of, premium, if any, and interest accrued on the Notes.

(b) The Issuer or the Trustee, as applicable, shall waive, rescind and annul such declaration and the consequences thereof, when any declaration of acceleration on the Bonds has been waived, rescinded and annulled pursuant to and in accordance with Section 804 of the Indenture.

(c) The Issuer or the Trustee may take whatever action at law or in equity may appear necessary or desirable to collect the payments and other amounts then due and thereafter to become due or to enforce the performance and observance of any obligation, agreement or covenant of the Borrower under this Agreement.

In case the Issuer or the Trustee shall have proceeded to enforce its fights under this Agreement or the Notes, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Issuer or the Trustee, as the case may be, then and in every such case the Borrower, the Issuer and the Trustee shall be restored respectively to their several positions and rights hereunder and under the Notes, and all rights, remedies and powers of the Borrower, the Issuer and the Trustee shall continue as though no such proceeding had been taken, except as provided for in any court order.

In case there shall be pending proceedings for the bankruptcy of the Borrower under the federal bankruptcy laws or any other applicable law, or in case a receiver or trustee shall have been appointed for the property of the Borrower, or in the case of any other similar judicial proceedings relative to the Borrower, or to the property of the Borrower, the Trustee shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a

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claim or claims for the whole amount owing and unpaid pursuant to this Agreement and the Notes and, in ease of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee allowed in such judicial proceedings relative to the Borrower, its creditors or its property, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute the same after the deduction of charges and expenses; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized to make such payments to the Trustee, and to pay to the Trustee any amount due it for compensation and expenses, including reasonable attorneys’ fees incurred by it up to the date of such distribution.

Section 9.3. Agreement to Pay Attorneys’ Fees and Expenses. In the event the Issuer or the Trustee should employ attorneys or incur other expenses for the collection of the payments due under this Agreement or the Notes or the enforcement of the performance or observance of any obligation or agreement on the part of the Borrower contained herein, the Borrower agrees that it will on demand therefor pay to the Issuer or the Trustee the reasonable fees of such attorneys and such other expenses so incurred by the Issuer or the Trustee.

Section 9.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Issuer or the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement and the Indenture now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any fight or power and accruing upon any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such fight and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Issuer to exercise any remedy reserved to it in this Article IX, it shall not be necessary to give any notice other than such notice as may be herein expressly required. Such rights and remedies as are given the Issuer hereunder shall also extend to the Trustee, and the Trustee and the owners from time to time of the Bonds shall be deemed third party beneficiaries of all covenants and agreements contained herein.

Section 9.5. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by the Borrower and thereafter waived by the Issuer or the Trustee, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.

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ARTICLE X.

MISCELLANEOUS

Section 10.1. Notices. All notices or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed as provided in the Indenture.

Section 10.2. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Borrower and their respective successors and assigns, subject, however, to the limitations contained in Section 6.1.

This Agreement shall be in full force and effect from the date hereof, and shall continue in effect until the payment in full of all principal of, premium, if any, and interest on the Bonds, or provision for the payment thereof shall have been made pursuant to Article XII of the Indenture, all fees, charges and expenses of the Issuer, the Trustee, the Tender Agent, and the Remarketing Agent have been fully paid or provision made for such payment (the payment of which fees, charges, indemnities and expenses shall be evidenced by a written certification of the Borrower that it has fully paid all such fees, charges, indemnities and expenses) and all other amounts due hereunder have been duly paid or provision made for such payment. All representations, certifications and covenants by the Borrower as to the indemnification of various parties and the payment of fees and expenses of the Issuer as described in Section 7.2 hereof, and all matters affecting the tax-exempt status of the Series 2007A Bonds shall survive the termination of this Agreement.

Section 10.3. Severability. If any provision of this Agreement shall be determined to be unenforceable at any time, that shall not affect any other provision of this Agreement or the enforceability of that provision at any other time.

Section 10.4. Amendments. After the issuance of the Bonds, this Agreement may not be effectively amended or terminated without the written consent of the Trustee (and, if the Letter of Credit is in effect, the Credit Provider) and in accordance with the provisions of the Indenture.

Section 10.5. Right of Borrower to Perform Issuer’s Agreements. The Issuer irrevocably authorizes and empowers the Borrower to perform in the name and on behalf of the Issuer any agreement made by the Issuer in this Agreement or in the Indenture which the Issuer fails to perform in a timely fashion if the continuance of such failure could result in an Event of Default. This Section will not require the Borrower to perform any agreement of the Issuer.

Section 10.6. Expiration of Rights of Credit Provider. It is expressly understood that any and all provisions of this Agreement for notices or the furnishing of documents, information or reports to the Credit Provider and the necessity of obtaining the consent of the Credit Provider to any modifications, amendments or supplements to this Agreement or waivers of any of the provisions hereof shall cease and terminate and be of no further force and effect when (a) the Letter of Credit is not in effect and no amounts are due and payable by the Borrower to the Credit Provider under the Reimbursement Agreement, or (b) the Credit Provider is in default on any of its obligations to pay drawings under the Letter of Credit submitted in conformity with the terms of the Letter of Credit.

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Section 10.7. Limitation of Liability. No recourse shall be had for the payment of the principal of, premium, if any, and interest on the Bonds or for any claim based thereon or upon any obligation, covenant or agreement contained in this Agreement against any past, present or future commissioner, director, member, officer or employee of the Issuer, as such, either directly or through the Issuer or any successor corporation, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such incorporator, commissioner, director, member, officer, employee or trustee as such is hereby expressly waived and released as a condition of and consideration for the execution of this Agreement and the issuance of the Bonds.

It is understood and agreed by the Borrower and the Bondowners that no covenant, provision or agreement of the Issuer herein or in the Bonds or in any other document executed by the Issuer in connection with the issuance, sale and delivery of the Bonds, or any obligation herein or therein imposed upon the Issuer or breach thereof, shall give rise to a pecuniary liability of the Issuer or a charge against its general credit or general fund or shall obligate the Issuer financially in any way except with respect to the application of revenues under this Agreement, and the proceeds of the Bonds. No failure of the Issuer to comply with any term, condition, covenant or agreement therein shall subject the Issuer to liability for any claim for damages, costs or other financial or pecuniary charges except to the extent that the same can be paid or recovered from this Agreement or revenues therefrom or proceeds of the Bonds. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit or general funds of the Issuer. In making the agreements, provisions and covenants set forth herein, the Issuer has not obligated itself except with respect to this Agreement and the application of revenues hereunder as hereinabove provided. The Bonds constitute special obligations of the Issuer, payable solely from the revenues pledged to the payment thereof pursuant to this Agreement and the Indenture, and do not now and shall never constitute an indebtedness or a loan of the credit of the Issuer, the State of Iowa or any political subdivision thereof within the meaning of any constitutional or statutory provision whatsoever. The Issuer has no taxing power. It is further understood and agreed by the Borrower and the Holders that the Issuer shall incur no pecuniary liability hereunder and shall not be liable for any expenses related hereto. If, notwithstanding the provisions of this Section, the Issuer incurs any expense, or suffers any losses, claims or damages or incurs any liabilities, the Borrower will indemnify and hold harmless the Issuer from the same and will reimburse the Issuer for any legal or other expenses incurred by the Issuer in relation thereto, and this covenant to indemnify, hold harmless and reimburse the Issuer shall survive delivery of and payment for the Bonds.

Section 10.8. Indenture Provisions. The Indenture provisions concerning the Bonds and the other matters therein are an integral part of the terms and conditions of the loan made by the Issuer to the Borrower pursuant to this Agreement and the execution of this Agreement shall constitute conclusive evidence of approval of the Indenture by the Borrower to the extent it relates to the Borrower. Additionally, the Borrower agrees that, whenever the Indenture by its terms imposes a duty or obligation upon the Borrower, such duty or obligation shall be binding upon the Borrower to the same extent as if the Borrower were an express party to the Indenture, and the Borrower hereby agrees to carry out and perform all of its obligations under the Indenture as fully as if the Borrower were a party to the Indenture.

Section 10.9. Applicable Law. This Agreement is governed by the laws of the State of Iowa, without regard to the choice of taw rules of the State of Iowa. Venue for any action under

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this Agreement to which the Issuer is a party shall lie within the district courts of the State of Iowa, and the parties hereto consent to the jurisdiction and venue of any such court and hereby waive any argument that venue in such forums is not convenient.

Section 10.10. Captions; References to Sections. The captions in this Agreement are for convenience only and do not define or limit the scope or intent of any provisions or Sections of this Agreement. References to Articles and Sections are to the Articles and Sections of this Agreement, unless the context otherwise requires.

Section 10.11. Complete Agreement. This Agreement represents the entire agreement between the Issuer and the Borrower with respect to its subject matter.

Section 10.12. Termination. When no Bonds are Outstanding under the Indenture, the Borrower and the Issuer shall not have any further obligations under this Agreement; provided that the Borrower’s covenants in Sections 5.2, 6.4, 6.5, 7.2 and 9.3 and the provisions of Section 5.3 with respect to mandatory redemption of the Bonds shall survive so long as any Bond remains unpaid.

Section 10.13. Counterparts. This Agreement may be signed in several counterparts. Each will be an original, but all of them together constitute the same instrument.

Section 10.14. Non-Recourse. Notwithstanding anything to the contrary contained herein or elsewhere in the other documents executed by the Borrower in connection with the Bonds, it is understood and agreed that the Issuer wilt look solely to the Borrower for payment of the obligations hereunder and not to the members of the Borrower; provided, however:

(a) nothing in this Section shall be or be deemed to be a release or impairment of such obligations or preclude the Issuer from suing pursuant to this Agreement;

(b) this Section shall not release the members of the Borrower from liability to the Issuer for the application of any funds received by the members of the Borrower in violation of the covenants contained in this Agreement or in any other document executed in connection herewith;

(c) this Section shall not preclude the Issuer from securing a judgment from any party who subsequently assumes the payment of the obligations hereunder or as against any other person or persons or entity who may hereafter become liable for the payment of such obligations; and

(d) nothing contained herein is intended to relieve, release, discharge or affect in any way the personal liability of any third party to the Issuer, including any guarantors, for payment of the Borrower’s obligations or otherwise.

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IN WITNESS WHEREOF, the Issuer and the Borrower have caused this Agreement to be executed in their respective names, by their duly authorized officers for and on their behalf, as of the date first above written.

IOWA FINANCE AUTHORITY
By:	/s/ Bret L. Mills
Its Executive Director
WINDSOR ON THE RIVER, LLC, a Delaware limited liability company
By:	/s/ Christopher G. Zock
	Christopher G. Zock, its Manager

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EXHIBIT A

DESCRIPTION OF THE PROJECT

The Project consists of the refinancing of existing indebtedness relating to the acquisition and the financing of the rehabilitation of a multi-family housing facility to be known as Windsor on the River, consisting of approximately 424 units and functionally related and subordinate facilities at a site located at 2200 Buckingham Drive in Cedar Rapids, Linn County, Iowa.

A-1

EXHIBIT B

FORM OF COMPLETION CERTIFICATE

COMPLETION CERTIFICATE

TO:	The Bank of New York Trust Company, N.A., as Trustee
FROM:	, as Borrower Representative
RE:	Loan Agreement dated as of the 1st day of May, 2007, between Iowa Finance Authority (the “Issuer”) and Windsor on the River, LLC (the “Borrower”)

Capitalized terms used herein are defined in the Loan Agreement or the Indenture of Trust dated as of May 1, 2007 between the Issuer and The Bank of New York Trust Company, N.A., as trustee.

The undersigned does hereby certify as follows:

1. The rehabilitation of the Project have been substantially completed in accordance with the plans, specifications and work orders therefor as of                 ,          (the “Completion Date “), and all labor, services, materials and supplies used in connection therewith have been paid for other than costs and expenses for which payment has been withheld.

2. The Costs of the Project have been paid in full except for those not yet due and payable or for which payment has been withheld, which are described below and for which moneys for payment thereof are being held in the Project Fund.

Costs of the Project not yet due and payable or for which payment has been withheld:

DESCRIPTION	AMOUNT
	$
TOTAL	$

3. At least 95% of the costs previously disbursed and to be disbursed from the Project Fund are Qualified Costs of Construction, and all of such costs are costs permitted by the Act.

This certificate is given without prejudice to any rights against third parties which exist at the date hereof or which may subsequently come into being.

Executed this      day of             , 20    .

By
	Borrower Representative

B-1

EXHIBIT C

PROMISSORY NOTE (SERIES 2007A)

FOR VALUE RECEIVED, intending to be legally bound hereby, Windsor on the River, LLC (the “Borrower”), hereby promises to pay to The Bank of New York Trust Company, N.A., or its successors and assigns (the “Trustee”), in lawful money of the United States of America in federal or other immediately available funds, the principal amount of                      Million Dollars ($            ) due on May 1, 2042, and to pay interest from the date hereof on the unpaid principal balance hereof at such rates equal to the interest rates from time to time borne by the Series 2007A Bonds (as hereinafter defined), calculated during the Weekly Period (as defined in the Indenture hereinafter referred to) on the basis of a calendar year consisting of 365 or 366 days, as the case may be, and calculated on the actual number of days elapsed, and calculated during the Semi-Annual Period and the Multi-Annual Period (as each is defined in the Indenture hereinafter referred to) on the basis of a calendar year consisting of 360 days of twelve (12) thirty (30) day months, payable in lawful money of the United States of America in federal or other immediately available funds (i) during said Weekly Period on the first Business Day (as defined in the Indenture hereinafter referred to) of each calendar month, (ii) during said Semi-Annual Period the first Business Day following any Semi-Annual Period and (iii) during said Multi-Annual Period the first Business Day of every sixth calendar month in a Multi-Annual Period, commencing with the first Business Day of the seventh calendar month occurring within such Multi-Annual Period, and the first Business Day following such Multi-Annual Period, until said principal amount is paid.

This Promissory Note shall bear interest on any overdue installment of principal hereof, premium, if any, or interest hereon (to the extent legally enforceable) at a rate equal to the interest rate borne by this Promissory Note, from time to time, from the due date thereof until paid.

This Promissory Note is issued pursuant to the Loan Agreement dated as of May 1, 2007, by and between the Iowa Finance Authority (the “Issuer”) and the Borrower, and is issued in consideration of the loan made thereunder and to evidence the obligations of the Borrower set forth in Section 5.1(a) thereof. The Borrower covenants and agrees that the payments of principal hereof and premium, if any, and interest hereon will be sufficient to enable the Borrower to pay when due the principal of, premium, if any, and interest on the issued and outstanding amount of the Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A (the “Series 2007A Bonds”), issued pursuant to the Indenture of Trust dated as of May 1, 2007, by and between the Issuer and the Trustee.

Each payment of principal of, premium, if any, and interest on this Promissory Note shall at all times be sufficient to pay the total amount of principal of (whether at maturity or upon acceleration or prior redemption), premium, if any, and interest due on the Series 2007A Bonds on the same date. The total payments to be made by the Borrower hereunder shall be sufficient to pay when due the principal of (whether at maturity or upon acceleration or prior redemption), premium, if any, and interest on the Series 2007A Bonds; provided, that the Excess Amount (as hereinafter defined) held by the Trustee in the Bond Fund (as defined in the Agreement) on a payment date shall be credited against the payment due on such date; and provided further, that, subject to the provisions of the immediately following sentence, if at any time the amount held

C-1

by the Trustee in said Bond Fund should be sufficient (and remain sufficient) to pay at the times required the principal of, interest and premium, if any, on the Series 2007A Bonds then remaining unpaid, the Borrower shall not be obligated to make any further payments under the provisions of the preceding sentence. If on any day the Excess Amount held by the Trustee in said Bond Fund is insufficient to make the then required payments of principal of (whether at maturity or upon redemption prior to maturity or acceleration), interest and premium, if any, on the Series 2007A Bonds on such date, the Borrower shall forthwith pay such deficiency. The term “Excess Amount” as of any interest payment date shall mean the amount in said Bond Fund on such date in excess of the amount required for payment of the principal of the Series 2007A Bonds which theretofore has matured at maturity or on a date fixed for redemption and premium, if any, on such Series 2007A Bonds in all cases where Bonds have not been presented for payment and paid, or for the payment of interest which has theretofore come due in all cases where interest cheeks have not been presented for payment and paid.

This Promissory Note is entitled to the benefit and is subject to the conditions of the Agreement. The obligations of the Borrower to make the payments required hereunder shall be absolute and unconditional, without any defense or without right of set-off, counterclaim or recoupment by reason of any default by the Issuer under the Agreement or under any other agreement among the Borrower, the Issuer or the Trustee, or out of any indebtedness or liability at any time owing to the Borrower by the Issuer or the Trustee, or for any other reason.

This Promissory Note is subject to mandatory prepayment and optional prepayment as a whole or in part, as provided in the Agreement.

In certain events, on the conditions, in the manner and with the effect set out in the Agreement, the principal installments of this Promissory Note may be declared due and payable before the stated maturity thereof, together with accrued interest thereon.

Reference is hereby made to the Agreement for a complete statement of the terms and conditions under which the maturity of the principal installments of this Promissory Note may be accelerated and to the exculpatory provision of Section 10.14 of the Agreement which shall apply with equal force and effect to this Promissory Note.

C-2

IN WITNESS WHEREOF, the Borrower has executed and delivered this Promissory Note as of May     , 2007.

WINDSOR ON THE RIVER, LLC, a Delaware limited liability company
By:
	Christopher G. Zock, its Manager

C-3

EXHIBIT D

PROMISSORY NOTE (SERIES 2007B)

FOR VALUE RECEIVED, intending to be legally bound hereby, Windsor on the River, LLC (the “Borrower”), hereby promises to pay to The Bank of New York Trust Company, N.A or its successors and assigns (the “Trustee”), in lawful money of the United States of America in federal or other immediately available funds, the principal amount of                      Million Dollars ($                    ) due on May 1, 2042, and to pay interest from the date hereof on the unpaid principal balance hereof at such rates equal to the interest rates from time to time borne by the Series 2007B Bonds (as hereinafter defined), calculated during the Weekly Period (as defined in the Indenture hereinafter referred to) on the basis of a calendar year consisting of 365 or 366 days, as the case may be, and calculated on the actual number of days elapsed, and calculated during the Semi-Annual Period and the Multi-Annual Period (as each is defined in the Indenture hereinafter referred to) on the basis of a calendar year consisting of 360 days of twelve (12) thirty (30) day months, payable in lawful money of the United States of America in federal or other immediately available funds (i) during said Weekly Period on the first Business Day (as defined in the Indenture hereinafter referred to) of each calendar month, (ii) during said Semi-Annual Period the first Business Day following any Semi-Annual Period and (iii) during said Multi-Annual Period the first Business Day of every sixth calendar month in a Multi-Annual Period, commencing with the first Business Day of the seventh calendar month occurring within such Multi-Annual Period, and the first Business Day following such Multi-Annual Period, until said principal amount is paid.

This Promissory Note shall bear interest on any overdue installment of principal hereof, premium, if any, or interest hereon (to the extent legally enforceable) at a rate equal to the interest rate borne by this Promissory Note, from time to time, from the due date thereof until paid.

This Promissory Note is issued pursuant to the Loan Agreement dated as of May 1, 2007, by and between the Iowa Finance Authority (the “Issuer”) and the Borrower, and is issued in consideration of the loan made thereunder and to evidence the obligations of the Borrower set forth in Section 5.1(a) thereof. The Borrower covenants and agrees that the payments of principal hereof and premium, if any, and interest hereon will be sufficient to enable the Borrower to pay when due the principal of, premium, if any, and interest on the issued and outstanding amount of the Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007B (the “Series 2007B Bonds”), issued pursuant to the Indenture of Trust dated as of May 1, 2007, by and between the Issuer and the Trustee.

Each payment of principal of, premium, if any, and interest on this Promissory Note shall at all times be sufficient to pay the total amount of principal of (whether at maturity or upon acceleration or prior redemption), premium, if any, and interest due on the Series 2007B Bonds on the same date. The total payments to be made by the Borrower hereunder shall be sufficient to pay when due the principal of (whether at maturity or upon acceleration or prior redemption), premium, if any, and interest on the Series 2007B Bonds; provided, that the Excess Amount (as hereinafter defined) held by the Trustee in the Bond Fund (as defined in the Agreement) on a payment date shall be credited against the payment due on such date; and provided further, that, subject to the provisions of the immediately following sentence, if at any time the amount held

D-1

by the Trustee in said Bond Fund should be sufficient (and remain sufficient) to pay at the times required the principal of, interest and premium, if any, on the Series 2007B Bonds then remaining unpaid, the Borrower shall not be obligated to make any further payments under the provisions of the preceding sentence. If on any day the Excess Amount held by the Trustee in said Bond Fund is insufficient to make the then required payments of principal of (whether at maturity or upon redemption prior to maturity or acceleration), interest and premium, if any, on the Series 2007B Bonds on such date, the Borrower shall forthwith pay such deficiency. The term “Excess Amount” as of any interest payment date shall mean the amount in said Bond Fund on such date in excess of the amount required for payment of the principal of the Series 2007B Bonds which theretofore has matured at maturity or on a date fixed for redemption and premium, if any, on such Series 2007B Bonds in all cases where Bonds have not been presented for payment and paid, or for the payment of interest which has theretofore come due in all cases where interest checks have not been presented for payment and paid.

This Promissory Note is entitled to the benefit and is subject to the conditions of the Agreement. The obligations of the Borrower to make the payments required hereunder shall be absolute and unconditional, without any defense or without right of set-off, counterclaim or recoupment by reason of any default by the Issuer under the Agreement or under any other agreement among the Borrower, the Issuer or the Trustee, or out of any indebtedness or liability at any time owing to the Borrower by the Issuer or the Trustee, or for any other reason.

This Promissory Note is subject to mandatory prepayment and optional prepayment as a whole or in part, as provided in the Agreement.

In certain events, on the conditions, in the manner and with the effect set out in the Agreement, the principal installments of this Promissory Note may be declared due and payable before the stated maturity thereof, together with accrued interest thereon.

Reference is hereby made to the Agreement for a complete statement of the terms and conditions trader which the maturity of the principal installments of this Promissory Note may be accelerated and to the exculpatory provision of Section 10.14 of the Agreement which shall apply with equal force and effect to this Promissory Note.

D-2

IN WITNESS WHEREOF, the Borrower has executed and delivered this Promissory Note as of May     , 2007.

WINDSOR ON THE RIVER, LLC, a Delaware limited liability company
By:
	Christopher G. Zock, its Manager

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The right, title and interest of Iowa Finance Authority, in and to the amounts receivable hereunder (except for the Unassigned Rights) have been assigned and pledged to The Bank of New York Trust Company, N.A., as Trustee, pursuant to the Indenture of Trust dated as of May 1, 2007, from Iowa Finance Authority to said Trustee.

EX-10.4

Exhibit 10.4

PROMISSORY NOTE (SERIES 2007A)

FOR VALUE RECEIVED, intending to be legally bound hereby, Windsor on the River, LLC (the “Borrower”), hereby promises to pay to The Bank of New York Trust Company, N.A., or its successors and assigns (the “Trustee”), in lawful money of the United States of America in federal or other immediately available funds, the principal amount of Twenty Four Million Dollars ($24,000,000) due on May 1, 2042, and to pay interest from the date hereof on the unpaid principal balance hereof at such rates equal to the interest rates from time to time borne by the Series 2007A Bonds (as hereinafter defined), calculated during the Weekly Period (as defined in the Indenture hereinafter referred to) on the basis of a calendar year consisting of 365 or 366 days, as the case may be, and calculated on the actual number of days elapsed, and calculated during the Semi-Annual Period and the Multi-Annual Period (as each is defined in the Indenture hereinafter referred to) on the basis of a calendar year consisting of 360 days of twelve (12) thirty (30) day months, payable in lawful money of the United States of America in federal or other immediately available funds (i) during said Weekly Period on the first Business Day (as defined in the Indenture hereinafter referred to) of each calendar month, (ii) during said Semi-Annual Period the first Business Day following any Semi-Annual Period and (iii) during said Multi-Annual Period the first Business Day of every sixth calendar month in a Multi-Annual Period, commencing with the first Business Day of the seventh calendar month occurring within such Multi-Annual Period, and the first Business Day following such Multi-Annual Period, until said principal amount is paid.

This Promissory Note shall bear interest on any overdue installment of principal hereof, premium, if any, or interest hereon (to the extent legally enforceable at a rate equal to the interest rate borne by this Promissory Note, from time to time, from the due date thereof until paid.

This Promissory Note is issued pursuant to the Loan Agreement dated as of May 1, 2007, by and between the Iowa Finance Authority (the “Issuer”) and the Borrower, and is issued in consideration of the loan made thereunder and to evidence the obligations of the Borrower set forth in Section 5.1(a) thereof. The Borrower covenants and agrees that the payments of principal hereof and premium, if any, and interest hereon will be sufficient to enable the Borrower to pay when due the principal of, premium, if any, and interest on the issued and outstanding amount of the Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A (the “Series 2007A Bonds”), issued pursuant to the Indenture of Trust dated as of May 1, 2007, by and between the Issuer and the Trustee.

Each payment of principal of, premium, if any, and interest on this Promissory Note shall at all times be sufficient to pay the total amount of principal of (whether at maturity or upon acceleration or prior redemption), premium, if any, and interest due on the Series 2007A Bonds on the same date. The total payments to be made by the Borrower hereunder shall be sufficient to pay when due the principal of (whether at maturity or upon acceleration or prior redemption), premium, if any, and interest on the Series 2007A Bonds; provided, that the Excess Amount (as hereinafter defined) held by the Trustee in the Bond Fund (as defined in the Agreement) on a

payment date shall be credited against the payment due on such date; and provided further, that, subject to the provisions of the immediately following sentence, if at any time the amount held by the Trustee in said Bond Fund should be sufficient (and remain sufficient) to pay at the times required the principal of, interest and premium, if any, on the Series 2007A Bonds then remaining unpaid, the Borrower shall not be obligated to make any further payments under the provisions of the preceding sentence. If on any day the Excess Amount held by the Trustee in said Bond Fund is insufficient to make the then required payments of principals of (whether at maturity or upon redemption prior to maturity or acceleration), interest and premium, if any, on the Series 2007A Bonds on such date, the Borrower shall forthwith pay such deficiency. The term “Excess Amount” as of any interest payment date shall mean the amount in said Bond Fund on such date in excess of the amount required for payments of the principal of the Series 2007A Bonds which therefore has matured at maturity or on a date fixed for redemption and premium, If any, on such Series 2007A Bonds in all cases where Bonds have not been presented for payment and paid, or for the payment of interest which has therefore come due in all cases where interest checks have not been presented for payment and paid.

This Promissory Note is entitled to the benefit and is subject to the conditions of the Agreement. The obligations of the Borrower to make the payments required hereunder shall be absolute and unconditional, without any defense or without right of set-off, counterclaim or recoupment by reason of any default by the Issuer under the Agreement or under any other agreement among the Borrower, the Issuer or the Trustee, or out of any indebtedness or liability at any time owing to the Borrower by the Issuer or the Trustee, or for any other reason.

This Promissory Note is subject to mandatory prepayment and optional prepayment as a whole or in part, as provided in the Agreement.

In certain events, on the conditions, in the manner and with the effect set out in the Agreement, the principal installments of this Promissory Note may be declared due and payable before the stated maturity thereof, together with accrued interest thereon.

Reference is hereby made to the Agreement for a complete statement of the terms and conditions under which the maturity of the principal installments of this Promissory Note may be accelerated and to the exculpatory provision of Section 10.14 of the Agreement which shall apply with equal force and effect to this Promissory Note.

IN WITNESS WHEREOF, the Borrower has executed and delivered this Promissory Note as of February 1, 2008.

WINDSOR ON THE RIVER, LLC, a Delaware
limited liability company
By:	/s/ Christopher G. Zock
	Christopher G. Zock, its Manager

EX-10.5

EXHIBIT 10.5

REIMBURSEMENT AND CREDIT AGREEMENT

Dated as of January 26, 2012

between

SIR WINDSOR ON THE RIVER, LLC

and

PNC BANK, NATIONAL ASSOCIATION

TABLE OF CONTENTS

		Page
Recitals			1
ARTICLE I
DEFINITIONS
Section 1.01	Definitions		2
Section 1.02	Accounting Terms		11
Section 1.03	Rules of Construction; Time of Day		11
ARTICLE II
LETTER OF CREDIT AND REIMBURSEMENT
Section 2.01	Issuance of Letter of Credit		11
Section 2.02	Reimbursement and Other Payments		12
Section 2.03	Intentionally Omitted		17
Section 2.04	Obligations Absolute		17
Section 2.05	Indemnification		18
Section 2.06	Liability of Bank		18
Section 2.07	Accounts		19
ARTICLE III
[Intentionally Omitted]
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01	Initial Fees		21
Section 4.02	Documentation		21
Section 4.03	Additional Conditions Precedent		23
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01	Existence; Compliance with Law		23
Section 5.02	[Intentionally Omitted]		23
Section 5.03	Power; Authorization; Enforceable Obligations		23
Section 5.04	No Legal Bar		23
Section 5.05	No Material Litigation		24
Section 5.06	No Violations		24
Section 5.07	Ownership of Property		24
Section 5.08	Governmental Authorizations, Licenses, etc.		24
Section 5.09	Patents, Trademarks, etc.		24
Section 5.10	Single Purpose Entity		25

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Section 5.11	ERISA	25
Section 5.12	Other Material Contracts	25
Section 5.13	Investment Company Act	26
Section 5.14	Environmental Representations	26
Section 5.15	Insurance	26
Section 5.16	Taxes	26
Section 5.17	Solvency	26
Section 5.18	Disclosure	26
Section 5.19	Priority of Mortgage	26
Section 5.20	No Illegal Activity as Source of Funds	27
Section 5.21	Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws	27
ARTICLE VI
GENERAL COVENANTS
Section 6.01	Maintain Single Purpose Entity Status	27
Section 6.02	Compliance with Laws	29
Section 6.03	Maintenance of Governmental Authorizations, Filings, Etc.	29
Section 6.04	Maintenance of Property	29
Section 6.05	Compliance with Other Contracts	29
Section 6.06	Environmental Laws	30
Section 6.07	Inspection of Property; Books and Records; Discussions	30
Section 6.08	Reporting Requirements	30
Section 6.09	[Intentionally Omitted]	32
Section 6.10	Financial Covenant	32
Section 6.11	Limitation on Liens	32
Section 6.12	Payment of Indebtedness	32
Section 6.13	Limitation on Optional Payments; Conversions	33
Section 6.14	Notices	33
Section 6.15	Credit Documents	34
Section 6.16	Replacement of Remarketing Agent	34
Section 6.17	Alternate Credit Facility	34
Section 6.18	Updated Appraisals	35
Section 6.19	Leases	35
Section 6.20	Management Agreement	35
Section 6.21	Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws	35
Section 6.22	Dividends, Distributions and Redemptions	36
Section 6.23	Insurance	36
Section 6.24	Radon Remediation	39
Section 6.25	Immediate Repairs	39
Section 6.26	Further Assurances	39

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ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.01	Defaults	40
Section 7.02	Remedies	42
Section 7.03	Waivers; Consents	42
Section 7.04	No Waiver; Remedies Cumulative	42
Section 7.05	Set-Off	43
ARTICLE VIII
MISCELLANEOUS
Section 8.01	Notices	43
Section 8.02	Successors and Assigns	44
Section 8.03	Survival of Covenants	45
Section 8.04	Counterparts	45
Section 8.05	Costs, Expenses and Taxes	45
Section 8.06	Amendments	45
Section 8.07	Severability; Interest Limitation	45
Section 8.08	[Intentionally Omitted]	46
Section 8.09	Complete Agreement	46
Section 8.10	Consent to Jurisdiction; Venue; Waiver of Jury Trial	46
Section 8.11	Governing Law	46
Section 8.12	Headings	46
Section 8.13	Participations	47
EXHIBIT A	Form of Letter of Credit	A-1
EXHIBIT B	Description of the Property	B-1
EXHIBIT C	Environmental Representations Exceptions	C-1
EXHIBIT D	Form of Compliance Certificate	D-1
EXHIBIT E	Form of Notice of Intent to Borrow	E-1
EXHIBIT F	Property Inspection Report Requirements	F-1

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REIMBURSEMENT AND CREDIT AGREEMENT

THIS REIMBURSEMENT AND CREDIT AGREEMENT (this “Agreement”), made as of January 26, 2012 between SIR WINDSOR ON THE RIVER, LLC (the “Borrower”), a limited liability company organized and existing under the laws of the Delaware, and PNC BANK, NATIONAL ASSOCIATION (the “Bank”), a national banking association,

W I T N E S S E T H :

A. Iowa Finance Authority (the “Issuer”) has issued its Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project) Series 2007A in the original aggregate principal amount of $24,000,000 (the “Bonds”) under an Indenture of Trust dated as of May 1, 2007 (the “Indenture”) between the Issuer and The Bank of New York Mellon Trust Company, N.A., as successor Trustee (including any successor trustee, the “Trustee”). The aggregate outstanding principal amount of the Bonds on the date hereof is $23,500,000.

B. Pursuant to a Loan Agreement dated as of May 1, 2007 (the “Loan Agreement”) between the Issuer and the Borrower (as assignee of Windsor on the River, LLC), the proceeds of the Bonds were used to finance certain costs of a Project (as that term is defined in the Loan Agreement) undertaken by the Borrower. The Borrower is obligated to make loan payments to the Trustee in amounts and at the times corresponding to the debt service and other payments required in respect of the Bonds.

C. In order to enhance the marketability of the Bonds and thereby achieve interest cost savings and other savings to the Borrower, the Borrower has asked the Bank to issue its Irrevocable Letter of Credit (together with any substitute letter of credit issued pursuant to the terms hereof, the “Letter of Credit”) to the Trustee for the account of the Borrower authorizing the Trustee to make one or more draws on the Bank up to an aggregate of $23,789,727 (the “Stated Amount”) (as reduced and reinstated from time to time in accordance with the provisions of the Letter of Credit, the “Letter of Credit Amount”), of which initially (i) $23,500,000 shall be in respect of principal of the Bonds, and (ii) $289,727 shall be in respect of accrued interest on the Bonds. The purpose of the Letter of Credit is to provide funds for the payment of principal of and interest on the Bonds and purchase price of Bonds which have been tendered pursuant to the tender provisions thereof and of the Indenture to the extent remarketing proceeds or other funds are not available therefor in accordance with the provisions of the Indenture. The Letter of Credit is being issued in substitution for an existing letter of credit issued by Wells Fargo Bank, National Association (the “Existing Letter of Credit”).

D. The Bank is willing to issue the Letter of Credit upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and the undertakings herein set forth and intending to be legally bound, the Borrower and the Bank hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. The following terms shall have the meanings specified in this Article, unless the context otherwise requires:

“Affiliate” means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.

“Bank Bond” means the Bonds purchased or deemed to be purchased or otherwise acquired with the proceeds of any Demand under the Letter of Credit during any period such Bonds are held by or on behalf of the Bank.

“Base Rate” means, for any day, a fluctuating per annum rate of interest equal to the highest of (i) the Federal Funds Open Rate, plus 0.5%, and (ii) the Prime Rate, and (iii) the Daily LIBOR Rate, plus 100 basis points (1.0%). Any change in the Base Rate (or any component thereof) shall take effect at the opening of business on the day such change occurs.

“Beneficiary” means the Trustee.

“Bond Documents” shall have the meaning ascribed to such term in the Indenture.

“Borrower” shall have the meaning specified in the preamble to this Agreement.

“Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day on which banking institutions in Philadelphia, Pennsylvania or in any other city where the corporate trust office of the Trustee responsible for the administration of the Indenture or the office of the Bank at which drafts are to be presented under the Letter of Credit is located are required or authorized by law (including executive order) to close or on which either such office is closed for a reason not related to financial condition, or (iii) a day on which the New York Stock Exchange is closed.

“Capital Expenditure” means the purchase or lease of any assets which if purchased would constitute fixed assets or which if leased such lease would constitute a Capital Lease.

“Capital Lease” means, at any time, a lease with respect to which the lessee is required to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder, including any amendments and successor provisions thereto.

“Commonly Controlled Entity” means an entity, whether or not incorporated, which is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes the Borrower and which is treated as a single employer under Section 414 of the Code.

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“Compliance Certificate” shall have the meaning ascribed to such term in Section 6.11(d).

“Contamination” means the uncontained presence of Hazardous Substances at the site of the Facility, or arising from activities at the site of the Facility, which may require remediation under any applicable law.

“Credit Documents” means this Agreement, the Letter of Credit, the Mortgage, the Security Agreement, the Repayment Guaranty, the Indemnity Agreement, the Hedging Agreements and the Bond Documents.

“Daily LIBOR Rate” means, for any day, the rate per annum determined by the Bank by dividing (i) the Published Rate by (ii) a number equal to 1.00 minus the LIBOR Reserve Percentage on such day.

“Date of Issuance” shall have the meaning ascribed to such term in Section 2.01.

“Debt Service Coverage Ratio” means, for any specified period, the ratio of (i) Net Operating Income to (ii) Debt Service.

“Debt Service” means, for any period, the greater of (i) the amount of principal and interest on the Bonds actually paid during such period, and (ii) the sum of all principal and interest payments that would be payable over such period with respect to the Bonds assuming mortgage-style amortization of a loan in the aggregate principal amount equal to the outstanding principal amount of the Bonds over 30 years at a rate equal to the higher of: (x) 2.00% over the yield to maturity of the most recent 10-year Treasury Note and (y) 6.00%.

“Default” means an event which with the passage of time or giving of notice or both would constitute an Event of Default.

“Default Rate” means a rate per annum equal to the Base Rate plus three percent (3.00%).

“Demand” means any sight draft, electronic or telegraphic transmission or other written demand drawn or made, or purported to be drawn or made, under or in connection with the Letter of Credit.

“Environmental Laws” means all environmental statues, ordinances, regulations, permits, orders and requirements of common law concerning (i) activities at the Facility, (ii) repairs or construction of any improvements at the Facility, (iii) handling of any materials at the Facility, (iv) discharges to the air, soil, surface water or ground water from the Facility, and (v) storage, treatment or disposal of any waste at or connected with any activity at the Facility.

“Equity Investment” means the investment of cash and/or cash equivalents by Guarantor in the Borrower in an aggregate amount of not less than $9,500,000.

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Event of Default” shall have the meaning ascribed to such term in Section 8.01.

“Facility” means the 442 unit residential apartment complex known as Windsor on the River located in Cedar Rapids, Iowa and operated on behalf of the Borrower by the Manager pursuant to the terms of the Management Agreement.

“Facility Fee” shall have the meaning ascribed to such term in Section 2.02(f)(ii).

“Federal Funds Open Rate” means, for any day, the rate per annum (based on a year of 360 days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate), or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by the Bank (for purposes of this definition, an “Alternate Source”) (or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on any Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, a comparable replacement rate determined by the Bank at such time (which determination shall be conclusive absent manifest error); provided however, that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding Business Day. If and when the Federal Funds Open Rate changes, the rate of interest with respect to any advance to which the Federal Funds Open Rate applies will change automatically without notice to the Borrower, effective on the date of any such change.

“Fiscal Year” means the annual accounting year of the Borrower, which currently begins on January 1 in each calendar year.

“GAAP” means generally accepted accounting principles consistently applied.

“Governmental Authority” means any nation or government, state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Gross Rental Income” means the rental payments actually received with respect to the Facility for the twelve (12) month period prior to the date of determination from tenants in occupancy under leases that are not in default.

“Guarantor” means Steadfast Income REIT, Inc., a Maryland corporation, and its successors and assigns.

“Guaranty” means, as to any Person, any obligation of such Person guaranteeing in any manner, whether directly or indirectly, any Indebtedness of any other Person.

“Hazardous Substances” means (a) any “hazardous substance” as defined in or pursuant to the federal Comprehensive Environmental Response, Compensation and Liability

4

Act (42 U.S.C. § 9601(14)), as amended from time to time, and regulations promulgated thereunder; (b) any “regulated substance” within the meaning of Subtitle I of the federal Resource Conservation Recovery Act (42 U.S.C. § 6991(2)), as amended from time to time, and regulations promulgated thereunder; (c) any “contaminants”, “hazardous substances”, “hazardous wastes”, “hazardous materials”, “medical wastes” or other substances as defined in or prohibited by or regulated pursuant to any federal, state or local law relating to environmental matters, as amended from time to time, and regulations promulgated thereunder; (d) any substance the presence of which on the applicable property is prohibited by law similar to those set forth in this definition; and (e) any other substance which by law requires special handling in its collection, storage, treatment or disposal.

“Hedge Agreement” means any agreement, device or arrangement providing for payments which are related to fluctuations of interest rates, exchange rates, forward rates, or equity prices, including, but not limited to, dollar-denominated or cross-currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, and any agreement pertaining to equity derivative transactions (e.g., equity or equity index swaps, options, caps, floors, collars and forwards), including without limitation any ISDA Master Agreement between Borrower and Bank or any Affiliate of the Bank, and any schedules, confirmations and documents and other confirming evidence between the parties confirming transactions thereunder, all whether now existing or hereafter arising, and in each case as amended, modified or supplemented from time to time.

“Hedging Obligations” means all obligations of Borrower to the Bank or any Affiliate of the Bank, whether absolute, contingent or otherwise and howsoever and whensoever (whether now or hereafter) created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under or in connection with (i) any and all Hedge Agreements, and (ii) any and all cancellations, buy-backs, reversals, terminations or assignments of any Hedge Agreement.

“Indebtedness” means, without duplication, as to any Person, (a) indebtedness created, issued or incurred by such Person for borrowed money (whether by loan or the issuance or sale of debt securities) whether or not recourse is limited to specific assets of such Person; (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable arising in the ordinary course of business so long as such trade accounts payable are not for borrowed money and are paid within 60 days of the date the respective goods are delivered or the respective services are rendered (except for any such trade account payable being contested in good faith); (c) indebtedness of another secured by a lien of such property of such Person, whether or not the indebtedness so secured has been assumed by such Person; (d) reimbursement obligations of such Person in respect of letters of credit, acceptances or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease obligations of such Person as determined in accordance with GAAP; (f) Guaranties by such Person of any Indebtedness of another Person; (g) net liabilities of such Person under interest rate cap agreements, interest rate swap agreements, foreign currency exchange agreements, netting agreements and other hedging agreements or arrangements (calculated on a basis satisfactory to the Bank and in accordance with accepted practice); (h) obligations for unfunded pension liabilities; and (i) accrued reserves for insurance (including self insurance) and other liabilities.

5

“Indemnity Agreement” means the Hazardous Materials Indemnity Agreement, dated as of January 26, 2012, by and between the Borrower and the Bank, as the same may be amended or modified from time to time.

“Insolvency” means, with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent” means pertaining to a condition of Insolvency.

“Interest Component” shall have the meaning assigned to such term in the Letter of Credit.

“Interest Payment Date” means the first Business Day of each month.

“Leases” shall have the meaning assigned to such term in the Mortgage.

“Letter of Credit” shall have the meaning specified in the recitals to this Agreement.

“Letter of Credit Amount” shall have the meaning assigned to such term in the Letter of Credit.

“Letter of Credit Fee Rate” means (i) for the period commencing on the Date of Issuance and ending on the day immediately preceding the first anniversary of the Date of Issuance, two hundred (200) basis points (2.00%) per annum, (ii) for the period commencing on the first anniversary of the Date of Issuance and ending on the day immediately preceding the third anniversary of the Date of Issuance, two hundred twenty five (225) basis points (2.25%) per annum, and (iii) for the period commencing on the third anniversary of the Date of Issuance and thereafter, two hundred fifty (250) basis points (2.50%) per annum.

“LIBOR Reserve Percentage” shall mean as of any day the maximum percentage in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities”).

“Lien” means any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on statute or contract, and including but not limited to the security interest lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes, and the Borrower shall be deemed to be the owner of any property which it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the property has been retained by or vested in some other Person for security purposes.

6

“Management Agreement” shall mean the management agreement from time to time existing between the Manager and the Borrower with respect to the management and operation of the Property.

“Manager” means, initially, Steadfast Management Company, Inc., a California corporation, and thereafter any other management services firm which is engaged by the Borrower to provide management services at the Facility and is approved in writing by the Bank.

“Material Adverse Effect” shall mean a material adverse effect on (a) the validity or enforceability of this Agreement or any Credit Document; (b) the business, properties, assets, financial condition, results of operations or prospects of the Borrower, (c) the ability of the Borrower to duly and punctually pay or perform its Indebtedness; or (d) the ability of the Bank, to the extent permitted, to enforce its legal remedies pursuant to this Agreement or any Credit Document.

“Material Contract” means each indenture, mortgage, agreement or other instrument or contract (written or oral) to which the Borrower is a party or by which any of its assets are bound (including, without limitation, any employment or executive compensation agreement, collective bargaining agreement, agreement relating to an Indebtedness, agreement for the construction, acquisition or disposition of real or personal property, agreement for the purchasing or furnishing of services, operating lease, joint venture agreement, agreement relating to the acquisition or disposition of an Affiliate or agreement of merger or consolidation) which (i) evidences, secures or governs any outstanding Indebtedness of the Borrower of $500,000.00 or more, (ii) is an operating lease (not evidencing the acquisition of a capital asset under GAAP) under which the Borrower is a lessee providing for aggregate annual rentals or similar payments of $100,000.00 or more, or (iii) if canceled, breached or not renewed by any party thereto, would have a Material Adverse Effect.

“Mortgage” means the Mortgage with Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of January 26, 2012 made by the Borrower in favor of the Bank, as the same may be amended or modified from time to time.

“Multiemployer Plan” means a Plan which is a multiemployer plan as defined in Section 4001(a) (3) of ERISA.

“Net Operating Income” means: the sum of (i) Net Rental Income minus the sum of (w) if the actual vacancy rate at the Facility is less than five percent (5%), an adjustment for vacancy losses equal to the Gross Rental Income multiplied by the difference between (A) five percent (5%) and (B) the actual vacancy rate for the Facility plus (x) the actual Operating Expenses for the twelve (12) month period prior to the date of determination plus (y) an amount for capital reserves equal to $400 per unit at the Facility plus (z) an amount equal to the greater of (A) the management fees paid to the Manager under the Management Agreement for the twelve (12) month period prior to the date of determination and (B) three percent (3.0%) of Gross Rental Income plus (ii) Other Income.

“Net Rental Income” means Gross Rental Income plus rental income from tenants in occupancy whose actual rent payments are scheduled to commence within the thirty (30) day

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period following the date of determination minus rent payments from tenant in occupancy whose actual rent payments are scheduled to terminate within the thirty (30) day period following the date of determination.

“OFAC List” means the list of specially designated nationals and blocked persons subject to financial sanctions that is maintained by the U.S. Treasury Department, Office of Foreign Assets Control and any other similar list maintained by the U.S. Treasury Department, Office of Foreign Assets Control pursuant to any Requirements of Law, including, without limitation, trade embargo, economic sanctions, or other prohibitions imposed by Executive Order of the President of the United States.

“Operating Expenses” means all reasonable operating expenses of the Facility and improvements, including, without limitation, those for maintenance, repairs, annual taxes, bond assessments, ground lease payments, insurance, utilities and other annual expenses (but not tenant retrofit and lease commission costs) and reserves that are customary and standard for properties similar to the Facility. Operating Expenses for this purpose shall not include any interest or principal payments with respect to the Bonds or otherwise under this Agreement or any allowance for depreciation.

“Other Income” means recurring income other than Gross Rental Income received from the Facility for the twelve (12) month period prior to the date of determination, if any.

“Participating Bank” shall have the meaning ascribed to such term in Section 8.13.

“Participation Agreement” shall have the meaning ascribed to such term in Section 8.13.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Person” means any individual, for-profit or not-for-profit corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Permitted Liens” means the following:

(a) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Borrower in conformity with GAAP;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days, which are being contested in good faith by appropriate proceedings, or which are bonded or secured against in an amount satisfactory to the Bank in its sole and absolute discretion;

(c) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

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(d) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Borrower;

(f) Liens created pursuant to the Credit Documents (not securing greater Indebtedness than exists on the Date of Issuance);

(g) Liens permitted under the Indenture;

(h) Liens appearing on the Title Policy; and

(i) Such other Liens and other encumbrances as are approved in writing by the Bank.

“Plan” at a particular time, any employee benefit plan which is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate” means the rate of interest publicly announced by the Bank from time to time as the prime rate of the Bank effective in Pittsburgh, Pennsylvania, adjusted as of the date of an announcement of any change in such prime rate. The prime rate is determined from time to time by the Bank as a means of pricing some loans to its borrowers and neither is tied to any external rate of interest or index, nor necessarily reflects the lowest rate of interest actually charged by the Bank to any particular class or category of customers.

“Principal Component” shall have the meaning assigned to such term in the Letter of Credit.

“Property” means the real properly owned by the Borrower and described in Exhibit B attached hereto.

“Published Rate” means the rate of interest published each Business Day in The Wall Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a one month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the rate at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market for a one month period as published in another publication selected by the Bank).

“Reimbursement Obligations” shall have the meaning ascribed to such term in Section 2.02(a)(1).

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“Remarketing Agent” means Stern Brothers & Co., or any successor Remarketing Agent appointed in accordance with Section 909 of the Indenture.

“Reorganization” means, with respect to any Multiemployer Plan, the condition that such Plan is in reorganization within the meaning of Section 4241 of ERISA.

“Repayment Guaranty” means the Repayment Guaranty, dated as of January 26, 2012, made by the Guarantor in favor of the Bank, as the same may be amended or modified from time to time.

“Reportable Event” means any of the events set forth in Section 4043(b) of ERISA, except to the extent that notice thereof has been waived by the PBGC.

“Requirement of Law” means, as to any Person, the articles of incorporation, bylaws, or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, including without limitation any such law, rule or regulation relating to licensure, health care, occupational safety and health or employment or labor practices, or applicable judgment, order or decree, in each case binding upon such person or any of its property or to which such person or any of its property is subject.

“Security Agreement” means the Amended and Restated Pledge and Security Agreement, dated as of January 26, 2012, by and among the Borrower, the Bank and the Trustee, as the same may be amended or modified from time to time.

“Single Employer Plan” means any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

“Single Purpose Entity” means a Person which complies with the requirements of Section 6.1.

“Solvent” means, with respect to the Borrower on a particular date, that on such date (i) the fair value of the Property of the Borrower is greater than the total amount of the liabilities, including, without limitation, contingent liabilities, of the Borrower, (ii) the present fair salable value of the assets of the Borrower is not less than the amount that will be required to pay the probable liability of the Borrower on its debts as they become absolute and matured, (iii) the Borrower is able to realize upon its assets and pay other commitments as they mature in the normal course of business, (iv) the Borrower does not intend to, and does not believe that it will, incur debts or liabilities beyond the Borrower’s ability to pay as such debts and liabilities mature, and (v) the Borrower is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which the Borrower’s property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which the Borrower is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represent the amount that can reasonably be expected to become an actual or matured liability.

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“Stated Expiration Date” shall have the meaning ascribed to such term in the Letter of Credit.

“Steadfast Operating Partnership” means Steadfast Income REIT Operating Partnership, L.P., a Delaware limited partnership.

“Tender Drawing” means any draw upon the Letter of Credit pursuant to a Demand accompanied by a certificate in the form of Annex C to the Letter of Credit for the purchase price of the Bonds which are tendered for repurchase pursuant to Articles II or V of the Indenture.

“Tender Drawing Date” shall have the meaning ascribed to such term in Section 2.02(b)(2).

“Tender Drawing Rate” means the Prime Rate plus two percent (2%).

“Tender Reimbursement Obligation” means any obligation of the Borrower to the Bank resulting from a Tender Drawing.

“Title Company” means First American Title Insurance Company.

“Title Policy” means the Extended Coverage ALTA Lender’s Policy of Title Insurance as issued by the Title Company with respect to the Mortgage.

Section 1.02 Accounting Terms. Each accounting term not defined herein and each accounting term partly defined herein, to the extent not defined herein, shall have the meaning given it under GAAP.

Section 1.03 Rules of Construction; Time of Day. In this Agreement, unless otherwise indicated, (i) defined terms may be used in the singular or the plural and the use of any gender includes all genders, (ii) the words “hereof”, “herein”, “hereto”, “hereby” and “hereunder” refer to this entire Agreement, (iii) the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation,” and (iii) all references to particular Articles, Sections or Exhibits are references to the Articles, Sections or Exhibits of this Agreement. References to any time of the day in this Agreement shall refer to Eastern standard time or Eastern daylight saving time, as in effect in Pittsburgh, Pennsylvania on such day.

ARTICLE II

LETTER OF CREDIT AND REIMBURSEMENT

Section 2.01 Issuance of Letter of Credit. The Borrower hereby requests the Bank to issue the Letter of Credit to the Trustee. Subject to the conditions precedent hereinafter set forth, the Bank will issue to the Trustee pursuant to the request of the Borrower, on the date of execution and delivery of this Agreement (the “Date of Issuance”), the Letter of Credit in the Letter of Credit Amount and substantially in the form attached hereto as Exhibit A. The Letter of Credit shall expire at 5:00 p.m. on January 25, 2017, or, if such day is not a Business Day, on

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the next succeeding Business Day, unless the Bank, at its option, upon written request of the Borrower, by one or more amendments delivered to the Trustee, extends the Letter of Credit for an additional period, in which case the Letter of Credit shall expire as set forth in such amendments, it being understood that the Bank shall have no obligation to grant any such extensions. Without limiting the foregoing, the Bank agrees that it will, within forty five (45) days following the Borrower’s request made prior to each anniversary of the date of issuance of the Letter of Credit, notify the Borrower whether or not it agrees to extend the expiration date of the Letter of Credit for an additional period. Any such extension shall be subject to the mutual agreement of the Borrower and the Bank as to any fees to be applicable to the period of extension and shall be evidenced by appropriate amendments to the Letter of Credit and this Agreement. The Letter of Credit is subject to prior automatic termination as provided therein.

Section 2.02 Reimbursement and Other Payments.

(a) Certain Reimbursement Obligations. Except as provided in Section 2.02(b)(3), the Borrower agrees to pay to Bank (i) on the day that the Bank pays a Demand made by the Trustee under the Letter of Credit, all amounts paid by the Bank pursuant to the Letter of Credit in respect of such Demand; and (ii) interest on any and all amounts unpaid by the Borrower when due under this Agreement from the date such amounts become payable until payment in full (collectively, the “Reimbursement Obligations”). Except as provided in Section 2.02(b)(3) hereof, interest shall accrue on unpaid Reimbursement Obligations at a rate per annum equal to the Default Rate.

(b) Tender Reimbursement Obligations.

(1) Each Tender Drawing paid by the Bank under the Letter of Credit shall constitute a Tender Reimbursement Obligation which obligation shall be due and payable by the Borrower as set forth below. The proceeds of Tender Drawings shall be used by the Trustee only for the purpose of purchasing Bonds tendered or deemed tendered for purchase pursuant to Articles II and V of the Indenture.

(2) Upon receiving, or receiving notification of, any Tender Drawing, the Bank shall notify the Borrower of such Tender Drawing and the amount of the Tender Drawing. The amount of any Tender Drawing shall be due and payable within five (5) days of the date the Tender Drawing is paid by the Bank (the “Tender Drawing Date”), unless within said five (5) day period the Borrower shall execute and deliver to the Bank a Notice of Intent to Borrow in the form attached hereto as Exhibit E. Interest shall accrue at the Default Rate on all Tender Drawing amounts from the Tender Drawing Date to the date such Tender Drawing is reimbursed in full, unless a Notice of Intent to Borrow with respect to that Tender Drawing is returned within five (5) days of the Tender Drawing Date, In which case interest shall accrue from the Tender Drawing Date at the Tender Drawing Rate; provided, however, that the Borrower shall have the option to reimburse a portion of the Tender Drawing amount, in which case the Borrower shall, within the applicable five (5) day period, pay to the Bank the amount of the Tender Drawing to be reimbursed, together with any accrued interest on said amount calculated from the Tender Drawing Date at the Tender Drawing Rate, and deliver the Notice of Intent to Borrow to the Bank specifying the amount of the Tender Drawing which is not so reimbursed.

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(3) Borrower agrees to pay to Bank the amount of any Tender Drawing with respect to which Borrower has executed and returned a Notice of Intent to Borrow in accordance with the preceding subsection (2) on the earliest of (a) the date on which the Bonds (or portion thereof) purchased with the proceeds of such Tender Drawing are redeemed or canceled pursuant to the Indenture, (b) the date on which such Bonds (or portion thereof) are remarketed pursuant to the Indenture, (c) the date on which the Letter of Credit is replaced by an Alternate Letter of Credit (as defined in the Indenture), (d) the date which is sixty (60) days after the applicable Tender Drawing Date, (unless such date is extended in writing at the sole discretion of Bank) and (v) the expiration date of the Letter of Credit. The unreimbursed amount of any such Tender Drawing shall bear interest at the Tender Drawing Rate from the Tender Drawing Date of such Tender Drawing until the date that payment of the principal amount of the Tender Drawing becomes due hereunder and at the Default Rate thereafter. Interest due on such amounts shall be paid to Bank on the first day of each month which first day occurs at least ten (10) calendar days after the Tender Drawing Date, and on the date that reimbursement of the principal amount of such Tender Reimbursement Obligation is due and payable. Borrower shall submit to Bank together with every payment of Tender Reimbursement Obligations and interest due thereon under this Section 2.02 a statement specifying the amounts paid, the principal and interest portions of such payments, and the basis upon which Borrower calculated such amounts.

(4) Borrower may, upon at least one (1) Business Day’s notice to Bank, prepay the outstanding amount of any Tender Reimbursement Obligation in whole or in part (but not in sums less than $10,000 per prepayment) together with accrued interest at the Tender Drawing Rate from the Tender Drawing Date related to such Tender Reimbursement Obligation to the date of such prepayment on the amount prepaid; provided, however, that prepayments shall be credited first to interest due and owing on any Reimbursement Obligations outstanding hereunder other than Tender Reimbursement Obligations, then to interest due and owing on any Tender Reimbursement Obligations, and finally to principal due and owing on any Tender Reimbursement Obligations, applied in the order in which Demands connected therewith were paid by the Bank; provided, further, that the proceeds paid to Bank from any redemption of Bank Bonds pursuant to the Indenture or from any remarketing of Bank Bonds pursuant to Article V of the Indenture will be credited toward the Tender Reimbursement Obligations of Borrower, applied in the order in which Drawings connected therewith were paid by Bank;

(5) All proceeds of the sale by the Remarketing Agent (as provided in Article V of the Indenture) of Bank Bonds, shall be remitted to Bank to repay any then outstanding Tender Reimbursement Obligations, applied in the order in which the Demands connected therewith were paid by Bank. Upon payment to Bank of such Tender Reimbursement Obligations and all other amounts owing under the Loan Documents with respect thereto, Bank shall release such Bank Bonds from the lien created by the Security Agreement.

(6) The Trustee shall register Bank (or its designated nominee) as owner of all Bonds purchased with the proceeds of a Tender Drawing in its registration books, which Bonds shall evidence the corresponding Tender Reimbursement Obligation. Such Bonds shall be deemed Bank Bonds and shall be entitled to all of the rights and privileges of and shall be governed by all of the terms and conditions of the Bonds and the Indenture; provided, however, that

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(i) such Bonds shall be redeemed or purchased and all principal and interest owing thereon shall be payable to the Bank,

(ii) if the Bank receives reimbursement in full of amounts paid by Bank with respect to any Tender Drawing by 5:00 p.m. (Pittsburgh, Pennsylvania time) on the Tender Drawing Date of such Tender Drawing, no interest shall be payable by the Borrower with respect thereto;

(iii) such Bonds may not be tendered for purchase pursuant to Section 204 of the Indenture; and

(iv) such Bonds shall not be entitled to payment of any premium upon redemption.

(7) Any optional redemption of the Bonds shall require prior written consent of the Bank, which consent shall not be unreasonably conditioned, withheld or delayed upon receipt by the Bank of satisfactory evidence of the Borrower’s ability to reimburse the Bank for any Demand under the Letter of Credit for such redemption.

(c) Interest. Subject to Section 2.02(d), the outstanding principal balance of each Demand shall bear interest for each day at a rate per annum equal to the Tender Rate.

(d) Past Due Amounts. Any overdue principal of, or interest on, the outstanding principal balance of any Demand and any other amount payable hereunder that is not paid when due, whether at stated maturity or otherwise, shall bear interest, for each day from the date the same becomes due until such amount is paid in full, at a rate per annum equal to the Default Rate.

(e) Interest Payment Date. Interest on the outstanding principal balance of all Demands shall be payable (i) on the first day of each month, commencing on March 1, 2012, (ii) at the time of any payment or prepayment of the outstanding principal balance of any Demand to the extent accrued on the amount paid or prepaid, and (iii) at the Maturity Date. Notwithstanding the foregoing, interest on overdue amounts shall be payable on demand.

(f) Fees.

(1) Origination Fee. On the date of execution and delivery hereof, the Borrower shall pay to the Bank the nonrefundable Letter of Credit origination fee equal to $118,950.

(2) Facility Fee. The Borrower agrees to pay to the Bank a facility fee (the “Facility Fee”) in connection with the Letter of Credit payable in advance on the Date of Issuance for the period from the Date of Issuance to April 1, 2012, and on each July 1, October 1, January 1 and April 1 thereafter for the quarterly period beginning on such date at a rate per annum equal to the Letter of Credit Fee Rate on the Letter of Credit Amount in each case in effect on the due date of such payment. Computations of the Facility Fee under this Section

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shall be for the actual number of days in the applicable period, based on a 360-day year. There shall be no reduction or refund of any portion of any Facility Fee in the event the Letter of Credit expires or is drawn upon, reduced (automatically or otherwise), terminated or otherwise modified after the date such Facility Fee is due and payable. In the event any Facility Fee payable under the terms hereof is not paid on or before the date it is due and payable, the payment of such Facility Fee shall be accompanied by interest thereon, from the date such payment becomes due until it is paid in full, at a fluctuating rate per annum (computed for the actual number of days elapsed, based on a 360-day year) equal to the Default Rate.

(g) Transaction and Transfer Charges and Expenses. The Borrower shall pay to the Bank all reasonable transaction charges that the Bank may make for drawings under the Letter of Credit (as of the Date of Issuance the transaction charge for each such drawing shall be $350). Such transaction charges shall be payable upon submission to the Borrower by the Bank of the Bank’s bill therefor. In addition, the Borrower shall pay to the Bank on demand any and all reasonable charges and expenses which the Bank may pay or incur relative to the Letter of Credit. The Borrower shall pay to the Bank upon each transfer or amendment of the Letter of Credit in accordance with its terms a transfer or amendment fee equal to $1,500, together with any and all costs and expenses of the Bank incurred in connection with such transfer or amendment.

(h) Increased Costs.

(1) If after the date of this Agreement any enactment, promulgation or adoption of or change in any applicable law, treaty, regulation or rule or in the interpretation or administration thereof by any court, administrative or governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Bank or any Participating Bank (or any controlling affiliate) with any guideline, request or directive issued after the Date of Issuance (whether or not having the force of law) of any such authority, central bank or comparable agency, shall either (i) impose, modify or deem applicable any reserve, special deposit, capital, insurance assessment or similar requirement (including without limitation a guideline, request or directive which affects the manner in which the Bank or any Participating Bank allocates capital resources to its commitments, including its obligations and/or risks under this Agreement, the Letter of Credit or any Participation Agreement), (ii) subject the Bank or any Participating Bank (or any controlling affiliate) to any tax, deduction or withholding or change the basis of taxation of the Bank or any Participating Bank (other than a change in a rate of tax based on overall net income of the Bank or such Participating Bank), (iii) cause or deem letters of credit to be assets held by the Bank and/or deposits on its books, or (iv) impose on the Bank or any Participating Bank any other condition regarding this Agreement, the Letter of Credit or any Participation Agreement, and the result of any event referred to in clause (i), (ii), (iii) or (iv) of this sentence shall be to increase the direct or indirect cost to the Bank or any Participating Bank of issuing or maintaining the Letter of Credit or the obligations and/or risks of the Bank or any Participating Bank under this Agreement or any Participation Agreement or to reduce the amounts receivable by the Bank or any Participating Bank hereunder or to reduce the rate of return on the capital of the Bank or any Participating Bank in connection with this Agreement (which increase in cost, reduction in amounts

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receivable or reduction in rate of return shall be determined by the Bank’s or the Participating Bank’s reasonable allocation of such cost increase or reduction in amounts receivable resulting from such event), then within 10 Business Days after demand by the Bank (on behalf of itself or any Participating Bank), the Borrower shall pay to the Bank or the applicable Participating Bank, from time to time as specified by the Bank or the applicable Participating Bank, additional amounts that in the aggregate shall be sufficient to compensate the Bank or such Participating Bank for such increased cost, reduction in amounts receivable or reduction in rate of return or take such other action as shall cause the Bank’s Letter of Credit obligations hereunder to be terminated. A certificate as to such increased cost, reduction in amounts receivable or reduction in rate of return by the Bank or any Participation Agreement submitted by the Bank or the applicable Participating Bank to the Borrower shall, in absence of manifest error, be conclusive and binding for all purposes.

(2) If the Bank or any Participating Bank shall have determined that any enactment, promulgation or adoption of or change in any applicable law, treaty, regulation, rule or guideline regarding capital adequacy, or in the interpretation or administration thereof, by any administrative or governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Bank or any Participating Bank (or any controlling affiliate) with any guideline, request or directive regarding capital adequacy (whether or not having the force of law and whether or not failure to comply thereunder would be unlawful) of any such authority, central bank or comparable agency, affects or would affect the amount of capital required or expected to be maintained by the Bank or any Participating Bank (or any controlling affiliate) and the Bank or any Participating Bank determines, on the basis of reasonable allocations, that the amount of such capital is increased by or is based on its issuance or maintenance of the Letter of Credit or its obligations or risks under this Agreement or any Participation Agreement, then, within 10 Business Days after demand by the Bank or any Participating Bank, the Borrower shall pay to the Bank or such Participating Bank, from time to time as specified by the Bank or such Participating Bank, additional amounts sufficient to compensate the Bank or such Participating Bank therefor. A certificate as to such additional amounts submitted to the Borrower by the Bank or the applicable Participating Bank shall, in the absence of manifest error, be conclusive and binding for all purposes.

(i) No Deductions. The Borrower shall not deduct or withhold Taxes (as defined below) from payments required to be made under this Agreement if and to the extent that, pursuant to applicable provisions of an income tax treaty between the United States and the country under the laws of which the Bank or any Participating Bank is organized, the Code or any other applicable law, the Borrower is permitted to make such payments free of any such deduction or withholding. Upon request of the Borrower, the Bank and any Participating Bank will provide the Borrower with the form prescribed by the Internal Revenue Service certifying the exemption of the Bank or such Participating Bank under current law from United States withholding taxes with respect to all payments made by the Borrower under this Agreement. Except as set forth above in this Section, all payments by the Borrower to the Bank or any Participating Bank under this Agreement shall be made free and clear of and without deduction for any present or future taxes or other amounts for or on account of levies, imposts, duties,

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deductions, withholdings or other charges of whatsoever nature (including, without limitation, interest, additions to tax and penalties thereon, but excluding any taxes based on income of the Bank or any Participating Bank and excluding franchise and similar taxes imposed by the jurisdiction under which it is organized or in which the Bank’s or such Participating Bank’s principal office is located or any political subdivision thereof), imposed, levied, collected, withheld or assessed by any governmental authority (collectively, “Taxes”). If the Borrower shall be required to withhold or deduct Taxes from any sum payable to the Bank or any Participating Bank hereunder, (i) the sum payable to the Bank or such Participating Bank shall be increased as may be necessary so that the Bank or such Participating Bank receives an amount equal to the sum it would have received had no such withholdings or deductions been made, (ii) the Borrower shall make such necessary withholdings and deductions, and (iii) the Borrower shall pay or cause to be paid the full amount withheld or deducted to the relevant authority according to applicable law so that the Bank or such Participating Bank shall not be required to make any deduction or payment of such Taxes.

(j) General Interest Accrual; Place of Payment. Except as otherwise provided in Sections 2.02(b) and (c), all payments to the Bank under this Agreement (including without limitation all payments becoming due under Sections 2.02(g) and 2.02(h)) shall be accompanied by interest thereon, from the date such payments become due until they are paid in full, at a fluctuating rate per annum (computed for the actual number of days elapsed, based on a 360-day year) equal to the Default Rate. All payments by the Borrower to the Bank under this Agreement shall be made in lawful currency of the United States at the Bank’s office at 500 First Avenue, Pittsburgh, PA 15219, or at such other address and to the attention of such other person as the Bank may stipulate by written notice to the Borrower, or by a wire transfer in immediately available funds from the Borrower to the Bank in accordance with written wire instructions given to the Borrower by the Bank; provided that (i) all reimbursement and transaction charge payments under Sections 2.02(a) and 2.02(g) shall be made at the Bank’s office at 500 First Avenue, Second Floor, P7-PFSC-02-T, Pittsburgh, PA 15219, Attention: Letter of Credit Department, or such other address as the Bank may stipulate by written notice to the Borrower, and (ii) all reimbursement payments under Section 2.02(a) shall be made in immediately available funds.

Section 2.03 Intentionally Omitted.

Section 2.04 Obligations Absolute. The obligations of the Borrower under this Article shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including without limitation the following circumstances: (i) any lack of validity or enforceability of the Letter of Credit or any other agreement or document relating thereto (ii) any amendment or waiver of or any consent to or departure from the Letter of Credit or any document relating thereto; provided, that any such amendment, waiver, consent or departure which materially increases the Borrower’s liability under this Agreement shall not be effective without the Borrower’s written consent thereto; (iii) the existence of any claim, set-off, defense or other right which the Borrower may have at any time against the Bank, any Participating Bank or any other Person, whether in connection with this Agreement, the transactions described herein or any unrelated transaction; or (iv) any of the circumstances contemplated in clauses (1) through (7), inclusive, of Section 2.06(a). The Borrower understands and agrees that no payment by it under any other agreement (whether voluntary or otherwise) shall constitute a defense to its obligations hereunder, except to the extent that the Bank has been indefeasibly paid in full.

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Section 2.05 Indemnification. To the extent permitted by applicable law, the Borrower hereby indemnifies and holds harmless the Bank and the Participating Banks (and their directors, officers, employees and agents) from and against any and all claims, damages, losses, liabilities, costs or expenses (including attorneys’ fees for counsel of the Bank’s or any Participating Bank’s choice) whatsoever which the Bank or any Participating Bank may incur (or which may be claimed against the Bank or any Participating Bank by any person or entity whatsoever) by reason of or in connection with (a) the issuance or a transfer of, or payment or failure to pay under, the Letter of Credit, (b) any breach by the Borrower of any representation, warranty, covenant, term or condition in, or the occurrence of any default under, this Agreement, including all fees or expenses resulting from the settlement or defense of any claims or liabilities arising as a result of any such breach or default and (c) the involvement of the Bank or any Participating Bank in any legal suit, investigation, proceeding, inquiry or action as a consequence, direct or indirect, of the Bank’s issuance of the Letter of Credit, its entering into this Agreement or action taken thereunder or any other event or transaction contemplated by any of the foregoing; provided the Borrower shall not be required to indemnify the Bank or any Participating Bank for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (i) the gross negligence or willful misconduct of the Bank in determining whether documents presented under the Letter of Credit complied with the terms of the Letter of Credit or (ii) the Bank’s willful failure to pay under the Letter of Credit after the presentation to it by the Beneficiary of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit, unless the Bank in good faith believes that it is prohibited by law or other legal authority from making such payment. Nothing in this Section is intended to limit the Borrower’s reimbursement obligations contained in Section 2.02(a). The obligations of the Borrower under this Section shall survive the termination of this Agreement.

Section 2.06 Liability of Bank.

(a) As between the Borrower and the Bank, the Borrower assumes all risks of the acts or omissions of the Beneficiary with respect to the Beneficiary’s use of the Letter of Credit. Neither the Bank nor any of its officers or directors shall be liable or responsible for: (1) the use which may be made of the Letter of Credit or for any acts or omissions of the Beneficiary in connection therewith; (2) the form, validity, sufficiency, accuracy or genuineness of any documents (including without limitation any documents presented under the Letter of Credit), or of any statement therein or endorsement thereon, even if any such documents, statements or endorsements should in fact prove to be in any or all respects invalid, insufficient, fraudulent, forged, inaccurate or untrue; (3) the payment by the Bank against presentation of documents which do not comply with the terms of the Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit, or any other failure by the Beneficiary to comply fully with conditions required in order to effect a drawing under the Letter of Credit; (4) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign the Letter of Credit or the rights or benefit thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (5) errors, omissions, interruptions, losses or delays in transmission or delivery of any messages by mail, cable, telegraph, telex, telephone or otherwise; (6) any loss or

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delay in the transmission or otherwise of any document or draft required in order to make a drawing under the Letter of Credit; or (7) any other circumstances whatsoever in making or failing to make payment under the Letter of Credit; except only that the Borrower shall have a claim against the Bank, and the Bank shall be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by the Borrower which the Borrower proves were caused solely by (i) the Bank’s gross negligence or willful misconduct in determining whether documents presented under the Letter of Credit complied with the terms of the Letter of credit or (ii) the Bank’s willful failure to pay under the Letter of Credit after the presentation to it by the Beneficiary of a draft and certificate strictly complying with the terms and conditions of the Letter of Credit, unless the Bank in good faith believes that it is prohibited by law or other legal authority from making such payment. In furtherance and not in limitation of the foregoing, the Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; provided that if the Bank shall receive written notification from both the Beneficiary and the Borrower that documents conforming to the terms of the Letter of Credit to be presented to the Bank are not to be honored, the Bank agrees that it will not honor such documents.

(b) Except for the Bank’s obligations under the Letter of Credit, the Bank shall have no liability to the Borrower or any other person as a result of any reduction of the credit rating of the Bank or any deterioration in the Bank’s financial condition, and the Borrower hereby indemnifies and holds harmless the Bank from any and all claims, damages, losses, liabilities, costs or expenses relating to the Letter of Credit asserted by or on behalf of Borrower, or any affiliate or agent thereof, which the Bank may incur in connection therewith. No reduction of the credit rating of the Bank or deterioration in the Bank’s financial condition shall reduce or in any way diminish the obligations of the Borrower to the Bank under this Agreement, including without limitation the Borrower’s obligation to pay Letter of Credit commitment fees to the Bank and to reimburse the Bank, with interest, for any drawing under the Letter of Credit.

Section 2.07 Accounts.

(a) Establishment of Accounts. Concurrently with the execution and delivery of this Agreement, the Borrower shall establish and maintain with the Bank the Interest Reserve Account and the Capital Expenditures Reserve Account (each as defined below). The Borrower shall cause such accounts to be maintained at all times until such accounts are permitted to be closed in accordance with this Section 2.07.

(b) Interest Reserve Account Deposits and Disbursements.

(1) On the Date of Issuance, the Borrower shall establish and thereafter maintain with the Bank an account for the purpose of reserving amounts in respect of interest payments required pursuant to the terms hereof (the “Interest Reserve Account”) in an amount equal to the amount of the Interest Component under the Letter of Credit from time to time (the “Interest Reserve”).

(2) In the event an Event of Default has occurred under the Credit Documents, the Bank may, in its sole discretion, apply all or any portion of the Interest Reserve to the repayment of the Reimbursement Obligations or any other amounts due hereunder, in such order and priority as Bank so chooses in its sole discretion.

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(3) So long as no Default or Event of Default exists and all Reimbursement Obligations have been paid in full or otherwise provided for to the Bank’s satisfaction, on the Stated Expiration Date, the balance of the Interest Reserve Account, if any, shall be paid over to the Borrower.

(4) Establishment of an Interest Reserve shall in no way relieve the Borrower of its obligations to pay the Reimbursement Obligations as set forth herein.

(c) Capital Expenditure Reserve Account

(1) On the Date of Issuance, the Borrower shall establish and thereafter maintain with the Bank an account for the purpose of reserving amounts for the payment of Capital Expenditures in respect of the Facility (the “Capital Expenditure Reserve Account”). Beginning on the Date of Issuance and continuing on or before the 15th day of each month thereafter until termination of this Reimbursement Agreement, the Borrower shall deposit $14,133 in the Capital Expenditure Reserve Account.

(2) Upon the request of the Borrower at any time that no Default or Event of Default is continuing (but not more often than once per calendar month), the Bank shall make disbursements to the Borrower from the Capital Expenditure Reserve Account to pay for or to reimburse the Borrower for Capital Expenditures in respect of the Facility; provided that:

(i) the Borrower shall deliver to the Bank invoices evidencing that the costs for Capital Expenditures which such disbursement is requested are due and payable;

(ii) the Borrower shall deliver to the Bank a certification confirming that all such costs have been previously paid by the Borrower or will be paid from the proceeds of the requested disbursement; and

(iii) the Bank may condition the making of a requested disbursement on (A) reasonable evidence establishing that the Borrower has applied any amounts previously received by it in accordance with this subsection (2) for the expenses to which specific draws made hereunder relate, (B) a reasonably satisfactory site inspection, and (C) receipt of lien releases and waivers from any contractors, subcontractors and others entitled to filing a Lien with respect to work paid for with the proceeds of the immediately preceding requested disbursement.

(3) So long as no Default or Event of Default exists and all Reimbursement Obligations have been paid in full or otherwise provided for to the Bank’s satisfaction, on the Stated Expiration Date, the balance of the Capital Expenditure Reserve Account, if any, shall be paid over to the Borrower.

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(d) The Borrower hereby grants to the Bank a security interest in all rights of the Borrower in and to the Interest Reserve Account and the Capital Expenditure Reserve Account (collectively, the “Accounts”), and all sums on deposit therein. Subject to the rights of the Borrower expressly set forth herein to make withdrawals from the Accounts, the Borrower hereby acknowledges and agrees that the Bank shall have sole dominion and control of the Accounts. The Borrower shall not close any Account without obtaining the prior consent of the Bank. The Borrower shall maintain the Accounts and shall pay all fees and charges with respect thereto when due. All interest earned on amounts deposited in any Account shall be re-deposited therein and become part thereof. No funds in any Account may be commingled with any other funds of the Borrower or of any other Person or with any funds contained in any other Account. The Bank shall not be liable for any loss of interest on or any penalty or charge assessed against the funds in, payable on, or credited to any Account as a result of the exercise by the Bank of any of its rights, remedies or obligations under any of the Credit Documents. All sums held in the Accounts shall constitute additional security for the Reimbursement Obligations. At any time following the occurrence and during the continuance of an Event of Default, the Borrower may apply any funds on deposit in the Accounts to repay the Reimbursement Obligations.

ARTICLE III

[Intentionally Omitted]

ARTICLE IV

CONDITIONS PRECEDENT

Section 4.01 Initial Fees. On the date of execution and delivery hereof, the Borrower shall pay to the Bank the Letter of Credit fees then due pursuant to Section 2.02(f).

Section 4.02 Documentation. As conditions precedent to the Bank’s issuance of the Letter of Credit, the Bank shall have received each of the following in form and substance satisfactory to the Bank:

(a) Executed copies of this Agreement and the other Credit Documents;

(b) A copy of the Indenture and the other Bond Documents;

(c) A copy of the Management Agreement;

(d) Such financing statements as the Bank may require to perfect the security interests granted hereunder and under the Security Agreement;

(e) Certified copies of the certificate of formation, operating agreement and authorizing resolutions of the Borrower; and a good standing certificate for the Borrower;

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(f) A certificate or certificates of officers of each of the Borrower and the Guarantor as of the date of execution and delivery hereof stating that (i) the representations and warranties contained in Article V are true and correct, (ii) no Event of Default has occurred and is continuing, and no event has occurred and is continuing which, with the giving of notice or lapse of time or both, would constitute an Event of Default and (iii) the incumbency of officers;

(g) (i) A legal opinion of Garrett DeFrenza Stiepel LLP, counsel to the Borrower and the Guarantor covering such matters as to the Borrower and the Guarantor as the Bank may reasonably request, (ii) a legal opinion of Brown, Winick, Graves, Gross, Baskerville & Schoenebaum, P.L.C., regarding the Mortgage and the Lien related thereto, (iii) a legal opinion of Ballard Spahr LLP, counsel to the Bank, (iv) a legal opinion of Ice Miller LLP, bond counsel; and (v) the legal opinion of Venable LLP regarding the Guarantor.

(h) Audited consolidated financial statements of the Guarantor for the Fiscal Years ended December 31, 2009 (for the period commencing on May 3, 2009 and ending on December 31, 2009) and December 31, 2010, and unaudited consolidated financial statements of the Guarantor for the fiscal quarter ending September 30, 2011;

(i) Evidence of the insurance required by this Agreement and the Mortgage;

(j) A Phase I environmental audit/assessment of the Property, which must be satisfactory to the Bank in all respects and prepared by an environmental engineering firm acceptable to the Bank;

(k) An appraisal of the Property, which must be satisfactory in form and substance to the Bank and indicate that the “as is” value of the Property is at least $33,000,000;

(l) A property inspection report, which must be satisfactory to the Bank in all respects and prepared by an property inspector acceptable to the Bank;

(m) a Title Insurance Policy issued by the Title Company in an amount equal to the initial Letter of Credit Amount, insuring, as of the date of the issuance of the Letter of Credit, the Mortgage to be a valid first and prior lien on the Property, subject only to the Permitted Exceptions;

(n) Evidence that the Equity Investment has been made and fully funded;

(o) Evidence that the Interest Reserve Account and the Capital Expenditures Account have been established with the Bank and have been funded to the extent required pursuant to Section 2.07; and

(p) Such other documents, certificates, approvals, assurances and opinions as the Bank or its counsel may reasonably request.

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Section 4.03 Additional Conditions Precedent. As additional conditions precedent to the issuance of the Letter of Credit, (i) the representations and warranties set forth in Article V of this Agreement and in all other documents delivered by the Borrower in connection herewith shall be true and correct as of the Date of Issuance; (ii) no material adverse change shall have occurred in the condition (financial or otherwise) of the Borrower between the most recent dates as to which information is given in the most recent audited financial statements of the Borrower and the Date of Issuance, and on or prior to the Date of Issuance no material transactions or obligations (not in the ordinary course of business or otherwise consented to by the Bank) shall have been entered into by the Borrower subsequent to the date of such financial statements; and (iii) on the Date of Issuance no Default or Event of Default shall have occurred and be continuing.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants as follows:

Section 5.01 Existence; Compliance with Law. The Borrower (a) is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware, (b) has the limited liability company power and authority, and legal right, to own and operate its property and to conduct the business in which it is currently engaged, (c) has furnished to the Bank true and complete copies of its articles of formation and operating agreement and (d) is in compliance with all Requirements of Law the non-compliance with which would have a Material Adverse Effect. The Guarantor is the general partner of Steadfast Operating Partnership, and Steadfast Operating Partnership is the sole member of the Borrower.

Section 5.02 [Intentionally Omitted].

Section 5.03 Power; Authorization; Enforceable Obligations. The Borrower has the power (limited liability company and otherwise), authority, and legal right, to make, deliver and perform this Agreement and has taken all necessary corporate action to authorize the obligations of the Borrower on the terms and conditions of this Agreement and to authorize the execution, delivery and performance of this Agreement. No consent or authorization of, filing with or other act by or in respect of, any Governmental Authority or any other Person (including the member and creditors of the Borrower) is required hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement by or on behalf of the Borrower, except such as have been made or obtained prior to the Date of Issuance. This Agreement has been duly executed and delivered on behalf of the Borrower. This Agreement constitutes a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

Section 5.04 No Legal Bar. The execution, delivery and performance of this Agreement by the Borrower and the issuance of the Letter of Credit will (a) not, to the

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Borrower’s knowledge, violate any Requirement of Law applicable to the Borrower, (b) not violate any Material Contract, and (c) not result in, or require, the creation or imposition of any Liens on any of its properties or revenues pursuant to any such Requirement of Law or Material Contract.

Section 5.05 No Material Litigation. Except as previously disclosed to the Bank, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened against the Borrower or against any of its properties or revenues or against any Plan (a) with respect to this Agreement or any of the transactions contemplated hereby, or (b) as to which there is a reasonable likelihood of an adverse determination and which, if adversely determined, would have a Material Adverse Effect.

Section 5.06 No Violations. Except as previously disclosed to the Bank, (a) The Borrower is in compliance in all material respects with, and no breach of or default has occurred and is continuing under (i) any Requirement of Law, including without limitation any Requirement of Law relating to licensure, occupational safety and health or employment or labor practices; or (ii) any indenture, mortgage, agreement or other instrument or contract to which it is a party or otherwise subject, except for events, if any, which the Borrower has disclosed to the Bank and is proceeding in good faith to remedy; (b) the Borrower has not received any notice of the institution of any investigation or proceeding affecting the Borrower or the Facility under any Requirement of Law; and (c) the Borrower has no knowledge of any violation, nor is there any notice or other record of any violation, of any zoning, subdivision, environmental, building, fire, safety, health or other statute or Requirement of Law or restrictive covenant or other restriction applicable to the Facility, except for notices of violations received in the ordinary course of business which the Borrower is diligently proceeding in good faith and in full compliance with all Requirements of Law to remove or correct and which collectively do not and will not have a Material Adverse Effect.

Section 5.07 Ownership of Property. Exhibit B sets forth, as of the Date of Issuance, a description of the Facility and all the other real property owned or leased by the Borrower and identifies the street address, the current owner (and current record owner, if different) and whether such property is leased or owned. The Borrower has good and marketable fee simple title to or valid leasehold interests in all real property owned or leased by it and good title to all of its personal property subject to no Lien of any kind except Permitted Liens. The Borrower enjoys peaceful and undisturbed possession under its leases except to the extent the lack thereof would not have a Material Adverse Effect.

Section 5.08 Governmental Authorizations, Licenses, etc. The Borrower has obtained and holds in full force and effect, all necessary governmental and other authorizations and approvals, franchises, licenses, permits, certificates, qualifications, easements, rights of way and other rights, consents and approvals which are necessary for the operation of its business as presently operated and conducted and contemplated to be operated and conducted, except any the absence of which would not reasonably be expected to have a Material Adverse Effect.

Section 5.09 Patents, Trademarks, etc. The Borrower has obtained and holds in full force and effect all patents, trademarks, service marks, trade names, copyrights or licenses

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therefor and other such rights (if any), free from burdensome restrictions, which are necessary for the operation of its business as presently conducted. To the Borrower’s best knowledge, nothing in the conduct of the business of the Borrower infringes any patent, trademark, service mark, trade name, copyright, license or other right owned by any other Person so as to have a Material Adverse Effect.

Section 5.10 Single Purpose Entity Borrower is a Single Purpose Entity.

Section 5.11 ERISA. (a) Each Plan has complied in all respects with the applicable provisions of ERISA and the Code, except to the extent that failure to so comply would not have a Material Adverse Effect. No prohibited transaction or accumulated funding deficiency (each as defined in subsection 7(h) of ERISA) or Reportable Event has occurred with respect to any Single Employer Plan which would have a Material Adverse Effect.

(b) The present value of all accrued benefits under each Single Employer Plan maintained by the Borrower or a Commonly Controlled Entity (based on those assumptions used to fund the Plans), as calculated on a termination basis, did not, as of the last annual valuation date, exceed the value of the assets of the Plans allocable to such benefits by an amount which exceeds $500,000 or which would have a Material Adverse Effect.

(c) Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan for which any liability remains unsatisfied which would exceed $500,000 or which, together with liabilities referred in subsections (b) and (d) hereof, would exceed $500,000 or which in either event would have a Material Adverse Effect, and neither the Borrower nor any Commonly Controlled Entity would become subject under ERISA to any liability which would exceed $500,000 or which, together with other liabilities referred in subsections (b) and (d) hereof or this subsection (c), would exceed $500,000 or which in either event would have a Material Adverse Effect if the Borrower or such Commonly Controlled Entity were to withdraw completely from any Multiemployer Plan as of the valuation date most closely preceding the date this representation is made or deemed made. To the best of the Borrower’s knowledge, such Multiemployer Plans are neither in Reorganization as defined in Section 4241 of ERISA nor Insolvent.

(d) The present value (determined using actuarial and other assumptions which are reasonable in respect of the benefits provided and the employees participating) of the liability of the Borrower and each Commonly Controlled Entity for post-retirement benefits to be provided to their current and former employees under Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all such Plans allocable to such benefits by an amount which exceeds $500,000 or which, together with liabilities referred in subsections (b) and (c) hereof, exceeds $500,000 or which in either event would have a Material Adverse Effect.

Section 5.12 Other Material Contracts. The Borrower has complied with all material provisions of all Material Contracts and there exists no material default under any such Material Contract by the Borrower or by any other party thereto or any act, or circumstance which except for giving of notice or lapse of time would constitute a material default.

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Section 5.13 Investment Company Act. The Borrower is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended; or subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

Section 5.14 Environmental Representations. The Borrower has furnished or caused to be furnished to the Bank environmental studies, as described in Exhibit C (the “Environmental Study”), and except as set forth therein, the Borrower has no actual knowledge of (a) any activity at the Property, or any storage, treatment or disposal of any waste connected with any activity at any of such sites, which has been conducted, or is being conducted, in material violation of any Environmental Law; (b) any of the following present at the Facility which could give rise to material liabilities, material costs for remediation or a Material Adverse Effect: (i) Contamination, (ii) polychlorinated biphenyls, (iii) asbestos or asbestos containing materials, (iv) urea formaldehyde foam insulation, or (v) tanks presently or formerly used for the storage of any liquid or gas; (c) any investigation or findings pertaining to the Property regarding the presence of radon gas or radioactive decay products of radon or the presence of radon or radon products in any existing structure located on the Property; and (d) the presence on the Property of tanks presently or formerly used for the storage of any liquid or gas below ground.

Section 5.15 Insurance. The Borrower carries insurance with reputable insurers (or, in the case of insurance other than fire and extended coverage insurance covering property, plant and equipment and business interruption insurance, under self-insurance programs in compliance with any Requirement of Law) in respect of the Property and operations, in such amounts and against such risks as is required by this Section 6.23 of this Agreement.

Section 5.16 Taxes. The Borrower has filed all income tax returns and all other material tax returns that are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessments received by it. The charges, accruals and reserves on the books of the Borrower in respect of taxes or other governmental charges are adequate.

Section 5.17 Solvency. The Borrower is and, after giving effect to this Agreement, will be Solvent.

Section 5.18 Disclosure. This Agreement, the other Credit Documents, the exhibits hereto and thereto and the other documents, certificates, schedules and statements furnished to the Bank by or on behalf of the Borrower in connection with the transactions contemplated hereby, do not contain any untrue statement of a material fact and do not omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which they were made. There is no fact known to the Borrower which would have a Material Adverse Effect which has not been set forth in this Agreement or in the other documents, certificates and statements furnished to the Bank by or on behalf of the Borrower prior to the date of execution and delivery of this Agreement in connection with the transactions contemplated hereby.

Section 5.19 Priority of Mortgage The Mortgage constitutes a valid first lien against the real and personal property described therein, prior to all other liens or encumbrances, including those which may hereafter accrue, excepting only Permitted Liens which do not and

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will not materially and adversely affect (a) the ability of the Borrower to pay in full its Reimbursement Obligations when due, (b) the security (and its value) set forth in the Mortgage or (c) the current use of the Land and the Improvements (each as defined in the Mortgage).

Section 5.20 No Illegal Activity as Source of Funds During the Borrower’s ownership of the Property, no portion of the Property has been or will be purchased, improved, equipped or furnished by the Borrower with proceeds of any illegal activity.

Section 5.21 Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws Each of the Borrower and the Guarantor: (i) is not currently identified on OFAC List, and (ii) is not a Person with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States. The Borrower has implemented procedures, and will consistently apply those procedures throughout the term of this Agreement, to ensure the foregoing representations and warranties remain true and correct.

ARTICLE VI

GENERAL COVENANTS

So long as any amount is available under the Letter of Credit or any amount is due and owing to the Bank hereunder, the Borrower covenants that, except to the extent the Bank shall otherwise consent in writing, each of the following covenants shall be performed and complied with by the Borrower as indicated:

Section 6.01 Maintain Single Purpose Entity Status The Borrower shall not:

(a) Engage in any business or activity other than the ownership, operation and maintenance of the Property and the Facility and activities incidental thereto;

(b) Acquire or own any material assets other than (A) the Property, and (B) such incidental machinery, equipment, fixtures and other personal property as may be necessary for the operation of the Property;

(c) Merge into or consolidate with any person or dissolve terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, without in each case the Bank’s prior written consent;

(d) Fail to preserve its existence as a limited liability company, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Bank, amend, modify, terminate or fail to comply with the provisions of its operating agreement, or similar organizational document as same may be further amended or supplemented;

(e) Own any subsidiary or make any investment in, any Person without the consent of the Bank;

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(f) Commingle its assets with the assets of any of its members, affiliates, or of any other Person;

(g) Incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Reimbursement Obligations, obligations under the Bond Documents and trade payables incurred in the ordinary course of business which are not evidenced by a promissory note, provided same are paid when due;

(h) Fail to maintain its records, books of account and bank accounts separate and apart from those of its members, its Affiliates, the Affiliates of any of its members, and any other Person;

(i) Enter into any contract or agreement with any of its members or its Affiliates, or the Affiliates of any of its members, except upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;

(j) Seek its dissolution or winding up in whole, or in part;

(k) Maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any of its members or its Affiliates or the Affiliates of any of its members or any other Person;

(l) Hold itself out to be responsible for the debts of another Person or pay another Person’s liabilities out of its own funds;

(m) Make any loans or advances to any third party, including any of its members or Affiliates, or the Affiliates of any of its members;

(n) [Intentionally Omitted];

(o) Agree to, enter into or consummate any transaction which would render it unable to confirm that (i) it is not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA; (ii) it is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (iii) none of the assets of the Borrower constitute “plan assets” (within the meaning of Department of Labor Regulation Section 2510.3-101, as modified by Section 3(42) of ERISA;

(p) Fail to correct any misunderstanding by a third party regarding its separate identity from any of its members or Affiliates, or the Affiliates of any of its members when it is aware of such misunderstanding;

(q) Fail to maintain its books, records, resolutions and agreements as official records;

(r) Fail to hold its assets or to conduct its business in its own name;

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(s) Fail to pay its own liabilities out of its own funds and assets;

(t) Fail to observe all limited liability company formalities, as applicable;

(u) Fail to maintain an arms-length relationship with Affiliates;

(v) Fail to allocate fairly and reasonably shared expenses with any Affiliates, including, shared office space, and to use separate stationery, invoices and checks;

(w) Fail to pay the salaries of its own employees from its own funds;

(x) Fail either to hold itself out to the public as a legal Person separate and distinct from any other Person or to conduct its business solely in its own name in order not (A) to mislead others as to the identity with which such other party is transacting business, or (B) to suggest that it is responsible for the debts of any third party (including any of its members or Affiliates, or any member or Affiliate thereof);

(y) Fail to 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; or

(z) Amend, modify or alter any provisions of its organizational documents relating to the foregoing restrictions.

Section 6.02 Compliance with Laws. The Borrower will comply in all material respects with all Requirements of Law applicable to its business, operations or the Facility, except for any such laws, rules, regulations and orders which it is contesting in good faith by appropriate proceedings and the noncompliance with which during such contest would not have a Material Adverse Effect if the result of such contest were adverse to it.

Section 6.03 Maintenance of Governmental Authorizations, Filings, Etc. The Borrower will maintain in full force and effect all of its governmental and other authorizations, approvals, consents, permits, licenses, certifications, qualifications and accreditations necessary or material for the conduct of its business and the ownership and operation of the Facility as they are presently being operated. The Borrower will promptly furnish to the Bank copies of all reports and correspondence relating to a loss or proposed revocation of any such authorization, approval, consent, permit, license, certification, qualification or accreditation which has or could have a Material Adverse Effect.

Section 6.04 Maintenance of Property. The Borrower will maintain in good repair, working order and condition (ordinary wear and tear excepted) in accordance with the Indenture, all Requirements of Law and the general practice of other businesses of similar character and size, the Facility and all of the other properties material or necessary to its business, and from time to time make or cause to be made all appropriate repairs, renewals or replacements thereof.

Section 6.05 Compliance with Other Contracts. The Borrower will comply with, or cause to be complied with, all material requirements and conditions of all contracts and

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insurance policies which relate to it or to the Facility, except to the extent non-compliance with any such contracts or insurance policies would not have a Material Adverse Effect or result in the cancellation of any such insurance policy.

Section 6.06 Environmental Laws. The Borrower will

(a) comply with, and require compliance by all tenants and to the extent possible, all subtenants, if any, with, all Environmental Laws and obtain and comply with and maintain, and require that all tenants and to the extent possible, all subtenants obtain and comply with and maintain, any and all licenses, approvals, registrations or permits required by Environmental Laws except to the extent that failure to so comply or obtain or maintain such documents would not have a Material Adverse Effect;

(b) comply with all lawful and binding orders and directives of all Governmental Authorities respecting Environmental Laws except to the extent that failure to so comply would not have a Material Adverse Effect; and

(c) defend, indemnify and hold harmless the Bank, and its employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the violation of or noncompliance with any Environmental Laws applicable to the real property owned or operated by any of the Borrower, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, attorneys’ and consultants’ fees, investigation and laboratory fees, court costs and litigation expenses, except to the extent that any of the foregoing arise out of the negligence or willful misconduct of any of the foregoing enumerated parties.

Section 6.07 Inspection of Property; Books and Records; Discussions. (a) The Borrower will permit any of the officers or authorized employees or representatives of the Bank to visit and inspect, during normal business hours, the Facility and to examine and make excerpts from its books and records, except to the extent the Borrower is precluded by any Requirement of Law from disclosing any such information, and discuss its business affairs, finances and accounts with its officers, all in such detail and at such times and as often as the Bank may reasonably request, provided that the Bank shall provide it with reasonable written notice prior to any visit or inspection; and

(b) maintain and keep proper books of record and account which enable it to issue financial statements in accordance with GAAP and as otherwise required by applicable Requirements of Law, and in which full, true and correct entries shall be made in all material respects of all its dealings and business and financial affairs.

Section 6.08 Reporting Requirements. The Borrower will furnish or cause to be furnished to the Bank the following in form satisfactory to the Bank:

(a) As soon as available, but in any event not later than 90 days after the close of each Fiscal Year of the Guarantor, consolidated financial statements for the Guarantor, including a balance sheet as at the end of such fiscal year, and related statements of cash flows and of operations and change in net assets for such fiscal year, setting forth in each

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case in comparative form the corresponding figures for the preceding fiscal year, all in reasonable detail, prepared in accordance with GAAP applied on a basis consistently maintained throughout the period involved and with the prior year with such changes therein as shall be approved by the Guarantor’s independent certified public accountants, such consolidated financial statements to be certified by Ernst & Young LLP or other independent certified public accountants selected by the Guarantor and reasonably acceptable to the Bank, without any exception or qualification arising out of the restricted or limited nature of the examination made by such accountants;

(b) As soon as available, but in any event not later than 45 days after the end of each fiscal quarter of the Borrower, unaudited financial statements of the Borrower, including a balance sheet of the Borrower as at the end of such fiscal quarter, and the related statements of cash flows and of operations and change in net assets all for the period from the beginning of such fiscal year to the end of such fiscal quarter, setting forth in each case in comparative form the corresponding figures for the like period of the preceding Fiscal Year; all in reasonable detail, prepared (except for the cash flow statements) in accordance with GAAP applied on a basis consistently maintained throughout the period involved and with prior periods (subject to normal year-end audit adjustments) and certified on behalf of the Borrower by its Chief Financial Officer;

(c) As soon as available, but in any event not later than 45 days after the end of each of the first three quarterly periods of each fiscal year of the Guarantor, unaudited consolidated financial statements of the Guarantor, including a balance sheet of the Guarantor as at the end of such fiscal quarter, and the related statements of cash flows and of operations and change in net assets all for the period from the beginning of such fiscal year to the end of such fiscal quarter, setting forth in each case in comparative form the corresponding figures for the like period of the preceding Fiscal Year; all in reasonable detail, prepared (except for the cash flow statements) in accordance with GAAP applied on a basis consistently maintained throughout the period involved and with prior periods (subject to normal year-end audit adjustments) and certified on behalf of the Guarantor by its Chief Financial Officer;

(d) Concurrently with the delivery of the financial statements referred to in subsection (b), a certificate of the chief financial officer of the Borrower in substantially the form of Exhibit D (each a “Compliance Certificate”) showing in detail the calculations demonstrating compliance with the financial covenant set forth in Section 6.10, and stating that, to the best of such officer’s knowledge, the Borrower during such period has kept, observed, performed and fulfilled each and every covenant and condition contained in this Agreement in all material respects and that such officer has obtained no knowledge of any Default or Event of Default except as specifically indicated; if the Compliance Certificate shall indicate that such officer has obtained knowledge of a Default or Event of Default, such Compliance Certificate shall state what efforts the Borrower is making to cure or cause to be cured such Default or Event of Default;

(e) As soon as available, but in any event not later than 90 days after the end of each Fiscal Year, the annual budget of the Borrower;

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(f) As soon as available, but in any event not later than 30 days after the end of each fiscal quarter of the Borrower, a leasing report for the Facility;

(g) As soon as available, but in any event not later than 30 days after the end of each fiscal quarter of the Borrower, a rent roll report for the Facility;

(h) As soon as available, but in any event not later than 30 days after the filing thereof, the annual tax returns for the Borrower and the Guarantor.

(i) Within 30 days after request therefore by the Bank, such detailed financial projections, forecasts and budgets as the Bank may from time to time reasonably request;

(j) Upon receipt thereof by the Borrower, copies of any letter or report with respect to its management, operations or properties submitted by its accountants in connection with any annual or interim audit of the Borrower’s accounts, and a copy of any written response of the Borrower to any such letter or report; and

(k) Such other information respecting the operations and properties, financial or otherwise, of the Borrower as the Bank may from time to time reasonably request.

Section 6.09 [Intentionally Omitted].

Section 6.10 Financial Covenant. The Borrower will maintain, on a rolling four-quarter basis, as of the last day of each fiscal quarter ending during the periods set forth below, a Debt Service Coverage Ratio equal to or greater than that set forth below opposite such period:

Period	Debt Service Coverage Ratio
Date of Issuance through and including March 30, 2013		1.25 to 1.0
March 31, 2013 through and including March 30, 2014		1.30 to 1.0
March 31, 2014 through and including March 30, 2015		1.35 to 1.0
March 31, 2015 and thereafter		1.40 to 1.0

Section 6.11 Limitation on Liens. The Borrower will not create, incur, assume or suffer to exist any Lien upon the Facility or any of its other property, assets or revenues, whether now owned or hereafter acquired, except for Permitted Liens.

Section 6.12 Payment of Indebtedness. The Borrower will pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all of its Indebtedness of whatever nature, except, to the extent any such payment is being contested

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in good faith, in appropriate proceedings which are being diligently pursued by the Borrower and where adequate and appropriate reserves therefor have been set aside by the Borrower and such non-payment has not given rise to any Lien on its assets.

Section 6.13 Limitation on Optional Payments; Conversions.

(a) The Borrower will not make any optional payment or prepayment on or redemption or purchase of the Bonds without the prior written consent of the Bank, which consent shall not be unreasonably conditioned, withheld or delayed upon receipt by the Bank of satisfactory evidence of the Borrower’s ability to reimburse the Bank for any Demand under the Letter of Credit for such prepayment or redemption.

(b) The Borrower will not direct or permit the conversion or establishment of the interest rate on the Bonds to an interest rate other than the Weekly Rate, unless either (i) the Letter of Credit is being terminated in connection therewith and the Borrower demonstrates to the reasonable satisfaction of the Bank that at the time of such conversion the Bank will be fully reimbursed for all drawings on the Letter of Credit at or before such conversion or (ii) the Bank consents in writing to such conversion or establishment.

Section 6.14 Notices. The Borrower will promptly give notice to the Bank of:

(a) the occurrence of any Default or Event of Default;

(b) any (i) default or event of default under any material provision of any Material Contract of the Borrower or (ii) litigation, investigation or proceeding which may exist at any time between the Borrower and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, would have a Material Adverse Effect or (iii) any notice from a licensing, accrediting or certifying body that indicates an intent to terminate any license, accreditation or certification of any facility of the Borrower, together with copies of any reports and correspondence relating thereto, as well as a statement of the actions taken or to be taken by the Borrower to avoid any such termination;

(c) any reorganization or change of corporate structure or control, senior officers (which shall be deemed to mean the chief executive officer, chief operating officer and chief financial officer of the Borrower or the Guarantor), management (including any execution and delivery, material revision or termination of the Management Agreement for the provision of management services for the Facility), auditors, corporate name, trade name (under which the Borrower is conducting material operations) or other material identity affecting the Borrower;

(d) any litigation or proceeding which, if adversely determined, could have a Material Adverse Effect or wherein the potential damages, in the reasonable judgment of the Borrower based upon the advice of counsel experienced in such matters (including counsel provided by the Borrower’s professional liability or general liability insurance carrier), exceed by more than $100,000 the applicable insurance coverage (if any) maintained by the Borrower (except for the deductible amounts applicable to such policies);

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(e) the following events, as soon as possible and in any event within 30 days after the Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event with respect to any Single Employer Plan, or any withdrawal from, or the termination, Reorganization or Insolvency of any Multiemployer Plan which may, individually or in the aggregate, result in a liability which would have a Material Adverse Effect or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the terminating, Reorganization or Insolvency of, any Single Employer Plan in a distress termination under Section 4041(c) of ERISA or Multiemployer Plan; and

(f) any event which has had a Material Adverse Effect.

Each notice pursuant to this subsection shall be accompanied by a statement of an officer of the Borrower, setting forth details of the occurrence referred to therein and stating what action the Borrower proposes to take with respect thereto.

Section 6.15 Credit Documents.

(a) The Borrower will not modify, amend or supplement, or give any consent to any modification, amendment or supplement, or make any waiver with respect to, any provision of any Credit Document without the prior written consent of the Bank.

(b) The Borrower shall punctually pay or cause to be paid when due all amounts payable by it under the Credit Documents and observe and perform all of the other conditions, covenants and requirements of the Credit Documents applicable to it.

(c) The Borrower shall take or cause to be taken all such action within the power or right of the Borrower as may be reasonably requested by the Bank to strictly enforce the obligations under the Credit Documents of each of the other parties thereto if the failure to take such action would materially adversely affect the rights, interests or obligations of the Bank.

Section 6.16 Replacement of Remarketing Agent Without the prior written approval of the Bank (which approval shall not be unreasonably withheld), the Borrower shall not (a) appoint or permit or suffer to be appointed any successor Remarketing Agent without the prior written consent of the Bank or (b) enter into any successor Remarketing Agreement that contains provisions (including provisions that protect the rights and interests of the Bank) that are not substantially (other than the identity of the successor Remarketing Agent and fees payable thereunder) the same in all respects material, in the reasonable judgment of the Bank, to the interests of the Bank as those contained in the Remarketing Agreement as in effect on the date hereof. The Borrower shall provide to the Bank a copy of such successor Remarketing Agreement promptly upon execution and delivery thereof.

Section 6.17 Alternate Credit Facility The Borrower will not deliver to the Trustee an Alternate Credit Facility (as defined in the Indenture) pursuant to Section 401(b) of the Indenture unless (a) the Borrower shall have given 60 days’ written notice of such delivery to the Bank, (b) such Alternate Credit Facility and any substitute reimbursement agreement pursuant to which such Alternate Credit Facility is issued shall require as a condition of such delivery, that the Borrower shall have paid in full all Reimbursement Obligations and Hedging

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Obligations, (c) immediately prior to or simultaneously with such delivery, either the Borrower or the issuer of such Alternate Credit Facility shall have purchased from the Bank all outstanding Bank Bonds by payment in full of the principal amount thereof and all accrued and unpaid interest thereon and the Borrower shall have paid to the Bank all other Reimbursement Obligations and Hedging Obligations then owing.

Section 6.18 Updated Appraisals For so long as the Borrower has any Reimbursement Obligations, the Bank may at any time cause the Property to be appraised by an appraiser selected by the Bank in accordance with the Bank’s appraisal guidelines and procedures then in effect, and the Borrower agrees to cooperate in all respects with such appraisals and furnish to the appraisers all requested information regarding the Property. If a Default or Event of Default exists, the Borrower agrees to pay all costs incurred by the Bank in connection with such appraisal which costs shall be secured by the Mortgage.

Section 6.19 Leases The Borrower shall perform all of the Borrower’s material obligations under each Lease on or before the due date thereof (if a due date is applicable).

Section 6.20 Management Agreement The Borrower shall maintain the Management Agreement in full force and effect and timely perform all of the Borrower’s obligations thereunder and enforce performance of all obligations of the Manager thereunder and not permit the termination, material amendment or assignment of the Management Agreement unless the prior written consent of the Bank is first obtained, which consent shall not be unreasonably withheld, conditioned or delayed. The Borrower will enter into and cause Manager to enter into the Assignment and Subordination of Management Agreement. The Borrower will not enter into any other management agreement or replace Manager under the existing Management Agreement without the Bank’s prior written consent, which consent shall not be unreasonably withheld. The Bank acknowledges that it has approved the Management Agreement.

Section 6.21 Compliance with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws The Borrower shall comply with all Requirements of Law relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect. Upon the Borrower’s request from time to time during the term of this Agreement, the Borrower shall certify in writing to the Bank that the Borrower’s representations, warranties and obligations under Article 5 of this Agreement remain true and correct and have not been breached. The Borrower shall promptly notify the Bank in writing if any of such representations, warranties or covenants are no longer true or have been breached or if the Borrower has a reasonable basis to believe that they may no longer be true or have been breached. In connection with such an event, the Borrower shall comply with all Requirements of Law and directives of Governmental Authorities and, at the Bank’s request, provide to the Bank copies of all notices, reports and other communications exchanged with, or received from, Governmental Authorities relating to such an event. The Borrower shall also reimburse the Bank any expense incurred by the Bank in evaluating the effect of such an event on this Agreement and the Letter of Credit and the Bank’s interest in the Collateral (as defined in the Security Agreement), in obtaining any necessary license from Governmental Authorities as may be necessary for the Bank to enforce its rights under the Credit Documents, and in complying with all Requirements of Law applicable to the Bank as the result of the existence of such an event and for any penalties or fines imposed upon the Bank as a result thereof.

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Section 6.22 Dividends, Distributions and Redemptions If a Default of which the Borrower has been notified or an Event of Default exists, except as otherwise consented to by the Bank in writing, declare or pay any distributions to its shareholders, members or partners, as applicable, or purchase, redeem, retire, or otherwise acquire for value, any ownership interests in the Borrower now or hereafter outstanding, return any capital to its shareholders, members or partners, as applicable, or make any distribution of assets to its shareholders, members, or partners, as applicable.

Section 6.23 Insurance Maintain, at its expense, or cause to be maintained, the following insurance coverages and policies with respect to the Property, which coverages and policies must be acceptable to the Bank in its sole and reasonable discretion:

(a) Comprehensive “all risk” or “special” cause of loss insurance, including coverage for windstorms and hail, in an amount equal to 100% of the full replacement cost of the Property, which replacement cost shall be determined by the “Insurable Value” or “Cost Approach to Value” reflected in the most recent Bank approved appraisal for the Property, without deduction for depreciation. Such insurance shall also include (i) agreed insurance amount endorsement waiving all co-insurance provisions, and (ii) an “Ordinance or Law Coverage” endorsement if the Property or the use thereof shall constitute a legal non-conforming structure or use.

(b) Commercial general liability insurance for personal injury, bodily injury, death or property damage, in or about the Property to be on a so-called “occurrence” basis for at least $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate with a $10,000,000.00 umbrella coverage.

(c) Business interruption income insurance for the Property in an amount equal to 100% of the net income plus carrying costs and extraordinary expenses of the Property for a period of twelve (12) months as projected by the Bank, containing a 90-day extended period of indemnity endorsement.

(d) Flood Hazard insurance if any portion of the Property is located in a “flood zone area,” as identified in the Federal Register by the Federal Emergency Management Agency as a 100-year flood zone or “special flood hazard area” and in which flood insurance is available. In lieu thereof, the Bank will accept proof, satisfactory to it in its reasonable discretion, that the Improvements are not within the boundaries of a designated “flood zone area” or “special flood hazard area”.

(e) Workers’ compensation insurance, if applicable and required by state law, subject to applicable state statutory limits.

(f) Comprehensive boiler and machinery insurance, including property damage coverage and time element coverage in an amount equal to 100% of the full replacement cost, without deduction for depreciation, of the Property housing the machinery, if steam boilers, pipes, turbines, engines or any other pressure vessels are in operation with respect to the

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Property. Such insurance coverage shall include a “joint loss” clause if such coverage is provided by an insurance carrier other than that which provides the comprehensive “all risk” insurance described above.

(g) During the period of any construction and/or renovation of capital improvements with respect to the Property or any new construction at the Property, builder’s risk insurance for any improvements under construction and/or renovation, including, without limitation, costs of demolition and increased cost of construction or renovation, in an amount equal the amount of the general contract plus the value of any existing purchase money financing for improvements and materials stored on or off the Property, including “soft cost” coverage.

(h) Such other insurance coverages as may be deemed necessary at any time during the term of this Agreement and as shall be provided within such time periods as the Bank may determine, in each case, in its commercially reasonable discretion, provided that such coverages are available at commercially reasonable rates and are customarily required by institutional lenders for similar projects.

All insurance policies shall have a term of not less than one year, shall be in the amounts set forth herein, and shall be in the form and amounts as, from time to time, shall be acceptable to the Bank in its sole and reasonable discretion, and may be subject to commercially reasonable deductibles. All such policies (with the exception of workers’ compensation insurance) shall provide for loss payable solely to the Bank and shall contain a standard “non-contributory mortgagee” endorsement or its equivalent relating, among other things, to recovery by the Bank notwithstanding the negligent or willful acts or omissions of the Borrower and notwithstanding (i) occupancy or use of the Property for purposes more hazardous than those permitted by the terms of such policy, (ii) any foreclosure or other action taken by the Bank pursuant to the Mortgage upon the occurrence of an Event of Default thereunder, or (iii) any change in title or ownership of the Property.

All insurance policies must be written by an admitted carrier authorized to do business in the state in which the Property is located and such insurance carrier must have a long-term senior debt rating of at least “A-” by Standard and Poor’s Rating Service.

All liability insurance policies (including, but not limited to, general liability, professional liability and any applicable blanket and/or umbrella policies) must name “PNC Bank, National Association and its successors and/or assigns” as additional insureds, and all property insurance policies must name “PNC Bank, National Association and its successors and/or assigns” as the named mortgage holder entitled to all insurance proceeds.

All insurance policies for the above-required insurance must provide for thirty (30) days prior written notice of cancellation to the Bank.

Policies or binders, together with evidence of the above required insurance on ACORD Form 25 for liability insurance and on ACORD Form 27 or ACORD Form 28 or their equivalents for property insurance, must be submitted to the Bank prior to the Date of Issuance.

With respect to insurance policies which require payment of premiums annually, prior to the expiration dates of the insurance policies obtained pursuant to this Agreement, the Borrower

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shall pay such amount. Prior to the expiration dates of the insurance policies obtained pursuant to this Agreement, originals or certified copies of renewals of such policies (or certificates evidencing such renewals) bearing notations evidencing the payment of premiums or accompanied by other evidence satisfactory to the Bank of such payment, which premiums shall not be paid by the Borrower through or by any financing arrangement, shall be delivered by Borrower to the Bank at the address set forth in Section 8.01 hereof. The Borrower shall not carry separate insurance, concurrent in kind or form or contributing in the event of loss, with any insurance required under this Section 6.23. If the limits of any policy required hereunder are reduced or eliminated due to a covered loss, the Borrower shall pay the additional premium, if any, in order to have the original limits of insurance reinstated, or the Borrower shall purchase new insurance in the same type and amount that existed immediately prior to the loss.

If the Borrower fails to maintain and deliver to the Bank the original policies or certificates of insurance required by this Agreement, the Bank may, at its option, following notice to the Borrower, procure such insurance and the Borrower shall pay or, as the case may be, reimburse the Bank for, all premiums thereon promptly, upon demand by the Bank, with interest thereon at the Default Rate from the date paid by the Bank to the date of repayment and such sum shall constitute a part of the Reimbursement Obligations.

The insurance required by this Agreement may, at the option of the Borrower, be effected by blanket and/or umbrella policies issued to the Borrower or to an Affiliate of the Borrower covering the Property and the properties of such Affiliate; provided that, in each case, the policies otherwise comply with the provisions of this Agreement and allocate to the Property, from time to time, the coverage specified by this Agreement, without possibility of reduction or coinsurance by reason of, or damage to, any other property (real or personal) named therein. If the insurance required by this Agreement shall be effected by any such blanket or umbrella policies, the Borrower shall furnish to the Bank original policies or certified copies thereof, with schedules attached thereto showing the amount of the insurance provided under such policies which is applicable to the Property.

Neither the Bank nor its agents or employees shall be liable for any loss or damage insured by the insurance policies required to be maintained under this Agreement; it being understood that (a) the Borrower shall look solely to its insurance company for the recovery of such loss or damage, (b) such insurance company shall have no rights of subrogation against the Bank, its agents or employees, and (c) the Borrower shall use its best efforts to procure from such insurance company a waiver of subrogation rights against the Bank. If, however, such insurance policies do not provide for a waiver of subrogation rights against the Bank (whether because such a waiver is unavailable or otherwise), then the Borrower hereby agrees, to the extent permitted by law and to the extent not prohibited by such insurance policies, to waive its rights of recovery, if any, against the Bank, its agents and employees, whether resulting from any damage to the Property, any liability claim in connection with the Property or otherwise. If any such insurance policy shall prohibit the Borrower from waiving such claims, then the Borrower must obtain from such insurance company a waiver of subrogation rights against the Bank.

The Borrower appoints the Bank as the Borrower’s attorney-in-fact, which appointment shall be deemed irrevocable and coupled with an interest, to cause the issuance of an endorsement of any insurance policy to bring the Borrower into compliance herewith and, as

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limited below, at the Bank’s sole option, to make any claim for, receive payment for, and execute and endorse any documents, checks or other instruments in payment for loss, theft, or damage covered under any such insurance policy; provided, however, that in no event will the Bank be liable for failure to collect any amounts payable under any insurance policy.

Section 6.24 Radon Remediation. The Borrower has provided the Bank with the January 18, 2012 report regarding Radon Resampling at: Windsor on the River prepared by EMG, Inc. (“EMG”) for EMG Project Number 99862.11R-003.173 (the “Report”). The Report contains a plan (the “Plan”) for remediation of certain dwelling units at the Facility (the “Remediation Units”), a list of which is attached hereto as Exhibit G, by EMG or another environmental consultant selected by the Borrower and reasonably acceptable to the Bank, and the Borrower shall cause the Plan to be commenced and completed within one hundred eighty (180) days after the date hereof, subject to extension on a day for day basis in the event of any delay caused by a force majeure event other than the Borrower’s financial inability to perform. The Borrower shall monitor and remediate the radon conditions in the Remediation Units pursuant to the Plan. Without limiting the generality of the preceding sentence, the Bank may, to the extent reasonably necessary, require (a) periodic reports regarding the Plan from the Borrower in form, substance and at intervals as the Bank may reasonably specify but in no event more often than monthly, (b) an amendment to the Plan if reasonably required to address changing circumstances, laws or other matters relating to the Remediation Units, (c) subject to tenant’s rights under the Leases, at the Borrower’s sole expense, supplemental examination of the Remediation Units by EMG or another consultant selected by the Borrower and reasonably acceptable to Bank, (d) subject to tenant’s rights under the Leases and prior written notice to the Borrower, access at reasonable times to the Remediation Units by the Bank, its agents or servicer, to review and assess the environmental condition of the Remediation Units and the Borrower’s compliance with the Plan, and (e) reasonable and necessary variation of the Plan in response to any additional reports provided by any such consultants.

Section 6.25 Immediate Repairs. The Borrower shall perform the repairs at the Property as set forth on Exhibit F hereto (such repairs hereinafter referred to as “Immediate Repairs”) and shall complete each of the Immediate Repairs within one hundred fifty (150) days of the date hereof, subject to extension on a day for day basis in the event of any delay caused by a force majeure event other than the Borrower’s financial inability to perform. All Immediate Repairs shall be completed in a good and workmanlike manner and in accordance with all applicable legal requirements. The Borrower shall provide the Bank with evidence (reasonably satisfactory to the Bank) that the Immediate Repairs have been timely and properly completed.

Section 6.26 Further Assurances. The Borrower will execute, acknowledge where appropriate, and deliver or file, and cause to be executed, acknowledged where appropriate, and delivered or filed, from time to time promptly at the request of the Bank, all such instruments and documents as are necessary or advisable to carry out the intent and purpose of this Agreement and the Credit Documents.

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ARTICLE VII

DEFAULTS AND REMEDIES

Section 7.01 Defaults. Each of the following shall constitute an event of default hereunder (“Event of Default”):

(a) Failure by the Borrower to make or cause to be made when due any payment under this Agreement as (i) reimbursement for a drawing under the Letter of Credit, (ii) any fees payable pursuant to Section 2.02(f), or (iii) interest on any such drawing or fees;

(b) Failure by the Borrower to make any other payment within thirty (30) days of the date when it is due under this Agreement;

(c) Failure by the Borrower to perform or comply with any of the other terms or conditions contained in this Agreement or any other document delivered by it to the Bank pursuant to this Agreement and continuance of such failure for thirty (30) days after the earlier of written notice from the Bank to the Borrower, or the Borrower has knowledge that such failure has occurred, or such longer period as may be necessary to cure a default if it is not curable by the exercise of due diligence within such 30 day period, provided that the Borrower shall have commenced to cure such default within such 30 day period and shall complete such cure as quickly as reasonably possible with the exercise of due diligence, but in any event within ninety (90) days;

(d) Any of the representations or warranties of the Borrower set forth in this Agreement or any other document furnished to the Bank by or on behalf of the Borrower pursuant to the terms hereof is false or misleading in any material respect;

(e) Any material provision of this Agreement shall at any time for any reason cease to be valid and binding on the Borrower, or is declared to be null and void by a court with jurisdiction over the matter, or is violative of any applicable law relating to a maximum amount of interest permitted to be contracted for, charged or received, or the validity or enforceability thereof is contested by the Borrower, or any governmental agency, court of authority, or the Borrower denies that it has any or further liability or obligation under this Agreement;

(f) The occurrence of an Event of Default as defined in the Indenture or the Repayment Guaranty;

(g) The Borrower (i) applies for or consents to the appointment of a receiver, trustee, liquidator or custodian or the like of the Borrower, or of the Borrower’s property, or (ii) admits in writing the inability of the Borrower to pay its debts generally as they become due, or (iii) makes a general assignment for the benefit of creditors, or (iv) is adjudicated a bankrupt or insolvent, or (v) commences a voluntary case under the United States Bankruptcy Code or files a voluntary petition or answer seeking reorganization, an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or files an answer admitting the material allegations of a petition filed against the Borrower in any

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bankruptcy, reorganization or insolvency proceeding, or action of the Borrower is taken for the purpose of effecting any of the foregoing, or (vi) has instituted against it, without the application, approval or consent of the Borrower a proceeding in any court of competent jurisdiction, under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking in respect of the Borrower an order for relief or an adjudication in bankruptcy, reorganization, dissolution, winding up or liquidation, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of the Borrower, or of all or any substantial part of the assets of the Borrower, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by the Borrower in good faith, the same (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed and undischarged for a period of 60 days;

(h) The Borrower fails to maintain in full force and effect the hazard or other insurance required pursuant to this Agreement or the Mortgage or the Indenture;

(i) Any litigation or administrative proceeding ensues, and is not dismissed within 60 days, involving the Borrower or any instrument, contract or document delivered to the Bank in compliance with this Agreement, and in the Bank’s reasonable judgment (i) such litigation or proceeding is likely to be formally adjudicated adversely to the Borrower and (ii) the adverse result of such litigation or proceeding would have in the Bank’s reasonable opinion, a materially adverse effect on the Borrower’s ability to pay its obligations and comply with the covenants under this Agreement;

(j) Any one or more judgments or orders are entered against the Borrower, where such judgments or orders aggregate $250,000 or more and either (i) continue unsatisfied and unstayed for 60 days or (ii) a judgment lien on any property of the Borrower is recorded in respect thereof and is not stayed pending appeal by a bond or other arrangement given or obtained by the Borrower on terms which do not violate any of the Borrower’s covenants under this Agreement;

(k) Failure by the Borrower or to make any payment or payments in respect of any Indebtedness, in a principal amount of $250,000 or more, when such payment or payments are due and payable (after notice (if applicable) and the lapse of any applicable grace period) that results in the acceleration of such Indebtedness or enables the holder or holders of any such Indebtedness or any person acting on behalf of such holder or holders to accelerate the maturity of any such Indebtedness;

(l) The occurrence of any default or event of default with respect to any other credit arrangement under which the Borrower is indebted to the Bank, which is not cured after notice (if applicable) and the lapse of any applicable cure period;

(m) (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to

41

administer or to terminate, any Single Employer Plan, which Reportable Event or institution of proceedings is, in the reasonable opinion of the Bank, likely to result in the termination by action of the PBGC or any court of such Plan for purposes of Title IV of ERISA, or (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA; and in each case in clauses (i) through (iv) above, such event or condition, together with all other such events or conditions, if any would have a Material Adverse Effect;

(n) Any Governmental Authority takes any other action or imposes any other requirement as a sanction for failure to meet any Requirement of Law which could have a Material Adverse Effect, or the Borrower or the Guarantor ceases to conduct its business, or is enjoined, restrained or in any way prevented by any order or directive of any Governmental Authority from conducting all or any material part of its business for more than 60 consecutive days;

(o) The Guarantor shall cease to be the general partner of the Steadfast Operating Partnership or the Steadfast Operating Partnership ceases to be the sole member of the Borrower; or

(p) The occurrence of an event of default under any Hedging Agreement entered into with the Bank or any Affiliate of the Bank.

Section 7.02 Remedies. Upon the occurrence of an Event of Default, at the sole election of the Bank, (i) all Bank Reimbursement Obligations and Hedging Obligations shall become immediately due and payable, without demand, presentment, protest or notice of any kind, all of which are hereby expressly waived, (ii) the Bank may give notice to the Trustee of an Event of Default, which notice or any subsequent notice may provide that the Bank is exercising some or all of its remedies hereunder or under any Credit Document (including the Indenture), and (iii) the Bank shall have the rights and remedies available to it under the Credit Documents (and the other Credit Documents, if specified therein) or otherwise available pursuant to law or equity, provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the United States Bankruptcy Code, the Reimbursement Obligations shall automatically become due and payable, without presentment, demand, protest of any notice of any kind, all of which are hereby expressly waived by the Borrower.

Section 7.03 Waivers; Consents. No waiver of, or consent with respect to, any provision of this Agreement shall in any event be effective unless the same shall be in writing and signed by the Bank and/or the Borrower, as applicable, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.

Section 7.04 No Waiver; Remedies Cumulative. No failure on the part of the Bank to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; and no single or partial exercise of any right hereunder shall preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies available under any other document or at law or in equity.

42

Section 7.05 Set-Off. Upon the occurrence and during the continuance of any Event of Default, the Bank is hereby authorized at any time and from time to time without notice to the Borrower (any such notice being expressly waived by the Borrower) and, to the fullest extent permitted by law, to set off and to apply any and all balances, credits, deposits (general or special, time or demand, provisional or final), accounts or moneys at any time held and other indebtedness at any time owing by the Bank to or for the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement, any Hedging Agreement or any other agreement or instrument delivered by the Borrower to the Bank in connection therewith, whether or not the Bank shall have made any demand hereunder or thereunder and although such obligations may be contingent or unmatured. The rights of the Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Bank may have.

ARTICLE VIII

MISCELLANEOUS

Section 8.01 Notices. All notices and other communications provided for hereunder shall, unless otherwise specified, be given or made in writing (which includes by means of electronic transmission (i.e., “e-mail”) or facsimile transmission or by setting forth such notice on a site on the World Wide Web (a “Website Posting”) if notice of such Website Posting (including the information necessary to access such site) has previously been delivered to the applicable parties hereto by another means set forth in this Section) in accordance with this Section. Any such notice must be delivered to the applicable parties hereto as the following addresses:

If to the Bank:

PNC Bank, National Association

26901 Agoura Road, Suite 200

Calabasas Hills, CA 91301

Attention: Sandeep Patel

Facsimile No.: (818) 880-3303

If to the Borrower:

SIR Windsor on the River, LLC

c/o: Steadfast Companies

18100 Von Karman Ave., Suite 500

Irvine, CA 926122

Attention: Ana Marie del Rio, Esq.

Facsimile No.: (949) 777-8316

with a copy to:

Garrett DeFrenza Stiepel LLP

695 Town Center Drive, Suite 500

43

Costa Mesa, California 92626

Attention: Marc DeFrenza

Facsimile No.: (714) 384-4320

(valid until March 9, 2012)

Garrett DeFrenza Stiepel LLP

3200 Bristol Street, Suite 850

Costa Mesa, California 92626

Attention: Marc DeFrenza

Facsimile No.: (714) 384-4320

(valid after March 9, 2012)

If to the Remarketing Agent:

Stern Brothers & Co.

801 West 47th Street, Suite 401

Kansas City, MO 64112

Attention: Marc DeFrenza

Any such notice to the Bank shall refer to this Agreement and PNC Bank, National Association Irrevocable Letter of Credit No. 18116631-00-000. Either party hereto may change the address to which notices to it are to be sent by written notice given to the other persons listed in this Section. All notices shall be effective:

(a) In the case of hand-delivery, when delivered;

(b) If given by mail, four days after such notice is deposited with the United States Postal Service, with first-class postage prepaid, return receipt requested;

(c) In the case of a facsimile transmission, when sent to the applicable party’s facsimile machine’s telephone number, if the party sending such notice receives confirmation of the delivery thereof from its own facsimile machine;

(d) In the case of electronic transmission, when actually received;

(e) In the case of a Website Posting, upon delivery of a Notice of such posting (including the information necessary to access such site) by another means set forth in this Section; and

(f) If given by any other means (including by overnight courier), when actually received.

Section 8.02 Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns. The Borrower may not assign its rights under this Agreement without the prior written consent of the Bank. The Borrower and the Bank intend that no other Person shall have any claim or interest under this Agreement or right of action hereon or hereunder.

44

Section 8.03 Survival of Covenants. All covenants made by the Borrower herein and in any document delivered pursuant hereto shall survive the delivery of this Agreement and the Letter of Credit and any advances under the Letter of Credit.

Section 8.04 Counterparts. The execution hereof by each party hereto shall constitute a contract between them for the uses and purposes herein set forth, and this Agreement may be executed in any number of counterparts, with each executed counterpart constituting an original and all counterparts together constituting one agreement.

Section 8.05 Costs, Expenses and Taxes. The Borrower agrees to pay promptly following Bank’s request therefor all reasonable costs and expenses of the Bank in connection with the preparation, execution, delivery and administration of this Agreement, the Letter of Credit, the Participation Agreements and any other documents that may be delivered in connection with this Agreement, the Letter of Credit, the Participation Agreements or any amendments or supplements thereto, including without limitation the reasonable fees and expenses of counsel for the Bank with respect thereto and with respect to advising the Bank as to its rights and responsibilities under this Agreement, the Letter of Credit and such other documents, and all costs and expenses, if any, including without limitation reasonable counsel fees and expenses of the Bank, in connection with the enforcement of this Agreement, the Letter of Credit, the Participation Agreements and such other documents. In addition, the Borrower shall pay any and all stamp and other taxes and governmental fees payable or determined to be payable in connection with the execution and delivery of this Agreement, the Letter of Credit, the Participation Agreements and such other documents and agrees to indemnify and to hold the Bank and the Participating Banks harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees; provided the Bank promptly notifies the Borrower of any such taxes and fees.

Section 8.06 Amendments. No amendment or waiver of any provision of this Agreement, nor consent to any departure by the Borrower or the Bank therefrom, shall in any event be effective unless the same shall be in writing and signed by the Bank, the Borrower or both, as applicable.

Section 8.07 Severability; Interest Limitation. If any provision hereof is found by a court of competent jurisdiction to be prohibited or unenforceable in any jurisdiction, it shall be ineffective as to such jurisdiction only to the extent of such prohibition or unenforceability, and such prohibition or unenforceability shall not invalidate the balance of such provision as to such jurisdiction to the extent it is not prohibited or unenforceable, nor invalidate such provision in any other jurisdiction, nor invalidate the other provisions hereof. Notwithstanding anything to the contrary herein contained, the total liability of the Borrower for payment of interest pursuant hereto shall not exceed the maximum amount, if any, of such interest permitted by applicable law to be contracted for, charged or received, and if any payments by the Borrower to the Bank include interest in excess of such a maximum amount, the Bank shall apply such excess to the reduction of the unpaid principal amount due pursuant hereto, or if none is due, such excess shall be refunded to the Borrower; provided that, to the extent permitted by applicable law, in the

45

event the interest is not collected, is applied to principal or is refunded pursuant to this sentence and interest thereafter payable pursuant hereto shall be less than such maximum amount, then such interest thereafter so payable shall be increased up to such maximum amount to the extent necessary to recover the amount of interest, if any, theretofore uncollected, applied to principal or refunded pursuant to this sentence. Any such application or refund shall not cure or waive any Event of Default. In determining whether or not any interest payable under this Agreement exceeds the highest rate permitted by law, any nonprincipal payment (except payments specifically stated in this Agreement to be “interest”) shall be deemed, to the extent permitted by applicable law, to be an expense, fee, premium or penalty rather than interest.

Section 8.08 [Intentionally Omitted].

Section 8.09 Complete Agreement. Taken together with the other instruments and documents delivered in compliance herewith, this Agreement is a complete memorandum of the agreement of the Borrower and the Bank. Waivers or modifications of any provision hereof must be in writing signed by the party to be charged with the effect thereof.

Section 8.10 Consent to Jurisdiction; Venue; Waiver of Jury Trial. The Borrower hereby irrevocably (i) agrees that any suit, action or other legal proceeding arising out of or relating to this Agreement or the Letter of Credit may be brought in any federal or state court located in Pittsburgh, Pennsylvania and consents to the jurisdiction of such court in any such suit, action or proceeding, (ii) agrees that any suit, action or other legal proceeding by the Borrower against the Bank shall be brought solely in a federal or state court located in Pittsburgh, Pennsylvania, and (iii) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. The Borrower hereby irrevocably consents to the service of any and all process in any such suit, action or proceeding by mailing of copies of such process to the Borrower at its address provided under or pursuant to Section 8.01. The Borrower 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. All mailings under this Section shall be by certified or registered mail, return receipt requested. Nothing in this Section shall affect the right of the Bank to serve legal process in any other manner permitted by law or affect the right of the Bank to bring any suit, action or proceeding against the Borrower or its property in the courts of any other jurisdiction. The Borrower and the Bank hereby waive the right to trial by jury in any action arising hereunder or under any of the Credit Documents or otherwise in connection herewith.

Section 8.11 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania without reference to its principles of conflicts of law. The Letter of Credit shall be governed and construed as set forth therein.

Section 8.12 Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

46

Section 8.13 Participations. Notwithstanding any other provision of this Agreement, the Borrower understands that the Bank may enter into one or more participation agreements (each a “Participation Agreement”) with other banks or financial institutions (each a “Participating Bank”) whereby the Bank will allocate to the Participating Banks certain percentages of the payment obligations of the Borrower under this Agreement and the funding obligations of the Bank under the Letter of Credit. The Borrower acknowledges, that, for the convenience of all parties, this Agreement is being entered into with the Bank only and that the Borrower’s obligations under this Agreement are and will be undertaken for the benefit of, and as an inducement to, the Participating Banks as well as the Bank. Without limiting the foregoing, the Borrower acknowledges that Sections 2.02(h), 2.05 and the indemnity under Section 8.05 are also for the benefit of the Participating Banks, and agrees to make any payments required by such provisions for the account of any one or more Participating Banks on demand of the Bank. Notwithstanding the foregoing, the Borrower shall not be required to respond to requests or inquiries made by any of the Participating Banks unless such requests or inquiries are made through the Bank. The Borrower hereby waives any right of set-off it may at any time have against the Bank or any Participating Bank as a result of the participations of the Participating Banks in the payment obligations of the Borrower under this Agreement. The Bank agrees to give written notice to the Borrower identifying each Participating Bank with whom the Bank has entered into a Participation Agreement from time to time; provided that failure to give any such notice shall not affect the rights of any Participating Bank or result in any liability of the Bank. The Borrower hereby authorizes the Bank to provide, without any notice to the Borrower, any information concerning the Borrower and the Guarantor, including information pertaining to their financial condition, business operations or general creditworthiness, to any person or entity which has or may become a Participating Bank.

47

IN WITNESS WHEREOF, the Borrower and the Bank have caused this Agreement to be duly executed and delivered as of the date first above written.

SIR WINDSOR ON THE RIVER, LLC, a Delaware limited liability company
By:	Steadfast Income Advisor, LLC, a Delaware limited liability company, its Manager
	By:	/s/ Rodney F. Emery
		Name: Rodney F. Emery
		Title: CEO and President
PNC BANK, NATIONAL ASSOCIATION
By:	/s/ Sandeep K. Patel
	Name: Sandeep K. Patel
	Title: Vice President

This execution page is part of the Reimbursement and Credit Agreement dated as of January 26, 2012 between SIR Windsor on the River, LLC and PNC Bank, National Association.

EXHIBIT A

FORM OF LETTER OF CREDIT

January 26, 2012

IRREVOCABLE LETTER OF CREDIT NO. 18116631-00-000

The Bank of New York Mellon Trust Company, N.A

2 N. LaSalle Street, 7th Floor

Chicago, IL 60602

Ladles and Gentlemen:

At the request and for the account of SIR Windsor on the River, LLC (the “Borrower”), we hereby establish in your favor, as Trustee under the Indenture of Trust dated as of May 1, 2007 (the “Indenture”) between The Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”), and the Iowa Finance Authority (the “Issuer”), pursuant to which $24,000,000 aggregate principal amount of Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007B (as the same were converted into an equal aggregate principal amount of the Issuer’s Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A pursuant to the terms and conditions set forth in the Indenture, the “Bonds”) have been issued by the Issuer, our Irrevocable Letter of Credit No. 18116631-00-000 (the “Letter of Credit”) in the amount of $23,789,727 (as more fully described below), effective immediately and expiring at 5:00 p.m. on January 25, 2017 or, if such day is not a Business Day (as hereinafter defined), on the next succeeding Business Day (the “Stated Expiration Date”). This Letter of Credit is subject to automatic termination as provided herein.

We hereby irrevocably authorize you, on behalf of the Bondholders (as defined in the Indenture), to draw on us in accordance with the terms and conditions hereinafter set forth, by one or more drafts on us, an aggregate amount not exceeding Twenty Three Million Seven Hundred Eighty Nine Thousand Seven Hundred Twenty Seven and 00/100 Dollars ($23,789,727) (as reduced and reinstated from time to time in accordance with the provisions hereof, the “Letter of Credit Amount”), of which (i) an aggregate amount not exceeding $23,500,000 (as reduced and reinstated from time to time in accordance with the provisions hereof, the “Principal Component”) may be drawn upon with respect to principal of the Bonds or the principal portion of the purchase price of the Bonds and (ii) an aggregate amount not exceeding $289,727 (as reduced and reinstated from time to time in accordance with the provisions hereof, the “Interest Component”) may be drawn upon with respect to interest accrued on the Bonds or the interest portion of the purchase price of the Bonds. The Interest Component has been initially established on the basis of 45 days interest and a year of 365 days, at an assumed maximum interest rate of 10% per annum, applied to the aggregate principal amount of the Bonds. The Principal Component shall not be available to pay amounts corresponding to the interest on the Bonds, and the Interest Component shall not be available to pay amounts corresponding to principal of the Bonds.

A-1

Funds under this Letter of Credit are available against presentation of one or more signed and dated demands addressed by you to PNC Bank, National Association, Letter of Credit Department, Pittsburgh, Pennsylvania, each in the form (each, a “Certificate”) of Annex A (an “A Drawing”), Annex B (a “B Drawing”), Annex C (a “C Drawing”). Annex D (a “D Drawing”) or Annex E (an ‘E Drawing”) hereto, with all instructions in brackets therein being complied with. Each such demand must be presented to us in its original form or by facsimile transmission of such original form.

Each such presentation must be made at or before 5:00 p.m. Pittsburgh, Pennsylvania time on a Business Day (as hereinafter defined) to our Letter of Credit Department in Pittsburgh, Pennsylvania (presently located at 500 First Avenue, Second Floor, P7-PFSC-02-T, Pittsburgh, Pennsylvania 15219).

As used herein the term “Business Day” shall mean a day on which our Pittsburgh, Pennsylvania Letter of Credit Department is open for business.

The amount of any demand presented hereunder will be the amount inserted in numbered Paragraph 4 of said demand. By honoring any such demand we make no representation as to the correctness of the amount demanded.

We hereby agree with you that each demand presented hereunder in full compliance with the terms hereof will be duly honored by our payment to you of the amount of such demand, in immediately available funds of PNC Bank, National Association:

(i) not later than 11:00 a.m., Pittsburgh, Pennsylvania time, on the Business Day following the Business Day on which such demand is presented to us as aforesaid if such presentation is made to us at or before 11:00 a.m., Pittsburgh, Pennsylvania time, or

(ii) not later than 11:00 a.m., Pittsburgh, Pennsylvania time, on the second Business Day following the Business Day on which such demand is presented to us as aforesaid, if such presentation is made to us after 11:00 a.m., Pittsburgh, Pennsylvania time.

Notwithstanding the foregoing, any demand presented hereunder, in full compliance with the terms hereof, for a C Drawing will be duly honored (i) not later than 1:30 p.m., Pittsburgh, Pennsylvania time, on the Business Day on which such demand is presented to us as aforesaid if such presentation is made to us at or before 11:00 a.m., Pittsburgh, Pennsylvania time, and (ii) not later than 1:30 a.m., Pittsburgh, Pennsylvania time, on the Business Day following the Business Day on which such demand is presented to us as aforesaid if such presentation is made to us after 11:00 a.m., Pittsburgh, Pennsylvania time.

If the remittance instructions included with any demand presented under this Letter of Credit require that payment is to be made by transfer to an account with us or with another bank, we and/or such other bank may rely solely on the account number specified in such instructions even if the account is in the name of a person or entity different from the intended payee.

A-2

With respect to any demand that is honored hereunder, the total amount of this Letter of Credit shall be reduced as follows:

(A) With respect to any A Drawing or B Drawing, the total amount of this Letter of Credit, and the corresponding Principal Component and Interest Component, as the case may be, shall be reduced, as to all demands subsequent to the applicable demand, by the amount of the applicable demand as of the time of presentation of such demand and shall not be reinstated;

(B) With respect to any C Drawing, the total amount of this Letter of Credit, and the corresponding Principal Component and Interest Component, as the case may be, shall be reduced, as of the time of presentation of the applicable demand and as to all demands subsequent to the applicable demand, by the sum of (1) the amount inserted as principal in paragraph 5(A) of the applicable demand plus (2) the greater of (a) the amount inserted as interest in paragraph 5(B) of the applicable demand and (b) interest on the amount inserted as principal in paragraph 5(A) of the applicable demand calculated for 45 days at the rate of ten percent (10%) per annum based on a year of 365 days (with any fraction of a cent being rounded upward to the nearest whole cent); provided, however, that if the Bonds (as defined below) related to a C Drawing are remarketed and the remarketing proceeds are paid to us, then on the day we receive such remarketing proceeds the amount of this Letter of Credit, and the corresponding Principal Component and Interest Component, as the case may be, shall be reinstated by an amount which equals the sum of (i) the amount paid to us from such remarketing proceeds and (ii) interest on such amount calculated for the same number of days, at the same interest rate, and on the basis of a year of the same number of days as is specified in (2)(b) of this paragraph (B) (with any fraction of a cent being rounded upward to the nearest whole cent), with such reinstatement and its amount being promptly advised to you; provided, however, that in no event will the total amount of all C Drawing reinstatements exceed the total amount of all Letter of Credit reductions made pursuant to this paragraph (B); and

(C) With respect to any E Drawing, the total amount of this Letter of Credit, and the corresponding Interest Component, shall be reduced, as to all demands subsequent to the applicable demand, by the amount of the applicable demand as of the time of presentation of such demand; provided, however, that such amount shall be automatically reinstated on the eleventh (11^th) calendar day following the date such demand is honored by us, unless (i) you shall have received notice from us by express courier, authenticated SWIFT message, facsimile transmission, or registered mail no later than nine (9) calendar days after such demand is honored by us that there shall be no such reinstatement, or (ii) such eleventh (11^th) calendar day falls after the Stated Expiration Date.

Upon presentation to us of a D Drawing in compliance with the terms of this Letter of Credit, no further demand whatsoever may be presented hereunder.

An E Drawing shall not be presented to us (i) more than once during any twenty-seven (27) calendar day period, or (ii) with respect to any single E Drawing, for an amount more than the Interest Component.

A-3

It is a condition of this Letter of Credit that the amount available for drawing under this Letter of Credit shall be decreased automatically without amendment upon our receipt of each reduction authorization in the form of Annex F to this Letter of Credit (with all instructions therein in brackets being complied with) sent to us as an authenticated SWIFT message or as a signed and dated original form.

This Letter of Credit is subject to the provisions of the International Standby Practices, International Chamber of Commerce Publication No. 590 (“ISP98”). This Letter of Credit shall be deemed to be issued under the laws of the Commonwealth of Pennsylvania and shall, as to matters not governed by the ISP98, be governed and construed in accordance with the laws of said Commonwealth, without regard to principles of conflicts of law.

This Letter of Credit shall automatically terminate upon the first to occur of: (a) the Stated Expiration Date (as such date may have been extended), (b) the tenth calendar day after you receive written notice from us stating that an Event of Default has occurred and is continuing under the Reimbursement Agreement, directing you to declare the Bonds immediately due and payable pursuant to the Indenture and stating that this Letter of Credit will terminate on such tenth calendar day, or (c) the date on which a D Drawing is honored. This Letter of Credit shall be promptly surrendered to us by you upon such termination.

This Letter of Credit is transferable and may be transferred more than once, but in each case only in the amount of the full unutilized balance hereof to any single transferee who you shall have advised us pursuant to Annex G has succeeded The Bank of New York Mellon Trust Company, N.A. or a successor trustee as Trustee under the Indenture. Transfers may be effected without charge to the transferor and only through ourselves and only upon presentation to us of a duly executed Instrument of transfer in the form attached hereto as Annex G. Any transfer of this Letter of Credit as aforesaid must be endorsed by us on the reverse hereof and may not change the place of presentation of demands from our Letter of Credit Department in Pittsburgh, Pennsylvania.

All payments hereunder shall be made from our own funds.

This Letter of Credit sets forth in full the terms of our undertaking to you, but not any of our rights (whether under applicable law or otherwise). Our undertaking to you, but not any of our rights (whether under applicable law or otherwise), shall not in any way be modified, amended or amplified by reference to any document, instrument or agreement referred to in this Letter of Credit or to which this Letter of Credit relates (including the Bonds), other than the Certificates, and any such reference shall not be deemed to incorporate herein by reference or otherwise any document, instrument or agreement, except for such Certificates.

Very truly yours,

PNC BANK, NATIONAL ASSOCIATION

By:

Name:

Title:

A-4

Letter of Credit Department

Telephone No.: 800-682-4689

Facsimile No.: (412) 705-0966

A-5

ANNEX A to PNC Bank, National Association

Irrevocable Letter of Credit No. 18116631-00-000

To: PNC Bank, National Association

500 First Avenue, Second Floor, P7-PFSC-02-T

Pittsburgh, Pennsylvania 15219

Attention: Letter of Credit Department

[INSERT NAME OF BENEFICIARY] (THE “TRUSTEE”) HEREBY CERTIFIES TO PNC BANK, NATIONAL ASSOCIATION (THE “BANK”) WITH REFERENCE TO IRREVOCABLE LETTER OF CREDIT NO. 18116631-00-000 (THE “LETTER OF CREDIT”). THE TERMS THE “BONDS”, “BUSINESS DAY” AND THE “INDENTURE” USED HEREIN SHALL HAVE THEIR RESPECTIVE MEANINGS SET FORTH IN THE LETTER OF CREDIT) THAT:

(1) THE TRUSTEE IS THE TRUSTEE OR A SUCCESSOR TRUSTEE UNDER THE INDENTURE.

(2) THE TRUSTEE IS MAKING A DEMAND FOR PAYMENT UNDER THE LETTER OF CREDIT WITH RESPECT TO THE PAYMENT OF PRINCIPAL UPON AN OPTIONAL AND/OR MANDATORY REDEMPTION OF LESS THAN ALL OF THE BONDS CURRENTLY OUTSTANDING.

(3) THE AMOUNT OF THIS DEMAND FOR PAYMENT WAS COMPUTED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE BONDS AND THE INDENTURE AND IS DEMANDED IN ACCORDANCE WITH THE INDENTURE, WHICH AMOUNT PLEASE REMIT TO THE UNDERSIGNED AS FOLLOWS:

[INSERT REMITTANCE INSTRUCTIONS].

(4) THE AMOUNT HEREBY DEMANDED UNDER THE LETTER OF CREDIT IS $[INSERT AMOUNT].

(5) THE TRUSTEE HAS CONTACTED OR ATTEMPTED TO CONTACT BY TELEPHONE AN OFFICER OF THE BANK’S LETTER OF CREDIT OFFICE IN PITTSBURGH, PENNSYLVANIA REGARDING THE AMOUNT OF THIS DEMAND AND THE DATE AND TIME BY WHICH PAYMENT IS DEMANDED.

Page 1 of Annex A

A-6

(6) IF THIS DEMAND IS RECEIVED BY YOU AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON THE NEXT BUSINESS DAY. IF THIS DEMAND IS RECEIVED BY YOU AFTER 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON THE SECOND BUSINESS DAY FOLLOWING SUCH BUSINESS DAY.

[INSERT NAME OF BENEFICIARY]

Page 2 of Annex A

A-7

ANNEX B to PNC Bank, National Association

Irrevocable Letter of Credit No. 18116631-00-000

To: PNC Bank, National Association

500 First Avenue, Second Floor, P7-PFSC-02-T

Pittsburgh, Pennsylvania 15219

Attention: Letter of Credit Department

[INSERT NAME OF BENEFICIARY] (THE “TRUSTEE”) HEREBY CERTIFIES TO PNC BANK, NATIONAL ASSOCIATION (THE “BANK”) WITH REFERENCE TO IRREVOCABLE LETTER OF CREDIT NO. 18116631-00-000 (THE “LETTER OF CREDIT”). THE TERMS THE “BONDS”, “BUSINESS DAY” AND THE “INDENTURE” USED HEREIN SHALL HAVE THEIR RESPECTIVE MEANINGS SET FORTH IN THE LETTER OF CREDIT) THAT:

(1) THE TRUSTEE IS THE TRUSTEE OR A SUCCESSOR TRUSTEE UNDER THE INDENTURE.

(2) THE TRUSTEE IS MAKING A DEMAND FOR PAYMENT UNDER THE LETTER OF CREDIT WITH RESPECT TO THE PAYMENT OF UNPAID INTEREST UPON AN OPTIONAL AND/OR MANDATORY REDEMPTION OF LESS THAN ALL OF THE BONDS CURRENTLY OUTSTANDING.

(3) THE AMOUNT OF THIS DEMAND FOR PAYMENT WAS COMPUTED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE BONDS AND THE INDENTURE AND IS DEMANDED IN ACCORDANCE WITH THE INDENTURE, WHICH AMOUNT PLEASE REMIT TO THE UNDERSIGNED AS FOLLOWS:

[INSERT REMITTANCE INSTRUCTIONS],

(4) THE AMOUNT HEREBY DEMANDED UNDER THE LETTER OF CREDIT IS $[INSERT AMOUNT].

(5) THE TRUSTEE HAS CONTACTED OR ATTEMPTED TO CONTACT BY TELEPHONE AN OFFICER OF THE BANK’S LETTER OF CREDIT OFFICE IN PITTSBURGH, PENNSYLVANIA REGARDING THE AMOUNT OF THIS DEMAND AND THE DATE AND TIME BY WHICH PAYMENT IS DEMANDED.

Page 1 of Annex B

A-8

(6) IF THIS DEMAND IS RECEIVED BY YOU AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON THE NEXT BUSINESS DAY. IF THIS DEMAND IS RECEIVED BY YOU AFTER 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON THE SECOND BUSINESS DAY FOLLOWING SUCH BUSINESS DAY.

[INSERT NAME OF BENEFICIARY]

[INSERT SIGNATURE AND DATE]

Page 2 of Annex B

A-9

ANNEX C to PNC Bank, National Association

Irrevocable Letter of Credit No. 18116631-00-000

To: PNC Bank, National Association

500 First Avenue, Second Floor, P7-PFSC-02-T

Pittsburgh, Pennsylvania 15219

Attention: Letter of Credit Department

[INSERT NAME OF BENEFICIARY] (THE “TRUSTEE”) HEREBY CERTIFIES TO PNC BANK, NATIONAL ASSOCIATION (THE “BANK”) WITH REFERENCE TO IRREVOCABLE LETTER OF CREDIT NO. 18116631-00-000 (THE “LETTER OF CREDIT”). THE TERMS THE “BONDS”, “BUSINESS DAY” AND THE “INDENTURE” USED HEREIN SHALL HAVE THEIR RESPECTIVE MEANINGS SET FORTH IN THE LETTER OF CREDIT) THAT:

(1) THE TRUSTEE IS THE TRUSTEE OR A SUCCESSOR TRUSTEE UNDER THE INDENTURE.

(2) THE TRUSTEE IS MAKING A DEMAND FOR PAYMENT UNDER THE LETTER OF CREDIT WITH RESPECT TO THE PAYMENT OF THE PRINCIPAL AMOUNT OF, AND INTEREST DUE ON, THOSE BONDS WHICH THE REMARKETING AGENT (AS DEFINED IN THE INDENTURE) HAS BEEN UNABLE TO REMARKET WITHIN THE TIME LIMITS ESTABLISHED IN THE INDENTURE.

(3) THE AMOUNT OF THIS DEMAND FOR PAYMENT WAS COMPUTED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE BONDS AND THE INDENTURE AND IS DEMANDED IN ACCORDANCE WITH THE INDENTURE, WHICH AMOUNT PLEASE REMIT TO THE UNDERSIGNED AS FOLLOWS:

[INSERT REMITTANCE INSTRUCTIONS],

(4) THE AMOUNT HEREBY DEMANDED UNDER THE LETTER OF CREDIT IS $[INSERT AMOUNT WHICH IS THE SUM OF THE TWO AMOUNTS INSERTED IN PARAGRAPH 5 BELOW].

(5) THE AMOUNT OF THIS DEMAND IS EQUAL TO THE SUM OF (A) $[INSERT AMOUNT] BEING DRAWN IN RESPECT OF THE PAYMENT OF PRINCIPAL OF THE BONDS AND (B) $[INSERT AMOUNT] BEING DRAWN IN RESPECT TO THE PAYMENT OF INTEREST DUE ON THE BONDS.

(6) THE TRUSTEE HAS CONTACTED OR ATTEMPTED TO CONTACT BY TELEPHONE AN OFFICER OF THE BANK’S LETTER OF CREDIT OFFICE IN PITTSBURGH, PENNSYLVANIA REGARDING THE AMOUNT OF THIS DEMAND AND THE DATE AND TIME BY WHICH PAYMENT IS DEMANDED.

Page 1 of Annex C

A-10

(7) IF THIS DEMAND IS RECEIVED BY YOU AT OR BEFORE 10:30 A.M., PITTSBURGH, PENNSYLVANIA TIME ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 1:30 P.M., PITTSBURGH, PENNSYLVANIA TIME, ON SAID BUSINESS DAY. IF THIS DEMAND IS RECEIVED BY YOU AFTER 10:30 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 1:30 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON THE BUSINESS DAY FOLLOWING SAID BUSINESS DAY.

[INSERT NAME OF BENEFICIARY]

[INSERT SIGNATURE AND DATE]

Page 2 of Annex C

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ANNEX D to PNC Bank, National Association

Irrevocable Letter of Credit No. 18116631-00-000

To: PNC Bank, National Association

500 First Avenue, Second Floor, P7-PFSC-02-T

Pittsburgh, Pennsylvania 15219

Attention: Letter of Credit Department

[INSERT NAME OF BENEFIC1ARYJ (THE “TRUSTEE”¹) HEREBY CERTIFIES TO PNC BANK, NATIONAL ASSOCIATION (THE “BANK”) WITH REFERENCE TO IRREVOCABLE LETTER OF CREDIT NO. 18116631-00-000 (THE “LETTER OF CREDIT”). THE TERMS THE “BONDS”, “BUSINESS DAY” AND THE “INDENTURE” USED HEREIN SHALL HAVE THEIR RESPECTIVE MEANINGS SET FORTH IN THE LETTER OF CREDIT) THAT:

(1) THE TRUSTEE IS THE TRUSTEE OR A SUCCESSOR TRUSTEE UNDER THE INDENTURE.

(2) THE TRUSTEE IS MAKING A DEMAND FOR PAYMENT UNDER THE LETTER OF CREDIT WITH RESPECT TO THE PAYMENT, AT STATED MATURITY, UPON ACCELERATION FOLLOWING AN EVENT OF DEFAULT, OR UPON REDEMPTION AS A WHOLE, OF THE TOTAL UNPAID PRINCIPAL OF, AND UNPAID INTEREST ON, ALL OF THE BONDS WHICH ARE PRESENTLY OUTSTANDING.

(3) THE AMOUNT OF THIS DEMAND FOR PAYMENT WAS COMPUTED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE BONDS AND THE INDENTURE AND IS DEMANDED IN ACCORDANCE WITH THE INDENTURE, WHICH AMOUNT PLEASE REMIT TO THE UNDERSIGNED AS FOLLOWS:

[INSERT REMITTANCE INSTRUCTIONS].

(4) THE AMOUNT HEREBY DEMANDED UNDER THE LETTER OF CREDIT IS $[INSERT AMOUNT] WHICH IS THE SUM OF THE TWO AMOUNTS SET FORTH IN PARAGRAPH 5, BELOW}.

(5) THE AMOUNT OF THIS DEMAND IS EQUAL TO THE SUM OF (A) $[INSERT AMOUNT] BEING DRAWN IN RESPECT OF THE PAYMENT OF UNPAID PRINCIPAL OF THE BONDS AND (B) $[INSERT AMOUNT] BEING DRAWN IN RESPECT OF THE PAYMENT OF UNPAID INTEREST ON THE BONDS.

(6) THE TRUSTEE HAS CONTACTED OR ATTEMPTED TO CONTACT BY TELEPHONE AN OFFICER OF THE BANK’S LETTER OF CREDIT OFFICE IN PITTSBURGH, PENNSYLVANIA REGARDING THE AMOUNT OF THIS DEMAND AND THE DATE AND TIME BY WHICH PAYMENT IS DEMANDED.

(7) IF THIS DEMAND IS RECEIVED BY YOU AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON THE NEXT BUSINESS DAY. IF THIS DEMAND IS RECEIVED BY YOU AFTER 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON THE SECOND BUSINESS DAY FOLLOWING SUCH BUSINESS DAY.

[INSERT NAME OF BENEFICIARY]

[INSERT SIGNATURE AND DATE]

Page 1 of Annex D

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ANNEX E to PNC Bank, National Association

Irrevocable Letter of Credit No. 18116631-00-000

To: PNC Bank, National Association

500 First Avenue, Second Floor

P7-PFSC-02-T

Pittsburgh, Pennsylvania 15219

Attention: Letter of Credit Department

[INSERT NAME OF BENEFICIARY] (THE “TRUSTEE”) HEREBY CERTIFIES TO PNC BANK, NATIONAL ASSOCIATION (THE “BANK”) WITH REFERENCE TO IRREVOCABLE LETTER OF CREDIT NO. 18116631-00-000 (THE “LETTER OF CREDIT”). THE TERMS THE “BONDS”, “BUSINESS DAY” AND THE “INDENTURE” USED HEREIN SHALL HAVE THEIR RESPECTIVE MEANINGS SET FORTH IN THE LETTER OF CREDIT) THAT:

(1) THE TRUSTEE IS THE TRUSTEE OR A SUCCESSOR TRUSTEE UNDER THE INDENTURE.

(2) THE TRUSTEE IS MAKING A DEMAND FOR PAYMENT UNDER THE LETTER OF CREDIT WITH RESPECT TO THE PAYMENT, ON AN INTEREST PAYMENT DATE (AS DEFINED IN THE INDENTURE), OTHER THAN AN INTEREST PAYMENT DATE WITH RESPECT TO MANDATORY TENDER, OF UNPAID INTEREST WITH RESPECT TO THE BONDS.

(3) THE AMOUNT OF THIS DEMAND FOR PAYMENT WAS COMPUTED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE BONDS AND THE INDENTURE AND IS DEMANDED IN ACCORDANCE WITH THE INDENTURE, WHICH AMOUNT PLEASE REMIT TO THE UNDERSIGNED AS FOLLOWS:

[INSERT REMITTANCE INSTRUCTIONS].

(4) THE AMOUNT HEREBY DEMANDED UNDER THE LETTER OF CREDIT IS $[INSERT AMOUNT].

(5) THE TRUSTEE HAS CONTACTED OR ATTEMPTED TO CONTACT BY TELEPHONE AN OFFICER OF THE BANK’S LETTER OF CREDIT OFFICE IN PITTSBURGH, PENNSYLVANIA REGARDING THE AMOUNT OF THIS DEMAND AND THE DATE AND TIME BY WHICH PAYMENT IS DEMANDED.

Page 1 of Annex E

A-13

(6) IF THIS DEMAND IS RECEIVED BY YOU AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON THE NEXT BUSINESS DAY. IF THIS DEMAND IS RECEIVED BY YOU AFTER 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON A BUSINESS DAY, YOU MUST MAKE PAYMENT ON THIS DEMAND AT OR BEFORE 11:00 A.M., PITTSBURGH, PENNSYLVANIA TIME, ON THE SECOND BUSINESS DAY FOLLOWING SUCH BUSINESS DAY.

[INSERT NAME OF BENEFICIARY]

[INSERT SIGNATURE AND DATE]

Page 2 of Annex E

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ANNEX F to PNC Bank, National Association

Irrevocable Letter of Credit No. 18116631-00-000

To: PNC Bank, National Association

500 First Avenue, Second Floor, P7-PFSC-02-T

Pittsburgh, Pennsylvania 15219

Attention: Letter of Credit Department

FOR THE URGENT ATTENTION OF LETTER OF CREDIT MANAGER

LETTER OF CREDIT REDUCTION AUTHORIZATION

[INSERT NAME OF BENEFICIARY], WITH REFERENCE TO LETTER OF CREDIT NO. 18116631-00-000 ISSUED BY PNC BANK, NATIONAL ASSOCIATION (THE “BANK”), HEREBY UNCONDITIONALLY AND IRREVOCABLY REQUESTS THAT THE BANK DECREASE THE AMOUNT AVAILABLE FOR DRAWING UNDER THE LETTER OF CREDIT BY $[INSERT AMOUNT].

[FOR SIGNED REDUCTION AUTHORIZATIONS ONLY]

[INSERT NAME OF BENEFICIARY]

By:

TITLE:

DATE:

SIGNATURE GUARANTEED BY
[INSERT NAME OF BANK]
By:
	[INSERT NAME AND TITLE]

Page 1 of Annex F

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ANNEX G to PNC Bank, National Association

Irrevocable Letter of Credit No. 18116631-00-000

To: PNC Bank, National Association

500 First Avenue, Second Floor

P7-PFSC-02-T

Pittsburgh, Pennsylvania 15219

Attention: Letter of Credit Department

[INSERT DATE]

Subject: Your Letter of Credit No. 18116631-00-000

Ladies and Gentlemen:

For value received, we hereby irrevocably assign and transfer ail of our rights under the above-captioned Letter Credit, as heretofore and hereafter amended, extended, increased or reduced to:

[Name of Transferee]

[Address of Transferee]

By this transfer, all of our rights in the Letter of Credit are transferred to the transferee, and the transferee shall have sole rights as beneficiary under the Letter of Credit, including sole rights relating to any amendments, whether increases or extensions or other amendments, and whether now existing or hereafter made. You are hereby irrevocably instructed to advise future amendment(s) of the Letter of Credit to the transferee without our consent or notice to us.

The original Letter of Credit is returned with all amendments to this date. Please notify the transferee in such form as you deem advisable of this transfer and of the terms and conditions to this Letter of Credit, including amendments as transferred.

You are hereby advised that the transferee named above has succeeded The Bank of New York Mellon Trust Company, N.A. or a successor trustee, as Trustee under the Indenture of Trust dated as of May 1, 2007 as supplemented from time to time (the “Indenture”) between the Iowa Finance Authority (the “Issuer”) and The Bank of New York Mellon Trust Company, N.A., as Trustee, pursuant to which U.S. $24,000,000.00 In aggregate principal amount of the Issuer’s Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2O07B (as the same were converted into an equal aggregate principal amount of the Issuer’s Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A pursuant to the terms and conditions set forth in the Indenture, the “Bonds”) were issued.

Page 1 of Annex G

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Very truly yours,
[Insert Name of Transferor]
By:
	[Insert Name and Title]
TRANSFEROR’S SIGNATURE GUARANTEED
By:
	[Bank Name]
By:
	[Insert Name and Title]

By its signature below, the undersigned transferee acknowledges that it has duly succeeded The Bank of New York Mellon Trust Company, N.A. or a successor trustee as Trustee under the Indenture.

[Insert Name of Transferee]
By:
	[Insert Name and Title]

Page 2 of Annex G

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EXHIBIT B

Real property in the City of Cedar Rapids, County of Linn, State of Iowa, described as follows:

Lot 1 of Windsor-on-the-River First Addition and Lot 2 and Lot 3 of Windsor-on-the-River Second Addition and Lot 4 of Windsor-on-the-River Third Addition and Lot 5 of Windsor-on-the-River Fourth Addition, all in the North one-half of the Northeast Quarter of Section 18, Township 83 North, Range 7 West of the 5th Principal Meridian, Cedar Rapids, Linn County, Iowa.

APN: 14-18-1-01-002-0-0000 and 14-18-1-03-001-0-0000 and 14-18-1-26-001-0-0000 and 14-18-1-26-002-0-0000 and 14-18-1-26-003-0-0000

EXHIBIT C

That certain Phase I Environmental Site Assessment, ASTM 1527-00, with respect to the Property dated December 22, 2011 and prepared by EMG, Inc.

That certain report dated January 18, 2012 regarding Radon Resampling at: Windsor on the River prepared by EMG Inc. for EMG Project Number 99862.11R-003.173

EXHIBIT D

COMPLIANCE CERTIFICATE

This Compliance Certificate is executed and delivered by SIR WINDSOR ON THE RIVER, LLC (the “Borrower”), in connection with the Reimbursement and Credit Agreement (the “Reimbursement Agreement”) dated as of January 26, 2012 between the Borrower and PNC Bank, National Association (“PNC”). All capitalized terms used in this Compliance Certificate as defined terms shall have the meanings given them in the Reimbursement Agreement.

The undersigned,                                         , Chief Financial Officer of the Borrower, hereby attests on behalf of the Borrower to PNC, with respect to the fiscal quarter ended                     ,         (the “Fiscal Period”), as follows:

1. As of the date of this Compliance Certificate, and since the date of the most recent Compliance Certificate submitted to PNC by the Borrower, (i) to the actual knowledge of the Borrower, the Borrower has kept, observed, performed and fulfilled in all material respects each and every covenant and condition contained in the Reimbursement Agreement and the other Credit Documents to which the Borrower is a party, and (ii) the Borrower has no actual knowledge of any Default or Event of Default, except as disclosed in this Compliance Certificate.

Details regarding any Default or Event of Default during the Fiscal Period, and what efforts the Borrower is making to cure or cause to be cured such Default or Event of Default, are attached hereto.

2. Pursuant to and determined in accordance with the provisions of Section 6.10 of the Reimbursement Agreement, the Borrower maintained as of the end of the Fiscal Period a Debt Service Coverage Ratio of [                    ].

Computations demonstrating the foregoing are attached hereto.

SIR WINDSOR ON THE RIVER, LLC
By:
	Name:
	Title: Chief Financial Officer

EXHIBIT E

Form of Notice of Intent to Borrow

Pursuant to that certain Reimbursement and Credit Agreement dated as of January 26, 2012 (the “Reimbursement Agreement”: capitalized terms used herein without definition shall have the meanings set forth in the Reimbursement Agreement) between SIR Windsor on the River, LLC (“Borrower”) and PNC BANK, NATIONAL ASSOCIATION (“Bank”), this represents the Borrower’s notice to the Bank of its intention to borrow from the Bank at the Tender Drawing Rate:

[the full amount of the Tender Drawing made on                     , 20     in the amount of                                         ]

or

[a portion of the Tender Drawing made on                     ,                     in the amount of $        ; the portion borrowed being $        , with the remainder of $        paid in full herewith together with interest thereon at the Tender Drawing Rate.]

The proceeds of such borrowing are to be used to reimburse the Bank for unreimbursed Tender Drawings in accordance with Section 2.02 of the Reimbursement Agreement.

The Borrower certifies that (i) the representations and warranties contained in Article 5 of the Reimbursement Agreement are correct on and as of the date hereof to the same extent as though made on and as of the date hereof (except to the extent that any such representation and warranty expressly relates to an earlier date); and (ii) no Default or Event of Default has occurred nor is continuing.

BORROWER

SIR Windsor on the River, LLC
By:
	Name:
	Title:

EXHIBIT F

DESCRIPTION

Replace Site Light Lens

One of the Facility’s site light lens was found to be damaged. The damaged lens should be replaced at this time.

Replace CMU Retaining Wall

The concrete masonry unit retaining wall located at the east end of Buckingham Drive has started to fail. The wall has started to rotate. Continued wall movement is highly probable. Remove existing wall system and install a new designed concrete masonry unit retaining wall system.

Grind Down Sidewalk Tripping Hazard Edges

Several of the Facility’s concrete sidewalk sections have settled or heaved over the years - causing tripping hazards. While the sidewalk fields have not spalled or cracked, we recommend grinding down the trip edges only.

Replace Concrete Sidewalk Sections

Sidewalk sections are severely cracked and deteriorated. Such condition were noted at the front entrance sidewalks. Remove deteriorated sections, prepare bed, and install new 4" thick sidewalks. Sidewalk sections that exhibit cracks but that do not warrant replacement should have all cracks pointed with a non-shrinking grout.

Repair Eaves Soffit Metal Panel System

The eaves soffit panel system on the Fitness Center building consists of pre-finished vented aluminum panels. Some of the panels are dislodged or missing. At this time repairs are required to preserve its watertightness and to improve its general aesthetics.

Replace Damaged Area of Carpeting

The carpeting in Building 1913, Unit #7 was found to be torn. The affected area should be replaced as needed to improve overall curb appeal.

Replace Damaged Vinyl Wall Covering

Remove existing and install (fabric, vinyl) wall covering having a Class “A” smoke and flame spread rating located at the corridors of Building 2407 near apartments 127, 308, and 309.

Painting Gypsum Board Ceilings

Stained sheetrock ceiling conditions were observed at the foyer of Building 2407 and in the living room of Building 2407 unit # 127. All affected areas should be primed and finished with two (2) coats of flat latex paint to match the existing.

EXHIBIT G

Building #1807 Unit #1

Building #1807 Unit #2

Building #1807 Unit #3

Building #1807 Unit #4

Building #1809 Unit #1

Building #1809 Unit #2

Building #1906 Unit #1

Building #1906 Unit #3

Building #1907 Unit #1

Building #1907 Unit #2

Building #1909 Unit #1

Building #1909 Unit #2

Building #1909 Unit #3

Building #1919 Unit #1

Building #2007 Unit #2

Building #2009 Unit #1

Building #2009 Unit #2

Building #2107 Unit #2

Building #2109 Unit #1

Building #2109 Unit #2

Building #2310 Unit #2

Building #2310 Unit #4

Building #2415 Unit #3

Building #2430 Unit #1

Building #2432 Unit #1

SCHEDULE 6.1

Existing Indebtedness

EX-10.6

EXHIBIT 10.6

Prepared by and Return Document to: John Rollings, Ballard Spahr LLP, 1735 Market Street, Philadelphia, PA 19103.

Mortgagor/Taxpayer Information: SIR Windsor on the River, LLC, Attention: Kevin Keating c/o: Steadfast Companies, 18100 Von Karman Ave., Suite 500, Irvine, CA 92612.

Legal Description: See Exhibit A hereto.

THIS MORTGAGE SECURES A NOTE WHICH PROVIDES FOR A VARIABLE

INTEREST RATE

MORTGAGE

WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

NOTICE: This Mortgage secures credit in the amount of $23,789,727.00 (Twenty-Three Million Seven Hundred Eighty-Nine Thousand Seven Hundred Twenty Seven and 00/100 Dollars). Advances up to this amount, together with interest, are senior to indebtedness to other creditors under subsequently recorded or filed mortgages and liens.

This Mortgage also secures loans or advancements made to directly finance work or improvements upon the real estate described herein, and is a ‘construction mortgage lien’ within the meaning of §572.18 of the Iowa Code.

THIS MORTGAGE WITH ABSOLUTE ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (“Mortgage”), made as of January 26, 2012, is made by SIR WINDSOR ON THE RIVER, LLC, a Delaware limited liability company (“Mortgagor”), for the benefit of PNC Bank, National Association (“Mortgagee”).

ARTICLE 1. GRANT

1.1 GRANT. For the purposes of and upon the terms and conditions in this Mortgage, Mortgagor irrevocably grants, bargains, sells, conveys, assigns, transfers, mortgages, pledges, grants a security interest in and sets over to

Mortgagee and its successors and assigns forever all of Mortgagor’s interest in that real property located in the City of Cedar Rapids, County of Linn, State of Iowa, described on Exhibit A attached hereto, together with all right, title, interest, and privileges of Mortgagor in and to all streets, ways, roads, and alleys used in connection with or pertaining to such real property, all development rights or credits, air rights, water, water rights and water stock related to the real property, and all minerals, oil and gas, and other hydrocarbon substances in, on or under the real property, and all appurtenances, easements, rights and rights of way appurtenant or related thereto; all buildings, other improvements and fixtures now or hereafter located on the real property, including, but not limited to, all apparatus, equipment, and appliances used in the operation or occupancy of the real property, it being intended by the parties that all such items shall be conclusively considered to be a part of the real property, whether or not attached or affixed to the real property (the “Improvements”); all interest or estate which Mortgagor may hereafter acquire in the property described above, and all additions and accretions thereto, and the proceeds of any of the foregoing; (all of the foregoing being collectively referred to as the “Subject Property”). The listing of specific rights or property shall not be interpreted as a limit of general terms.

1.2 ADDRESS. The address of the Subject Property (if known) is 1707 Ellis Blvd. NW, 1813 & 2307 Buckingham Dr. NW, and 2310 & 2415 Oxford Ln. NW. However, neither the failure to designate an address nor any inaccuracy in the address designated shall affect the validity or priority of the lien of this Mortgage on the Subject Property as described on Exhibit A.

ARTICLE 2. OBLIGATIONS SECURED

2.1 OBLIGATIONS SECURED. Mortgagor makes this Mortgage for the purpose of securing the following obligations (“Secured Obligations”):

(a) Payment and performance of all covenants and obligations on the part of Mortgagor under that certain Reimbursement and Credit Agreement (“Reimbursement Agreement”) of even date herewith by and between Mortgagor and Mortgagee; and

(b) Payment and performance of all covenants and obligations of Mortgagor under this Mortgage; and

(c) Payment and performance of all covenants and obligations on the part of Mortgagor under the Credit Documents (as defined in the Reimbursement Agreement); and

(d) Payment and performance of all Future Advances (as hereinafter defined). Future Advances means any loan of money from Mortgagee to Mortgagor made within twenty (20) years from the date hereof. The Mortgagee has no obligation whatsoever, to make a Future Advance; and

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(e) Payment and performance of all covenants and obligations of Mortgagor under any interest rate swap agreement, or other interest rate agreement executed by and between Mortgagor and Mortgagee, which agreement is evidenced by a writing which recites that it is secured by this Mortgage; and

(f) All modifications, extensions and renewals of any of the obligations secured hereby, however evidenced, including, without limitation; (i) modifications of the required principal payment dates or interest payment dates or both, as the case may be, deferring or accelerating payment dates wholly or partly; and (ii) modifications, extensions or renewals at a different rate of interest whether or not in the case of a note, the modification, extension or renewal is evidenced by a new or additional promissory note or notes.

It is expressly understood and agreed that the indebtedness secured hereby will in no event exceed $47,579,454.00.

This Mortgage secures the repayment of future draws on the Letter of Credit (as defined in the Reimbursement Agreement) which may be made after the date hereof to the same extent as if such future draws were made on the date of the execution of this Mortgage, although there may be no advance made on the date of the execution of this Mortgage, and although there may be no indebtedness outstanding at the time the draw is made. The total principal amount of the Obligations secured by this Mortgage may decrease or increase from time to time but the total unpaid principal balance so secured at any one time shall not exceed $23,789,727, plus interest thereon, and any and all disbursements made by the Mortgagee for the payment of taxes, special assessments or insurance on the Subject Property, with interest on such disbursements. The parties hereby acknowledge and intend that all draws under the Letter of Credit, including future draws whenever hereafter made, shall be a lien from the time this Mortgage is recorded.

2.2 OBLIGATIONS. The term “obligations” is used herein in its broadest and most comprehensive sense and shall be deemed to include, without limitation, all interest and charges, prepayment charges (if any), late charges and loan fees at any time accruing or assessed on any of the Secured Obligations.

2.3 INCORPORATION. All terms of the Secured Obligations and the documents evidencing such obligations are incorporated herein by this reference. All persons who may have or acquire an interest in the Subject Property shall be deemed to have notice of the terms of the Secured Obligations and to have notice, if provided therein, that: (a) the Reimbursement Agreement may permit borrowing, repayment and re-borrowing so that repayments or reimbursements shall not reduce the amounts of the Secured Obligations; and (b) the rate of interest on one or more Secured Obligations may vary from time to time.

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ARTICLE 3. ASSIGNMENT OF LEASES AND RENTS

3.1 ASSIGNMENT. Mortgagor hereby irrevocably assigns to Mortgagee all of Mortgagor’s right, title and interest in, to and under: (a) all leases of the Subject Property or any portion thereof, and all other agreements of any kind relating to the use or occupancy of the Subject Property or any portion thereof, whether now existing or entered into after the date hereof (“Leases”); and (b) the rents, revenue, income, issues, deposits and profits of the Subject Property, including, without limitation, all amounts payable and all rights and benefits accruing to such Mortgagor under the Leases (“Payments”). The term “Leases” shall also include all guarantees of and security for the lessees’ performance thereunder, and all amendments, extensions, renewals or modifications thereto which are permitted hereunder. This is a present and absolute assignment, not an assignment for security purposes only, and Mortgagee’s right to the Leases and Payments is not contingent upon, and may be exercised without possession of, the Subject Property.

3.2 GRANT OF LICENSE. Mortgagee confers upon Mortgagor a license (“License”) to collect and retain the Payments as they become due and payable, until the occurrence of a Default (as hereinafter defined). Upon a Default, the License shall be automatically revoked and Mortgagee may collect and apply the Payments pursuant to Section 6.4 without notice and without taking possession of the Subject Property. Mortgagor hereby irrevocably authorizes and directs the lessees under the Leases to rely upon and comply with any notice or demand by Mortgagee for the payment to Mortgagee of any rental or other sums which may at any time become due under the Leases, or for the performance of any of the lessees’ undertakings under the Leases, and the lessees shall have no right or duty to inquire as to whether any Default has actually occurred or is then existing hereunder. Mortgagor hereby relieves the lessees from any liability to Mortgagor by reason of relying upon and complying with any such notice or demand by Mortgagee.

3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not cause Mortgagee to be: (a) a mortgagee in possession; (b) responsible or liable for the control, care, management or repair of the Subject Property or for performing any of the terms, agreements, undertakings, obligations, representations, warranties, covenants and conditions of the Leases; or (c) responsible or liable for any waste committed on the Subject Property by the lessees under any of the Leases or any other parties; for any dangerous or defective condition of the Subject Property; or for any negligence in the management, upkeep, repair or control of the Subject Property resulting in loss or injury or death to any lessee, licensee, employee, invitee or other person. Mortgagee shall not directly or indirectly be liable to Mortgagor or any other person as a consequence of: (i) the exercise or failure to exercise by Mortgagee, or any of their respective employees, agents, contractors or subcontractors, any of the rights, remedies or powers granted to Mortgagee hereunder; or (ii) the failure or refusal of Mortgagee to perform or discharge any obligation, duty or liability of Mortgagor arising under the Leases.

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3.4 REPRESENTATIONS AND WARRANTIES. Mortgagor represents and warrants that none of the lessor’s interests under any of the Leases has been transferred or assigned.

3.5 COVENANTS. Mortgagor covenants and agrees at Mortgagor’s sole cost and expense to: (a) perform the obligations of lessor contained in the Leases and enforce by all available remedies performance by the lessees of the obligations of the lessees contained in the Leases; (b) exercise Mortgagor’s commercially reasonable efforts to keep all portions of the Subject Property that are capable of being leased at all times at rentals not less than the fair market rental value; (c) deliver to Mortgagee, or make available to Mortgagee for inspection, fully executed, counterpart original(s) of each and every Lease if requested to do so; and (d) execute and record such additional commercially reasonable assignments of any Lease, in form and substance acceptable to Mortgagee, as Mortgagee may request.

3.6 ESTOPPEL CERTIFICATES. Within thirty (30) days after written request by Mortgagee, Mortgagor shall deliver to Mortgagee and to any party designated by Mortgagee estoppel certificates executed by Mortgagor, in recordable form, certifying (if such be the case): (a) that the foregoing assignment and the Leases are in full force and effect; (b) the date of each lessee’s most recent payment of rent; (c) that there are no defenses or offsets outstanding, or stating those claimed by Mortgagor under the foregoing assignment or the Leases, as the case may be; and (d) any other information reasonably requested by Mortgagee.

ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING

4.1 SECURITY INTEREST. Mortgagor hereby grants and assigns to Mortgagee as of the date hereof a security interest, to secure payment and performance of all of the Secured Obligations, in all of the following described personal property in which Mortgagor now or at any time hereafter has any interest (collectively, the “Collateral”):

All goods, building and other materials, supplies, inventory, work in process, equipment, machinery, fixtures, furniture, furnishings, signs and other personal property and embedded software included therein and supporting information, wherever situated, which are or are to be incorporated into, used in connection with, or appropriated for use on (i) the real property described on Exhibit A attached hereto and incorporated by reference herein or (ii) any existing or future improvements on the real property (which real property and improvements are collectively referred to herein as the “Subject Property”); together with all rents and security deposits derived from the Subject Property; all inventory, accounts,

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cash receipts, all amounts in the Interest Reserve Account and the Capital Expenditure Reserve Account (each as defined in the Reimbursement Agreement), deposit accounts, accounts receivable, contract rights, licenses, agreements, general intangibles, payment intangibles, software, chattel paper (whether electronic or tangible), instruments, documents, promissory notes, drafts, letters of credit, letter of credit rights, supporting obligations, insurance policies, insurance and condemnation awards and proceeds, proceeds of the sale of promissory notes, any other rights to the payment of money, trade names, trademarks and service marks arising from or related to the ownership, management, leasing, operation, sale or disposition of the Subject Property or any business now or hereafter conducted thereon by Mortgagor; all development rights and credits, and any and all permits, consents, approvals, licenses, authorizations and other rights granted by, given by or obtained from, any governmental entity with respect to the Subject Property; all water and water rights, wells and well rights, canals and canal rights, ditches and ditch rights, springs and spring rights, and reservoirs and reservoir rights appurtenant to or associated with the Subject Property, whether decreed or undecreed, tributary, non-tributary or not non-tributary, surface or underground or appropriated or unappropriated, and all shares of stock in water, ditch, lateral and canal companies, well permits and all other evidences of any of such rights; all deposits or other security now or hereafter made with or given to utility companies by Mortgagor with respect to the Subject Property; all advance payments of insurance premiums made by Mortgagor with respect to the Subject Property; all plans, drawings and specifications relating to the Subject Property; all funds held by Mortgagee in connection with the Reimbursement Agreement, whether or not disbursed, including without limitation, all amounts in the Interest Reserve Account and the Capital Expenditure Reserve Account; all funds deposited with Mortgagee pursuant to any bank agreement; all reserves, deferred payments, deposits, accounts, refunds, cost savings and payments of any kind related to the Subject Property or any portion thereof; together with all replacements and proceeds of, and additions and accessions to, any of the foregoing; together with all books, records and files relating to any of the foregoing.

As to all of the above described personal property which is or which hereafter becomes a “fixture” under applicable law, this Mortgage from the date of its recording constitutes a fixture filing under the Iowa Uniform Commercial Code, as amended or recodified from time to time (“UCC”), and is acknowledged and agreed to be a “mortgage” under the UCC. For this purpose, the name and address of the Debtor is the name and address of the

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Mortgagor as set forth in this Mortgage and the name and address of the Secured Party is the name and address of the Mortgagee as set forth in this Mortgage.

This Mortgage creates a security interest in the Collateral, and, to the extent the Collateral is not real property, this Mortgage constitutes a security agreement from Mortgagor to Mortgagee under the UCC.

4.2 REPRESENTATIONS AND WARRANTIES. Mortgagor represents and warrants that: (a) Mortgagor has, or will have, good title to the Collateral; (b) Mortgagor has not previously assigned or encumbered the Collateral, and no financing statement covering any of the Collateral has been delivered to any other person or entity; (c) Mortgagor’s principal place of business is located at the address shown in Section 7.10; and (d) Mortgagor’s legal name is exactly as set forth on the first page of this Mortgage and all of Mortgagor’s organizational documents or agreements delivered to Mortgagee are complete and accurate in every respect and (e) the organizational number for Mortgagor is 5073636.

4.3 COVENANTS. Mortgagor agrees: (a) to execute and deliver such documents as Mortgagee deems necessary to create, perfect and continue the security interests contemplated hereby; (b) not to change its name, and as applicable its chief executive office, its principal residence or the jurisdiction in which it is organized and/or registered without giving Mortgagee prior written notice thereof; (c) to cooperate with Mortgagee in perfecting all security interests granted herein and in obtaining such agreements from third parties as Mortgagee deems necessary, proper or convenient in connection with the preservation, perfection or enforcement of any of its rights hereunder; and (d) that Mortgagee is authorized to file financing statements in the name of Mortgagor to perfect Mortgagee’s security interest in Collateral.

4.4 RIGHTS OF MORTGAGEE. In addition to Mortgagee’s rights as a “Secured Party” under the UCC, Mortgagee may, but shall not be obligated to, at any time without notice and at the expense of Mortgagor: (a) give notice to any person of Mortgagee’s rights hereunder and enforce such rights at law or in equity; (b) insure, protect, defend and preserve the Collateral or any rights or interests of Mortgagee therein; (c) inspect the Collateral; and (d) endorse, collect and receive any right to payment of money owing to Mortgagor under or from the Collateral.

4.5 RIGHTS OF MORTGAGEE ON DEFAULT. Upon the occurrence of a Default (hereinafter defined) under this Mortgage, then in addition to all of Mortgagee’s rights as a “Secured Party” under the UCC or otherwise at law:

(a) Mortgagee may (i) upon written notice, require Mortgagor to assemble any or all of the Collateral and make it available to Mortgagee at a place designated by Mortgagee; (ii) without prior notice, enter upon the Subject Property or other place where any of the Collateral may be located and

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take possession of, collect, sell, lease, license and dispose of any or all of the Collateral, and store the same at locations acceptable to Mortgagee at Mortgagor’s expense; and (iii) sell, assign and deliver at any place or in any lawful manner all or any part of the Collateral and bid and become the purchaser at any such sales;

(b) Mortgagee may, for the account of Mortgagor and at Mortgagor’s expense: (i) operate, use, consume, sell or dispose of the Collateral as Mortgagee deems appropriate for the purpose of performing any or all of the Secured Obligations; (ii) enter into any agreement, compromise, or settlement, including insurance claims, which Mortgagee may deem desirable or proper with respect to any of the Collateral; and (iii) endorse and deliver evidences of title for, and receive, enforce and collect by legal action or otherwise, all indebtedness and obligations now or hereafter owing to Mortgagor in connection with or on account of any or all of the Collateral; and

(c) In disposing of Collateral hereunder, Mortgagee may disclaim all warranties of title, possession, quiet enjoyment and the like. Any proceeds of any disposition of any Collateral may be applied by Mortgagee to the payment of expenses incurred by Mortgagee in connection with the foregoing, including reasonable attorneys’ fees, and the balance of such proceeds may be applied by Mortgagee toward the payment of the Secured Obligations in such order of application as Mortgagee may from time to time elect.

(d) Mortgagor agrees that Mortgagee shall have no obligation to process or prepare any Collateral for sale or other disposition.

4.6 POWER OF ATTORNEY. Mortgagor hereby irrevocably appoints Mortgagee as Mortgagor’s attorney-in-fact (such agency being coupled with an interest), and as such attorney-in-fact Mortgagee may, without the obligation to do so, in Mortgagee’s name, or in the name of Mortgagor, prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve any of Mortgagee’s security interests and rights in or to any of the Collateral, and, upon a Default hereunder, take any other action required of Mortgagor; provided, however, that Mortgagee as such attorney-in-fact shall be accountable only for such funds as are actually received by Mortgagee.

4.7 POSSESSION AND USE OF COLLATERAL. Except as otherwise provided in this Article 4 or in the other Credit Documents, so long as no Default exists under this Mortgage or any of the other Credit Documents, Mortgagor may possess, use, move, transfer or dispose of any of the Collateral in the ordinary course of Mortgagor’s business and in accordance with the Reimbursement Agreement.

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ARTICLE 5. RIGHTS AND DUTIES OF THE PARTIES

5.1 TITLE. Mortgagor represents and warrants that, except as disclosed to Mortgagee in writing, Mortgagor lawfully holds and possesses fee simple title to the Subject Property without limitation on the right to encumber, and that this Mortgage is a first and prior lien on the Subject Property.

5.2 TAXES AND ASSESSMENTS. Mortgagor shall pay prior to delinquency all taxes, assessments, levies and charges imposed by any public or quasi-public authority or utility company which are or which may become a lien upon or cause a loss in value of the Subject Property or any interest therein. Mortgagor shall also pay prior to delinquency all taxes, assessments, levies and charges imposed by any public authority upon Mortgagee by reason of its interest in any Secured Obligation or in the Subject Property, or by reason of any payment made to Mortgagee pursuant to any Secured Obligation; provided, however, Mortgagor shall have no obligation to pay taxes which may be imposed from time to time upon Mortgagee and which are measured by and imposed upon Mortgagee’s net income.

5.3 TAX AND INSURANCE IMPOUNDS. After the occurrence and during the continuance of a Default, at Mortgagee’s option and upon its demand, Mortgagor, shall, until all Secured Obligations have been paid in full, pay to Mortgagee monthly, annually or as otherwise directed by Mortgagee an amount estimated by Mortgagee to be equal to: (a) all taxes, assessments, levies and charges imposed by any public or quasi-public authority or utility company which are or may become a lien upon the Subject Property or Collateral and will become due for the tax year during which such payment is so directed; and (b) premiums for fire, hazard and insurance required or requested pursuant to the Credit Documents when same are next due, if Mortgagee determines that any amounts paid by Mortgagor are insufficient for the payment in full of such taxes, assessments, levies, charges and/or insurance premiums, Mortgagee shall notify Mortgagor of the increased amounts required to pay all amounts when due, whereupon Mortgagor shall pay to Mortgagee within thirty (30) days thereafter the additional amount as stated in Mortgagee’s notice. All sums so paid shall not bear interest, except to the extent and in any minimum amount required by law; and Mortgagee shall, unless Mortgagor is otherwise in Default hereunder or under any Credit Document, apply said funds to the payment of, or at the sole option of Mortgagee release said funds to Mortgagor for the application to and payment of, such sums, taxes, assessments, levies, charges, and insurance premiums. Upon Default by Mortgagor hereunder or under any Secured Obligation, Mortgagee may apply all or any part of said sums to any Secured Obligation and/or to cure such Default, in which event Mortgagor shall be required to restore all amounts so applied, as well as to cure any other events or conditions of Default not cured by such application. Upon assignment of this Mortgage, Mortgagee shall have the right to assign all amounts collected and in its possession to its assignee whereupon Mortgagee shall be released from all liability with respect thereto. Within ninety-five (95) days following full repayment of the Secured Obligations (other than full repayment of

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the Secured Obligations as a consequence of a foreclosure or conveyance in lieu of foreclosure of the liens and security interests securing the Secured Obligations) or at such earlier time as Mortgagee may elect, the balance of all amounts collected and in Mortgagee’s possession shall be paid to Mortgagor and no other party shall have any right or claim thereto.

5.4 PERFORMANCE OF SECURED OBLIGATIONS. Mortgagor shall promptly pay and perform each Secured Obligation when due.

5.5 LIENS, ENCUMBRANCES AND CHARGES. Mortgagor shall immediately discharge any lien not approved by Mortgagee in writing that has or may attain priority over this Mortgage. Mortgagor shall pay when due all obligations secured by or which may become liens and encumbrances which shall now or hereafter encumber or appear to encumber all or any part of the Subject Property or Collateral, or any interest therein, whether senior or subordinate hereto; provided, however, that if Mortgagor disputes the obligations secured by such liens or encumbrances, in lieu of paying such obligations, Mortgagor may cause such liens or encumbrances to be released of record by posting a bond or by other action.

5.6 DAMAGES; INSURANCE AND CONDEMNATION PROCEEDS.

(a) The following (whether now existing or hereafter arising) are all absolutely and irrevocably assigned by Mortgagor to Mortgagee and, at the request of Mortgagee, shall be paid directly to Mortgagee: (i) all awards of damages and all other compensation payable directly or indirectly by reason of a condemnation or proposed condemnation for public or private use affecting all or any part of, or any interest in, the Subject Property or Collateral; (ii) all other claims and awards for damages to, or decrease in value of, all or any part of, or any interest in, the Subject Property or Collateral; (iii) all proceeds of any insurance policies (whether or not expressly required by Mortgagee to be maintained by Mortgagor, including, but not limited to, earthquake insurance and terrorism insurance, if any) payable by reason of loss sustained to all or any part of the Subject Property or Collateral; and (iv) all interest which may accrue on any of the foregoing. Mortgagee may commence, appear in, defend or prosecute any assigned claim or action and may adjust, compromise, settle and collect all claims and awards assigned to Mortgagee; provided, however, in no event shall Mortgagee be responsible for any failure to collect any claim or award, regardless of the cause of the failure, including, without limitation, any malfeasance or nonfeasance by Mortgagee or its employees or agents.

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(b) If, after damage to or destruction of the Subject Property or the Collateral (or any part thereof), the net proceeds of insurance (after payment of Mortgagee’s reasonable costs and expenses in connection with the administration thereof) are:

less than One Million Dollars ($1,000,000), then Mortgagee shall make such net proceeds available to Mortgagor and Mortgagor shall apply such proceeds to the repair, restoration and replacement by Mortgagor of the Subject Property and/or the Collateral damaged or destroyed,

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One Million Dollars ($1,000,000) or more and Mortgagor complies with the following requirements, then Mortgagee shall make such net proceeds available to Mortgagor on the following terms:

(i) At the time of such loss or damage and at all times thereafter while Mortgage is holding any portion of such proceeds, there shall exist no Event of Default;

(ii) The Improvements to which loss or damage has resulted shall be capable of being restored to the condition existing prior to the damage or destruction, and such restoration shall be capable of being completed prior to the Stated Expiration Date (as defined in the Reimbursement Agreement), or if such restoration is not capable of being completed prior to the Stated Expiration Date, the Mortgagee reasonably determines that the value of the Property as of the Stated Expiration Date plus any remaining net proceeds will exceed the amount secured by this Mortgage as of the Stated Expiration Date;

(iii) prior to any such proceeds being disbursed to Mortgagor, Mortgagor shall have provided to Mortgagee all of the following:

(A) complete plans and specifications for restoration, repair and replacement of the damaged Improvements to the condition, utility and value required by (ii) above,

(B) if loss or damage exceeds Five Million Dollars ($5,000,000), fixed-price or guaranteed maximum cost bonded construction contracts for completion of the repair and restoration work in accordance with such plans and specifications,

(C) builder’s risk insurance for the full cost of construction with Mortgagee named under a standard mortgagee loss-payable clause,

(D) evidence of availability of such additional funds as in Mortgagee’s reasonable opinion are necessary to complete such repair, restoration and replacement, and

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(E) copies of all permits and licenses necessary to complete the work in accordance with the plans and specifications;

(iv) Mortgagee may, at Mortgagor’s expense, retain an independent inspector to review and approve plans and specifications and completed construction and to approve all requests for disbursement, which approvals shall be conditions precedent to release of any such proceeds as work progresses;

(v) No portion of such proceeds shall be made available by Mortgagee for architectural reviews or for any other purposes which are not directly attributable to the cost of repairing, restoring or replacing the Improvements to which a loss or damage has occurred unless the same are covered by such insurance;

(vi) Mortgagor shall diligently pursue such work and shall complete such work prior to the Stated Expiration Date;

(vii) Each disbursement by Mortgagee of such proceeds and deposits shall be funded subject to conditions and in accordance with Mortgagee’s reasonable disbursement procedures and shall be made only upon receipt of disbursement requests on an AIA G702/703 form (or similar form approved by Mortgagee) signed and certified by Mortgagor and, if required by Mortgagee, its architect and general contractor with appropriate invoices and lien waivers as required by Mortgagee; and

(viii) Mortgagee shall have a first lien on and security interest in all building materials and completed repair and restoration work and in all fixtures and equipment acquired with such proceeds, and Mortgagor shall execute and deliver such mortgages, deeds of trust, security agreements, financing statements and other instruments as Mortgagee shall request to create, evidence, or perfect such lien and security interest.

In the event and to the extent that such Proceeds are One Million Dollars ($1,000,000) or more and are not required to be used for the repair, restoration and replacement of the Improvements to which a loss or damage has occurred, or, if the conditions set forth herein for such application are otherwise not satisfied, then Mortgagee shall be entitled without notice to or consent from Mortgagor to retain and apply such proceeds, or the balance thereof, at Mortgagee’s option either (a) to the reduction of or as a reserve against the Secured Obligations or (b) to the repair, restoration and/or replacement of all or any part of such Improvements to which a loss or damage has occurred. Any excess proceeds after such application by Mortgagee shall be paid to Mortgagor.

5.7 MAINTENANCE AND PRESERVATION OF THE SUBJECT PROPERTY. Subject to the provisions of the Reimbursement Agreement,

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Mortgagor covenants: (a) to insure the Subject Property and Collateral as required by the Reimbursement Agreement against such risks as Mortgagee may require and, at Mortgagee’s request, to provide evidence of such insurance to Mortgagee, and to comply with the requirements of any insurance companies providing such insurance; (b) to keep the Subject Property and Collateral in good condition and repair; (c) not to remove or demolish the Subject Property or Collateral or any part thereof, not to alter, restore or add to the Subject Property or Collateral and not to initiate or acquiesce in any change in any zoning or other land classification which affects the Subject Property without Mortgagee’s prior written consent or as provided in the Reimbursement Agreement; (d) to complete or restore promptly and in good and workmanlike manner the Subject Property and Collateral, or any part thereof which may be damaged or destroyed, without regard to whether Mortgagee elects to require that insurance proceeds be used to reduce the Secured Obligations as provided in Section 5.6; (e) to comply with all laws, ordinances, regulations and standards, and all covenants, conditions, restrictions and equitable servitudes, whether public or private, of every kind and character which affect the Subject Property or Collateral and pertain to acts committed or conditions existing thereon, including, without limitation, any work, alteration, improvement or demolition mandated by such laws, covenants or requirements; (f) not to commit or permit waste of the Subject Property or Collateral; and (g) to do all other acts which from the character or use of the Subject Property or Collateral may be reasonably necessary to maintain and preserve its value.

5.8 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. At Mortgagor’s sole expense, Mortgagor shall protect, preserve and defend the Subject Property and Collateral and title to and right of possession of the Subject Property and Collateral, the security hereof and the rights and powers of Mortgagee hereunder against all adverse claims. Mortgagor shall give Mortgagee prompt notice in writing of the assertion of any claim, of the filing of any action or proceeding, of the occurrence of any damage to the Subject Property or Collateral and of any condemnation offer or action.

5.9 ACTIONS BY MORTGAGEE. From time to time and without affecting the personal liability of any person for payment of any indebtedness or performance of any obligations secured hereby, Mortgagee, without liability therefor and without notice, may: (a) release all or any part of the Subject Property from this Mortgage; (b) consent to the making of any map or plat thereof; and (c) join in any grant of easement thereon, any declaration of covenants and restrictions, or any extension agreement or any agreement subordinating the lien or charge of this Mortgage.

5.10 DUE ON SALE OR ENCUMBRANCE. If the Subject Property or any interest therein shall be sold, transferred (including, without limitation, through sale or transfer of a majority or controlling interest of the corporate stock or general partnership interests or limited liability company interests of Mortgagor), mortgaged, assigned, further encumbered or leased (other than in the ordinary

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course of Mortgagor’s business), whether directly or indirectly, whether voluntarily, involuntarily or by operation of law, without the prior written consent of Mortgagee, then Mortgagee, in its sole discretion, may declare all Secured Obligations immediately due and payable.

5.11 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without notice to or the consent, approval or agreement of any persons or entities having any interest at any time in the Subject Property and Collateral or in any manner obligated under the Secured Obligations (“Interested Parties”), Mortgagee may, from time to time, release any person or entity from liability for the payment or performance of any Secured Obligation, take any action or make any agreement extending the maturity or otherwise altering the terms or increasing the amount of any Secured Obligation, or accept additional security or release all or a portion of the Subject Property and Collateral and other security for the Secured Obligations. None of the foregoing actions shall release or reduce the personal liability of any of said interested Parties, or release or impair the priority of the lien of and security interests created by this Mortgage upon the Subject Property and Collateral.

5.12 RELEASE OF ASSIGNMENT. When this Mortgage has been fully released, the last such release shall operate as a reassignment of all future rents, issues and profits of the Subject Property to the person or persons legally entitled thereto.

5.13 SUBROGATION. Mortgagee shall be subrogated to the lien of all encumbrances, whether released of record or not, paid in whole or in part by Mortgagee pursuant to the Credit Documents or by the proceeds of any loan secured by this Mortgage.

5.14 RIGHT OF INSPECTION. Subject to the rights of Mortgagee’s tenants under the Leases, Mortgagee, its agents and employees, may enter the Subject Property at any reasonable time, after reasonable prior notice, for the purpose of inspecting the Subject Property and Collateral and ascertaining Mortgagor’s compliance with the terms hereof.

ARTICLE 6. DEFAULT PROVISIONS

6.1 DEFAULT. For all purposes hereof, the term “Default” shall mean any Event of Default as defined in the Reimbursement Agreement.

6.2 RIGHTS AND REMEDIES. At any time after Default, Mortgagee shall have all the following rights and remedies:

(a) With or without notice, to declare all Secured Obligations immediately due and payable;

(b) With or without notice, terminate any interest rate swap agreement;

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(c) With or without notice, and without releasing Mortgagor from any Secured Obligation, and without becoming a mortgagee in possession, to cure any breach or Default of Mortgagor and, in connection therewith, to enter upon the Subject Property and do such acts and things as Mortgagee deems necessary or desirable to protect the security hereof, including, without limitation: (i) to appear in and defend any action or proceeding purporting to affect the security of this Mortgage or the rights or powers of Mortgagee under this Mortgage; (ii) to pay, purchase, contest or compromise any encumbrance, charge, lien or claim of lien which, in the sole judgment of Mortgagee, is or may be senior in priority to this Mortgage, the judgment of Mortgagee being conclusive as between the parties hereto; (iii) to obtain insurance; (iv) to pay any premiums or charges with respect to insurance required to be carried under this Mortgage; or (v) to employ counsel, accountants, contractors and other appropriate persons;

(d) To commence and maintain an action or actions in any court of competent jurisdiction to foreclose this instrument or to obtain specific enforcement of the covenants of Mortgagor hereunder, and Mortgagor agrees that such covenants shall be specifically enforceable by injunction or any other appropriate equitable remedy and that for the purposes of any suit brought under this subparagraph, Mortgagor waives the defense of laches and any applicable statute of limitations. In connection with any such action, Mortgagor shall promptly reimburse Mortgagee for all reasonable attorneys’ fees, appraisers’ fees, receiver’s costs and expenses, insurance, taxes, outlays for documentary and expert evidence, costs for preservation of the Subject Property, stenographer’s charges, publication costs and costs of procuring all abstracts of title, title searches and examinations, guarantee policies and similar data and assurances with respect to title as Mortgagee may deem to be reasonably necessary either to prosecute such suit or to evidence to bidders at any sale which may be had pursuant to such decree the true condition of the title to or value of the Subject Property or for any other reasonable purpose;

(e) To apply to a court of competent jurisdiction for and obtain appointment of a receiver of the Subject Property as a matter of strict right and without regard to the adequacy of the security for the repayment of the Secured Obligations, the existence of a declaration that the Secured Obligations have been accelerated and are immediately due and payable, or the filing of a notice of default, and Mortgagor hereby consents to such appointment;

(f) To enter upon, possess, manage and operate the Subject Property or any part thereof, to take and possess all documents, books, records, papers and accounts of Mortgagor or the then owner of the Subject Property, to make, terminate, enforce or modify Leases of the Subject Property upon such terms and conditions as Mortgagee deems proper, to make repairs,

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alterations and improvements to the Subject Property as necessary, in Mortgagee’s sole judgment, to protect or enhance the security hereof and to continue and complete construction of the improvements on the Subject Property as necessary in Mortgagee’s sole judgment;

(g) To resort to and realize upon the security hereunder and any other security now or later held by Mortgagee concurrently or successively and in one or several consolidated or independent judicial actions and to apply the proceeds received upon the Secured Obligations all in such order and manner as Mortgagee determines in its sole discretion;

(h) Upon sale of the Subject Property at any foreclosure sale, Mortgagee may credit bid (as determined by Mortgagee in its sole and absolute discretion) all or any portion of the Secured Obligations. In determining such credit bid, Mortgagee may, but is not obligated to, take into account all or any of the following: (i) appraisals of the Subject Property as such appraisals may be discounted or adjusted by Mortgagee in its sole and absolute underwriting discretion; (ii) expenses and costs incurred by Mortgagee with respect to the Subject Property prior to foreclosure; (iii) expenses and costs which Mortgagee anticipates will be incurred with respect to the Subject Property after foreclosure, but prior to resale, including, without limitation, costs of structural reports and other due diligence, costs to carry the Subject Property prior to resale, costs of resale (e.g. commissions, attorneys’ fees, and taxes), costs of any hazardous materials clean-up and monitoring, costs of deferred maintenance, repair, refurbishment and retrofit, costs of defending or settling litigation affecting the Subject Property, and lost opportunity costs (if any), including the time value of money during any anticipated holding period by Mortgagee; (iv) declining trends in real property values generally and with respect to properties similar to the Subject Property; (v) anticipated discounts upon resale of the Subject Property as a distressed or foreclosed property; (vi) the fact of additional collateral (if any), for the Secured Obligations; and (vii) such other factors or matters that Mortgagee (in its sole and absolute discretion) deems appropriate. In regard to the above, Mortgagor acknowledges and agrees that: (w) Mortgagee is not required to use any or all of the foregoing factors to determine the amount of its credit bid; (x) this Section does not impose upon Mortgagee any additional obligations that are not imposed by law at the time the credit bid is made; (y) the amount of Mortgagee’s credit bid need not have any relation to any loan-to-value ratios specified in the Credit Documents or previously discussed between Mortgagor and Mortgagee; and (z) Mortgagee’s credit bid may be (at Mortgagee’s sole and absolute discretion) higher or lower than any appraised value of the Subject Property;

(i) Upon the completion of any foreclosure of all or a portion of the Subject Property, commence an action to recover any of the Secured Obligations that remains unpaid or unsatisfied; and/or

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(j) Exercise any and all remedies at law, equity, or under the Mortgage or the other Credit Documents for such Default.

6.3 APPLICATION OF FORECLOSURE SALE PROCEEDS. Except as may be otherwise required by applicable law, after deducting all costs, including, without limitation, cost of evidence of title and attorneys’ fees in connection with sale and costs and expenses of sale and of any judicial proceeding wherein such sale may be made, all proceeds of any foreclosure sale shall be applied: (a) to payment of all sums expended by Mortgagee under the terms hereof and not then repaid, with accrued interest at the Default Rate (as defined in the Reimbursement Agreement) to be applicable on or after maturity or acceleration of the Secured Obligations; (b) to payment of all other Secured Obligations; and (c) the remainder, if any, to the person or persons legally entitled thereto.

6.4 APPLICATION OF OTHER SUMS. All sums received by Mortgagee under Section 6.2 or Section 3.2, less all costs and expenses incurred by Mortgagee or any receiver under either of said Sections, including, without limitation, attorneys’ fees, shall be applied in payment of the Secured Obligations in such order as Mortgagee shall determine in its sole discretion; provided, however, Mortgagee shall have no liability for funds not actually received by Mortgagee.

6.5 NO CURE OR WAIVER. Neither Mortgagee’s nor any receiver’s entry upon and taking possession of all or any part of the Subject Property and Collateral, nor any collection of rents, issues, profits, insurance proceeds, condemnation proceeds or damages, other security or proceeds of other security, or other sums, nor the application of any collected sum to any Secured Obligation, nor the exercise or (failure to exercise of any other right or remedy by Mortgagee or any receiver shall cure or waive any breach, Default or notice of default under this Mortgage, or nullify the effect of any notice of default or sale (unless all Secured Obligations then due have been paid and performed and Mortgagor has cured all other defaults), or impair the status of the security, or prejudice Mortgagee in the exercise of any right or remedy, or be construed as an affirmation by Mortgagee of any tenancy, lease or option or a subordination of the lien of or security interest created by this Mortgage.

6.6 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS’ FEES. Mortgagor agrees to pay to Mortgagee immediately and without demand all costs and expenses incurred by Mortgagee pursuant to that certain Section entitled Rights and Remedies (including, without limitation, court costs and attorneys’ fees, whether incurred in litigation or not) with interest from the date of expenditure until said sums have been paid at the Default Rate.

6.7 POWER TO FILE NOTICES AND CURE DEFAULTS. Mortgagor hereby irrevocably appoints Mortgagee and its successors and assigns, as its attorney-in-fact, which agency is coupled with an interest, (a) to execute and/or record any notices of completion, cessation of labor, or any other notices that Mortgagee deems appropriate to protect Mortgagee’s interest, (b) upon the issuance of a deed

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pursuant to the foreclosure of the lien of this Mortgage or the delivery of a deed in lieu of foreclosure, to execute all instruments of assignment or further assurance with respect to the Subject Property and Collateral, Leases and Payments in favor of the grantee of any such deed, as may be necessary or desirable for such purpose, (c) to prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve Mortgagee’s security interests and rights in or to any of the Subject Property and Collateral, and (d) upon the occurrence of an event, act or omission which, with notice or passage of time or both, would constitute a Default, Mortgagee may perform any obligation of Mortgagor hereunder; provided, however, that: (i) Mortgagee as such attorney-in-fact shall only be accountable for such funds as are actually received by Mortgagee; and (ii) Mortgagee shall not be liable to Mortgagor or any other person or entity for any failure to act (whether such failure constitutes negligence) by Mortgagee under this Section.

6.8 REMEDIES CUMULATIVE. All rights and remedies of Mortgagee provided hereunder are cumulative and are in addition to all rights and remedies provided by applicable law (including specifically that of foreclosure of this instrument as though it were a mortgage) or in any other agreements between Mortgagor and Mortgagee. No failure on the part of Mortgagee to exercise any of its rights hereunder arising upon any Default shall be construed to prejudice its rights upon the occurrence of any other or subsequent Default. No delay on the part of Mortgagee in exercising any such rights shall be construed to preclude it from the exercise thereof at any time while that Default is continuing. Mortgagee may enforce any one or more remedies or rights hereunder successively or concurrently. By accepting payment or performance of any of the Secured Obligations after its due date, Mortgagee shall not thereby waive the agreement contained herein that time is of the essence, nor shall Mortgagee waive either its right to require prompt payment or performance when due of the remainder of the Secured Obligations or its right to consider the failure to so pay or perform a Default.

6.9 REDEMPTION. In the event of foreclosure of this Mortgage and sale of the Subject Property by sheriff’s sale in said foreclosure proceeding:

(a) If the Subject Property, subject of this Mortgage, covers less than ten (10) acres and Mortgagee waives in the foreclosure action any rights to a deficiency judgment against Mortgagor, the redemption period shall be reduced to six (6) months, consistent with the provisions of §628.26, Code of Iowa, or any revision or successor thereof;

(b) If the Subject Property, subject of this Mortgage, covers less than ten (10) acres, the Court in the foreclosure action affirmatively finds that such property has been abandoned by the owners and those persons personally liable thereunder at the time of such foreclosure, and Mortgagee waives in the foreclosure action any rights to a deficiency judgment against

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Mortgagor, the redemption period shall be reduced to sixty (60) days, consistent with the provisions of §628.27, Code of Iowa, or any revision or successor thereof; and

(c) If the Subject Property, subject of this Mortgage, is not used for agricultural purposes, as defined in Iowa Code §535.13, and is either not the residence of the Mortgagor or owner, or is such a residence but is not a single family or a two family dwelling, and the Mortgagee waives its right to a deficiency judgment in the foreclosure action, the redemption period shall be reduced to ninety (90) days, consistent with the provisions of §628.28, Code of Iowa, or any revision or successor thereof.

6.10 FORCE PLACED INSURANCE. Unless Mortgagor provides Mortgagee with evidence reasonably satisfactory to Mortgagee of the insurance coverage required by this Mortgage, Mortgagee may purchase insurance at Mortgagor’s expense to protect Mortgagee’s interest in the Subject Property. This insurance may, but need not, protect Mortgagor’s interest in the Subject Property. The coverages that Mortgagee purchases may not pay any claim that Mortgagor makes or any claim that is made against Mortgagor in connection with the Subject Property. Mortgagor may later cancel any insurance purchased by Mortgagee, but only after providing Mortgagee with evidence reasonably satisfactory to Mortgagee that Mortgagor has obtained insurance as required by this Mortgage. If Mortgagee purchases insurance for the Subject Property, Mortgagor will be responsible for the costs of that insurance, including interest at the highest rate applicable during the continuance of a default and any other charges imposed by Mortgagee in connection with the placement of insurance, until the effective date of the cancellation or expiration of such insurance. The costs of the insurance may, at Mortgagee’s discretion, be added to Mortgagor’s total principal obligation owing to Mortgagee, and in any event shall be secured by the liens on the Subject Property created by this Mortgage. It is understood and agreed that the costs of insurance obtained by Mortgagee may be more than the costs of insurance Mortgagor may be able to obtain on its own.

6.11 NONJUDICIAL FORECLOSURE. The Mortgagee may at its option elect to foreclose this Mortgage by nonjudicial procedures allowed by Iowa law.

ARTICLE 7. MISCELLANEOUS PROVISIONS

7.1 ADDITIONAL PROVISIONS. The Credit Documents contain or incorporate by reference the entire agreement of the parties with respect to matters contemplated herein and supersede all prior negotiations. The Credit Documents grant further rights to Mortgagee and contains further agreements and affirmative and negative covenants by Mortgagor which apply to this Mortgage and to the Subject Property and Collateral and such further rights and agreements are incorporated herein by this reference.

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7.2 MERGER. No merger shall occur as a result of Mortgagee’s acquiring any other estate in, or any other lien on, the Subject Property unless Mortgagee consents to a merger in writing.

7.3 OBLIGATIONS OF MORTGAGOR, JOINT AND SEVERAL. If more than one person has executed this Mortgage as “Mortgagor”, the obligations of all such persons hereunder shall be joint and several.

7.4 WAIVER OF MARSHALLING RIGHTS. Mortgagor, for itself and for all parties claiming through or under Mortgagor, and for all parties who may acquire a lien on or interest in the Subject Property and Collateral, hereby waives all rights to have the Subject Property and Collateral and/or any other property which is now or later may be security for any Secured Obligation (“Other Property”) marshalled upon any foreclosure of the lien of this Mortgage or on a foreclosure of any other lien or security interest against any security for any of the Secured Obligations. Mortgagee shall have the right to sell, and any court in which foreclosure proceedings may be brought shall have the right to order a sale of, the Subject Property and any or all of the Collateral or Other Property as a whole or in separate parcels, in any order that Mortgagee may designate.

7.5 RULES OF CONSTRUCTION. When the identity of the parties or other circumstances make it appropriate the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. The term “Subject Property” and “Collateral” means all and any part of the Subject Property and Collateral, respectively, and any interest in the Subject Property and Collateral, respectively.

7.6 SUCCESSORS IN INTEREST. The terms, covenants, and conditions herein contained shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties hereto; provided, however, that this Section does not waive or modify the provisions of Section 5.10.

7.7 EXECUTION IN COUNTERPARTS. To facilitate execution, this document may be executed in as many counterparts as may be convenient or required. It shall not be necessary that the signature or acknowledgment of, or on behalf of, each party, or that the signature of all persons required to bind any party, or the acknowledgment of such party, appear on each counterpart. All counterparts shall collectively constitute a single document. It shall not be necessary in making proof of this document to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, and the respective acknowledgments of, each of the parties hereto. Any signature or acknowledgment page to any counterpart may be detached from such counterpart without impairing the legal effect of the signatures or acknowledgments thereon and thereafter attached to another counterpart identical thereto except having attached to it additional signature or acknowledgment pages.

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7.8 CHOICE OF LAW. This Mortgage shall be construed in accordance with the laws of the State of Iowa, except to the extent that federal laws preempt the laws of the State of Iowa.

7.9 INCORPORATION. Exhibit A, attached hereto, is incorporated into this Mortgage by this reference.

7.10 NOTICES. All notices, demands or other communications required or permitted to be given pursuant to the provisions of this Mortgage shall be in writing and shall be considered as properly given if delivered personally or sent by first class United States Postal Service mail, postage prepaid, except that notice of Default may be sent by certified mall, return receipt requested, or by Overnight Express Mail or by overnight commercial courier service, charges prepaid. Notices so sent shall be effective three (3) days after mailing, if mailed by first class mail, and otherwise upon receipt at the address set forth below; provided, however, that non-receipt of any communication as the result of any change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication. For purposes of notice, the address of the parties shall be:

Mortgagor:	SIR Windsor on the River, LLC c/o Steadfast Companies 18100 Von Karman Avenue, Suite 500 Irvine, CA 92612 Attention: Ana Marie del Rio, Esquire
Mortgagee:	PNC Bank, National Association 26901 Agoura Road, Suite 200 Calabasas Hills, CA 91301 Attention: Sandeep Patel

Any party shall have the right to change its address for notice hereunder to any other location within the continental United States by the giving of thirty (30) days notice to the other party in the manner set forth hereinabove. Mortgagor shall forward to Mortgagee, without delay, any notices, letters or other communications delivered to the Subject Property or to Mortgagor naming Mortgagee, “Lender” or any similar designation as addressee or the ability of Mortgagor to perform its obligations to Mortgagee under the Reimbursement Agreement.

7.11 COPY. The Mortgagor hereby acknowledges the receipt of a copy of this Mortgage, together with a copy of each promissory note secured hereby, and all other documents executed by the Mortgagor in connection herewith.

7.12 BUSINESS PURPOSE. Mortgagor warrants that the Subject Property is not used for agricultural purposes as defined in Iowa Code §535.13 and that the

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Subject Property is not agricultural land as defined in Iowa Code §9H.1. Further, the Mortgagor warrants that the Subject Property is not a one-family or two-family dwelling and that the indebtedness secured by this Mortgage does not constitute a consumer credit transaction as defined in Iowa Code §537.1301(12).

7.13 PURCHASE MONEY MORTGAGE. This Mortgage is a purchase money mortgage as defined by Iowa Code §654.12B.

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED, YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the day and year set forth above.

SIR WINDSOR ON THE RIVER, LLC,
a Delaware limited liability company,
By:	Steadfast Income Advisor, LLC, a Delaware limited liability company
By:	/s/ Rodney F. Emery
	Name: Rodney F. Emery
	Title: CEO and President

STATE OF	)
	)	SS.
COUNTY OF

I,                     , a notary public, in and for said County, in the State aforesaid, DO HEREBY CERTIFY that                     , personally known to me to be the             of Steadfast Income Advisor, LLC, the manager of SIR Windsor on the River, LLC, appeared before me this day in person and acknowledged that as such                     , being authorized to do so, signed and delivered the said instrument, as his free and voluntary act, and as the free and voluntary act of said limited liability company, for the uses and purposes therein set forth.

GIVEN under my hand and                      seal this      day of January, 2012.

	Notary Public
Commission Expires

EXHIBIT A

DESCRIPTION OF SUBJECT PROPERTY

Real property in the City of Cedar Rapids, County of Linn, State of Iowa, described as follows:

Lot 1 of Windsor-on-the-River First Addition and Lot 2 and Lot 3 of Windsor-on-the-River Second Addition and Lot 4 of Windsor-on-the-River Third Addition and Lot 5 of Windsor-on-the-River Fourth Addition, all in the North one-half of the Northeast Quarter of Section 18, Township 83 North, Range 7 West of the 5th Principal Meridian, Cedar Rapids, Linn County, Iowa.

APN: 14-18-1-01-002-0-0000 and 14-18-1-03-001-0-0000 and 14-18-1-26-001-0-0000 and 14- 18-1-26-002-0-0000 and 14-18-1-26-003-0-0000

(Notary Page to Mortgage)

EX-10.7

EXHIBIT 10.7

PLEDGE AND SECURITY AGREEMENT

THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”) dated as of January 26, 2012, is among SIR WINDSOR ON THE RIVER, LLC, a Delaware limited liability company (“Pledgor”), The Bank of New York Mellon Trust Company, N.A., as Trustee under the Indenture (as hereinafter defined) and as custodian hereunder (the “Trustee”), and PNC Bank, National Association, as issuer of the hereinafter defined Letter of Credit (“Lender”).

RECITALS

The parties acknowledge the following:

A. The Iowa Finance Authority (the “Issuer”) has issued $24,000,000 of its Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007B (as the same have been converted into an equal aggregate principal amount of the Issuer’s Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A pursuant to the terms and conditions set forth in the Indenture, the “Bonds”) under an Indenture of Trust dated as of May 1, 2007 (the “Indenture”) between the Issuer and the Trustee.

B. In connection with the Bonds, Pledgor shall cause Lender to issue its irrevocable direct-pay letter of credit in favor of the Trustee (the “Letter of Credit”) pursuant to a Reimbursement and Credit Agreement dated as of January 26, 2012 (such Agreement, as amended, revised, supplemented or restated from time to time, the “Reimbursement Agreement”) among Pledgor and Lender. Capitalized terms not otherwise defined herein shall have the meanings given them in the Reimbursement Agreement.

C. The Indenture requires the Trustee to purchase Bonds from the owners thereof or, if the Bonds are in book entry form, the beneficial ownership interests therein on such terms and conditions as are set forth in the Indenture and to register such purchased Bonds or beneficial ownership interests to the extent the purchase price for such purchase is obtained by a drawing under the Letter of Credit (any of such Bonds or beneficial ownership interests so purchased from a draw under the Letter of Credit being hereafter referred to as the “Pledged Bonds”) as directed by Lender.

D. To secure repayment of Pledgor’s obligations under the Reimbursement Agreement, Pledgor shall grant to Lender a security interest in the Pledged Bonds and other collateral, all as more fully hereinafter set forth.

E. It is a condition precedent to the obligation of Lender to issue the Letter of Credit and to enter into the Reimbursement Agreement that Pledgor and Trustee shall have executed and delivered this Pledge Agreement to Lender.

AGREEMENTS

In consideration of the Recitals and in order to induce Lender to enter into the Reimbursement Agreement and issue the Letter of Credit thereunder, Pledgor and Trustee hereby agree with Lender as follows:

1. Defined Terms. Unless otherwise defined herein, terms defined in the Reimbursement Agreement shall have such defined meanings when used herein.

2. Pledge. Pledgor hereby pledges, assigns, hypothecates, transfers and delivers to Lender or its designee all its right, title and interest in, and grants to Lender a first-priority lien upon, (a) the Pledged Bonds as the same may from time to time either (i) be delivered to or held by the Trustee in the name of Lender or its nominee pursuant to Article V of the Indenture or (ii) if the Depository Trust Company or its nominee (“DTC”) is the registered owner of all Bonds, be registered in the name of DTC with Lender’s interest in such Bonds recorded by DTC on its books or by the Trustee on its books, as appropriate and all interest thereon, (b) all proceeds of the Pledged Bonds and (c) subject to the rights of the Trustee under the Bond Documents (as defined in the Indenture), all monies in all accounts created under the Indenture or the other Bond Documents, including, without limitation, the Bond Fund and the Project Fund (each, as defined in the Indenture) and all rights of Pledgor under the Bond Documents with respect to such monies (all property at any time pledged to Lender hereunder and all income therefrom and proceeds thereof are referred to herein collectively as the “Collateral”), all as collateral security for (x) the prompt and complete payment of all amounts payable to Lender under the Reimbursement Agreement and the other Credit Documents, (y) the performance and observance of all covenants, terms, and conditions upon which the Letter of Credit is issued, including without limitation the covenants, terms, and conditions set forth in the Reimbursement Agreement, and (z) the performance of the covenants herein contained and any monies expended by Lender in connection therewith (collectively, the “Obligations”). Pledgor hereby agrees that the Trustee shall act as the agent and bailee of Lender for the purpose of perfecting the lien of this Pledge Agreement and of holding the Collateral for the benefit of Lender pursuant to the Indenture.

3. Payments on the Pledged Bonds. If, while this Pledge Agreement is in effect, Pledgor shall become entitled to receive or shall receive any payment in respect of the Pledged Bonds either (a) pursuant to a remarketing of the Pledged Bonds under the Indenture, (b) pursuant to any redemption or maturing of the Pledged Bonds, or (c) as interest on the Pledged Bonds (collectively the “Proceeds”), Pledgor agrees to accept the same as Lender’s agent, to hold the same in trust on behalf of Lender and to deliver the same forthwith to Lender. Pledgor instructs and authorizes Trustee to hold and receive on Lender’s behalf and to deliver forthwith to Lender any payment received by it in respect of the Collateral (including the proceeds of any remarketing of the Pledged Bonds). All such payments in respect of the Pledged Bonds which are paid to Lender shall be credited against the Obligations of Pledgor to Lender as Lender may determine.

4. Release of Pledged Bonds. Lender agrees to release the Pledged Bonds from the lien of this Agreement and deliver the Pledged Bonds to the Remarketing Agent in accordance with Section 2.02 of the Reimbursement Agreement.

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5. Rights of Lender. Lender shall not be liable for failure to collect the Obligations or for failure to realize upon any collateral security or guarantee therefor, or any part thereof, or for any delay in so doing nor shall Lender be under any obligation to take any action whatsoever with regard thereto. If an Event of Default under the Reimbursement Agreement has occurred and is continuing, Lender may thereafter without notice exercise all rights, privileges or options pertaining to any Collateral as if it were the absolute owner thereof, upon such terms and conditions as it may determine, all without liability except to account for property actually received by it, but Lender shall have no duty to exercise any of the aforesaid rights, privileges or options and shall not be responsible for any failure to do so or delay in so doing.

6. Remedies. In the event that any portion of the Obligations has been declared due and payable, Lender, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon Pledgor or any other person (all and each of which demands, advertisements and/or notices are hereby expressly waived), may forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, assign, give option or options to purchase, contract to sell or otherwise dispose of and deliver said Collateral, or any part thereof, in one or more parcels at public or private sale or sales, at any exchange, broker’s board or at any of Lender’s offices or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk, with the right to Lender upon any such sale or sales, public or private, to purchase the whole or any part of said Collateral so sold, free of any right or equity of redemption in Pledgor, which right or equity is hereby expressly waived or released. Lender shall pay over the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs and expenses of every kind incurred therein or incidental to the care or safekeeping of any and all of the Collateral or in any way relating to the rights of Lender hereunder, including reasonable attorney’s fees and legal expenses, to the payment in whole or in part of the Obligations in such order as Lender may elect, and only after so paying over such net proceeds and after the payment by Lender of any other amount required by any provision of law, including, without limitation, the Uniform Commercial Code of the Commonwealth of Pennsylvania (the “UCC”), need Lender account for the surplus, if any, to Pledgor. Lender agrees to give Pledgor, Trustee and Issuer not less than ten (10) Business Days’ prior written notice of the time and place of any public sale and of the time after which a private sale or other intended disposition is to take place. Pledgor agrees that such notice is reasonable notification of such matters. No notification need be given to Pledgor if it has signed after an Event of Default a statement renouncing or modifying any right to notification of sale or other intended disposition. In addition to the rights and remedies granted to it in this Pledge Agreement and in any other instrument or agreement securing, evidencing or relating to any of the Obligations, Lender shall have all the rights and remedies of a secured party under the UCC. Pledgor further agrees to waive and agree not to assert any rights or privileges which it may acquire under Section 9-623 of the UCC (as such section may be renumbered from time to time) and Pledgor shall be liable for the deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay all amounts to which Lender is entitled, and the reasonable fees of any attorneys employed by Lender to collect such deficiency.

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7. Representations, Warranties and Covenants of Pledgor. Pledgor represents and warrants that: (a) on the date of delivery to Lender or its designee of any Pledged Bonds in accordance with Section 2 hereof, no other Person will have any right, title or interest in and to the Pledged Bonds; (b) it has, and on the date of delivery to Lender or its designee of any Pledged Bonds, it will have, full power, authority and legal right to pledge all of its right, title and interest in and to the Collateral pursuant to this Agreement; (c) this Agreement has been duly authorized, executed and delivered by Pledgor and constitutes a legal, valid and binding obligation of Pledgor enforceable in accordance with its terms; (d) no consent of any other party (including, without limitation, any creditors of Pledgor) and no consent, license, permit, approval or authorization of exemption by, notice or report to, or registration, filing or declaration with, any governmental authority, domestic or foreign, is required to be obtained by Pledgor in connection with the execution, delivery or performance of this Agreement; (e) the execution, delivery and performance of this Agreement will not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, or of the organizational documents of Pledgor or of any securities issued by Pledgor or of any mortgage, indenture, lease, contract, or other agreement, instrument or undertaking to which Pledgor is a party or which purports to be binding upon Pledgor or upon any of its assets and will not result in the creation or imposition of any lien, charge or encumbrance on or security interest in any of the assets of Pledgor except as contemplated by this Agreement; and (f) the pledge, assignment and delivery of such Pledged Bonds and the Proceeds thereof are subject to no prior pledge, lien, mortgage, hypothecation, security interest, charge, option or encumbrance or to any agreement purporting to grant to any third party a security interest in the property or assets of Pledgor which would include the Pledged Bonds. Pledgor covenants and agrees that it will defend Lender’s right, title and security interest in and to the Collateral against the claims and demands of all persons whomsoever; and covenants and agrees that it will have like title to and right to pledge to Lender the Collateral hereunder and will likewise defend Lender’s right thereto and security interest therein.

8. No Disposition, Etc. Except as otherwise provided in the Indenture with respect to the Pledged Bonds, in each case sold by the Remarketing Agent, Pledgor agrees that it will not, without the prior written consent of Lender, sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Collateral, nor will it create, incur or permit to exist any pledge, lien, mortgage, hypothecation, security interest, charge, option or any other encumbrance with respect to any of the Collateral, or any interest therein, or any proceeds thereof, except for the lien and security interest provided for by this Agreement.

9. Power of Attorney. Pledgor hereby irrevocably appoints Lender as Pledgor’s attorney-in-fact (such agency being coupled with an interest), and as such attorney-in-fact Lender may, without the obligation to do so, in Lender’s name, or in the name of Pledgor, prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve any of Lender’s security interests and rights in or to any of the Collateral, and, if an Event of Default (as defined in the Reimbursement Agreement) occurs and is continuing, take any other action required of Pledgor; provided, however, that Lender as such attorney-in-fact shall be accountable only for such funds as are actually received by Lender.

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10. Sale of Collateral. (a) Pledgor recognizes that Lender may be unable to effect a public sale of any or all of the Pledged Bonds and accordingly may be compelled to resort to one or more private sales thereof to a restricted group of purchasers. Pledgor acknowledges and agrees that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, so long as Lender has conducted such private sale in good faith, Pledgor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. Lender shall be under no obligation to delay a sale of any of the Pledged Bonds for the period of time necessary to permit the registration of such securities for public sale under the Securities Act of 1933 or under applicable state securities laws.

(b) Pledgor further agrees to do or cause to be done all such other acts and things as may be necessary to make such sale or sales of any portion or all of the Pledged Bonds valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at Pledgor’s expense. Pledgor further agrees that a breach of any of the covenants contained in this Section 10 will cause irreparable injury to Lender, that Lender has no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this paragraph shall be specifically enforceable against Pledgor and Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred or is continuing under the Reimbursement Agreement.

11. Collateral Agency Agreement.

(a) Lender hereby appoints Trustee as agent and bailee for Lender on the terms and conditions of this Section 11, and Trustee hereby accepts such appointment and agrees with Lender to act as agent without compensation separate from that provided to Trustee pursuant to the Indenture, except as otherwise provided in Section 15 hereof.

(b) The duties of Trustee as agent under this Agreement shall be as follows:

(i) Trustee shall hold in trust for Lender all Pledged Bonds purchased by Trustee with payments made under the Letter of Credit pursuant to the Indenture, all proceeds thereof and all other amounts held by Trustee and payable to Lender pursuant to the Indenture; and

(ii) upon remarketing of the Pledged Bonds, Trustee shall deliver to Lender the proceeds of such remarketing and all other amounts received by Trustee and payable to Lender pursuant to the Indenture.

(c) Trustee shall not pledge, hypothecate, transfer or release all or any part of the Collateral to any other Person or in any manner not in accordance with this Section 11 without the prior written consent of Lender.

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(d) Neither Trustee nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Section 11 (except for its or such Person’s own negligence or willful misconduct). Trustee undertakes to perform only such duties as are expressly set forth herein. Trustee may rely, and shall be protected in acting or refraining from acting, upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party. Trustee may consult with counsel of its own choice and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel. Notwithstanding any provision to the contrary contained herein, Trustee shall not be relieved of liability arising in connection with its own gross negligence or willful misconduct.

12. Further Assurances. Pledgor agrees that at any time and from time to time within a reasonable time after its receipt of written request from Lender, Pledgor will execute and deliver such further documents and do such further acts and things as Lender may reasonably request in order to effect the purposes of this Agreement.

13. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

14. No Waiver; Cumulative Remedies. Lender shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies hereunder and no waiver shall be valid unless in writing, signed by Lender, and then only to the extent therein set forth. A waiver by Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Lender would otherwise have on any future occasion. No failure to exercise nor any delay in exercising on the part of Lender, any right, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights or remedies provided by law.

15. Waivers; Amendments; Applicable Law. None of the terms or provisions of this Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by all parties hereto. This Agreement and all obligations of the Pledgor hereunder shall be binding upon the successors and assigns of the Pledgor, and shall, together with the rights and remedies of Lender hereunder, inure to the benefit of Lender and its successors and assigns. This Agreement shall be governed by, and be construed and interpreted in accordance with, the laws of the Commonwealth of Pennsylvania.

16. Fees and Expenses. The Pledgor agrees to pay and reimburse the Trustee and Lender for and, except to the extent of any liability to a third party arising from the gross negligence or willful misconduct of Trustee or Lender, as applicable, indemnify and hold them

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harmless against all costs, expenses, taxes and fees (including reasonable attorneys’ fees and disbursements) and any liability incurred in connection with the administration and enforcement of this Agreement. Such undertaking of the Pledgor shall survive the termination of this Agreement.

17. Termination. This Agreement shall terminate upon the expiration of the Letter of Credit and payment in full and the performance and satisfaction of all Obligations, and upon such termination, Lender and Trustee shall assign, transfer and deliver without recourse and without warranty the Collateral to Pledgor (and any property received in respect thereof) as has not theretofore been sold or otherwise applied pursuant to the provisions of this Agreement.

18. Counterparts. This Agreement may be signed in any number of counterpart copies, and all such copies shall constitute one and the same Instrument.

[Signature Page Follows]

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THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
By:	/s/ Joan Blume
	Name:  Joan Blume
	Title:    Vice President
PNC BANK, NATIONAL ASSOCIATION
By:	/s/ Sandeep K. Patel
	Name:  Sandeep K. Patel
	Title:    Vice President
SIR WINDSOR ON THE RIVER, LLC, a Delaware limited liability company
By:	Steadfast Income Advisor, LLC, a Delaware limited liability company, its Manager
By:	/s/ Rodney F. Emery
	Name:  Rodney F. Emery
	Title:    CEO and President

EX-10.8

EXHIBIT 10.8

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (this “Agreement” or “Guaranty”) is made as of January 26, 2012, by STEADFAST INCOME REIT, INC., a Maryland corporation (the “Guarantor”) in favor of PNC BANK, NATIONAL ASSOCIATION, a national banking association (“Bank”), to secure obligations of SIR WINDSOR ON THE RIVER, LLC, a Delaware limited liability company (“Borrower”) to Bank.

Background

A. Iowa Finance Authority (“Issuer”) has issued its Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project) Series 2007A in the original aggregate principal amount of $24,000,000 (the “Bonds”) under an Indenture of Trust dated as of May 1, 2007 between Issuer and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “Trustee”) (with permitted amendments and supplements, the “Indenture”) the proceeds of which were loaned to Borrower’s predecessor-in-interest, Windsor on the River, LLC, a Delaware limited liability company (“Original Borrower”) pursuant to a Loan Agreement dated as of May 1, 2007 between Issuer and Original Borrower (the “Loan Agreement”) to finance the Project (as defined in the Loan Agreement) undertaken by Original Borrower. Borrower has assumed all of Original Borrower’s interests under the Loan Agreement pursuant to that certain Assumption Agreement of even date herewith between Borrower, Original Borrower and Trustee. The aggregate outstanding principal amount of the Bonds on the date hereof is $23,500,000.

B. In order to enhance the marketability of the Bonds and thereby achieve interest cost savings and other savings to Borrower, Borrower has asked Bank to issue, pursuant to a Reimbursement and Credit Agreement of even date herewith between Borrower and Bank (the “Reimbursement Agreement”), its Irrevocable Letter of Credit (together with any substitute letter of credit issued pursuant to the terms thereof, the “Letter of Credit”) to Trustee for the account of Borrower authorizing Trustee to make one or more draws on Bank up to an aggregate of $23,789,727.

C. As a condition to entering into the Reimbursement Agreement and issuing the Letter of Credit, Bank has required the execution and delivery of this Guaranty. Capitalized terms not otherwise defined herein shall have the meaning given them in the Reimbursement Agreement.

NOW, THEREFORE, in consideration of Bank’s agreement to issue the Letter of Credit, and intending to be legally bound, Guarantor hereby agrees as follows:

1. Payment and Performance of the Obligations. In order to secure payment and performance by Borrower of its obligations under the Reimbursement Agreement, Guarantor hereby irrevocably and unconditionally guarantees to Bank, and become surety to Bank for, the due and punctual payment and performance of the principal and any interest accruing thereon

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owed by Borrower to Bank under the Reimbursement Agreement (hereinafter referred to individually as “Obligation” and collectively as “Obligations”); plus all interest accrued thereon pursuant to the Reimbursement Agreement, plus all reasonable costs and expenses, including without limitation reasonable counsel fees, which may be incurred by Bank in collection or enforcement of the Obligations under this Guaranty. If any Obligation is not paid or performed by Borrower punctually when due, subject to any applicable notice and grace period, Guarantor will, upon Bank’s written demand, immediately pay or perform such Obligation or cause the same to be paid or performed strictly in accordance with the terms thereof. Guarantor will pay to Bank, upon written demand, all reasonable costs and expenses, including without limitation reasonable counsel fees, which are incurred by Bank in the collection or enforcement of Guarantor’s obligations under this Agreement. No reference hereinafter or in any other document to Obligations or to Borrower’s performance or to this Guaranty or to Guarantor shall change the nature or limits of this Guaranty as defined in this Section 1.

2. Representations and Warranties of Guarantor. Guarantor represents and warrants to Bank as of the date of this Agreement that:

(a) Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland, is duly qualified and in good standing to conduct business in those jurisdictions in which its ownership of property or the conduct of its business requires such qualification, and has the requisite power and authority to make and perform this Guaranty;

(b) This Guaranty has been duly authorized, executed and delivered by Guarantor and such execution and delivery and the performance by Guarantor of its obligations hereunder will not violate any applicable provision of law or any rule, regulation, order, writ, judgment, injunction, decree, determination or award applicable to Guarantor nor conflict with or constitute a breach of or a default under the certificate of incorporation or by-laws of Guarantor or any instrument to which Guarantor is a party or by which Guarantor or Guarantor’s property is bound, and this Guaranty is a valid and binding obligation of Guarantor enforceable in accordance with its terms;

(c) There is no litigation, proceeding or investigation pending or, to the knowledge of Guarantor, threatened against Guarantor, or against any of its properties or revenues, as to which there is a reasonable likelihood of an adverse determination and which if adversely determined, would have or constitute a Material Adverse Effect, and Guarantor is not in violation in any material respect of any statute, rule, order or regulation of any governmental body applicable to Guarantor which individually or collectively could have or constitute a Material Adverse Effect, except for notices of violations received in the ordinary course of business which Guarantor is diligently proceeding in good faith and in full compliance with all Requirements of Law to remove or correct;

(d) The consolidated and consolidating financial statements of Guarantor as of December 31, 2010 are complete and correct, were prepared in accordance with generally accepted accounting principles consistently applied and fairly set forth the financial condition of Guarantor and its Subsidiaries as of the date thereof and the results of Guarantor’s operations for the period covered thereby; and there has occurred no material adverse change in the financial condition of Guarantor as shown thereon since the date thereof, except such changes as have been heretofore disclosed to Bank in writing; and

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(e) Guarantor has filed all income tax returns and all other material tax returns required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessments received by it.

3. Affirmative Covenants. Guarantor covenants and agrees that so long as any Obligations are outstanding and unpaid, or not fully performed, and, except to the extent Bank shall otherwise consent in writing, Guarantor will:

(a) Comply in all material respects with all Requirements of Law applicable to its business, operations or facilities the noncompliance with which would have or constitute a Material Adverse Effect, except for any such laws, rules, regulations and orders which it is contesting in good faith by appropriate proceedings;

(b) Notify Bank in writing immediately upon the occurrence of any Event of Default hereunder or any default or event of default under any other agreement or instrument of debt of Guarantor or any litigation or proceeding which, if adversely determined, could have or constitute a Material Adverse Effect or any other event which has had or constitutes a Material Adverse Effect;

(c) Furnish or cause to be furnished to Bank the financial statements and other information required by the Reimbursement Agreement;

(d) Permit any of the officers or authorized employees or representatives of Bank to visit and inspect during normal business hours any of its properties and to examine and make excerpts from its books and records, except to the extent Guarantor is precluded by any Requirement of Law from disclosing any such information, and to discuss its business affairs, finances and accounts with any of its officers, all in such detail and at such times and as often as Bank may reasonably request, provided that Bank shall provide it with reasonable notice prior to any visit or inspection;

(e) Furnish Bank with prompt and detailed notice of any event which has or may have or constitutes a Material Adverse Effect; and

(f) (i) Maintain a Consolidated Net Worth of at least $100,000,000, as of the last day of each fiscal quarter of Guarantor, starting with the fiscal quarter ending December 31, 2013.

(ii) Maintain Liquidity of not less than $5,000,000, as of the last day of each fiscal quarter of Guarantor, starting with the fiscal quarter ending December 31, 2013.

(iii) Not pay any distributions or dividends during any fiscal quarter in excess of Adjusted Funds From Operations, starting with the fiscal quarter ending December 31, 2013.

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Any failure to meet any of the requirements of clauses (i) through (iii) above shall not constitute an Event of Default hereunder, provided that and as long as the Guarantor shall immediately establish and thereafter maintain with Bank a restricted deposit account for the purpose of accumulating and reserving amounts for the payment of principal and interest in respect of the Bonds (the “Sinking Fund Account”). Beginning on the date the Guarantor fails to meet any of the requirements of clauses (i) through (iii) above (the “Sinking Fund Creation Date”) and continuing until the Stated Expiration Date, Guarantor shall deposit, on or before the 15th day of each month, an amount in the Sinking Fund Account equal to $500,000 divided by the number of months remaining, as of the Sinking Fund Creation Date (including the current month), until the Stated Expiration Date.

Guarantor hereby grants to Bank a security interest in all rights of the Guarantor in and to the Sinking Fund Account established pursuant to the previous paragraph, and all sums deposited therein. Guarantor hereby acknowledges and agrees that Bank shall have sole dominion and control of the Sinking Fund Account. Guarantor shall not close the Sinking Fund Account without obtaining the prior consent of Bank. Guarantor shall maintain the Sinking Fund Account and shall pay all fees and charges with respect thereto when due. All interest earned on amounts deposited in the Sinking Fund Account shall be re-deposited therein and become part thereof. No funds in the Sinking Fund Account may be commingled with any other funds of Guarantor or of any other Person. Except to the extent resulting solely from the gross negligence or willful misconduct of Bank, Bank shall not be liable for any loss of interest on or any penalty or charge assessed against the funds in, payable on, or credited to the Sinking Fund Account as a result of the exercise by the Bank of any of its rights, remedies or obligations under this Agreement. All sums held in the Sinking Fund Account shall constitute additional security for the Obligations. At any time following the occurrence and during the continuance of an Event of Default, Bank may apply any funds on deposit in the Sinking Fund Account to repay the Obligations.

As used herein:

(A) “Adjusted Funds from Operations” means, as of the end of any fiscal quarter of Guarantor, Funds from Operations during such quarter less Capital Reserves;

(B) “Capital Reserves” means the quotient obtained by multiplying Three Hundred Fifty and 00/100 Dollars ($350.00) by the sum of the number of units owned by Guarantor plus any entity directly or indirectly owned by Guarantor (“Guarantor Subsidiary Owned Units”) and dividing the resulting product by four (4) (i.e. ($350 x (units owned by Guarantor plus Guarantor Subsidiary Owned Units))/4);

(C) “Consolidated Net Worth” means, on any date, all amounts that would be included under stockholders’ equity on a consolidated balance sheet of Guarantor and its Subsidiaries, as determined on a consolidated basis in accordance with GAAP;

(D) “Funds From Operations” has the meaning promulgated by the National Association of Real Estate Investment Trusts on the Date of Issuance;

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(E) “Liquidity” means, at any time, the aggregate amount of Unrestricted Cash at such time; and

(F) “Unrestricted Cash” means unrestricted cash and cash equivalents owned by the Guarantor and not controlled by or subject to any Lien in favor of any creditor.

(g) Concurrently with the delivery of the financial statements referred to in Sections 6.08(a) and (c) of the Reimbursement Agreement, a certificate of the chief financial officer of the Guarantor in substantially the form of Exhibit A attached hereto (each a “Compliance Certificate”) showing in detail the calculations demonstrating compliance with the financial covenant set forth in Section 3(g) above, and stating that, to the best of such officer’s knowledge, the Guarantor during such period has kept, observed, performed and fulfilled each and every covenant and condition contained in this Agreement in all material respects.

4. Negative Covenants. Guarantor covenants and agrees that so long as any Obligations are outstanding and unpaid, or any Obligation is not fully performed, Guarantor will not:

(a) Wind-up, liquidate or dissolve its affairs, or convey, sell, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its properties or assets (whether now owned or hereafter acquired);

(b) Sell or transfer or permit or suffer to be sold or transferred, voluntarily or by operation of law a material amount of its property, other than in the ordinary course of business for equivalent value contemporaneously given; or

(c) Make or permit any material change in the nature of its business as carried on as of the date hereof.

5. Events of Default; Remedies. (a) The occurrence of any of the following and its continuance after any applicable notice and cure period herein provided shall be an “Event of Default”: (i) Guarantor’s failure to pay or perform any of its obligations hereunder when due which in the case of any payment obligation continues for ten (10) days after written notice from Bank, or in the case of any other obligation which continues for thirty (30) days after the earlier of the effective date of written notice from Bank, or the date on which Guarantor otherwise acquires knowledge that such failure has occurred, provided, however, that if Guarantor shall proceed to take any curative action that, if begun and prosecuted with due diligence, cannot be completed within such 30 day period, then such period shall be increased to such extent as shall be reasonably necessary to enable Guarantor to complete such curative action through the exercise of due diligence; (ii) the material falsity, material inaccuracy or material breach by Guarantor of any written warranty, representation or statement made or furnished to Bank by or on behalf of Guarantor; or (iii) the termination or attempted termination of this Guaranty except as provided for in Section 7.

(b) Upon the occurrence of any Event of Default under this Guaranty, (i) Guarantor shall pay to Bank the amount of the Obligations then and at any time thereafter due under the Reimbursement Agreement; and (ii) Bank in its discretion may exercise, or cause to be exercised, from time to time any other rights and remedies available to it under this Guaranty or at law, in equity or otherwise.

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6. General Terms and Conditions.

(a) All payments by Guarantor hereunder shall be made in Dollars of the United States of America.

(b) Guarantor hereby waives (i) notice of acceptance of this Agreement and of any action by Bank in reliance thereon, (ii) presentment, demand of payment, notice of dishonor or nonpayment, protest and notice of protest with respect to the Obligations, and giving any notice of default or other notice to, or making any demand on anyone (including without limitation Borrower and Guarantor) liable in any manner for the payment of the Obligations, (iii) any right to require Bank to proceed initially against Borrower or any other collateral for the Obligations upon any default in the payment or performance of the Obligations, and (iv) notice of any election by Bank to sell any of the property mortgaged, assigned or pledged as security for any of the Obligations at a public or private sale, provided that nothing contained in this paragraph shall be deemed to be a waiver of any notice expressly required to be given to Borrower pursuant to the Reimbursement Agreement.

(c) Bank may at any time and from time to time without the consent of or notice to Guarantor and without increasing, impairing or releasing the obligations of Guarantor hereunder (i) exercise or refrain from exercising any right or remedy against Borrower or others, including without limitation Guarantor, or against any of the collateral and (ii) modify, amend, extend, supplement or waive or consent to the breach of any provision of the Reimbursement Agreement or any of the collateral, to which modifications, amendments, extensions, supplements, waivers and consents Guarantor hereby assents. Without limiting the foregoing, it is specifically understood that any modification, limitation or discharge of Borrower’s liability under the Reimbursement Agreement or any of the collateral arising out of or by virtue of any bankruptcy, arrangement, reorganization or similar proceeding for relief of debtors under federal or state law hereafter initiated by or against Borrower will not affect, modify, or discharge the liability of Guarantor in any manner and this Guaranty shall remain in full force and effect and shall be enforceable against Guarantor to the same extent and with the same effect as if such proceedings had not been instituted.

(d) The guaranty and surety contained in paragraph 1 hereof is absolute and unconditional, primary, direct and immediate and shall be valid and binding upon Guarantor regardless of (i) any invalidity, irregularity, defect or unenforceability of or in the Reimbursement Agreement or any of the collateral for the Obligations or any other obligation or agreement of Borrower or Guarantor, (ii) any action or inaction by Bank or other occurrence referred to in subsection 6(c) above, or (iii) any other circumstance which might otherwise constitute a defense available to, or a discharge or release of, Borrower or Guarantor, by operation of law.

(e) No failure or delay on the part of Bank in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof

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or the exercise of any other right, power or privilege. The rights and remedies of Bank hereunder are cumulative and concurrent and not exclusive of any other rights or remedies Bank may have.

(f) Guarantor hereby waives and releases all relief from any and all appraisement, stay or execution law of any state now in force or hereafter enacted.

(g) No set-off, permissive counterclaim, reduction or diminution of an obligation, or any defense of any kind or nature that Guarantor has or may have against Borrower or Bank except payment, satisfaction or defeasance of Borrower’s obligations that Guarantor is guaranteeing and acting as surety for under this Guaranty shall affect, modify or impair Guarantor’s obligations hereunder. Any claim, if any, that Guarantor now or hereafter has against Borrower by way of subrogation under this Agreement or otherwise shall be fully subordinate in lien and payment to any claim that Bank now or hereafter has against Borrower.

(h) Guarantor hereby subordinates any claim, remedy or other right they may now or hereafter acquire against Borrower that arises from the existence or performance of the Obligations, including without limitation, any right of subrogation, reimbursement, exoneration, contribution, or indemnification against Borrower or any right to participate in any collateral for the Obligations, whether or not such claim, remedy or right arises in equity, under contract, statute, or common law, to any right, claim or cause of action the Bank may now or hereafter have against Borrower with respect to the Obligations until the termination of this Agreement in accordance with Section 7 hereof.

(i) Upon the occurrence and during the continuance of any Event of Default under this Guaranty, Bank is hereby authorized at any time and from time to time to set off any or all of the property of Guarantor in Bank’s possession (including all deposits and other indebtedness owing by Bank to or for the credit or the account of Guarantor) at or subsequent to the occurrence of the Event of Default against any and all of the obligations of Guarantor now or hereafter existing under this Agreement, irrespective of whether or not Bank shall have made any demand under this Agreement and although such obligations may be contingent and unmatured.

(j) For the purpose of any suit, action or proceeding arising out of or relating to this Agreement, Guarantor hereby irrevocably consents and submits to the jurisdiction and venue of any of the courts of the Commonwealth of Pennsylvania, and irrevocably agree to service of process by certified mail, return receipt requested, postage prepaid, to its address set forth in Section 8(b) of this Agreement. Guarantor irrevocably waive any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in such court and any claim that such suit, action or proceeding brought in such a court has been brought in an inconvenient forum and agree that service of process in accordance with the foregoing sentence shall be deemed in every respect effective and valid personal service of process upon Guarantor. The provisions of this paragraph shall not limit or otherwise affect the right of Bank to institute and conduct an action in any other appropriate manner, jurisdiction or court.

(k) Bank and Guarantor hereby waive all right to a trial by jury in any litigation relating to this Agreement.

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7. Termination. This Agreement shall terminate and be of no further force or effect upon Borrower’s or Guarantor’s payment in full of all of the Obligations and termination of Bank’s obligations under the Reimbursement Agreement and the Letter of Credit, provided that this Agreement shall continue to be effective or be reinstated, (as the case may be) if at any time payment of any of the Obligations is refunded or must otherwise be returned by Bank or if Bank’s obligations under the Reimbursement Agreement or Letter of Credit are reinstated as a result of any bankruptcy, arrangement, reorganization or similar proceeding for relief of debtors under state or federal law, all as though such payment had not been made.

8. Miscellaneous.

(a) This Agreement shall be binding upon Guarantor and Guarantor’s successors and assigns and shall inure to the benefit of Bank and its successors and assigns.

(b) Any notice, demand or request under this Agreement shall be in writing, and shall be delivered by personal service or shall be sent by postage prepaid, first class mail, return receipt requested or by reputable overnight courier (e.g., Federal Express) addressed, if to Guarantor or Bank, at the address set forth below, or at such other address as the addressee may designate in writing:

If to Bank:

PNC Bank, National Association

26901 Agoura Road, Suite 200

Calabasas Hills, CA 91301

Attention: Sandeep Patel

Facsimile No.: (818) 880-3303

If to Guarantor:

Steadfast Income REIT, Inc.

18100 Von Karman Ave., Suite 500

Irvine, CA 926122

Attention: Ana Marie del Rio, Esquire

Facsimile No.: (949) 777-8316

Each notice, demand or request hereunder shall be deemed given on the date it is delivered, in the case of personal service, or two days after it is deposited with the United States Postal Service, in the case of first class mail, or the day after deposit with an overnight courier.

(c) No amendment, modification or release from or waiver of any provision hereof shall be effective unless in writing and signed by Bank and shall be effective only in the specific instance and for the specific purpose for which given.

(d) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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(e) This Agreement and the rights and obligations hereunder shall be construed in accordance with and governed by the substantive laws of the Commonwealth of Pennsylvania.

(f) The paragraph headings used herein are for convenience only and do not affect or modify the terms and conditions hereof.

(g) If any provision hereof is found by a court of competent jurisdiction to be prohibited or unenforceable it shall be ineffective only to the extent of such prohibition or unenforceability, and such prohibition or unenforceability shall not invalidate the balance of such provision to the extent it is not prohibited or unenforceable, nor invalidate the other provisions hereof, all of which shall be liberally construed in favor of Bank in order to effect the provisions hereof.

(h) If the date (“Performance Date”) on which any action is to be taken, any obligation is to be performed, or any notice is to be given under this Guaranty falls on any day other than a business day (i.e., any day which is not a Saturday, Sunday or legal holiday), such Performance Date shall be automatically extended to the next business day.

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IN WITNESS WHEREOF, Guarantor has executed this Agreement as of the day and year first above written.

STEADFAST INCOME REIT, INC., a Maryland corporation
By:	/s/ Rodney F. Emery
	Name: Rodney F. Emery
	Title: CEO and President

EXHIBIT A

COMPLIANCE CERTIFICATE

This Compliance Certificate is executed and delivered by STEADFAST INCOME REIT, INC. (the “Guarantor”), in connection with the Guaranty Agreement (the “Guaranty”) dated as of January 26, 2012 between the Borrower and PNC Bank, National Association (“PNC”). All capitalized terms used in this Compliance Certificate as defined terms shall have the meanings given them in the Guaranty.

The undersigned,                     , Chief Financial Officer of the Guarantor, hereby attests on behalf of the Guarantor to PNC, with respect to the fiscal quarter ended                     ,         (the “Fiscal Period”), as follows:

1. As of the date of this Compliance Certificate, and since the date of the most recent Compliance Certificate submitted to PNC by the Guarantor, to the actual knowledge of the Guarantor, the Guarantor has kept, observed, performed and fulfilled in all material respects each and every covenant and condition contained in the Guaranty Agreement.

2. Pursuant to and determined in accordance with the provisions of Section 3(f)(i) of the Guaranty, the Guarantor maintained as of the end of the Fiscal Period a Consolidated Net Worth of at least $100,000,000.

3. Pursuant to and determined in accordance with the provisions of Section 3(f)(ii) of the Guaranty, the Guarantor maintained as of the end of the Fiscal Liquidity of not less than $5,000,000.

4. Pursuant to and determined in accordance with the provisions of Section 3(f)(iii) of the Guaranty, the Guarantor did not pay any distributions or dividends during the Fiscal Period in excess of Adjusted Funds From Operations.

Computations demonstrating the foregoing are attached hereto.

STEADFAST INCOME REIT, INC.
By:
	Name:
	Title: Chief Financial Officer

EX-10.9

EXHIBIT 10.9

HAZARDOUS MATERIALS INDEMNITY AGREEMENT

THIS HAZARDOUS MATERIALS INDEMNITY AGREEMENT (Unsecured) (“Indemnity”) is given January 26, 2012 by SIR WINDSOR ON THE RIVER, LLC, a Delaware limited liability company (“Borrower”) and STEADFAST INCOME REIT, INC., a Maryland corporation (the “Guarantor” and together with Borrower, “Indemnitors”) to PNC BANK, NATIONAL ASSOCIATION (“Lender”), on the basis of the following facts and understandings:

A. Pursuant to the terms of a Reimbursement and Credit Agreement (“Reimbursement Agreement”) between Borrower and Lender, of even date herewith, Lender has agreed to issue a letter of credit to The Bank of New York Trust Company, N.A., as trustee under the Indenture (as defined in the Reimbursement Agreement), on behalf of Borrower in the principal sum of $23,789,727.00 (Twenty-Three Million Seven Hundred Eighty Nine Thousand Seven Hundred Twenty Seven and 00/100 Dollars) (the “Letter of Credit”) for the purposes specified in the Reimbursement Agreement. The Reimbursement Agreement provides that amounts owing to Lender under the Reimbursement Agreement or otherwise shall be secured by, among other things, a mortgage (the “Mortgage”), executed by Borrower, as Mortgagor, to Lender, as Mortgagee. The Mortgage encumbers the real property and any and all improvements thereon described on Exhibit A attached hereto and incorporated herein by this reference (“Property”). Capitalized terms not otherwise defined herein shall have the meanings given them in the Reimbursement Agreement.

B. Each Indemnitor has a direct financial interest in the Property and will benefit from Lender issuing the Letter of Credit on behalf of Borrower.

C. Lender is willing to issue the Letter of Credit only on the condition, among others, that Indemnitors defend, indemnify and hold harmless Lender from and against any and all claims, loss, damage, cost, expense or liability arising out of the presence of Hazardous Materials (as defined below) on the Property, subject to the provisions of this Indemnity.

D. Since the presence of Hazardous Materials on the Property may reduce the value of the Property to an extent that is unforeseeable and indeterminable and may, in fact, cause the value of the Property to be substantially less than the claims against Lender or the liabilities associated with ownership of such Property, Lender also is willing to issue the Letter of Credit only on the condition that this Indemnity be and remain an unsecured personal obligation of Indemnitors.

NOW, THEREFORE, in consideration of Lender contemporaneously herewith issuing the Letter of Credit as requested by Borrower, and for other good, valuable and adequate consideration, receipt of which is hereby acknowledged, Indemnitors agree as follows:

1. INDEMNITY. EACH INDEMNITOR HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER, ANY AFFILIATE (AS DEFINED IN THE REIMBURSEMENT AGREEMENT) OF LENDER, AND EACH OF THEIR

RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS (INCLUDING, WITHOUT LIMITATION, ANY PARTICIPANTS IN THE CREDIT EXTENDED TO BORROWER) FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS, ACTIONS, JUDGMENTS, COURT COSTS AND LEGAL OR OTHER EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND EXPENSES) WHICH LENDER MAY INCUR AS A DIRECT OR INDIRECT CONSEQUENCE OF: (A) THE USE, GENERATION, MANUFACTURE, STORAGE, TREATMENT, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL, TRANSPORTATION OR PRESENCE OF ANY HAZARDOUS MATERIALS, WHICH ARE FOUND IN, ON, UNDER OR ABOUT THE PROPERTY; OR (B) THE BREACH OF ANY COVENANTS (OR REPRESENTATION AND WARRANTY) OF ANY INDEMNITOR UNDER THIS INDEMNITY. SUCH INDEMNITY SHALL INCLUDE, WITHOUT LIMITATION: (i) THE COSTS, WHETHER FORESEEABLE OR UNFORESEEABLE, OF ANY REPAIR, CLEANUP OR DETOXIFICATION OF THE PROPERTY WHICH IS REQUIRED BY ANY GOVERNMENTAL AUTHORITY (AS DEFINED IN THE REIMBURSEMENT AGREEMENT) OR IS OTHERWISE NECESSARY TO RENDER THE PROPERTY IN COMPLIANCE WITH ALL LAWS AND REGULATIONS PERTAINING TO HAZARDOUS MATERIALS; (ii) ALL OTHER DIRECT OR INDIRECT CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY THIRD PARTY TORT CLAIMS OR GOVERNMENTAL CLAIMS, FINES OR PENALTIES AGAINST LENDER, ANY AFFILIATE OF LENDER, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS OR ASSIGNS); AND (iii) ALL COURT COSTS AND REASONABLE ATTORNEYS’ FEES AND EXPENSES PAID OR INCURRED BY LENDER, ANY AFFILIATE OF LENDER, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS OR ASSIGNS. NOTWITHSTANDING THE FOREGOING, THE INDEMNIFICATION OBLIGATIONS SET FORTH HEREIN SHALL NOT APPLY WITH RESPECT TO THE PRESENCE OF ANY HAZARDOUS MATERIALS IN, ON, UNDER OR ABOUT THE PROPERTY AS THE SOLE RESULT OF ANY ACT OR OMISSION BY LENDER, ANY AFFILIATE OF LENDER, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS OR ASSIGNS.

2. HAZARDOUS MATERIALS,

2.1 Representations and Warranties. Each Indemnitor hereby specially represents and warrants to such Indemnitor’s actual knowledge as of the date of this Indemnity, as follows:

(a) Hazardous Materials. Except as previously disclosed to Lender in (i) that certain Phase I Environmental Site Assessment, ASTM 1527-00, with respect to the Property dated December 22, 2011 and prepared by EMG, Inc., and (ii) that certain report dated January 18, 2012 regarding Radon Resampling at: Windsor on the River prepared by EMG Inc. for EMG Project Number 99862.11R-003.173, the Property is not and has not been

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a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, transportation or presence of any oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including, without limitation, any substances which are “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances,” “wastes,” “regulated substances,” “industrial solid wastes,” or “pollutants” under the Hazardous Materials Laws, as described below, and/or other applicable environmental laws, ordinances and regulations (collectively, the “Hazardous Materials”). “Hazardous Materials” shall not include commercially reasonable amounts of such materials used in the ordinary course of operation of the Property which are used and stored in accordance with all applicable environmental laws, ordinances and regulations.

(b) Hazardous Materials Laws. The Property is in compliance with all laws, ordinances and regulations relating to Hazardous Materials (“Hazardous Materials Laws”), including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environment Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments and Reauthorization Act of 1986, “CERCLA”), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of other jurisdictions or orders and regulations.

(c) Hazardous Materials Claims. There are no claims or actions (“Hazardous Materials Claims”) pending or threatened against any Indemnitor or the Property by any Governmental Authority or by any other person or entity relating to Hazardous Materials or pursuant to the Hazardous Materials Laws.

2.2 Hazardous Materials Covenants. Each Indemnitor agrees as follows:

(a) No Hazardous Activities. Such Indemnitor shall not cause or permit the Property to be used as a site for the use, generation, manufacture, storage, treatment, release, discharge, disposal, transportation or presence of any Hazardous Materials.

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(b) Compliance. Such Indemnitor shall comply and cause the Property to comply with all Hazardous Materials Laws.

(c) Notices. Such Indemnitor shall immediately notify Lender in writing of: (1) the Indemnitor’s discovery of any Hazardous Materials on, under or about the Property in violation of Hazardous Materials Laws; (2) any knowledge by such Indemnitor that the Property does not comply with any Hazardous Materials Laws; and (3) any Hazardous Materials Claims.

(d) Remedial Action. In response to the presence of any Hazardous Materials on, under or about the Property, Indemnitors shall immediately take, at Indemnitors’ sole expense, all remedial action required by any Hazardous Materials Laws or any judgment, consent decree, settlement or compromise in respect to any Hazardous Materials Claims.

3. TERM. The term of the Indemnity provided for herein will commence on the date hereof and continue until such time as no legal action can be successfully brought against Lender due to applicable statutes of limitation. WITHOUT IN ANY WAY LIMITING THE ABOVE, IT IS EXPRESSLY UNDERSTOOD THAT INDEMNITOR’S DUTY TO INDEMNIFY LENDER SHALL SURVIVE: (a) ANY JUDICIAL OR NON-JUDICIAL FORECLOSURE UNDER THE MORTGAGE, OR TRANSFER OF THE PROPERTY IN LIEU THEREOF; (b) THE RELEASE AND RECONVEYANCE OR CANCELLATION OF THE MORTGAGE; AND (c) THE SATISFACTION OF ALL OF BORROWER’S OBLIGATIONS UNDER THE CREDIT DOCUMENTS (AS DEFINED IN THE REIMBURSEMENT AGREEMENT).

4. INDEPENDENT AND UNSECURED OBLIGATIONS. Each Indemnitor acknowledges that, notwithstanding any other provision of this Indemnity or any of the Credit Documents to the contrary (including, without limitation, any non-recourse provision under the Credit Documents) the obligations of Indemnitors under this Indemnity are unlimited obligations of Indemnitors.

5. SETTLEMENTS; CLAIMS; JUDGMENTS. Indemnitors shall not, without the prior written consent of Lender: (a) settle or compromise any action, suit, proceeding, or claim in which Lender is named as a party or consent to the entry of any judgment in such a matter that does not include as an unconditional term thereof the delivery by the claimant or plaintiff to Lender of a written release of Lender (in form, scope and substance satisfactory to Lender in its sole discretion) from all liability in respect of such action, suit, or proceeding; or (b) settle or compromise any action, suit, proceeding, or claim in which Lender is named as a party in any manner that may materially and adversely affect Lender as determined by Lender in its sole discretion.

6. INTEREST. Indemnitors shall pay Lender, on demand, interest, at the Default Rate (as defined in the Reimbursement Agreement) on any costs or expenses incurred by Lender in the enforcement of this Indemnity or on any sums Lender is obligated to pay in respect to the matters with respect to which this Indemnity is given, accruing from and after the date of Lender’s demand.

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7. RIGHTS NOT EXCLUSIVE. The rights of Lender under this Indemnity shall be in addition to any other rights and remedies of Lender against any Indemnitor under any other document or instrument now or hereafter executed by such Indemnitor, or at law or in equity (including, without limitation, any right of reimbursement or contribution pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as heretofore or hereafter amended from time to time).

8. RIGHTS OF LENDER. Each Indemnitor authorizes Lender, without giving notice to any Indemnitor or obtaining any Indemnitor’s consent and without affecting the liability of Indemnitors, from time to time to: (a) renew or extend all or any portion of Borrower’s obligations under the Reimbursement Agreement or any of the other Credit Documents; (b) declare all sums owing to Lender under the Reimbursement Agreement and the other Credit Documents due and payable upon the occurrence of a default under the Credit Documents; (c) make nonmaterial changes in the dates specified for payments of any item payable in periodic installments under the Reimbursement Agreement or any of the other Credit Documents; (d) otherwise modify the terms of any of the Credit Documents; (e) take and hold security for the performance of Borrower’s obligations under the Reimbursement Agreement or the other Credit Documents and exchange, enforce, waive and release any such security; (f) apply such security and direct the order or manner of sale thereof as Lender in its discretion may determine; (g) release, substitute or add any one or more guarantors of Borrower’s obligations under the Reimbursement Agreement or the other Credit Documents; (h) apply payments received by Lender from Borrower to any obligations of Borrower to Lender, in such order as Lender shall determine in its sole discretion, whether or not any such obligations are covered by this Indemnity; and (i) assign this Indemnity in whole or in part.

9. INDEMNITOR’S WAIVERS. Each Indemnitor waives: (a) any defense based upon any legal disability to enter into the Reimbursement Agreement or other defense of Borrower, any other guarantor or other person, or by reason of the cessation or limitation of the liability of Borrower from any cause; (b) any defense based upon any lack of authority of the officers, directors, partners, joint venturers, members or agents acting or purporting to act on behalf of Borrower or any principal of Borrower, or any defect in the formation of Borrower or any principal of Borrower; (c) any defense based upon the application of the proceeds of the Bonds by Borrower for purposes other than the purposes represented by Borrower to Lender or intended or understood by Lender or Indemnitors; (d) any and all rights and defenses arising out of an election of remedies by Lender, even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed such Indemnitor’s rights of subrogation and reimbursement against the principal; (e) any defense based upon Lender’s failure to disclose to such Indemnitor any information concerning Borrower’s financial condition or any other circumstances bearing on Borrower’s ability to perform its obligations under the Reimbursement Agreement or any of the other Loan Documents; (f) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal; (g) any defense based upon Lender’s election, in any proceeding instituted under the Federal Bankruptcy Code, of the application of Section 1111(b) (2) of

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the Federal Bankruptcy Code or any successor statute; (h) any defense based upon any borrowing or any grant of a security Interest under Section 364 of the Federal Bankruptcy Code; (i) any right of subrogation, any right to enforce any remedy which Lender may have against Borrower and any right to participate in, or benefit from, any security for the obligations of the Borrower under the Reimbursement Agreement or the other Credit Documents now or hereafter held by Lender (j) presentment, demand, protest and notice of any kind, (k) any right or claim of right to cause a marshalling of any of Borrower’s assets or the assets of any other party now or hereafter held as security for Borrower’s obligations; and (l) the benefit of any statute of limitations affecting the liability of Indemnitor hereunder or the enforcement hereof. Each Indemnitor agrees that the payment of all sums payable under the Reimbursement Agreement or any of the other Credit Documents or any part thereof or other act which toils any statute of limitations applicable to the Reimbursement Agreement or the other Credit Documents shall similarly operate to toll the statute of limitations applicable to such Indemnitor’s liability hereunder. In addition, each Indemnitor understands that such Indemnitor’s duties, obligations and liabilities under this Indemnity are not limited in any way by any information (whether obtained from Borrower, from an Indemnitor, or from Lender’s own investigations) which Lender may have concerning the Property and the presence of any Hazardous Materials on the Property.

10. PARTICIPATIONS; DISCLOSURE OF INFORMATION. Each Indemnitor agrees that Lender may elect, at any time, to sell, assign or grant participations in all or any portion of its rights and obligations under the Credit Documents and this Indemnity, and that any such sale, assignment or participation may be to one or more financial institutions, private investors, and/or other entities, at Lender’s sole discretion. Each Indemnitor further agrees that Lender may disseminate to any such actual or potential purchaser(s), assignee(s) or participants) all documents and information (including, without limitation, all financial information) which has been or is hereafter provided to or known to Lender with respect to: (a) the Property and its operation; (b) any party connected with the Reimbursement Agreement (including, without limitation, such Indemnitor, Borrower, any partner, joint venturer or member of Borrower, any constituent partner, joint venturer or member of Borrower, any guarantor and any non-borrower mortgagor); and/or (c) any lending relationship other than the Letter of Credit which Lender may have with any party connected with the Letter of Credit in the event of any such sale, assignment or participation, Lender and the parties to such transaction shall share in the rights and obligations of Lender as set forth in the Credit Documents only as and to the extent they agree among themselves, in connection with any such sale, assignment or participation, such Indemnitor further agrees that this Indemnity shall be sufficient evidence of the obligations of such Indemnitor to each purchaser, assignee, or participant, and upon written request by Lender, such Indemnitor shall consent to such amendments or modifications to the Credit Documents as may be reasonably required in order to evidence any such sale, assignment or participation.

Anything in this Indemnity to the contrary notwithstanding, and without the need to comply with any of the formal or procedural requirements of this Indemnity including this section, Lender may at any time and from time to time pledge and assign all or any portion of its rights under all or any of the Credit Documents to a Federal Reserve Bank; provided that no such pledge or assignment shall release Lender from its obligations thereunder.

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11. ATTORNEYS’ FEES. If any attorney is engaged by Lender to enforce or defend any provision of this Indemnity, or as a consequence of any default under the Indemnity, with or without the filing of any legal action or proceeding, Indemnitors shall immediately pay to Lender, upon receipt of written demand therefor, the amount of all reasonable attorneys’ fees and expenses and all costs incurred by Lender in connection therewith, including all trial and appellate proceedings in any legal action, suit, bankruptcy or other proceeding, together with interest thereon accruing from the date that is ten (10) days after Indemnitor’s receipt of such demand until paid at the Default Rate.

12. ENFORCEABILITY. Each Indemnitor hereby acknowledges that: (a) the obligations undertaken by such Indemnitor in this Indemnity are complex in nature, and (b) numerous possible defenses to the enforceability of these obligations may presently exist and/or may arise hereafter, and (c) as part of Lender’s consideration for entering into this transaction, Lender has specifically bargained for the waiver and relinquishment by such Indemnitor of all such defenses, and (d) such Indemnitor has had the opportunity to seek and receive legal advice from skilled legal counsel in the area of financial transactions of the type contemplated herein. Given all of the above, each Indemnitor does hereby represent and confirm to Lender that such Indemnitor is fully informed regarding, and that such Indemnitor does thoroughly understand: (i) the nature of all such possible defenses, and (ii) the circumstances under which such defenses may arise, and (iii) the benefits which such defenses might confer upon such Indemnitor, and (iv) the legal consequences to such Indemnitor of waiving such defenses. Each Indemnitor acknowledges that such Indemnitor makes this Indemnity with the intent that this Indemnity and all of the informed waivers herein shall each and all be fully enforceable by Lender, and that Lender is induced to enter into this transaction in material reliance upon the presumed full enforceability thereof.

13. ADDITIONAL OBLIGATIONS; AMENDMENTS. The obligations of Indemnitors hereunder shall be in addition to and shall not limit or in any way affect the obligations of Indemnitors under any other existing or future guaranties or indemnities unless said other guaranties or indemnities are expressly modified or revoked in writing. No modification, waiver, amendment, discharge or change of this Indemnity shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver or amendment, discharge or change is or may be sought.

14. SUCCESSORS AND ASSIGNS. All terms of this Indemnity shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective legal representatives, successors and assigns.

15. GOVERNING LAW. This Indemnity shall be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania, except to the extent preempted by federal laws.

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16. MISCELLANEOUS. Time is of the essence with respect to all provisions hereof. The liability of all persons and entities who are in any manner obligated hereunder to Lender as an Indemnitor shall be joint and several. If any provision of this Indemnity shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that portion shall be deemed severed from this Indemnity and the remaining parts shall remain in full force as though the invalid, illegal or unenforceable portion had never been part of this Indemnity.

17. PERFORMANCE DATE. If the date (“Performance Date”) on which any action is to be taken, any obligation is to be performed, or any notice is to be given under this Indemnity falls on any day other than a business day (i.e., any day which is not a Saturday, Sunday or legal holiday), such Performance Date shall be automatically extended to the next business day.

18. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS INDEMNITY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THE CREDIT DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE CREDIT DOCUMENTS (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY PARTY TO THIS INDEMNITY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

[Signature Page Follows]

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IN WITNESS WHEREOF, this Indemnity has been executed as of the date first set forth above.

SIR WINDSOR ON THE RIVER, LLC, a Delaware limited liability company
By:	Steadfast Income Advisor, LLC, a
	Delaware limited liability company
By:	/s/ Rodney F. Emery
	Name: Rodney F. Emery
	Title: CEO and President
STEADFAST INCOME REIT, INC.
By:	/s/ Rodney F. Emery
	Name: Rodney F. Emery
	Title: CEO and President
PNC BANK, NATIONAL ASSOCIATION
By:	/s/ Sandeep K. Patel
	Name: Sandeep K. Patel
	Title: Vice President

EXHIBIT A

Real property in the City of Cedar Rapids, County of Linn, State of Iowa, described as follows:

Lot 1 of Windsor-on-the-River First Addition and Lot 2 and Lot 3 of Windsor-on-the-River Second Addition and Lot 4 of Windsor-on-the-River Third Addition and Lot 5 of Windsor-on-the-River Fourth Addition, all in the North one-half of the Northeast Quarter of Section 18, Township 83 North, Range 7 West of the 5th Principal Meridian, Cedar Rapids, Linn County, Iowa.

APN: 14-18-1-01-002-0-0000 and 14-18-1-03-001-0-0000 and 14-18-1-26-001-0-0000 and 14-18-1-26-002-0-0000 and 14-18-1-26-003-0-0000

EX-10.10

Exhibit 10.10

LAND USE RESTRICTION AGREEMENT

Borrower’s	Windsor on the River, LLC
Name and Address:	c/o Cunat, Inc.
	5400 West Elm Street, Suite 110
	McHenry, Illinois 60050
Location of Property:	2200 Buckingham Drive
	Cedar Rapids, Linn County, Iowa (see Exhibit A hereto)
Name of Project:	Windsor on the River

This LAND USE RESTRICTION AGREEMENT dated as of November 1, 2007 (together with any amendments or supplements hereto, the “Land Use Restriction Agreement” or the “Agreement”), is made and entered into among IOWA FINANCE AUTHORITY (the “Issuer”), WINDSOR ON THE RIVER, LLC (the “Borrower”), and THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee (the “Trustee”) under the Indenture, hereinafter defined.

A. Pursuant to an Indenture of Trust dated as of May 1, 2007 (the “Indenture”) and between the Issuer and The Bank of New York Trust Company, N.A., as trustee (the “Trustee”), and a resolution adopted by the Issuer on May 2, 2007 (the “Bond Resolution”), the Issuer has authorized the issuance of its Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A, in the principal amount $17,000,000, and authorized in an amount up to $24,000,000 (the “Series 2007A Bonds”) and its Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007B, in the principal amount $7,000,000 (the “Series 2007B Bonds” and together with the Series 2007A Bonds, the “Bonds”), the proceeds of which will be lent to the Borrower to finance and/or refinance the acquisition and rehabilitation of an apartment project located in Cedar Rapids, Linn County, Iowa (the “Project”), to be partially occupied by individuals of low or moderate income within the meaning of Section 142 of the Internal Revenue Code of 1986, as amended (the “Code”).

This instrument was prepared by Patra S. Geroulis, Ice Miller LLP, 200 West Madison Street, Suite 3500, Chicago, Illinois 60606.

B. The Code and the regulations and rulings promulgated with respect thereto prescribe that the use and operation of the Project be restricted in certain respects and in order to ensure that the Project will continue to be used and operated in accordance with the Code and the regulations issued thereunder, the Issuer, the Trustee and the Borrower have determined to enter into this Land Use Restriction Agreement in order to set forth certain terms and conditions relating to the use and operation of the Project.

NOW THEREFORE, in consideration of the foregoing and intending to be legally bound, the Issuer, Trustee and the Borrower agree and declare as follows:

Section 1. Rental Requirement.

(a) Once available for occupancy, each unit of the Project (as “unit” is defined in Treas. Reg. § 1.103-8(b)(8)(i) and “Project” is defined in Treas. Reg. § 1.103-8(b)(4)) must be rented or available for rental on a continuous basis during the longer of (i) the period during which the Series 2007A Bonds are outstanding, or (ii) a period (the “Qualified Project Period”) (A) commencing on the first day on which at least 10% of the units in the Project were first occupied, and (B) ending on the date which is the latest of(l) 15 years after the date on which at least 50% of the units in the Project were first occupied, (2) the first day on which no tax-exempt private activity bond issued with respect to such Project is outstanding (all within the meaning of Section 142(d) of the Code), or (3) the date on which any assistance provided with respect to the Project under Section 8 of the United States Housing Act of 1937, as amended, terminates.

(b) All of the units in the Project must be rented or available for rental on a continuous basis to members of the general public and substantially all of the Project must consist of similarly constructed units together with any functionally related or subordinate facilities, including facilities for use by tenants, e.g., swimming pools, recreational facilities, parking areas, and other facilities which are reasonably required for such Project as a residential rental facility.

Section 2. Low or Moderate Income Occupancy Requirement.

(a) Twenty percent (20%) or more of the completed units of the Project (the “Low or Moderate Income Units”) shall be occupied by Low or Moderate Income Tenants (as described in Section 3 hereof) continuously during the Qualified Project Period (the “Occupancy Requirement”).

(b) A unit shall be treated as occupied by Low or Moderate Income Tenants until re-occupied, other than for a temporary period not to exceed 31 days, by another occupant, at which time the character of the unit shall be redetermined.

Section 3. Low or Moderate Income Tenants; Annual Reviews.

(a) “Low or Moderate Income Tenants” means the occupants of a dwelling unit in the Project whose adjusted income, as computed in accordance with Exhibit B hereto, does not

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exceed fifty percent (50%) of the Median Gross Income for the Area. “Median Gross Income for the Area” means the median income for th4 area where the Project is located as determined, with adjustments for larger and smaller family sizes, by the Secretary of the Department of Housing and Urban Development under Section 8(f)(3) of the United States Housing Act of 1937, as amended. If programs under Section 8(f) are terminated, Median Gross Income for the Area shall be determined under the method used by the Secretary immediately prior to such termination.

(b) The determination of whether the income of the residents of a unit exceed the applicable income limit shall be made first at the time of occupancy and thereafter at least annually on the basis of the current income of such residents. If the income of the occupants of a unit did not exceed the applicable income limit upon commencement of such tenants’ occupancy, the income of such occupants shall be treated as continuing not to exceed the applicable income limit unless, as of the most recent determination of annual income, such occupants’ income exceeds 140% of the applicable income limit for new tenants at such Project and before the next income determination, another residential unit of comparable or smaller size in the Project is occupied by a new tenant whose income exceeds the applicable income limit.

(c) If all the occupants of a unit are students as defined under Section 151 (e)(4) of the Code, no one of whom is entitled to file a joint return under Section 6013 of the Code, such occupants shall not qualify as Low or Moderate Income Tenants hereunder.

(d) Determination of the status of an occupant of a unit as a Low or Moderate Income Tenant shall be made upon initial occupancy of a unit in the Project by such occupant, and a new determination shall be made (i) at least annually thereafter, and (ii) upon the initial occupancy by such occupant of any other unit in the Project.

(e) Except as provided in Section 10 hereof, the method of determining low or moderate income in effect on the date of issuance of the Bonds shall be determinative even if such method is subsequently changed.

Section 4. Additional Covenants. The Borrower further covenants and agrees that:

(a) The Borrower will own, manage and operate the Project on a continuous basis as a residential rental project Comprised of several proximate and interrelated buildings or structures, each containing at least one dwelling unit, and facilities functionally related and subordinate thereto, in accordance with Section 142(d) of the Code and the regulations promulgated thereunder or applicable thereunder.

(b) All of the dwelling units in the Project will consist of similarly constructed units, and each dwelling unit in the Project will contain separate and complete facilities for living, sleeping, eating, cooking and sanitation separate and distinct from other units, including cooking facilities equipped with a cooking range, refrigerator and sink.

(c) None of the dwelling units in the Project will at any time be utilized on a transient basis, will ever be leased or rented for an initial lease term of less than six months, nor will any portion of the Project ever be used as a hotel, motel, dormitory, fraternity house, sorority house, hospital, nursing home, retirement home, sanitarium, rest home or trailer court or park for use on a transient basis.

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(d) Except for dwelling units occupied by a resident manager or maintenance personnel, the dwelling units in the Project will be rented to persons who are members of the general public, and the Borrower shall not give preference to any particular class or group of persons in renting units other than to Low or Moderate Income Tenants.

(e) The Borrower will annually file not later than December 31 and will submit to the Trustee as often as necessary to comply with the requirements of Sections 42 and 142(d) of the Code, copies of all annual filings of Project compliance required to be filed under the Code which are subject to independent investigation and verification by the Trustee.

(f) The Mortgage to be granted by the Borrower in connection with the Project as described in Section 22 below provide that the indebtedness secured thereby may be declared to be immediately due and payable, at the option of the holder thereof, upon sale or transfer of the Project or any interest therein or transfer of beneficial interest in the Borrower, unless certain conditions specified in the Mortgage are met. As a further condition to any sale or transfer of the Project, the proposed purchaser or assignee shall assume in writing and agree to be bound by all of the obligations and covenants of the Borrower and all restrictions applicable to the Project contained herein in the manner and subject to the conditions provided in Sections 5 and 22 below.

Section 5. Covenants and Restrictions Not to Apply Under Certain Circumstances.

(a) Except as provided in Section 5(b) below, the Occupancy Requirement shall be a continuing requirement on the part of the Borrower and their successors and assigns for the period prescribed in Section 1 hereof, regardless of whether or not the Series 2007A Bonds remain outstanding.

(b) In the event of an involuntary noncompliance with the requirements of this Agreement and Treas. Reg. § 1.103-8(b) caused by fire, seizure, requisition, foreclosure, transfer of title by deed in lieu of foreclosure, change in federal law or an action of a federal agency after the date of issuance of the Bonds which prevents the Trustee from enforcing the requirements of this Agreement or Treas. Reg. § 1.103-8(b), or condemnation or similar event, the covenants and restrictions of this Agreement shall cease to apply, but only if, within a reasonable period, either the Series 2007A Bonds are retired or amounts received as a consequence of such event are used to provide a project which meets the requirement of Section 142(d) of the Code and Treas. Reg. § 1.103-8(b).

(c) Notwithstanding the foregoing provisions of Section 5(b), such requirements shall continue to apply to the Project subsequent to foreclosure, transfer of title by deed in lieu of foreclosure or similar event if, at any time during the Qualified Project Period subsequent to such event, the obligor on the “acquired purpose obligation” (as defined in Treas. Reg. § 1.103-13(b)(4)(iv)(a)) or “related person” (as defined in Treas. Reg. § 1.103-10(e)) obtains an ownership interest in the Project or any portion thereof for federal tax purposes.

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Section 6. Submissions to Trustee and Others.

(a) During that portion of the term of this Agreement that the Borrower must comply with procedures of the Issuer under Section 42 of the Code, the Borrower shall comply with those procedures as if set forth in this Agreement.

(b) During any other portion of the term of this Agreement, the income certifications described in Treas. Reg. § 1.167(k)-3(b) will be submitted to the Trustee in substantially the form of Exhibit B attached hereto and at the times as provided herein.

(c) During any other portion of the term of this Agreement, the Borrower shall deliver to the Trustee a compliance certificate executed by the Borrower in the form attached as Exhibit C hereto (the “Compliance Certificate”) on or before August 15 of each year stating, among other matters: (1) the dwelling units of the Project which were occupied by Low or Moderate Income Tenants during such period, together with photocopies of all residential leases and income certifications of Low or Moderate Income Tenants of the Project not previously furnished to the Trustee (or a certified compilation of the substantive context thereof in sufficient detail to enable the Trustee to ascertain compliance with the provisions hereof, together with copies of the forms of lease and income certifications then in use at the Project); (2) that no default has occurred in the observance of the covenants contained in this Agreement; (3) that no event has occurred in connection with the operation of the Project which has caused, or will cause, the Project to cease to meet the requirements of this Agreement; and (4) in the event the Borrower is unable to deliver any such Compliance Certificate, the Borrower shall furnish to the Trustee in writing a detailed explanation of the reasons for such failure or inability to provide the Compliance Certificate.

(d) The Borrower shall maintain complete and accurate records pertaining to the dwelling units occupied, or to be occupied, by Low or Moderate Income Tenants and permit any duly authorized representative of the Trustee or the Issuer to inspect the books and records of the Borrower pertaining to the incomes and the Income Certifications of Low or Moderate Income Tenants residing in the Project upon reasonable notice and at reasonable times.

(e) As soon as is reasonably possible, the Borrower shall notify the Trustee and the Issuer of the existence of any situation or the occurrence of any event of which the Borrower has knowledge, the existence or occurrence of which would violate any of the provisions of this Agreement or cause the interest on the Series 2007A Bonds to become includable in the gross income of the holders thereof for federal income tax purposes, including the provision to the Trustee of all notices and correspondence from the Issuer or the Internal Revenue Service with respect to compliance with the provisions hereof.

(f) The Borrower shall deliver annually to the Secretary of the Treasury Form 8703, Annual Certification of Residential Rental Project, care of Internal Revenue Service Center, 1160 West 1200 South, Ogden, Utah 84201-0103, as required by the Code.

Section 7. Low or Moderate Income Units. The Borrower will maintain the Project so that the Low or Moderate Income Units will be similarly constructed with all other units in the Project. Low or Moderate Income Tenants shall enjoy equal access to all common facilities of the Project.

- 5 -

Section 8. Tenant Lists. All tenant lists, applications, and waiting lists relating to the Project shall be kept separate and identifiable from any other business of the Borrower which is unrelated to the Project and shall be maintained in a reasonable condition for proper audit and subject to examination during business hours by representatives of the Issuer or the Trustee.

Section 9. Tenant Lease Requirements. All tenant leases with respect to Low or Moderate Income Units will contain as an additional event of default by the tenant thereunder any material misstatement contained in the income certification described in Treas. Reg. § 1.167(k)-3(b) submitted to Borrower. In addition, all leases entered into after the date of original issuance and delivery of the Bonds shall specifically provide that each such lease is subject and subordinate to the terms and provisions of the Loan (as defined in the Loan Agreement), and whether or not a particular lease so provides, such lease shall nonetheless be subject and subordinate to the terms and provisions of the Loan.

Section 10. Modification of Covenants. It is understood and agreed that the covenants of the Issuer and the Borrower contained herein are intended to comply with Section 142(d) of the Code and the regulations promulgated thereunder. Consistent with such intent it is agreed that any amendment to Section 142(d) of the Code (or any section of the Code or other law referred to or referenced therein) which would have the effect of reducing the restrictions imposed on the Borrower pursuant to this Agreement, shall be deemed to be an amendment to this Agreement without further action on the part of the parties hereto, and this Agreement shall be deemed to have been amended in accordance with the provisions of such amendment upon the effective date of such amendment. Such amendments shall include, without limitation, any modification of the definition of low or moderate income which would have the effect of increasing the maximum permissible income of the tenants of the Low or Moderate Income Units; provided, however, if any such amendment, in the opinion of Bond Counsel (such counsel to be acceptable to the Trustee), would adversely affect the excludability of the interest on the Series 2007A Bonds from gross income for federal tax purposes, such amendment shall be of no force or effect.

Section 11. Covenant Runs with the Land-Successors Bound. This Agreement shall be placed of record in the land records of Linn County, Iowa, and, except as provided in Sections 5 and 22 hereof, the covenants contained herein shall run with the land and shall bind, and the benefits shall inure to, respectively, the Borrower and its successors and assigns, and the Issuer and all subsequent owners of the Project or any interest therein, for the periods prescribed in Section 1 and Section 2 hereof.

Section 12. No Conflict with Other Documents. The Borrower warrants that it has not and will not execute any other agreement with provisions contradictory to, or in opposition to the provisions hereof, and that, in any event, the requirements of this Agreement are paramount and controlling as to the obligations herein set forth and supersede any other requirements in conflict herewith.

- 6 -

Section 13. Amendments. This Agreement may be amended, or the enforcement of any obligation of the Borrower hereunder waived (in whole or in part) only upon receipt by the Issuer of an opinion of qualified Bond Counsel, satisfactory to the Issuer and to the Trustee, to the effect that such proposed amendment or waiver will not adversely affect the excludability of the interest on the Series 2007A Bonds from gross income for federal tax purposes and, except in the case of a waiver, an amendment in writing executed by the parties hereto, except with respect to modifications and/or amendments made or deemed made in accordance with the provisions of Section 10 hereof, which modifications and/or amendments shall be self-executing without action of the parties. The Borrower agrees, from time to time, to take all actions and steps necessary to comply, and to cause the Project to comply, with the requirements of Section 142(d) of the Code and to enter into modifications and amendments to this Agreement to the extent required by Treasury Regulations promulgated thereunder. Restrictions contained herein which are not required by such regulations may be amended in accordance with the first sentence of this section.

Section 14. Assignment of Issuer’s Interest. For so long as the Series 2007A Bonds are outstanding, the interest of the Issuer in this Agreement will be, and hereby is, assigned to the Trustee, and its successors, under the Indenture, and during such period this Agreement shall be enforceable by the Trustee in accordance with its terms. If the Series 2007A Bonds shall mature or be redeemed prior to the end of the periods set forth in Sections 1 and 2 hereof, the Trustee shall continue to enforce the provisions of this Agreement for and on behalf of the Issuer. In such case, the Borrower hereby covenants to pay the reasonable fees and expenses, including attorney’s fees, of the Trustee incurred by the Trustee in enforcing the provisions hereof.

Section 15. Defaults, Remedies. If the Borrower shall fail to observe or perform any covenant, condition or agreement contained herein on its part to be observed or performed for a period of 30 days after the Trustee or the Issuer shall have given written notice to the Borrower of such failure, then and in such event, the Issuer or the Trustee shall be entitled, individually or collectively, in addition to all other remedies provided by law or in equity, to compel specific performance by the Borrower of its obligations under this Agreement or by mandamus or other suit, action or proceeding at law or in equity require the Borrower to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of the rights of the Issuer or Trustee hereunder or otherwise seek injunctive relief, it being recognized that the beneficiaries of the Borrower’s obligations hereunder cannot be adequately compensated by monetary damages in the event of the Borrower’s default. The Trustee agrees that upon receipt from the Borrower of notice of noncompliance pursuant to Section 6 hereof, or if the Trustee otherwise believes that the Borrower is not in compliance with one or more of the terms and provisions of this Agreement, it will promptly, by written notice to the Borrower, direct the Borrower to institute action to correct such noncompliance, such corrective action to be taken within a reasonable period after the violation is first discovered. In no event shall the Issuer or the Trustee seek any form of compensation or monetary damages in the event of the Borrower’s default under this Agreement (other than indemnification of the Issuer pursuant to the Loan Agreement and payment of its fees and expenses).

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Section 16. Reliance; Compliance.

(a) The Issuer and the Borrower hereby recognize and agree that the representations and covenants set forth herein may be relied upon by all persons interested in the legality and validity of the Bonds and in the exclusion from gross income for federal income tax purposes of the interest on the Series 2007A Bonds. In performing their duties and obligations hereunder, the Issuer and the Trustee may rely upon statements and certificates of the Borrower and Low or Moderate Income Tenants, unless the Issuer and the Trustee have reason to doubt them, and upon audits of the books and records of the Borrower pertaining to the Project. In addition, the Issuer and the Trustee may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Issuer or the Trustee hereunder in good faith and in conformity with such opinion.

(b) Promptly following its receipt thereof, the Trustee will review each Income Certificate and Compliance Certificate delivered pursuant to this Agreement in order to determine that each such document is complete and to verify that the percentage set forth in paragraph 2 of the Compliance Certificate is at least 20%. The Trustee will maintain such documents on file and open to the inspection of the Issuer and the Borrower.

(c) Promptly upon determining that any report or certificate submitted to it is inaccurate or incomplete, the Trustee shall give written notice by certified mail, return receipt requested, of such inaccuracy or lack of completeness to the Borrower and direct the Borrower to correct or complete the same, as the case may be, within a reasonable period of time thereafter. If the Borrower fail to submit to the Trustee any certification required pursuant to this Agreement within 45 days of the time set forth herein, the Trustee shall immediately give written notice of that fact to the Issuer, the Credit Provider and the Borrower. If any documentation filed with the Trustee reflects that the Project has ceased to meet the requirements of this Agreement, the Trustee shall immediately give written notice of that fact to the Issuer, the Credit Provider and the Company.

Section 17. Indemnification. The Borrower shall indemnify, hold harmless and defend the Issuer and the Trustee and their respective officers, members, directors, agents and employees against all loss, costs, damages, expenses, suits, judgments, actions and liabilities of whatsoever nature (including, without limitation, attorney’s fees, litigation and court costs, amounts paid in settlement, and amounts paid to discharge judgments) directly or indirectly resulting from or arising out of or related to the performance by the Issuer or Trustee of the duties imposed upon them under this Agreement, except, with respect to the Trustee, to the extent caused by gross negligence or willful misconduct. This provision shall survive termination of this Agreement.

Section 18. Notice. Any notice, demand, consent, permission or other communication, which any party hereto is required or desires to give, or communicate to any other party, shall be in writing and shall be given personally or communicated by registered or certified mail, postage prepaid, return receipt requested, addressed to the other parties at the addresses of the parties set forth on the first page of this Agreement, to the Trustee, at 1125 17^th Street, 4^th Floor, Denver, Colorado, 80202, Attention: Corporate Trust Services, to the Borrower at 5400 West Elm Street, Suite 110, McHenry, Illinois 60050, Attention: Christopher G. Zock,

- 8 -

and to the Issuer at 2015 Grand Avenue, Des Moines, Iowa 50312, Attention: Executive Director. Any such notice or other communication so sent shall be deemed to have been given on the second business day following the date the same was deposited in the mail, as registered or certified matter, with postage fully prepaid thereon. Any party may change its address for notice or from any other party in the manner provided in this Section.

Section 19. Definitions. Terms used herein and not otherwise defined herein but defined in the Indenture shall have the meanings assigned to them in the Indenture. Unless otherwise expressly provided herein or unless the context clearly requires otherwise, the following terms shall have the respective meanings set forth below for all purposes of this Agreement:

“Agreement” means this Land Use Restriction Agreement, as it may from time to time be amended.

“Bond Counsel” means nationally recognized bond counsel acceptable to the Trustee.

“Income Certification” means a certification as to income executed by a tenant of the Project, in substantially the form of Exhibit B hereto.

Section 20. Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions shall not in any way be affected or impaired. In case any covenant, stipulation, obligation or agreement of the Issuer or the Borrower contained herein shall for any reason be held to be in violation of law, then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant, stipulation, obligation or agreement of the Issuer or the Borrower, as the case may be, to the full extent permitted by law.

Section 21. Governing Law. This Agreement is governed by the laws of the State of Iowa, without regard to the choice of law rules of the State of Iowa. Venue for any action under this Agreement to which the Issuer is a party shall lie within the district courts of the State of Iowa, and the parties hereto consent to the jurisdiction and venue of any such court and hereby waive any argument that venue in such forums is not convenient.

Section 22. Subordination. The Issuer and the Borrower agree that this Land Use Restriction Agreement shall be subordinate in all respects to the first Mortgage with Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing on the Project executed by the Borrower as of May 1, 2007, in favor of Wells Fargo Bank, National Association, Chicago, Illinois or any other mortgage in favor of an issuer of any Alternate Credit Facility (the “Mortgage”) and the Borrower shall on behalf of itself and/or the Issuer, at the written request of the holder of the Mortgage, execute such instruments as may be required to implement and evidence the subordination expressed in this Section 22.

The Issuer, the Trustee and the Borrower further agree that this Agreement shall terminate if the Project is acquired by foreclosure of the Mortgage, conveyance of the Project by deed-in-lieu of foreclosure or comparable conversion of the Mortgage, such termination to be effective as of the date of such foreclosure, deed-in lieu of foreclosure or conversion. No right or

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authority on the part of the Issuer (other than rights to indemnification by the Borrower), the Trustee or any other party which is provided by this Agreement with respect to the Project shall survive the foreclosure, granting of a deed-in-lieu of foreclosure or comparable conversion and no such right or authority shall apply to the Project if title is transferred pursuant to or following any such foreclosure, deed-in-lieu of foreclosure or comparable conversion.

Section 23. Non-Recourse. Notwithstanding anything to the contrary contained herein or elsewhere in the other documents to be executed by the Borrower in connection with the Bonds, it is understood and agreed that the Issuer and the Trustee will look solely to the Borrower for payment of the obligations hereunder and not to the members or the partners of the Borrower; provided, however:

(a) nothing in this Section shall be or be deemed to be a release or impairment of such obligations or preclude the Issuer and the Trustee from suing pursuant to this Agreement;

(b) this Section shall not release the members of the Borrower from liability to the Issuer and the Trustee for the application of any funds received by the members of the Borrower in violation of the covenants contained in this Agreement or in any other document executed in connection herewith;

(c) this Section shall not preclude the Issuer and the Trustee from securing a judgment from any party who subsequently assumes the payment of the obligations hereunder or as against any other person or persons or entity who may hereafter become liable for the payment of such obligations; and

(d) nothing contained herein is intended to relieve, release, discharge or affect in any way the personal liability of any third party to the Issuer and the Trustee, including any guarantors, for payment of the Borrower’s obligations or otherwise.

(e) No covenant, provisions or agreement of the Issuer herein or in the Bonds or in any other document executed by the Issuer in connection with the issuance, sale and delivery of the Bonds, or any obligation herein or therein imposed upon the Issuer or breach thereof, shall give rise to a pecuniary liability of the Issuer, its officers, employees or agents or a charge against the Issuer’s general credit or general fund or shall obligate the Issuer, its officers, employees or agents financially in any way except with respect to this Indenture and the application of revenues therefrom and the proceeds of the Bonds. No failure of the Issuer to comply with any term, condition, covenant or agreement therein shall subject the Issuer, its officers, employees or agents to liability for any claim for damages, costs or other financial or pecuniary charges except to the extent that the same can be paid or recovered from this Indenture or revenues therefrom or proceeds of the Bonds. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit or general fund of the Issuer. In making the agreements, provisions and covenants set forth herein, the Issuer has not obligated itself except with respect to the Indenture and the application of revenues thereunder as provided therein. The Bonds constitute special obligations of the Issuer, payable solely from the revenues pledged to the payment thereof pursuant to this Indenture and the Loan. Agreement, and do not now and shall never constitute an indebtedness or a loan of the credit of the Issuer, the State of Iowa or any political subdivision thereof or a charge against their general

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taxing powers within the meaning of any constitutional or statutory provision whatsoever. The Issuer has no taxing power. It is further understood and agreed by the Borrower and the Bondowners that the Issuer, its officers, employees or agents shall incur no pecuniary liability hereunder and shall not be liable for any expenses related hereto, all of which the Borrower agrees to pay. If, notwithstanding the provisions of this Section, the Issuer, its officers, employees or agents incur any expense, or suffer any losses, claims or damages or incurs any liabilities, the Borrower will indemnify and hold harmless the Issuer, its officers, employees or agents from the same and will reimburse the Issuer, its officers, employees or agents in relation thereto, and this covenant to indemnify, hold harmless and reimburse the Issuer, its officers, employees or agents shall survive delivery of and payment for the Bonds.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and sealed by its duly authorized representative, as of the day and year first written above.

IOWA FINANCE AUTHORITY, as Issuer
By	/s/ Bret L. Mills
	Bret L. Mills, Executive Director

[Issuer’s signature page to Land Use Restriction Agreement]

WINDSOR ON THE RIVER, LLC,
a Delaware limited liability company, as Owner
By:	/s/ Christopher G. Zock
	Christopher G. Zock, Manager

[Borrower’s signature page to Land Use Restriction Agreement]

THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee
By:	/s/ Somsri Helmer
Its:	ASSISTANT TREASURER

[Trustee’s signature page to Land Use Restriction Agreement]

STATE OF IOWA	)
	) SS:
COUNTY OF POLK	)

The foregoing instrument was acknowledged before me on this 14^th day of November, 2007, by Bret L. Mills, as Executive Director of the Iowa Finance Authority, on its behalf.

	/s/ Lori K. Beary
	Notary Public in and for said State

[N-1]

STATE OF ILLINOIS	)
	) SS:
COUNTY OF COOK	)

On this 15TH day of November, 2007, before me appeared SOMSRI HELMER, to me personally known, who being by me duly sworn did say that she is a ASSISTANT TREASURER of The Bank of New York Trust Company, N.A., a national banking association, and acknowledged said instrument to be the free act and deed of said banking association.

IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal, the day and year last above written.

/s/ Diane Mary Wuertz

(Signature)

Diane Mary Wuertz

(Printed Name)

Notary Public in and for said County and State

[SEAL]
My Commission Expires:                        .
My County of Residence:                        .

[N-2]

STATE OF Illinois	)
	)	SS:
COUNTY OF McHenry	)

On this 12^th day of November, 2007, before me appeared Christopher G. Zock, to me personally known, who being by me duly sworn did say that he is the Manager of Windsor on the River, LLC, and that he is the person who executed the foregoing instrument as such officer in behalf of said Windsor on the River, LLC, and acknowledge that he executed the same as his free act and deed as such Manager of Windsor on the River, LLC.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal, the day and year last above written.

	/s/ Loreen A. O’Brien
	(Signature)
	Loreen A. O’Brien
	(Printed Name)
	Notary Public in and for said County and State

[SEAL]
My Commission Expires:	6-29-09.
My County of Residence:	McHenry.

[N-3]

EXHIBIT A

Legal Description

[Attached]

A-1

All the certain real property located in the County of Linn, State of Iowa, described as follows:

Lot 1 of Windsor-on-the-River First Addition to Cedar Rapids, Iowa, and Lot 2 and Lot 3 of Windsor-on-the-River Second Addition to Cedar Rapids, Iowa, and Lot 4 of Windsor-on-the-River Third Addition to Cedar Rapids, Iowa, and Lot 5 of Windsor-on-the-River Fourth Addition to Cedar Rapids, Iowa; all in Linn County, Iowa.

EXHIBIT B

INCOME COMPUTATION AND CERTIFICATION FORM

(TAX-EXEMPT FINANCED PROJECTS)

Re:

Unit Address and Number:                                         

I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully, frankly and personally each of the following questions for all persons who are to occupy the residential unit in the above developments for which application is made, all of whom are listed below:

OCCUPANT INFORMATION

1.	2.	3.	4.
Names of Members of the Household	Relationship to Head of Household	Age	Social Security Number
	HEAD
	SPOUSE

5. The anticipated total income of all the above persons, except income from employment of minors younger than 18 years of age, during the 12-month period beginning this date is as follows:

Name	Wages*	Interest and Dividends	Periodic Payments**	Other***	Total
			TOTAL

* All wages and salaries, over-time pay, commissions, fees, tips and bonuses, and other compensation for personal services, in each case before payroll deductions.

B-1

** The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts, worker’s compensation, public or welfare assistance, and alimony and child support payments.

*** Include all other income not otherwise listed including income from assets described in Paragraph 6. SEE SCHEDULE A ATTACHED HERETO FOR MORE DETAILED INFORMATION CONCERNING OTHER INCOME AND EXCLUDABLE ITEMS.

(ONLY FOR USE IN CONNECTION WITH TAX-EXEMPT FINANCED PROJECTS)

FAMILY ASSETS

6. If any of the persons listed in column 1 above has any savings, stocks, bonds, equity in real property, personal property (excluding necessary items such as clothes, autos and furniture) or any other form of capital investment, provide:

a. The total value of all such assets owned by all such persons (including the excess of fair market value over consideration received for business or family assets disposed of at less than fair market value during the preceding two years): $         ; and

b. The amount of income, if any, expected to be derived from such assets in the 12 month period commencing this date: $        .

STUDENTS

7. If ALL of the persons listed in column 1 above are or will be full time students during five calendar months of this calendar year at an educational institution (other than a correspondence school) with regular faculty and students, answer the following questions; otherwise, check here. ¨ NOT APPLICABLE.

a. Is any such person (other than nonresident aliens) married and filing a joint federal income tax return? Yes ¨ No ¨

b. Is any such person receiving assistance under Title IV of the Social Security Act (relating to Aid to Families with Dependent Children or AFDC?) Yes ¨ No ¨

c. Is any such person enrolled in a job training program receiving assistance under the Job Training Partnership Act or under other similar Federal, State, or local laws? Yes ¨ No ¨

d. Are such persons single parents and their children (not one of whom is a dependent of a person not residing in the unit)? Yes ¨ No ¨

B-2

CERTIFICATION

I/We have reviewed Schedule A attached hereto and certify that the income set forth in paragraph 5 above includes all income, from all sources described on Schedule A, with no exceptions. We acknowledge that all of the above information is relevant to the status under federal income tax law of certain housing tax credits to finance the apartment for which application is being made. We consent to the disclosure of the foregoing information to the U.S. Government, the developer of the project, investors in the project and their legal and accounting representatives, and to any lender providing financing for the development.

I understand that copies of this property’s utility estimates are available in the manager’s office.

Date:                    ,
	Head of Household
	Spouse or Other Occupant

B-3

STATE OF	)
	) SS:
COUNTY OF	)

Subscribed and sworn to before me, a Notary Public, in and for said County and State, this     day of                     ,        .

	Signature
	Printed                                                                    Notary Public
My Commission Expires:	County of Residence:

B-4

FOR COMPLETION BY DEVELOPMENT OWNER OR MANAGER ONLY

1. Calculation of Eligible Income:

a	Enter amount entered for entire household, except minors, in 5 above:	$
b	If the amount entered in 6.a. above is greater than $5,000, enter the excess of     % (being the current passbook savings rate as determined by HUD) of line 6.a. over the amount entered on line 6.b., if any.	$
	TOTAL ELIGIBLE INCOME
	(line 1.a plus line 1.b):	$

2. First Year Certifications. In order to comply with applicable federal tax law, the development has elected to comply with the requirement that at least 20 percent of the units in the development will be set aside and rented to individuals and families with incomes less than or equal to 50 percent of Median Gross Income for the Area.* Based upon the foregoing election, the Total Eligible Income of the occupants of the unit as a first year tenant qualifies the unit as a set aside unit for purposes of the housing tax credit provisions contained in Section 42(g) and tax-exempt bond provisions of Section 142(d) of the Internal Revenue Code of 1986 (the “Code”).

3. Recertifications. Applicable federal law requires that the determination of whether the income of residents of a unit in the development exceeds the applicable income limit shall be made at least annually on the basis of the current income of the residents. On recertification, the income of such resident shall be treated as continuing not to exceed the applicable income limit unless, as of the most recent annual recertification, (a) such resident’s income exceeds 140% of the income limit applicable for the first year tenants, and (b) before the next income determination, any residential unit of comparable or smaller size in the development is occupied by a new resident whose income exceeds the applicable income limit.

4. Students. If the answers to items 7.a., 7.b., 7.c. AND 7.d. above are all NO, the unit will not qualify as a set aside unit. If the answer to item 7.a., 7.b., 7.c. OR 7.d. above is YES, the unit does not fail to qualify as a set aside unit merely because all occupants are students. If the answer to 7.a. above is NO, but the answer to item 7.b., 7.c. or 7.d. is YES, the unit will not qualify as a set aside unit under the tax-exempt bond provisions of Section 142(d) of the Code but will qualify for purposes of low income housing tax credits under Section 42 of the Code.

B-5

Applicant/Tenant: Under the ¨ 20/50 Test or ¨ 40/60 Test

¨ Qualifies as a first year set-aside tenant under paragraph 2 above.

¨ Qualifies, on recertification, as a continuing set-aside tenant under the 140% test under paragraph 3 above.

¨ Does not, on recertification, qualify as a set-aside tenant (NOTE: If this box is checked and the development is not 100% set-aside tenants, the next available unit of comparable or smaller size in the development may need to be rented to a first year qualifying set-aside tenant to assure that at least 20% of the units are occupied by, or available for rental to, qualifying tenants or to assure some greater percentage of units ale so rented to generate the desired level of tax credits).

Date:	,
		Owner/Manager

* “Median Gross Income for the Area” means the median income for the statistical area where the Project is located as determined by the Secretary of Housing and Urban Development under Section 8(f)(3) of the United States Housing Act of 1937, as amended, taking into account adjustments for family size or if programs under said Section 8(f) are terminated, median income determined under the method used by the Secretary immediately prior to the termination. Such income figures are to be updated annually by HUD.

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SCHEDULE A

§ 813.106 Annual Income

(a) Annual Income is the anticipated total income from all sources received by the Family head and spouse (even if temporarily absent) and by each additional member of the Family, including all net income derived from assets for the 12 month period following the effective date of certification of income, exclusive of certain types of income as provided in paragraph (c) of this section.

(b) Annual Income includes, but is not limited to:

(1) The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services;

(2) The net income from operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the Family;

(3) Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as a deduction in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the Family. Where the Family has Net Family Assets in excess of $5,000, Annual Income shall include the greater of the actual income derived from all Net Family Assets or a percentage of the value of such Assets based on the current passbook savings rate, as determined by HUD;

(4) The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts, including a lump sum payment for the delayed start of a periodic payment;

(5) Payments in lieu of earnings such as unemployment and disability compensation, worker’s compensation and severance pay (but see paragraph (c)(3) of this section);

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(6) Welfare Assistance. If the Welfare Assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the Welfare Assistance agency in accordance with the actual cost of shelter and utilities, the amount of Welfare Assistance income to be included as income shall consist of:

(i) The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities, plus

(ii) The maximum amount that the Welfare Assistance agency could in fact allow the Family for shelter and utilities. If the Family’s Welfare Assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph (b)(6)(ii) shall be the amount resulting from one application of the percentage;

(7) Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling;

(8) All regular pay, special pay and allowances of a member of the Armed Forces (but see paragraph (c)(7) of this section); and

(9) Any earned income tax credit to the extent it exceeds income tax liability.

(c) Annual income does not include the following:

(1) Income from employment of children (including foster children) under the age of 18 years;

(2) Payments received for the care of foster children;

(3) Lump-sum additions to Family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker’s compensation), capital gains and settlement for personal or property losses (but see paragraph (b)(6) of this section);

(4) Amounts received by the Family, that are specifically for, or in reimbursement of, the cost of medical expenses for any Family member;

(5) Income of a live-in aide, as defined in § 813.102;

(6) Amounts of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the Government to a veteran, for use in meeting the costs of tuition, fees, books, equipment, materials, supplies, transportation, and miscellaneous personal expenses of the student. Any amount of such scholarship or payment to a veteran not used for the above purposes that is available for subsistence is to be included in income;

(7) The special pay to a Family member serving in the Armed Forces who is exposed to hostile fire;

(8) (i) Amounts received under training programs funded by HUD;

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(ii) Amounts received by a Disabled person that are disregarded for a limited time for purposes of Supplemental Security Income of eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS); or

(iii) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out of pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program;

(9) Temporary, nonrecurring or sporadic income (including gifts); or

(10) Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the United States Housing Act of 1937. A notice will be published in the Federal Register and distributed to PHAs and owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary.

(d) If it is not feasible to anticipate a level of income over a 12-month period, the income anticipated for a shorter period may be annualized, subject to a redetermination at the end of the shorter period.

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EXHIBIT C

(to Land Use Restriction Agreement)

CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE

The undersigned (the “Borrower”), the owner of Windsor on the River, a 424-unit multifamily housing development located in Cedar Rapids, Linn County, Iowa has read and is thoroughly familiar with the provisions of the Land Use Restriction Agreement (the “Agreement”) dated as of November 1, 2007 among the Borrower, the Issuer and The Bank of New York Trust Company, N.A., as Trustee (the “Trustee”):

1. As of                                          1,            , the following number of residential units in the Project (i) are occupied by Low or Moderate Income Tenants (as such term is defined in the Agreement) or (ii) were previously occupied by Low or Moderate Income Tenants and have been vacant and not reoccupied except for a temporary period of no more than 31 days, as indicated:

(a)    Number of units occupied by Low or Moderate Income Tenants

(b)    Number of units previously occupied by Low or Moderate Income Tenants, but vacated and not reoccupied except for a temporary period of no more than 31 days since the date of the last Compliance Certificate:

(c)    Total number of completed residential units in the Project (i.e., units for which a certificate of occupancy or local equivalent has been obtained):

2. The total number of units occupied or previously occupied by Low or Moderate Income Tenants as shown above, is         % (at least 20%) of the total number of completed units.

3. The undersigned hereby certifies that (i) as of the date of this certificate, no default has occurred in the observance of the covenants contained in the Agreement, and no event has occurred in connection with the operation of the Project which has caused or will cause the Project to cease to meet the requirements of the Agreement, and (ii) attached hereto are true and correct copies of (a) all leases for units at the Project and (b) all Income Certifications (including annual recertifications), received from Low or Moderate Income Tenants since the date of the last Compliance Certificate which have not previously been provided to the Trustee.

Dated:

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WINDSOR ON THE RIVER, LLC,
a Delaware limited liability company, as Owner
By:
	Christopher G. Zock, Manager
By:
	Property Manager
By:
	Authorized Representative

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EX-10.11

Exhibit 10.11

REMARKETING AGREEMENT

This Remarketing Agreement made and entered into on May I, 2007 between STERN BROTHERS & CO. (the “Remarketing Agent”) and WINDSOR ON THE RIVER, LLC, a Delaware limited liability company (the “Borrower”).

W I T N E S S E T H:

WHEREAS, Iowa Finance Authority (the “Issuer”) has authorized the issuance of Iowa Finance Authority Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007A, in a maximum aggregate principal amount of up to $24,000,000 (the “Series 2007A Bonds”), which Series 2007A Bonds will only be issued when and if the Series 2007B Bonds (defined below) are converted to Series 2007A Bonds, and Iowa Finance Authority Taxable Variable Rate Demand Multifamily Housing Revenue Bonds (Windsor on the River, LLC Project), Series 2007B, which wilt be issued initially in the principal amount of $24,000,000, subject to decrease in principal amount when, and if, Series 2007B Bonds are converted to Series 2007A Bonds (the “Series 2007B Bonds” and, together with the Series A Bonds, the “Bonds”), with the proceeds of the sale of such Bonds to be loaned to the Borrower pursuant to a Loan Agreement, dated as of May I, 2007, between the Issuer and the Borrower (the “Loan Agreement”) to finance the Project and to refinance certain existing indebtedness in connection with the Project (as defined in the Indenture); and

WHEREAS, the maximum aggregate principal amount of Bonds outstanding at any time shall be $24,000,000; and

WHEREAS, the Bonds are subject to purchase upon optional and mandatory tender upon notice and delivery, pursuant to the provisions of an Indenture of Trust dated as of May 1, 2007 (the “Indenture”), and between the Issuer and The Bank of New York Trust Company, N.A., as trustee (the “Trustee”); and

WHEREAS, Stern Brothers & Co., as underwriter, has agreed to arrange for the sale of the Series 2007B Bonds upon the initial delivery thereof pursuant to a Bond Purchase Agreement, dated May 16, 2007, among the Underwriter, the Borrower and the Issuer; and

WHEREAS, the Borrower desires that the Remarketing Agent provide a mechanism for remarketing the Bonds according to the terms and subject to the conditions described herein and in the Indenture;

NOW, THEREFORE, for and in consideration of the covenants herein made, and subject to the conditions herein set forth, the parties agree as follows:

1. Definitions. All capitalized terms not defined herein shall have the meanings ascribed to them in the Indenture unless a different meaning clearly appears from the context.

2. Appointment, Resignation and Removal of and Remarketing Responsibilities of Remarketing Agent. (a) In reliance upon the representations and agreements but subject to the terms and conditions contained in the Indenture and in this Agreement, the Borrower appoints the Remarketing Agent, and the Remarketing Agent accepts appointment, as exclusive Remarketing Agent in connection with the remarketing of the Bonds from time to time in the secondary market.

(b) The Indenture set forth rights of and duties and obligations imposed on, the Remarketing Agent in connection with the tender and remarketing of the Bonds. The parties hereto agree that the provisions of the Indenture relating to the Remarketing Agent shall be incorporated herein by reference and be made a part hereof as if fully set forth herein, and the Remarketing Agent accepts such duties and obligations imposed pursuant to the Indenture.

(c) The Remarketing Agent wilt keep such books and records as shall be consistent with prudent industry practice and will summarize (i) the principal amount of the Bonds, if any, remarketed by it pursuant to this Agreement and the Indenture, and (ii) the interest rate on the Bonds for each Interest Period determined pursuant to and in accordance with the Indenture and deliver such summary on a monthly basis to the Borrower and Wells Fargo Bank, National Association (the “Credit Provider”), as issuer of the Letter of Credit for the Bonds (the “Letter of Credit”).

(d) The Remarketing Agent may at any time resign and be discharged of the duties and obligations created hereby and by the Indenture by notifying the Issuer, the Trustee, the Tender Agent, if any, the Credit Provider and the Borrower at least 30 days before the effective date of such resignation. The Borrower, with the consent of the Credit Provider, may remove the Remarketing Agent, and upon the removal or resignation of the Remarketing Agent may appoint a successor by notifying the Remarketing Agent and the Trustee. No removal or resignation shall be effective until a successor Remarketing Agent has delivered an acceptance of its appointment to the Trustee. Any such successor Remarketing Agent, upon its appointment pursuant to the terms and conditions hereof, and those contained in the Indenture, shall succeed to and become vested with all the rights, powers, privileges and duties of the former Remarketing Agent. Notwithstanding the foregoing, the Remarketing Agent may resign and be discharged of its duties and obligations hereunder and under the Indenture by notifying the Trustee, the Tender Agent, if any, the Credit Provider and the Borrower, and such resignation shall take immediate effect without the appointment of a successor Remarketing Agent, if an Event of Default has occurred and is continuing under the Indenture or the Borrower falls to pay the fees and expenses of the Remarketing Agent in the amounts and at the time provided in Section 6 hereof. Notwithstanding the foregoing, no termination shall affect the rights and obligations of the parties regarding Bonds with respect to which the Remarketing Agent is obligated to use its best efforts to remarker the Bonds pursuant to Section 3(d) hereof or which theretofore otherwise have been remarketed by the Remarketing Agent.

(e) The Remarketing Agent’s responsibilities hereunder will include (i) soliciting purchases of Bonds by institutional investors that customarily purchase tax-exempt securities in large denominations at market rates, (ii) effecting and processing such purchases, (iii) causing the distribution of any written disclosure materials, as shall have been approved and paid for by the Borrower, to prospective purchasers in connection with the remarketing of the Bonds, and (iv) performing such other related functions as may be requested by the Borrower and agreed to by the Remarketing Agent. The Remarketing Agent will furnish copies of the foregoing disclosure materials to the Borrower and the Trustee upon their written request therefor. The Remarketing Agent may purchase Bonds but shall be under no obligation to purchase Bonds remarketed pursuant to this Agreement. Upon a repurchase of Bonds and prior to their remarketing, the Remarketing Agent will be entitled to all rights of a Bondholder.

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If, during such time as the Official Statement dated May 14, 2007, relating to the Bonds (the “Official Statement”) is used in connection with the remarketing of the Bonds, any event known to the Borrower relating to or affecting the Borrower, the Issuer, the Credit Provider, or the Bonds shall occur, the result of which is that the Official Statement would include a misstatement of a material fact, or would omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, the Borrower will promptly notify the Remarketing Agent in writing of the circumstances and details of such event. The Borrower wilt cooperate with the Remarketing Agent in the preparation of any additional disclosure statement or marketing materials (a “Disclosure Statement”) that the Remarketing Agent determines are necessary or desirable in connection with the remarketing of the Bonds or which the Remarketing Agent determines should be provided to owners of the Bonds.

The Borrower and the Remarketing Agent acknowledge that certain remarketings of the Bonds may be subject to the requirements of Rule 15c2-12 under the Securities and Exchange Act of 1934, as amended (“Rule 15c2-12”). The Borrower agrees, in the event Rule 15c2-12 is applicable to any remarketing of Bonds hereunder, to take such actions as are necessary at the time to comply with the provisions of Rule 15c2-12. The Borrower shall furnish to the Issuer and the Remarketing Agent a Disclosure Statement at such times and in such quantities as are necessary to enable the Issuer and the Remarketing Agent to comply with Rule 15c2-12, if applicable.

If the Borrower fails to perform its obligations under this Section, the Remarketing Agent may immediately cease remarketing efforts.

(f) The Remarketing Agent agrees that, so long as this Agreement remains in effect, it will be available to consult with the Borrower on a timely basis with respect to the determination of the Weekly Rate, the Semi-Annual Rate and the Multi-Annual Rate, all in the manner contemplated by the Indenture and with respect to all other matters relating to its responsibilities under this Agreement. In addition, the Remarketing Agent will furnish the Borrower with information as to the prices at which such Bonds are sold, as the Borrower may from time to time reasonably request. The Remarketing Agent shall not be liable for any action taken or omitted to be taken pursuant to this Agreement, except for its own gross negligence or willful misconduct or that of its agents which have been so appointed in writing by the Remarketing Agent.

(g) Pursuant to Article V of the Indenture relating to the Bonds, in the event that the Bonds shall have been tendered and the Remarketing Agent has not sold all or part of such Bonds, Remarketing Agent shall notify the Trustee and the Borrower.

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3. Representations, Warranties, Covenants and Agreements of the Remarketing Agent. The Remarketing Agent, by its acceptance hereof represents, warrants, covenants and agrees with the Issuer and the Borrower as follows:

(a) The Remarketing Agent meets the requirements of Section 909 of the Indenture in that it is either a member of the National Association of Securities Dealers, Inc., or is a commercial bank chartered under the laws of the United States of America or any state thereof, having a capitalization of at least $15,000,000 and authorized by law in each case to perform the duties of the Remarketing Agent under the Indenture.

(b) The Remarketing Agent is authorized by law to perform the duties imposed upon it by the Indenture and has full power and authority to take all actions required or permitted to be taken by the Remarketing Agent by or under, and to perform and observe the covenants and agreements on its part contained in this Agreement.

(c) The Remarketing Agent shall determine the Weekly Rate, the Semi-Annual Rate and the Multi-Annual Rate for the Bonds, all in accordance with Section 202 of the Indenture.

(d) The Remarketing Agent shall use its best efforts to remarket or sell the Bonds pursuant to the Indenture and this Agreement, unless there has occurred an Event of Default under the Indenture.

(e) The Remarketing Agent will not remarket any tendered Bonds if the Credit Provider notifies the Remarketing Agent that the Letter of Credit has not been reinstated to an amount equal to the principal amount of outstanding Bonds together with at least 45 days’ accrued interest thereon.

4. Representations, Warranties, Covenants and Agreements of the Borrower. The Borrower, by its acceptance hereof represents, warrants, covenants and agrees with the Remarketing Agent as follows:

(a) The Borrower has the requisite power and authority to take all actions required or permitted to be taken by the Borrower by or under, and to perform and observe the covenants and agreements on its part contained in, this Agreement and any other instrument or agreement relating thereto to which the Borrower is a party.

(b) The Borrower has, as of the date hereof, duly taken all action necessary to be taken by it prior to such date, for (i) the execution, delivery and performance of this Agreement and any other instrument or agreement to which the Borrower is a party and which has been or will be executed in connection with the transactions contemplated by the foregoing documents and (ii) the carrying out, giving effect to, consummation and performance of, the transactions and obligations contemplated hereby and by the Official Statement.

(c) This Agreement and any other instrument or agreement to which the Borrower is a party and which have been or will be executed in connection with the consummation of the transactions contemplated by the foregoing documents, when executed and delivered by the parties hereto and thereto, constitute or will constitute valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws, judicial decisions or principles of equity relating to or affecting the enforcement of creditors’ rights generally.

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(d) The execution and delivery of this Agreement and any other instrument or agreement to which the Borrower is a party and which have been or will be executed in connection with the consummation of the transactions contemplated by the foregoing documents, the compliance with the terms, conditions or provisions hereof and thereof, and the consummation of the transactions herein and therein contemplated do not upon the date of execution and delivery hereof and thereof, and wilt not, violate any law or any regulation, order, writ, injunction or decree of any court or governmental instrumentality applicable to the Borrower which violation would have a material adverse effect on the Borrower, or result in a breach of any of the terms, conditions or provisions of, or constitute default under, any mortgage, indenture, agreement or instrument to which the Borrower is a party or by which it or any of its property is bound.

(e) All authorizations, consents and approvals of notices to, registrations or filings with, or actions in respect to any governmental body, agency or other instrumentality or court required in connection with the execution, delivery and performance by the Borrower of this Agreement and any other agreement or instrument to which the Borrower is a party and which has been or will be executed in connection with the consummation of the transactions contemplated by the foregoing documents, have been obtained, given or taken and are in full force and effect, except for such licenses, certificates, approvals, ordinances or permits which may be necessary for the use of the proceeds of the Bonds as described in the Official Statement and for which the Borrower has applied or will apply and which it expects to receive and except as may be required under the state securities or blue sky laws in connection with the remarketing of the Bonds by the Remarketing Agent pursuant to this Agreement.

(f) Except as disclosed by the Borrower and described in the Official Statement or any supplements thereto delivered to the Remarketing Agent, there is no action, suit, investigation, proceeding, or arbitration, at law or in equity or before or by any foreign or domestic court or other governmental entity, pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower wherein an unfavorable decision, ruling or finding could have a material adverse effect on the transactions contemplated by this Agreement or by the Official Statement, or which would materially and adversely affect the validity or enforceability of or the authority or ability of the Borrower to perform its obligations under, this Agreement or any other agreement or instrument to which the Borrower is a party and which is used or contemplated for use in consummation of the transactions contemplated by this Agreement or the Official Statement.

(g) The Borrower is not in default under any indenture or other agreement or instrument governing outstanding indebtedness to which the Borrower is a party or by which it is bound, which default would have a material adverse effect on the transactions contemplated by this Agreement or by the Official Statement, nor has any event occurred which with notice or the passage of time or both would constitute such a default under any such document.

(h) The Borrower wilt cooperate with the Remarketing Agent in the qualification of the Bonds for sale and the determination of the eligibility of the Bonds for investment under the laws of such jurisdictions as the Remarketing Agent shall designate and will use its best efforts to continue any such qualification in effect so long as required for the distribution of the Bonds by the Remarketing Agent; provided, that the Borrower shall not be required to qualify to do business in any jurisdiction where they are not so qualified or to take any action which would subject them to general service of process in any jurisdiction where they are not now so subject.

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(i) The Borrower has no knowledge or reason to believe that any information relating to the Borrower contained in the Official Statement, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading.

(j) The Borrower shall, consistent with the terms of the Indenture, if the Remarketing Agent deems it advisable as a means of facilitating its performance under this Agreement, cooperate with the Issuer and the Remarketing Agent to secure or maintain a rating of the Bonds from Standard & Poor’s.

5. Conditions of the Remarketing Agent’s Obligations. The obligations of the Remarketing Agent under this Agreement have been undertaken in reliance on, and shall be subject to, the due performance by the Borrower of its obligations and agreements to be performed hereunder and to the accuracy of and compliance with the representations, warranties, covenants and agreements of the Borrower contained herein, on and as of the date of delivery of this Agreement and on and as of each date on which Bonds are to be sold pursuant to this Agreement. The obligations of the Remarketing Agent to remarker the Bonds pursuant to this Agreement are also subject, in the discretion of the Remarketing Agent, to the following further conditions:

(a) The Letter of Credit or Alternate Credit Facility, covering the aggregate principal amount of originally issued Bonds Outstanding and at least 45 days’ accrued interest thereon calculated at an interest rate of 10% based on a 365/366 day year, shall be in full force and effect and shall not have been amended, modified or supplemented in any way which would materially and adversely affect the Bonds and there shall be in full force and effect such additional resolutions, agreements, certificates (including such certificates as may be required by regulations of the Internal Revenue Service in order to establish the tax-exempt character of interest on the Series 2007A Bonds) and opinions as shall be reasonably necessary to effect the transactions contemplated by this Agreement, which resolutions, agreements, certificates and opinions, at the request of the Remarketing Agent, shall be satisfactory in form and substance to the Remarketing Agent;

(b) The representations, warranties, covenants and agreements of the Borrower made herein and in the Bond Purchase Agreement shall be true and correct in all material respects;

(c) The Borrower shall have complied with the second and third paragraphs of Section 2(e) hereof required in connection with any remarketing of the Bonds; and

(d) No Event of Default (as such term is defined in the Indenture) shall have occurred and be continuing and no event shall have occurred and be continuing which, with the passage of time or giving of notice or both, would constitute such an Event of Default.

6. Payment of Fees and Expenses. In consideration for the services to be performed by the Remarketing Agent under this Agreement, the Borrower shall pay to the Remarketing Agent a fee (the “Remarketing Fee”) payable quarterly in arrears on each March 31, June 30,

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September 30 and December 31, commencing on June 30, 2007 (the “Calculation Dates”) in an amount equal to the product of the principal amount of the Bonds outstanding on each Calculation Dates multiplied by 0.100%. The remarketing fee with respect to Bonds in a mode other than at the Weekly Mode shall be agreed upon by the Remarketing Agent and the Borrower at the time of remarketing of such Bonds. The Remarketing Agent will not be entitled to such compensation for any period after this Agreement is terminated except for a pro rata portion of the fee in respect of the year in which such termination occurs. The Borrower shall make all such payments directly to the person or entity to whom or to which they are due. The Borrower shall pay to the Remarketing Agent on demand all reasonable costs, expenses and attorney’s fees incurred by the Remarketing Agent in connection with actions initiated by the Remarketing Agent to enforce this Agreement in which the Remarketing Agent prevails.

7. Indemnification. (a) The Borrower shall indemnify and hold harmless the Remarketing Agent and the directors, officers, members, employees and each person, if any, who controls the Remarketing Agent within the meaning of section 15 of the Securities Act of 1933, as amended (the “Securities Act”) (such persons being herein sometimes collectively referred to as the “Indemnified Persons”) and individually, an “Indemnified Person”), from any losses, claims, damages or liabilities to which any Indemnified Person may become subject insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of; or are based upon (i) an allegation or determination that the Bonds or the obligations of the Borrower under the Loan Agreement or the Reimbursement Agreement or the obligations of the Credit Provider under the Letter of Credit should have been registered under the Securities Act or the Indenture should have been qualified under the Trust Indenture Act of 1939, as amended, or (ii) any untrue statement or alleged untrue statement of a material fact relating to the Borrower contained in the Official Statement or any Disclosure Statement provided pursuant to Section 2(e) hereof or any amendment or supplement thereto or the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, and will reimburse each Indemnified Person for any legal or other expenses reasonably incurred by such Indemnified Person in investigating, defending or preparing to defend any such action or claim. The indemnity agreement in this paragraph shall be in addition to any liability which the Borrower may otherwise have to any Indemnified Person.

(b) Promptly after receipt by an Indemnified Person under paragraph (a) of this Section of notice of the commencement of any action, such Indemnified Person shall, if a claim in respect thereof is to be made against the Borrower under such paragraph, notify the Borrower in writing of the commencement thereof. In case any such action shall be brought against any Indemnified Person, and such Indemnified Person shall notify the Borrower of the commencement thereof; the Borrower shall be entitled to participate in and, to the extent that it wishes, to assume the defense thereof; with counsel satisfactory to such Indemnified Person, and after notice from the Borrower to such Indemnified Person of its election so to assume the defense thereof; the Borrower shall not be liable to such Indemnified Person under such paragraph for any legal or other expenses subsequently incurred by such Indemnified Person in connection with the defense thereof other than reasonable costs of any investigation; provided, however, that if the named parties to any such action (including any impleaded parties) include both the Remarketing Agent (or its partners, officers or employees or any person so controlling the Remarketing Agent) and the Borrower, and the Remarketing Agent (or such partners, officers or employees or such person so controlling the Remarketing Agent) shall have reasonably

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concluded that there may be one or more legal defenses available to it which are different from or additional to those available to the Borrower, the Remarketing Agent (or such partners, officers or employees or such person so controlling the Remarketing Agent) shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of the Remarketing Agent (or such partners, officers or employees or such person so controlling the Remarketing Agent); provided further, however, that the Borrower shall not, in connection with any one such action, or separate but substantially similar or related actions arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys at any point in time for the Remarketing Agent and partners, officers and employees and all persons so controlling the Remarketing Agent.

(c) The Borrower shall not be liable for any settlement of any such action effected without its consent by any Indemnified Person, but if settled with the consent of the Borrower or if there be a final judgment for the plaintiff in any such action against the Borrower or any Indemnified Person, with or without the consent of the Borrower, the Borrower shall indemnify and hold harmless such Indemnified Person to the extent provided in this Agreement.

(d) The Remarketing Agent shall indemnify and hold harmless the Borrower and the directors, officers, employees, and each person, if any, who controls the Borrower within the meaning of Section 15 of the Securities Act (such persons being herein sometimes collectively referred to as the “Borrower Indemnified Persons” and individually, an “Borrower Indemnified Person”), from any losses, claims, damages or liabilities to which any Borrower Indemnified Person may become subject insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of, or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Official Statement or any Disclosure Statement provided pursuant to Section 2(e) hereof or any amendment or supplement thereto or the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that such untrue or misleading statement or alleged untrue or misleading statement or omission or alleged omission was made in the Official Statement or such Disclosure Statement or in such amendment or supplement thereto in reliance upon and in conformity with information furnished to the Borrower in writing by the Remarketing Agent. The Remarketing Agent shall reimburse each Borrower Indemnified Person for any legal or other expenses reasonably incurred by such Borrower Indemnified Person in investigating, defending, or preparing to defend any such action or claim. The indemnity agreement in this paragraph shall be in addition to any liability which the Remarketing Agent may otherwise have to any Borrower Indemnified Person.

(e) Promptly after receipt by an Borrower Indemnified Person under paragraph (d) of this Section of notice of the commencement of any action, such Borrower Indemnified Person shall, if a claim for indemnification in respect thereof is to be made against the Remarketing Agent under this paragraph, notify the Remarketing Agent of the commencement thereof; and the Remarketing Agent shall promptly assume the defense thereof; including the employment of legal counsel reasonably satisfactory to the Borrower, the payment of all expenses, and the right to negotiate and consent to settlement. If the Remarketing Agent assumes the defense of such claim, the Remarketing Agent shall not be liable to any Borrower Indemnified Person under such paragraph for any legal or other expense subsequently incurred by such Borrower Indemnified

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Person in connection with the defense thereof; provided, however, the if the named parties to any such action (including any impleaded parties) include both any Borrower Indemnified Person and the Remarketing Agent, and the Borrower Indemnified Person shall have reasonably concluded, based upon the advice of legal counsel, that there may be one or more legal defenses available to it which are different from or additional to those available to the Remarketing Agent, and that as a result thereof such counsel has advised such Borrower Indemnified Person that employment of the same legal counsel may involve a conflict of interest, the Borrower Indemnified Person shall have the right to select separate counsel to assume such legal defense and to otherwise participate in the defense of such action on behalf of the Borrower Indemnified Person; provided further, however, that the Remarketing Agent shall not, in connection with any one such action, or separate but substantially similar or related actions arising out of the same general allegations or circumstances, be liable for the feds and expenses of more than one separate firm of attorneys at any point in time for the Borrower and other Borrower Indemnified Persons.

(f) The Remarketing Agent shall not be liable for any settlement of any such action effected without its consent by any Borrower Indemnified Person, but if settled with the consent of the Remarketing Agent or if there is a final judgment for the plaintiff in any such action against any Borrower Indemnified Person, with or without the consent of the Remarketing Agent, the Remarketing Agent shall indemnify and hold harmless such Borrower Indemnified Person to the extent provided in this Agreement.

(g) The indemnity agreements contained in this Section 7 shall remain in full force and effect, regardless of any investigation made by or on behalf of the Remarketing Agent and the Borrower, and shall survive the termination or cancellation of this Agreement.

8. Nature of the Remarketing Agent’s Obligations. Without limiting the foregoing, the Remarketing Agent is expressly authorized and directed to honor its obligations under and in compliance with the terms of this Agreement without regard to, and without any duty on its part to inquire into, the existence of any disputes or controversies between the Borrower, the Trustee, the Credit Provider or any other person or the respective rights, duties or liabilities of any of them, or whether the facts or occurrences represented in any of the documents presented under this Agreement are true and correct. Furthermore, the Borrower fully understands and agrees that the Remarketing Agent’s sole obligation to the Borrower shall be limited to honoring its obligations under and in compliance with the terms of this Agreement.

9. Intention of Parties. It is the express intention of the parties hereto that neither the determination of any interest rate on the Bonds nor any sale, tender or transfer of any Bond, as herein provided, shall constitute or be construed to be the extinguishment of any Bond or the indebtedness represented thereby or the reissuance of any Bonds.

10. Registration of Letter of Credit. If the blue sky or securities laws of any state or other jurisdiction requires the registration or qualification of the Letter of Credit, the Remarketing Agent shall not offer or sell any Bonds in or into such state or other jurisdiction.

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11. Miscellaneous. (a) Except as otherwise specifically provided in this Agreement, all notices, demands and formal actions under this Agreement shall be in writing and mailed or delivered by courier or facsimile transmission to:

The Remarketing Agent:

Stern Brothers & Co.

8000 Maryland Avenue, Suite 800

St. Louis, Missouri 63105

Attention: Terrence Finn

Telephone: (314) 743-4010

Facsimile number: (314) 727-7313

The Borrower:

Windsor on the River, LLC

5400 West Elm Street, Suite 110

McHenry, Illinois 60050

Attention: Christopher G. Zock

Telephone: (815) 385-3192

Facsimile number: (815) 385-2068

Each of the above-named addressees may, by notice given under this Agreement, designate other addresses to which subsequent notices, requests, reports or other communications shall be directed.

(b) This Agreement will inure to the benefit of and be binding upon the Remarketing Agent and the Borrower and their respective successors and assigns. The terms “successors” and “assigns” shall not include any purchaser of any of the Bonds merely because of such purchase.

(c) All of the representations, warranties and covenants of the Borrower, and the Remarketing Agent in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of the Remarketing Agent, the Issuer or the Borrower or (ii) delivery of and any payment for any Bonds.

(d) Section headings have been inserted in this Agreement as a matter of convenience for reference only, and such section headings are not a part of this Agreement and will not be used in the interpretation of any provisions of this Agreement.

(e) If any provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any constitution, statute, rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provisions in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatever.

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(f) This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document.

(g) This Agreement shall be governed exclusively by and construed in accordance with the internal laws of the State of Iowa applicable to contracts to be wholly performed therein.

(h) This Agreement shall become effective upon execution by the Remarketing Agent and the Borrower and shall continue in full force and effect until the payment in full of the Bonds, subject to the right of the Remarketing Agent and the Borrower to cancel this Agreement at any time pursuant to Section 2(d) hereof.

12. Non-Recourse. It is understood and agreed that the Remarketing Agent will look solely to the Borrower for payment of the obligations hereunder, and not to the members of the Borrower; provided, however:

(a) nothing in this Section shall be or be deemed to be a release or impairment of such obligations or preclude the Remarketing Agent from suing pursuant to this Agreement;

(b) this Section shall not release the Borrower from liability to the Remarketing Agent for the application of any funds received by the Borrower in violation of the covenants contained in this Agreement or in any other document executed in connection herewith;

(c) this Section shall not preclude the Remarketing Agent from securing a judgment from any party who subsequently assumes the payment of the obligations hereunder or as against any other person or persons or entity who may hereafter become liable for the payment of such obligations; and

(d) nothing contained herein is intended to relieve, release, discharge or affect in any way the personal liability of any third party to the Remarketing Agent, including any guarantors, for payment of the Borrower’s obligations or otherwise.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first written above.

STERN BROTHERS & CO.
By:	/s/ Illegible
Its:	Vice-President
WINDSOR ON THE RIVER, LLC, a Delaware limited liability company
By:	/s/ Christopher G. Zock
	Christopher G. Zock, its Manager

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EX-99.1

EXHIBIT 99.1

18100 Von Karman Avenue Suite 500 Irvine, CA 92612 949.852.0700

NEWS RELEASE

Contact: Jennifer Schmidt

Phone: 949.333.1721

Email: jschmidt@steadfastcmg.com

STEADFAST INCOME REIT

ACQUIRES WINDSOR ON THE RIVER APARTMENTS IN CEDAR RAPIDS, IOWA

REIT Portfolio Now Tops $100 Million with Nine Properties

IRVINE, Calif., Feb. 1, 2012 – Steadfast Income REIT, Inc. announced today the $33 million acquisition of Windsor on the River, a 424-unit community in Cedar Rapids, Iowa. Cedar Rapids recently ranked near the top of Forbes Magazine’s 2011 list of “Best Places for Business and Careers.”

“Many of the factors that Forbes highlighted in their review of Cedar Rapids — namely its favorable employment growth and outlook, education, cost of doing business and cost of living — were key components in our decision to acquire Windsor on the River,” said Rodney F. Emery, CEO and president of Steadfast.

Windsor on the River was built in 1982 in a wooded, resort-style setting overlooking the Cedar River and the Ellis Golf Course, and consists of one-,two- and three-bedroom apartments averaging 930 square feet. The property underwent a $2.4 million renovation in 2007 that included newly appointed interiors with oak cabinetry, wood flooring and new carpeting. Additionally, many units include a washer/dryer, vaulted ceilings, wood-burning fireplaces, private patios or balconies and sizeable walk-in closets.

The 95% occupied property boasts community features that include fitness facilities, lighted tennis courts, indoor racquetball courts, an Olympic-sized pool, gated underground parking and a clubhouse. Windsor’s proximity to park areas also affords it the distinction of being one of the only pet-friendly apartment communities in the area.

The acquisition marks the REIT’s second Iowa-area property. In December 2010, Steadfast acquired Park Place Apartments, a high-rise building located in downtown Des Moines.

About Steadfast Income REIT

Steadfast Income REIT is a real estate investment trust that intends to use the proceeds from its ongoing public offering of up to $1.65 billion of common stock to acquire and operate a diverse portfolio of real estate investments focused primarily on the multifamily sector, including stable, income-producing and value-added properties.

The REIT is sponsored by Steadfast REIT Investments, LLC, an affiliate of Steadfast Companies, an Orange County, Calif.-based group of affiliated real estate investment and operating companies that acquire, develop and manage real estate in the U.S. and Mexico.

This release contains certain forward-looking statements. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements and you should not place undue reliance on any such statements. A number of important factors could cause actual results to differ materially from the forward-looking statements contained in this release. Such factors include those described in the Risk Factors sections of Steadfast Income REIT, Inc.’s annual report on Form 10-K and other reports filed with the Securities and Exchange Commission. Forward-looking statements in this document speak only as of the date on which such statements were made, and the company undertakes no obligation to update any such statements that may become untrue because of subsequent events. Such forward-looking statements are subject to the safe harbor protection for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SECURITIES.

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