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):

March 9, 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 March 9, 2012 (the “Closing Date”), Steadfast Income REIT, Inc. (the “Company”) acquired a fee simple interest in a 252-unit multifamily residential property located in Edmond, Oklahoma commonly known as Spring Creek of Edmond (the “Spring Creek Property”) through SIR Spring Creek, LLC (“SIR Spring Creek”), a wholly-owned subsidiary of Steadfast Income REIT Operating Partnership, L.P., the Company’s operating partnership (the “Operating Partnership”).

SIR Spring Creek acquired the Spring Creek Property from WC/TP Spring Creek, LLC, a third party seller, for an aggregate purchase price of $19,350,000, exclusive of closing costs. SIR Spring Creek financed the payment of the purchase price for the Spring Creek Property with (1) proceeds from the Company’s ongoing public offering and (2) the assumption of an existing mortgage loan from U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Securities Corp., Multifamily Mortgage pass-Through Certificates, Series 2011-K702 (the “Lender”) in the original principal amount of $14,100,000 (the “Spring Creek Loan”). For additional information on the terms of the Spring Creek Loan, see Item 2.03 below.

The Spring Creek Property was constructed in 1974 and was renovated extensively in 2009 and 2010. The Spring Creek Property is comprised of twenty-four two and three-story buildings and contains 252 units. The units at the Spring Creek Property consist of a mix of one, two and three-bedroom units averaging approximately 1,050 square feet per unit. Average in-place monthly rent at the Spring Creek Property was approximately $825 as of February 16, 2012. Property amenities at the Spring Creek Property include two swimming pools, a clubhouse, a fitness center and an onsite leasing office. Unit amenities at the Spring Creek Property include fully equipped kitchens with stainless steel appliances, granite countertops, washer/dryer connections, wood burning fireplaces in select units, ceiling fans, large closets, private patios and/or balconies (in all but eight units) and vinyl wood flooring. Occupancy at the Spring Creek Property was 94% as of February 16, 2012.

An acquisition fee of approximately $390,000 was earned by Steadfast Income Advisor, LLC, the Company’s external affiliated advisor (the “Advisor”), in connection with the acquisition of the Spring Creek Property, which acquisition fee is expected to be paid to the Advisor subject to the terms of the advisory agreement between the Company, the Operating Partnership and the Advisor.

The material terms of the agreements regarding the acquisition of the Spring Creek Property described herein are qualified in their entirety by the agreements attached as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated herein by reference.

Management of Property

On the Closing Date, SIR Spring Creek and Steadfast Management Company, Inc. (the “Property Manager”), an affiliate of the Company, entered into a Property Management Agreement (the “Management Agreement”), pursuant to which the Property Manager will serve as the exclusive leasing

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agent and manager of the Spring Creek Property. Pursuant to the Management Agreement, SIR Spring Creek will pay the Property Manager a monthly management fee in an amount equal to 3.5% of the Spring Creek 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 Spring Creek may terminate the Management Agreement at any time upon 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. Either party may terminate the Management Agreement due to a material breach of the other party’s obligations under the Management Agreement that remains uncured for thirty days after notification of such breach.

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 10.3 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.

Spring Creek Loan

In connection with the acquisition of the Spring Creek Property, pursuant to an Assumption Agreement (the “Assumption Agreement”), SIR Spring Creek assumed the Spring Creek Loan and all of the obligations under the Multifamily Note evidencing the Spring Creek Loan (the “Spring Creek Note”), the Spring Creek Mortgage (as defined below) and certain other loan documents relating to the Spring Creek Loan (collectively, the “Loan Documents”). Pursuant to the Assumption Agreement, SIR Spring Creek paid the Lender an assumption fee of $139,132, or 1.0% of the outstanding principal balance of the Spring Creek Loan (the “Assumption Fee”). As of the Closing Date, the outstanding principal balance of the Spring Creek Loan, taking into account the payment of the Assumption Fee, was $13,876,940.

The Spring Creek Loan has a maturity date of February 1, 2018 (the “Maturity Date”). Interest on the outstanding principal balance of the Spring Creek Loan will accrue at a fixed rate of 4.88% per annum (the “Interest Rate”). A monthly payment of principal and interest on the Spring Creek Loan in the amount of $74,661.16 is due and payable on the first day of each month until the Maturity Date. The entire outstanding principal balance of the Spring Creek Loan is due and payable in full on the Maturity Date. So long as any monthly payment or any other amount due under the Spring Creek Note remains past due for 30 days or more or any other event of default under the Loan Documents has occurred and is continuing, interest will accrue on the Spring Creek Loan at a rate per annum equal to the lesser of (1) the Interest Rate plus 4.0% or (2) the maximum interest rate which may be collected by the Lender under applicable law. So long as any payment due under the Spring Creek Note or any other Loan Document is not received by the Lender within ten days after such payment is due, SIR Spring Creek will pay to the Lender, immediately and without demand by the Lender and in addition to the default interest rate payable to the Lender, a late charge equal to 5.0% of the amount of the payment due.

SIR Spring Creek may voluntarily prepay all, but not less than all, of the unpaid principal balance of the Spring Creek Loan and all accrued interest thereon and other sums due to the Lender under the Loan Documents, provided that (1) no prepayment may be made during certain time periods set forth in the Spring Creek Note and (2) SIR Spring Creek must provide the Lender with at least 30 days prior written notice of any such prepayment. In addition, under certain circumstances SIR Spring Creek must also pay a prepayment fee to the Lender, calculated as set forth in the Spring Creek Note, in connection with a voluntary prepayment of the Spring Creek Loan. The terms of prepayment of the Spring Creek Note vary depending on whether or not the Spring Creek Note has been assigned to a Real Estate Mortgage Investment Conduit (REMIC) trust.

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The performance of the obligations of SIR Spring Creek under the Spring Creek Loan are secured by a Multifamily Mortgage, Assignment of Rents and Security Agreement (Oklahoma) by SIR Spring Creek for the benefit of the Lender with respect to the Spring Creek Property (the “Spring Creek Mortgage”). Additionally, pursuant to an Assignment of Management Agreement and Subordination of Management Fees, SIR Spring Creek assigned all of its rights and interests in the Management Agreement to Lender upon an event of default under any of the Loan Documents.

Pursuant to the Spring Creek Note, SIR Spring Creek will have no liability under the Loan Documents for the repayment of the principal and interest and any other amounts due under the Loan Documents (the “Indebtedness”) or for the performance of any other obligations under the Loan Documents; provided, however, that (1) the Indebtedness shall be recourse to SIR Spring Creek for the repayment of a portion of the Indebtedness equal to any loss or damage suffered by the Lender as a result of, among other events, (a) failure of SIR Spring Creek to pay to the Lender upon demand after an event of default all rents and security deposits to which the Lender is entitled under the Spring Creek Mortgage, (b) failure of SIR Spring Creek to apply all insurance proceeds and condemnation proceeds as required by the Spring Creek Mortgage, (c) failure by SIR Spring Creek to comply with the provisions of the Spring Creek Mortgage regarding delivery of books, records and statements, and (d) willful material waste of the Spring Creek Property, and (2) SIR Spring Creek will be personally liable to Lender with respect to (a) the performance of SIR Spring Creek’s obligations under the environmental protection and hazardous materials provisions of the Spring Creek Mortgage and (b) any audit of SIR Spring Creek’s books and records by the Lender pursuant to the Spring Creek Mortgage. In addition, SIR Spring Creek will be personally liable to the Lender for the repayment of all Indebtedness, and the Spring Creek Loan will be fully recourse to SIR Spring Creek, upon the occurrence of, among other events, (1) fraud or written material misrepresentation by SIR Spring Creek or any officer, director, partner, member or employee of SIR Spring Creek in connection with the Indebtedness or any request for any action or consent by the Lender, (2) SIR Spring Creek’s acquisition of any real property other than the Spring Creek Property or operation of any business other than the management of the Spring Creek Property, (3) certain prohibited transfers of ownership interests in SIR Spring Creek or the Spring Creek Property, and (4) certain bankruptcy and insolvency events with respect to SIR Spring Creek or the Spring Creek Property.

In connection with the Spring Creek Loan, the Company and the Operating Partnership, jointly and severally, have absolutely, unconditionally and irrevocably guaranteed to the Lender full and prompt payment when due of all amounts for which SIR Spring Creek is personally liable under the Loan Documents, as described above.

The material terms of the agreements described herein are qualified in their entirety by the agreements attached as Exhibits 10.4 through 10.9 to this Current Report on Form 8-K and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On March 15, 2012, the Company distributed a press release announcing the completion of the acquisition of the Spring Creek 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.

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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	Purchase and Sale Agreement and Joint Escrow Instructions, dated as of December 9, 2011, by and between WC/TP Spring Creek, LLC and Steadfast Asset Holdings, Inc.
10.2	Assignment and Assumption of Purchase Agreement, dated as of March 9, 2012, by and between Steadfast Asset Holdings, Inc. and SIR Spring Creek, LLC
10.3	Property Management Agreement, dated as of March 9, 2012, by and between SIR Spring Creek, LLC and Steadfast Management Company, Inc.
10.4	Assumption Agreement, dated as of March 9, 2012, by and among U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Securities Corp., Multifamily Mortgage pass-Through Certificates, Series 2011-K702, WC/TP Spring Creek, LLC, SIR Spring Creek, LLC, John A. Wensigner, Steadfast Income REIT Operating Partnership, L.P. and Steadfast Income REIT, Inc.
10.5	Multifamily Note, effective as of January 31, 2011, by WC/TP Spring Creek, LLC in favor of Holliday Fenoglio Fowler, L.P.
10.6	Allonge to Note, dated as of March 9, 2012, by SIR Spring Creek, LLC in favor of U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Securities Corp., Multifamily Mortgage pass-Through Certificates, Series 2011-K702
10.7	Multifamily Mortgage, Assignment of Rents and Security Agreement (Oklahoma – Revision Date 03-31-2008), dated as of January 31, 2011, by and between WC/TP Spring Creek, LLC and Holliday Fenoglio Fowler, L.P.
10.8	Assignment of Management Agreement and Subordination of Management Fees, dated as of March 9, 2012, by and between SIR Spring Creek, LLC, Steadfast Management Company, Inc. and U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Securities Corp., Multifamily Mortgage pass-Through Certificates, Series 2011-K702

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10.9	Guaranty, dated as of March 9, 2012, by Steadfast Income REIT Operating Partnership, L.P. and Steadfast Income REIT, Inc. for the benefit of U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Securities Corp., Multifamily Mortgage pass-Through Certificates, Series 2011-K702
99.1	Press Release, dated March 15, 2012

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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: March 15, 2012	By:	/s/ Rodney F. Emery
		Rodney F. Emery
		Chief Executive Officer and President

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EXHIBIT INDEX

Exhibit	Description
10.1	Purchase and Sale Agreement and Joint Escrow Instructions, dated as of December 9, 2011, by and between WC/TP Spring Creek, LLC and Steadfast Asset Holdings, Inc.
10.2	Assignment and Assumption of Purchase Agreement, dated as of March 9, 2012, by and between Steadfast Asset Holdings, Inc. and SIR Spring Creek, LLC
10.3	Property Management Agreement, dated as of March 9, 2012, by and between SIR Spring Creek, LLC and Steadfast Management Company, Inc.
10.4	Assumption Agreement, dated as of March 9, 2012, by and among U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Securities Corp., Multifamily Mortgage pass-Through Certificates, Series 2011-K702, WC/TP Spring Creek, LLC, SIR Spring Creek, LLC, John A. Wensigner, Steadfast Income REIT Operating Partnership, L.P. and Steadfast Income REIT, Inc.
10.5	Multifamily Note, effective as of January 31, 2011, by WC/TP Spring Creek, LLC in favor of Holliday Fenoglio Fowler, L.P.
10.6	Allonge to Note, dated as of March 9, 2012, by SIR Spring Creek, LLC in favor of U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Securities Corp., Multifamily Mortgage pass-Through Certificates, Series 2011-K702
10.7	Multifamily Mortgage, Assignment of Rents and Security Agreement (Oklahoma – Revision Date 03-31-2008), dated as of January 31, 2011, by and between WC/TP Spring Creek, LLC and Holliday Fenoglio Fowler, L.P.
10.8	Assignment of Management Agreement and Subordination of Management Fees, dated as of March 9, 2012, by and between SIR Spring Creek, LLC, Steadfast Management Company, Inc. and U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Securities Corp., Multifamily Mortgage pass-Through Certificates, Series 2011-K702
10.9	Guaranty, dated as of March 9, 2012, by Steadfast Income REIT Operating Partnership, L.P. and Steadfast Income REIT, Inc. for the benefit of U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Securities Corp., Multifamily Mortgage pass-Through Certificates, Series 2011-K702
99.1	Press Release, dated March 15, 2012

EX-10.1

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

by and between

WC/TP SPRING CREEK, LLC,

a Delaware limited liability company

(“Seller”)

and

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

(“Buyer”)

TABLE OF CONTENTS

		Page No.
1.	PURCHASE AND SALE		1
2.	PURCHASE PRICE		2
3.	PAYMENT OF PURCHASE PRICE		3
4.	BUYER’S REMEDIES		4
5.	ESCROW INSTRUCTIONS		5
6.	CLOSING		6
7.	BUYER’S REVIEW		6
8.	REPRESENTATIONS AND WARRANTIES		11
9.	COVENANTS		15
10.	ADJUSTMENTS AND PRORATIONS		18
11.	CLOSING DOCUMENTS		20
12.	COSTS		21
13.	CASUALTY OR CONDEMNATION		21
14.	ATTORNEYS’FEES		22
15.	ASSIGNMENT		23
16.	WAIVER		23
17.	GOVERNING LAW; TIME		23
18.	NOTICES		23
19.	ENTIRE AGREEMENT		24
20.	COUNTERPARTS; COPIES		24
21.	AUTHORITY		24
22.	RECORD ACCESS AND RETENTION		25
23.	CONTRACT CONSIDERATION		25
24.	CONFIDENTIALITY		25
25.	DISCHARGE OF OBLIGATIONS		26
26.	EXCULPATION OF SELLER AND RELATED PARTIES		26

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EXHIBITS
Exhibit “A”	Real Property Description
Exhibit “B”	Personal Property Description
Exhibit “C”	Due Diligence Documents
Exhibit “D”	Form of Deed
Exhibit “E”	Form of General Assignment
Exhibit “F”	Form of Bill of Sale
Exhibit “G”	Form of Non-Foreign Certificate
Exhibit “H”	Form of Tenant Notice
SCHEDULES
Schedule 1	Leases
Schedule 2	Contracts
Schedule 3	Approvals

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PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“Agreement”) is made and entered into as of the 9^th day of December, 2011, by and between WC/TP SPRING CREEK, LLC, a Delaware limited liability company (“Seller”), and STEADFAST ASSET HOLDINGS, INC., a California corporation (“Buyer”), with reference to the following facts:

RECITALS:

A. Seller is the fee owner of that certain land with a multi-family housing project consisting of two hundred fifty-two (252) apartment units situated thereon, which is located at 777 E. 15th Street, Edmond, Oklahoma and more particularly described in Exhibit “A” attached hereto (together with all structures, improvements, machinery, fixtures and equipment affixed or attached to the land, the “Real Property”).

B. Seller desires to sell the Real Property, along with certain related personal and intangible property, to Buyer, and Buyer desires to purchase such real, personal, and intangible property from Seller in accordance with the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto mutually agree as follows:

1. PURCHASE AND SALE. Subject to the terms and conditions of this Agreement, and for the consideration herein set forth, Seller agrees to sell and transfer, and Buyer agrees to purchase and acquire, all of Seller’s right, title, and interest in and to the following (collectively, the “Property”):

1.1 The Real Property;

1.2 All easements, licenses, interests, rights, and privileges appurtenant to the Real Property, including, without limitation, all water and water rights;

1.3 All equipment, tools, machinery, materials, supplies and other tangible personal property owned by Seller and located on or used in connection with or arising out of the ownership of the Real Property as of the date hereof, as more particularly described in Exhibit “B” attached hereto (collectively, “Personal Property”);

1.4 All leases and occupancy agreements relating to the Property in effect on the Date of Closing (as hereinafter defined), including all amendments thereto (collectively, “Leases”) (the Leases in effect on the date of this Agreement are identified on Schedule 1 attached hereto);

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1.5 Subject to Section 7.6 below, all maintenance, supply or other contracts relating to the operation of the Property in effect as of the date hereof, which are identified on Schedule 2 attached hereto and which are assignable by their terms to Buyer (collectively, “Contracts”);

1.6 All approvals, plans, studies and surveys relating to the Property, which are identified on Schedule 3 attached hereto (collectively, “Approvals”); and

1.7 All entitlements and intangible personal property in connection with or arising out of the ownership of the Real Property, including, without limitation, all licenses, permits and certificates of occupancy for the Real Property and trade names and logos (collectively, “Intangible Property”).

2. PURCHASE PRICE. The total purchase price (“Purchase Price”) to be paid by Buyer to Seller for the Property shall be NINETEEN MILLION THREE HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($19,350,000.00). The Purchase Price shall be comprised of the following: (i) the assumption by Buyer (the “Assumption”) of the outstanding principal balance as of the Closing Date (defined in Section 6.1 below) of that loan (the “Loan”) to Seller evidenced by a promissory note in the original principal amount of Fourteen Million One Hundred Thousand and 00/100 Dollars ($14,100,000.00) dated January 31, 2011 given by Seller to Holliday Fenoglio Fowler, L.P., as assigned to U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Mortgage Securities Corp., Multifamily Mortgage Pass-Through Certificates, Series 2011-K702, (“Lender”) and secured by a first priority deed of trust or mortgage encumbering the Property (the “Assumed Loan Balance”), (ii) the Deposit (defined in Section 3.1 below), and (iii) the Closing Funds (defined in Section 3.2 below). Buyer shall use its commercially reasonable efforts to make written application to Lender for the Assumption, without any changes in the terms of the Loan except as specified herein, and shall pay all initial review and application fees within ten (10) days following the Opening of Escrow and thereafter Buyer shall promptly provide all information reasonably requested by Lender in connection with such application, including without limitation financial statements, tax returns, organizational documents and management profile/credentials, and diligently and in good faith pursue Lender’s approval of the Assumption. In the event that Buyer (a) has not made written application to Lender for the Assumption within the aforementioned ten (10)-day period, or (b) Buyer fails to otherwise diligently and in good faith pursue Lender’s approval of the Assumption, Seller’s sole remedy shall be to terminate this Agreement by delivering written notice to Buyer and Escrow Holder, in which case the Deposit, less the Independent Contract Consideration, shall be returned to Buyer, and this Agreement shall be null and void and of no further force and effect whatsoever, except for the terms of this Agreement which expressly survive termination; provided, however, that with respect to item (a) above, Seller’s termination notice shall only be effective if it is received by Buyer before Buyer makes such application to Lender. If on or before the Initial Scheduled Closing Date or, as applicable, the Rescheduled Closing Date, Lender has not approved the Assumption on terms and conditions acceptable to Buyer, and agreed to the release of Seller and all existing guarantors from all liability on the Loan for events arising after the Closing, then the Deposit will be refunded in full to Buyer, less the Independent Contract Consideration, and this Agreement shall be null and void and of no further force and effect whatsoever, except for the terms of this

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Agreement which expressly survive termination. Buyer’s determination of whether the terms and conditions of the Assumption are acceptable to Buyer shall be made in its reasonable discretion; provided, however, that it shall in all events be reasonable for Buyer to conclude that the terms and conditions of the Assumption are unacceptable if Lender requires any of the following in connection with the Loan (“Satisfaction Criteria”): (i) an interest rate exceeding 4.88% per annum, (ii) reserves exceeding $400 per housing unit, (iii) payment of (A) an assumption fee exceeding 1% of the outstanding principal balance of the Loan as of the Closing Date or (B) Other Expenses (as defined below) exceeding $40,000, (iv) a principal balance on the date that Buyer assumes the Loan of more than Fourteen Million One Hundred Thousand and 00/100 Dollars ($14,100,000.00) or less than Thirteen Million Eight Hundred Thousand and 00/100 Dollars ($13,800,000.00), and (v) a loan maturity date earlier than February 1, 2018. Buyer shall provide Seller with written notice of any objections that Buyer has to the documents to be executed by Buyer and which have been provided to Buyer, Seller, any guarantors and Lender in connection with the Loan Assumption (collectively, the “Assumption Documents”) within three (3) business days after receipt thereof and will use good faith efforts to resolve, prior to Closing, such objections to Buyer’s reasonable satisfaction, subject to Buyer’s right to disapprove the Assumption Documents if the Assumption Documents are not in compliance with the Satisfaction Criteria set forth above. Subject to Buyer’s right to approve the terms and conditions of the Assumption and the Assumption Documents, Buyer agrees to pay any assumption fee and all other reasonable costs and expenses imposed by Lender in connection with the Assumption including, without limitation, underwriting and due diligence fees, loan policy title insurance premiums and Lender’s legal fees (collectively, “Other Expenses”).

3. PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid as follows:

3.1 Deposit. Within three (3) business days after the mutual execution of this Agreement, Buyer shall deliver to First American Title Company (“Escrow Holder”), which has an address of 5 First American Way, Santa Ana, California 92707, Attn: Kathleen Huntsman, the sum of THREE HUNDRED THOUSAND AND 00/100 DOLLARS ($300,000.00) (“Initial Deposit”) in immediately available funds as a good faith deposit. The Initial Deposit and all interest earned thereon shall be collectively referred to in this Agreement as the “Deposit”. The Initial Deposit shall be in the form of wire transfer, cash or certified or bank cashier’s check. Escrow Holder shall place the Deposit in an interest-bearing account under Buyer’s Tax ID# 90-0152520. If Closing occurs in accordance with this Agreement, the Deposit shall be applied against the Purchase Price. The Deposit shall be returned to Buyer only if Buyer exercises the right to terminate this Agreement in accordance with Sections 7.3 or 7.4, or Closing fails to occur due to (i) Seller’s material breach of this Agreement, which breach continues for a period of five (5) days after receipt of written notice from Buyer and which is not caused by Buyer’s breach of this Agreement, (ii) the failure of a condition to close set forth in Section 5.2.2 (with respect to Seller’s deliveries only), Section 5.2.4, or Section 5.2.5 (with respect to Seller’s performance only) of this Agreement, to the extent the foregoing are not waived by Buyer or caused by Buyer’s breach or failure to perform, or (iii) termination of this Agreement pursuant to a casualty or condemnation event as described in Section 13 below.

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3.2 Remainder of Purchase Price. On or before the Closing Date, Buyer shall deposit into Escrow immediately available funds in an amount which, when added to the Deposit and the Assumed Loan Balance, will equal the Purchase Price plus any additional amounts necessary to cover costs and/or prorations under this Agreement (the “Closing Funds”).

3.3 Liquidated Damages. SELLER AND BUYER AGREE THAT, IF THE PURCHASE AND SALE OF THE PROPERTY IS NOT COMPLETED AND THIS AGREEMENT TERMINATES BECAUSE BUYER MATERIALLY DEFAULTS UNDER OR MATERIALLY BREACHES THIS AGREEMENT, THE DEPOSIT SHALL BE PAID TO SELLER UPON TERMINATION OF THIS AGREEMENT AND RETAINED BY SELLER AS LIQUIDATED DAMAGES AND AS SELLER’S SOLE REMEDY AT LAW OR IN EQUITY. SELLER AND BUYER AGREE THAT, UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS AGREEMENT, ACTUAL DAMAGES MAY BE DIFFICULT TO ASCERTAIN AND THE DEPOSIT AND ALL INTEREST THEREON IS A REASONABLE ESTIMATE OF THE DAMAGES THAT WILL BE INCURRED BY SELLER IF BUYER MATERIALLY DEFAULTS UNDER OR MATERIALLY BREACHES THIS AGREEMENT AND FAILS TO PURCHASE THE PROPERTY.

SELLER’S INITIALS:        BUYER’S INITIALS:             

4. BUYER’S REMEDIES. SELLER AND BUYER AGREE THAT IF THE PURCHASE AND SALE OF THE PROPERTY IS NOT COMPLETED AND THIS AGREEMENT TERMINATES BECAUSE SELLER MATERIALLY DEFAULTS UNDER OR MATERIALLY BREACHES THIS AGREEMENT OR IF SELLER OTHERWISE MATERIALLY FAILS TO SATISFY ITS OBLIGATIONS UNDER THIS AGREEMENT FOR ANY REASON EXCEPT FAILURE BY BUYER TO PERFORM HEREUNDER OR BUYER’S MATERIAL BREACH HEREUNDER, WHICH DEFAULT, BREACH OR FAILURE BY SELLER CONTINUES FOR A PERIOD OF FIVE (5) DAYS AFTER RECEIPT OF WRITTEN NOTICE FROM BUYER, BUYER MAY, AS BUYER’S SOLE AND EXCLUSIVE REMEDIES, (i) DEMAND THE RETURN OF THE DEPOSIT LESS THE INDEPENDENT CONTRACT CONSIDERATION, WHICH DEMAND SHALL OPERATE TO TERMINATE THIS AGREEMENT IF NOT ALREADY TERMINATED, (ii) COMPEL SPECIFIC PERFORMANCE OF SELLER’S OBLIGATIONS UNDER THIS AGREEMENT, HOWEVER BUYER SHALL HAVE WAIVED ITS RIGHT TO ENFORCE SPECIFIC PERFORMANCE IF BUYER FAILS TO FILE A LAWSUIT ASSERTING SUCH CAUSE OF ACTION IN THE COUNTY IN WHICH THE PROPERTY IS LOCATED WITHIN SIXTY (60) DAYS OF THE SCHEDULED CLOSING DATE (AS THE CLOSING DATE MAY BE EXTENDED PURSUANT TO THIS AGREEMENT), (iii) RECOVER FROM SELLER THE DEPOSIT, LESS THE INDEPENDENT CONTRACT CONSIDERATION, PLUS BUYER’S ACTUAL OUT-OF- POCKET EXPENSES INCURRED BY BUYER IN CONNECTION WITH THIS AGREEMENT PROVIDED HOWEVER, THAT IN NO EVENT SHALL SELLER’S LIABILITY HEREUNDER EXCEED $175,000.00, AND/OR (iv) IN THE EVENT OF AN INTENTIONAL BREACH OF THIS AGREEMENT BY SELLER, RECOVER FROM SELLER THE DEPOSIT, LESS THE INDEPENDENT CONTRACT CONSIDERATION,

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PLUS BUYER’S ACTUAL DAMAGES, HOWEVER IN NO EVENT SHALL SELLER’S LIABILITY HEREUNDER EXCEED $500,000.00 NOR SHALL BUYER HAVE THE RIGHT TO RECOVER AGAINST SELLER CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES.

SELLER’S INITIALS:       BUYER’S INITIALS:             

5. ESCROW INSTRUCTIONS.

5.1 Opening of Escrow. Within three (3) business days after the mutual execution of this Agreement, the parties shall open an escrow (“Escrow”) with Escrow Holder in order to consummate the purchase and sale in accordance with the terms and provisions hereof. This Agreement shall be deposited in the Escrow and the provisions hereof shall constitute joint primary escrow instructions to Escrow Holder; provided, however, that the parties shall execute such additional instructions as requested by Escrow Holder not inconsistent with the provisions hereof. The date as of which Escrow Holder shall have received (i) the Initial Deposit and (ii) executed counterparts of this Agreement from both Seller and Buyer shall constitute the “Opening of Escrow.” Escrow Holder shall deliver written confirmation of the date of the Opening of Escrow to the parties in the manner set forth in Section 18 of this Agreement. In the event the Initial Deposit is not received by the Escrow Holder within the time period specified in Section 3.1, this Agreement will become null and void and of no further force or effect at Seller’s option, which must be exercised by delivering written notice of such election to Buyer and Escrow Holder at any time before the Initial Deposit is received by Escrow Holder.

5.2 Conditions to Close. Closing shall not occur unless and until the following conditions precedent and contingencies have been satisfied or waived in writing by the party for whose benefit the conditions have been included:

5.2.1 All conditions and contingencies to Buyer’s obligation to close Escrow set forth in Sections 7.3 and 7.4 below have been satisfied or waived in writing by Buyer, and Buyer’s rights to terminate this Agreement in accordance with Sections 7.3 and 7.4 below have expired.

5.2.2 All Closing Funds described in Section 3, and Closing Documents described in Section 11 have been delivered to Escrow Holder.

5.2.3 The title department of Escrow Holder, which has an address of 5 First American Way, Santa Ana, California 92707, Attn: Kristen A. Hueter, shall have irrevocably committed to issue to Buyer pursuant to the Title Commitment (as hereinafter defined) an ALTA owner’s policy of title insurance, subject only to the Permitted Exceptions (as hereinafter defined) and the payment of the applicable premium, but otherwise in form and content and containing such endorsements approved by Buyer pursuant to Section 7 below, insuring Buyer’s title to the Real Property in an amount equal to the Purchase Price

5.2.4 Buyer shall have obtained, at Buyer’s sole cost and expense, Lender’s consent to the Assumption by Buyer of the Loan, effective as of the Closing Date and the release of Seller and all guarantors of the Loan from any default occurring after the Closing.

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5.2.5 Seller and Buyer shall each have materially performed, observed and complied with all covenants, agreements and conditions required by this Agreement to be performed, observed and/or complied with by such party prior to, or as of, the Closing.

Any condition not otherwise satisfied or waived as of the Closing shall be deemed fully satisfied or waived by the party for whose benefit the condition had been included.

5.3 Recordation and Transfer. Upon satisfaction of the conditions set forth in Section 5.2 above, Escrow Holder shall transfer the Property as follows:

5.3.1 Cause the Deed (as such term is hereinafter defined) to be recorded with the County Clerk of Oklahoma County, Oklahoma;

5.3.2 Deliver to the parties entitled thereto the other Closing Documents;

5.3.3 Disburse all funds deposited with Escrow Holder by Buyer in payment of the Purchase Price for the Property to Seller pursuant to instructions to be delivered by Seller to Escrow Holder, less the amount of all items, costs and prorations chargeable to the account of Seller; and

5.3.4 Disburse the remaining balance of the funds deposited by Buyer to Buyer upon the Close of Escrow pursuant to instructions to be delivered by Buyer to Escrow Holder after all costs payable by Buyer pursuant to Section 12 below have been deducted.

6. CLOSING.

6.1 Generally. Escrow shall close upon the delivery of the Deed in accordance with the provisions of this Agreement (“Date of Closing”, “Closing Date”, “Closing” or “Close of Escrow”). The Close of Escrow shall occur no later than the date that is sixty (60) days after the Opening of Escrow (“Initial Scheduled Closing Date”) at the office of Escrow Holder or at such other location as may be mutually agreed upon by Seller and Buyer, unless otherwise extended (i) by operation of Sections 7.3.1 or 13, (ii) by Buyer pursuant to Section 6.2 below, or (iii) by written agreement between Buyer and Seller. Buyer shall have the option, in its sole and absolute discretion, to require that the Close of Escrow occur earlier than the Initial Scheduled Closing Date or the Rescheduled Closing Date (defined in Section 6.2 below) by giving written notice thereof to Seller and Escrow Holder.

6.2 Extension Option. Notwithstanding Section 6.1 above, Buyer shall have the option (“Extension Option”) to extend the Initial Scheduled Closing Date for an additional thirty (30) days (“Rescheduled Closing Date”), in Buyer’s sole and absolute discretion, by providing written notice to Seller of such election prior to the Initial Scheduled Closing Date.

7. BUYER’S REVIEW.

7.1 Delivery of Documents. Within three (3) business days after the Opening of Escrow, Seller shall, at the sole expense of Seller, deliver to Buyer the following documents pertaining to the Property, to the extent existing, that have been prepared by, for or at the request

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of Seller, or (a) are in the possession of, or (b) to Seller’s knowledge (as defined in Section 8.1 below), are readily available at no material cost to, Seller, the manager retained by Seller to manage the Property, or Seller’s investment advisors, including, without limitation, (i) copies of the Leases, Contracts and Approvals; (ii) copies of all architectural, engineering and other drawings, plans and specifications for the buildings, structures, improvements, machinery, fixtures and equipment included in the Real Property; (iii) copies of all reports, studies, investigations, appraisals and other materials concerning the design, construction, condition or status of the Real Property or any of the buildings, structures, improvements, machinery, fixtures or equipment included in the Real Property, or any system, element or component thereof, or any past or present Release (as hereinafter defined) or threatened Release of any Hazardous Substances (as hereinafter defined) in, on, under or within the Real Property or any other real property in the vicinity of the Real Property, or the compliance of the Real Property with Environmental Laws (as hereinafter defined); and (iv) copies of all environmental impact reports, negative declarations, environmental impact certifications, and zoning, land use or development agreements relating to the Real Property, and (v) to the extent not covered by the foregoing clauses (i) – (iv), the documents listed on Exhibit “C” attached hereto. Notwithstanding the foregoing, those certain Due Diligence Documents specifically designated on Exhibit “C” as “Available.on Site” will not be delivered to Buyer, but may be reviewed and copied by Buyer at the management office located on the Real Property pursuant to Section 7.2 below.

As used in this Agreement, the following definitions shall apply: “Environmental Laws” shall mean all federal, state and local laws, ordinances, rules and regulations now or hereafter in force, as amended from time to time, in any way relating to or regulating human health or safety, or industrial hygiene or environmental conditions, or protection of the environment, or pollution or contamination of the air, soil, surface water or groundwater, and includes the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., the Clean Water Act, 33 U.S.C. § 1251, et seq., and the Hazardous Substance Account Act. “Hazardous Substances” shall mean any substance or material that is described as a toxic or hazardous substance waste or material or a pollutant or contaminant, or words of similar import, in any of the Environmental Laws, and includes, without limitation, asbestos, petroleum (including crude oil or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel, or any mixture thereof), petroleum products, polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive matter, medical waste, and chemicals which may cause cancer or reproductive toxicity. “Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment, including continuing migration, of Hazardous Substances into or through soil, surface water or groundwater.

7.2 Access. Upon the execution of this Agreement, Seller shall allow Buyer or Buyer’s agents or representatives access to the Property for purposes of any non-intrusive physical or environmental inspection of the Property and, to the extent copies are not provided to Buyer by Seller, review and copying of Seller’s books and records relating to the Property and any of the documents described in Section 7.1 above, and other matters necessary in the reasonable discretion of Buyer to evaluate and analyze the feasibility of the Property for Buyer’s

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intended use thereof. Buyer shall not conduct or authorize any physically intrusive testing of, on, or under the Property without first obtaining Seller’s written consent as to the timing and scope of work to be performed, which consent shall not be unreasonably withheld, conditioned or delayed. In performing its on-site inspections, Buyer will provide Seller and Seller’s property manager with at least twenty-four (24) hours prior notice regarding the scope and execution of its activities, and shall be accompanied by a building management escort, if deemed necessary by Seller. In conducting its investigation and review of the Property, Buyer will not unreasonably inconvenience or interfere with the operation, management or use of the Property by Seller, Seller’s property manager, tenants, or by any of their respective agents, customers, invitees, or guests. Buyer will not materially alter the physical condition of the Property without obtaining Seller’s prior written consent. Except to the extent arising out of the negligence or willful misconduct of Seller or its employees or agents, Buyer agrees to indemnify, hold harmless and defend (with counsel reasonably satisfactory to Seller), and hereby releases, Seller, Seller’s managers, officers, directors, employees, and agents, from and against all losses, claims, costs, damages, and liabilities, including attorney’s fees, arising out of or in connection with (.1) injury to persons and damage to property, including the Property, during access to the Property or arising out of entry upon the Property caused by Buyer and its agents, employees, and contractors; and (.2) any liens filed against the Property arising out of Buyer’s access to the Property. Buyer will restore the Property to its condition existing prior to Buyer’s activities thereon at Buyer’s expense if this transaction does not close. Buyer agrees that it will deliver to Seller, prior to any such entry, a certificate of commercial general liability insurance, naming Seller as an additional insured and otherwise in form reasonably acceptable to Seller. The provisions of this Section 7.2 will expressly survive the Closing or earlier termination of this Agreement.

7.3 Title and Survey.

7.3.1 Within ten (10) days after the Opening of Escrow, Buyer shall obtain from Escrow Holder a preliminary report of title prepared by the title department of Escrow Holder regarding the Property (“Title Commitment”). Buyer shall have twenty (20) days following the later of (a) its receipt of the Title Commitment and any existing survey provided to Buyer pursuant to Section 7.3.2 below, and (b) the Opening of Escrow (“Title Objection Period”) in which to give Seller written notice of any objections Buyer has, in Buyer’s sole and absolute discretion, to any matters shown on the Title Commitment (“Title Objection Notice”). All objections raised by Buyer in the manner herein provided are hereafter called “Objections.” Seller shall have the right, but not the obligation, to remedy or remove all Objections (or agree irrevocably in writing to remedy or remove all such Objections at or prior to Closing) within ten (10) days following Buyer’s delivery of the Title Objection Notice (“Seller’s Cure Period”). In the event Seller fails to notify Buyer that Seller agrees irrevocably in writing to remedy or remove any Objections at or prior to Closing, or Seller is unable to remedy or cause the removal of any Objections (or agree irrevocably to do so at or prior to Closing) within Seller’s Cure Period, then Buyer, within three (3) business days after the expiration of Seller’s Cure Period, shall deliver to Seller written notice (a “Title Election Notice”) electing, in Buyer’s sole and absolute discretion, to either (i) terminate this Agreement, or (ii) unconditionally waive any such Objections. If Buyer fails to timely deliver to Seller a Title Election Notice, Buyer shall conclusively be deemed to have elected (i) above. If Buyer

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does not elect, or is not conclusively deemed to have elected, to terminate this Agreement as set forth above, all matters reflected on the Title Commitment and the survey, which Seller has not otherwise elected in writing to cure, shall constitute permitted title exceptions approved by Buyer (the “Permitted Exceptions”) for all purposes of this Agreement. Any new title or survey information received by Seller or Buyer after the expiration of the Title Objection Period or Seller’s Cure Period, as applicable, from a supplemental title report obtained from the Escrow Holder, survey or other source which is not the result of the acts or omissions of Buyer or its agents, contractors or invitees (each, a “New Title Matter”) shall be subject to the same procedure provided in this Section 7.3.1 (and the Date of Closing shall be extended commensurately if the Closing would have occurred but for those procedures being implemented for a New Title Matter), except that the Buyer’s Title Objection Period and Seller’s Cure Period for any New Title Matters shall be five (5) business days each. Seller, without duty of inquiry, shall notify Buyer in writing of any New Title Matter within two (2) business days after Seller’s receipt thereof. Close of Escrow shall be delayed as needed to accommodate such additional time periods.

7.3.2 Within three (3) business days after the Opening of Escrow, Seller shall provide Buyer with a copy of any existing survey of the Property in Seller’s possession or control. Buyer may elect to obtain, at Buyer’s expense, a new survey or revise, modify, or recertify an existing survey of the Property as necessary in order for the title department of Escrow Holder to delete the survey exception from title or to otherwise satisfy Buyer’s objectives, however the Title Objection Period shall not be extended as a result thereof.

7.4 Buyer’s Due Diligence. Buyer shall have until the expiration of the Due Diligence Period (as defined below) to evaluate and analyze the feasibility of the Property for Buyer’s intended use thereof, including, without limitation, the zoning of the Property, the physical, environmental and geotechnical condition of the Property and the economic feasibility of owning and operating the Property. As used in this Agreement, the term “Due Diligence Period” shall mean the period commencing on the Opening of Escrow, and ending thirty (30) days thereafter. If, during the Due Diligence Period, Buyer determines that the Property is not acceptable for any reason whatsoever, Buyer shall have the right, by giving written notice to Seller on or before the last day of the Due Diligence Period, to terminate this Agreement.

7.5 Buyer’s Termination Right. If Buyer exercises the right to terminate this Agreement in accordance with Sections 7.3 or 7.4 above, this Agreement shall terminate as of the date the termination notice is given by Buyer. If Buyer does not exercise the right to terminate this Agreement in accordance with Sections 7.3 or Section 7.4 above, this Agreement shall continue in full force and effect and the Deposit shall become non-refundable except as provided in Section 3.1.

7.6 Contracts. On or before the expiration of the Due Diligence Period, Buyer shall notify Seller in writing as to which of the Contracts, that by their terms can be terminated as of the Closing Date, Buyer elects not to assume at Closing, in Buyer’s sole and absolute discretion. Seller shall notify the vendors under those Contract(s) which Buyer has not agreed to assume and, provided that Closing occurs hereunder, such Contracts shall terminate effective as of the Date of Closing. Seller shall cooperate with Buyer, at no material expense to Seller, both

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before and after the Close of Escrow, to obtain any approvals or consents required to assign any Contracts to Buyer, including, without limitation, sending requests for such approvals or consents to the party or parties whose consent or approval is required. If Seller fails to timely send any such request for approval or consent, Buyer may do so in Seller’s name. Seller’s obligations under this Section 7.6 shall survive the Close of Escrow.

7.7 “AS IS, WHERE IS”. If Buyer does not exercise the right to terminate this Agreement in accordance with Sections 7.3 or Section 7.4 above, then: (.1) BUYER ACKNOWLEDGES THAT EXCEPT FOR ANY EXPRESS WARRANTIES, REPRESENTATIONS AND COVENANTS CONTAINED IN THIS AGREEMENT, BUYER IS NOT RELYING ON ANY WRITTEN, ORAL, IMPLIED, OR OTHER REPRESENTATIONS, STATEMENTS, OR WARRANTIES BY SELLER OR ANY AGENT OF SELLER OR ANY REAL ESTATE BROKER OR SALESMAN; (.2) ALL PREVIOUS WRITTEN, ORAL, IMPLIED, OR OTHER STATEMENTS, REPRESENTATIONS, WARRANTIES, OR AGREEMENTS, IF ANY, ARE MERGED HEREIN; AND (.3) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE CLOSING DOCUMENTS, SELLER SHALL NOT HAVE ANY LIABILITY TO BUYER, AND BUYER SHALL RELEASE SELLER FROM ANY LIABILITY (INCLUDING, WITHOUT LIMITATION, CONTRACTUAL AND STATUTORY ACTIONS FOR CONTRIBUTION OR INDEMNITY), FOR, CONCERNING, OR REGARDING: (i) THE NATURE AND CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE SUITABILITY THEREOF FOR ANY ACTIVITY OR USE; (ii) ANY IMPROVEMENTS OR SUBSTANCES LOCATED THEREON; OR (iii) THE COMPLIANCE OF THE PROPERTY WITH ANY LAWS, RULES, ORDINANCES, OR REGULATIONS OF ANY GOVERNMENT OR OTHER BODY. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT AND THE CLOSING DOCUMENTS, SELLER HAS NOT MADE, DOES NOT MAKE, AND EXPRESSLY DISCLAIMS, ANY WARRANTIES, REPRESENTATIONS, COVENANTS OR GUARANTEES, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, AS TO THE MERCHANTABILITY, HABITABILITY, QUANTITY, QUALITY, OR ENVIRONMENTAL CONDITION OF THE PROPERTY OR ITS SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE. BUYER AFFIRMS THAT IT HAS INVESTIGATED AND INSPECTED THE PROPERTY AND IS FAMILIAR AND SATISFIED WITH THE PHYSICAL CONDITION OF THE PROPERTY, AND HAS MADE ITS OWN DETERMINATION AS TO THE MERCHANTABILITY, QUANTITY, QUALITY, AND CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE POSSIBLE PRESENCE OF TOXIC OR HAZARDOUS SUBSTANCES OR WASTE OR OTHER ENVIRONMENTAL CONTAMINATION AND THE PROPERTY’S SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE. AT CLOSING, BUYER ACCEPTS THE PROPERTY IN ITS PRESENT CONDITION (INCLUDING ENVIRONMENTAL CONDITIONS) ON AN “AS-IS”, “WHERE-IS”, AND “WITH ALL FAULTS” BASIS. BUYER FURTHER ACKNOWLEDGES THAT WITHOUT THIS ACCEPTANCE, THIS SALE WOULD NOT BE MADE. EXCEPT FOR ANY EXPRESS WARRANTIES, REPRESENTATIONS AND COVENANTS CONTAINED IN THIS AGREEMENT, BUYER AND ITS SUCCESSORS AND ASSIGNS HAVE, AND SHALL BE DEEMED TO HAVE, ASSUMED ALL RISK

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AND LIABILITY WITH RESPECT TO THE PRESENCE OF TOXIC OR HAZARDOUS SUBSTANCES OR WASTE OR OTHER ENVIRONMENTAL CONTAMINATION ON OR WITHIN OR UNDER THE SURFACE OF THE PROPERTY, WHETHER KNOWN OR UNKNOWN, APPARENT, NON-APPARENT OR LATENT, AND WHETHER EXISTING PRIOR TO, AT, OR SUBSEQUENT TO TRANSFER OF THE PROPERTY. THE PROVISIONS OF THIS DISCLAIMER AND RELEASE EXPRESSLY SURVIVE CLOSING.

8. REPRESENTATIONS AND WARRANTIES.

8.1 Seller’s Representations and Warranties. The representations, warranties and covenants of Seller in this Section 8.1 are a material inducement for Buyer to enter into this Agreement. Buyer would not purchase the Property from Seller without such representations, warranties and covenants of Seller. Such representations, warranties and covenants shall survive the Closing. References to the “knowledge” of Seller shall refer only to the actual knowledge, without inquiry, of John A. Wensinger, Manager of Seller’s Manager, and shall not be construed, by imputation or otherwise, to refer to the knowledge of Seller, or any affiliate of Seller, to Seller’s property manager, or to any other officer, agent, manager, representative, advisor, or employee of Seller or any affiliate thereof or to impose upon such designated employee any duty to investigate the matter to which such actual knowledge, or the absence thereof, pertains. Notwithstanding anything contained in this Agreement to the contrary, John A. Wensinger shall have no personal liability under this Agreement. Seller represents, warrants and covenants to Buyer that, with respect to all of the matters as to which a representation or warranty in this Section 8.1 is qualified as “to Seller’s knowledge” (or words of similar import), John A. Wensinger is an individual representing or employed by Seller who is knowledgeable and actively involved in the management of the relevant aspect(s) of the Property that is (are) the subject matter of such qualified reprensentation or warranty. Seller represents, warrants and covenants to Buyer as of the date of this Agreement and as of the Closing as follows:

8.1.1 Seller is a limited liability company (i) duly organized and validly existing and in good standing under the laws of the State of Delaware, and (ii) duly qualified to do business and in good standing in the State of Oklahoma. Seller has full power and authority to enter into this Agreement and to perform this Agreement. The execution, delivery and performance of this Agreement by Seller have been duly and validly authorized by all necessary action on the part of Seller and all required consents and approvals have been duly obtained. This Agreement is a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms.

8.1.2 To Seller’s knowledge, (.1) the Personal Property described in Exhibit “B” attached hereto is, in all material respects, an accurate and complete list of all tangible and intangible personal property owned by Seller relating to the ownership, management, operation, maintenance or repair of the Real Property; (.2) the Personal Property is located at the Real Property. Seller has good title to the Personal Property, free and clear of all liens, encumbrances, security interests and adverse claims of any kind or nature whatsoever except in connection with the Loan.

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8.1.3 All of the Leases are described in Schedule 1 attached hereto, and there are no persons leasing, using or occupying the Real Property or any part thereof except the tenants under the Leases and as may be indicated on the Title Commitment. To Seller’s knowledge, the Contracts described in Schedule 2 attached hereto are, in all material respects, an accurate and complete list of all presently effective contracts, agreements, warranties and guaranties relating to the leasing, advertising, promotion, design, construction, ownership, management, operation, maintenance or repair of the Real Property. To Seller’s knowledge, the Approvals described in Schedule 3 attached hereto are, in all material respects, an accurate and complete list of all presently effective building permits, certificates of occupancy, and other certificates, permits, licenses and approvals relating to the design, construction, ownership, occupancy, use, management, operation, maintenance or repair of the Real Property. Seller has good title to the Leases, the Contracts and the Approvals, free and clear of all liens, encumbrances, security interests and adverse claims of any kind or nature whatsoever except in connection with the Loan. All of the copies of the documents delivered to Buyer pursuant to Section 7.1 above are, in all material respects, accurate and complete copies of all originals of the documents described in Section 7.1 above and Seller has no actual knowledge that any contain any misstatements or omissions of fact that would make them materially misleading. With respect to only those materials delivered to Buyer pursuant to Section 7.1 which were created by Seller, such materials are true, correct and complete in all material respects. With respect to documents delivered to Buyer pursuant to Section 7.1 above that were prepared by third parties, Seller has not and does not adopt or ratify the findings of third parties who prepared same, does not represent that they are accurate in all respects, and does not warrant or represent that they can or should be relied upon by Buyer in making its investment decisions concerning the Property.

8.1.4 All information concerning the Leases is accurate and complete, as indicated on the rent roll, as same may be updated from time to time. The Leases are in full force and effect and rent is accruing thereunder as indicated on the rent roll. To Seller’s knowledge, the Leases have not been amended or modified except as disclosed in writing to Buyer; no monthly rent has been paid more than one (1) month in advance (except as otherwise expressly permitted or required pursuant to the terms of the Lease); and no security deposit or prepaid rent has been paid except as otherwise disclosed in writing to Buyer. To Seller’s knowledge, no tenant under the Leases is entitled to interest on any security deposit. To Seller’s knowledge, other than routine maintenance and work order requests, all improvements and construction required to be performed by the landlord under the Leases have been completed. To Seller’s knowledge and except as disclosed in writing to Buyer, there is no existing breach or default by the landlord or by any tenant under the Leases and the tenants have no defenses, claims or demands against the landlord, under the Leases or otherwise, which can be offset against rents or other charges due or to become due under the Leases. Except as indicated on the rent roll, to Seller’s knowledge, no money is owed to any tenant for improvements or otherwise under the Leases and no improvement, moving, relocation or other payment or credit of any kind is presently owed, or will or could become due and payable, to any tenant under the Leases. Except in connection with the Loan, Seller has not assigned, transferred, pledged or encumbered in any manner any of the Leases or any rents or other amount payable by any tenant thereunder.

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8.1.5 To Seller’s knowledge, Seller has received no written, oral or electronic notice, citation or other claim alleging any violation of any law, statute, rule, regulation, ordinance, covenant, condition or restriction applicable to Seller or the Real Property and the Approvals have been duly and validly issued, are in full force and effect, and, to Seller’s knowledge, are all of the certificates, permits, licenses and approvals that are required by law to own, operate, use and occupy the Real Property as it is presently owned, operated, used and occupied. To Seller’s knowledge, Seller has fully performed, satisfied and discharged all of the obligations, requirements and conditions imposed on the Real Property by the Approvals.

8.1.6 To Seller’s knowledge, no Hazardous Substances are present in, on or under the Real Property or any nearby real property which could migrate to the Real Property, and, to Seller’s knowledge, there is no present Release or threatened Release of any Hazardous Substances in, on or under the Real Property. To Seller’s knowledge, Seller has never used the Real Property or any part thereof, and has never permitted any person to use the Real Property or any part thereof, for the production, processing, manufacture, generation, treatment, handling, storage or disposal of Hazardous Substances. To Seller’s knowledge, no underground storage tanks of any kind are located in the Real Property. To Seller’s knowledge, the Real Property and every part thereof, and all operations and activities therein and thereon and the use and occupancy thereof, comply with all applicable Environmental Laws. To Seller’s knowledge, neither Seller nor any person using or occupying the Real Property or any part thereof is violating any Environmental Laws. To Seller’s knowledge, Seller has all permits, licenses and approvals (which are included in the Approvals) required by all applicable Environmental Laws for the use and occupancy of, and all operations and activities in, the Real Property, Seller is in material compliance with all such permits, licenses and approvals, and all such permits, licenses and approvals were duly issued and are in full force and effect. Except as set forth in any environmental assessment reports in Seller’s possession or available to Seller and delivered to Buyer or as otherwise disclosed in writing to Buyer, to Seller’s knowledge no written, oral or electronic claim, demand, action or proceeding of any kind relating to any past or present Release or threatened Release of any Hazardous Substances in, on or under the Real Property or any past or present violation of any Environmental Laws at the Real Property has been made or commenced, or is pending, or is being threatened or contemplated by any person.

8.1.7 There is no litigation, arbitration or other legal or administrative suit, action, proceeding or investigation of any kind pending or, or to Seller’s knowledge, threatened or being contemplated against or involving Seller relating to the Real Property, or any part thereof and, to Seller’s knowledge, there is no valid basis for any such litigation, arbitration or other legal or administrative suit, action, proceeding or investigation which would adversely affect the Property. To Seller’s knowledge, there is no land use or zoning action, or special assessment action, or condemnation or eminent domain action pending with respect to the Real Property.

8.1.8 To Seller’s knowledge, Seller has received no written notice that any water, sewer, gas, electric, steam, telephone and drainage facilities or other utilities presently available to the Property are subject to termination, restriction, or moratorium.

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8.1.9 Seller is not a “foreign person” as defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and the Income Tax Regulations thereunder.

8.1.10 No withholding of tax will be required with respect to the sale of the Property by Seller.

8.1.11 Seller is a single purpose entity, has not made a general assignment for the benefit of its creditors, and is not a party to any bankruptcy proceedings.

8.1.12 Except for CB Richard Ellis (“Seller’s Broker”), Seller has not dealt with any investment adviser, real estate broker or finder, or incurred any liability for any commission or fee to any investment adviser, real estate broker or finder, in connection with the sale of the Property to Buyer or this Agreement.

8.1.13 [Intentionally omitted.]

8.1.14 Neither Seller nor any person, group, entity or nation that Seller is acting, directly or indirectly for, or on behalf of, is named by any Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or is otherwise a banned or blocked person, group, entity, or nation pursuant to any law that is enforced or administered by the Office of Foreign Assets Control, and Seller is not engaging in the transaction contemplated herein, directly or indirectly, on behalf of, or instigating or facilitating the transaction contemplated herein, directly or indirectly, on behalf of, any such person, group, entity or nation. Seller is not engaging in the transaction contemplated herein, directly or indirectly, in violation of any laws relating to drug trafficking, money laundering or predicate crimes to money laundering.

8.1.15 Seller has not sold, transferred, conveyed, or entered into any agreement regarding water or water rights relating to the Property, except as otherwise expressly set forth in the Title Commitment.

8.1.16 [Intentionally omitted.]

8.2 Buyer’s Representations and Warranties. The representations, warranties, and covenants of Buyer in this Section 8.2 are a material inducement for Seller to enter into this Agreement. Seller would not sell the Property to Buyer without such representations, warranties, and covenants of Buyer. Such representations, warranties, and covenants shall survive the Closing. Buyer represents and warrants to Seller as of the date of this Agreement and as of the Closing as follows:

8.2.1 Buyer is a corporation, duly organized, validly existing, and in good standing under the laws of the State of California.

8.2.2 Buyer has all requisite power and authority to execute and deliver this Agreement and to carry out its obligations hereunder and the transactions contemplated

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hereby. This Agreement has been, and the documents contemplated hereby will be, duly executed and delivered by Buyer and constitute its legal, valid, and binding obligation enforceable against it in accordance with its terms.

8.2.3 None of the funds of Buyer have been or will be derived from any unlawful activity with the result that the investment of direct or indirect equity owners in Buyer is prohibited by law or that the transaction contemplated herein or this Agreement is or will be in violation of law.

8.2.4 Except for Seller’s Broker, whose commission or fee shall be paid by Seller pursuant to a separate written agreement between Seller and Seller’s Broker, Buyer has not dealt with any investment adviser, real estate broker or finder, or incurred any liability for any commission or fee to any investment adviser, real estate broker or finder, in connection with the purchase of the Property from Seller or this Agreement.

8.2.5 Buyer is a sophisticated buyer of real estate that specializes in the investment in and ownership and operation of income producing commercial real estate in geographically diverse markets. As such, it is a sophisticated real estate owner, investor, and manager with particular experience in the acquisition, ownership, and operations of properties similar to the Property. Buyer further warrants and represents that it has the ability through its own employees, or through agents, independent contractors, consultants or other experts with whom it has a relationship, to evaluate fully the investment characteristics of the Property and to assess fully all issues pertaining to title to the Property, the assumption by Buyer of the Leases and the Contracts, the value of the Property, the ability of Buyer to obtain financing, the physical and environmental condition of the Property, and the compliance of the Property and the operation thereof with all applicable laws, rules, and regulations of any and all governmental agencies having jurisdiction with respect thereto, and the past and future economic performance of the Property. Accordingly, Buyer warrants and represents that except for the express warranties, representations and covenants contained in this Agreement or in the Closing Documents executed and delivered by Seller at Closing, Buyer has not relied and will not rely upon any warranty, representation, statement of fact, or other information made by or furnished on behalf of Seller or any of its employees, affiliates, agents, Seller’s property manager, investment advisor, consultants, contractors, or others, but is relying solely upon its own investigations, assessments, and evaluations, and those of its own employees, agents, independent contractors, consultants, investment advisors and other experts with whom it is dealing in connection with the transactions contemplated by this Agreement.

9. COVENANTS.

9.1 Seller. Seller covenants and agrees with Buyer as follows:

9.1.1 Between the date of this Agreement and the Closing Date, Seller shall not execute any additional lease affecting the Real Property or amend, modify, renew, extend or terminate any of the Leases, the Contracts or the Approvals in any respect without the prior approval of Buyer, which approval may be withheld in the sole and absolute discretion of Buyer; provided, however, that any Leases which are either executed or renewed on a month-to-month basis and which are consistent with the current leasing practices of Seller, including,

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without limitation, current rental rates, shall be deemed to be automatically approved by Buyer. Between the date of this Agreement and the Closing Date, Seller shall manage, operate, maintain and repair the Real Property and the Personal Property in the ordinary course of business in accordance with the manner in which Seller has operated and maintained the Property prior to the date of this Agreement. Seller shall not (i) create or agree to any easements, liens, mortgages, encumbrances or other interests that would affect the Property or Seller’s ability to comply with this Agreement; (ii) initiate or consent to, approve or otherwise take any action with respect to zoning or any other governmental rules or regulations presently applicable to all or any part of the Real Property; (iii) fail to pay when due and payable all taxes and other public charges assessed against the Real Property or Seller; (iv) fail to keep the Loan current and free from default; or (v) fail to pay in a timely fashion all proper bills for labor or services for work performed for or on behalf of Seller with respect to the Property. Between the date of this Agreement and the Closing Date, Seller shall keep in force property insurance covering all buildings, structures, improvements, machinery, fixtures and equipment included in the Real Property in accordance with Seller’s existing insurance program, shall comply with the Approvals and all covenants, conditions, restrictions, laws, statutes, rules, regulations and ordinances applicable to the Real Property or the Personal Property, shall use commercially reasonable efforts to keep the Leases, the Contracts and the Approvals in force, promptly give Buyer copies of all material notices received by Seller asserting any breach or default under the Leases or the Contracts or any violation of the Approvals or any covenants, conditions, restrictions, laws, statutes, rules, regulations or ordinances applicable to the Real Property or the Personal Property, and shall perform when due all of Seller’s obligations under the Leases, the Contracts and the Approvals in accordance with the Leases, the Contracts and the Approvals and all applicable laws in all material respects.

9.1.2 Between the date of this Agreement and the Closing Date, Seller shall not use, produce, process, manufacture, generate, treat, handle, store or dispose of any Hazardous Substances in violation of applicable laws in, on or under the Real Property, or use the Real Property for any such purposes, or Release any Hazardous Substances in violation of applicable laws into any air, soil, surface water or groundwater comprising the Real Property, and shall use commercially reasonable efforts to prevent third parties using or occupying the Real Property or any part thereof to do any of the foregoing. Between the date of this Agreement and the Closing Date, Seller shall comply with all Environmental Laws applicable to the Real Property, or the use or occupancy thereof, or any operations or activities therein or thereon, and shall not knowingly permit any persons using or occupying the Real Property thereof to fail to comply with Environmental Laws applicable thereto. Between the date of this Agreement and the Closing Date, and promptly after Seller obtains any information indicating that any Hazardous Substances may be present or any Release or threatened Release of Hazardous Substances may have occurred in, on or under the Real Property or that any violation of any Environmental Laws may have occurred at the Real Property, Seller shall give written notice thereof to Buyer. Seller shall promptly furnish to Buyer copies of all written communications given or received by Seller that any Release or threatened Release of any Hazardous Substances or any violation of any Environmental Laws has actually or allegedly occurred in, on or under the Real Property.

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9.1.3 All representations and warranties made by Seller in Section 8.1 above shall survive the Closing. Seller shall use commercially reasonable efforts, in good faith and with diligence, to cause all of the representations and warranties made by Seller in Section 8.1 above to be true and correct on and as of the Closing Date. Seller shall indemnify and defend Buyer against and hold Buyer harmless from all claims, demands, liabilities, losses, damages, costs and expenses, including reasonable attorneys’ fees and disbursements, that may be suffered or incurred by Buyer if any representation or warranty made by Seller in Section 8.1 above was untrue or incorrect in any material respect when made or that may be caused by any breach by Seller of any such representation or warranty.

9.1.4 Seller shall indemnify and defend Buyer against and hold Buyer harmless from all claims, demands, liabilities, losses, damages, costs and expenses, including reasonable attorneys’ fees and disbursements, arising from or based on any failure by Seller to perform all obligations of Seller in accordance with the Leases, the Contracts or the Approvals before the Closing Date, or any breach, default or violation by Seller (or any event by Seller or condition which, after notice or the passage of time, or both, would constitute a breach, default or violation by Seller) under the Leases, the Contracts or the Approvals that occurs before the Closing Date, or any condition, event or circumstance relating to the Real Property that existed or occurred before the Closing Date, or any third party claim for personal injury or property damage occurring in, on or about the Real Property before the Closing Date.

9.1.5 [Intentionally omitted.]

9.1.6 Between the date of this Agreement and the Closing Date, Seller shall not in any manner sell, convey, assign, transfer, encumber or otherwise dispose of the Real Property, the Leases, the Personal Property, the Contracts or the Approvals, or any part thereof or interest therein provided, however, that subject to prior written notice to, and prior written approval by, Buyer, Seller may sell, convey, assign, transfer, encumber or otherwise dispose of Personal Property or Contracts in the ordinary course of its business.

9.1.7 Seller shall pay all commissions, fees and expenses due to Seller’s Broker in respect of the sale of the Property to Buyer or this Agreement. Seller hereby agrees to indemnify and hold Buyer harmless from and against any and all claims for brokerage or finder’s fees or other similar commissions or compensation made by any and all other brokers or finders claiming to have dealt with Seller in connection with this Agreement or the consummation of the transaction contemplated hereby.

9.1.8 Seller shall not dissolve its existing entity and shall remain validly existing and in good standing under the laws of the State of Delaware during the period commencing on the date of this Agreement and ending on December 31, 2012; provided, however, that if Buyer gives Seller written notice of a claim under this Agreement on or before the expiration of such period, such covenant shall extend until the later to occur of (a) December 31, 2013, or (b) the date such claim has been resolved.

9.1.9 Seller shall cooperate with Buyer in connection with obtaining Lender’s consent to the Assumption; provided, however, that Buyer shall be responsible for paying all costs, fees, and expenses imposed by Lender in connection with the Assumption.

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The indemnification obligations of Seller set forth in this Section 9.1 shall survive the Closing or the termination of this Agreement for any reason.

9.2 Buyer. Buyer covenants and agrees with Seller as follows:

9.2.1 All representations and warranties made by Buyer in Section 8.2 above shall survive the Closing. Buyer shall use commercially reasonable efforts, in good faith and with diligence, to cause all of the representations and warranties made by Buyer in Section 8.2 above to be true and correct on and as of the Closing Date. Buyer shall indemnify and defend Seller against and hold Seller harmless from all claims, demands, liabilities, losses, damages, costs and expenses, including reasonable attorneys’ fees and disbursements, that may be suffered or incurred by Seller if any representation or warranty made by Buyer in Section 8.2 above was untrue or incorrect in any material respect when made or that may be caused by any breach by Buyer of any such representation or warranty.

9.2.2 Subject to Seller’s representations, warranties and covenants set forth in Section 8.1 above above, Buyer shall indemnify and defend Seller against and hold Seller harmless from all claims, demands, liabilities, losses, damages, costs and expenses, including reasonable attorneys’ fees and disbursements, arising from or based on any failure by Buyer to perform all obligations of Buyer in accordance with the Leases, the Contracts or the Approvals arising or accruing on or after the Closing Date, or any breach, default or violation by Buyer (or any event by Buyer or condition which, after notice or the passage of time, or both, would constitute a breach, default or violation by Buyer) under the Leases, the Contracts or the Approvals that occurs on or after the Closing Date, or any condition, event or circumstance relating to the Real Property that occurs on or after the Closing Date, or any third party claim for personal injury or property damage occurring in, on or about the Real Property on or after the Closing Date.

9.2.3 Except with respect to Seller’s Broker, Buyer hereby agrees to indemnify and hold Seller harmless from and against any and all claims for brokerage or finder’s fees or other similar commissions or compensation made by any and all other brokers or finders claiming to have dealt with Buyer in connection with this Agreement or the consummation of the transaction contemplated hereby.

The indemnification obligations of Buyer set forth in this Section 9.12 shall survive the Closing or the termination of this Agreement for any reason.

10. ADJUSTMENTS AND PRORATIONS.

10.1 Generally. All taxes (including personal property taxes on the Personal Property), including, without limitation, real estate taxes and personal property taxes, collected rents, laundry income, parking income, furniture rental, charges for utilities, including water, sewer, gas, and fuel oil, and for utility services, maintenance services, maintenance and service contracts, all operating costs and expenses, interest on the Loan, payments under the Contracts which Buyer assumes at Closing, and all other income, costs, and charges of every kind which in any manner relate to the operation of the Property (but not including insurance premiums) shall be prorated to the Date of Closing. If the amount of said taxes or assessments is not known or

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cannot be reasonably estimated on the Date of Closing, they shall be apportioned on the basis of the amounts for the preceding year, with a reapportionment as soon as the new amounts can be ascertained. Any additional taxes relating to the year of Closing or future years arising out of a change in the use of the Real Property by Buyer shall be assumed by Buyer effective as of Closing and paid by Buyer when due and payable, and Buyer shall indemnify, defend, and hold Seller harmless for, from, and against any and all such taxes, which indemnification obligation shall survive the Closing. Any deposits on utilities paid by Seller shall be returned to Seller. The foregoing provisions of this Section 10.1 shall not apply to any taxes, assessments, or other payments which are directly payable by tenants under their leases or reimbursable by such tenants to the owner of the Property, as landlord, under their leases. On the Date of Closing, Seller shall deliver to Buyer all inventories of supplies on hand at the Property owned by Seller, if any, at no additional cost to Buyer. The amount of any reserves, impositions, impounds, and escrowed funds (replacement, capital improvements, taxes, insurance and other) held by Lender, the beneficial ownership of which is assigned to Buyer at Closing in the Assumption Documents, will be credited to Seller.

10.2 Rental Income. Rental income from the Property (including, without limitation, laundry income, late fees and charges, and all other payments received from tenants under or in connection with the Leases) shall be prorated as of the Closing Date. Non-delinquent rents shall be prorated to the Closing Date. Rents delinquent as of the Closing Date, but collected later, shall be prorated as of the Closing Date when collected. Rents collected after the Closing Date from tenants whose rental was delinquent at the Closing Date shall be deemed to apply first to the current rental due at the time of payment and second to rentals which were delinquent at the Closing Date. Rents collected after the Closing Date to which Seller is entitled shall be promptly paid to Seller. For a period of sixty (60) days after the Closing Date, Buyer shall use reasonable efforts to collect all rents which are delinquent as of the Closing Date with no obligation to incur any expenses or commence litigation to collect such rents. Commencing as of sixty-one (61) days after the Closing Date, Seller may use reasonable efforts, including litigation, to collect any rents delinquent as of the Closing Date which are still uncollected; provided, however, in exercising its remedies against tenants as outlined in this Section, Seller shall not evict any tenant of the Property or otherwise unreasonably interfere with Buyer’s operation of the Property. With respect to security deposits, if any, made by tenants at the Property, Buyer shall receive credit therefor at Closing.

10.3 Proration Period. If any of the items subject to proration hereunder cannot be prorated at the Closing because the information necessary to compute such proration is unavailable, or if any errors or omissions in computing prorations at the Close of Escrow are discovered subsequent to the Close of Escrow, then such items shall be reapportioned and such errors and omissions corrected as soon as practicable after the Close of Escrow and the proper party reimbursed; provided, however, that all final prorations shall be made within one hundred twenty (120) days after Closing, except post-closing adjustments for Real Property and Personal Property taxes which shall be made within ten (10) days after written demand therefor is made by either party hereto to the other party with a copy of the actual tax bills attached.

10.4 Rent Ready Adjustments. Not more than five (5) days prior to Close of Escrow, a representative of Buyer and Seller shall conduct an onsite walk-through of the then-

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unoccupied rental units on the Property to determine whether such unoccupied rental units are in “rent ready” condition. With respect to any rental unit that is vacated on or before five (5) days prior to Close of Escrow, Seller shall, at Seller’s option, either (i) make such unoccupied rental unit into a “rent ready” condition, or (ii) provide Buyer with a credit against the Purchase Price due at Closing, which credit shall be equal to the amount (to be reasonably estimated by Buyer), if any, reasonably required to put the unoccupied rental units in “rent-ready” condition; provided, however, that such credit shall not exceed Seven Hundred Fifty Dollars ($750.00) per unoccupied rental unit for a maximum of fifty (50) units. With respect to any rental unit that is vacated later than five (5) days prior to Close of Escrow, Seller shall have no responsibility or liability to put such unoccupied rental unit into a “rent ready” condition, and Seller shall not be required to compensate Buyer if such unit is not “rent ready” condition as of Close of Escrow. As used herein, “rent ready condition” means Seller’s practice and procedures, as of the date of this Agreement, for placing units in “rent ready” condition.

11. CLOSING DOCUMENTS

11.1 Seller’s Deliveries. Conditioned upon performance by Buyer hereunder, Seller shall execute and deliver to Escrow Holder prior to Closing the following documents:

11.1.1 Deed. A special warranty deed with respect to the Real Property in the form of attached Exhibit “D” (the “Deed”), subject only to the Permitted Exceptions;

11.1.2 Assignment and Assumption of Leases, Contracts and Approvals. An assignment of all of Seller’s right, title and interest in and to the Leases, Contracts and Approvals in the form of attached Exhibit “E” (“General Assignment”);

11.1.3 Bill of Sale. A bill of sale and general assignment in the form of attached Exhibit “F”, assigning and transferring to Buyer all of the right, title, and interest of Seller in and to the Personal Property and the Intangible Property;

11.1.4 Non-Foreign Certificate. A certification that Seller is not a non-resident alien (a foreign corporation, partnership, trust, or estate as defined in the Internal Revenue Code and Treasury Regulations promulgated thereunder), in the form of attached Exhibit “G”; and

11.1.5 Tenant Notices. Notices to the tenants under all Leases of the occurrence of the sale of the Property in the form of attached Exhibit “H”, as may be modified at the reasonable request of Buyer to conform to the requirements of applicable law.

11.1.6 Assignment and Assumption of Loan. The Assumption Documents.

11.2 Buyer’s Deliveries. Conditioned upon performance by Seller hereunder, Buyer shall pay to Seller the full amount of the Purchase Price in the manner described in Section 3 and shall execute and deliver to Escrow Holder prior to Closing the General Assignment, the Tenant Notices, and the Assumption Documents. Buyer shall send fully executed Tenant Notices to each Tenant within ten (10) days after Closing, which obligation shall expressly survive Closing.

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11.3 Other Closing Documents. Each party shall deliver to the other party or Escrow Holder such duly executed and acknowledged or verified certificates, affidavits, and other usual closing documents respecting the power and authority to perform the obligations hereunder and as to the due authorization thereof by the appropriate corporate, partnership, or other representatives acting for it, as counsel for the other party or Escrow Holder may reasonably request. Each party shall deliver any additional documents that the other party or Escrow Holder may reasonably require for the proper consummation of the transaction contemplated by this Agreement (provided, however, that no such additional document shall expand any obligation, covenant, representation or warranty of such party or result in any new or additional obligation, covenant, representation or warranty of such party under this Agreement beyond those expressly set forth in this Agreement).

11.4 Closing Documents. All documents to be delivered to Escrow Holder pursuant to this Section 11 shall hereinafter be referred to as “Closing Documents”.

12. COSTS. Seller shall pay the cost of the documentary stamp tax for recordation of the Deed and the base premium of a standard ALTA Owner’s Policy of Title Insurance and any endorsements to the title policy (to the extent that such endorsements are necessary to cure any Title Objections). Buyer shall pay all costs associated with the Assumption of the Loan, including the mortgage tax for recordation of the Assumption Documents, if any; the incremental cost for extended ALTA title insurance coverage, if desired, and the cost of any endorsements to the title policy (if requested by Buyer), including the costs to modify the survey exception, other than those necessary to cure any Title Objections; the fees, costs and premiums for any endorsements to the loan policy of title insurance, or for a new loan policy of title insurance if so required by Lender; recording fees for the Deed and any other instruments required to be recorded at Closing (other than the documentary stamp tax for recordation of the Deed); any transfer or assignment fees on transferable Approvals and Contracts; and the cost of any updated survey, if desired. Seller and Buyer shall each pay one-half (1/2) of Escrow Holder’s escrow fee (excluding charges assessed by Escrow Holder for special services, which shall be paid by the party requesting or using such special services). Each party shall pay its own attorney’s fees.

13. CASUALTY OR CONDEMNATION. If, before the Closing Date, the improvements on the Real Property are damaged by any casualty and such damage is “material,” as hereinafter defined, Buyer shall have the right, by giving notice to Seller within thirty (30) days after Seller gives written notice of the cost to repair the casualty to Buyer, to terminate this Agreement, in which event the Deposit, less the Independent Contract Consideration, shall be returned to Buyer, and this Agreement shall be null and void and of no further force and effect whatsoever, except for the terms of this Agreement which expressly survive termination. If Buyer does not elect to terminate this Agreement within thirty (30) days after Seller sends Buyer written notice of the cost to repair the material damage, then Buyer shall be deemed to have elected to proceed with Closing, in which event upon the mutual agreement of the parties Seller will either (i) perform any necessary repairs at Seller’s expense, or (ii) assign to Buyer all of Seller’s right, title and interest to any claims and proceeds Seller may have with respect to any

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property insurance policies relating to the portion of the improvements in question; provided, however, if the parties are unable to reach agreement within ten (10) days after the expiration of the aforementioned thirty (30)-day period, the parties conclusively will be deemed to have elected to proceed pursuant to clause (ii) above. For purposes of this Section 13, “material” damage refers to loss or damage to the improvements or any portion thereof such that the cost of repairing or restoring the portion of the improvements in question to a condition substantially identical to that prior to the event of damage would be, in the opinion of a contractor selected by Seller and reasonably approved by Buyer, equal to or greater than $200,000.00. If Buyer does not give notice to Seller of Buyer’s reasons for disapproving a contractor within three (3) business days after receipt of notice of the proposed contractor, Buyer shall be deemed to have approved the contractor selected by Seller. If, before the Closing Date, the improvements on the Real Property are damaged by any casualty, but such damage is not “material,” then this Agreement shall remain in full force and effect, provided that upon the mutual agreement of the parties Seller will either (.1) perform any necessary repairs at Seller’s expense, or (.2) assign to Buyer all of Seller’s right, title and interest to any claims and proceeds Seller may have with respect to any property insurance policies relating to the improvements in question; provided, however, that if the parties are unable to reach mutual agreement within ten (10) days after Seller gives Buyer notice of such casualty, the parties conclusively will be deemed to have elected to proceed pursuant to clause (.2) above. If the parties elect to assign a property insurance claim to Buyer, the Purchase Price shall be reduced by an amount equal to the uninsured damage, including the deductible under Seller’s insurance policy. Seller shall give notice to Buyer promptly after the occurrence of any damage to the improvements on the Real Property by any casualty. If necessary, the Closing Date shall be postponed until Seller has given the notice to Buyer required by this Section 13 and the initial period of thirty (30) days described in this Section 13 for Buyer to elect to terminate this Agreement has expired. In the event that Seller and Buyer agree for Seller to perform repairs upon the improvements, Seller shall use its commercially reasonable efforts to complete such repairs promptly and the Closing Date shall be extended a reasonable time in order to allow for the completion of such repairs.

If, before the Closing Date, action is initiated to take all or any portion of the Real Property by eminent domain proceedings or by deed in lieu thereof, Seller shall notify Buyer thereof in writing. Thereafter, Buyer may either (i) terminate this Agreement by delivering written notice to Seller within thirty (30) days after receipt of Seller’s notice, in which event the Deposit, less the Independent Contract Consideration, shall be returned to Buyer, and this Agreement shall be null and void and of no further force and effect whatsoever, except for the terms of this Agreement which expressly survive termination, or (ii) consummate the Closing, in which event Seller shall assign any award payable by the condemning authority on account thereof to Buyer and the transactions contemplated hereunder will be consummated without reduction in the Purchase Price. If necessary, the Closing Date shall be postponed until Seller has given the notice to Buyer required by this paragraph and the initial period of thirty (30) days described in this paragraph for Buyer to elect to terminate this Agreement has expired.

14. ATTORNEYS’ FEES. In any action to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys’ fees and costs.

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15. ASSIGNMENT. Buyer shall have the right, by giving notice to Seller before the Closing Date, to assign this Agreement or to have Seller convey, assign and transfer the Property at the Closing in accordance with this Agreement to any person or entity designated by Buyer in such notice, provided the assignee must assume all obligations of Buyer hereunder pursuant to a written assignment and assumption agreement and a copy of the fully executed written assignment and assumption agreement must be delivered to Seller at least two (2) business days prior to Closing. Notwithstanding any such assignment, Buyer will remain primarily liable for performance of Buyer’s obligations hereunder.

16. WAIVER. No waiver of any breach of any agreement or provision contained herein shall be deemed a waiver of any preceding or succeeding breach of any other agreement or provision herein contained. No extension of time for the performance of any obligation or act shall be deemed an extension of time for the performance of any other obligation or act.

17. GOVERNING LAW; TIME. This Agreement shall be construed under the laws of the State of Oklahoma. As used in this Agreement, the term “business days” shall mean all days other than Saturdays, Sundays, national holidays, and holidays observed in California or in the state in which the Real Property is located, or both. All periods of time referred to in this Agreement shall include all business and non-business days unless such period of time specifies business days; provided, however, that if the date or last date to perform any act or give a notice with respect to the Agreement shall fall on a day that is not a business day, such act or notice may be timely performed or given on the next succeeding business day. Time is of the essence in this Agreement.

18. NOTICES. All notices required or permitted to be given hereunder shall be in writing and sent by overnight delivery service (such as Federal Express), in which case notice shall be deemed given on the day after the date sent, or by personal delivery, in which case notice shall be deemed given on the date received, or by certified mail, in which case notice shall be deemed given three (3) days after the date sent, or by fax (with copy by overnight delivery service), in which case notice shall be deemed given on the date sent, to the appropriate address set forth below or at such other place or places as either Buyer or Seller may, from time to time, respectively, designate in a written notice given to the other in the manner described above.

To Seller:	WC/TP Spring Creek, LLC 8111 Preston Rd., Suite 320 Dallas, TX 75225 Attn: Jack Wensinger, Manager Fax No.: (214) 373-3804 Telephone No.: (214) 373-3193 Email: jack@willmax.net
With a copy to:	Thackeray Partners 5207 McKinney Avenue, Suite 200 Dallas, Texas 75205 Attn: Mr. Ryan Thornton Fax No.: (214) 360-7831 Telephone No.: (214) 360-7861 Email: rt@thackeraypartners.com

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	and to: Terry Letteer, Esq. Whaley, Letteer & Mock, P.C. 13760 Noel Road, Suite 840 Dallas, Texas 75240 Fax No.: (972) 488-2899 Telephone No.: (972) 488-9899 Email: tletteer@wlmattys.com
To Buyer:	Steadfast Asset Holdings, Inc. 18100 Von Karman, Suite 500 Irvine, California 92612 Attn: Ana Marie del Rio, Esq. Fax No.: (949) 852-0143 Telephone No.: (949) 852-0700
With a copy to:	Garrett DeFrenza Stiepel LLP 695 Town Center Drive, Suite 500 Costa Mesa, California 92626 Attn: Marcello F. De Frenza, Esq. Fax No.: (714) 384-4320 Telephone No.: (714) 384-4300 (On or before March 9, 2012) Garrett DeFrenza Stiepel LLP 3200 Bristol Street, Suite 850 Costa Mesa, California 92626 Attn: Marcello F. De Frenza, Esq. Fax No.: (714) 384-4320 Telephone No.: (714) 384-4300 (After March 9, 2012)

19. ENTIRE AGREEMENT. This instrument, executed in duplicate, sets forth the entire agreement between the parties and may not be canceled, modified, or amended except by a written instrument executed by both Seller and Buyer.

20. COUNTERPARTS; COPIES. This Agreement may be executed and delivered in any number of counterparts, each of which so executed and delivered shall be deemed to be an original and all of which shall constitute one and the same instrument. Electronic, photocopy and facsimile copies of signatures may be used in place and stead of original signatures with the same force and effect as originals.

21. AUTHORITY. The parties hereto represent and warrant that the individuals executing this Agreement on behalf of each party hereto have the capacity, with full power and authority, to bind such party to the terms and provisions of this Agreement.

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22. RECORD ACCESS AND RETENTION.

22.1 Seller shall provide to Buyer (at Buyer’s expense) copies of, or shall provide Buyer reasonable access to, such factual information as may be reasonably requested by Buyer, and in the possession or control of Seller, or its property manager or accountants, to enable Buyer’s auditor to conduct an audit, in accordance with Rule 3-14 of Securities and Exchange Commission Regulation S-X, of the income statements of the Property for the year to date of the year in which Closing occurs plus one (1) prior calendar year (provided, however, such audit shall not include an audit of management fees or interest expenses attributable to the Seller). Buyer shall be responsible for all out-of-pocket costs associated with this audit. Seller shall reasonably cooperate (at no cost to Seller) with Buyer’s auditor in the conduct of such audit. In addition, Seller agrees to provide to Buyer or any affiliate of Buyer, if requested by such auditor, historical financial statements for the Property, including, without limitation, income and balance sheet data for the Property, whether required before or after the Closing. Without limiting the foregoing and at no cost to Seller, (i) Buyer or its designated independent or other auditor may audit Seller’s operating statements of the Property, at Buyer’s expense, and Seller shall provide such documentation as Buyer or its auditor may reasonably request in order to complete such audit, and (ii) Seller shall furnish to Buyer such financial and other information as may be reasonably required by Buyer or any affiliate of Buyer to make any required filings with the Securities and Exchange Commission or other governmental authority. Seller’s obligation to maintain its records for use under this Section 22.1 shall be an on-going condition to Closing for Buyer’s benefit until Close of Escrow. Seller shall maintain its records for use under this Section 22.1 for a period of not less than one (1) year after the Closing Date. The provisions of this Section 22.1 shall survive Closing.

23. CONTRACT CONSIDERATION. Buyer shall deliver to Escrow Holder, in addition to and as part of Buyer’s delivery to Escrow Holder of the Initial Deposit, the sum of ONE HUNDRED AND 00/100 DOLLARS ($100.00) (“Independent Contract Consideration”). Escrow Holder shall deliver the Independent Contract Consideration to Seller immediately following receipt from Buyer without the need for further instruction from the parties. The parties have bargained for and expressly agree that the rights and obligations of each party contained in this Agreement, including, without limitation, Buyer’s obligations to deliver the Independent Contract Consideration to Seller and the Initial Deposit to Escrow Holder, constitute sufficient consideration for the other party’s execution and delivery of this Agreement, including without limitation, Buyer’s exclusive right to inspect and purchase the Property pursuant to this Agreement and all contingencies and conditions of Closing for the benefit of Buyer set forth in this Agreement.

24. CONFIDENTIALITY. Until Closing, Buyer and its representatives shall hold in strictest confidence all data and information obtained with respect to Seller, its business or the Property that is not otherwise available to the public, whether obtained before or after the execution and delivery of this Agreement, and shall not disclose the same to others; provided, however, that it is understood and agreed that Buyer may disclose such data and information to Buyer’s third party consultants, members, directors, officers, employees, legal counsel, accountants, investors and prospective lenders, to any public agency or governmental regulatory body, or as otherwise required by law or judicial order. In the event this Agreement is terminated

25

or Buyer fails to perform hereunder, Buyer shall promptly return to Seller or destroy any statements, documents, schedules, exhibits or other written information obtained from Seller in connection with this Agreement or the transaction contemplated herein. This Section 24 shall survive Closing or earlier termination of this Agreement.

25. DISCHARGE OF OBLIGATIONS. The acceptance of the Deed by Buyer shall be deemed to be a full performance and discharge of every representation and warranty made by Seller herein and every covenant on the part of Seller to be performed pursuant to the provisions of this Agreement, except those which are herein specifically stated, or by their nature are intended, to survive Closing. The covenants of this Agreement that cannot be performed before termination of this Agreement or before Closing will survive termination of this Agreement or Closing, and the legal doctrine of merger will not apply to these matters. Notwithstanding the foregoing, nothing in this Section 25 shall be deemed to limit Buyer’s remedies with respect to any breach of any representation, warranty or covenant made by Seller herein as of the Closing to the extent that such breach is not actually known to Buyer as of the Closing Date.

26. EXCULPATION OF SELLER AND RELATED PARTIES. Notwithstanding anything to the contrary contained in this Agreement or in any exhibits attached hereto or in any documents, instruments, or agreements executed and delivered in connection herewith (collectively, including this Agreement, said exhibits and any such document, instrument, and agreement, the “Purchase Documents”), it is expressly understood and agreed by and between the parties hereto that: (.1) the recourse of Buyer or its successors or assigns against Seller with respect to any alleged breach by or on the part of Seller of any representation, warranty, covenant, undertaking, indemnity or agreement contained in any of the Purchase Documents (collectively, “Seller’s Undertakings”) shall not survive Closing beyond December 31, 2012; and (.2) no personal liability or personal responsibility of any sort with respect to any of Seller’s Undertakings or any alleged breach thereof is assumed by, or shall at any time be asserted or enforceable against, Seller’s affiliates, or against any of Seller’s or its affiliates’ respective shareholders, directors, officers, managers, employees, agents, advisors, constituent partners, members, beneficiaries, trustees or representatives, except to the extent that any proceeds from this transaction were distributed or paid to the same. Notwithstanding anything contained herein to the contrary, after Closing, the maximum aggregate liability of Seller for Seller’s breaches of Seller’s Undertakings shall not exceed the aggregate sum of $500,000.00.

[SIGNATURES APPEAR ON FOLLOWING PAGES]

26

Seller Signature Page for Purchase and Sale Agreement and Joint Escrow Instructions

dated December 9, 2011 between WC/TP Spring Creek, LLC

and Steadfast Asset Holdings, Inc.

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the day and year first above written.

SELLER:
WC/TP SPRING CREEK, LLC, a Delaware limited liability company
By:	WILLMAX SPRING CREEK LLC, a Texas limited liability company, its manager
	By:	/s/ John A.Wensinger
	Name:	John A. Wensinger
	Its:	Manager

STATE OF TEXAS	)
	)	ss.
COUNTY OF DALLAS	)

On December 12, 2011, before me, LAURA SAMFORD, a Notary Public personally appeared John A. Wensinger, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the entity upon behalf of which he acted, executed the instrument.

WITNESS my hand and official seal.
/s/ Laura Samford Notary Public

S-1

Buyer Signature Page for Purchase and Sale Agreement and Joint Escrow Instructions

dated December 9, 2011 between WC/TP Spring Creek, LLC

and Steadfast Asset Holdings, Inc.

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the day and year first above written.

BUYER:
STEADFAST ASSET HOLDINGS, INC., a California corporation
By:	/s/ Rodney F. Emery
Name:	Rodney F. Emery
Its:	President

STATE OF California	)
	)	ss.
COUNTY OF Orange	)

On December 12, 2011, before me, MONA SALAMA, a Notary Public personally appeared RODNEY F. EMERY, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

/s/ Mona Salama Notary Public (SEAL)

S-2

Escrow Officer Signature Page for Purchase and Sale Agreement and Joint Escrow

Instructions dated December 9, 2011 between WC/TP Spring Creek, LLC

and Steadfast Asset Holdings, Inc.

THE UNDERSIGNED HEREBY ACCEPTS THE FOREGOING PURCHASE AND SALE AGREEMENT AS OF DECEMBER 13 2011, AND AGREES TO ACT AS ESCROW HOLDER IN ACCORDANCE THEREWITH.

FIRST AMERICAN TITLE
By:	/s/ Kathleen Huntsman
	Kathleen Huntsman Escrow Officer

S-3

EXHIBIT “A”

Description of Real Property

A tract of land in the Southeast Quarter (SE/4) of the Southwest Quarter (SW/4) of Section Thirty–Six (36), Township Fourteen (14) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being more particularly described as follows:

COMMENCING at the Southwest corner of the SE/4 of the SW/4 of said Section 36;

THENCE North 89°39'15" East, along the South line of said SE/4 of the SW/4, a distance of 164.42 feet to a point, said point being the POINT OF BEGINNING;

THENCE North 89°39'15" East, along the said south line of said SE/4 of the SW/4 a distance of 1150.94 feet to a point (being the Southeast corner of said SE/4 of the SW/4);

THENCE North 00°20'24" West a distance of 706.36 feet to a point, said point being in the South line of Lot 2, Block 4, BRENTWOOD ADDITION;

THENCE South 89°39'41" West a distance of 95.51 feet to a point, said point being the Southwest corner of said Lot 2, Block 4;

THENCE North 12°54'26" West a distance of 78.60 feet to a point, said point being the Southeast corner of Lot 16 Block 6, BRENTWOOD 3RD ADDITION;

THENCE North 87°26'08" West a distance of 135.77 feet to a point;

THENCE South 45°27'41" West a distance of 255.00 feet to a point;

THENCE South 56°36'43" West a distance of 125.12 feet to a point, said point being the Southeast corner of Lot 8, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 63°16'39" West a distance of 260.45 feet to a point;

THENCE South 00°08'02" West a distance of 51.59 feet to a point;

THENCE South 58°03'08" West a distance of 211.82 feet to a point;

THENCE North 58°19'11" West a distance of 211.82 feet to a point, said point being the Southwest corner of Lot 2, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 2°52'06" West a distance of 385.17 feet to a point, said point being the POINT OR PLACE OF BEGINNING.

EXHIBIT “A”

Page 1 of 1

EXHIBIT “B”

Personal Property Description

[Subject to Seller confirmation.]

Spring Creek Inventory

September 14, 2011

Fitness Center

Bathrooms

2 trash cans 1 fan 1 stereo 5 medicine balls- (2) 8lbs, (1) 4lb, (1) 6lb, (1) 12lb 2 fitness balls- (1)75cm. (1) 55cm 2 towel racks 1 magazine rack 3 elipticals 3 treadmills 1 clock 1 Sony Flat Screen 55 inch 1 water machine ozarka 1 Styrofoam roll 2 chairs 1 basket 1 bench press 1 multi exercise machine Free Weight rack with the following free weights: (3) 10lbs, l5lb- (2) 5lbs, 25lbs, 20lbs, 30lbs, 35lbs, 40lbs, 45lbs, 50lbs

Mens: 1 Vacuum 1 Mirror 1 Flower Vase 1 Trash Can 1 Flower Portrait 1 Toilet Brush 3 mats Womens: 2 mats 1 toilet brush 1 trash can 1 flower portrait 1 broom 2 mirrors 1 star decor Paper towel dispenser

EXHIBIT “B”

Page 1 of 6

Spring Creek Inventory

September 14, 2011

Kitchen

Leasing Office

1 rug 1 Coffee Pot 1 hanging decor 1 Paper towel rack 1 trash can 1 microwave 1 dishwasher 1 stove 1 refrigerator 1 coffee maker thermal coffeemate 1 napkin holder 13 piece sugar caddy Everyday kitchen supplies and coffee supplies. Business Center 1lg wood conference table 4 leather chairs Rug, flower vase, hanging wall decor, and large decorative mirror Large wood end table w/ decorative lamp 2 metal dvd racks with approximately 70 dvds

2 hanging candle decor 4 pictures 2 ceiling fans 2 office chairs (leather) 4 Desk chairs 2 lounging chairs 2 small end tables 3 decor vases 3 rugs 2 mats 1 clock 7 frames 2 desks 2 filing cabinets wood 2 telephones 1 computer and hp printer 1 mini e-machine laptop Everyday office supplies and desk organizers

EXHIBIT “B”

Page 2 of 6

Spring Creek Inventory

September 14, 2011

    Copy Room   Wood end table   24 slot plastic filers   Wood printer table   Sharp mx-b401 copier/scanner   12 drawer filing wood cabinet   Fax machine brother   2 large black metal filing cabinet with 4 drawers   2 Hp printers   2 wood chest cabinet with 4 shelves   Small glass and metal laptop desk and chair   Brother printer   Toshiba laptop   2 make ready boards   Flower pot   Hanging coat mirror   1 rug   Managers Office   22 drawer roller wood cabinets   Paper shredder   3 shelf metal wall file hanger   Decorative lamp   2 desks w 1 drawer   2 computers   2 telephones   Hp laser jet printer   2 canon 10 key   122 inch Samsung flat screen   2 leather office chairs   11g wood 4 drawer 2 shelf cabinet   2 trash cans   2 metal dvd racks   1 wood & leather guest chairs   2 rollaway computer tower holders   Everyday office supplies such as staplers, hole punchers, pens, etc.

EXHIBIT “B”

Page 3 of 6

Spring Creek Inventory

September 14, 2011

Maintenance   1 ace sump pump w/ hose   6 gallon portercable air compressor   1 ilco key machine   1 shop grinder   1 k-50 snake machine w/ line   1 husgvarna backpack leaf blower   1 homelite chain saw   Hatachi miter saw   Rigid jigsaw   Skil Electric planer   Inficon gas mate detector   Aw Sperry electric meter   Inficon vortex recovery machine   JB vacuum pump   20- Small portable heaters   Alum shop vac   14 v dewalt drill   1 spraytech paint rig   Acoustic Hopper   1 Elect heat gun   JB Manifold gauge   Portable atomizer Small engraver   Hand toilet auger   Paslode nail gun   Porter cable sophet gun   Rotozip saw   2 recovery tanks r-22   Electric belt sauder   Spray gun extension pole   Ace tool box w/ misc sockets   Red 10’ step ladder   Red 8’ step ladder   40 ft alum ladder   Misc yard tools   Appliance dolly   2 fold out tables   2 ez 60 golf carts with chargers   3 club golf carts w chargers   2 Rigid carpet air movers   1 Milwaukee saw saw   1 Dewalt disc grinder

EXHIBIT “B”

Page 4 of 6

Spring Creek Inventory

September 14, 2011

  Pool Furniture   3 Large tables   5 Small Tables   2 Umbrellas   15 Chairs   18 Lounge chairs   1 Trash can   2 Cigarette buckets   5 Cement flower pots   1 Water hose caddy   1 Net   2 Safety poles   1 Hayward 1  ¹/2 pool pump   1 Bed Model   1 Couch   1 Chair   1 Coffee table   1 End table   1 Entry way table 1 Kitchen table w/4 chairs   1 Full size bed/ frame/bed set   1 Dresser/mirror   1 Night stand   4 Lamps   6 Frame pictures   Kitchen accessories   Bathroom accessories   1 Candle arrangement   1 Samsung front load w/d set   Misc decorations         Appliances   252 Stainless refrigerators   252 Hot point microwaves   252 Hot point dishwashers   252 Hot point gas ranges

EXHIBIT “B”

Page 5 of 6

Spring Creek Inventory

September 14, 2011

2 Bedroom model

1 Queen bed/frame/bed set

1 Full bed/frame/bed set

1 Dresser/mirror

1 Chest

2 night stands

1 Love seat

1 Lounge chair

1 Coffee table

1 end table

1 entry table

1 kitchen table/4 chairs

1 kitchen bar table/2 stools

3 lamps

Bathroom accessories

Kitchen accessories

10 framed pictures

Misc decorations

EXHIBIT “B”

Page 6 of 6

EXHIBIT “C”

Due Diligence Documents

[Subject to Seller confirmation.]

	CONSTRUCTION / REHABILITATION
1
2
3	Current capital improvements and schedule over past 3 years.
4	Warranties in effect (roof)
5	Copies of all Licenses and Permits, including Business License (with expiration date & annual costs) and Building Permits (with placed in service date(s))
6	Certificate(s) of Occupancy
7
8	Copies of all Governmental correspondence or notices pertaining to the property including but not limited to Building Code, Health Code, Zoning and Fire Code
9
	FINANCIAL
1	Monthly Operating Statements, YTD and 3-yr historical; cash flow statements, income statements
2	Operating Budget. (current year and/or next available)
3	Year-End Financial Statements for 2009 and 2010
4	All mortgages, loan docs, bond doc, regulatory agreements and all other documents pertaining to any current financing on the property which would be assumed by Buyer at closing
5	Property Tax Bills & Assessments for current and past 3-yrs (including special assessments or districts & appeals); any Notices of Delinquency
6
7	Type of Accounting Software: rentmanager
8	Utilities:
	a. Utility Bills (monthly for past calendar year & YTD) - for any master-metered utility expenses & residential unit utilities paid by property: except for a representative sample of utility bills, which sample shall be delivered to Buyer upon request, available on site.
	b. List of which utilities are paid by Resident & Owner
	c. List of account numbers for any utility accounts
	d. Schedule of meters and required deposits (gas, electric, telephone, water)
9	List of existing payables (current & past 30 days, with updates through closing)
10	Other
1
2
3
4
5
6
	MANAGEMENT/LEASING/OPERATIONS

EXHIBIT “C”

Page 1 of 3

1	Monthly Rent Rolls, YTD & for previous year (showing, sq ft, mo. rent, deposits, financial concessions, other concessions, lease term, and such other information as Buyer may require)
2	Security Deposit/Resident Ledgers
3	Market Rent Survey (if available, comparison of subject w/other properties)
4	Occupancy History (monthly YTD & past 3 years)
5	Leases for all tenants and all available tenant correspondence files (including amendments/letters/agreements): except for the Lease Selections as identified in Item 10 under “Capital Source-Specific Information: REIT” below, which Lease Selections shall be delivered to Buyer upon request, available on site.
6	Form of Lease (with all addendums)
7
8	Aged Delinquency Report (showing total rent outstanding) and status of all files placed for eviction or collection
9
10	Copies of all operating & management service contracts, including but not limited to:
	a.
	b. Landscaping
	c.
	d. Janitorial Services
	e. Security
	f. Equipment Leases (such as copier, etc.)
	g. Trash
	h. Pest Control
	i.
	j. Cable/TV (if none, please indicate in writing)
	k. Advertising
	l. Fire Extinguisher
	m.
	n.
	o.
	p. Phone (including any cell phones or pagers for staff)
	q. Property Management Agreement; indicate whether entity is related party for disclosure purposes
	r. Other
11	Inventory of Personal Property and Supplies Inventory to be included in sale
12	Current Staff Information (employees, titles, hire dates, salary, unit information)
13
14	Property Brochure
15	Operations & Maintenance Manuals (if any available on site, please indicate) Available on site.
16	Other
	PHYSICAL ITEMS
1
2	Unit Floor Plans (w/sq. footage)
3	Property Information (including number of pools, spas, dumpsters (with size), year built)
4	Property Photos (including aerial photos if available)
5	Model Units, if any (apt. #, bedrooms, rent loss)
6	Building (# of bldgs., storage units, laundry rooms)
7	Parking (carport, garages, or open spaces & number of each type)
8	Insurance

EXHIBIT “C”

Page 2 of 3

	a. Certificates
	b.
	c. Loss runs (YTD and last 2-yrs)
	d. Invoices & premium amount(s) for prior year & YTD, along with payment support (check copies)
9	List of fire safety equipment, such as smoke sensors, suppression devices, etc. (including system type, rating, map of locations, etc.)
10	Other
	THIRD PARTY REPORTS
1	All existing reports, including but not limited to the following to the extent they exist:
2	a. Soils or Geotechnical Report
3	b. Phase I Environmental Report
4	c. Property Condition Report
5	d. Lead-Based Paint Report
6	e. Mold Report
7	f. Asbestos Report
8	g. O & M Plan (if any)
9	h. Engineering study or inspection
10	i. Termite
11	j. Radon
12	k. Appraisal (if dated w/n 24 months)
13	l. Existing Survey, pursuant to Section 7.3.2
14	Other
	TITLE AND OTHER
1	Title Insurance Commitment and all recorded documents referenced therein.
2
3	Hazard Zone Designations as indicated on the existing survey: Flood
4	Disclosure of any legal matters affecting the property or collection of rents or deposits; information on any pending litigation
5	Agreements, bonds affecting property (to the extent they exist)
6	City or County Development Agreements (to the extent they exist)
7
	CAPITAL SOURCE - SPECIFIC INFORMATION: REIT
1	REIT Property Services Questionnaire
2	Trial balance: Prior year & most recent quarter-end and YTD of current year
3	General Ledgers: Prior year & most recent quarter-end and YTD of current year
4	Cash Disbursement Journal: Prior year & most recent quarter-end and YTD of current year
5	Monthly Bank Statements & Reconciliations: Prior year end & most recent quarter-end and YTD of current year
6	Check Register: Monthly for most recent quarter-end and YTD of current year
7	AP Aging Detail: Year-end prior year & most recent quarter-end and YTD of current year
8	Invoices & Payment Support: Access to a reasonable number of invoices and payment support detail for prior year & most recent quarter-end and YTD of current year (selections made by auditors)
9	Payroll Selections & Support: 2-mos of third-party prepared payroll register selections (made by auditors) and detail support to include the inputs to the amounts, such as timecards, reimbursement calculations, agreements or contracts, etc., as necessary, to support and recalculate the payroll amounts in the financial statements.
10	Lease Selections: 25 selections (made by auditors) with copies of back-up for rents received, for both tenant portion and any housing authority portion paid.

EXHIBIT “C”

Page 3 of 3

EXHIBIT “D”

Form of Deed

After recordation, return to:

Steadfast Asset Holdings, Inc.

18100 Von Karman, Suite 500

Irvine, California 92612

Attn: Ana Marie del Rio, Esq.

Space Reserved For Recording

Information

Special Warranty Deed

WC/TP SPRING CREEK, LLC, a Delaware limited liability company (the “Grantor”), having a mailing address of 8111 Preston Road, Suite 320, Dallas, Texas 75225, in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby grant, bargain, sell and convey unto         , a              (the “Grantee”), having a mailing address of 18100 Von Karman, Suite 500, Irvine, California 92612, the real property and improvements described on Exhibit A attached hereto and made a part hereof, commonly known as Spring Creek Apartments, together with improvements and appurtenances, if any (the “Property”) SUBJECT TO the matters set forth on Exhibit B attached hereto and made a part hereof, and warrants, and shall defend, the title to the same against any and all acts, conveyances, liens and encumbrances affecting such property made or suffered to be made by, through, or under Grantor, but not otherwise.

TO HAVE AND TO HOLD the Property unto the Grantee, and Grantee’s successors and assigns forever.

EXECUTED the     day of         , 20    .

GRANTOR:	WC/TP SPRING CREEK, LLC,
	a Delaware limited liability company
	By:	WILLMAX SPRING CREEK LLC,
		a Texas limited liability company,
		its manager
		John A. Wensinger, Manager

EXHIBIT “D”

Page 1 of 4

STATE OF TEXAS	)
	) ss.
COUNTY OF DALLAS	)

Subscribed and sworn to before me this     day of             , 20    , by John A. Wensinger, as Manager of WILLMAX SPRING CREEK LLC, a Texas limited liability company, in its capacity as Manager of WC/TP SPRING CREEK, LLC, a Delaware limited liability company.

Notary

My commission expires:                    

EXHIBIT “D”

Page 2 of 4

EXHIBIT A

(Legal Description)

A tract of land in the Southeast Quarter (SE/4) of the Southwest Quarter (SW/4) of Section Thirty-Six (36), Township Fourteen (14) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being more particularly described as follows:

COMMENCING at the Southwest corner of the SE/4 of the SW/4 of said Section 36;

THENCE North 89°39'15" East, along the South line of said SE/4 of the SW/4, a distance of 164.42 feet to a point, said point being the POINT OF BEGINNING;

THENCE North 89°39'15" East, along the said south line of said SE/4 of the SW/4 a distance of 1150.94 feet to a point (being the Southeast corner of said SE/4 of the SW/4);

THENCE North 00°20'24" West a distance of 706.36 feet to a point, said point being in the South line of Lot 2, Block 4, BRENTWOOD ADDITION;

THENCE South 89°39'41" West a distance of 95.51 feet to a point, said point being the Southwest corner of said Lot 2, Block 4;

THENCE North 12°54'26" West a distance of 78.60 feet to a point, said point being the Southeast corner of Lot 16 Block 6, BRENTWOOD 3RD ADDITION;

THENCE North 87°26'08" West a distance of 135.77 feet to a point;

THENCE South 45°27'41" West a distance of 255.00 feet to a point;

THENCE South 56°36'48" West a distance of 125.12 feet to a point, said point being the Southeast corner of Lot 8, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 63°16'39" West a distance of 260.45 feet to a point;

THENCE South 00°08'02" West a distance of 51.59 feet to a point;

THENCE South 58°03'08" West a distance of 211.82 feet to a point;

THENCE North 58°19'11" West a distance of 211.82 feet to a point said point being the Southwest corner of Lot 2, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 2°52'06" West a distance of 385.17 feet to a point, said point being the POINT OR PLACE OF BEGINNING.

EXHIBIT “D”

Page 3 of 4

EXHIBIT B

1. First priority mortgage encumbering the Property originally given to Holliday Fenoglio Fowler, L.P., as assigned to Holliday Fenoglio Fowler, L.P., as assigned to U.S. Bank National Association, as Trustee for the Registered Holders of J.P. Morgan Commercial Mortgage Securities Corp., Multifamily Mortgage Pass-Through Certificates, Series 2011-K702, as recorded in Book 11562, Page 1719, securing a promissory note dated January 31, 2011 in the original principal amount of $14,100,000.00.

2. (Additional Permitted Exceptions to be determined.)

EXHIBIT “D”

Page 4 of 4

EXHIBIT “E”

Form of General Assignment

ASSIGNMENT AND ASSUMPTION

OF LEASES, CONTRACTS AND APPROVALS

THIS ASSIGNMENT AND ASSUMPTION OF LEASES, CONTRACTS AND APPROVALS (this “Assignment”) is made as of the      day of             , 20    , by and between WC/TP SPRING CREEK, LLC, a Delaware limited liability company (“Assignor”), and                             , a(n)                              (“Assignee”).

W I T N E S S E T H:

For good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

1. Assignor hereby sells, transfers, assigns and conveys to Assignee the following:

a. All right, title and interest of Assignor in and to those certain leases described on Exhibit A attached hereto and made a part hereof (collectively, the “Leases”), relating to the leasing of space in or on that certain land and improvements located in the County of Oklahoma, State of Oklahoma, more particularly described in Exhibit B attached hereto (“Property”), and all of the rights, interests, benefits and privileges of the lessor thereunder, and all prepaid rents and security and other deposits held by Assignor under the Leases and not credited to Assignee under the Purchase Agreement (defined below) or credited or returned to tenants, but subject to all terms, conditions, reservations and limitations set forth in the Leases.

b. To the extent assignable, all right, title and interest of Assignor in and to those certain contracts set forth on Exhibit C attached hereto and made a part hereof, and all warranties, guaranties, indemnities and claims (including, without limitation, for workmanship, materials and performance) and which exist or may hereafter exist against any contractor, subcontractor, manufacturer or supplier or laborer or other services relating thereto (collectively, the “Contracts”).

c. To the extent assignable, all right, title and interest of Assignor in and to those certain approvals, plans, studies and surveys set forth on Exhibit D attached hereto and made a part hereof (collectively, the “Approvals”).

2. This Assignment is given pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions (as amended, the “Purchase Agreement”) dated as of December     , 2011, between Assignor and Assignee, providing for, among other things, the conveyance of the Leases, the Contracts and the Approvals.

EXHIBIT “E”

Page 1 of 8

3. Assignee hereby accepts the assignment of the Leases, the Contracts and the Approvals and agrees to assume and discharge, in accordance with the terms thereof, all of the obligations thereunder from and after the date hereof.

4. Assignor agrees to indemnify, defend and hold harmless Assignee from and against any and all claims, damages, liabilities, losses, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) asserted against or suffered or incurred by Assignee as a result of or in connection with any liabilities or obligations under the Leases, the Contracts or the Approvals relating to periods prior to the date hereof. Assignee agrees to indemnify, defend and hold harmless Assignor from and against any and all claims, damages, liabilities, losses, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) asserted against or suffered or incurred by Assignor as a result of or in connection with any liabilities or obligations under the Leases, the Contracts or the Approvals relating to periods on or after the date hereof.

5. In any action to enforce the provisions of this Assignment, the prevailing party shall be entitled to an award of its attorneys’ fees and costs. This Assignment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Assignment. The terms, covenants and conditions hereof shall inure to the benefit of and be binding upon the respective parties hereto, their heirs, executors, administrators, successors and assigns. Any alteration, change or modification of or to this Assignment, in order to become effective, must be made in writing and in each instance signed on behalf of each party to be charged. No provision of this Assignment that is held to be inoperative, unenforceable or invalid shall affect the remaining provisions, and to this end all provisions of this Agreement shall be severable. This Assignment shall be governed by the laws of the State of Oklahoma.

6. Notwithstanding anything to the contrary contained in this Assignment, it is expressly understood and agreed by and between the parties hereto that any liability of Assignor hereunder shall be limited as set forth in Section 26 of the Purchase Agreement.

IN WITNESS WHEREOF, the parties have executed this Assignment as of the date first above written.

ASSIGNOR:	ASSIGNEE:
WC/TP SPRING CREEK, LLC,	,
a Delaware limited liability company
By:	By:
Name:	Name:
Its:	Its:

EXHIBIT “E”

Page 2 of 8

Exhibit A	Leases
Exhibit B	Description of the Property
Exhibit C	Contracts
Exhibit D	Approvals

ACKNOWLEDGEMENTS ON NEXT PAGE

EXHIBIT “E”

Page 3 of 8

STATE OF                             )

                                                 ) ss.

COUNTY OF                         )

On                             , before me,                                         , a Notary Public personally appeared                                                          , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of                      that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Notary Public (SEAL)

STATE OF                             )

                                                 ) ss.

COUNTY OF                         )

On                             , before me,                                         , a Notary Public personally appeared                                                          , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of                      that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Notary Public (SEAL)

EXHIBIT “E”

Page 4 of 8

Exhibit A

Leases

[Current Rent Roll to be attached at Closing.]

EXHIBIT “E”

Page 5 of 8

Exhibit B

Description of the Property

A tract of land in the Southeast Quarter (SE/4) of the Southwest Quarter (SW/4) of Section Thirty-Six (36), Township Fourteen (14) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being more particularly described as follows:

COMMENCING at the Southwest corner of the SE/4 of the SW/4 of said Section 36;

THENCE North 89°39'15" East, along the South line of said SE/4 of the SW/4, a distance of 164.42 feet to a point, said point being the POINT OF BEGINNING;

THENCE North 89°39'15" East, along the said south line of said SE/4 of the SW/4 a distance of 1150.94 feet to a point (being the Southeast corner of said SE/4 of the SW/4);

THENCE North 00°20'24" West a distance of 706.36 feet to a point, said point being in the South line of Lot 2, Block 4, BRENTWOOD ADDITION;

THENCE South 89°39'41" West a distance of 95.51 feet to a point, said point being the Southwest corner of said Lot 2, Block 4;

THENCE North 12°54'26" West a distance of 78.60 feet to a point, said point being the Southeast corner of Lot 16 Block 6, BRENTWOOD 3RD ADDITION;

THENCE North 87°26'08" West a distance of 135.77 feet to a point;

THENCE South 45°27'41" West a distance of 255.00 feet to a point;

THENCE South 56°36'48" West a distance of 125.12 feet to a point, said point being the Southeast corner of Lot 8, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 63°16'39" West a distance of 260.45 feet to a point;

THENCE South 00°08'02" West a distance of 51.59 feet to a point;

THENCE South 58°03'08" West a distance of 211.82 feet to a point;

THENCE North 58°19'11" West a distance of 211.82 feet to a point, said point being the Southwest corner of Lot 2, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 2°52'06" West a distance of 385.17 feet to a point, said point being the POINT OR PLACE OF BEGINNING.

EXHIBIT “E”

Page 6 of 8

Exhibit C

Contracts

[Subject to Seller confirmation.]

1. Advertiser Agreement with Apartment Finder, dated August 1, 2011.

2. Advertising Agreement with Apartment Guide, issued March 8, 2011.

3. Internet Advertising Agreement with apartments.com, dated April 28, 2009.

4. Purchase Order & Agreement with HandyTrac, dated January 26, 2008.

5. Preventative Maintenance Plan with Hollywood Fitness Repair, LLC, dated March 9, 2010.

6. Contract with J&A LawnCare, dated March 1, 2011.

7. Exterior Emergency Telephone Services Agreement with Kings III Emergency Communications, dated June 9, 2006.

8. Equipment Service Agreement with R.K. Black, Inc., dated November 20, 2009.

9. Pest Management Service Plan – General Pest Control with Terminix, dated December 31, 2010.

10. Termite Service Plan with Terminix, dated May 6, 2009.

11. Panoak Natural Gas Purchase Agreement, dated February, 2010.

12. Cox Preferred Digital Community Agreement, with CoxCom, Inc., dated February 15, 2008.

13. Marketing Agreement, with CoxCom, Inc., dated February 15, 2008.

EXHIBIT “E”

Page 7 of 8

Exhibit D

Approvals

The Approvals relating to the Property, as specifically listed on Exhibit C to the Purchase Agreement.

EXHIBIT “E”

Page 8 of 8

EXHIBIT “F”

Form of Bill of Sale and General Assignment

BILL OF SALE AND GENERAL ASSIGNMENT

Know all men by these presents, that WC/TP SPRING CREEK, LLC, a Delaware limited liability company (“Grantor”), for and in consideration of the sum of ten dollars and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does bargain, sell, grant, transfer, assign, and convey to                                          (“Grantee”) all of its right, title, and interest, if any, in and to any and all (i) tangible personal property owned by Grantor and now at, in or upon or used in connection with the property commonly known as 777 E. 15^th Street, located in the City of Edmond, County of Oklahoma and State of Oklahoma (“Property”), and more particularly described on Exhibit A attached hereto, and (ii) intangible personal property in connection with or arising out of the ownership of the Property, to the extent assignable.

Grantor warrants the right and title to the Property against all persons lawfully claiming by, under or through Grantor, but not otherwise, and is expressly subject to any loan secured by the Property assumed by Grantee, evidenced by that certain UCC-1 financing statement recorded in Book 11667, Page 990. Grantor specifically does not make any other express or implied warranty or representation with respect to the Property, including, but not limited to, fitness for any particular purpose; the design or condition of the Property; the quality or capacity of the Property; workmanship or compliance of the Property with the requirements of any law, rule, specification or contract relating thereto; patent infringement; or latent defect. Except as expressly stated herein, Grantee accepts the Property on an “AS IS, WHERE IS” basis.

This Bill of Sale is expressly subject to Section 26 of that certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of December     , 2011, between Grantor and Grantee.

IN WITNESS WHEREOF, Grantor has executed this Bill of Sale and General Assignment as of the      day of             , 20    .

WC/TP SPRING CREEK, LLC,

a Delaware limited liability company

By:

Name:

Its:

STATE OF	)
	) ss.
COUNTY OF	)

EXHIBIT “F”

Page 1 of 3

On                                                                                  , before me,                                         , a Notary Public personally appeared                                         , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of                      that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
Notary Public	(SEAL)

EXHIBIT “F”

Page 2 of 3

Exhibit A

Legal Description

A tract of land in the Southeast Quarter (SE/4) of the Southwest Quarter (SW/4) of Section Thirty-Six (36), Township Fourteen (14) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being more particularly described as follows:

COMMENCING at the Southwest corner of the SE/4 of the SW/4 of said Section 36;

THENCE North 89°39'15" East, along the South line of said SE/4 of the SW/4, a distance of 164.42 feet to a point, said point being the POINT OF BEGINNING;

THENCE North 89°39'15" East, along the said south line of said SE/4 of the SW/4 a distance of 1150.94 feet to a point (being the Southeast corner of said SE/4 of the SW/4);

THENCE North 00°20'24" West a distance of 706.36 feet to a point, said point being in the South line of Lot 2, Block 4, BRENTWOOD ADDITION;

THENCE South 89°39'41" West a distance of 95.51 feet to a point, said point being the Southwest corner of said Lot 2, Block 4;

THENCE North 12°54'26" West a distance of 78.60 feet to a point, said point being the Southeast corner of Lot 16 Block 6, BRENTWOOD 3RD ADDITION;

THENCE North 87°26'08" West a distance of 135.77 feet to a point;

THENCE South 45°27'41" West a distance of 255.00 feet to a point;

THENCE South 56°36'48" West a distance of 125.12 feet to a point, said point being the Southeast corner of Lot 8, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 63°16'39" West a distance of 260.45 feet to a point;

THENCE South 00°08'02" West a distance of 51.59 feet to a point;

THENCE South 58°03'08" West a distance of 211.82 feet to a point;

THENCE North 58°19'11" West a distance of 211.82 feet to a point, said point being the Southwest corner of Lot 2, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 2°52'06" West a distance of 385.17 feet to a point, said point being the POINT OR PLACE OF BEGINNING.

EXHIBIT “F”

Page 3 of 3

EXHIBIT “G”

Form of Non-Foreign Certificate

CERTIFICATE OF NON-FOREIGN STATUS

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform                     , a(n)                      (“Transferee”), that withholding of tax is not required upon the disposition of a U.S. real property interest by                             , a(n)                      (“Transferor”), the undersigned hereby certifies to Transferee the following on behalf of Transferor:

1. Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);

2. Transferor’s U.S. employer identification number is                     ; and

3. Transferor’s office address is                                                                                  .

Transferor understands that this certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Under penalties of perjury, the undersigned declares that the undersigned has examined this certification and to the best of the undersigned’s knowledge and belief it is true, correct and complete, and the undersigned further declares that the undersigned has authority to sign this document on behalf of Transferor.

Dated as of                     , 20    .

                                                                                                       ,

a(n)

By:

Name:

Title:

EXHIBIT “G”

Page 1 of 2

STATE OF                             )

                                                 ) ss.

COUNTY OF                         )

On                                                                                  , before me,                                         , a Notary Public personally appeared                                                                                  , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of                      that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Notary Public (SEAL)

EXHIBIT “G”

Page 2 of 2

EXHIBIT “H”

Form Of Tenant Notice

            , 20    

TO:

Re: Notice of Lease Assignment and Transfer of Security Deposit

This letter is to notify you that the property commonly known as                      (“Property”) has this date been sold and the ownership transferred.

In connection with this sale, all of the interest of the lessor under your lease of space in the Property, together with your security deposit in the amount of $             , have been transferred to the new owner. You are hereby notified that, from and after the date hereof and until further notice, all future payments under your lease should be made payable to “                    ” and mailed to                     . In addition, all questions or other matters regarding your lease should be directed to the                  at (            )                     .

Thank you for your cooperation.

Very truly yours,

                                                                                                        ,

a

By:

Name:

Title:

EXHIBIT “H”

Page 1 of 1

SCHEDULE 1

LEASES

SCHEDULE 1

Report Summary
Total Possible Rent:	206,272.00
Vacancy Rent:	8,060.00
Occupied Unit Rent:	198,212.00
# of Units:	252
Vacant Units:	11
Occupancy %:	95.63	%

Rent Roll Analysis 12/9/11 11:07am Page 7 of 7 rentmanager.com - property management systems rev.3377

SCHEDULE 1

Page 8 of 8

SCHEDULE 2

CONTRACTS

[Subject to Seller confirmation.]

1. Advertiser Agreement with Apartment Finder, dated August 1, 2011.

2. Advertising Agreement with Apartment Guide, issued March 8, 2011.

3. Internet Advertising Agreement with apartments.com, dated April 28, 2009.

4. Purchase Order & Agreement with HandyTrac, dated January 26, 2008.

5. Preventative Maintenance Plan with Hollywood Fitness Repair, LLC, dated March 9, 2010.

6. Contract with J&A LawnCare, dated March 1, 2011.

7. Exterior Emergency Telephone Services Agreement with Kings III Emergency Communications, dated June 9, 2006.

8. Equipment Service Agreement with R.K. Black, Inc., dated November 20, 2009.

9. Pest Management Service Plan – General Pest Control with Terminix, dated December 31, 2010.

10. Termite Service Plan with Terminix, dated May 6, 2009.

11. Panoak Natural Gas Purchase Agreement, dated February, 2010.

12. Cox Preferred Digital Community Agreement, with CoxCom, Inc., dated February 15, 2008.

13. Marketing Agreement, with CoxCom, Inc., dated February 15, 2008.

SCHEDULE 2

Page 1 of 1

SCHEDULE 3

APPROVALS

The Approvals relating to the Property, as specifically listed on Exhibit C to the Purchase Agreement.

SCHEDULE 3

Page 1 of 1

EX-10.2

Exhibit 10.2

ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, STEADFAST ASSET HOLDINGS, INC., a California corporation (“Assignor”), hereby assigns to SIR SPRING CREEK, LLC, a Delaware limited liability company (“Assignee”), all of Assignor’s rights and obligations under and in regard to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated December 9, 2011 (as may be amended, the “Purchase Agreement”), between WC/TP Spring Creek, LLC (“Seller”) and Assignor, for the purchase and sale of that certain real property located in Edmond, Oklahoma, as more particularly described in Exhibit A attached hereto (the “Property”).

Assignee hereby agrees to and shall assume, perform and be fully responsible for the performance of all of the obligations of Assignor under the Purchase Agreement.

All of the provisions covenants and agreements contained in the Assignment shall extend to and be binding upon the respective legal representatives, successors and assigns of Assignor and Assignee. This Assignment represents the entire agreement between Assignor and Assignee with respect to the subject matter of the Assignment , and all prior or contemporaneous agreements regarding such matters are hereby rendered null and void and of no force and effect.

(SIGNATURES APPEARS ON FOLLOWING PAGE)

WITNESS THE EXECUTION HEREOF, as of this March 9, 2012.

ASSIGNOR:
STEADFAST ASSET HOLDINGS, INC., a California corporation
By:	/s/ Ana Marie del Rio
Name:	Ana Marie del Rio
Title:	Vice President and Secretary
ASSIGNEE:
SIR SPRING CREEK, LLC a Delaware limited liability company
By:	Steadfast Income Advisor, LLC, a Delaware limited liability company, its Manager
	By:	/s/ Ana Marie del Rio
	Name:	Ana Marie del Rio
	Title:	Secretary

Exhibit A

DESCRIPTION OF THE LAND

That certain real property described as:

A tract of land in the Southeast Quarter (SE/4) of the Southwest Quarter (SW/4) of Section Thirty–Six (36), Township Fourteen (14) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being more particularly described as follows:

COMMENCING at the Southwest corner of the SE/4 of the SW/4 of said Section 36;

THENCE North 89°39'15" East, along the South line of said SE/4 of the SW/4, a distance of 164.42 feet to a point, said point being the POINT OF BEGINNING;

THENCE North 89°39'15" East, along the said south line of said SE/4 of the SW/4 a distance of 1150.94 feet to a point (being the Southeast corner of said SE/4 of the SW/4);

THENCE North 00°20'24" West a distance of 706.36 feet to a point, said point being in the South line of Lot 2, Block 4, BRENTWOOD ADDITION;

THENCE South 89°39'41" West a distance of 95.51 feet to a point, said point being the Southwest corner of said Lot 2, Block 4;

THENCE North 12°54'26" West a distance of 78.60 feet to a point, said point being the Southeast corner of Lot 16 Block 6, BRENTWOOD 3RD ADDITION;

THENCE North 87°26'08" West a distance of 135.77 feet to a point;

THENCE South 45°27'41" West a distance of 255.00 feet to a point;

THENCE South 56°36'48" West a distance of 125.12 feet to a point, said point being the Southeast corner of Lot 8, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 63°16'39" West a distance of 260.45 feet to a point;

THENCE South 00°08'02" West a distance of 51.59 feet to a point;

THENCE South 58°03'08" West a distance of 211.82 feet to a point;

THENCE North 58°19'11" West a distance of 211.82 feet to a point, said point being the Southwest corner of Lot 2, Block 5, BRENTWOOD 2ND ADDITION;

THENCE South 2°52'06" West a distance of 385.17 feet to a point, said point being the POINT OR PLACE OF BEGINNING.

EXHIBIT “F”

Page 3 of 3

EX-10.3

Exhibit 10.3

PROPERTY MANAGEMENT AGREEMENT

THIS PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of March 9, 2012 (the “Effective Date”), by and between SIR SPRING CREEK, 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).

“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.

1

“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, 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.

“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.

2

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.

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

3

(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

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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 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 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.

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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

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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 the 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.

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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.

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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.

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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. 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 (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) which 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

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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 and One-half Percent (3.5%) of Gross Collections for such month. The Management 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 4.3, 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.

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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.

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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 Spring Creek, 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.

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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.

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

OWNER:	SIR SPRING CREEK, 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/ William C. Stoll
		William C. Stoll, Vice President

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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 p.u.p.y.

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EXHIBIT B

THE PROPERTY

Legal Description: 777 East 15^th Street, Edmond, OK 73013

The real property situated in the City of Edmond, County of Oklahoma, State of Oklahoma, and described as follows:

The Property consists of 252 one, two and three-bedroom units. Site amenities include leasing office, clubhouse, fitness center, and outdoor swimming pool. It is comprised of 12.83 acres and it was built in 1974 and renovated in 2008-2010.

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EX-10.4

Exhibit 10.4

PREPARED BY:
Harold A. Hagen, Esq.	)
Bryan Cave LLP	)
333 Market Street, 25th  Floor	)
San Francisco, CA 94105	)

ASSUMPTION AGREEMENT

This Assumption Agreement (“Assumption Agreement” or “Agreement”) is made this 9th of March, 2012, by U.S. BANK NATIONAL ASSOCIATION, as Trustee for the registered holders of J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP., MULTIFAMILY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-K702 (“Noteholder”), WC/TP SPRING CREEK, LLC, a Delaware limited liability company (“Borrower”), JOHN A. WENSINGER, an individual (“Original Guarantor”), SIR SPRING CREEK, LLC, a Delaware limited liability company (“Assumptor”), STEADFAST INCOME REIT OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“OP”) and STEADFAST INCOME REIT, INC., a Maryland corporation (“SIR” and, together with OP, jointly and severally, “New Guarantor”). Borrower, Original Guarantor, Assumptor and New Guarantor are collectively referred to herein as the “Borrower Parties.” The Borrower Parties and Noteholder are collectively referred to herein as the “Parties.”

RECITALS

A. Noteholder’s predecessor in interest, Holliday Fenoglio Fowler, L.P., a Texas limited partnership (“Original Lender”) made a loan to Borrower in the original principal amount of Fourteen Million One Hundred Thousand and no/100 Dollars ($14,100,000.00) (“Loan”), under the terms and provisions set forth in the following loan documents, all of which are dated as of January 31, 2011, unless otherwise noted:

1. Multifamily Note – CME (“Note”) in the original principal amount of the Loan, made by Borrower and payable to Original Lender, said Note having been endorsed by Original Lender to the Federal Home Loan Mortgage Corporation, a corporation organized and existing under the laws of the United States (“Freddie Mac”) and thereafter endorsed by Freddie Mac to Noteholder. Noteholder is now the owner and holder of the Note and the Loan is serviced by Wells Fargo Bank, N.A. (“Servicer”);

2. Multifamily Mortgage, Assignment of Rents and Security Agreement (Oklahoma) executed by Borrower and given to Original Lender which secures the Note and other obligations of Borrower (“Security Instrument”), and which Security Instrument was recorded on January 31, 2011, in Book 11562 at Page 1719 with the County Clerk of Oklahoma County, State of Oklahoma (“Official Records”), the Original Lender’s interest under which was assigned to the Freddie Mac, by instrument recorded on January 31, 2011, in Book 11562 at Page 1831 in said Official Records and thereafter assigned by Freddie Mac to

Noteholder by instrument recorded on July 5, 2011, in Book 11667 at Page 986 in said Official Records. The land, improvements and other real property which are subject to the Security Instrument are hereinafter referred to as the “Property” and the equipment, machinery and other personal property which are subject to the Security Instrument are hereinafter referred to as the “Collateral”;

3. UCC-1 Financing Statement recorded on January 31, 2011, in Book 11562 at Page 1796 in said Official Records, naming Freddie Mac as secured party, the secured party’s interest thereunder having been assigned to Noteholder by UCC-3 Financing Statement Amendment recorded on July 5, 2011, in Book 11667 at Page 990 in said Official Records (collectively, the “County UCC”);

4. UCC-1 Financing Statement filed on February 11, 2011, with the Delaware Department of State as File No. 2011 0517386, naming Freddie Mac as secured party, the secured party’s interest thereunder having been assigned to Noteholder by UCC-3 Financing Statement Amendment filed with the Delaware Department of State as File No. 2011 2526963 (collectively, the “State UCC”);

5. Guaranty – CME, executed by Original Guarantor (“Guaranty”);

6. Replacement Reserve Agreement – CME, executed by Borrower (“Replacement Reserve Agreement”);

7. Assignment of Management Agreement and Subordination of Management Fees, executed by Borrower and Willmax Capital Management, Inc. (“Original Assignment of Management Agreement”);

8. Repair Escrow Agreement – CME, executed by Borrower (“Repair Escrow Agreement”);

9. Operations and Maintenance Agreement – Moisture Management Plan and Asbestos, executed by Borrower (“O&M Agreement”); and

10. Borrower’s Certificate of Representations and Warranties executed by Borrower (“Borrower’s Certificate”).

The documents described in the foregoing paragraphs 1 through 10 and any other Loan Documents, including, in each case, any prior amendments thereto, together with this Assumption Agreement, are hereinafter collectively defined as the “Loan Documents”. The documents described in the foregoing paragraphs 1-4, 6 and 9, together with and as modified by this Assumption Agreement, are hereinafter collectively defined as the “Assumed Loan Documents”. All defined terms not otherwise defined herein shall have the meanings given them in the Note, or if not defined therein, the Security Instrument.

B. As of March 5, 2012:

1. The principal balance outstanding under the Note was $13,876,940.44;

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2. Accrued interest on the Note has been paid through February 29, 2012;

3. The balance of Imposition Deposits held for the payment of Taxes (as provided in Section 7(a) of the Security Instrument) was $30,539.03;

4. The balance of Imposition Deposits held for the payment of Hazard Insurance premiums or other insurance premiums (as provided in Section 7(a) of the Security Instrument) was $44,503.50;

5. The balance in the Replacement Reserve Fund (as provided in the Replacement Reserve Agreement) was $[21,308.00];

C. Borrower has sold and conveyed the Property and the Collateral to Assumptor, or is about to sell and convey the Property and the Collateral to Assumptor (the “Transfer”), and both parties desire to obtain from Noteholder a waiver of any right Noteholder may have under the Loan Documents to accelerate the Maturity Date of the Note by virtue of such conveyance.

D. Subject to the terms and conditions hereof, Noteholder is willing to consent to the Transfer, and to waive any right of acceleration of the Maturity Date of the Note upon assumption by Assumptor of all obligations of Borrower under the Loan Documents.

NOW THEREFORE, FOR VALUABLE CONSIDERATION, including, without limitation, the mutual covenants and promises contained herein, the Parties agree as follows:

1. Incorporation. The foregoing recitals are incorporated herein by this reference.

2. Assumption Fee. As consideration for Noteholder’s execution of this Assumption Agreement and in addition to any other sums due hereunder, Borrower and Assumptor agree to pay Noteholder or Noteholder’s servicer(s) (all as set forth in the escrow instructions to be executed in connection with the closing of this assumption) an assumption fee of $[139,132.00] (1.00% of the Loan balance), due on execution of this Assumption Agreement by Noteholder (“Assumption Fee”).

3. Conditions Precedent. The following are conditions precedent to Noteholder’s obligations under this Assumption Agreement:

(a) The irrevocable commitment of First American Title Insurance Company (“Title Company”) to issue a date-down endorsement and other endorsements specified by Servicer to Title Company’s Title Policy No. M1538519, dated January 31, 2011, in each case in form and substance acceptable to Noteholder and without deletions or exceptions other than as expressly approved by Noteholder in writing, insuring Noteholder that the priority and validity of the Security Instrument has not been and will not be impaired by this Assumption Agreement, the conveyance of the Property, or the transaction contemplated hereby;

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(b) Receipt and approval by Noteholder of: (i) the executed original of this Assumption Agreement; (ii) an executed original of a Memorandum of Assumption Agreement in the form attached hereto as EXHIBIT A, with signatures notarized, and otherwise in form and substance acceptable to Noteholder (“Memorandum of Assumption Agreement”); and (iii) any other documents and agreements which are required pursuant to this Assumption Agreement, in form and content acceptable to Noteholder;

(c) Recordation in the Official Records of the Memorandum of Assumption Agreement, together with such other documents and agreements, if any, required pursuant to this Assumption Agreement or which Noteholder has requested to be recorded or filed;

(d) Assumptor’s delivery to Noteholder of UCC-1 Financing Statements and UCC-3 Financing Statement Amendments in proper form for filing in the appropriate jurisdictions as determined by Noteholder, which Assumptor expressly authorizes Noteholder to file;

(e) Execution and delivery to Noteholder by New Guarantor of a Guaranty (Multistate – Assumptions and Transfers) (“New Guaranty”) in favor of Noteholder and in form and substance acceptable to Noteholder, pursuant to which New Guarantor irrevocably guarantees payment for certain matters under the Loan as more specifically set forth in the New Guaranty, along with delivery to Noteholder of such resolutions or certificates of New Guarantor as Noteholder may require, in form and content acceptable to Noteholder;

(f) [Reserved];

(g) Delivery to Noteholder of the organizational documents and evidence of good standing of Assumptor, its constituent parties, and of New Guarantor, together with such resolutions or certificates as Noteholder may require, in form and content acceptable to Noteholder, authorizing the assumption of the Loan and executed by the appropriate persons and/or entities on behalf of Assumptor and New Guarantor;

(h) The representations and warranties contained herein are true and correct;

(i) Receipt by Noteholder of a copy of Assumptor’s casualty insurance policy and comprehensive liability insurance policy with respect to the Property, each in form and amount satisfactory to Noteholder, with the annual premium for same to be paid at closing;

(j) Receipt by Noteholder of a copy of the special warranty deed by which title to the Property will be conveyed to Assumptor, and the purchase and sale agreement documenting the sale of the Property to Assumptor;

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(k) Receipt by Noteholder of an executed assignment of the purchaser’s interest in the purchase and sale agreement for the Property from the purchaser named therein to Assumptor;

(l) [Intentionally deleted];

(m) Receipt by Noteholder of a copy of the new property management agreement for the Property in form and substance, and with a manager, acceptable to Noteholder, along with an executed assignment of management agreement acceptable to Noteholder;

(n) Noteholder shall have received an opinion of counsel to Noteholder with respect to the compliance of this Assumption Agreement, the transfer to Assumptor, and the transactions referenced herein with the provisions of the Internal Revenue Code as the same pertain to real estate mortgage investment conduits and such other opinion letters as Noteholder’s counsel shall require;

(o) All items on the closing checklist of Noteholder’s counsel shall be satisfied or waived by Noteholder or its counsel;

(p) Payment of the Assumption Fee provided for in Section 2 above; and

(q) Borrower’s or Assumptor’s reimbursement to Noteholder of Noteholder’s costs and expenses incurred in connection with this Assumption Agreement and the transactions contemplated hereby, including, without limitation, title insurance costs, escrow and recording fees, attorneys’ fees, appraisal, engineers’ and inspection fees and documentation costs and charges, whether such services are furnished by Noteholder’s employees, agents or independent contractors.

4. Effective Date. The effective date of this Assumption Agreement shall be the date the Memorandum of Assumption Agreement is recorded in the Official Records (“Effective Date”).

5. Assumption. Assumptor hereby assumes and agrees to pay when due all sums due or to become due or owing under the Note, the Security Instrument and the other Assumed Loan Documents and shall hereafter faithfully perform all of Borrower’s obligations under and be bound by all of the provisions of the Assumed Loan Documents and assumes all liabilities of Borrower under the Assumed Loan Documents as if Assumptor were an original signatory thereto. The execution of this Assumption Agreement by Assumptor shall be deemed its execution of the Note, the Security Instrument and the other Assumed Loan Documents. Assumptor shall henceforth be deemed to be the “Mortgagor,” “Assignor,” “Grantor,” “Indemnitor” and/or “Borrower”, as the case may be, under each of the Assumed Loan Documents. Without limiting the generality of the foregoing, Assumptor’s assumption includes the assumption of all obligations, liabilities, and waivers of Borrower set forth in the Note, including, without limitation, the liabilities of Borrower under Section 9 thereof. The foregoing assumption by Assumptor is absolute and unconditional.

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6. Partial Release of Borrower; Release of Noteholder. Noteholder hereby releases (on the Effective Date) Borrower from liability under the Loan Documents other than this Assumption Agreement as to acts, events or omissions occurring or obligations arising after the Effective Date; provided however, that the Parties hereby acknowledge and agree that Borrower is expressly not released from and nothing contained herein is intended to limit, impair, terminate or revoke, any of Borrower’s obligations including, without limitation, those set forth in Section 9 of the Note, to the extent the same arise out of or in connection with any acts, events or omissions occurring or obligations arising on or before the Effective Date (the “Retained Obligations”), and that such obligations shall continue in full force and effect in accordance with the terms and provisions thereof and hereof. Borrower’s obligations under the Loan Documents with respect to the Retained Obligations shall not be discharged or reduced by any extension, amendment, renewal or modification to, the Note, the Security Instrument or any other Loan Documents, including, without limitation, changes to the terms of repayment thereof, modifications, extensions or renewals of repayment dates, releases or subordinations of security in whole or in part, changes in the interest rate or advances of additional funds by Noteholder in its discretion for purposes related to those set forth in the Loan Documents.

7. Confirmation of Guaranty; Partial Release of Original Guarantor. Effective upon the Effective Date, Original Guarantor shall be released from liability under the Guaranty as to acts, events or omissions occurring or obligations arising after the Effective Date; provided, however, such release shall not apply to any acts, events or omissions which occurred prior to the Effective Date, whether or not the effects of or damages from such acts, events or omissions are apparent or ascertainable as of the Effective Date. Nothing contained herein is intended to limit, impair, terminate or revoke Original Guarantor’s obligations under the Guaranty to the extent the same arise out of or in connection with any acts, events or omissions occurring or obligations arising on or before the Effective Date.

8. Release of Lender Parties and Covenant Not to Sue. Each Borrower Party, on behalf of itself and its heirs, successors and assigns, hereby releases and forever discharges Noteholder, any trustee with regard to the Loan, any servicer of the Loan, each of their respective predecessors-in-interest and successors and assigns, together with the officers, directors, partners, employees, investors, certificate holders and agents of each of the foregoing (collectively, the “Noteholder Parties”), from all debts, accountings, bonds, warranties, representations, covenants, promises, contracts, controversies, agreements, claims, damages, judgments, executions, actions, inactions, liabilities, demands or causes of action of any nature, at law or in equity, known or unknown, which any Borrower Party now has by reason of any cause, matter, or thing through and including the date hereof, arising out of or relating to: (a) the Loan, including,

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without limitation, its funding, administration and servicing, (b) the Loan Documents, (c), the Property or Collateral, (d) any reserve and/or escrow balances held by Noteholder or any servicers of the Loan, or (e) the sale, conveyance, assignment and transfer of the Property and Collateral. Each Borrower Party, on behalf of itself and its heirs, successors and assigns, covenants and agrees never to institute or cause to be instituted or continue prosecution of any suit or other form of action or proceeding of any kind or nature whatsoever against any of the Noteholder Parties by reason of or in connection with any of the foregoing matters, claims or causes of action.

THE RELEASE CONTAINED IN THIS SECTION 8 INCLUDES CLAIMS OF WHICH BORROWER PARTIES (INDIVIDUALLY AND COLLECTIVELY) ARE PRESENTLY UNAWARE OR WHICH BORROWER PARTIES (INDIVIDUALLY AND COLLECTIVELY) DO NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY A BORROWER PARTY WOULD MATERIALLY AFFECT ITS RELEASE OF THE NOTEHOLDER PARTIES.

BY EXECUTING THIS AGREEMENT, EACH BORROWER PARTY ACKNOWLEDGES THAT (i) THIS SECTION 8 HAS BEEN READ AND FULLY UNDERSTOOD, (ii) EACH BORROWER PARTY HAS EACH HAD THE CHANCE TO ASK QUESTIONS OF ITS COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE AND (iii) EACH BORROWER PARTY HAS ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS SECTION 8.

9. Representations and Warranties.

(a) Assignment. Borrower and Assumptor each hereby represents, warrants, and covenants to Noteholder and each other that Borrower has irrevocably and unconditionally transferred and assigned to Assumptor all of Borrower’s right, title and interest in and to:

(i) The Property and the Collateral;

(ii) The Assumed Loan Documents;

(iii) All leases related to the Property or the Collateral;

(iv) All rights as named insured under all casualty and liability insurance policies (and all endorsements in connection therewith) relating to the Property or the Collateral (unless, but only to the extent that, Assumptor is obtaining its own such insurance policies);

(v) All reciprocal easement agreements, operating agreements, and declarations of conditions, covenants and restrictions related to the Property;

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(vi) All prepaid rents applicable to the period from and after the Effective Date and security deposits, if any, held by Borrower in connection with leases of any part of the Property or the Collateral; and

(vii) All funds, if any, deposited in impound accounts held by or for the benefit of Noteholder pursuant to the terms of the Loan Documents.

Borrower and Assumptor each hereby further represents and warrants to Noteholder that no consent to the transfer of the Property and the Collateral to Assumptor is required under any agreement to which Borrower or Assumptor is a party, including, without limitation, under any lease, operating agreement, mortgage or security instrument (other than the Loan Documents), or if such consent is required, that it has been obtained and is in full force and effect.

(b) No Defaults. Assumptor and Borrower each hereby represents and warrants, to the best of its respective knowledge, that no default, event of default, breach or failure of condition has occurred, or would exist with notice or the lapse of time or both, under any of the Loan Documents, as modified by this Assumption Agreement, and all representations and warranties herein and in the other Loan Documents are true and correct.

(c) Loan Documents. Assumptor represents and warrants to Noteholder that Assumptor has actual knowledge of all terms and conditions of the Loan Documents, and agrees that Noteholder has no obligation or duty to provide any information to Assumptor regarding the terms and conditions of the Loan Documents. Assumptor further agrees that all representations, agreements and warranties in the Loan Documents regarding Borrower, its status, authority, financial condition and business shall apply to Assumptor as well as to Borrower, as though Assumptor were the borrower originally named in the Loan Documents. Assumptor further understands and acknowledges that, except as expressly provided in a writing executed by Noteholder, Noteholder has not waived any right of Noteholder or obligation of Borrower or Assumptor under the Loan Documents and Noteholder has not agreed to any modification of any provision of any Loan Document or to any extension of the Loan.

(d) Financial Statements. Assumptor represents and warrants to Noteholder that the financial statements of Assumptor and of each New Guarantor, if any, previously delivered by Borrower, Assumptor or any of such parties to Noteholder: (i) are materially complete and correct; (ii) present fairly the financial condition of each of such parties; and (iii) have been prepared in accordance with generally accepted accounting principles consistently applied or other accounting standards approved by Noteholder. Assumptor further represents and warrants to Noteholder that, since the date of such financial statements, there has been no

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material adverse change in the financial condition of any of such parties, nor have any assets or properties reflected on such financial statements been sold, transferred, assigned, mortgaged, pledged or encumbered except as previously disclosed in writing by Assumptor to Noteholder and approved in writing by Noteholder.

(e) Reports. Assumptor represents and warrants to Noteholder that, to the best of its knowledge after due inquiry and investigation, all reports, documents, instruments and information delivered to Noteholder in connection with Assumptor’s assumption of the Loan: (i) are materially correct and sufficiently complete to give Noteholder accurate knowledge of their subject matter; and (ii) do not contain any misrepresentation of a material fact or omission of a material fact which omission makes the provided information misleading.

(f) Assumptor Location. Assumptor represents and warrants that its chief executive office (or principal residence, if applicable) is located at the address set forth in Section 14 below. Assumptor represents and warrants that its state of formation is Delaware. All organizational documents of Assumptor delivered to Noteholder are complete and accurate in every respect. Assumptor’s legal name is exactly as shown on page one of this Assumption Agreement. Assumptor shall not change Assumptor’s name or, as applicable, Assumptor’s chief executive office, Assumptor’s principal residence or the jurisdiction in which Assumptor is organized, without giving Noteholder at least 30 days’ prior written notice.

(g) No Adverse Change. Assumptor and New Guarantor represent and warrant to Noteholder that since the date of the financial statements for Assumptor and New Guarantor submitted by Assumptor in connection with its application to assume the Loan, there has occurred no adverse change in the financial condition of Assumptor or New Guarantor.

(h) No Pledge of Equity Interests. Assumptor and New Guarantor represent and warrant to Noteholder that no equity interest in Assumptor or an entity that, directly or indirectly, owns an equity interest in Assumptor has been pledged, hypothecated or otherwise encumbered as security for any obligation, and that no portion of the capital contributed to Assumptor, directly or indirectly, in connection with Assumptor’s acquisition of the Property consists of borrowed funds.

(i) Embargoed Person. Assumptor and New Guarantor represent and warrant that none of the funds or other assets of Assumptor or New Guarantor constitute property of, or are beneficially owned, directly or indirectly, by any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the USA

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PATRIOT Act (including the anti-terrorism provisions thereof), the International Economic Powers Act, 50 U.S.C. §§ 1701, et. seq., the Trading with the Enemy Act, 50 U.S.C. App. 1 et. seq., and any Executive Orders or regulations promulgated thereunder, including those related to Specially Designated Nationals and Specially Designated Global Terrorists (“Embargoed Person”) and further warrant and represent that no Embargoed Person has any interest of any nature whatsoever in Assumptor or New Guarantor with the result that the investment in Assumptor (whether directly or indirectly) is prohibited by law.

(j) Authority and Enforceability. In addition to all representations and warranties in the Loan Documents, each of the Borrower Parties represents and warrants as to itself that (i) it has full power, authority, legal right and capacity to execute, deliver and perform its respective obligations under this Assumption Agreement and the other Loan Documents and enter into the purchase and sale transaction contemplated by this Agreement; (ii) the Loan Documents to which it is a party, including, without limitation, this Assumption Agreement, constitute valid, enforceable and binding obligations of such party; and (iii) as of the Effective Date, there are no counterclaims, defenses or offsets of any nature whatsoever to any of its respective obligations under the Loan Documents.

(k) Organizational Status. Borrower and Assumptor each represent and warrant as to itself that it is (i) duly organized, validly existing and in good standing under the laws of its State of organization; and (ii) duly qualified to transact business and in good standing in the State where the Property is located.

10. Waiver of Acceleration. Effective upon the satisfaction of, and subject to, all the terms and conditions set forth in this Assumption Agreement, Noteholder hereby consents to the sale and conveyance of the Property and Collateral and agrees that it shall not exercise its right to cause all sums secured by the Security Instrument to become immediately due and payable because of the conveyance of the Property and the Collateral from Borrower to Assumptor; provided, however, Noteholder reserves its right under the terms of the Security Instrument or any other Loan Document to accelerate all principal and interest in the event of any subsequent sale, transfer, encumbrance or other conveyance of the Property, the Collateral or any interest in Assumptor, except as permitted by the Loan Documents.

11. Hazardous Materials. Without in any way limiting any other provision of this Assumption Agreement, Assumptor and Borrower expressly reaffirm as of the date hereof, and Assumptor reaffirms continuing hereafter: (a) each and every representation and warranty in the Loan Documents respecting “Hazardous Materials”, provided that each such representation and warranty by Assumptor

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and Borrower shall be limited to Asumptor’s and Borrower’s own respective acts and knowledge; and (b) each and every covenant and indemnity in the Loan Documents respecting “Hazardous Materials”.

12. Multiple Parties. If more than one person or entity has signed this Assumption Agreement as Assumptor or Borrower, then all references in this Assumption Agreement to Assumptor or Borrower shall mean each and all of the persons so signing, as applicable. The liability of all persons and entities signing shall be joint and several with all others similarly liable.

13. Confirmation of Security Interest; Ratification. Nothing contained herein shall affect or be construed to affect any lien, charge or encumbrance created by any Loan Document or the priority of that lien, charge or encumbrance. All assignments and transfers by Borrower to Assumptor are subject to any security interest(s) held by Noteholder. Assumptor hereby ratifies and reaffirms (i) each grant, pledge, assignment and conveyance to Noteholder of, and Assumptor grants pledges, assigns and conveys to Noteholder a lien on, pledge of, and security interest in, the Property pursuant to the terms of the Security Instrument, including all rights, interests and property hereafter acquired, and all products and proceeds thereof and additions and accessions thereto, and (ii) that as of the Effective Date, all of the terms, representations, warranties, covenants and provisions of the Assumed Loan Documents remain in full force and effect, without modification, except as necessary to implement the terms and provisions of this Assumption Agreement. Borrower ratifies and reaffirms that as of the Effective Date, all of the terms, representations, warranties, covenants and provisions of the Loan Documents remain in full force and effect, and are true and correct with respect to Borrower, without modification, except as necessary to implement the terms and provisions of this Assumption Agreement.

14. Notices. All notices to be given to Assumptor pursuant to the Loan Documents shall be addressed as follows:

SIR SPRING CREEK, LLC

c/o Steadfast Asset Holdings, Inc.

18100 Von Karman Ave., Suite 500

Irvine, California 92612

Attn: Tim Middleton

With a copy to:

Garrett DeFrenza Stiepel Ryder LLP

3200 Bristol Street, Suite 850

Costa Mesa, California 92626

Attn: Marcello F. De Frenza, Esq.

15. Integration; Interpretation. The Loan Documents, including this Assumption Agreement, contain or expressly incorporate by reference the entire agreement of

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the Parties with respect to the matters contemplated herein and supersede all prior negotiations. The Assumed Loan Documents shall not be further modified except by written instrument executed by Noteholder and Assumptor. Any reference in any of the Loan Documents to the Property or the Collateral shall include all or any parts of the Property or the Collateral.

16. Successors and Assigns. This Assumption Agreement is binding upon and shall inure to the benefit of the heirs, successors and assigns of the Parties but subject to all prohibitions of transfers contained in any of the Loan Documents.

17. Attorneys’ Fees; Enforcement. If any attorney is engaged by Noteholder to enforce, construe or defend any provision of this Assumption Agreement, or as a consequence of any default under or breach of this Assumption Agreement, with or without the filing of any legal action or proceeding, Assumptor shall pay to Noteholder, upon demand, the amount of all attorneys’ fees and costs reasonably incurred by Noteholder in connection therewith, together with interest thereon from the date of such demand at the rate of interest applicable to the principal balance of the Note as specified therein.

18. Additional Transfers. Notwithstanding Noteholder’s consent to the Transfer, Assumptor understands and agrees that such consent will in no way limit or operate as a waiver of Noteholder’s continuing rights with respect to future transfers under the provisions of the Security Instrument.

19. Deferred Maintenance. Assumptor covenants and agrees that it will, within 90 days of the Closing Date, repair or cause to have repaired, in a good and workmanlike manner, all items listed as deferred maintenance on Servicer’s Standard Inspection Form dated January 12, 2012 (the “Deferred Maintenance”). Assumptor further covenants and agrees that should such items of Deferred Maintenance not be repaired as provided herein, that an immediate Event of Default shall have occurred, and that Noteholder shall have all remedies available to it under the terms of the Assumed Loan Documents, including but not limited to the immediate right to accrue interest on the Loan at the Default Rate.

20. Subordination of Rights of Borrower and Assumptor.

(a) Any indebtedness of Borrower to Assumptor, or of Assumptor to Borrower, now or existing after the date of this Agreement, together with any interest on such debt, is subordinated to any indebtedness of Borrower or Assumptor to Noteholder under the Loan Documents or the Assumed Loan Documents, as applicable.

(b) Any collection or receipts with respect to any such indebtedness of Borrower to Assumptor, or of Assumptor to Borrower, will be collected, enforced and received by Assumptor or Borrower (as applicable) in trust for the benefit of Noteholder, and will be paid over to Noteholder on

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account of the indebtedness of Borrower and Assumptor to Noteholder, but without impairing or affecting in any manner the liability of Borrower or Assumptor under the other provisions of the Loan Documents or the Assumed Loan Documents, as applicable, and this Agreement.

(c) Notwithstanding the provisions of Section 20(b), until the occurrence of an Event of Default under the Security Instrument, Borrower or Assumptor (as applicable) will be entitled to retain for its own account all payments made on account of the principal of and interest on any such indebtedness; provided no such payment is made more than ten (10) days in advance of the due date.

21. Loan Document Modifications. The following modifications are hereby made to the Loan Documents:

(a) From and after the date hereof, all references to the defined term “Loan Documents” in any of the Assumed Loan Documents (and any documents executed concurrently with this Agreement) shall be deemed to mean, collectively, (i) this Assumption Agreement, (ii) the Note, the Security Instrument, the County UCC and the State UCC, in each case as modified hereby, (iii) the Replacement Reserve Agreement, (iv) the O&M Agreement, (v) the replacement Assignment of Management Agreement, (vi) the new Guaranty, and (vii) any UCC-1 financing statements filed or recorded in connection herewith.

(b) From and after the date hereof, all references to the defined terms “Note” and “Security Instrument”, in any of the Loan Documents shall be deemed to mean such document as modified hereby.

(c) Effective as of the Effective Date, the Security Instrument is hereby amended as follows:

(i) The introductory paragraph is hereby amended to restate the notice addresses as follows:

Lender:	U.S. BANK NATIONAL ASSOCIATION, as Trustee
	for the registered holders of J.P. MORGAN CHASE
	COMMERCIAL MORTGAGE SECURITIES CORP.,
	MULTIFAMILY MORTGAGE PASS-THROUGH
	CERTIFICATES, SERIES 2011-K702, whose address
	is c/o Wells Fargo Bank, N.A., Commercial Mortgage
	Servicing, 1901 Harrison Street, 7th Floor, Oakland,
	California 94612, Attn: Asset Manager
Borrower:	SIR SPRING CREEK, LLC, a Delaware limited
	liability company, whose address is c/o Steadfast Asset
	Holdings, Inc., 18100 Von Karman Ave., Suite 500,
	Irvine, California 92612

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(ii) Section 1(ttt) is hereby amended and restated as follows: “Property Manager” means Steadfast Management Company, Inc., a California corporation.

(iii) Excluding only Section II.1 thereof (which added a new subsection (i) to Section 17 of the Security Instrument), Exhibit B is deleted in its entirety.

(iv) Section 33(b)(xxiv) is deleted in its entirety.

(d) Effective as of the Effective Date, the Note is hereby amended as follows:

(i) By deleting Section I (Recycled Provisions) of Exhibit A to the Note.

22. Further Documents, Etc. The Borrower Parties each hereby agree to execute and deliver to Noteholder, and authorize the filing and/or recording by Noteholder of, any and all further documents and instruments required by Noteholder to effectuate the transaction contemplated by this Assumption Agreement, to create, perfect and/or modify the liens and security interests granted to Noteholder under the Loan Documents and/or to give effect to the terms and provisions of this Assumption Agreement, including, without limitation, appropriate UCC financing statements or amendments.

23. Miscellaneous.

(a) This Assumption Agreement shall be governed and interpreted in accordance with the laws of the jurisdiction(s) specified in the Security Instrument. In any action brought or arising out of this Assumption Agreement, Borrower and Assumptor, and general partners, members and joint venturers of them, hereby consent to the jurisdiction of any state or federal court having proper venue as specified in the other Loan Documents and also consent to the service of process by any means authorized by the law of such jurisdiction(s). Except as expressly provided otherwise herein, all terms used herein shall have the meaning given to them in the Loan Documents. Time is of the essence of each term of the Loan Documents, including this Assumption Agreement. If any provision of this Assumption Agreement or any of the other Loan Documents shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that portion shall be deemed severed therefrom and the remaining parts shall remain in full force as though the invalid, illegal, or unenforceable portion had not been a part thereof. This Assumption Agreement, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or

14

by any act or failure to act on the part of any party, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

(b) Notwithstanding anything to the contrary herein, this Assumption Agreement is subject to the provisions of Section 9(a) of the Note as if such provisions were set forth at length herein.

(c) Assumptor acknowledges that in connection with the transactions contemplated by this Assumption Agreement it has not relied on any representations by Noteholder or any loan servicer regarding the Property, the title thereto or any other matter.

24. Counterparts. This Assumption Agreement may be executed in any number of counterparts, each of which when executed and delivered will be deemed an original and all of which taken together will be deemed to be one and the same instrument.

[Remainder of Page Intentionally Left Blank. Signatures Begin on Next Page.]

15

IN WITNESS WHEREOF, the Parties have caused this Assumption Agreement to be duly executed as of the date first above written.

NOTEHOLDER:
U.S. BANK NATIONAL ASSOCIATION, as Trustee for the registered holders of J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP., MULTIFAMILY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-K702
By:	Wells Fargo Bank, N.A., solely in its capacity as Master Servicer, as authorized pursuant to that Pooling and Servicing Agreement dated June 1, 2011
	By:	/s/ Denil Barber
	Name:	Denil Barber
	Title:	Assistant Vice President

Signature Page to Assumption Agreement

S-1

IN WITNESS WHEREOF, the Parties have caused this Assumption Agreement to be duly executed as of the date first above written.

BORROWER:
WC/TP SPRING CREEK, LLC, a Delaware limited liability company
By:	WillMax Spring Creek LLC, a Texas limited liability company, its Managing Member
	By:	/s/ John A. Wensinger
	Name:	John A. Wensinger
	Title:	Manager
ORIGINAL GUARANTOR:
/s/ John A. Wensinger JOHN A. WENSINGER, an individual

Signature Page to Assumption Agreement

S-2

IN WITNESS WHEREOF, the Parties have caused this Assumption Agreement to be duly executed as of the date first above written.

ASSUMPTOR:
SIR SPRING CREEK, LLC, a Delaware limited liability company
By:	Steadfast Income Advisor, LLC, a Delaware limited liability company, its Manager
	By:	/s/ Ana Marie del Rio
	Name:	Ana Marie del Rio
	Title:	Secretary
NEW GUARANTOR:
STEADFAST INCOME REIT OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
By:	STEADFAST INCOME REIT, INC., a Maryland corporation, its General Partner
	By:	/s/ Ana Marie del Rio
	Name:	Ana Marie del Rio
	Title:	Secretary
STEADFAST INCOME REIT, INC., a Maryland corporation
By:	/s/ Ana Marie del Rio
Name:	Ana Marie del Rio
Title:	Secretary

Signature Page to Assumption Agreement

S-3

ACKNOWLEDGMENT OF NOTEHOLDER

STATE OF CALIFORNIA	)
	)	ss
COUNTY OF	)

On March     , 2012, before me,                             , the undersigned Notary Public in and for said County and State, personally appeared                             , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Notary Public

My Commission Expires:

ACKNOWLEDGMENT OF BORROWER

STATE OF	)
	)	ss
COUNTY OF	)

On this the      day of March, 2012, before me, the undersigned Notary Public, personally appeared                             ,                              of                             , proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commission Expires:

ACKNOWLEDGMENT OF ORIGINAL GUARANTOR

STATE OF	)
	)	ss
COUNTY OF	)

On this the      day of March, 2012, before me, the undersigned Notary Public, personally appeared                             , proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commission Expires:

ACKNOWLEDGMENT OF ASSUMPTOR

STATE OF	)
	)	ss
COUNTY OF	)

On this the      day of March, 2012, before me, the undersigned Notary Public, personally appeared                              for                             , proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commission Expires:

SEE LOOSE CERTIFICATE ATTACHED

Loose Acknowledgement Certificate of Assumptor

CALIFORNIA ALL PURPOSE ACKNOWLEDGMENT

State of CALIFORNIA	)
	ss
County of ORANGE	)

On March 7, 2012, before me, Mona Salama, Notary Public, personally appeared Ana Marie del Rio, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

	WITNESS my hand and official seal.
	/s/ Mona Salama
	Signature of Notary Public

ACKNOWLEDGMENT OF NEW GUARANTOR

STATE OF	)
	)	ss
COUNTY OF	)

On this the      day of March, 2012, before me, the undersigned Notary Public, personally appeared                             , proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commission Expires:

SEE LOOSE CERTIFICATE ATTACHED

ACKNOWLEDGMENT OF NEW GUARANTOR

STATE OF	)
	)	ss
COUNTY OF	)

On this the      day of March, 2012, before me, the undersigned Notary Public, personally appeared                             , proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commission Expires:

SEE LOOSE CERTIFICATE ATTACHED

Loose Acknowledgement Certificate of New Guarantor

Steadfast Income REIT Operating Partnership, L.P.

CALIFORNIA ALL PURPOSE ACKNOWLEDGMENT

State of CALIFORNIA	)
	ss
County of ORANGE	)

On March 7, 2012, before me, Mona Salama, Notary Public, personally appeared Ana Marie del Rio, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

	WITNESS my hand and official seal.
	/s/ Mona Salama
	Signature of Notary Public

Loose Acknowledgement Certificate of New Guarantor

Steadfast Income REIT, Inc.

CALIFORNIA ALL PURPOSE ACKNOWLEDGMENT

State of CALIFORNIA	)
	ss
County of ORANGE	)

On March 7, 2012, before me, Mona Salama, Notary Public, personally appeared Ana Marie del Rio, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

	WITNESS my hand and official seal.
	/s/ Mona Salama
	Signature of Notary Public

EXHIBIT A

TO ASSUMPTION AGREEMENT

PREPARED BY AND	)
WHEN RECORDED	)
MAIL TO:	)
Harold A. Hagen, Esq.	)
Bryan Cave LLP	)
333 Market Street, 25th Floor	)
San Francisco, CA 94105	)

MEMORANDUM OF ASSUMPTION AGREEMENT

U.S. BANK NATIONAL ASSOCIATION, as Trustee for the registered holders of J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP., MULTIFAMILY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-K702, with a mailing address c/o Wells Fargo Bank, N.A., Commercial Mortgage Servicing, 1901 Harrison Street, 7^th Floor, Oakland, California 94612 (“Noteholder”) WC/TP SPRING CREEK, LLC, a Delaware limited liability company, with a mailing address at c/o WillMax Capital Inc., 8111 Preston Road, Suite 320, Dallas, Texas 75225 (“Borrower”), JOHN A. WENSINGER, an individual, with a mailing address at c/o WillMax Capital Inc., 8111 Preston Road, Suite 320, Dallas, Texas 75225 (“Original Guarantor”), SIR SPRING CREEK, LLC, a Delaware limited liability company, with a mailing address at c/o Steadfast Asset Holdings, Inc., 18100 Von Karman Ave., Suite 500, Irvine, California 92612 (“Assumptor”), and STEADFAST INCOME REIT OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“OP”) and STEADFAST INCOME REIT, INC., a Maryland corporation (“SIR” and, together with OP, jointly and severally, “New Guarantor”), each with a mailing address at c/o Steadfast Asset Holdings, Inc., 18100 Von Karman Ave., Suite 500, Irvine, California 92612, are parties to that certain ASSUMPTION AGREEMENT dated of even date herewith (“Assumption Agreement”). The undersigned parties agree that all obligations under that certain Multifamily Note - CME (“Note”) dated January 31, 2011, in the original principal amount of Fourteen Million One Hundred Thousand and no/100 Dollars ($14,100,000.00), and secured by that certain Multifamily Mortgage, Assignment of Rents and Security Agreement (Oklahoma) (“Security Instrument”) executed by Borrower for the benefit of Holliday Fenoglio Fowler, L.P., a Texas limited partnership (“Original Lender”) and recorded on January 31, 2011, in Book 11562 at Page 1719 with the County Clerk of Oklahoma County, State of Oklahoma (“Official Records”), the Original Lender’s interest under which was assigned to the Federal Home Loan Mortgage Corporation, a corporation organized and existing under the laws of the United States (“Freddie Mac”), by instrument recorded on January 31, 2011, in Book 11562 at Page 1831 in said Official Records, and thereafter assigned by Freddie Mac to Noteholder by instrument recorded on July 5, 2011, in Book 11667 at Page 986 in said Official Records; and all other Loan Documents (as defined in the Assumption Agreement) securing the real property described on EXHIBIT A, have been assumed by Assumptor upon the terms and conditions set forth in the Assumption Agreement. The Assumption Agreement is by this reference incorporated herein and made a part hereof. This Memorandum of Assumption Agreement may be executed

in any number of counterparts, each of which when executed and delivered will be deemed an original and all of which taken together will be deemed to be one and the same instrument.

Dated: March     , 2012

[Add signature blocks, notary pages and Exhibit A property description]

EX-10.5

Exhibit 10.5

Freddie Mac Loan No. 981199259

Spring Creek of Edmond

MULTIFAMILY NOTE-CME

MULTISTATE – FIXED RATE

(REVISION DATE 6-1-2010)

US $14,100,000.00 Effective Date: As of January 31, 2011

FOR VALUE RECEIVED, the undersigned (together with such party’s or parties’ successors and assigns, “Borrower”) jointly and severally (if more than one) promises to pay to the order of HOLLIDAY FENOGLIO FOWLER, L.P., a Texas limited partnership, the principal sum of Fourteen Million One Hundred Thousand and 00/100 Dollars (US $14,100,000.00), with interest on the unpaid principal balance, as hereinafter provided.

1. Defined Terms.

(a) As used in this Note:

“Base Recourse” means a portion of the Indebtedness equal to zero percent (0%) of the original principal balance of this Note.

“Business Day” means any day other than a Saturday, a Sunday or any other day on which Lender or the national banking associations are not open for business.

“Cut-off Date” means the twelfth (12^th) Installment Due Date.

“Default Rate” means an annual interest rate equal to four (4) percentage points above the Fixed Interest Rate. However, at no time will the Default Rate exceed the Maximum Interest Rate.

“Defeasance Period” is the period beginning the day after the Defeasance Date until but not including the first day of the Window Period. The Defeasance Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.

“Fixed Interest Rate” means the annual interest rate of four and eighty eight hundredths percent (4.88%).

“Installment Due Date” means, for any monthly installment of interest only or principal and interest, the date on which such monthly installment is due and payable pursuant to Section 3 of this Note. The “First Installment Due Date” under this Note is March 1, 2011.

“Lender” means the holder from time to time of this Note.

“Loan” means the loan evidenced by this Note.

“Lockout Period” means the period beginning on the day that this Note is assigned to a REMIC trust until and including the Defeasance Date. The Lockout Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.

Page 1

“Maturity Date” means the earlier of (i) February 1, 2018 (the “Scheduled Maturity Date”), and (ii) the date on which the unpaid principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any right or remedy under any Loan Document.

“Maximum Interest Rate” means the rate of interest that results in the maximum amount of interest allowed by applicable law.

“Prepayment Premium Period” means the period during which, if a prepayment of principal occurs, a prepayment premium will be payable by Borrower to Lender. The Prepayment Premium Period is the period from and including the date of this Note until but not including the earlier to occur of the following (i) the day that this Note is assigned to a REMIC trust if this Note is assigned to a REMIC trust prior to the Cut-off Date or (ii) the first day of the Window Period. The Prepayment Premium Period only applies if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.

“Security Instrument” means the multifamily mortgage, deed to secure debt or deed of trust effective as of the effective date of this Note, from Borrower to or for the benefit of Lender and securing this Note.

“Window Period” means the three (3) consecutive calendar month period prior to the Scheduled Maturity Date.

“Yield Maintenance Period” means the period from and including the date of this Note until but not including the earlier to occur of the following (i) the first day that the Note is assigned to a REMIC trust or (ii) August 1, 2017 (the “Yield Maintenance Expiration Date”). The Yield Maintenance Period only applies if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.

(b) Other capitalized terms used but not defined in this Note shall have the meanings given to such terms in the Security Instrument.

2. Address for Payment. All payments due under this Note shall be payable at (i) if by regular mail - Holliday Fenoglio Fowler, L.P., Post Office Box 840637, Dallas, Texas 75284- 0637, or (ii) if by overnight mail - Bank of America Lockbox Services, Lockbox 840637, 1950 N. Stemmons Freeway, Suite 5010, Dallas, Texas 75207, or such other place as may be designated by Notice to Borrower from or on behalf of Lender.

3. Payments.

(a) Interest will accrue on the outstanding principal balance of this Note at the Fixed Interest Rate, subject to the provisions of Section 8 of this Note.

Page 2

(b) Interest under this Note shall be computed, payable and allocated on the basis of an actual/360 interest calculation schedule (interest is payable for the actual number of days in each month, and each month’s interest is calculated by multiplying the unpaid principal amount of this Note as of the first day of the month for which interest is being calculated by title Fixed Interest Rate, dividing the product by 360, and multiplying the quotient by the number of days in the month for which interest is being calculated). The portion of the monthly installment of principal and interest under this Note attributable to principal and the portion attributable to interest will vary based upon the number of days in the month for which such installment is paid. Each monthly payment of principal and interest will first be applied to pay in full interest due, and the balance of the monthly installment payment paid by Borrower will be credited to principal.

(c) Unless disbursement of principal is made by Lender to Borrower on the first day of a calendar month, interest for the period beginning on the date of disbursement and ending on and including the last day of such calendar month shall be payable by Borrower simultaneously with the execution of this Note. If disbursement of principal is made by Lender to Borrower on the first day of a calendar month, then no payment will be due from Borrower at the time of the execution of this Note. The Installment Due Date for the first monthly installment payment under Section 3(d) of interest only or principal and interest, as applicable, will be the First Installment Due Date set forth in Section 1(a) of this Note. Except as provided in this Section 3(c), Section 10 and in Section 11, accrued interest will be payable in arrears.

(d) Beginning on the First Installment Due Date, and continuing until and including the monthly installment due on the Maturity Date, principal and accrued interest shall be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of the monthly installment of principal and interest payable pursuant to this Section 3(d) on an Installment Due Date shall be Seventy Four Thousand Six Hundred Sixty One and 16/100 Dollars ($74,661.16).

(e) All remaining Indebtedness, including all principal and interest, shall be due and payable by Borrower on the Maturity Date.

(f) All payments under this Note shall be made in immediately available U.S. funds.

(g) Any regularly scheduled monthly installment of interest only or principal and interest payable pursuant to this Section 3 that is received by Lender before the date it is due shall be deemed to have been received on the due date for the purpose of calculating interest due.

(h) Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may be added to and become part of the unpaid principal balance of this Note and any reference to “accrued interest” shall refer to accrued interest which has not become part of the unpaid principal balance. Any amount added to principal pursuant to the Loan Documents shall bear interest at the applicable rate or rates specified in this Note and shall be payable with such interest upon demand by Lender and absent such demand, as provided in this Note for the payment of principal and interest.

4. Application of Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, Lender may apply the amount received to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Borrower agrees that neither Lender’s acceptance of a payment from Borrower in an amount that is less than all amounts then due and payable nor Lender’s application of such payment shall constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.

Page 3

5. Security. The Indebtedness is secured by, among other things, the Security Instrument, and reference is made to the Security Instrument for other rights of Lender as to collateral for the Indebtedness.

6. Acceleration. If an Event of Default has occurred and is continuing, the entire unpaid principal balance, any accrued interest, any prepayment premium payable under Section 10 and Section 11, and all other amounts payable under this Note and any other Loan Document, shall at once become due and payable, at the option of Lender, without any prior Notice to Borrower (except if notice is required by applicable law, then after such notice). Lender may exercise this option to accelerate regardless of any prior forbearance. For purposes of exercising such option, Lender shall calculate the prepayment premium as if prepayment occurred on the date of acceleration. If prepayment occurs thereafter, Lender shall recalculate the prepayment premium as of the actual prepayment date.

7. Late Charge.

(a) If any monthly installment of interest or principal and interest or other amount payable under this Note or under the Security Instrument or any other Loan Document is not received in full by Lender within ten (10) days after the installment or other amount is due, counting from and including the date such installment or other amount is due (unless applicable law requires a longer period of time before a late charge may be imposed, in which event such longer period shall be substituted), Borrower shall pay to Lender, immediately and without demand by Lender, a late charge equal to five percent (5%) of such installment or other amount due (unless applicable law requires a lesser amount be charged, in which event such lesser amount shall be substituted).

(b) Borrower acknowledges that its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan and that it is extremely difficult and impractical to determine those additional expenses. Borrower agrees that the late charge payable pursuant to this Section represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional expenses Lender will incur by reason of such late payment. The late charge is payable in addition to, and not in lieu of, any interest payable at the Default Rate pursuant to Section 8.

8. Default Rate.

(a) So long as (i) any monthly installment under this Note remains past due for thirty (30) days or more or (ii) any other Event of Default has occurred and is continuing, then notwithstanding anything in Section 3 of this Note to the contrary, interest under this Note shall accrue on the unpaid principal balance from the Installment Due Date of the first such unpaid monthly installment or the occurrence of such other Event of Default, as applicable, at the Default Rate.

(b) From and after the Maturity Date, the unpaid principal balance shall continue to bear interest at the Default Rate until and including the date on which the entire principal balance is paid in full.

Page 4

(c) Borrower acknowledges that (i) its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan, (ii) during the time that any monthly installment under this Note is delinquent for thirty (30) days or more, Lender will incur additional costs and expenses arising from its loss of the use of the money due and from the adverse impact on Lender’s ability to meet its other obligations and to take advantage of other investment opportunities; and (iii) it is extremely difficult and impractical to determine those additional costs and expenses. Borrower also acknowledges that, during the time that any monthly installment under this Note is delinquent for thirty (30) days or more or any other Event of Default has occurred and is continuing, Lender’s risk of nonpayment of this Note will be materially increased and Lender is entitled to be compensated for such increased risk. Borrower agrees that the increase in the rate of interest payable under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional costs and expenses Lender will incur by reason of the Borrower’s delinquent payment and the additional compensation Lender is entitled to receive for the increased risks of nonpayment associated with a delinquent loan.

9. Limits on Personal Liability.

(a) Except as otherwise provided in this Section 9, Borrower shall have no personal liability under this Note, the Security Instrument or any other Loan Document for the repayment of the Indebtedness or for the performance of any other obligations of Borrower under the Loan Documents and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations shall be Lender’s exercise of its rights and remedies with respect to the Mortgaged Property and to any other collateral held by Lender as security for the Indebtedness. This limitation on Borrower’s liability shall not limit or impair Lender’s enforcement of its rights against any guarantor of the Indebtedness or any guarantor of any other obligations of Borrower.

(b) Borrower shall be personally liable to Lender for the amount of the Base Recourse, plus any other amounts for which Borrower has personal liability under this Section 9.

(c) In addition to the Base Recourse, Borrower shall be personally liable to Lender for the repayment of a further portion of the Indebtedness equal to any loss or damage suffered by Lender as a result of the occurrence of any of the following events:

(i) Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3(a) of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence. However, Borrower will not be personally liable for any failure described in this subsection (i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

(ii) Borrower fails to apply all insurance proceeds and condemnation proceeds as required by the Security Instrument. However, Borrower will not be personally liable for any failure described in this subsection (ii) if Borrower is unable to apply insurance or condemnation proceeds as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

Page 5

(iii) Borrower fails to comply with Section 14(g) or (i) of the Security Instrument relating to the delivery of books and records, statements, schedules and reports.

(iv) Borrower fails to pay when due in accordance with the terms of the Security Instrument the amount of any item below marked “Deferred”; provided however, that if no item is marked “Deferred”, this Section 9(c)(iv) shall be of no force or effect.

[ Collect ]	Hazard Insurance premiums or other insurance premiums,
[ Collect ]	Taxes,
[Deferred]	water and sewer charges (that could become a lien on the Mortgaged Property),
[ N/A ]	ground rents,
[Deferred]	assessments or other charges (that could become a lien on the Mortgaged Property)

(v) Borrower engages in any willful act of material waste of the Mortgaged Property.

(d) In addition to the Base Recourse, Borrower shall be personally liable to Lender for:

(i) the performance of all of Borrower’s obligations under Section 18 of the Security Instrument (relating to environmental matters);

(ii) the costs of any audit under Section 14(g) of the Security Instrument; and

(iii) any costs and expenses incurred by Lender in connection with the collection of any amount for which Borrower is personally liable under this Section 9, including Attorneys’ Fees and Costs and the costs of conducting any independent audit of Borrower’s books and records to determine the amount for which Borrower has personal liability.

(e) All payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Security Instrument and the other Loan Documents shall be applied first to the portion of the Indebtedness for which Borrower has no personal liability.

(f) Notwithstanding the Base Recourse, Borrower shall become personally liable to Lender for the repayment of all of the Indebtedness upon the occurrence of any of the following Events of Default:

(i) Borrower or any SPE Equity Owner fails to comply with Section 33 of the Security Instrument;

(ii) a Transfer (including, but not limited to, a lien or encumbrance) that is an Event of Default under Section 21 of the Security Instrument, other than a Transfer consisting solely of the involuntary removal or involuntary withdrawal of a general partner in a limited partnership or a manager in a limited liability company;

Page 6

(iii) fraud or written material misrepresentation by Borrower or any officer, director, partner, member or employee of Borrower in connection with the application for or creation of the Indebtedness or any request for any action or consent by Lender;

(iv) Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the United States Bankruptcy Code;

(v) Borrower or any SPE Equity Owner voluntarily becomes subject to any reorganization, receivership, insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights;

(vi) The Mortgaged Property or any part thereof becomes an asset in a voluntary bankruptcy or becomes subject to any reorganization, receivership, insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights;

(vii) an order of relief is entered against Borrower or any SPE Equity Owner pursuant to the United States Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined in by a “Related Party;” or

(viii) an involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use commercially reasonable efforts to dismiss such proceeding or has consented to such proceeding.

For purposes of this Section, the term “Related Party” means:

(A) Borrower, any guarantor or any SPE Equity Owner; and

(B) any Person that holds, directly or indirectly, any ownership interest in or right to manage Borrower, any guarantor or any SPE Equity Owner, including without limitation, any shareholder, member or partner of Borrower, any guarantor or any SPE Equity Owner; and

(C) any Person in which any ownership interest (direct or indirect) or right to manage is held by Borrower, any guarantor, any SPE Equity Owner or any partner, shareholder or member of, or any other Person holding an interest in, Borrower, any guarantor or any SPE Equity Owner; and

(D) any other creditor of Borrower that is related by blood, marriage or adoption to Borrower, any guarantor, any SPE Equity Owner or any partner, shareholder or member of, or any other Person holding an interest in, Borrower, any guarantor or any SPE Equity Owner.

If Borrower, any guarantor, any SPE Equity Owner or any Related Party has solicited creditors to initiate or participate in any proceeding referred to in this Section 9, regardless of whether any of the creditors solicited actually initiates or participates in the proceeding, then such proceeding shall be considered as having been initiated by a Related Party.

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(g) To the extent that Borrower has personal liability under this Section 9, Lender may exercise its rights against Borrower personally without regard to whether Lender has exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any guarantor, or pursued any other rights available to Lender under this Note, the Security Instrument, any other Loan Document or applicable law. To the fullest extent permitted by applicable law, in any action to enforce Borrower’s personal liability under this Section 9, Borrower waives any right to set off the value of the Mortgaged Property against such personal liability.

10. Voluntary and Involuntary Prepayments During the Prepayment Premium Period (Section Applies Prior to Securitization and if Loan is Assigned to REMIC Trust On or After the Cut-off Date).

(a) This Section 10 shall apply (i) prior to the date that this Note is assigned to a REMIC trust and (ii) if this Note is assigned to a REMIC trust on or after the Cut-off Date. This Section 10 shall be of no effect if this Note is assigned to a REMIC trust prior to the Cut-off Date.

(b) Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.

(c) During the Prepayment Premium Period, the Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. Unless Lender has previously notified Borrower of the expiration of the Prepayment Premium Period, upon receipt of such Notice from Borrower, Lender will notify Borrower if the Note has been assigned to a REMIC trust and the Prepayment Premium Period has expired. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 10 only, the term “Installment Due Date” shall mean the Business Day immediately preceding the scheduled Installment Due Date.

(d) Notwithstanding Section 10(c) above, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 10(c) above and meets the other requirements set forth in this subsection. Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender shall deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower shall be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

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(e) Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all of the principal of this Note, Borrower must pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment, plus (iii) any prepayment premium calculated pursuant to Section 10(f).

(f) Except as provided in Section 10(g), a prepayment premium shall be due and payable by Borrower in connection with any prepayment of principal under this Note during the Prepayment Premium Period. The prepayment premium shall be computed as follows:

(i) For any prepayment made during the Yield Maintenance Period, the prepayment premium shall be whichever is the greater of subsections (A) and (B) below:

(A) 1.0% of the amount of principal being prepaid; or

(B) the product obtained by multiplying:

(1) the amount of principal being prepaid or accelerated,

by

(2) the excess (if any) of the Monthly Note Rate over the Assumed Reinvestment Rate,

by

(3) the Present Value Factor.

For purposes of subsection (B), the following definitions shall apply:

Monthly Note Rate: one-twelfth (1/12) of the Fixed Interest Rate, expressed as a decimal calculated to five digits.

Prepayment Date: in the case of a voluntary prepayment, the date on which the prepayment is made; in the case of the application by Lender of collateral or security to a portion of the principal balance, the date of such application.

Assumed Reinvestment Rate: one-twelfth (1/12) of the yield rate expressed as a decimal to two digits, as of the close of the trading session which is five Business Days before the Prepayment Date, found among the Daily Treasury Yield Curve Rates, commonly known as Constant Maturity Treasury (“CMT”) rates, with a maturity equal to the remaining Yield Maintenance Period, as reported on the U.S. Department of the Treasury website. If no published CMT maturity matches the remaining Yield Maintenance Period, Lender shall interpolate as a decimal to two digits the yield rate between (a) the CMT with a maturity closest to, but shorter than, the remaining Yield Maintenance Period, and (b) the CMT with a maturity closest to, but longer than, the remaining Yield Maintenance Period, as follows:

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A =	yield rate for the CMT with a maturity shorter than the remaining Yield Maintenance Period
B =	yield rate for the CMT with a maturity longer than the remaining Yield Maintenance Period
C =	number of months to maturity for the CMT maturity shorter than the remaining Yield Maintenance Period
D =	number of months to maturity for the CMT maturity longer than the remaining Yield Maintenance Period
E =	number of months remaining in the Yield Maintenance Period

In the event the U.S. Department of the Treasury ceases publication of the CMT rates, the Assumed Reinvestment Rate shall equal the yield rate on the first U.S. Treasury security which is not callable or indexed to inflation and which matures after the expiration of the Yield Maintenance Period.

Present Value Factor: the factor that discounts to present value the costs resulting to Lender from the difference in interest rates during the months remaining in the Yield Maintenance Period using the Assumed Reinvestment Rate as the discount rate, with monthly compounding, expressed numerically as follows:

n = the number of months remaining in the Yield Maintenance Period; provided, however, if a prepayment occurs on an Installment Due Date, then the number of months remaining in the Yield Maintenance Period shall be calculated beginning with the month in which such prepayment occurs and if such prepayment occurs on a Business Day other than an Installment Due Date, then the number of months remaining in the Yield Maintenance Period shall be calculated beginning with the month immediately following the date of such prepayment.

ARR = Assumed Reinvestment Rate

(ii) For any prepayment made after the expiration of the Yield Maintenance Period but during the remainder of the Prepayment Premium Period, the prepayment premium shall be 1.0% of the amount of principal being prepaid.

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(g) Notwithstanding any other provision of this Section 10, no prepayment premium shall be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any insurance proceeds or condemnation award under the Security Instrument.

(h) Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note shall not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments.

(i) Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions.

11. Voluntary and Involuntary Prepayments During the Lockout Period and During the Defeasance Period (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

(a) This Section 11 shall apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 11 shall be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date.

(b) Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.

(c) Borrower may not voluntarily prepay any portion of the principal balance of this Note during the Lockout Period or during the Defeasance Period; provided, however, any prepayment occurring as a result of the application of any insurance proceeds or condemnation award under the Security Instrument shall be permitted during the Lockout Period and during the Defeasance Period. If any portion of the principal balance of this Note is prepaid during the Lockout Period or during the Defeasance Period by reason of the application by Lender of any proceeds of collateral or other security to any portion of the unpaid principal balance of this Note or following a determination that the prohibition on voluntary prepayments during the Lockout Period or during the Defeasance Period is in contravention of applicable law, the Borrower must also pay to Lender upon demand by Lender, a prepayment premium equal to five percent (5.0%) of the amount of principal being prepaid.

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(d) Notwithstanding any other provision of this Section 11, no prepayment premium shall be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any insurance proceeds or condemnation award under the Security Instrument.

(e) After the expiration of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 11 only, the term “Installment Due Date” shall mean the Business Day immediately preceding the scheduled Installment Due Date.

(f) Notwithstanding Section 11(e) above, following the end of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 11(e) and meets the other requirements set forth in this subsection. Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender shall deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower shall be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

(g) Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all of the principal of this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment.

(h) Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note shall not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments.

(i) Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in Section 11(c) of this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the lockout and prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions.

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(j) If, after the expiration of the Lockout Period, the Borrower defeases the Loan as described in Section 44 of the Security Instrument during the Defeasance Period, Borrower shall not have the right to voluntarily prepay any of the principal of this Note at any time.

12. DEFEASANCE (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

(a) This Section 12 shall apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 12 shall be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date.

(b) Section 5 of this Note is amended by adding a new paragraph at the end thereof as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 44 of the Security Instrument, the Indebtedness shall be secured by the Pledge Agreement and reference shall be made to the Pledge Agreement for other rights of Lender as to collateral for the Indebtedness.

(c) Section 9 of this Note is amended by adding a new paragraph at the end thereof as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 44 of the Security Instrument, Borrower shall have no personal liability under this Note or the Pledge Agreement for the repayment of the Indebtedness or for the performance of any other obligations of Borrower under this Note or the Pledge Agreement (other than any liability under Section 18 of the Security Instrument for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date), and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations shall be Lender’s exercise of its rights and remedies with respect to the collateral held by Lender under the Pledge Agreement as security for the Indebtedness.

(d) Section 21(a) of this Note is amended by adding a new paragraph at the end thereof as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 44 of the Security Instrument, all Notices, demands and other communications required or permitted to be given pursuant to this Note shall be given in accordance with the Pledge Agreement.

13. Costs and Expenses. To the fullest extent allowed by applicable law, Borrower shall pay all expenses and costs, including Attorneys’ Fees and Costs incurred by Lender as a result of any default under this Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or nonjudicial foreclosure proceeding. Borrower acknowledges and agrees that, in connection with each request by Borrower under this Note or any Loan Document, Borrower shall pay all

Page 13

reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies, regardless of whether the matter is approved, denied or withdrawn.

14. Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Security Instrument, or any other Loan Document or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of that or any other right or remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, shall not be a waiver of Lender’s right to require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s obligations under this Note shall not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender.

15. Waivers. Borrower and all endorsers and guarantors of this Note and all other third party obligors waive presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness.

16. Loan Charges. Neither this Note nor any of the other Loan Documents shall be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate greater than the Maximum Interest Rate. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan is interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, shall be deemed to be allocated and spread ratably over the stated term of this Note. Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of this Note.

17. Commercial Purpose. Borrower represents that Borrower is incurring the Indebtedness solely for the purpose of carrying on a business or commercial enterprise, and not for personal, family, household, or agricultural purposes.

18. Counting of Days. Except where otherwise specifically provided, any reference in this Note to a period of “days” means calendar days, not Business Days.

19. Governing Law. This Note shall be governed by the law of the Property Jurisdiction.

20. Captions. The captions of the Sections of this Note are for convenience only and shall be disregarded in construing this Note.

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21. Notices; Written Modifications.

(a) All Notices, demands and other communications required or permitted to be given pursuant to this Note shall be given in accordance with Section 31 of the Security Instrument.

(b) Any modification or amendment to this Note shall be ineffective unless in writing signed by the party sought to be charged with such modification or amendment; provided, however, in the event of a Transfer under the terms of the Security Instrument that requires Lender’s consent, any or some or all of the Modifications to Multifamily Note set forth in Exhibit A to this Note may be modified or rendered void by Lender at Lender’s option, by Notice to Borrower and the transferee, as a condition of Lender’s consent.

22. Consent to Jurisdiction and Venue. Borrower agrees that any controversy arising under or in relation to this Note may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have jurisdiction over all controversies that shall arise under or in relation to this Note. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Note is intended to limit any right that Lender may have to bring any suit, action or proceeding relating to matters arising under this Note in any court of any other jurisdiction.

23. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

24. State-Specific Provisions. N/A.

ATTACHED EXHIBIT. The Exhibit noted below, if marked with an “X” in the space provided, is attached to this Note:

x Exhibit A Modifications to Multifamily Note

IN WITNESS WHEREOF, and in consideration of the Lender’s agreement to lend Borrower the principal amount set forth above, Borrower has signed and delivered this Note under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative.

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WC/TP SPRING CREEK, LLC, a Delaware limited liability company
By:	WillMax Spring Creek LLC, a Texas limited liability company, its Managing Member
	By:	/s/ John A. Wensinger
		Name:	John A. Wensinger
		Manager
26-1712496
Borrower’s Social Security/Employer ID Number

[Note]

Page 16

PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION, WITHOUT RECOURSE.
HOLLIDAY FENOGLIO FOWLER, L.P., a Texas limited partnership
By:	Holliday GP Corp, a Delaware corporation, its general partner
	By:	/s/ Steven D. Henderson
		Steven D. Henderson
		Vice President
Freddie Mac Loan No. 981199259

[Note]

Page 17

EXHIBIT A

MODIFICATIONS TO MULTIFAMILY NOTE

The following modifications are made to the text of the Note that precedes this Exhibit.

I. RECYCLED PROVISIONS:

1. The following new subsection 9(c)(vi) is added as follows:

“(vi) If any of the Underwriting Representations set forth in Section 33(f) of the Security Instrument or any of the Separateness Representations set forth in Section 33(g) of the Security Instrument shall have been untrue in any respect when made.”

2. Section 9(f)(i) is deleted and replaced with the following:

“(i) Borrower or any SPE Equity Owner fails to comply with Section 33(a) through 33(e) of the Security Instrument;”

II. ZONING MODIFICATION:

1. Section 9(c) is modified to insert the following new subsection:

(vii) A casualty occurs affecting the Mortgaged Property, which results in loss or damage to Lender because

(A) (1) the Mortgaged Property is a legal, non-conforming use under the applicable zoning laws, ordinances and/or regulations in the Property Jurisdiction (the “Zoning Code”), (2) the affected Improvements cannot be rebuilt to their pre-casualty condition under the terms of the Zoning Code, and (3) the Hazard Insurance proceeds available to Lender under the terms of the Security Instrument are insufficient to repay the Indebtedness in full, or

(B) Borrower fails to commence and diligently pursue completion of any Restoration within the time frame required by the Zoning Code and any permits issued pursuant thereto as necessary to allow the Restoration to the pre-casualty condition described in (A)(2) above.

Page A-1

EX-10.6

Exhibit 10.6

ALLONGE TO NOTE

This Allonge is to be firmly affixed and attached to the Note as a part thereof.

as of March 9, 2012

A. U.S. BANK NATIONAL ASSOCIATION, as Trustee for the registered holders of J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP., MULTIFAMILY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-K702 (“Lender”) is the owner and holder of that certain Multifamily Note - CME, dated as of January 31, 2011 (the “Note”), evidencing a loan (the “Loan”) in the original principal amount of Fourteen Million One Hundred Thousand and No/100ths Dollars ($14,100,000.00), made by WC/TP SPRING CREEK, LLC, a Delaware limited liability company (“Original Borrower”), in favor of HOLLIDAY FENOGLIO FOWLER, L.P., a Texas limited partnership (“Original Lender”).

B. Pursuant to that certain Multifamily Mortgage, Assignment of Rents and Security Agreement (Oklahoma) of even date with the Note (the “Security Instrument”), Original Borrower mortgaged, gave, granted, bargained, sold, aliened, enfeoffed, conveyed, confirmed, pledged, assigned and hypothecated all of its right, title and interest in, to and under the property described in the Security Instrument (the “Mortgaged Property”). The Note, Security Instrument and the Assumed Loan Documents (as defined in the Assumption Agreement (defined below)) are collectively referred to as the “Loan Documents.”

C. Original Lender transferred, assigned and conveyed all of its right, title and interest in and to the Loan Documents to Lender, and Lender is the current holder of Original Lender’s interest in the Loan and the Loan Documents.

D. Original Borrower, with the consent of Lender, has transferred the Mortgaged Property to SIR SPRING CREEK, LLC, a Delaware limited liability company (“Assuming Borrower”), subject to the Security Instrument and the other Loan Documents, and Assuming Borrower has assumed each and every obligation of Original Borrower under the Loan Documents. In connection therewith, Original Borrower and Assuming Borrower and the other parties named therein executed and delivered to Lender an Assumption Agreement (“Assumption Agreement”) of even date herewith.

FOR VALUE RECEIVED, Assuming Borrower represents, warrants and agrees in favor of Lender and its successors and assigns, under the Note made by Original Borrower, to which this Allonge is attached, as follows:

1. Confirmation of Recitals. Each of the foregoing statements is incorporated herein and is made a part hereof.

2. Loan Terms to Remain Same. The terms of the Note including, without limitation, the rate of interest accrual and the amount of monthly installments due thereunder, are unchanged except as modified by the Assumption Agreement and shall remain in full force and effect, enforceable against Assuming Borrower in accordance therewith.

1

IN WITNESS WHEREOF, the undersigned has executed and delivered this Allonge to the Note as of the date first set forth above.

ASSUMING BORROWER:
SIR SPRING CREEK, LLC, a Delaware limited liability company
By:	Steadfast Income Advisor, LLC, a Delaware limited liability company, its Manager
	By:	/s/ Ana Marie del Rio
	Name:	Ana Marie del Rio
	Title:	Secretary

Signature page to Allonge

EX-10.7

Exhibit 10.7

Prepared by, and after recording return to:

Bernice H. Cilley, Esquire

Troutman Sanders LLP

Post Office Box 1122

Richmond, Virginia 23218-1122

I certify this to be a true and exact copy of the original.
By:

MULTIFAMILY MORTGAGE,

ASSIGNMENT OF RENTS

AND SECURITY AGREEMENT

(OKLAHOMA – REVISION DATE 03-31-2008)

Freddie Mac Loan No. 981199259

Spring Creek of Edmond

MULTIFAMILY MORTGAGE,

ASSIGNMENT OF RENTS

AND SECURITY AGREEMENT

(OKLAHOMA – REVISION DATE 03-31-2008)

THIS MULTIFAMILY MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the “Instrument”) is made as of the 31st day of January, 2011, between WC/TP SPRING CREEK, LLC, a limited liability company organized and existing under the laws of Delaware, whose address is 8111 Preston Road, Suite 715, Dallas, Texas 75225, as mortgagor (“Borrower”), and HOLLIDAY FENOGLIO FOWLER, L.P., a limited partnership organized and existing under the laws of Texas, whose address is 9 Greenway Plaza, Suite 700, Houston, Texas 77046, as mortgagee (“Lender”). Borrower’s organizational identification number, if applicable, is 4486082.

Borrower is indebted to Lender in the principal amount of $14,100,000.00, as evidenced by Borrower’s Multifamily Note payable to Lender dated as of the date of this Instrument, and maturing on February 1, 2018 (the “Maturity Date”).

TO SECURE TO LENDER the repayment of the Indebtedness, and all renewals, extensions and modifications of the Indebtedness, and the performance of the covenants and agreements of Borrower contained in the Loan Documents, Borrower mortgages, warrants, grants, conveys and assigns to Lender, with power of sale, the Mortgaged Property, including the Land located in the County of Oklahoma,, State of Oklahoma, and described in Exhibit A attached to this Instrument.

Borrower represents and warrants that Borrower is lawfully seized of the Mortgaged Property and has the right, power and authority to grant, convey and assign the Mortgaged Property, and that the Mortgaged Property is unencumbered except as shown on the schedule of exceptions to coverage in the title policy issued to and accepted by Lender contemporaneously with the execution and recordation of this Instrument and insuring Lender’s interest in the Mortgaged Property (the “Schedule of Title Exceptions”). Borrower covenants that Borrower will warrant and defend generally the title to the Mortgaged Property against all claims and demands, subject to any easements and restrictions listed in the Schedule of Title Exceptions.

UNIFORM COVENANTS – CME

REVISION DATE 11-23-2010

Covenants. In consideration of the mutual promises set forth in this Instrument, Borrower and Lender covenant and agree as follows:

1. DEFINITIONS. The following terms, when used in this Instrument (including when used in the above recitals), shall have the following meanings:

(a) “Affiliate” of any Person means (i) any other Person which, directly or indirectly, is in Control of, is Controlled by or is under common Control with, such Person; (ii) any other Person who is a director or officer of (A) such Person, (B) any subsidiary of such Person, or (C) any Person described in clause (i) above; or (iii) any corporation, limited liability company or partnership which has as a director any Person described in subsection (ii) above.

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(b) “Approved Seller/Servicer” is defined in Section 43(b).

(c) “Assignment of Management Agreement” means Assignment of Management Agreement and Subordination of Management Fee of even date herewith among Borrower, Lender and Property Manager, including all schedules, riders, allonges and addenda, as such Assignment of Management Agreement may be amended from time to time.

(d) “Attorneys’ Fees and Costs” means (i) fees and out of pocket costs of Lender’s and Loan Servicer’s attorneys, as applicable, including costs of Lender’s and Loan Servicer’s in-house counsel, support staff costs, costs of preparing for litigation, computerized research, telephone and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process service, videotaping and similar costs and expenses; (ii) costs and fees of expert witnesses, including appraisers; (iii) investigatory fees; and (iv) the costs for any opinion required by Lender pursuant to the terms of the Loan Documents.

(e) “Borrower” means all entities identified as “Borrower” in the first paragraph of this Instrument, together with their successors and assigns.

(f) “Business Day” means any day other than a Saturday, a Sunday or any other day on which Lender or the national banking associations are not open for business.

(g) “Claim” is defined in Section 18(1).

(h) “Collateral Agreement” means any separate agreement between Borrower and Lender for the purpose of establishing replacement reserves for the Mortgaged Property, establishing a fund to assure the completion of repairs or improvements specified in that agreement, or assuring reduction of the outstanding principal balance of the Indebtedness if the occupancy of or income from the Mortgaged Property does not increase to a level specified in that agreement, or any other agreement or agreements between Borrower and Lender which provide for the establishment of any other fund, reserve or account.

(i) “Condemnation” is defined in Section 20(a).

(j) “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person whether through ownership of voting securities, beneficial interests, by contract or otherwise. The definition is to be construed to apply equally to variations of the word “Control,” including “Controlled,” “Controlling” or “Controlled by.”

(k) “Controlling Entity” means an entity which, directly or indirectly through one or more intermediaries, (i) owns or Controls a general partnership interest or a Controlling Interest of the limited partnership interests in Borrower (if Borrower is a partnership), (ii) is a Manager of Borrower or owns a Controlling Interest in a manager of Borrower or a Controlling Interest of the ownership or membership interests in Borrower (if Borrower is a limited liability company), or (iii) owns or Controls a Controlling Interest of any class of voting stock of Borrower (if Borrower is a corporation). The SPE Equity Owner, if applicable, shall be considered a Controlling Entity for purposes of this definition.

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(l) “Controlling Interest” means (i) 50 percent or more of the direct or indirect ownership interests in an entity, or (ii) a percentage ownership interest in an entity of less than 50 percent, if the owner(s) of that interest actually Control(s) the business and affairs of the entity without the requirement of consent of any other party.

(m) “Cut-off Date” is defined in the Note.

(n) “Defeasance” is defined in Section 44.

(o) “Defeasance Closing Date” is defined in Section 44(b).

(p) “Defeasance Collateral” means (i) a Freddie Mac Debt Security, (ii) a Fannie Mae Debt Security, (iii) U.S. Treasury Obligations, or (iv) FHLB Obligations.

(q) “Defeasance Date” means the second (2^nd) anniversary of the “startup date” of the last REMIC within the meaning of Section 860G(a)(9) of the Tax Code which holds all or any portion of the Loan.

(r) “Defeasance Fee” is defined in Section 44(c).

(s) “Defeasance Notice” is defined in Section 44(b).

(t) “Defeasance Period” is defined in the Note.

(u) “Disclosure Document” is defined in Section 39.

(v) “Eligible Account” means an identifiable account which is separate from all other funds held by the holding institution that is either (i) an account or accounts maintained with the corporate trust department of a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (ii) a segregated trust account or accounts maintained with the corporate trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal and state authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.

(w) “Eligible Institution” means a federal or state chartered depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least A-3 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., P-3 by Moody’s Investors Service, Inc. and F-3 by Fitch, Inc. in the case of accounts in which funds are held for thirty (30) days or less or, in the case of letters of credit or accounts in which funds are held for more than thirty (30) days, the long term unsecured debt obligations of which are rated at least “A” by Fitch, Inc. and Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and “A2” by Moody’s Investors Service, Inc. If at any time an Eligible Institution does not meet the required rating, the Loan Servicer must move the Eligible Account within thirty (30) days of such event to an appropriately rated Eligible Institution.

(x) “Environmental Inspections” is defined in Section 18(g).

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(y) “Environmental Permit” means any permit, license, or other authorization issued under any Hazardous Materials Law with respect to any activities or businesses conducted on or in relation to the Mortgaged Property.

(z) “ERISA” is defined in Section 48(d).

(aa) “Event of Default” means the occurrence of any event listed in Section 22.

(bb) “Fannie Mae Debt Security” means any non-callable bond, debenture, note, or other similar debt obligation issued by Federal National Mortgage Association.

(cc) “FHLB Obligations” mean direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by any consolidated bank that is a member of the Federal Home Loan Banks.

(dd) “First Mortgage” is defined in Section 43(b).

(ee) “Fixtures” means all property owned by Borrower which is so attached to the Land or the Improvements as to constitute a fixture under applicable law, including: machinery, equipment, engines, boilers, incinerators, installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air, or light; antennas, cable, wiring and conduits used in connection with radio, television, security, fire prevention, or fire detection or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors; cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants; swimming pools; and exercise equipment.

(ff) “Freddie Mac” is defined in Section 43(a).

(gg) “Freddie Mac Debt Security” means any non-callable bond, debenture, note, or other similar debt obligation issued by Freddie Mac.

(hh) “Governmental Authority” means any board, commission, department or body of any municipal, county, state or federal governmental unit, or any subdivision of any of them, that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of the Mortgaged Property or over the Borrower.

(ii) “Hazard Insurance” is defined in Section 19.

(jj) “Hazardous Materials” means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive materials; polychlorinated biphenyls (“PCBs”) and compounds containing them; lead and lead-based paint; asbestos or asbestos containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which on the Mortgaged Property is prohibited by any federal, state or local authority; any substance that requires special handling and any other material or substance now or in the future that (i) is defined as a “hazardous substance,”

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“hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” or “pollutant” by or within the meaning of any Hazardous Materials Law, or (ii) is regulated in any way by or within the meaning of any Hazardous Materials Law.

(kk) “Hazardous Materials Laws” means all federal, state, and local laws, ordinances and regulations and standards, rules, policies and other governmental requirements, administrative rulings and court judgments and decrees in effect now or in the future and including all amendments, that relate to Hazardous Materials or the protection of human health or the environment and apply to Borrower or to the Mortgaged Property. Hazardous Materials Laws include, but are not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101, et seq., and their state analogs.

(ll) “Impositions” and “Imposition Deposits” are defined in Section 7(a).

(mm) “Improvements” means the buildings, structures, improvements, and alterations now constructed or at any time in the future constructed or placed upon the Land, including any future replacements and additions.

(nn) “Indebtedness” means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under, the Note, this Instrument or any other Loan Document, including prepayment premiums, late charges, default interest, and advances as provided in Section 12 to protect the security of this Instrument.

(oo) “Indemnitees” is defined in Section 18(j).

(pp) “Initial Owners” means, with respect to Borrower or any other entity, the Persons that (i) on the date of the Note, or (ii) on the date of a Transfer to which Lender has consented, own in the aggregate 100 percent of the ownership interests in Borrower or that entity.

(qq) “Intercreditor Agreement” is defined in Section 43(b).

(rr) “Issuer Group” is defined in Section 47.

(ss) “Issuer Person” is defined in Section 47.

(tt) “Junior Lender” is defined in Section 43(e).

(uu) “Land” means the land described in Exhibit A.

(w) “Leases” means all present and future leases, subleases, licenses, concessions or grants or other possessory interests now or hereafter in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals.

(ww) “Lender” means the entity identified as “Lender” in the first paragraph of this Instrument, or any subsequent holder of the Note.

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(xx) “Lien” is defined in Section 16.

(yy) “Loan” means the loan evidenced by the Note.

(zz) “Loan Documents” means the Note, this Instrument, the Assignment of Management Agreement, all guaranties, all indemnity agreements, all Collateral Agreements, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any guarantor or any other Person in connection with the Loan evidenced by the Note, as such documents may be amended from time to time.

(aaa) “Loan Servicer” means the entity that from time to time is designated by Lender or its designee to collect payments and deposits and receive Notices under the Note, this Instrument and any other Loan Document, and otherwise to service the Loan evidenced by the Note for the benefit of Lender. Unless Borrower receives Notice to the contrary, the Loan Servicer is the entity identified as “Lender” in the first paragraph of this Instrument.

(bbb) “Lockout Period” is defined in the Note.

(ccc) “Manager” or “Managers” means a Person who is named or designated as a manager or managing member or otherwise acts in the capacity of a manager or managing member of a limited liability company in a limited liability company agreement or similar instrument under which the limited liability company is formed or operated.

(ddd) “Material Adverse Effect” is defined in Section 48(f).

(eee) “MMP” means a moisture management plan to control water intrusion and prevent the development of Mold or moisture at the Mortgaged Property throughout the term of this Instrument. At a minimum, the MMP must contain a provision for (i) staff training, (ii) information to be provided to tenants, (iii) documentation of the plan, (iv) the appropriate protocol for incident response and remediation and (v) routine, scheduled inspections of common space and unit interiors.

(fff) “Mold” means mold, fungus, microbial contamination or pathogenic organisms.

(ggg) “Mortgaged Property” means all of Borrower’s present and future right, title and interest in and to all of the following:

(i) the Land;

(ii) the Improvements;

(iii) the Fixtures;

(iv) the Personalty;

(v) all current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights of way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses, and appurtenances related to or benefiting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated;

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(vi) all proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Properly, whether or not Borrower obtained the insurance pursuant to Lender’s requirement;

(vii) all awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, including any awards or settlements resulting from condemnation proceedings or the total or partial taking of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof;

(viii) all contracts, options and other agreements for the sale of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations;

(ix) all proceeds from the conversion, voluntary or involuntary, of any of the above into cash or liquidated claims, and the right to collect such proceeds;

(x) all Rents and Leases;

(xi) all earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the Loan secured by this Instrument;

(xii) all Imposition Deposits;

(xiii) all refunds or rebates of Impositions by any municipal, state or federal authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Instrument is dated);

(xiv) all tenant security deposits which have not been forfeited by any tenant under any Lease and any bond or other security in lieu of such deposits; and

(xv) all names under or by which any of the above Mortgaged Property may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Mortgaged Property.

(hhh) “New Commercial Lease” is defined in Section 4(f).

(iii) “Note” means the Multifamily Note described on page 1 of this Instrument, including all schedules, riders, allonges and addenda, as such Multifamily Note may be amended from time to time.

(jjj) “Notice” is defined in Section 31(a).

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(kkk) “O&M Program” is defined in Section 18(d).

(lll) “Person” means any natural person, sole proprietorship, corporation, general partnership, limited partnership, limited liability company, limited liability limited partnership, joint venture, association, joint stock company, bank, trust, estate, unincorporated organization, any federal, state, county or municipal government (or any agency or political subdivision thereof), endowment fund or any other form of entity.

(mmm) “Personalty” means all:

(i) accounts (including deposit accounts) of Borrower related to the Mortgaged Property;

(ii) equipment and inventory owned by Borrower, which are used now or in the future in connection with the ownership, management or operation of the Land or Improvements or are located on the Land or Improvements, including furniture, furnishings, machinery, building materials, goods, supplies, tools, books, records (whether in written or electronic form), and computer equipment (hardware and software);

(iii) other tangible personal property owned by Borrower which is used now or in the future in connection with the ownership, management or operation of the Land or Improvements or is located on the Land or in the Improvements, including ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances (other than Fixtures);

(iv) any operating agreements relating to the Land or the Improvements;

(v) any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements;

(vi) all other intangible property, general intangibles and rights relating to the operation of, or used in connection with, the Land or the Improvements, including all governmental permits relating to any activities on the Land and including subsidy or similar payments received from any sources, including a governmental authority; and

(vii) any rights of Borrower in or under letters of credit.

(nnn) “Pledge Agreement” is defined in Section 44(f).

(ooo) “Preapproved Transfer” is defined in Section 21(c).

(ppp) “Prior Lien” is defined in Section 12.

(qqq) “Proceeding” means, whether voluntary or involuntary, any case, proceeding or other action against Borrower or any SPE Equity Owner under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors.

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(rrr) “Prohibited Activities or Conditions” is defined in Section 18(a).

(sss) “Property Jurisdiction” is defined in Section 30(a).

(ttt) “Property Manager” means WillMax Capital Management Inc., a Texas corporation.

(uuu) “Rating Agencies” means Fitch, Inc.; Moody’s Investors Service, Inc.; or Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor entity of the foregoing, or any other nationally recognized statistical rating organization.

(vvv) “Release Instruments” is defined in Section 44(f).

(www) “Remedial Work” is defined in Section 18(h).

(xxx) “Rent Schedule” means a written schedule for the Mortgaged Property showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable for the current month, the date through which rent has been paid, and any related information requested by Lender.

(yyy) “Rents” means all rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due, or to become due, and deposits forfeited by tenants, and, if Borrower is a cooperative housing corporation or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements, whether now due, past due, or to become due.

(zzz) “Required DSCR” is defined in Section 43(b).

(aaaa) “Required LTV” is defined in Section 43(b).

(bbbb) “Restoration” is defined in Section 19(f).

(cccc) “Scheduled Debt Payments” is defined in Section 44(g).

(dddd) “Secondary Market Transaction” means (a) any sale or assignment of this Instrument, the Note and the other Loan Documents to one or more investors as a whole loan; (b) a participation of the Loan to one or more investors; (c) any deposit of this Instrument, the Note and the other Loan Documents with a trust or other entity which may sell certificates or other instruments to investors evidencing an ownership interest in the assets of such trust or other entity; or (d) any other sale, assignment or transfer of the Loan or any interest therein to one or more investors.

(eeee) “Securities Liabilities” is defined in Section 47.

(ffff) “Securitization” means when the Note or any portion of the Note is assigned to a REMIC trust.

(gggg) “Servicing Arrangement” is defined in Section 36(b).

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(hhhh) “Single Purpose Entity” is defined in Section 33(b).

(iiii) “SPE Equity Owner” is NOT APPLICABLE-Borrower shall not be required to maintain an SPE Equity Owner in its organizational structure during the term of the Loan and all references to SPE Equity Owner in this Instrument and in the Note shall be of no force or effect.

(jjjj) “Successor Borrower” is defined in Section 44(h).

(kkkk) “Supplemental Mortgage” is defined in Section 43(b).

(llll) “Supplemental Mortgage Product” is defined in Section 43(a).

(mmmm) “Tax Code” means the Internal Revenue Code of the United States.

(nnnn) “Taxes” means all taxes, assessments, vault rentals and other charges, if any, whether general, special or otherwise, including all assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, will become a lien on the Land or the Improvements.

(oooo) “Third Party Information” is defined in Section 47.

(pppp) “Transfer” is defined in Section 21.

(qqqq) “Transfer and Assumption Agreement” is defined in Section 44(f).

(rrrr) “UCC Collateral” is defined in Section 2.

(ssss) “Underwriter Group” is defined in Section 47.

(tttt) “U.S. Treasury Obligations” means direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the United States of America.

2. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT.

(a) This Instrument is also a security agreement under the Uniform Commercial Code for any of the Mortgaged Property which, under applicable law, may be subjected to a security interest under the Uniform Commercial Code, whether such Mortgaged Property is owned now or acquired in the future, and all products and cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and Borrower hereby grants to Lender a security interest in the UCC Collateral. Borrower hereby authorizes Lender to prepare and file financing statements, continuation statements and financing statement amendments in such form as Lender may require to perfect or continue the perfection of this security interest and Borrower agrees, if Lender so requests, to execute and deliver to Lender such financing statements, continuation statements and amendments. Borrower shall pay all filing costs and all costs and expenses of any record searches for financing statements and/or amendments that Lender may require. Without the prior written consent of Lender, Borrower shall not create or permit to exist any other lien or security interest in any of the UCC Collateral.

(b) Unless Borrower gives Notice to Lender within 30 days after the occurrence of any of the following, and executes and delivers to Lender modifications or supplements of this

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Instrument (and any financing statement which may be filed in connection with this Instrument) as Lender may require, Borrower shall not (i) change its name, identity, structure or jurisdiction of organization; (ii) change the location of its place of business (or chief executive office if more than one place of business); or (iii) add to or change any location at which any of the Mortgaged Property is stored, held or located.

(c) If an Event of Default has occurred and is continuing, Lender shall have the remedies of a secured party under the Uniform Commercial Code, in addition to all remedies provided by this Instrument or existing under applicable law. In exercising any remedies, Lender may exercise its remedies against the UCC Collateral separately or together, and in any order, without in any way affecting the availability of Lender’s other remedies.

(d) This Instrument constitutes a financing statement with respect to any part of the Mortgaged Property that is or may become a Fixture, if permitted by applicable law.

3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.

(a) As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all Rents. It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all Rents and to authorize and empower Lender to collect and receive all Rents without the necessity of further action on the part of Borrower. Promptly upon request by Lender, Borrower agrees to execute and deliver such further assignments as Lender may from time to time require. Borrower and Lender intend this assignment of Rents to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to this absolute assignment of Rents, and for no other purpose, Rents shall not be deemed to be a part of the Mortgaged Property. However, if this present, absolute and unconditional assignment of Rents is not enforceable by its terms under the laws of the Property Jurisdiction, then the Rents shall be included as a part of the Mortgaged Property and it is the intention of the Borrower that in this circumstance this Instrument create and perfect a lien on Rents in favor of Lender, which lien shall be effective as of the date of this Instrument.

(b) After the occurrence of an Event of Default, and during the continuance of such Event of Default, Borrower authorizes Lender to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender. However, until the occurrence of an Event of Default, Lender hereby grants to Borrower a revocable license to collect and receive all Rents, to hold all Rents in trust for the benefit of Lender and to apply all Rents to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents, including Imposition Deposits, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities, Taxes and insurance premiums (to the extent not included in Imposition Deposits), tenant improvements and other capital expenditures. So long as no Event of Default has occurred and is continuing, the Rents remaining after application pursuant to the preceding sentence may be retained by Borrower free and clear of, and released from, Lender’s rights with respect to Rents under this Instrument. From and after the occurrence of an Event of Default and during the continuance of such Event of Default, and without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly, or by a receiver, Borrower’s license to collect Rents shall automatically terminate and Lender shall without Notice be entitled to all Rents as they become due and payable, including Rents then due and unpaid. Borrower shall pay

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to Lender upon demand all Rents to which Lender is entitled. At any time on or after the date of Lender’s demand for Rents, (i) Lender may give, and Borrower hereby irrevocably authorizes Lender to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents to Lender, (ii) no tenant shall be obligated to inquire further as to the occurrence or continuance of an Event of Default, and (iii) no tenant shall be obligated to pay to Borrower any amounts which are actually paid to Lender in response to such a notice. Any such notice by Lender shall be delivered to each tenant personally, by mail or by delivering such demand to each rental unit. Borrower shall not interfere with and shall cooperate with Lender’s collection of such Rents.

(c) Borrower represents and warrants to Lender that Borrower has not executed any prior assignment of Rents (other than an assignment of Rents securing any prior indebtedness that is being assigned to Lender, or paid off and discharged with the proceeds of the Loan evidenced by the Note), that Borrower has not performed, and Borrower covenants and agrees that it will not perform, any acts and has not executed, and shall not execute, any instrument which would prevent Lender from exercising its rights under this Section 3, and that at the time of execution of this Instrument there has been no anticipation or prepayment of any Rents for more than two months prior to the due dates of such Rents. Borrower shall not collect or accept payment of any Rents more than two months prior to the due dates of such Rents.

(d) If an Event of Default has occurred and is continuing, Lender may, regardless of the adequacy of Lender’s security or the solvency of Borrower and even in the absence of waste, enter upon and take and maintain full control of the Mortgaged Property in order to perform all acts that Lender in its discretion determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents, the making of repairs to the Mortgaged Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing the assignment of Rents pursuant to Section 3(a), protecting the Mortgaged Property or the security of this Instrument, or for such other purposes as Lender in its discretion may deem necessary or desirable. Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy of Lender’s security, without regard to Borrower’s solvency and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in the preceding sentence. If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this Instrument, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte if permitted by applicable law. If Borrower is a housing cooperative corporation or association, Borrower hereby agrees that if a receiver is appointed, the order appointing the receiver may contain a provision requiring the receiver to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents, including Imposition Deposits, it being acknowledged and agreed that the Indebtedness is an obligation of the Borrower and must be paid out of maintenance charges payable by the Borrower’s tenant shareholders under their proprietary leases or occupancy agreements. Lender or the receiver, as the case may be, shall be entitled to receive a reasonable fee for managing the Mortgaged Property. Immediately upon appointment of a receiver or immediately upon the Lender’s entering upon and taking possession and control of the Mortgaged Property, Borrower shall surrender possession of the Mortgaged Property to Lender or the receiver, as the case may be, and shall deliver to Lender or the receiver, as the case may be, all documents, records (including records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property and all security deposits and prepaid Rents. In the event Lender takes possession and control of the

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Mortgaged Property, Lender may exclude Borrower and its representatives from the Mortgaged Property. Borrower acknowledges and agrees that the exercise by Lender of any of the rights conferred under this Section 3 shall not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and Improvements.

(e) If Lender enters the Mortgaged Property, Lender shall be liable to account only to Borrower and only for those Rents actually received. Except to the extent of Lender’s gross negligence or willful misconduct, Lender shall not be liable to Borrower, anyone claiming under or through Borrower or anyone having an interest in the Mortgaged Property, by reason of any act or omission of Lender under Section 3(d), and Borrower hereby releases and discharges Lender from any such liability to the fullest extent permitted by law.

(f) If the Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged Property and collecting the Rents, any funds expended by Lender for such purposes shall become an additional part of the Indebtedness as provided in Section 12.

(g) Any entering upon and taking of control of the Mortgaged Property by Lender or the receiver, as the case may be, and any application of Rents as provided in this Instrument shall not cure or waive any Event of Default or invalidate any other right or remedy of Lender under applicable law or provided for in this Instrument.

4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.

(a) As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all of Borrower’s right, title and interest in, to and under the Leases, including Borrower’s right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease. It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all of Borrower’s right, title and interest in, to and under the Leases. Borrower and Lender intend this assignment of the Leases to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose, the Leases shall not be deemed to be a part of the Mortgaged Property. However, if this present, absolute and unconditional assignment of the Leases is not enforceable by its terms under the laws of the Property Jurisdiction, then the Leases shall be included as a part of the Mortgaged Property and it is the intention of the Borrower that in this circumstance this Instrument create and perfect a lien on the Leases in favor of Lender, which lien shall be effective as of the date of this Instrument.

(b) Until Lender gives Notice to Borrower of Lender’s exercise of its rights under this Section 4, Borrower shall have all rights, power and authority granted to Borrower under any Lease (except as otherwise limited by this Section or any other provision of this Instrument), including the right, power and authority to modify the terms of any Lease or extend or terminate any Lease. Upon the occurrence of an Event of Default, and during the continuance of such Event of Default, the permission given to Borrower pursuant to the preceding sentence to exercise all rights, power and authority under Leases shall automatically terminate. Borrower shall comply with and observe Borrower’s obligations under all Leases, including Borrower’s obligations pertaining to the maintenance and disposition of tenant security deposits.

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(c) Borrower acknowledges and agrees that the exercise by Lender, either directly or by a receiver, of any of the rights conferred under this Section 4 shall not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and the Improvements. The acceptance by Lender of the assignment of the Leases pursuant to Section 4(a) shall not at any time or in any event obligate Lender to take any action under this Instrument or to expend any money or to incur any expenses. Except to the extent of Lender’s gross negligence or willful misconduct, Lender shall not be liable in any way for any injury or damage to person or property sustained by any Person or Persons in or about the Mortgaged Property. Prior to Lender’s actual entry into and taking possession of the Mortgaged Property, Lender shall not (i) be obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease); (ii) be obligated to appear in or defend any action or proceeding relating to the Lease or the Mortgaged Property; or (iii) be responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property. The execution of this Instrument by Borrower shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and shall be that of Borrower, prior to such actual entry and taking of possession.

(d) Upon delivery of Notice by Lender to Borrower of Lender’s exercise of Lender’s rights under this Section 4 at any time after the occurrence of an Event of Default, and during the continuance of such Event of Default, and without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, Lender immediately shall have all rights, powers and authority granted to Borrower under any Lease, including the right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease.

(e) Borrower shall, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect. All Leases for residential dwelling units shall be on forms approved by Lender, shall be for initial terms of at least six months and not more than two years, and shall not include options to purchase.

         (f) (i) Except as set forth below, Borrower shall not enter into a Lease for any portion of the Mortgaged Property for non-residential use without the prior written consent of Lender.

(ii) Borrower shall not modify the terms of, or extend or terminate, any Lease for non-residential use (including any Lease in existence on the date of this Instrument) without the prior written consent of Lender; provided, however, Lender’s consent shall not be required for the modification or extension of a non-residential Lease if such modification or extension is on terms at least as favorable to Borrower as those customary at that time in the applicable market and the income from the extended or modified Lease will not be less than the income received from the Lease as of the date of this Instrument.

(iii) Lender’s consent shall not be required for Borrower to enter into a new Lease for space occupied as of the date of this Instrument for non-residential use (“New Commercial Lease”), provided that such New Commercial Lease satisfies the following requirements:

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(A) the aggregate of the income derived from the space leased by the New Commercial Lease accounts for less than five percent (5%) of the gross income of the Mortgaged Property on the date of this Instrument;

(B) the tenant under the New Commercial Lease is not an Affiliate of the Borrower or any guarantor;

(C) terms of the New Commercial Lease are at least as favorable to Borrower as those customary on the date of this Instrument in the applicable market;

(D) the rents paid to the Borrower pursuant to the New Commercial Lease are greater than or equal to the rents paid to Borrower pursuant to the Lease for that portion of the Mortgaged Property that was in effect prior to the New Commercial Lease; and

(E) the New Commercial Lease must provide that the space may not be used or operated, in whole or in part, for any of the following: (1) the operation of a so-called “head shop” or other business devoted to the sale of articles or merchandise normally used or associated with illegal or unlawful activities such as, but not limited to, the sale of paraphernalia used in connection with marijuana or controlled drugs or substances, (2) a gun shop, shooting gallery or firearms range, (3) a so-called massage parlor or any business which sells, rents or permits the viewing of so-called “adult” or pornographic materials such as, but not limited to, adult magazines, books, movies, photographs, sexual aids, sexual articles and sex paraphernalia, (4) for the sale or distribution of any flammable liquids, gases or other Hazardous Materials as defined under this Instrument, (5) an off-track betting parlor or arcade, (6) a liquor store or other business whose primary business is the sale of alcoholic beverages for off-site consumption, (7) a burlesque or strip club, or (8) any other illegal activity.

(iv) Borrower shall, without request by Lender, deliver a fully executed copy of each non-residential Lease to Lender promptly after such Lease is signed.

(v) All non-residential Leases, regardless of whether Lender’s consent or approval is required, including renewals or extensions of existing Leases, shall specifically provide that (A) such Leases are subordinate to the lien of this Instrument; (B) the tenant shall attorn to Lender and any purchaser at a foreclosure sale, such attornment to be self-executing and effective upon acquisition of title to the Mortgaged Property by any purchaser at a foreclosure sale or by Lender in any manner; (C) the tenant agrees to execute such further evidences of attornment as Lender or any purchaser at a foreclosure sale may from time to time request; (D) the Lease shall not be terminated by foreclosure or any other transfer of the Mortgaged Property; (E) after a foreclosure sale of the Mortgaged Property, Lender or any other purchaser at such foreclosure sale may, at Lender’s or such

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purchaser’s option, accept or terminate such Lease; and (F) upon receipt of a written request from Lender following the occurrence of an Event of Default, pay all Rents payable under the Lease to Lender.

(g) Borrower shall not receive or accept Rent under any Lease (whether residential or non-residential) for more than two months in advance.

(h) If Borrower is a cooperative housing corporation or association, notwithstanding anything to the contrary contained in this subsection or in Section 21, so long as Borrower remains a cooperative housing corporation or association and is not in breach of any covenant of this Instrument, Lender hereby consents to:

(i) the execution of leases of apartments for a term in excess of two years from Borrower to a tenant shareholder of Borrower, so long as such leases, including proprietary leases, are and will remain subordinate to the lien of this Instrument; and

(ii) the surrender or termination of such leases of apartments where the surrendered or terminated lease is immediately replaced or where the Borrower makes its best efforts to secure such immediate replacement by a newly executed lease of the same apartment to a tenant shareholder of the Borrower. However, no consent is hereby given by Lender to any execution, surrender, termination or assignment of a lease under terms that would waive or reduce the obligation of the resulting tenant shareholder under such lease to pay cooperative assessments in full when due or the obligation of the former tenant shareholder to pay any unpaid portion of such assessments.

5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT PREMIUM. Borrower shall pay the Indebtedness when due in accordance with the terms of the Note and the other Loan Documents and shall perform, observe and comply with all other provisions of the Note and the other Loan Documents. Borrower shall pay a prepayment premium in connection with certain prepayments of the Indebtedness, including a payment made after Lender’s exercise of any right of acceleration of the Indebtedness, as provided in the Note.

6. EXCULPATION. Borrower’s personal liability for payment of the Indebtedness and for performance of the other obligations to be performed by it under this Instrument is limited in the manner, and to the extent, provided in the Note.

7. DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES.

(a) Unless this requirement is waived in writing by Lender, which waiver may be contained in this Section 7(a), Borrower shall deposit with Lender on the day monthly installments of principal or interest, or both, are due under the Note (or on another day designated in writing by Lender), until the Indebtedness is paid in full, an additional amount sufficient to accumulate with Lender the entire sum required to pay, when due, the items marked “Collect” below. Lender will not require the Borrower to make Imposition Deposits with respect to the items marked “Deferred” below.

[Collect]   Hazard Insurance premiums or other insurance premiums required by Lender under Section 19,

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[Collect] [Deferred] [N/A] [Deferred] Taxes, water and sewer charges (that could become a lien on the Mortgaged Property), ground rents, assessments or other charges (that could become a lien on the Mortgaged Property)

The amounts deposited under the preceding sentence are collectively referred to in this Instrument as the “Imposition Deposits.” The obligations of Borrower for which the Imposition Deposits are required are collectively referred to in this Instrument as “Impositions.” The amount of the Imposition Deposits shall be sufficient to enable Lender to pay each Imposition before the last date upon which such payment may be made without any penalty or interest charge being added. Lender shall maintain records indicating how much of the monthly Imposition Deposits and how much of the aggregate Imposition Deposits held by Lender are held for the purpose of paying Taxes, insurance premiums and each other Imposition.

(b) Imposition Deposits shall be deposited in an Eligible Account at an Eligible Institution (which may be Lender, if Lender is such an institution) and shall be invested in “permitted investments” as then defined and required by the Rating Agencies. Lender shall not be obligated to open additional accounts or deposit Imposition Deposits in additional institutions when the amount of the Imposition Deposits exceeds the maximum amount of the federal deposit insurance or guaranty. Lender shall apply the Imposition Deposits to pay Impositions so long as no Event of Default has occurred and is continuing. Unless applicable law requires, Lender shall not be required to pay Borrower any interest, earnings or profits on the Imposition Deposits. As additional security for all of Borrower’s obligations under this Instrument and the other Loan Documents, Borrower hereby pledges and grants to Lender a security interest in the Imposition Deposits and all proceeds of, and all interest and dividends on, the Imposition Deposits. Any amounts deposited with Lender under this Section 7 shall not be trust funds, nor shall they operate to reduce the Indebtedness, unless applied by Lender for that purpose under Section 7(e).

(c) If Lender receives a bill or invoice for an Imposition, Lender shall pay the Imposition from the Imposition Deposits held by Lender. Lender shall have no obligation to pay any Imposition to the extent it exceeds Imposition Deposits then held by Lender. Lender may pay an Imposition according to any bill, statement or estimate from the appropriate public office or insurance company without inquiring into the accuracy of the bill, statement or estimate or into the validity of the Imposition.

(d) If at any time the amount of the Imposition Deposits held by Lender for payment of a specific Imposition exceeds the amount reasonably deemed necessary by Lender, the excess shall be credited against future installments of Imposition Deposits. If at any time the amount of the Imposition Deposits held by Lender for payment of a specific Imposition is less than the amount reasonably estimated by Lender to be necessary, Borrower shall pay to Lender the amount of the deficiency within 15 days after Notice from Lender.

(e) If an Event of Default has occurred and is continuing, Lender may apply any Imposition Deposits, in any amounts and in any order as Lender determines, in Lender’s discretion, to pay any Impositions or as a credit against the Indebtedness. Upon payment in full of the Indebtedness, Lender shall refund to Borrower any Imposition Deposits held by Lender.

(f) If Lender does not collect an Imposition Deposit with respect to an Imposition either marked “Deferred” in Section 7(a) or pursuant to a separate written waiver by Lender, then

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on or before the date each such Imposition is due, or on the date this Instrument requires each such Imposition to be paid, Borrower must provide Lender with proof of payment of each such Imposition for which Lender does not require collection of Imposition Deposits. Lender may revoke its deferral or waiver and require Borrower to deposit with Lender any or all of the Imposition Deposits listed in Section 7(a), regardless of whether any such item is marked “Deferred” in such section, upon Notice to Borrower, (i) if Borrower does not timely pay any of the Impositions, (ii) if Borrower fails to provide timely proof to Lender of such payment, or (iii) at any time during the existence of an Event of Default.

(g) In the event of a Transfer prohibited by or requiring Lender’s approval under Section 21, Lender’s waiver of the collection of any Imposition Deposit in this Section 7 may be modified or rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s) as a condition of Lender’s approval of such Transfer.

8. COLLATERAL AGREEMENTS. Borrower shall deposit with Lender such amounts as may be required by any Collateral Agreement and shall perform all other obligations of Borrower under each Collateral Agreement.

9. APPLICATION OF PAYMENTS. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, then Lender may apply that payment to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Neither Lender’s acceptance of an amount that is less than all amounts then due and payable nor Lender’s application of such payment in the manner authorized shall constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the application of any such amount to the Indebtedness, Borrower’s obligations under this Instrument and the Note shall remain unchanged.

10. COMPLIANCE WITH LAWS AND ORGANIZATIONAL DOCUMENTS.

(a) Borrower shall comply with all laws, ordinances, regulations and requirements of any Governmental Authority and all recorded lawful covenants and agreements relating to or affecting the Mortgaged Property, including all laws, ordinances, regulations, requirements and covenants pertaining to health and safety, construction of improvements on the Mortgaged Property, fair housing, disability accommodation, zoning and land use, and Leases. Borrower also shall comply with all applicable laws that pertain to the maintenance and disposition of tenant security deposits.

(b) Borrower shall at all times maintain records sufficient to demonstrate compliance with the provisions of this Section 10.

(c) Borrower shall take appropriate measures to prevent, and shall not engage in or knowingly permit, any illegal activities at the Mortgaged Property that could endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise materially impair the lien created by this Instrument or Lender’s interest in the Mortgaged Property. Borrower represents and warrants to Lender that no portion of the Mortgaged Property has been or will be purchased with the proceeds of any illegal activity.

(d) Borrower shall at all times comply with all laws, regulations and requirements of any Governmental Authority relating to Borrower’s formation, continued existence and good standing in the Property Jurisdiction. Borrower shall at all times comply with its organizational

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documents, including but not limited to its partnership agreement (if Borrower is a partnership), its by-laws (if Borrower is a corporation or housing cooperative corporation or association) or its operating agreement (if Borrower is an limited liability company or tenancy-in-common). If Borrower is a housing cooperative corporation or association, Borrower shall at all times maintain its status as a “cooperative housing corporation” as such term is defined in Section 216(b) of the Internal revenue Code of 1986, as amended, or any successor statute thereto.

(e) Borrower represents and warrants that Borrower, any commercial tenant of the Mortgaged Property and/or any operator of the Mortgaged Property were in possession of all material licenses, permits and authorizations required for use of the Mortgaged Property which were valid and in full force and effect as of the date of this Instrument. Borrower warrants that it, any commercial tenant of the Mortgaged Property and/or any operator of the Mortgaged Property shall remain in material compliance with all material licenses, permits and other legal requirements necessary and required to conduct its business.

11. USE OF PROPERTY. Unless required by applicable law, Borrower shall not (a) allow changes in the use for which all or any part of the Mortgaged Property is being used at the time this Instrument was executed, except for any change in use approved by Lender, (b) convert any individual dwelling units or common areas to commercial use, (c) initiate a change in the zoning classification of the Mortgaged Property or acquiesce without Notice to and consent of Lender in a change in the zoning classification of the Mortgaged Property, (d) establish any condominium or cooperative regime with respect to the Mortgaged Property, (e) combine all or any part of the Mortgaged Property with all or any part of a tax parcel which is not part of the Mortgaged Property, or (f) subdivide or otherwise split any tax parcel constituting all or any part of the Mortgaged Property without the prior consent of Lender. The Mortgaged Property (x) permits ingress and egress, (y) is served by public utilities and services generally available in the surrounding community or otherwise appropriate for the use in which the Mortgaged Property is currently being utilized, and (z) constitutes one or more separate tax parcels or the Lender’s title policy contains one or more endorsements with respect to the matters described in (x) or (z). Notwithstanding anything contained in this Section to the contrary, if Borrower is a housing cooperative corporation or association, Lender acknowledges and consents to Borrower’s use of the Mortgaged Property as a housing cooperative.

12. PROTECTION OF LENDER’S SECURITY; INSTRUMENT SECURES FUTURE ADVANCES.

(a) If Borrower fails to perform any of its obligations under this Instrument or any other Loan Document, or if any action or proceeding is commenced which purports to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Instrument, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent, then Lender at Lender’s option may make such appearances, file such documents, disburse such sums and take such actions as Lender reasonably deems necessary to perform such obligations of Borrower and to protect Lender’s interest, including (i) payment of Attorneys’ Fees and Costs, (ii) payment of fees and out-of-pocket expenses of accountants, inspectors and consultants, (iii) entry upon the Mortgaged Property to make repairs or secure the Mortgaged Property, (iv) procurement of the insurance required by Section 19, (v) payment of amounts which Borrower has failed to pay under Sections 15 and 17, and (vi) advances made by Lender to pay, satisfy or discharge any obligation of Borrower for the payment of money that is secured by a pre-existing mortgage, deed of trust or other lien encumbering the Mortgaged Property (a “Prior Lien”).

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(b) Any amounts disbursed by Lender under this Section 12, or under any other provision of this Instrument that treats such disbursement as being made under this Section 12, shall be secured by this Instrument, shall be added to, and become part of, the principal component of the Indebtedness, shall be immediately due and payable and shall bear interest from the date of disbursement until paid at the “Default Rate,” as defined in the Note.

(c) Nothing in this Section 12 shall require Lender to incur any expense or take any action.

13. INSPECTION.

(a) Lender, its agents, representatives, and designees may make or cause to be made entries upon and inspections of the Mortgaged Property (including environmental inspections and tests) during normal business hours, or at any other reasonable time, upon reasonable notice to Borrower if the inspection is to include occupied residential units (which notice need not be in writing). Notice to Borrower shall not be required in the case of an emergency, as determined in Lender’s discretion, or when an Event of Default has occurred and is continuing.

(b) If Lender determines that Mold has developed as a result of a water intrusion event or leak, Lender, at Lender’s discretion, may require that a professional inspector inspect the Mortgaged Property as frequently as Lender determines is necessary until any issue with Mold and its cause(s) are resolved to Lender’s satisfaction. Such inspection shall be limited to a visual and olfactory inspection of the area that has experienced the Mold, water intrusion event or leak. Borrower shall be responsible for the cost of such professional inspection and any remediation deemed to be necessary as a result of the professional inspection. After any issue with Mold, water intrusion or leaks is remedied to Lender’s satisfaction, Lender shall not require a professional inspection any more frequently than once every three years unless Lender is otherwise aware of Mold as a result of a subsequent water intrusion event or leak.

(c) If Lender or Loan Servicer determines not to conduct an annual inspection of the Mortgaged Property, and in lieu thereof Lender requests a certification, Borrower shall be prepared to provide and must actually provide to Lender a factually correct certification each year that the annual inspection is waived to the following effect:

Borrower has not received any written complaint, notice, letter or other written communication from tenants, management agent or governmental authorities regarding mold, fungus, microbial contamination or pathogenic organisms (“Mold”) or any activity, condition, event or omission that causes or facilitates the growth of Mold on or in any part of the Mortgaged Property or if Borrower has received any such written complaint, notice, letter or other written communication that Borrower has investigated and determined that no Mold activity, condition or event exists or alternatively has fully and properly remediated such activity, condition, event or omission in compliance with the Moisture Management Plan for the Mortgaged Property.

If Borrower is unwilling or unable to provide such certification, Lender may require a professional inspection of the Mortgaged Property at Borrower’s expense.

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14. BOOKS AND RECORDS; FINANCIAL REPORTING.

(a) Borrower shall keep and maintain at all times at the Mortgaged Property or the management agent’s office, and upon Lender’s request shall make available at the Mortgaged Property (or, at Borrower’s option, at the management agent’s office), complete and accurate books of account and records (including copies of supporting bills and invoices) adequate to reflect correctly the operation of the Mortgaged Property, in accordance with GAAP consistently applied (or such other method which is reasonably acceptable to Lender), and copies of all written contracts, Leases, and other instruments which affect the Mortgaged Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection by Lender at any reasonable time.

(b) Borrower shall furnish to Lender each of the following within twenty-five (25) days after the end of each calendar quarter prior to Securitization and within thirty-five (35) days after the end of each calendar quarter after Securitization:

(i) a Rent Schedule dated no earlier than the date that is five (5) days prior to the end of such quarter; and

(ii) a statement of income and expenses for Borrower’s operation of the Mortgaged Property either

(A) for the twelve (12) month period ending upon the last day of such quarter, or

(B) if at the end of such quarter Borrower and any Affiliate of Borrower have owner the Mortgaged Property for less than twelve (12) months, for the period commencing with the acquisition of the Mortgaged Property by Borrower or its Affiliates, and ending upon the last day of such quarter.

(c) Within ninety (90) days after the end of each fiscal year of Borrower, Borrower shall furnish to Lender each of the following:

(i) an annual statement of income and expenses for Borrower’s operation of the Mortgaged Property for that fiscal year;

(ii) a statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal year;

(iii) a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal year and a profit and loss statement for Borrower; and

(iv) an accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

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(d) Borrower shall furnish to Lender each of the following:

(i) in addition to the requirements of Section 14(b), upon Lender’s request prior to a Securitization, and thereafter upon Lender’s reasonable request, in each case within twenty-five (25) days after the end of each month, a monthly Rent Schedule and a monthly statement of income and expenses for Borrower’s operation of the Mortgaged Property;

(ii) upon Lender’s request prior to a Securitization, and thereafter upon Lender’s reasonable request, in each case within ten (10) days after such request, a statement that identifies all owners of any interest in Borrower and any Controlling Entity and the interest held by each (unless Borrower or any Controlling Entity is a publicly-traded entity in which case such statement of ownership shall not be required), and if Borrower or a Controlling Entity is a corporation, all officers and directors of Borrower and the Controlling Entity, and if Borrower or a Controlling Entity is a limited liability company, all Managers who are not members;

(iii) copies of all tax returns filed by Borrower, within thirty (30) days after the date of filing; and

(iv) such other financial information or property management information (including, without limitation, information on tenants under Leases to the extent such information is available to Borrower, copies of bank account statements from financial institutions where funds owned or controlled by Borrower are maintained, and an accounting of security deposits) as may be required by Lender from time to time.

(e) At any time upon Lender’s request, Borrower shall furnish to Lender a monthly property management report for the Mortgaged Property, showing the number of inquiries made and rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender. However, Lender shall not require the foregoing more frequently than quarterly except when there has been an Event of Default and such Event of Default is continuing, in which case Lender may require Borrower to furnish the foregoing more frequently.

(f) A natural person having authority to bind Borrower (or the SPE Equity Owner or guarantor, as applicable) shall certify each of the statements, schedules and reports required by Sections 14(b) through 14(e) and 14(h) to be complete and accurate. Each of the statements, schedules and reports required by Sections 14(b) through 14(e) and 14(h) shall be in such form and contain such detail as Lender may reasonably require. Lender also may require that any of the statements, schedules or reports listed in Section 14(b), 14(c) and Section 14(d)(i) and (iv) be audited at Borrower’s expense by independent certified public accountants acceptable to Lender, at any time when an Event of Default has occurred and is continuing or at any time that Lender, in its reasonable judgment, determines that audited financial statements are required for an accurate assessment of the financial condition of Borrower or of the Mortgaged Property.

(g) If Borrower fails to provide in a timely manner the statements, schedules and reports required by Sections 14(b) through 14(e) and 14(h), Lender shall give Borrower Notice specifying the statements, schedules and reports required by Section 14(b) through 14(e) and 14(h) that Borrower has failed to provide. If Borrower has not provided the required statements, schedules and reports within 10 Business Days following such Notice, then Lender shall have the right to have Borrower’s books and records audited, at Borrower’s expense, by independent

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certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender shall become immediately due and payable and shall become an additional part of the Indebtedness as provided in Section 12. Notice to Borrower shall not be required in the case of an emergency, as determined in Lender’s discretion, or when an Event of Default has occurred and is continuing.

(h) Borrower shall cause each guarantor and, at Lender’s request, any SPE Equity Owner, to provide to Lender (i) within ninety (90) days after the close of such party’s fiscal year, such party’s balance sheet and profit and loss statement (or if such party is a natural person, within ninety (90) days after the close of each calendar year, such party’s personal financial statements) in form reasonably satisfactory to Lender and certified by such party to be accurate and complete; and (ii) such additional financial information (including, without limitation, copies of state and federal tax returns with respect to any SPE Equity Owner but Lender shall only require copies of such tax returns with respect to each guarantor if an Event of Default has occurred and is continuing) as Lender may reasonably require from time to time and in such detail as reasonably required by Lender.

(i) If an Event of Default has occurred and is continuing, Borrower shall deliver to Lender upon written demand all books and records relating to the Mortgaged Property or its operation.

(j) Borrower authorizes Lender to obtain a credit report on Borrower at any time.

15. TAXES; OPERATING EXPENSES.

(a) Subject to the provisions of Section 15(c) and Section 15(d), Borrower shall pay, or cause to be paid, all Taxes when due and before the addition of any interest, fine, penalty or cost for nonpayment.

(b) Subject to the provisions of Section 15(c), Borrower shall (i) pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including utilities, repairs and replacements) before the last date upon which each such payment may be made without any penalty or interest charge being added, and (ii) pay insurance premiums at least 30 days prior to the expiration date of each policy of insurance, unless applicable law specifies some lesser period.

(c) If Lender is collecting Imposition Deposits, to the extent that Lender holds sufficient Imposition Deposits for the purpose of paying a specific Imposition, then Borrower shall not be obligated to pay such Imposition, so long as no Event of Default exists and Borrower has timely delivered to Lender any bills or premium notices that it has received. If an Event of Default exists, Lender may exercise any rights Lender may have with respect to Imposition Deposits without regard to whether Impositions are then due and payable. Lender shall have no liability to Borrower for failing to pay any Impositions to the extent that (i) any Event of Default has occurred and is continuing, (ii) insufficient Imposition Deposits are held by Lender at the time an Imposition becomes due and payable or (iii) Borrower has failed to provide Lender with bills and premium notices as provided above.

(d) Borrower, at its own expense, may contest by appropriate legal proceedings, conducted diligently and in good faith, the amount or validity of any Imposition other than insurance premiums, if (i) Borrower notifies Lender of the commencement or expected commencement of such proceedings, (ii) the Mortgaged Property is not in danger of being sold

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or forfeited, (iii) if Borrower has not already paid the Imposition, Borrower deposits with Lender reserves sufficient to pay the contested Imposition, if requested by Lender, and (iv) Borrower furnishes whatever additional security is required in the proceedings or is reasonably requested by Lender.

(e) Borrower shall promptly deliver to Lender a copy of all notices of, and invoices for, Impositions, and if Borrower pays any Imposition directly, Borrower shall furnish to Lender, on or before the date this Instrument requires such Impositions to be paid, receipts evidencing that such payments were made.

16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to the extent provided in Section 21, the grant, creation or existence of any mortgage, deed of trust, deed to secure debt, security interest or other lien or encumbrance (a “Lien”) on the Mortgaged Property (other than the lien of this Instrument) or on certain ownership interests in Borrower, whether voluntary, involuntary or by operation of law, and whether or not such Lien has priority over the lien of this Instrument, is a “Transfer” which constitutes an Event of Default and subjects Borrower to personal liability under the Note.

17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY.

(a) Borrower shall not commit waste or permit impairment or deterioration of the Mortgaged Property.

(b) Borrower shall not abandon the Mortgaged Property.

(c) Borrower shall restore or repair promptly, in a good and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its original condition, or such other condition as Lender may approve in writing, whether or not insurance proceeds or condemnation awards are available to cover any costs of such restoration or repair; however, Borrower shall not be obligated to perform such restoration or repair if (i) no Event of Default has occurred and is continuing, and (ii) Lender has elected to apply any available insurance proceeds and/or condemnation awards to the payment of Indebtedness pursuant to Section 19(h)(ii) through (viii), or pursuant to Section 20(d)(ii) through (viii).

(d) Borrower shall keep the Mortgaged Property in good repair, including the replacement of Personalty and Fixtures with items of equal or better function and quality.

(e) Borrower shall provide for professional management of the Mortgaged Property by the Property Manager or by a residential rental property manager satisfactory to Lender at all times under a property management agreement approved by Lender in writing. Borrower shall not surrender, terminate, cancel, modify, renew or extend its property management agreement, or enter into any other agreement relating to the management or operation of the Property with Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of Lender, which consent shall not be unreasonably withheld.; If at any time Lender consents to the appointment of a new property manager, such new property manager and Borrower shall, as a condition of Lender’s consent, execute an assignment of management agreement in a form acceptable to Lender. If any such replacement property manager is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered at the origination of the Loan, Borrower shall deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.

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(f) Borrower shall give Notice to Lender of and, unless otherwise directed in writing by Lender, shall appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Instrument. Borrower shall not (and shall not permit any tenant or other person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except (i) in connection with the replacement of tangible Personalty, (ii) if Borrower is a cooperative housing corporation or association, to the extent permitted with respect to individual dwelling units under the form of proprietary lease or occupancy agreement and (iii) repairs and replacements in connection with making an individual unit ready for a new occupant.

(g) Unless otherwise waived by Lender in writing, Borrower must have or must establish and must adhere to the MMP. If the Borrower is required to have an MMP, the Borrower must keep all MMP documentation at the Mortgaged Property or at the management agent’s office and available for the Lender or the Loan Servicer to review during any annual assessment or other inspection of the Mortgaged Property that is required by Lender.

(h) If Borrower is a housing cooperative corporation or association, until the Indebtedness is paid in full Borrower shall not reduce the maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements below a level which is sufficient to pay all expenses of the Borrower, including, without limitation, all operating and other expenses for the Mortgaged Property and all payments due pursuant to the terms of the Note and any Loan Documents.

18. ENVIRONMENTAL HAZARDS.

(a) Except for matters described in Section 18(b), Borrower shall not cause or permit any of the following:

(i) the presence, use, generation, release, treatment, processing, storage (including storage in above ground and underground storage tanks), handling, or disposal of any Hazardous Materials on or under the Mortgaged Property;

(ii) the transportation of any Hazardous Materials to, from, or across the Mortgaged Property;

(iii) any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws;

(iv) any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property; or

(v) any violation or noncompliance with the terms of any O&M Program as defined in subsection (d).

The matters described in clauses (i) through (v) above, except as otherwise provided in Section 18(b), are referred to collectively in this Section 18 as “Prohibited Activities or Conditions.”

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(b) Prohibited Activities or Conditions shall not include lawful conditions permitted by an O&M Program or the safe and lawful use and storage of quantities of (i) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable multifamily properties, (ii) cleaning materials, personal grooming items and other items sold in pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property; and (iii) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws.

(c) Borrower shall take all commercially reasonable actions (including the inclusion of appropriate provisions in any Leases executed after the date of this Instrument) to prevent its employees, agents, and contractors, and all tenants and other occupants from causing or permitting any Prohibited Activities or Conditions. Borrower shall not lease or allow the sublease or use of all or any portion of the Mortgaged Property to any tenant or subtenant for nonresidential use by any user that, in the ordinary course of its business, would cause or permit any Prohibited Activity or Condition.

(d) As required by Lender, Borrower shall also have established a written operations and maintenance program with respect to certain Hazardous Materials. Each such operations and maintenance program and any additional or revised operations and maintenance programs established for the Mortgaged Property pursuant to this Section 18 must be approved by Lender and shall be referred to herein as an “O&M Program.” Borrower shall comply in a timely manner with, and cause all employees, agents, and contractors of Borrower and any other Persons present on the Mortgaged Property to comply with each O&M Program. Borrower shall pay all costs of performance of Borrower’s obligations under any O&M Program, and Lender’s out of pocket costs incurred in connection with the monitoring and review of each O&M Program and Borrower’s performance shall be paid by Borrower upon demand by Lender. Any such out-of-pocket costs of Lender that Borrower fails to pay promptly shall become an additional part of the Indebtedness as provided in Section 12.

(e) Borrower represents and warrants to Lender that, except as previously disclosed by Borrower to Lender in writing (which written disclosure may be in certain environmental assessments and other written reports accepted by Lender in connection with the funding of the Indebtedness and dated prior to the date of this Instrument):

(i) Borrower has not at any time engaged in, caused or permitted any Prohibited Activities or Conditions on the Mortgaged Property;

(ii) to the best of Borrower’s knowledge after reasonable and diligent inquiry, no Prohibited Activities or Conditions exist or have existed on the Mortgaged Property;

(iii) the Mortgaged Property does not now contain any underground storage tanks, and, to the best of Borrower’s knowledge after reasonable and diligent inquiry, the Mortgaged Property has not contained any underground storage tanks in the past. If there is an underground storage tank located on the Mortgaged Property that has been previously disclosed by Borrower to Lender in writing, that tank complies with all requirements of Hazardous Materials Laws;

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(iv) to the best of Borrower’s knowledge after reasonable and diligent inquiry, Borrower has complied with all Hazardous Materials Laws, including all requirements for notification regarding releases of Hazardous Materials. Without limiting the generality of the foregoing, Borrower has obtained all Environmental Permits required for the operation of the Mortgaged Property in accordance with Hazardous Materials Laws now in effect and all such Environmental Permits are in full force and effect;

(v) to the best of Borrower’s knowledge after reasonable and diligent inquiry, no event has occurred with respect to the Mortgaged Property that constitutes, or with the passing of time or the giving of notice would constitute, noncompliance with the terms of any Environmental Permit;

(vi) there are no actions, suits, claims or proceedings pending or, to the best of Borrower’s knowledge after reasonable and diligent inquiry, threatened that involve the Mortgaged Property and allege, arise out of, or relate to any Prohibited Activity or Condition; and

(vii) Borrower has not received any written complaint, order, notice of violation or other communication from any Governmental Authority with regard to air emissions, water discharges, noise emissions or Hazardous Materials, or any other environmental, health or safety matters affecting the Mortgaged Property.

(f) Borrower shall promptly notify Lender in writing upon the occurrence of any of the following events:

(i) Borrower’s discovery of any Prohibited Activity or Condition;

(ii) Borrower’s receipt of or knowledge of any written complaint, order, notice of violation or other communication from any tenant, management agent, Governmental Authority or other Person with regard to present or future alleged Prohibited Activities or Conditions, or any other environmental, health or safety matters affecting the Mortgaged Property; or

(iii) Borrower’s breach of any of its obligations under this Section 18.

Any such notice given by Borrower shall not relieve Borrower of, or result in a waiver of, any obligation under this Instrument, the Note, or any other Loan Document.

(g) Borrower shall pay promptly the costs of any environmental inspections, tests or audits, a purpose of which is to identify the extent or cause of or potential for a Prohibited Activity or Condition (“Environmental Inspections”), required by Lender in connection with any foreclosure or deed in lieu of foreclosure, or as a condition of Lender’s consent to any Transfer under Section 21, or required by Lender following a reasonable determination by Lender that Prohibited Activities or Conditions may exist. Any such costs incurred by Lender (including Attorneys’ Fees and Costs and the costs of technical consultants whether incurred in connection with any judicial or administrative process or otherwise) that Borrower fails to pay promptly shall become an additional part of the Indebtedness as provided in Section 12. As long as (i) no Event of Default has occurred and is continuing, (ii) Borrower has actually paid for or reimbursed Lender for all costs of any such Environmental Inspections performed or required by

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Lender, and (iii) Lender is not prohibited by law, contract or otherwise from doing so, Lender shall make available to Borrower, without representation of any kind, copies of Environmental Inspections prepared by third parties and delivered to Lender. Lender hereby reserves the right, and Borrower hereby expressly authorizes Lender, to make available to any party, including any prospective bidder at a foreclosure sale of the Mortgaged Property, the results of any Environmental Inspections made by or for Lender with respect to the Mortgaged Property. Borrower consents to Lender notifying any party (either as part of a notice of sale or otherwise) of the results of any Environmental Inspections made by or for Lender. Borrower acknowledges that Lender cannot control or otherwise assure the truthfulness or accuracy of the results of any Environmental Inspections and that the release of such results to prospective bidders at a foreclosure sale of the Mortgaged Property may have a material and adverse effect upon the amount that a party may bid at such sale. Borrower agrees that Lender shall have no liability whatsoever as a result of delivering the results to any third party of any Environmental Inspections made by or for Lender, and Borrower hereby releases and forever discharges Lender from any and all claims, damages, or causes of action, arising out of, connected with or incidental to the results of, the delivery of any of Environmental Inspections made by or for Lender.

(h) If any investigation, site monitoring, containment, clean-up, restoration or other remedial work (“Remedial Work”) is necessary to comply with any Hazardous Materials Law or order of any Governmental Authority that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of the Mortgaged Property, or is otherwise required by Lender as a consequence of any Prohibited Activity or Condition or to prevent the occurrence of a Prohibited Activity or Condition, Borrower shall, by the earlier of (i) the applicable deadline required by Hazardous Materials Law or (ii) 30 days after Notice from Lender demanding such action, begin performing the Remedial Work, and thereafter diligently prosecute it to completion, and shall in any event complete the work by the time required by applicable Hazardous Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower shall reimburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender shall become part of the Indebtedness as provided in Section 12.

(i) Borrower shall comply with all Hazardous Materials Laws applicable to the Mortgaged Property. Without limiting the generality of the previous sentence, Borrower shall (i) obtain and maintain all Environmental Permits required by Hazardous Materials Laws and comply with all conditions of such Environmental Permits; (ii) cooperate with any inquiry by any Governmental Authority; and (iii) comply with any governmental or judicial order that arises from any alleged Prohibited Activity or Condition.

(j) Borrower shall indemnify, hold harmless and defend (i) Lender, including any custodian, trustee and any other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties, (ii) any prior owner or holder of the Note, (iii) the Loan Servicer, (iv) any prior Loan Servicer, (v) the officers, directors, shareholders, partners, employees and trustees of any of the foregoing, and (vi) the heirs, legal representatives, successors and assigns of each of the foregoing (collectively, the “Indemnitees”) from and against all proceedings, claims, damages, penalties and costs (whether initiated or sought by Governmental Authorities or private parties), including Attorneys’ Fees and Costs and remediation costs, whether incurred in connection with any judicial or administrative process or otherwise, arising directly or indirectly from any of the following:

(i) any breach of any representation or warranty of Borrower in this Section 18;

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(ii) any failure by Borrower to perform any of its obligations under this Section 18;

(iii) the existence or alleged existence of any Prohibited Activity or Condition;

(iv) the presence or alleged presence of Hazardous Materials on or under the Mortgaged Property or in any of the Improvements; and

(v) the actual or alleged violation of any Hazardous Materials Law.

(k) Counsel selected by Borrower to defend Indemnitees shall be subject to the approval of those Indemnitees. In any circumstances in which the indemnity under this Section 18 applies, Lender may employ its own legal counsel and consultants to prosecute, defend or negotiate any claim or legal or administrative proceeding and Lender, with the prior written consent of Borrower (which shall not be unreasonably withheld, delayed or conditioned) may settle or compromise any action or legal or administrative proceeding. However, unless an Event of Default has occurred and is continuing, or the interests of Borrower and Lender are in conflict, as determined by Lender in its discretion, Lender shall permit Borrower to undertake the actions referenced in this Section 18 in accordance with this Section 18(k) and Section 18(l) so long as Lender approves such action, which approval shall not be unreasonably withheld or delayed. Borrower shall reimburse Lender upon demand for all costs and expenses incurred by Lender, including all costs of settlements entered into in good faith, consultants’ fees and Attorneys’ Fees and Costs.

(l) Borrower shall not, without the prior written consent of those Indemnitees who are named as parties to a claim or legal or administrative proceeding (a “Claim”), settle or compromise the Claim if the settlement (i) results in the entry of any judgment that does not include as an unconditional term the delivery by the claimant or plaintiff to Lender of a written release of those Indemnitees, satisfactory in form and substance to Lender; or (ii) may materially and adversely affect Lender, as determined by Lender in its discretion.

(m) Borrower’s obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Borrower or any guarantor to receive notice of or consideration for any of the following:

(i) any amendment or modification of any Loan Document;

(ii) any extensions of time for performance required by any Loan Document;

(iii) any provision in any of the Loan Documents limiting Lender’s recourse to property securing the Indebtedness, or limiting the personal liability of Borrower or any other party for payment of all or any part of the Indebtedness;

(iv) the accuracy or inaccuracy of any representations and warranties made by Borrower under this Instrument or any other Loan Document;

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(v) the release of Borrower or any other Person, by Lender or by operation of law, from performance of any obligation under any Loan Document;

(vi) the release or substitution in whole or in part of any security for the Indebtedness; and

(vii) Lender’s failure to properly perfect any lien or security interest given as security for the Indebtedness.

(n) Borrower shall, at its own cost and expense, do all of the following:

(i) pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Section 18;

(ii) reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Section 18; and

(iii) reimburse Indemnitees for any and all expenses, including Attorneys’ Fees and Costs, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Section 18, or in monitoring and participating in any legal or administrative proceeding.

(o) The provisions of this Section 18 shall be in addition to any and all other obligations and liabilities that Borrower may have under applicable law or under other Loan Documents, and each Indemnitee shall be entitled to indemnification under this Section 18 without regard to whether Lender or that Indemnitee has exercised any rights against the Mortgaged Property or any other security, pursued any rights against any guarantor, or pursued any other rights available under the Loan Documents or applicable law. If Borrower consists of more than one Person, the obligation of those Persons to indemnify the Indemnitees under this Section 18 shall be joint and several. The obligation of Borrower to indemnify the Indemnitees under this Section 18 shall survive any repayment or discharge of the Indebtedness, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Instrument. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of, or held title to, the Mortgaged Property, Borrower shall have no obligation to indemnify the Indemnitees under this Section 18 after the date of the release of record of the lien of this Instrument by payment in full at the Maturity Date or by voluntary prepayment in full.

19. PROPERTY AND LIABILITY INSURANCE.

(a) At all times during the term hereof, Borrower shall maintain, at its sole cost and expense, for the mutual benefit of Borrower and Lender, the following policies of insurance:

(i) Insurance against any peril included within the classification “All Risks of Physical Loss” with extended coverage in amounts at all times sufficient to prevent Borrower from becoming a co-insurer within the terms of the applicable policies, but in any event such insurance shall be maintained in an amount equal to the full insurable value of the Mortgaged Property.

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The policy referred to in this Section 19 shall contain a replacement cost endorsement and a waiver of depreciation. As used in this Instrument, “full insurable value” means the actual replacement cost of the Improvements and Personalty (without taking into account any depreciation), determined annually by an insurer or by Borrower or, at the request of Lender, by an insurance broker (subject to Lender’s reasonable approval). In all cases where any of the Improvements or the use of the Mortgaged Property shall at any time constitute legal non-conforming structures or uses under applicable legal requirements of any Governmental Authority, the policy referred to in this Section 19 must include “Ordinance and Law Coverage,” with “Time Element,” “Loss to the Undamaged Portion of the Building,” “Demolition Cost” and “Increased Cost of Construction” endorsements, in the amount of coverage required by Lender;

(ii) Commercial general liability insurance, including contractual injury, bodily injury, broad form death and property damage liability against any and all claims, including all legal liability to the extent insurable imposed upon Borrower and all Attorneys’ Fees and Costs, arising out of or connected with the possession, use, leasing, operation, maintenance or condition of the Mortgaged Property with a combined limit of not less than $2,000,000 in the aggregate and $1,000,000 per occurrence, plus umbrella or excess liability coverage with minimum limits in the aggregate and per occurrence of $1,000,000 for Improvements that have 1 to 3 stories and an additional $2,000,000 in coverage for each additional story with maximum required coverage of $10,000,000, plus motor vehicle liability coverage for all owned and non-owned vehicles (including, without limitation, rented and leased vehicles) containing minimum limits per occurrence, including umbrella coverage, of $1,000,000.

(iii) Statutory workers’ compensation insurance;

(iv) Business interruption including loss of rental value insurance for the Mortgaged Property in an amount equal to not less than twelve (12) months’ estimated gross Rents attributable to the Mortgaged Property and based on gross Rents for the immediately preceding year and otherwise sufficient to avoid any co-insurance penalty with a 90 day extended period of indemnity (but a minimum of eighteen (18) months’ estimated gross Rents attributable to the Mortgaged Property and based on gross Rents for the immediately preceding year and otherwise sufficient to avoid any coinsurance penalty with a 90 day extended period of indemnity when (A) the Improvements have 5 or more stories or (B) at all times during which the Indebtedness is equal to or greater than $50,000,000);

(v) If any portion of the Improvements are located within a federally designated flood hazard zone, flood insurance in an amount equal to the full insurable value of the portion of such Improvements within such flood hazard zone. Such coverage may need to be purchased through excess carriers if the required coverage exceeds the maximum insurance allowed under the federal flood insurance program;

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(vi) Insurance against loss or damage from (A) leakage of sprinkler systems and (B) explosion of steam boilers, air conditioning equipment, pressure vessels or similar apparatus now or hereafter installed at the Mortgaged Property, in such amounts as Lender may from time to time reasonably require and which are customarily required by institutional lenders with respect to similar properties similarly situated;

(vii) The insurance required under clauses (i) and (iv) above shall cover perils of terrorism and acts of terrorism and Borrower shall maintain commercial property insurance for loss resulting from perils and acts of terrorism on terms (including amounts) consistent with those required under clauses (i) and (iv) above at all times during the term of the Loan evidenced by the Note;

(viii) During any period of Restoration, builder’s “all risk” insurance in an amount equal to not less than the full insurable value of the Property against such risks (including fire and extended coverage and collapse of the Improvements to agreed limits) as Lender may request, in form and substance acceptable to Lender; and

(ix) Such other insurance with respect to the Improvements and Personalty located on the Property against loss or damage as required by Lender (including, without limitation, liquor/dramshop, Mold, hurricane, windstorm and earthquake insurance) provided such insurance is of the kind for risks from time to time customarily insured against and in such minimum coverage amounts and maximum deductibles as are generally required by institutional lenders for properties comparable to the Mortgaged Property or which Lender may deem necessary in its reasonable discretion; provided, however, if Lender requires earthquake insurance, the amount of coverage must be equal to 150% of the probable maximum loss for the Mortgaged Property but Lender shall not require earthquake insurance if the probable maximum loss for the Mortgaged Property is less than twenty percent (20%). In the event any updated reports or other documentation are reasonably required by Lender in order to determine whether such additional insurance is necessary or prudent, Borrower shall pay for all such documentation at its sole cost and expense.

All insurance required pursuant to subsections (i) and subsections (iv) through (ix) shall be referred to as “Hazard Insurance”.

(b) All premiums on insurance policies required under Section 19(a) shall be paid in the manner provided in Section 7, unless Lender has designated in writing another method of payment. All such policies shall also be in a form approved by Lender. All policies of Hazard Insurance must include a non-contributing, non-reporting mortgagee clause in favor of, and in a form approved by, Lender. All policies for general liability insurance must contain a standard additional insured provision, in favor of, and in a form approved by Lender. Borrower shall deliver to Lender a legible copy of each insurance policy (or duplicate original), and Borrower shall promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies and all receipts for paid premiums. At least 30 days prior to the expiration date of any insurance policy, Borrower shall deliver to Lender evidence acceptable to Lender that the policy has been renewed. If Borrower has not delivered a legible copy of each renewal policy (or a duplicate original) prior to the expiration date of any insurance policy,

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Borrower shall deliver a legible copy of each renewal policy (or a duplicate original), in a form satisfactory to Lender, no later than the earlier of (i) the date that is 60 days after the expiration date of the original policy, or (ii) the date of any notice to Lender under subsection (f) below.

(c) Borrower will maintain the insurance coverage described in this Section 19 with companies acceptable to Lender and with a rated claims paying ability of at least (i) “A-” or its equivalent by Fitch, Inc., (ii) “A-” or its equivalent by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., (iii) “A3” or its equivalent by Moody’s Investors Service, Inc. or (iv) “A” for financial strength and “VIII” for financial size, or their equivalents, by A.M. Best Company. All insurers providing insurance required by this Instrument must be authorized to issue insurance in the Property Jurisdiction.

(d) All insurance policies and renewals of insurance policies required by this Section 19 shall be for such periods as Lender may from time to time require.

(e) Borrower shall comply with all insurance requirements and shall not permit any condition to exist on the Mortgaged Property that would invalidate any part of any insurance coverage that this Instrument requires Borrower to maintain.

(f) In the event of loss, Borrower shall give immediate written notice to the insurance carrier and to Lender. Borrower hereby authorizes and appoints Lender as attorney in fact for Borrower to make proof of loss, to adjust and compromise any claims under policies of Hazard Insurance, to appear in and prosecute any action arising from such Hazard Insurance policies, to collect and receive the proceeds of Hazard Insurance, to hold the proceeds of Hazard Insurance, and to deduct from such proceeds Lender’s expenses incurred in the collection of such proceeds. This power of attorney is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 19 shall require Lender to incur any expense or take any action. Lender may, at Lender’s option, (i) require a “repair or replacement” settlement, in which case the proceeds will be used to reimburse Borrower for the cost of restoring and repairing the Mortgaged Property to the equivalent of its original condition or to a condition approved by Lender (the “Restoration”), or (ii) require an “actual cash value” settlement in which case the proceeds may be applied to the payment of the Indebtedness, whether or not then due. To the extent Lender determines to require a repair or replacement settlement and apply insurance proceeds to Restoration, Lender shall apply the proceeds in accordance with Lender’s then-current policies relating to the restoration of casualty damage on similar multifamily properties.

(g) Notwithstanding any provision to the contrary in this Section 19, as long as no Event of Default, or any event which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default, has occurred and is continuing,

(i) in the event of a casualty resulting in damage to the Mortgaged Property which will cost $25,000 or less to repair, the Borrower shall have the sole right to make proof of loss, adjust and compromise the claim and collect and receive any proceeds directly without the approval or prior consent of the Lender so long as the insurance proceeds are used solely for the Restoration of the Mortgaged Property; and

(ii) in the event of a casualty resulting in damage to the Mortgaged Property which will cost more than $25,000 but less than $100,000 to repair, the Borrower is authorized to make proof of loss and adjust and compromise the claim without the prior consent of Lender, and Lender shall hold the applicable insurance proceeds to be used to reimburse Borrower for the cost of Restoration of the Mortgaged Property and shall not apply such proceeds to the payment of sums due under this Instrument.

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(h) Lender will have the right to exercise its option to apply insurance proceeds to the payment of the Indebtedness only if Lender determines that at least one of the following conditions is met:

(i) an Event of Default (or any event, which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default) has occurred and is continuing;

(ii) Lender determines, in its discretion, that there will not be sufficient funds from insurance proceeds, anticipated contributions of Borrower of its own funds or other sources acceptable to Lender to complete the Restoration;

(iii) Lender determines, in its discretion, that the rental income from the Mortgaged Property after completion of the Restoration will not be sufficient to meet all operating costs and other expenses, Imposition Deposits, deposits to reserves and Loan repayment obligations relating to the Mortgaged Property;

(iv) Lender determines, in its discretion, that the Restoration will not be completed by the earlier of (A) at least one year before the Maturity Date (or six months before the Maturity Date if Lender determines in its discretion that re-leasing of the Mortgaged Property will be completed within such six-month period) or (B) the expiration of the business interruption coverage;

(v) Lender determines that the Restoration will not be completed within one year after the date of the loss or casualty;

(vi) the casualty involved an actual or constructive loss of more than 30% of the fair market value of the Mortgaged Property, and rendered untenantable more than 30% of the residential units of the Mortgaged Property;

(vii) after Restoration the fair market value of the Mortgaged Property is expected to be less than the fair market value of the Mortgaged Property immediately prior to such casualty (assuming the affected portion of the Mortgaged Property is relet within a reasonable period after the date of such casualty); or

(viii) during and after the completion of the Restoration less than 35% of the Leases covering the residential units of the Mortgaged Property will remain in full force and effect.

(i) If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender shall automatically succeed to all rights of Borrower in and to any insurance policies and unearned insurance premiums and in and to the proceeds resulting from any damage to the Mortgaged Property prior to such sale or acquisition.

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(j) Unless Lender otherwise agrees in writing, any application of any insurance proceeds to the Indebtedness shall not extend or postpone the due date of any monthly installments referred to in the Note, Section 7 of this Instrument or any Collateral Agreement, or change the amount of such installments.

(k) Borrower agrees to execute such further evidence of assignment of any insurance proceeds as Lender may require.

20. CONDEMNATION.

(a) Borrower shall promptly notify Lender in writing of any action or proceeding or notice relating to any proposed or actual condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect (a “Condemnation”). Borrower shall appear in and prosecute or defend any action or proceeding relating to any Condemnation unless otherwise directed by Lender in writing. Borrower authorizes and appoints Lender as attorney in fact for Borrower to commence, appear in and prosecute, in Lender’s or Borrower’s name, any action or proceeding relating to any Condemnation and to settle or compromise any claim in connection with any Condemnation, after consultation with Borrower and consistent with commercially reasonable standards of a prudent lender. This power of attorney is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 20 shall require Lender to incur any expense or take any action. Borrower hereby transfers and assigns to Lender all right, title and interest of Borrower in and to any award or payment with respect to (i) any Condemnation, or any conveyance in lieu of Condemnation, and (ii) any damage to the Mortgaged Property caused by governmental action that does not result in a Condemnation.

(b) Lender may hold such awards or proceeds and apply such awards or proceeds, after the deduction of Lender’s expenses incurred in the collection of such amounts (including Attorneys’ Fees and Costs) at Lender’s option, to the restoration or repair of the Mortgaged Property or to the payment of the Indebtedness, with the balance, if any, to Borrower. Unless Lender otherwise agrees in writing, any application of any awards or proceeds to the Indebtedness shall not extend or postpone the due date of any monthly installments referred to in the Note, Section 7 of this Instrument or any Collateral Agreement, or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require.

(c) Notwithstanding any provision to the contrary in this Section 20, but subject to Section 20(e) below, in the event of a partial Condemnation of the Mortgaged Property, as long as no Event of Default, or any event which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default, has occurred and is continuing, in the event of a partial Condemnation resulting in proceeds or awards in the amount of less than $100,000, the Borrower shall have the sole right to make proof of loss, adjust and compromise the claim and collect and receive any proceeds directly without the approval or prior consent of the Lender so long as the proceeds or awards are used solely for the Restoration of the Mortgaged Property.

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(d) In the event of a partial Condemnation of the Mortgaged Property resulting in proceeds or awards in the amount of $100,000 or more and subject to Section 20(e) below, Lender will have the right to exercise its option to apply Condemnation proceeds to the payment of the Indebtedness only if Lender determines that at least one of the following conditions is met:

(i) an Event of Default (or any event, which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default) has occurred and is continuing;

(ii) Lender determines, in its discretion, that there will not be sufficient funds from Condemnation proceeds, anticipated contributions of Borrower of its own funds or other sources acceptable to Lender to complete the Restoration;

(iii) Lender determines, in its discretion, that the rental income from the Mortgaged Property after completion of the Restoration will not be sufficient to meet all operating costs and other expenses, Imposition Deposits, deposits to reserves and Loan repayment obligations relating to the Mortgaged Property;

(iv) Lender determines, in its discretion, that the Restoration will not be completed at least one year before the Maturity Date (or six months before the Maturity Date if Lender determines in its discretion that re-leasing of the Mortgaged Property will be completed within such six-month period);

(v) Lender determines that the Restoration will not be completed within one year after the date of the Condemnation;

(vi) the Condemnation involved an actual or constructive loss of more than 15% of the fair market value of the Mortgaged Property, and rendered untenantable more than 25% of the residential units of the Mortgaged Property;

(vii) after Restoration the fair market value of the Mortgaged Property is expected to be less than the fair market value of the Mortgaged Property immediately prior to the Condemnation (assuming the affected portion of the Mortgaged Property is relet within a reasonable period after the date of the Condemnation); or

(viii) during and after the completion of the Restoration less than 35% of the Leases covering the residential units of the Mortgaged Property will remain in full force and effect.

(e) Notwithstanding anything to the contrary set forth in this Instrument, including this Section 20, during any period that the Loan or any portion of the Loan is included in a Securitization, if any portion of the Mortgaged Property is released from the lien of the Loan in connection with a Condemnation and if the ratio of (i) the unpaid principal balance of the Loan to (ii) the value of the Mortgaged Property, as determined by Lender in its sole discretion based on a commercially reasonable valuation method, is greater than 125% immediately after such Condemnation and before any restoration or repair of the Mortgaged Property (but taking into account any planned restoration or repair of the Mortgaged Property as if such planned restoration or repair were completed), the Lender shall apply any net proceeds or awards from such Condemnation, in full, to the payment of the principal of the Indebtedness whether or not then due and payable, unless Lender shall have received an opinion of counsel, satisfactory to Lender, that a different application of such net proceeds or awards will not cause such Securitization to fail to meet applicable federal income tax qualification requirements or subject such Securitization to any tax.

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(f) If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender shall automatically succeed to all rights of Borrower in and to any Condemnation proceeds and awards prior to such sale or acquisition.

(g) Borrower agrees to execute such further evidence of assignment of any Condemnation proceeds as Lender may require.

21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER. [RIGHT TO UNLIMITED TRANSFERS – WITH LENDER APPROVAL]. Notwithstanding anything to the contrary in this Section 21, no Transfer will be permitted under this Section 21 unless the provisions of Section 33 are satisfied.

(a) “Transfer” means

(i) a sale, assignment, transfer or other disposition or divestment of any interest therein (whether voluntary, involuntary or by operation of law);

(ii) the granting, creating or attachment of a lien, encumbrance or security interest (whether voluntary, involuntary or by operation of law);

(iii) the issuance or other creation of an ownership interest in a legal entity, including a partnership interest, interest in a limited liability company or corporate stock;

(iv) the withdrawal, retirement, removal or involuntary resignation of a partner in a partnership or a member or Manager in a limited liability company; or

(v) the merger, dissolution, liquidation, or consolidation of a legal entity or the reconstitution of one type of legal entity into another type of legal entity.

For purposes of defining the term “Transfer,” the term “partnership” shall mean a general partnership, a limited partnership, and a joint venture, and the term “partner” shall mean a general partner, a limited partner and a joint venturer.

(b) “Transfer” does not include

(i) a conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure sale under this Instrument,

(ii) the Mortgaged Property becoming part of a bankruptcy estate by operation of law under the United States Bankruptcy Code, or

(iii) a lien against the Mortgaged Property for local taxes and/or assessments not then due and payable.

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(c) The occurrence of any of the following Transfers shall not constitute an Event of Default under this Instrument, notwithstanding any provision of Section 21(e) to the contrary:

(i) a Transfer to which Lender has consented;

(ii) a Transfer that occurs in accordance with Section 21(d);

(iii) the grant of a leasehold interest in an individual dwelling unit for a term of two years or less not containing an option to purchase;

(iv) a Transfer of obsolete or worn out Personalty or Fixtures that are contemporaneously replaced by items of equal or better function and quality, which are free of liens, encumbrances and security interests other than those created by the Loan Documents or consented to by Lender;

(v) the creation of a mechanic’s, materialman’s, or judgment lien against the Mortgaged Property, which is released of record or otherwise remedied to Lender’s satisfaction within 60 days of the date of creation;

(vi) if Borrower is a housing cooperative corporation or association, the Transfer of more than 49 percent of the shares in the housing cooperative or the assignment of more than 49 percent of the occupancy agreements or leases relating thereto by tenant shareholders of the housing cooperative or association to other tenant shareholders;

(vii) any Transfer of an interest in Borrower or any interest in a Controlling Entity (which, if such Controlling Entity were Borrower, would result in an Event of Default) listed in (A) through (F) below (a “Preapproved Transfer”), under the terms and conditions listed as items (1) through (9) below:

(A) a sale or transfer to one or more of the transferor’s immediate family members; or

(B) a sale or transfer to any trust having as its sole beneficiaries the transferor and/or one or more of the transferor’s immediate family members; or

(C) a sale or transfer from a trust to any one or more of its beneficiaries who are immediate family members of the transferor; or

(D) the substitution or replacement of the trustee of any trust with a trustee who is an immediate family member of the transferor; or

(E) a sale or transfer to an entity owned and Controlled by the transferor or the transferor’s immediate family members; or

(F) a sale or transfer to a natural person or entity that has an existing interest in the Borrower or in a Controlling Entity.

(1) Borrower shall provide Lender with prior written Notice of the proposed Preapproved Transfer, which Notice must be accompanied by a non-refundable review fee in the amount of $3,000.00.

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(2) For the purposes of these Preapproved Transfers, a transferor’s immediate family members will be deemed to include a spouse, parent, child or grandchild of such transferor.

(3) Either directly or indirectly, John A. Wensinger shall retain at all times a Controlling Interest in the Borrower and manage the day-to-day operations of the Borrower.

(4) At the time of the proposed Preapproved Transfer, no Event of Default shall have occurred and be continuing and no event or condition shall have occurred and be continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(5) Lender shall be entitled to collect all costs, including the cost of all title searches, title insurance and recording costs, and all Attorneys’ Fees and Costs.

(6) Lender shall not be entitled to collect a transfer fee as a result of these Preapproved Transfers.

(7) In the event of a Transfer prohibited by or requiring Lender’s approval under this Section 21, this Section (c)(vii) may be modified or rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s), as a condition of Lender’s consent.

(8) If a nonconsolidation opinion was delivered at origination of the Loan and if, after giving effect to all Preapproved Transfers and all prior Transfers, fifty percent (50%) or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a fifty percent (50%) direct or indirect interest in Borrower as of the origination of the Loan, an opinion of counsel for Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation.

(9) Confirmation acceptable to Lender that Section 33 continues to be satisfied; and

(viii) a Supplemental Mortgage that complies with Section 43 or Defeasance that complies with Section 44.

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(d) The occurrence of any of the following Transfers shall not constitute an Event of Default under this Instrument, provided such Transfer does not constitute an Event of Default under any other Section of this Instrument:

(i) a Transfer that occurs by devise, descent, or by operation of law upon the death of a natural person to one or more members of the immediate family of such natural person or to a trust or family conservatorship established for the benefit of such immediate family member or members, provided that:

(A) The Property Manager (or a replacement property manager approved by Lender), if applicable, continues to be responsible for the management of the Mortgaged Property, and such Transfer shall not result in a change in the day-to-day operations of the Mortgaged Property;

(B) those persons responsible for the management and control of Borrower remain unchanged as a result of such Transfer, or any replacement management is approved by Lender;

(C) Lender receives confirmation acceptable to Lender that Section 33 continues to be satisfied;

(D) each guarantor executes such documents and agreements as Lender shall reasonably require to evidence and effectuate the ratification of each guaranty and indemnity agreement, or in the event of the death of any guarantor or indemnitor, the Borrower causes one or more natural persons or entities acceptable to Lender to execute and deliver to Lender a guaranty in a form acceptable to Lender, without any cost or expense to Lender;

(E) Borrower shall give Lender Notice of such Transfer together with copies of all documents effecting such Transfer not more than thirty (30) calendar days after the date of such Transfer, and contemporaneously therewith, shall (1) reaffirm the warranties and representations under Section 10 and Section 48 of this Instrument and (2) satisfy Lender, in its discretion, that such Transferee’s organization, credit and experience in the management of similar properties are deemed to be appropriate to the overall structure and documentation of the existing financing;

(F) such legal opinions from Transferee’s counsel as Lender deems necessary, including an opinion that the Transferee and any SPE Equity Owner is in compliance with Section 33 of this Instrument, a nonconsolidation opinion (if a nonconsolidation opinion was delivered at origination of the Loan and if required by Lender), an opinion that the ratification of the Loan Documents and guaranty, if applicable, has been duly authorized, executed, and delivered and that the ratification documents and guaranty, if applicable, are enforceable as the obligation of the Transferee; and

(G) Borrower shall pay or reimburse Lender for all costs and expenses incurred by Lender in connection with such Transfer (including all Attorneys’ Fees and Costs); and

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(ii) the grant of an easement, if before the grant Lender determines that the easement will not materially affect the operation or value of the Mortgaged Property or Lender’s interest in the Mortgaged Property, and Borrower pays to Lender, upon demand, all costs and expenses, including Attorneys’ Fees and Costs, incurred by Lender in connection with reviewing Borrower’s request; and, if the Note is held by a REMIC trust and if required by Lender, an opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that (A) the grant of such easement has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (B) the qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of such grant, and (C) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of such grant.

(e) The occurrence of any of the following Transfers shall constitute an Event of Default under this Instrument:

(i) a Transfer of all or any part of the Mortgaged Property or any interest in the Mortgaged Property;

(ii) if Borrower is a limited partnership, a Transfer of (A) any general partnership interest, or (B) limited partnership interests in Borrower that would cause the Initial Owners of Borrower to own less than 50% of all limited partnership interests in Borrower;

(iii) if Borrower is a limited liability company, (A) a Transfer of any membership interest in Borrower which would cause the Initial Owners to own less than 50% of all the membership interests in Borrower or (B) a Transfer that results in a change of Manager;

(iv) if Borrower is a corporation (A) the Transfer of any voting stock in Borrower which would cause the Initial Owners to own less than 50% of any class of voting stock in Borrower or (B) if the outstanding voting stock in Borrower is held by 100 or more shareholders, one or more Transfers by a single transferor within a 12-month period affecting an aggregate of 5 percent or more of that stock;

(v) a Transfer of any interest in a Controlling Entity which, if such Controlling Entity were Borrower, would result in an Event of Default under any of Sections 21(e)(i) through (iv) above.

Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default in order to exercise any of its remedies with respect to an Event of Default under this Section 21.

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(f) Lender shall consent, without any adjustment to the rate at which the Indebtedness secured by this Instrument bears interest or to any other economic terms of the Indebtedness set forth in the Note, to a Transfer that would otherwise violate this Section 21 if, prior to the Transfer, Borrower has satisfied each of the following requirements:

(i) the submission to Lender of all information required by Lender to make the determination required by this Section 21(f);

(ii) the absence of any Event of Default;

(iii) the transferee (the “Transferee”) meets Lender’s eligibility, credit, management and other standards satisfactory to Lender in its sole discretion;

(iv) the Transferee’s organization, credit and experience in the management of similar properties are deemed by the Lender, in its discretion, to be appropriate to the overall structure and documentation of the existing financing;

(v) the Mortgaged Property will be managed by a property manager meeting the requirements of Section 17(e);

(vi) the Mortgaged Property, at the time of the proposed Transfer, meets all standards as to its physical condition, occupancy, net operating income and the collection of reserves satisfactory to Lender in its sole discretion;

(vii) in the case of a Transfer of all or any part of the Mortgaged Property, (A) the execution by the Transferee of Lender’s then-standard assumption agreement that, among other things, requires the Transferee to perform all obligations of Borrower set forth in the Note, this Instrument and any other Loan Documents, and may require that the Transferee comply with any provisions of this Instrument or any other Loan Document which previously may have been waived or modified by Lender, (B) if Lender requires, the Transferee causes one or more natural persons or entities acceptable to Lender to execute and deliver to Lender a guaranty in a form acceptable to Lender, and (C) the Transferee executes such additional Collateral Agreements as Lender may require;

(viii) in the case of a Transfer of any interest in a Controlling Entity, if a guaranty has been executed and delivered in connection with the Note, this Instrument or any of the other Loan Documents, the Borrower causes one or more natural persons or entities acceptable to Lender to execute and deliver to Lender a guaranty in a form acceptable to Lender;

(ix) If a Supplemental Mortgage is outstanding, the Borrower obtains the consent of the lender for the Supplemental Mortgage;

(x) Lender’s receipt of all of the following:

(A) a review fee in the amount of $3,000.00;

(B) a transfer fee in an amount equal to one percent of the unpaid principal balance of the Indebtedness immediately before the applicable Transfer; and

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(C) the amount of Lender’s out of pocket costs (including reasonable Attorneys’ Fees and Costs) incurred in reviewing the Transfer request and any fees charged by the Rating Agencies; and

(xi) evidence satisfactory to Lender that the Transferee and any SPE Equity Owner of such Transferee meet the requirements of Section 33;

(xii) such legal opinions from Transferee’s counsel as Lender deems necessary, including an opinion that the Transferee and any SPE Equity Owner is in compliance with Section 33 of this Instrument, a nonconsolidation opinion (if a nonconsolidation opinion was delivered at origination of the Loan and if required by Lender), an opinion that the assignment and assumption of the Loan Documents has been duly authorized, executed, and delivered and that the assignment documents and the Loan Documents are enforceable as the obligation of the Transferee; and

22. EVENTS OF DEFAULT. The occurrence of any one or more of the following shall constitute an Event of Default under this Instrument:

(a) any failure by Borrower to pay or deposit when due any amount required by the Note, this Instrument or any other Loan Document;

(b) any failure by Borrower to maintain the insurance coverage required by Section 19;

(c) any failure by Borrower or any SPE Equity Owner to comply with the provisions of Section 33 or if any of the assumptions contained in any nonconsolidation opinions delivered to Lender at any time is or shall become untrue in any material respect;

(d) fraud or material misrepresentation or material omission by Borrower, any of its officers, directors, trustees, general partners or managers, any SPE Equity Owner or any guarantor in connection with (i) the application for or creation of the Indebtedness, (ii) any financial statement, Rent Schedule, or other report or information provided to Lender during the term of the Indebtedness, or (iii) any request for Lender’s consent to any proposed action, including a request for disbursement of funds under any Collateral Agreement;

(e) any failure by Borrower to comply with the provisions of Section 20;

(f) any Event of Default under Section 21;

(g) the commencement of a forfeiture action or proceeding, whether civil or criminal, which could result in a forfeiture of the Mortgaged Property or otherwise materially impair the lien created by this Instrument or Lender’s interest in the Mortgaged Property;

(h) any failure by Borrower to perform any of its obligations under this Instrument (other than those specified in Sections 22(a) through (g)), as and when required, which continues for a period of 30 days after Notice of such failure by Lender to Borrower. However, if Borrower’s failure to perform its obligations as described in this Section 22(h) is of the nature that it cannot be cured within the 30 day grace period but reasonably could be cured within 90 days, then Borrower shall have additional time as determined by Lender in its discretion, not to exceed an additional 60 days, in which to cure such default, provided that Borrower has

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diligently commenced to cure such default during the 30-day grace period and diligently pursues the cure of such default. However, no such Notice or grace periods shall apply in the case of any such failure which could, in Lender’s judgment, absent immediate exercise by Lender of a right or remedy under this Instrument, result in harm to Lender, impairment of the Note or this Instrument or any other security given under any other Loan Document;

(i) any failure by Borrower to perform any of its obligations as and when required under any Loan Document other than this Instrument which continues beyond the applicable cure period, if any, specified in that Loan Document;

(j) any exercise by the holder of any other debt instrument secured by a mortgage, deed of trust or deed to secure debt on the Mortgaged Property of a right to declare all amounts due under that debt instrument immediately due and payable;

(k) if (i) Borrower or any SPE Equity Owner shall commence any case, Proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors (A) seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debt, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets; or (ii) there shall be commenced against Borrower or any SPE Equity Owner any case, Proceeding, or other action of a nature referred to in clause (i) above by any party other than Lender which (A) results in the entry of an order for relief or any such adjudication or appointment, or (B) remains undismissed, undischarged or unbonded for a period of ninety (90) days; or (iii) there shall be commenced against Borrower or any SPE Equity Owner any case, Proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of any order by a court of competent jurisdiction for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within ninety (90) days from the entry thereof; or (iv) Borrower or any SPE Equity Owner shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; and

(1) any representations and warranties by Borrower or any SPE Equity Owner in this Instrument that are false or misleading in any material respect.

23. REMEDIES CUMULATIVE; REMEDIES OF BORROWER. Each right and remedy provided in this Instrument is distinct from all other rights or remedies under this Instrument or any other Loan Document or afforded by applicable law, and each shall be cumulative and may be exercised concurrently, independently, or successively, in any order. In the event that a claim or adjudication is made that Lender has acted unreasonably or unreasonably delayed acting in any case where, by law or under this Instrument or the other Loan Documents, Lender has an obligation to act reasonably or promptly, Lender shall not be liable for any monetary damages, and Borrower’s sole remedy shall be limited to commencing an action seeking injunctive relief or declaratory judgment. Any action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment.

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24. FORBEARANCE.

(a) Lender may (but shall not be obligated to) agree with Borrower, from time to time, and without giving notice to, or obtaining the consent of, or having any effect upon the obligations of, any guarantor or other third party obligor, to take any of the following actions: extend the time for payment of all or any part of the Indebtedness; reduce the payments due under this Instrument, the Note, or any other Loan Document; release anyone liable for the payment of any amounts under this Instrument, the Note, or any other Loan Document; accept a renewal of the Note; modify the terms and time of payment of the Indebtedness; join in any extension or subordination agreement; release any Mortgaged Property; take or release other or additional security; modify the rate of interest or period of amortization of the Note or change the amount of the monthly installments payable under the Note; and otherwise modify this Instrument, the Note, or any other Loan Document.

(b) Any forbearance by Lender in exercising any right or remedy under the Note, this Instrument, or any other Loan Document or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any other right or remedy, or the subsequent exercise of any right or remedy. The acceptance by Lender of payment of all or any part of the Indebtedness after the due date of such payment, or in an amount which is less than the required payment, shall not be a waiver of Lender’s right to require prompt payment when due of all other payments on account of the Indebtedness or to exercise any remedies for any failure to make prompt payment. Enforcement by Lender of any security for the Indebtedness shall not constitute an election by Lender of remedies so as to preclude the exercise of any other right available to Lender. Lender’s receipt of any awards or proceeds under Sections 19 and 20 shall not operate to cure or waive any Event of Default.

25. LOAN CHARGES. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower is interpreted so that any charge provided for in any Loan Document, whether considered separately or together with other charges levied in connection with any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that charge is hereby reduced to the extent necessary to eliminate that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the principal of the Indebtedness. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness which constitutes interest, as well as all other charges levied in connection with the Indebtedness which constitute interest, shall be deemed to be allocated and spread over the stated term of the Note. Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Note.

26. WAIVER OF STATUTE OF LIMITATIONS, OFFSETS, AND COUNTERCLAIMS. Borrower hereby waives the right to assert any statute of limitations as a bar to the enforcement of the lien of this Instrument or to any action brought to enforce any Loan Document. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or otherwise to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations hereunder shall be a valid defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents.

27. WAIVER OF MARSHALLING. Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender shall

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have the right to determine the order in which any or all of the Mortgaged Property shall be subjected to the remedies provided in this Instrument, the Note, any other Loan Document or applicable law. Lender shall have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies. Borrower and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of this Instrument waives any and all right to require the marshalling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with the exercise of any of the remedies permitted by applicable law or’ provided in this Instrument.

28. FURTHER ASSURANCES; LENDER’S EXPENSES. Borrower shall execute, acknowledge, and deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing statements or amendments, transfers and assurances as Lender may require from time to time in order to better assure, grant, and convey to Lender the rights intended to be granted, now or in the future, to Lender under this Instrument and the Loan Documents. Borrower acknowledges and agrees that, in connection with each request by Borrower under this Instrument or any Loan Document, Borrower shall pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower hereunder shall be deemed a part of the Indebtedness, shall be secured by this instrument and shall bear interest at the Default Rate if not fully paid within ten (10) days of written demand for payment.

29. ESTOPPEL CERTIFICATE. Within 10 days after a request from Lender, Borrower sha|l deliver to Lender a written statement, signed and acknowledged by Borrower, certifying to Lender or any Person designated by Lender, as of the date of such statement, (i) that the Loan Documents are unmodified and in full force and effect (or, if there have been modifications, that the Loan Documents are in full force and effect as modified and setting forth such modifications); (ii) the unpaid principal balance of the Note; (iii) the date to which interest under the Note has been paid; (iv) that Borrower is not in default in paying the Indebtedness or in performing or observing any of the covenants or agreements contained in this Instrument or any of the other Loan Documents (or, if the Borrower is in default, describing such default in reasonable detail); (v) whether or not there are then existing any setoffs or defenses known to Borrower against the enforcement of any right or remedy of Lender under the Loan Documents; and (vi) any additional facts requested by Lender.

30. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.

(a) This Instrument, and any Loan Document which does not itself expressly identify the law that is to apply to it, shall be governed by the laws of the jurisdiction in which the Land is located (the “Property Jurisdiction”).

(b) Borrower agrees that any controversy arising under or in relation to the Note, this Instrument, or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have jurisdiction over all controversies that shall arise under or in relation to the Note, any security for the Indebtedness, or any other Loan Document. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 30 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Instrument in any court of any other jurisdiction.

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31. NOTICE.

(a) All Notices, demands and other communications (“Notice”) under or concerning this Instrument shall be in writing. Each Notice shall be addressed to the intended recipient at its address set forth in this Instrument, and shall be deemed given on the earliest to occur of (i) the date when the Notice is received by the addressee; (ii) the first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next Business Day delivery; or (iii) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified mail, return receipt requested.

(b) Any party to this Instrument may change the address to which Notices intended for it are to be directed by means of Notice given to the other party in accordance with this Section 31. Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with this Section 31, that it will acknowledge, in writing, the receipt of any Notice upon request by the other party and that any Notice rejected or refused by it shall be deemed for purposes of this Section 31 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service.

(c) Any Notice under the Note and any other Loan Document that does not specify how Notices are to be given shall be given in accordance with this Section 31.

32. SALE OF NOTE; CHANGE IN SERVICER; LOAN SERVICING. The Note or a partial interest in the Note (together with this Instrument and the other Loan Documents) may be sold one or more times without prior Notice to Borrower. A sale may result in a change of the Loan Servicer. There also may be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given Notice of the change. All actions regarding the servicing of the Loan evidenced by the Note, including the collection of payments, the giving and receipt of Notice, inspections of the Mortgaged Property, inspections of books and records, and the granting of consents and approvals, may be taken by the Loan Servicer unless Borrower receives Notice to the contrary. If Borrower receives conflicting Notices regarding the identity of the Loan Servicer or any other subject, any such Notice from Lender shall govern.

33. SINGLE PURPOSE ENTITY.

(a) Until the Indebtedness is paid in full, each Borrower and SPE Equity Owner shall remain a Single Purpose Entity.

(b) A “Single Purpose Entity” means a corporation, limited partnership, or limited liability company which, at all times since its formation and thereafter:

(i) shall not engage in any business or activity, other than the ownership, operation and maintenance of the Mortgaged Property and activities incidental thereto;

(ii) shall not acquire, own, hold, lease, operate, manage, maintain, develop or improve any assets other than the Mortgaged Property and such Personalty as may be necessary for the operation of the Mortgaged Property and shall conduct and operate its business as presently conducted and operated;

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(iii) shall preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its formation or organization and shall do all things necessary to observe organizational formalities;

(iv) shall not merge or consolidate with any other Person;

(v) shall not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than Transfers permitted hereunder; issue additional partnership, membership or other equity interests, as applicable; or seek to accomplish any of the foregoing;

(vi) shall not, without the prior unanimous written consent of all of the Borrower’s partners, members, or shareholders, as applicable, and, if applicable, the prior unanimous written consent of one hundred percent (100%) of the members of the board of directors or of the board of managers of the Borrower or the SPE Equity Owner: (A) file any insolvency, or reorganization case or proceeding, to institute proceedings to have the Borrower or any SPE Equity Owner be adjudicated bankrupt or insolvent, (B) institute proceedings under any applicable insolvency law, (C) seek any relief under any law relating to relief from debts or the protection of debtors, (D) consent to the filing or institution of bankruptcy or insolvency proceedings against the Borrower or any SPE Equity Owner, (E) file a petition seeking, or consent to, reorganization or relief with respect to the Borrower or any SPE Equity Owner under any applicable federal or state law relating to bankruptcy or insolvency, (F) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for the Borrower or a substantial part of its property or for any SPE Equity Owner or a substantial part of its property, (G) make any assignment for the benefit of creditors of the Borrower or any SPE Equity Owner, (H) admit in writing the Borrower’s or any SPE Equity Owner’s inability to pay its debts generally as they become due, or (I) take action in furtherance of any of the foregoing;

(vii) shall not amend or restate its organizational documents if such change would modify the requirements set forth in this Section 33;

(viii) shall not own any subsidiary or make any investment in, any other Person;

(ix) shall not commingle its assets with the assets of any other Person and shall hold all of its assets in its own name;

(x) shall not incur any debt, secured or unsecured, direct or contingent (including, without limitation, guaranteeing any obligation), other than,

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(A) the Indebtedness (and any further indebtedness as described in Section 43 with regard to Supplemental Mortgages) and (B) customary unsecured trade payables incurred in the ordinary course of owning and operating the Mortgaged Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of two percent (2%) of the original principal amount of the Indebtedness and are paid within sixty (60) days of the date incurred;

(xi) shall maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person and shall not list its assets as assets on the financial statement of any other Person; provided, however, that the Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (A) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets shall also be listed on the Borrower’s own separate balance sheet;

(xii) except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents, shall only enter into any contract or agreement with any general partner, member, shareholder, principal or Affiliate of Borrower or any guarantor, or any general partner, member, principal or Affiliate thereof, upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties;

(xiii) shall not maintain its assets in such a manner that will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

(xiv) shall not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Note) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person;

(xv) shall not make or permit to remain outstanding any loans or advances to any other Person except for those investments permitted under the Loan Documents and shall not buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities);

(xvi) shall file its own tax returns separate from those of any other Person, except to the extent that the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and shall pay any taxes required to be paid under applicable law;

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(xvii) shall hold itself out to the public as a legal entity separate and distinct from any other Person and conduct its business solely in its own name, shall correct any known misunderstanding regarding its separate identity and shall not identify itself or any of its Affiliates as a division or department of any other Person;

(xviii) shall maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and shall pay its debts and liabilities from its own assets as the same shall become due;

(xix) shall allocate fairly and reasonably shared expenses with Affiliates (including, without limitation, shared office space) and use separate stationery, invoices and checks bearing its own name;

(xx) shall pay (or cause the Property Manager to pay on behalf of the Borrower from the Borrower’s funds) its own liabilities (including, without limitation, salaries of its own employees) from its own funds;

(xxi) shall not acquire obligations or securities of its partners, members, shareholders, or Affiliates, as applicable;

(xxii) except as contemplated or permitted by the property management agreement with respect to the Property Manager, shall not permit any Affiliate or constituent party independent access to its bank accounts;

(xxiii) shall maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds;

(xxiv) if such entity is a single member limited liability company, such entity shall (A) be formed and organized under Delaware law, (B) have either (1) one springing member that is a corporation whose stock is 100% owned by the sole member of Borrower and that satisfies the requirements for a corporate springing member set forth below in this subsection or (2) two springing members who are natural persons and (C) otherwise comply with all Rating Agencies criteria for single member limited liability companies (including, without limitation, the delivery of Delaware single member limited liability company opinions acceptable in all respects to Lender and to the Rating Agencies). If the springing member is a corporation, such springing member shall at all times comply, and will cause Borrower to comply, with each of the representations, warranties and covenants contained in this Section 33 as if such representation, warranty or covenant were made directly by such corporation. If there is more than one springing member, only one springing member shall be the sole member of Borrower at any one time, and the second springing member shall become the sole member only upon the first springing member ceasing to be a member, so that at all times Borrower has one and only one member;

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(xxv) if such entity is a single member limited liability company that is board-managed, such entity shall have a board of managers separate from that of guarantor and any other Person and shall cause its board of managers to keep minutes of board meetings and actions and observe all other Delaware limited liability company required formalities; and

(xxvi) if a SPE Equity Owner is required pursuant to Section 1(jjjj) of this Instrument, if the Borrower is (A) a limited liability company with more than one member, then the Borrower has and shall have at least one (1) member that is an SPE Equity Owner that has satisfied and shall satisfy the requirements of Section 33(c) below and such member is its managing member, or (B) a limited partnership, then all of its general partners are SPE Equity Owners that have satisfied and shall satisfy the requirements of Section 33(c) below.

(c) With respect to each SPE Equity Owner, if applicable, a “Single Purpose Entity” means a corporation or a Delaware single member limited liability company which, at all times since its formation and thereafter complies in its own right (subject to the modifications set forth below), and shall cause Borrower to comply, with each of the requirements contained in Section 33(b). Upon the withdrawal or the disassociation of an SPE Equity Owner from Borrower, Borrower shall immediately appoint a new SPE Equity Owner, whose organizational documents are substantially similar to those of the withdrawn or disassociated SPE Equity Owner, and deliver a new nonconsolidation opinion to the Rating Agencies and Lender in form and substance satisfactory to Lender and to the Rating Agencies (unless the opinion is waived by the Rating Agencies), with regard to nonconsolidation by a bankruptcy court of the assets of each of the Borrower and SPE Equity Owner with those of its Affiliates.

(i) With respect to Sections 33(b)(i) and 33(b)(x) the SPE Equity Owner shall not engage in any business or activity other than being the sole managing member or general partner, as the case may be, of the Borrower and owning at least a 0.5% equity interest in Borrower;

(ii) With respect to Section 33(b)(ii), the SPE Equity Owner has not and shall not acquire or own any assets other than its equity interest in the Borrower and personal property related thereto; and

(iii) With respect to Section 33(b)(viii), the SPE Equity Owner shall not own any subsidiary or make any investment in any other Person, except for Borrower;

(iv) With respect to Section 33(b)(xiv), the SPE Equity Owner shall not assume or guaranty the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person, except for in its capacity as general partner of the Borrower (if applicable);

(v) With respect to Section 33(b)(x), the SPE Equity Owner has not and shall not incur any debt, secured or unsecured, direct or contingent (including, without limitation, guaranteeing any obligation), other than (A) customary

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unsecured payables incurred in the ordinary course of owning the Borrower provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of $10,000 and are paid within sixty (60) days of the date incurred and (B) except in its capacity as general partner of the Borrower (if applicable).

(d) [INTENTIONALLY DELETED]

(e) Notwithstanding anything to the contrary in this Instrument, no Transfer will be permitted under Sections 21(c), (d), (e) or (f) unless the provisions of this Section 33 are satisfied at all times.

34. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and the rights granted by this Instrument shall inure to, the respective successors and assigns of Lender and Borrower. However, a Transfer not permitted by Section 21 shall be an Event of Default.

35. JOINT AND SEVERAL LIABILITY. If more than one Person signs this Instrument as Borrower, the obligations of such Persons shall be joint and several.

36. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY.

(a) The relationship between Lender and Borrower shall be solely that of creditor and debtor, respectively, and nothing contained in this Instrument shall create any other relationship between Lender and Borrower.

(b) No creditor of any party to this Instrument and no other Person shall be a third party beneficiary of this Instrument or any other Loan Document. Without limiting the generality of the preceding sentence, (i) any arrangement (a “Servicing Arrangement”) between the Lender and any Loan Servicer for loss sharing or interim advancement of funds shall constitute a contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (ii) Borrower shall not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness.

37. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability of any provision of this Instrument shall not affect the validity or enforceability of any other provision, and all other provisions shall remain in full force and effect. This Instrument contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Instrument. This Instrument may not be amended or modified except by a writing signed by the party against whom enforcement is sought; provided, however, that in the event of a Transfer prohibited by or requiring Lender’s approval under Section 21, any or some or all of the Modifications to Instrument set forth in Exhibit B (if any) may be modified or rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s).

38. CONSTRUCTION. The captions and headings of the Sections of this Instrument are for convenience only and shall be disregarded in construing this Instrument. Any reference in this Instrument to an “Exhibit” or a “Section” shall, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit attached to this Instrument or to a Section of this Instrument. All Exhibits attached to or referred to in this Instrument are incorporated by reference into this Instrument. Any reference in this Instrument to a statute or regulation shall be construed as referring to that statute or regulation as amended from time to time. Use of the singular in this Agreement includes the plural and use of the plural includes the singular. As used in this Instrument, the term “including” means “including, but not limited to.”

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39. DISSEMINATION OF INFORMATION. Borrower acknowledges that Lender may provide to third parties with an existing or prospective interest in the servicing, enforcement, evaluation, performance, ownership, purchase, participation or Securitization of the Loan, including, without limitation, any of the Rating Agencies, any entity maintaining databases on the underwriting and performance of commercial mortgage loans, as well as governmental regulatory agencies having regulatory authority over Lender, any and all information which Lender now has or may hereafter acquire relating to the Loan, the Mortgaged Property, Borrower, any SPE Equity Owner or any guarantor, as Lender determines necessary or desirable and that such information may be included in disclosure documents in connection with a Securitization or syndication of participation interests, including, without limitation, a prospectus, prospectus supplement, offering memorandum, private placement memorandum or similar document (each, a “Disclosure Document”) and also may be included in any filing with the Securities and Exchange Commission pursuant to the Securities Act or the Securities Exchange Act. To the fullest extent permitted under applicable law, Borrower irrevocably waives all rights, if any, to prohibit such disclosure, including, without limitation, any right of privacy.

40. NO CHANGE IN FACTS OR CIRCUMSTANCES. Borrower warrants that (a) all information in the application for the Loan submitted to Lender (the “Loan Application”) and in all financial statements, Rent Schedules, reports, certificates and other documents submitted in connection with the Loan Application are complete and accurate in all material respects; and (b) there has been no material adverse change in any fact or circumstance that would make any such information incomplete or inaccurate.

41. SUBROGATION. If, and to the extent that, the proceeds of the Loan evidenced by the Note, or subsequent advances under Section 12, are used to pay, satisfy or discharge a Prior Lien, such Loan proceeds or advances shall be deemed to have been advanced by Lender at Borrower’s request, and Lender shall automatically, and without further action on its part, be subrogated to the rights, including lien priority, of the owner or holder of the obligation secured by the Prior Lien, whether or not the Prior Lien is released.

42. [INTENTIONALLY DELETED]

43. SUPPLEMENTAL FINANCING.

(a) This Section shall apply only if at the time of any application referred to below, the Federal Home Loan Mortgage Corporation (“Freddie Mac”) has in effect a product described in its Multifamily Seller/Servicer Guide under which it purchases supplemental mortgages on multifamily properties that meet specified criteria (a “Supplemental Mortgage Product”).

(b) After the first anniversary of the date of this Instrument (the “First Mortgage”), Freddie Mac will consider an application from an originating lender that is generally approved by Freddie Mac to sell mortgages to Freddie Mac under the Supplemental Mortgage Product (an “Approved Seller/Servicer”) for the purchase by Freddie Mac of a proposed indebtedness of Borrower to the Approved Seller/Servicer to be secured by one or more supplemental mortgages on the Mortgaged Property (such indebtedness and supplemental mortgages being referred to

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together as a “Supplemental Mortgage”). Freddie Mac will purchase each Supplemental Mortgage secured by the Mortgaged Property if the following conditions are satisfied:

(i) At the time of the proposed Supplemental Mortgage, no Event of Default shall have occurred and be continuing and no event or condition shall have occurred and be continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default;

(ii) Borrower, the Mortgaged Property and the proposed Supplemental Mortgage must be acceptable to Freddie Mac under its then-current Supplemental Mortgage Product;

(iii) New loan documents must be entered into to reflect each Supplemental Mortgage, such documents to be acceptable to Freddie Mac in its sole discretion;

(iv) Each Supplemental Mortgage will not cause the combined debt service coverage ratio of the Mortgaged Property after each Supplemental Mortgage to be less than 1.25:1, subject to increase in accordance with Freddie Mac’s then-current policies (“Required DSCR”), as determined by Freddie Mac. As used in this Section, the term “combined debt service coverage ratio” means, with respect to the Mortgaged Property, the ratio of (A) the annual net operating income from the operations of the Mortgaged Property at the time of the proposed Supplemental Mortgage to (B) the aggregate of the annual principal and interest payable on (I) the Indebtedness under this Instrument (using a 30-year amortization schedule), (II) any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property (using a 30-year amortization schedule for any Supplemental Mortgages) and (III) the proposed “Indebtedness” for any Supplemental Mortgage (using a 30-year amortization schedule). The annual net operating income of the Mortgaged Property will be as determined by Freddie Mac in its sole discretion considering factors such as income in place at the time of the proposed Supplemental Mortgage and income during the preceding twelve (12) months, and actual, historical and anticipated operating expenses. Freddie Mac shall determine the combined debt service coverage ratio of the Mortgaged Property based on its underwriting. Borrower shall provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations;

(v) Each Supplemental Mortgage will not cause the combined loan to value ratio of the Mortgaged Property after each Supplemental Mortgage to exceed 73%, subject to decrease in accordance with Freddie Mac’s then-current policies (“Required LTV”), as determined by Freddie Mac. As used in this Section, “combined loan to value ratio” means, with respect to the Mortgaged Property, the ratio, expressed as a percentage, of (A) the aggregate outstanding principal balances of (I) the Indebtedness under this Instrument, (II) any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property and (III) the proposed “Indebtedness” for any Supplemental Mortgage, to (B) the value of the Mortgaged Property. Freddie Mac shall determine the combined loan to

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value ratio of the Mortgaged Property based on its underwriting. Borrower shall provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations. In addition, Freddie Mac, at Borrower’s expense, may obtain MAI appraisals of the Mortgaged Property in order to assist Freddie Mac in making the determinations hereunder. If Freddie Mac requires an appraisal, then the value of the Mortgaged Property that will be used to determine whether the Required LTV has been met shall be the lesser of (A) the appraised value set forth in such appraisal or (B) the value of the Mortgaged Property as determined by Freddie Mac;

(vi) The Borrower’s organizational documents are amended to permit the Borrower to incur additional debt in the form of Supplemental Mortgages (Lender shall consent to such amendment(s));

(vii) One or more natural persons or entities acceptable to Freddie Mac executes and delivers to the Approved Seller/Servicer a guaranty in a form acceptable to Freddie Mac with respect to the exceptions to non-recourse liability described in Freddie Mac’s form promissory note, unless Freddie Mac has elected to waive its requirement for a guaranty;

(viii) The loan term of each Supplemental Mortgage shall be coterminous with the First Mortgage or longer than the First Mortgage, including any “Extension Period” described in the Note secured by the First Mortgage, at Freddie Mac’s discretion;

(ix) The Prepayment Premium Period (as defined in the Note) of each Supplemental Mortgage shall be coterminous with the Prepayment Premium Period or the combined Lockout Period and Defeasance Period (all, as defined in the Note), as applicable, of the First Mortgage;

(x) The interest rate of each Supplemental Mortgage will be determined by Freddie Mac in its sole and absolute discretion;

(xi) The Lender enters into an intercreditor agreement (“Intercreditor Agreement”) acceptable to Freddie Mac and to Lender for each Supplemental Mortgage;

(xii) Borrower’s payment of fees and other expenses charged by Lender, Freddie Mac, the Approved Seller/Servicer, and the Rating Agencies (including reasonable Attorneys’ Fees and Costs) in connection with reviewing and originating each Supplemental Mortgage;

(xiii) Notwithstanding anything to the contrary in Section 7 of this Instrument, Borrower shall make deposits under this First Mortgage for the payment of any Impositions, so long as a Supplemental Mortgage is outstanding, and such deposits shall be credited to the payment of such Impositions under any Supplemental Mortgage;

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(xiv) All other requirements of the Supplemental Mortgage Product must be met, unless Freddie Mac has elected to waive one or more of its requirements.

(c) No later than 5 Business Days after Lender’s receipt of a written request from Borrower, Lender shall provide the following information to an Approved Seller/Servicer upon Borrower’s written request. Lender shall only be obligated to provide this information in connection with Borrower’s request for a Supplemental Mortgage from an Approved Seller/Servicer; provided, however, if Freddie Mac is the owner of the Note, Lender shall not be obligated to provide such information:

(i) the then-current outstanding principal balance of the First Mortgage;

(ii) payment history of the First Mortgage;

(iii) whether taxes, insurance, ground rents, replacement reserves, repair escrows, or other escrows are being collected on the First Mortgage and the amount of each such escrow as of the date of the request;

(iv) whether any repairs, capital replacements or improvements or rental achievement or burn-off guaranty requirements are existing or outstanding under the terms of the First Mortgage;

(v) a copy of the most recent inspection report for the Mortgaged Property;

(vi) whether any modifications or amendments have been made to the Loan Documents for the First Mortgage since origination of the First Mortgage and, if applicable, a copy of such modifications and amendments; and

(vii) whether to Lender’s knowledge any Event of Default exists under the First Mortgage.

(d) Lender shall have no obligation to consent to any mortgage or lien on the Mortgaged Property that secures any indebtedness other than the Indebtedness, except as set forth herein.

(e) If a Supplemental Mortgage is made to Borrower, Borrower agrees that the terms of the Intercreditor Agreement shall govern with respect to any distributions of excess proceeds by Lender to the Approved Seller/Servicer, Freddie Mac or their successors and/or assigns (collectively, the “Junior Lender”), and Borrower agrees that Lender may distribute any excess proceeds received by Lender pursuant to the Loan Documents to Junior Lender pursuant to the Intercreditor Agreement.

44. DEFEASANCE (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 44 shall apply in the event the Note is assigned to a REMIC trust prior to me Cut-off Date, and, subject to Section 44(a) and (c) below, Borrower shall have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the lien of this Instrument upon the satisfaction of the following conditions:

(a) Borrower shall not have the right to obtain Defeasance at any of the following times:

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(i) if the Loan is not assigned to a REMIC trust;

(ii) during the Lockout Period (as defined in the Note);

(iii) after the expiration of the Defeasance Period (as defined in the Note); or

(iv) after Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 6 of the Note.

(b) Borrower shall give Lender Notice (the “Defeasance Notice”) specifying a Business Day (the “Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. Lender will acknowledge receipt of the Defeasance Notice and will state in such receipt whether Lender will designate the Successor Borrower or will permit Borrower to designate the Successor Borrower.

(c) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (the “Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice shall terminate.

(d)(i) If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations hereunder, Lender shall have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as provided in Section 44(d)(ii), Borrower shall be released from all further obligations under this Section 44. Borrower acknowledges that Lender will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the lien of this Instrument in reliance on the executed Defeasance Notice. Borrower agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Instrument, of the damages Lender will incur by reason of Borrower’s default.

(ii) In the event that the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 44(d)(i) above) incurred by Lender in reliance on the executed Defeasance Notice, within 5 Business Days after Borrower receives a written demand for payment, accompanied by a statement, in reasonable detail, of Lender’s third party costs and expenses.

(iii) All payments required to be made by Borrower to Lender pursuant to this Section 44 shall be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.

(e) No Event of Default has occurred and is continuing.

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(f) The documents required to be delivered to Lender on or prior to the Defeasance Closing Date are:

(i) an opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that Lender has a valid and perfected lien and security interest of first priority in the Defeasance Collateral and the proceeds thereof;

(ii) an opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that the Pledge Agreement is duly authorized, executed, delivered and enforceable against Borrower in accordance with the respective terms;

(iii) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Transfer and Assumption Agreement is duly authorized, executed, delivered and enforceable against Successor Borrower in accordance with the respective terms;

(iv) unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Successor Borrower has been validly created;

(v) if Borrower designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation of the assets of the Successor Borrower with those of its Affiliates by a bankruptcy court;

(vi) unless waived by Lender, an opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that:

(A) if, as of the Defeasance Closing Date, the Note is held by a REMIC trust, (1) the Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (2) the qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Defeasance, and (3) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance, and

(B) the Defeasance will not result in a “sale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder;

(vii) unless waived by Lender, a written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date;

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(viii) Lender’s form of a pledge and security agreement (“Pledge Agreement”) and financing statements which pledge and create a first priority security interest in the Defeasance Collateral in favor of Lender;

(ix) Lender’s form of a transfer and assumption agreement (“Transfer and Assumption Agreement”), whereupon Borrower and any guarantor (in each case, subject to satisfaction of all requirements hereunder) shall be relieved from liability in connection with the Loan (other than any liability under Section 18 of this Instrument for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date) and Successor Borrower shall assume all remaining obligations;

(x) Forms of all documents necessary to release the Mortgaged Property from the liens created by this Instrument and related UCC financing statements (collectively, “Release Instruments”), each in appropriate form required by the state in which the Property is located; and

(xi) such other opinions, certificates, documents or instruments as Lender may reasonably request;

(g) Borrower shall deliver to Lender on or prior to the Defeasance Closing Date:

(i) . The Defeasance Collateral which meets all requirements of Section 44(g)(ii) below and is owned by Borrower, free and clear of all liens and claims of third-parties;

(ii) The Defeasance Collateral must be in an amount to provide for (A) redemption payments to occur prior, but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date and (B) deliver redemption proceeds at least equal to the amount of principal and interest due on the Note on each Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”). The Defeasance Collateral shall be arranged such that redemption payments received from the Defeasance Collateral are paid directly to Lender to be applied on account of the Scheduled Debt Payments. Unless otherwise agreed in writing by Lender, the pledge of the Defeasance Collateral shall be effectuated through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable laws; and

(iii) All accrued and unpaid interest and all other sums due under the Note, this Instrument and under the other Loan Documents, including, without limitation, all amounts due under Section 44(i) below, up to the Defeasance Closing Date shall be paid in full on or prior to the Defeasance Closing Date.

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(h) If Lender permits Borrower to designate the Successor Borrower, then Borrower shall, at Borrower’s expense, designate or establish an accommodation borrower (“Successor Borrower”) satisfactory to Lender (or Lender, at its option, may designate the Successor Borrower) which satisfies Lender’s then current requirements for a “Single Purpose Entity” to assume at the time of Defeasance ownership of the Defeasance Collateral and liability for all of Borrower’s obligations under the Pledge Agreement and the Loan Documents (to the extent that liability thereunder survives release of this Instrument). Borrower shall pay to Successor Borrower a fee of $1,000.00 as consideration of Successor Borrower’s assumption of Borrower’s obligations under the Loan Documents. Notwithstanding any contrary provision hereunder, no Transfer fee is payable to Lender upon a Transfer of the Loan in accordance with this Section.

(i) Borrower shall pay all reasonable costs and expenses incurred by Lender in connection with the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include, without limitation, all fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including, without limitation, reasonable Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described herein and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance); r; reasonable Attorneys’ Fees and Costs; and a processing fee to cover Lender’s administrative costs to process Borrower’s Defeasance request. Lender reserves the right to require that Borrower post a deposit to cover costs which Lender reasonably anticipates will be incurred.

45. INTENTIONALLY DELETED.

46. LENDER’S RIGHTS TO SELL OR SECURITIZE. Borrower acknowledges that Lender, and each successor to Lender’s interest, may (without prior Notice to Borrower or Borrower’s prior consent), sell or grant participations in the Loan (or any part thereof), sell or subcontract the servicing rights related to the Loan, securitize the Loan or include the Loan as part of a trust. Borrower, at its expense, agrees to cooperate with all reasonable requests of Lender in connection with any of the foregoing including, without limitation, executing any financing statements or other documents deemed necessary by Lender or its transferee to create, perfect or preserve the rights and interest to be acquired by such transferee, providing any updated financial information with appropriate verification through auditors letters, delivering revised organizational documents and counsel opinions satisfactory to the Rating Agencies, executed amendments to the Loan Documents, and review information contained in a preliminary or final private placement memorandum, prospectus, prospectus supplements or other Disclosure Document, and providing a mortgagor estoppel certificate and such other information about Borrower, any SPE Equity Owner, any guarantor, any Property Manager or the Mortgaged Property as Lender may require for Lender’s offering materials.

47. SECURITIZATION INDEMNIFICATION.

(a) Borrower and each guarantor agree, in connection with each Disclosure Document, to provide an indemnification certificate, as set forth below, indemnifying Lender, any Issuer Person, the Issuer Group and/or the Underwriter Group (as those terms are defined below; each an “Indemnified Party” and collectively the “Indemnified Parties”) for any losses to which any Indemnified Party may become subject under the conditions set forth below.

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(b) The indemnification certificate will provide that

(i) Borrower and each guarantor have carefully examined those sections of the Disclosure Documents relating to the following:

(A) Borrower, any SPE Equity Owner, any guarantor, any Property Manager, their respective Affiliates, the Loan and the Mortgaged Property (the “Borrower Information”); and

(B) the sections entitled “Special Considerations,” and/or “Risk Factors,” and “Certain Legal Aspects of the Mortgage Loan,” or similar sections but only to the extent such sections specifically refer to the Borrower Information (the “Borrower Information Sections”).

(ii) To the best of such indemnitor’s knowledge, with regard to the Borrower Information, the Borrower Information Sections do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.

Notwithstanding the foregoing, any indemnification certificate may expressly exclude any information contained in third party reports prepared by parties that are not Affiliates of Borrower or any guarantor (“Third Party Information”), and the obligations and liability of Borrower and any guarantor pursuant to this Section shall not extend to the Third Party Information.

(c) Borrower’s and each guarantor’s agreement to indemnify the Indemnified Parties for any losses to which any Indemnified Party may become subject will extend only to such losses that arise out of or are based upon any untrue statement of any material fact contained in the Borrower Information or the Borrower Information Sections of the Disclosure Documents or arise out of or are based upon the omission to state in the Borrower Information or the Borrower Information Sections of the Disclosure Documents a material fact required to be stated in such sections necessary in order to make the statements in such sections or in light of the circumstances under which they were made, not misleading (collectively, “Securities Liabilities”).

(d) Borrower and each guarantor agrees to reimburse any Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in investigating or defending the Securities Liabilities.

(e) The indemnitors will be liable under clauses (b), (c) and (d) above only to the extent that such Securities Liabilities arise out of, or are based upon, any such untrue statement or omission made in the Disclosure Documents in reliance upon, and in conformity with, Borrower Information furnished to any Indemnified Party by or on behalf of Borrower or a guarantor in connection with the preparation of the Disclosure Documents or in connection with the underwriting of the Loan, including, without limitation, financial statements of Borrower, any SPE Equity Owner or any guarantor, and operating statements and rent rolls with respect to the Mortgaged Property.

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(f) This indemnity is in addition to any liability which Borrower may otherwise have and shall be effective whether or not an indemnification certificate described above is provided and shall be applicable based on information previously provided by or on behalf of Borrower or a guarantor if the indemnification certificate is not provided.

(g) For purposes of this Section:

(i) The term “Lender” shall include its officers and directors.

(ii) An “Issuer Person” shall include:

(A) any Affiliate of Lender that has filed the registration statement, if any, relating to the Securitization; and

(B) any Affiliate of Lender which is acting as issuer, depositor, sponsor and/or in a similar capacity with respect to the Securitization.

(iii) The “Issuer Group” shall include:

(A) each director and officer of any Issuer Person; and

(B) each entity that Controls any Issuer Person within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act.

(iv) The “Underwriter Group” shall include:

(A) each entity which is acting as an underwriter, manager, placement agent, initial purchaser or in a similar capacity with respect to the Securitization;

(B) each of its directors and officers;

(C) each entity that Controls any such entity within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act and is acting as an underwriter, manager, placement agent, initial purchaser or in a similar capacity with respect to the Securitization; and

(D) the directors and officers of such entity described in subsection (iv)(C) above.

48. WARRANTIES OF BORROWER. Borrower, for itself and its successors and assigns, does hereby represent, warrant and covenant to and with Lender, its successors and assigns, that:

(a) The representations, warranties and covenants contained in this Instrument survive for as long as any Indebtedness remains outstanding;

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(b) None of the items shown in the Schedule of Title Exceptions will materially or adversely affect (i) the ability of the Borrower to pay the Loan in full, (ii) the use for which all or any part of the Mortgaged Property is being used at the time this Instrument was executed, except as set forth in Section 11 of this Instrument, (iii) the operation of the Mortgaged Property or (iv) the value of the Mortgaged Property;

(c) Borrower is not an “investment company”, or a company Controlled by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended;

(d) Borrower is not an “employee benefit plan,” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), which is subject to Title I of ERISA and the assets of Borrower do not constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101;

(e) Borrower will give prompt written Notice to Lender of any litigation or governmental proceedings pending or, to the best of Borrower’s knowledge, threatened (in writing) against Borrower which might have a Material Adverse Effect as defined below.

(f) There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or, to the best of Borrower’s knowledge, threatened (in writing) against or affecting Borrower (and, if Borrower is a limited partnership, any of its general partners or if Borrower is a limited liability company, any member of Borrower) or the Mortgaged Property which, if adversely determined, would have a material adverse effect on (i) the Mortgaged Property, (ii) the business, prospects, profits, operations or condition (financial or otherwise) of Borrower, (iii) the enforceability, validity, perfection or priority of the lien of any Loan Document, or (iv) the ability of Borrower to perform any obligations under any Loan Document (collectively, a “Material Adverse Effect”).

(g) With regard to ERISA:

(i) Borrower shall not engage in any transaction which would cause an obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, this Instrument or any of the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA.

(ii) Borrower further covenants and agrees to deliver to Lender such certifications or other evidence from time to time throughout the term of this Instrument, as requested by Lender in its sole discretion, that (A) Borrower is not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA; (B) Borrower is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (C) one or more of the following circumstances is true:

(1) Equity interests in Borrower are publicly offered securities within the meaning of 29 C.F.R. Section 2510.3-101(b)(2), as amended from time to time or any successor provision;

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(2) Less than twenty-five percent (25%) of each outstanding class of equity interests in Borrower are held by “benefit plan investors” within the meaning of Section 3(42) of ERISA, as amended from time to time or any successor provision; or

(3) Borrower qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. Section 2510.3-101(c), as amended from time to time or any successor provision, or within the meaning of 29 C.F.R. Section 2510.3- 101(e) as an investment company registered under the Investment Company Act of 1940.

(iii) BORROWER SHALL INDEMNIFY LENDER AND DEFEND AND HOLD LENDER HARMLESS FROM AND AGAINST ALL CIVIL PENALTIES, EXCISE TAXES, OR OTHER LOSS, COST, DAMAGE AND EXPENSE (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE AND SETTLEMENT OF CLAIMS AND LOSSES INCURRED IN CORRECTING ANY PROHIBITED TRANSACTION OR IN THE SALE OF A PROHIBITED LOAN, AND IN OBTAINING ANY INDIVIDUAL PROHIBITED TRANSACTION EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN LENDER’S SOLE DISCRETION) THAT LENDER MAY INCUR, DIRECTLY OR INDIRECTLY, AS A RESULT OF DEFAULT UNDER THIS SECTION 48. THIS INDEMNITY SHALL SURVIVE ANY TERMINATION, SATISFACTION OR FORECLOSURE OF THIS INSTRUMENT.

49. COOPERATION WITH RATING AGENCIES AND INVESTORS. Borrower covenants and agrees that in the event Lender decides to include the Loan as an asset of a Secondary Market Transaction, Borrower shall (a) at Lender’s request, meet with representatives of the Rating Agencies and/or investors to discuss the business and operations of the Mortgaged Property, and (b) permit Lender or its representatives to provide related information to the Rating Agencies and/or investors, and (c) cooperate with the reasonable requests of the Rating Agencies and/or investors in connection with all of the foregoing.

50. RESERVED.

51. RESERVED.

52. RESERVED.

53. RESERVED.

54. RESERVED.

55. RESERVED.

56. RESERVED.

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57. RESERVED.

58. RESERVED.

59. RESERVED.

60. ACCELERATION; REMEDIES. At any time during the existence of an Event of Default, Lender shall give any notice to Borrower required by applicable law. If no notice is required or if the Event of Default is not cured as prescribed by applicable law, Lender at its option may declare the Indebtedness to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by applicable law or provided in this Instrument or in any other Loan Document. Borrower acknowledges that the power of sale granted in this Instrument may be exercised by Lender without prior judicial hearing. Borrower has the right to bring an action to assert the nonexistence of an Event of Default or any other defense of Borrower to acceleration and sale. Lender shall be entitled to collect all costs and expenses incurred in pursuing such remedies including attorneys’ fees and costs of documentary and title evidence.

If Lender invokes the power of sale, Lender shall give notice in the manner required by applicable law to Borrower and any other persons prescribed by applicable law. Lender shall also publish the notice of sale, and the Mortgaged Property shall be sold, as prescribed by applicable law. Lender may, at its option, sell the Mortgaged Property in one or more parcels and in such order as Lender may determine. Lender may postpone the sale or change the place of the sale as permitted by applicable law by giving notice complying with applicable law. Lender or its designee may purchase the Mortgaged Property at any sale. The proceeds of the sale shall be applied in the manner prescribed by applicable law.

61. RELEASE. Upon payment of the Indebtedness, Lender shall release this Instrument. Lender shall pay reasonable costs incurred in releasing this Instrument.

62. WAIVER OF APPRAISEMENT. Appraisement of the Mortgaged Property is hereby waived or not waived at Lender’s option, which shall be exercised on or before the date on which a written judgment in any judicial foreclosure hereof is signed by the court.

63. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

NOTICE TO BORROWER

A power of sale has been granted in this Instrument. A power of sale may allow the Lender to take the Mortgaged Property and sell it without going to court in a foreclosure action upon the occurrence of an Event of Default under this Instrument.

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ATTACHED EXHIBITS. The following Exhibits are attached to this Instrument:

x	Exhibit A	Description of the Land (required).
x	Exhibit B	Modifications to Instrument

IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or has caused this Instrument to be signed and delivered by its duly authorized representative.

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WC/TP SPRING CREEK, LLC, a Delaware limited liability company
By:	WillMax Spring Creek LLC, a Texas limited liability company, its Managing Member
	By:	/s/ John A. Wensinger
	Name:	John A. Wensinger
		Manager

STATE OF TEXAS, DALLAS County ss:

The foregoing instrument was acknowledged before me this 26^th day of January, 2011 by John A. Wensinger, Manager of WillMax Spring Creek LLC, a Texas limited liability company, Managing Member on behalf of WC/TP Spring Creek, LLC, a Delaware limited liability company.

/s/ Angela Pace

Notary Public

My commission expires:

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[Security Instrument]

EXHIBIT A

Legal Description

(Spring Creek of Edmond)

A tract of land in the Southeast Quarter (SE/4) of the Southwest Quarter (SW/4) of Section Thirty-six (36), Township Fourteen (14) North, Range Three (3) West of the Indian Meridian, Oklahoma County, Oklahoma, being more particularly described as follows:

COMMENCING at the Southwest Corner of the Southeast Quarter (SE/4) of the Southwest Quarter (SW/4) of said Section 36;

Thence North 89°39’15” East along the South line of said Southeast Quarter (SE/4) of the Southwest Quarter (SW/4) a distance of 164.42 feet to a point, said point being the Point or Place of Beginning;

Thence North 89°39’15” East along the South line of said Southeast Quarter (SE/4) of the Southwest Quarter (SW/4) a distance of 1150.94 feet to a point (being the Southeast Comer of said Southeast Quarter (SE/4) of the Southwest Quarter (SW/4));

Thence North 0°20’24” West a distance of 706.36 feet to a point, said point being in the South line of Lot 2, Block 4, BRENTWOOD ADDITION;

Thence South 89°39’41” West a distance of 95.51 feet to a point, said point being the Southwest Corner of said Lot 2, Block 4;

Thence North 12°54’26” West a distance of 78.60 feet to a point, said point being the Southeast Corner of Lot 16, Block 6, BRENTWOOD 3RD ADDITION;

Thence North 87°26’08” West a distance of 135.77 feet to a point;

Thence South 45°27’41” West a distance of 255.00 feet to a point;

Thence South 56°36’48” West a distance of 125.12 feet to a point; said point being the Southeast Corner of Lot 8, Block 5, BRENTWOOD 2ND ADDITION;

Thence South 63°16’39” West a distance of 260.45 feet to a point;

Thence South 0°08’02” West (recorded legal) East (surveyed legal) a distance of 51.59 feet to a point;

Thence South 58°03’08” West a distance of 211.82 feet to a point;

Thence North 58°19’11” West a distance of 211.82 feet to a point, said point being the Southwest Corner of Lot 2, Block 5, BRENTWOOD 2ND ADDITION;

Thence South 2°52’06” West a distance of 385.17 feet to a point, said point being the Point or Place of Beginning.

PAGE A-1

EXHIBIT B

MODIFICATIONS TO INSTRUMENT

The following modifications are made to the text of the Instrument that precedes this Exhibit:

I.     RECYCLED PROVISIONS:

1. Section 22 is modified to add the following new subsection (m):

(m) if any of the Underwriting Representations set forth in Section 33(f) or any of the Separateness Representations set forth in Section 33(g) shall have been untrue in any respect when made.

2. Section 33 is modified to add the following new subsection (f):

(f) Underwriting Representations. Borrower hereby represents with respect to Borrower, from the date of such entity’s formation that it

(i) is and always has been duly formed, validly existing, and in good standing in the state of its formation and in all other jurisdictions where it is qualified to do business;

(ii) has no judgments or liens of any nature against it except for tax liens not yet due;

(iii) is in compliance with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Instrument, has received all permits necessary for it to operate;

(iv) is not involved in any dispute with any taxing authority;

(v) has paid all taxes which it owes;

(vi) has never owned any real property other than the Mortgaged Property and personal property necessary or incidental to its ownership or operation of the Mortgaged Property and has never engaged in any business other than the ownership and operation of the Mortgaged Property;

(vii) is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending or that resulted in a judgment against it that has not been paid in full;

(viii) has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition;

(ix) has obtained a current Phase I environmental site assessment (the “ESA”) for the Mortgaged Property prepared consistent with ASTM Practice E 1527 and the ESA has not identified any recognized environmental conditions that require further investigation or remediation;

PAGE B-1

(x) has no material contingent or actual obligations not related to the Mortgaged Property; and

(xi) each amendment and restatement of Borrower’s organizational documents has been accomplished in accordance with, and was permitted by, the relevant provisions of said documents prior to its amendment or restatement from time to time.

3. Section 33 is modified to add the following new subsection (g):

(g) Separateness Representations. Borrower hereby represents from the date of such entity’s formation that it:

(i) has not entered into any contract or agreement with any of its Affiliates, constituents, or owners, or any guarantors of any of its obligations or any Affiliate of any of the foregoing (individually, a “Related Affiliate Party,” and collectively, the “Related Affiliate Parties”), except upon terms and conditions that are commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party;

(ii) has paid all of its debts and liabilities from its assets;

(iii) has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence;

(iv) has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person;

(v) has not had its assets listed as assets on the financial statement of any other Person;

(vi) has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law) and, if it is a corporation, has not filed a consolidated federal income tax return with any other Person;

(vii) has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other Related Affiliate Party);

(viii) has corrected any known misunderstanding regarding its status as a separate entity;

(ix) has conducted all of its business and held all of its assets in its own name;

(x) has not identified itself or any of its affiliates as a division or part of the other;

(xi) has maintained and utilized separate stationery, invoices and checks bearing its own name;

PAGE B-2

(xii) has not commingled its assets with those of any other Person and has held all of its assets in its own name;

(xiii) has not guaranteed or become obligated for the debts of any other Person;

(xiv) has not held itself out as being responsible for the debts or obligations of any other Person;

(xv) has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Affiliate Party;

(xvi) has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the Loan;

(xvii) has maintained adequate capital in light of its contemplated business operations;

(xviii) has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds;

(xix) has not owned any subsidiary or any equity interest in any other entity;

(xx) has not incurred any indebtedness that is still outstanding other than Indebtedness that is permitted under the Loan Documents;

(xxi) has not had any of its obligations guaranteed by an Affiliate or other Related Affiliate Party, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or guarantees that are expressly contemplated by the Loan Documents; and

(xxii) none of the tenants holding leasehold interests with respect to the Mortgaged Property are an Affiliate of the Borrower or other Related Affiliate Party.

II.     TRANSACTION-SPECIFIC PROVISIONS:

1. The following provision is added as a new subsection to Section 17:

(i) Borrower shall maintain the contract for termite control services with a qualified service provider at the Mortgaged Property for so long as the Indebtedness remains outstanding.

1. Section 21 (c)(vii)(F) is deleted in its entirety.

2. The following provision is added to Section 21(c):

(ix) any Transfer pursuant to a buy-sell agreement or similar agreement of an interest in Borrower or any interest in a Controlling Entity (which, if such Controlling Entity were Borrower, would result in an Event of Default) to a natural person or entity that has an existing interest in the Borrower or in a

PAGE B-3

Controlling Entity (an “Ownership Interest Transfer”), under the terms and conditions listed as items (A) through (K) below:

(A) Borrower shall provide Lender with thirty (30) days prior written Notice of the proposed Ownership Interest Transfer, which Notice must be accompanied by a non-refundable review fee in the amount of $5,000.

(B) At the time of the proposed Ownership Interest Transfer, no Event of Default shall have occurred and be continuing and no event or condition shall have occurred and be continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default; provided, however, if the Ownership Interest Transfer would cure the Event of Default, the Ownership Interest Transfer must occur within sixty (60) days after all conditions in this Section have been satisfied to Lender’s satisfaction.

(C) Borrower must pay or reimburse Lender for all costs and expenses incurred by Lender in connection with the Ownership Interest Transfer (including all Attorneys’ Fees and Costs).

(D) At the time of the Ownership Interest Transfer Borrower must pay to Lender a transfer fee in the following amount:

(1) the amount of $25,000 if John A. Wensinger directly or indirectly retains the Controlling Interest, managing member interest or general partnership interest, as applicable.

(2) the amount of $50,000 if Thackeray Partners Realty Fund II, L.P. will obtain directly or indirectly the Controlling Interest, managing member interest or general partnership interest, as applicable (“New Borrower Principal”).

(E) In the event of a Transfer prohibited by or requiring Lender’s approval under this Section 21, this Section may be modified or rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s), as a condition of Lender’s consent.

(F) If there will be a New Borrower Principal, the New Borrower Principal must provide a replacement guarantor (the “New Guarantor”) meeting the following requirements and otherwise acceptable to Lender in its discretion:

(1) New Guarantor shall be required to have a net worth of at least $5,000,000.00, and liquid assets of at least $1,410,000.00 (the “Net Worth and Liquidity Requirements”).

(2) Lender must receive all information and organizational documents reasonably requested by Lender with respect to the New Guarantor.

PAGE B-4

(3) The New Guarantor must execute a guaranty in the same form and content as the current Guaranty (the “New Guaranty”), and if the New Guarantor is an entity, the New Guaranty shall be modified to include the following new Section 21.

(4) If the New Guarantor is an entity, the Guaranty must be modified to insert one of the following versions of new Section 21, to be determined by New Guarantor at its option:

MINIMUM NET WORTH/LIQUIDITY

21. Minimum Net Worth/Liquidity Requirements.

(a) Guarantor shall maintain a minimum net worth of $5,000,000.00 with liquid assets of at least $1,410,000.00 (collectively, the “Minimum Net Worth Requirement”).

(b) In addition to the financial information that Guarantor is required to provide pursuant to Section 12 of this Guaranty, Guarantor shall provide Lender, annually within ninety (90) days after the end of each fiscal year of Guarantor, with a written certification (the “Guarantor Certification”) of the net worth and liquid assets of Guarantor, derived in accordance with customarily acceptable accounting practices, which shall be certified, under penalty of perjury, by Guarantor.

(c) In the event Guarantor receives written notice from Lender that it has failed to maintain the Minimum Net Worth Requirement, within thirty (30) days of receipt of such written notice, Guarantor must deliver to Lender a letter of credit (or other collateral acceptable to Lender in its sole discretion) meeting the following conditions:

(i) if a letter of credit, be in the form found on Freddie Mac’s website at http://www.freddiemac.com/multifamily/cm e_documents.html (The letter of credit must name Lender as the sole beneficiary, have an initial term of not less than 12 months or not less than thirty (30) davs after Loan maturity, whichever is earlier, and be issued by a bank acceptable to Lender in its sole discretion); and

(ii) be in an amount equal to the greater of (X) the positive difference, if any, obtained by subtracting the net worth identified in the Guarantor Certification from the minimum net worth required under the Minimum Net Worth Requirement, (Y) the positive

PAGE B-5

difference, if any, obtained by subtracting the liquid assets identified in the Guarantor Certification from the minimum liquid assets required under the Minimum Net Worth Requirement and (Z) $100,000.

(d) Provided no Event of Default (as defined in the Security Instrument) then exists, Guarantor shall be entitled to request a return of the unused portion, if any, of the letter of credit or other collateral in the event it delivers to Lender evidence in form and substance satisfactory to Lender, including, without limitation, a Guarantor Certification, that it has satisfied the Minimum Net Worth Requirement.

OR

MATERIAL ADVERSE CHANGE

21. Material Adverse Change.

(a) In the event Guarantor receives Notice (as defined in the Security Instrument) from Lender of Lender’s determination, in its reasonable judgment based on financial information that Guarantor has provided pursuant to Section 12 of this Guaranty and Section 14 of the Security Instrument (“Financial Information”) that there has been a Material Adverse Change (as defined below), within thirty (30) days of receipt of such Notice, Guarantor must either (1) cause one or more natural persons or entities acceptable to Lender to execute and deliver to Lender a guaranty in a form acceptable to Lender, without any cost or expense to Lender or (2) deliver to Lender a letter of credit (or other collateral acceptable to Lender in its sole discretion) meeting the following conditions:

(i) if a letter of credit, in the form found on Freddie Mac’s website at http://www.freddiemac.com/multifamily/cm e_documents.html (The letter of credit must name Lender as the sole beneficiary, have an initial term of not less than 12 months or not less than thirty (30) days after Loan maturity, whichever is earlier, and be issued by a bank acceptable to Lender in its sole discretion); and

(ii) be in an amount equal to the greater of (X) the positive difference, if any, obtained by subtracting the net worth identified in the Financial Information from $5,000,000.00,

PAGE B-6

(Y) the positive difference, if any, obtained by subtracting the liquid assets identified in the Financial Information from $1,410,000.00 and (Z) $100,000.

(b) Provided no Event of Default (as defined in the Security Instrument) then exists, Guarantor shall be entitled to request a return of the letter of credit or other collateral in the event it delivers to Lender evidence in form and substance satisfactory to Lender that a Material Adverse Change no longer exists.

(c) For purposes of this Section, the term “Material Adverse Change” shall mean any material adverse effect or material adverse change, either individually or in the aggregate, in the general affairs, condition (financial or other), business, properties, results of operations, prospects, assets, liabilities, net worth or operations of the business and/or assets of Guarantor which would, if Guarantor were a publicly-traded company, result in a downgrade of its credit rating below investment grade.

(5) Section 22 of this Instrument will be deemed to be modified to insert the following as a new subsection:

(m) any failure by Guarantor to comply with any Net Worth and Liquidity provision or Material Adverse Change provision of Section 21 of the Guaranty, if applicable.

(G) At all times the Mortgaged Property must continue to be managed by (i) the initial Property Manager or (ii) a successor Property Manager satisfactory to Lender pursuant to a property management agreement approved by Lender in writing; provided that such successor Property Manager and Borrower shall execute an assignment of the management agreement in form acceptable to Lender.

(H) If applicable, at the time of the proposed Ownership Interest Transfer, the New Borrower Principal must certify that its net worth and liquidity are substantially the same as its net worth and liquidity as of the date of this Instrument and there is not any pending bankruptcy, reorganization or litigation which would substantially negatively affect such net worth and/or liquidity.

(I) If a nonconsolidation opinion was delivered at origination of the Loan and if, after giving effect to all Ownership Interest Transfer and all prior Transfers, fifty percent (50%) or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a fifty percent (50%) direct or indirect interest in Borrower as of the origination of the Loan, an opinion of counsel for Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation.

PAGE B-7

(J) Lender must receive confirmation acceptable to Lender that Section 33 continues to be satisfied.

(K) For purposes of the Preapproved Transfers set forth in Section 21(c)(vii), the New Guarantor will be deemed to be the person or entity set forth in subsection 21(c)(vii)(3).

PAGE B-8

EX-10.8

Exhibit 10.8

Property Name: Spring Creek Apartments

ASSIGNMENT OF MANAGEMENT AGREEMENT AND

SUBORDINATION OF MANAGEMENT FEES

THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF MANAGEMENT FEES (“Assignment”) is made effective as of the 9th day of March, 2012, by and among SIR SPRING CREEK, LLC, a Delaware limited liability company, having its principal place of business at c/o Steadfast Asset Holdings, Inc., 18100 Von Karman Ave., Suite 500, Irvine, California 92612 (“New Borrower”), U.S. BANK NATIONAL ASSOCIATION, as Trustee for the registered holders of J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP., MULTIFAMILY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-K702, having an address at c/o Wells Fargo Bank, N.A., Commercial Mortgage Servicing, 1901 Harrison Street, 7th Floor, Oakland, California 94612 (together with its successors and assigns, “Noteholder”), and STEADFAST MANAGEMENT COMPANY, INC., a California corporation, having its principal place of business at 18100 Von Karman Ave., Suite 500, Irvine, California 92612 (“Property Manager”).

RECITALS:

A. Noteholder is the current holder of a Multifamily Note dated as of January 31, 2011 (“Note”), evidencing a loan being assumed by New Borrower as of the date hereof in the amount of Fourteen Million One Hundred Thousand and 00/100 Dollars ($14,100,000.00) (“Loan”). The Note is secured by, among other things, a Multifamily Mortgage, Assignment of Rents and Security Agreement (“Security Instrument”), dated as of January 31, 2011, which grants Lender a first lien on the property encumbered by the Security Instrument (“Mortgaged Property”). The Note, the Security Instrument, this Assignment and any of the other documents evidencing the Loan are collectively referred to as the “Loan Documents”. Other capitalized terms used but not defined in this Assignment will have the meanings given to such terms in the Security Instrument.

B. Pursuant to a certain Management Agreement between New Borrower and Property Manager (“Management Agreement”) (a true and correct copy of which Management Agreement is attached as Exhibit A), New Borrower employed Property Manager exclusively to lease, operate and manage the Mortgaged Property and Property Manager is entitled to certain management fees (“Management Fees”) pursuant to the Management Agreement.

C. Noteholder requires as a condition to New Borrower’s assumption of the Loan that New Borrower assign the Management Agreement and that Property Manager subordinate its interest in the Management Fees in lien and payment to the Mortgage as set forth below.

D. For purposes of this Assignment, New Borrower shall be referred to hereinafter as “Borrower” and Noteholder as “Lender”.

AGREEMENT:

For good and valuable consideration the parties agree as follows:

1. Assignment of Management Agreement. As additional collateral security for the Loan, Borrower hereby conditionally transfers, sets over and assigns to Lender all of Borrower’s right, title and interest in and to the Management Agreement and all extensions and renewals, said transfer and assignment to automatically become a present, unconditional

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assignment, at Lender’s option, in the event of a default by Borrower under the Note, the Security Instrument or any of the other Loan Documents (each, an “Event of Default”), and the failure of Borrower to cure such Event of Default within any applicable grace period.

2. Subordination of Management Fees. The Management Fees and all rights and privileges of Property Manager to the Management Fees are hereby and will at all times continue to be subject and unconditionally subordinate in all respects in lien and payment to the lien and payment of the Security Instrument, the Note and the other Loan Documents and to any renewals, extensions, modifications, assignments, replacements, or consolidations thereof and the rights, privileges, and powers of Lender under the Note, the Security Instrument or any of the other Loan Documents.

3. Estoppel. Property Manager and Borrower represent and warrant that all of the following are true:

(a) The Management Agreement is in full force and effect and has not been modified, amended or assigned other than pursuant to this Assignment.

(b) Neither Property Manager nor Borrower is in default under any of the terms, covenants or provisions of the Management Agreement and Property Manager knows of no event which, but for the passage of time or the giving of notice or both, would constitute an event of default under the Management Agreement.

(c) Neither Property Manager nor Borrower has commenced any action or given or received any notice for the purpose of terminating the Management Agreement.

(d) The Management Fees and all other sums due and payable to the Property Manager under the Management Agreement have been paid in full.

4. Agreement by Borrower and Property Manager. Borrower and Property Manager agree that if there is an Event of Default by Borrower (continuing beyond any applicable grace period) under the Note, the Security Instrument or any of the other Loan Documents during the term of this Assignment or upon the occurrence of any event which would entitle Lender to terminate the Management Agreement in accordance with the terms of the Loan Documents, Lender may terminate the Management Agreement without payment of any cancellation fee or penalty and require Property Manager to transfer its responsibility for the management of the Mortgaged Property to a management company selected by Lender in Lender’s sole discretion, effective as of the date set forth in Lender’s notice to Property Manager. Following any such termination, Property Manager agrees to apply all rents, security deposits, issues, proceeds and profits of the Mortgaged Property in accordance with Lender’s written directions to Property Manager.

5. Lender’s Right to Replace Property Manager. In addition to the foregoing, in the event that Lender, in Lender’s reasonable discretion, at any time during the term of this Assignment, determines that the Mortgaged Property is not being managed in accordance with generally accepted management practices for properties similar to the Mortgaged Property, Lender will deliver written notice to Borrower and Property Manager, which notice will specify with particularity the grounds for Lender’s determination. If Lender reasonably determines that the conditions specified in Lender’s notice are not remedied to Lender’s reasonable satisfaction by Borrower or Property Manager within 30 days from receipt of such notice or that Borrower or Property Manager have failed to diligently undertake correcting such conditions within such 30

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day period, Lender may direct Borrower to terminate Property Manager as manager of the Mortgaged Property and terminate the Management Agreement without payment of any cancellation fee or penalty and to replace Property Manager with a management company acceptable to Lender in Lender’s sole discretion pursuant to a management agreement acceptable to Lender in Lender’s sole discretion.

6. Receipt of Management Fees. Borrower and Property Manager agree that in no event shall the Management Fees exceed five percent (5.0%) of the gross revenues derived from the Mortgaged Property on an annual basis. Property Manager will not be obligated to return or refund to Lender any Management Fees or other fee, commission or other amount received by Property Manager prior to the occurrence of the Event of Default, and to which Property Manager was entitled under the Management Agreement. If the Property Manager receives any Management Fees after it has received notice of an Event of Default, Property Manager hereby agrees that such Management Fees will be received and held in trust for Lender, to be applied by Lender to amounts due under the Note, Security Instrument or any other Loan Documents.

7. Consent and Agreement by Property Manager. Property Manager acknowledges and consents to this Assignment and agrees that Property Manager will act in conformity with the provisions of this Assignment and Lender’s rights hereunder or otherwise related to the Management Agreement. In the event that the responsibility for the management of the Mortgaged Property is transferred from Property Manager in accordance with the provisions of this Assignment, Property Manager will fully cooperate in transferring its responsibility to a new management company and effectuate such transfer no later than 30 days from the date the Management Agreement is terminated. Further, Property Manager agrees as follows:

(a) The Property Manager agrees that it will not contest or impede the exercise by Lender of any right it has under or in connection with this Assignment.

(b) The Property Manager agrees that in the manner provided for in this Assignment, give at least 30 days prior written notice to Lender of its intention to terminate the Management Agreement or otherwise discontinue its management of the Mortgaged Property.

(c) The Property Manager agrees that it will not amend any of the provisions or terms of the Management Agreement without the prior consent of Lender.

8. Termination. At such time as the Loan is paid in full and the Security Instrument is released or assigned of record, this Assignment and all of Lender’s right, title and interest hereunder with respect to the Management Agreement will terminate.

9. Notices. All notices under or concerning this Assignment must be in writing and must be given in accordance with Section 31 of the Security Instrument.

10. Governing Law. Except as otherwise expressly stated in this Assignment, this Assignment will be construed in accordance with and governed by the laws of the Property Jurisdiction.

11. Captions, Cross References and Exhibits. The captions assigned to provisions of this Assignment are for convenience only and will be disregarded in construing this Assignment. Any reference in this Assignment to an “Exhibit” or a “Section”, unless otherwise explicitly provided, will be construed as referring, respectively, to an Exhibit attached to this Assignment or to a section of this Assignment. All Exhibits attached to or referred to in this Assignment are incorporated by reference into this Assignment.

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12. Number and Gender. Use of the singular in this Assignment includes the plural, use of the plural includes the singular, and use of one gender includes all other genders, as the context may require.

13. No Partnership. This Assignment is not intended to, and will not, create a partnership or joint venture among the parties, and no party to this Assignment will have the power or authority to bind any other party except as explicitly provided in this Assignment.

14. Severability. The invalidity or unenforceability of any provision of this Assignment will not affect the validity of any other provision, and all other provisions will remain in full force and effect.

15. Entire Assignment. This Assignment contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Assignment.

16. Waiver; No Remedy Exclusive. Any forbearance by a party to this Assignment in exercising any right or remedy given under this Assignment or existing at law or in equity will not constitute a waiver of or preclude the exercise of that or any other right or remedy. Unless otherwise explicitly provided, no remedy under this Assignment is intended to be exclusive of any other available remedy, but each remedy will be cumulative and will be in addition to other remedies given under this Assignment or existing at law or in equity.

17. Third Party Beneficiaries. Neither any creditor of any party to this Assignment, nor any other person, is intended to be a third party beneficiary of this Assignment.

18. Further Assurances and Corrective Instruments. To the extent permitted by law, the parties will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements to this Assignment and such further instruments as may reasonably be required for carrying out the intention of or facilitating the performance of this Assignment.

19. Counterparts. This Assignment may be executed in multiple counterparts, each of which will constitute an original document and all of which together will constitute one agreement.

20. Indemnity. By executing this Assignment Borrower agrees to indemnify and hold harmless Lender and its successors and assigns from and against any and all losses, claims, damages, liabilities and expenses including, without limitation, attorneys’ fees and disbursements, which may be imposed or incurred in connection with this Assignment.

21. Costs and Expenses. Wherever pursuant to this Assignment it is provided that Borrower will pay any costs and expenses, such costs and expenses will include, but not be limited to, legal fees and disbursements of Lender, whether retained firms, the reimbursement for the expenses of in-house staff or otherwise.

22. Determinations by Lender. In any instance where the consent or approval of Lender may be given or is required, or where any determination, judgment or decision is to be rendered by Lender under this Assignment, the granting, withholding or denial of such consent or approval and the rendering of such determination, judgment or decision will be made or exercised by Lender (or its designated representative) at its sole and exclusive option and in its sole and absolute discretion and will be final and conclusive, except as may be otherwise expressly and specifically provided in this Assignment.

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23. Successors and Assigns. This Assignment will be binding upon and inure to the benefit of Borrower, Lender and Property Manager and their respective successors and assigns forever.

[Remainder of Page Intentionally Left Blank. Signatures Begin on Next Page.]

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IN WITNESS WHEREOF the undersigned have executed this Assignment as of the date and year first written above.

BORROWER:
SIR SPRING CREEK, LLC, a Delaware limited liability company
By:	Steadfast Income Advisor, LLC, a Delaware limited liability company, its Manager
	By:
	Name:
	Title:
PROPERTY MANAGER:
STEADFAST MANAGEMENT COMPANY, INC., a California corporation
By:
Name:
Title:
NOTEHOLDER:
U.S. BANK NATIONAL ASSOCIATION, as Trustee for the registered holders of J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP., MULTIFAMILY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-K702
By:	Wells Fargo Bank, N.A., solely in its capacity as Master Servicer, as authorized pursuant to that Pooling and Servicing Agreement dated June 1, 2011
	By:	/s/ Denil Barber
	Name:	Denil Barber
	Title:	Assistant Vice President

Signature page to Assignment of Management Agreement

EXHIBIT A

MANAGEMENT AGREEMENT

EX-10.9

Exhibit 10.9

Property Name: Spring Creek Apartments

GUARANTY

THIS GUARANTY (“Guaranty”) is entered into effective as of March 9, 2012, by STEADFAST IMCOME REIT OPERATING PARTNERSHIP, LP, a Delaware limited partnership (“OP”) and STEADFAST INCOME REIT, INC., a Maryland corporation (“SIR” and, together with OP, jointly and severally, “Guarantor”), for the benefit of U.S. BANK NATIONAL ASSOCIATION, as Trustee for the registered holders of J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP., MULTIFAMILY MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2011-K702 (“Noteholder”).

RECITALS

A. WC/TP SPRING CREEK, LLC, a Delaware limited liability company (“Original Borrower”) previously obtained a loan from HOLLIDAY FENOGLIO FOWLER, L.P., a Texas limited partnership (“Original Lender”) in the amount of $14,100,000.00 (“Loan”). The Loan was evidenced by a Multifamily Note in favor of Original Lender dated as of January 31, 2011 (“Note”). The Note was secured by a Multifamily Mortgage, Deed of Trust, or Deed to Secure Debt dated the same date as the Note (“Security Instrument”), encumbering the real property described in the Security Instrument (“Mortgaged Property”). Original Lender sold the Note, assigned its rights in the Security Instrument, and transferred the Loan to the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Freddie Mac endorsed the Note to the order of Noteholder and sold, assigned and transferred all right, title and interest of Freddie Mac in and to the Security Instrument and Loan Documents to Noteholder. Noteholder is now the holder of the Note and the owner of the Loan.

B. As a condition to allowing Original Borrower to transfer the Property to SIR SPRING CREEK, LLC, a Delaware limited liability company (“Borrower”) and allowing Borrower to assume the Loan (“Transfer”), Noteholder has required that Guarantor execute this Guaranty.

AGREEMENT

NOW, THEREFORE, to induce Noteholder to consent to the Transfer, and in consideration thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

1. Defined Terms. “Indebtedness,” “Loan Documents” and “Property Jurisdiction” and other capitalized terms used but not defined in this Guaranty will have the meanings assigned to them in the Security Instrument. As used hereinafter, Noteholder shall be referred to as “Lender”.

2. Scope of Guaranty.

(a) Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to Lender each of the following:

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(i) Guarantor guarantees the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, of each of the following:

(A) Guarantor guarantees a portion of the Indebtedness equal to zero percent (0%) of the original principal balance of the Note (“Base Guaranty”).

(B) In addition to the Base Guaranty, Guarantor guarantees all other amounts for which Borrower is personally liable under Sections 9(c), 9(d), and 9(f) of the Note (provided, however, that Guarantor will have no liability for failure of Borrower or SPE Equity Owner to comply with (I) Section 33(b)(xviii) of the Security Instrument, and (II) the requirement in Section 33(b)(x)(B) of the Security Instrument as to payment of trade payables within 60 days of the date incurred).

(C) Guarantor guarantees all costs and expenses, including reasonable Attorneys’ Fees and Costs incurred by Lender in enforcing its rights under this Guaranty.

(ii) Guarantor guarantees the full and prompt payment and performance when due of all of Borrower’s obligations under Section 18 of the Security Instrument.

(b)    (i) If the Base Guaranty stated in Section 2(a)(i)(A) is 100% of the original principal balance of the Note, then each of the following will apply:

(A) The Base Guaranty will mean and include, and Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to Lender the full and complete prompt payment of the entire Indebtedness and the performance of all Borrower’s obligations under the Loan Documents.

(B) For so long as the Base Guaranty remains in effect (there being no limit to the duration of the Base Guaranty unless otherwise expressly provided in this Guaranty), the obligations guaranteed pursuant to Sections 2(a)(i)(B), 2(a)(i)(C) and Section 3 will be part of, and not in addition to or in limitation of, the Base Guaranty.

(ii) If the Base Guaranty stated in Section 2(a)(i)(A) is less than 100% of the original principal balance of the Note, then this Section 2(b) will be completely inapplicable.

(c) If Guarantor is not liable for the entire Indebtedness, then all payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Security Instrument and the other Loan Documents (except this Guaranty) will be applied first to the portion of the Indebtedness for which neither Borrower nor Guarantor has personal liability.

3. Net Worth Covenant. SIR hereby represents, warrants and covenants that its net worth (“Net Worth”) is, as of the date hereof, not less than Fourteen Million One

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Hundred Thousand and No/100 Dollars ($14,100,000.00), and that, from and after December 31, 2012, and until such date as the Indebtedness is paid in full, SIR shall maintain a Net Worth of at least one hundred fifty percent (150%) of the then-current principal balance of the Loan (“Net Worth Covenant”). For the purposes herein, Net Worth shall be calculated in accordance with generally accepted accounting principles, and without marking up the value of cash investments to reflect appraisals, evidence of comparable sales or similar reports.

4. Guarantor’s Obligations Survive Foreclosure. The obligations of Guarantor under this Guaranty will survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Security Instrument, and, in addition, the obligations of Guarantor relating to Borrower’s obligations under Section 18 of the Security Instrument will survive any repayment or discharge of the Indebtedness. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of or held title to the Mortgaged Property, Guarantor will have no obligation under this Guaranty relating to Borrower’s obligations under Section 18 of the Security Instrument after the date of the release of record of the lien of the Security Instrument as a result of the payment in full of the Indebtedness on the Maturity Date or by voluntary prepayment in full.

5. Guaranty of Payment and Performance. Guarantor’s obligations under this Guaranty constitute an unconditional guaranty of payment and performance and not merely a guaranty of collection.

6. No Demand by Lender Necessary; Waivers by Guarantor. The obligations of Guarantor under this Guaranty will be performed without demand by Lender and will be unconditional regardless of the genuineness, validity, regularity, or enforceability of the Note, the Security Instrument, or any other Loan Document, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby waives, each of the following, to the fullest extent permitted by applicable law:

(a) The benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that Guarantor’s obligations will not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower, or a mortgagor.

(b) The benefits of any right of discharge under any and all statutes or other laws relating to a guarantor, a surety, a borrower, or a mortgagor, and any other rights of a surety, a guarantor, a borrower, or a mortgagor under such statutes or laws.

(c) Diligence in collecting the Indebtedness, presentment, demand for payment, protest, all notices with respect to the Note and this Guaranty which may be required by statute, rule of law, or otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any default or Event of Default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by Borrower of any obligation or indebtedness.

(d) All rights to cause a marshalling of Borrower’s assets or to require Lender to take any of the following actions:

(i) Proceed against Borrower or any other guarantor of Borrower’s payment or performance under the Loan Documents (“Other Guarantor”).

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(ii) Proceed against any general partner of Borrower or any Other Guarantor if Borrower or any Other Guarantor is a partnership.

(iii) Proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness.

(iv) Pursue any other remedy it may now or hereafter have against Borrower, or, if Borrower is a partnership, any general partner of Borrower.

(e) Any right to object to the timing, manner or conduct of Lender’s enforcement of its rights under any of the Loan Documents.

(f) Any right to revoke this Guaranty as to any future advances by Lender under the terms of the Security Instrument to protect Lender’s interest in the Mortgaged Property.

7. Modification of Loan Documents. At any time or from time to time and any number of times, without notice to Guarantor and without affecting the liability of Guarantor, Lender may take any of the following actions:

(a) Extend the time for payment of the principal of or interest on the Indebtedness or renew the Indebtedness in whole or in part.

(b) Extend the time for Borrower’s performance of or compliance with any covenant or agreement contained in the Note, the Security Instrument or any other Loan Document, whether presently existing or hereinafter entered into, or waive such performance or compliance.

(c) Accelerate the Maturity Date of the Indebtedness as provided in the Note, the Security Instrument, or any other Loan Document.

(d) With Borrower, modify or amend the Note, the Security Instrument, or any other Loan Document in any respect, including an increase in the principal amount.

(e) Modify, exchange, surrender or otherwise deal with any security for the Indebtedness or accept additional security that is pledged or mortgaged for the Indebtedness.

8. Joint and Several Liability. The obligations of Guarantor (and each party named as a Guarantor in this Guaranty) and any Other Guarantor will be joint and several. Lender, in its sole and absolute discretion, may take any of the following actions:

(a) Bring suit against Guarantor, or any one or more of the parties named as a Guarantor in this Guaranty, and any Other Guarantor, jointly and severally, or against any one or more of them.

(b) Compromise or settle with Guarantor, any one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, for such consideration as Lender may deem proper.

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(c) Release one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, from liability.

(d) Otherwise deal with Guarantor and any Other Guarantor, or any one or more of them, in any manner, and no such action will impair the rights of Lender to collect from Guarantor any amount guaranteed by Guarantor under this Guaranty.

9. Subordination of Borrower’s Indebtedness to Guarantor. Any indebtedness of Borrower held by Guarantor now or in the future is and will be subordinated to the Indebtedness and Guarantor will collect, enforce and receive any such indebtedness of Borrower as trustee for Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

10. Waiver of Subrogation. Guarantor will have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a preference under the United States Bankruptcy Code.

11. Preference. If any payment by Borrower is held to constitute a preference under any applicable bankruptcy, insolvency, or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund will not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty will not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance.

12. Financial Information. No later than one hundred twenty (120) days after the end of each calendar year, Guarantor shall furnish to Lender audited annual financial statements detailing the assets and liabilities of Guarantor, certified by Guarantor, in the form provided to Lender in connection with its review of Borrower’s application to assume the Loan, or otherwise in form and substance reasonably acceptable to Lender (each an “Annual Financial Statement”). If an Event of Default has occurred and is continuing under the Note, the Security Instrument, or any other Loan Document, then Guarantor will additionally deliver to Lender upon written request copies of its state and federal tax returns. If an Annual Financial Statement delivered to Lender discloses that SIR does not satisfy the Net Worth Covenant, it shall constitute an immediate and automatic default hereunder, without any further notice to any Guarantor, Borrower or any other party, such default commencing on the date the Annual Financial Statement was delivered to Lender. If such default is not cured (in the manner hereafter provided) within ninety (90) days after the default commenced, it shall then constitute an Event of Default under the Security Instrument. A breach of the Net Worth Covenant shall be deemed cured upon Lender’s receipt of evidence satisfactory to Lender showing that (A) an additional capital contribution has been made to SIR, and/or (B) SIR has identified replacement assets (and entered into purchase agreement(s) for the same either directly or indirectly) during the ninety (90) day cure period, provided that the closing of such purchase transaction(s) occurs within ninety (90) days after the execution of such purchase agreement(s), which capital contribution and/or acquisition(s) cause or would (upon timely closing) cause SIR to satisfy the Net Worth Covenant.

13. Assignment. Lender may assign its rights under this Guaranty in whole or in part and upon any such assignment, all the terms and provisions of this Guaranty will inure to the

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benefit of such assignee to the extent so assigned. The terms used to designate any of the parties in this Guaranty will be deemed to include the heirs, legal representatives, successors and assigns of such parties, and the term “Lender” will also include any lawful owner, holder or pledgee of the Note. Reference in this Guaranty to “person” or “persons” will be deemed to include individuals and entities.

14. Complete and Final Agreement. This Guaranty and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements. There are no unwritten oral agreements between the parties. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Guaranty and the other Loan Documents. Guarantor acknowledges that Guarantor has received a copy of the Note and all other Loan Documents. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged, or terminated except pursuant to a written agreement signed by the party against which the enforcement of the waiver, modification, amendment, discharge, or termination is sought, and then only to the extent set forth in that agreement.

15. Governing Law. This Guaranty will be governed by and enforced in accordance with the laws of the Property Jurisdiction, without giving effect to the choice of law principles of the Property Jurisdiction that would require the application of the laws of a jurisdiction other than the Property Jurisdiction.

16. Jurisdiction; Venue. Guarantor agrees that any controversy arising under or in relation to this Guaranty may be litigated in the Property Jurisdiction, and that the state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies which may arise under or in relation to this Guaranty. Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Guaranty is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters arising under this Guaranty against Guarantor or any of Guarantor’s assets in any court of any other jurisdiction.

17. Guarantor’s Interest in Borrower. Guarantor represents to Lender that Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit from the Transfer.

18. STATE-SPECIFIC PROVISIONS: If Lender elects to enforce this Guaranty before, or without, enforcing the Security Instrument, Guarantor waives any right, whether pursuant to 12 Okla. Stat. 686 or otherwise, to require Lender to set off the value of the Mortgaged Property against the Indebtedness.

19. Residence; Community Property Provision. INTENTIONALLY DELETED

20. Waiver of Jury Trial. GUARANTOR AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

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21. Attached Riders. The following Riders, if marked with an “X” in the space provided, are attached to this Guaranty:

x None

¨ Material Adverse Change Rider

¨ Minimum Net Worth/Liquidity Requirements Rider

22. Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Guaranty:

¨ Exhibit A         Modifications to Guaranty

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal or has caused this Guaranty to be signed and delivered under seal by its duly authorized representative.

GUARANTOR:
STEADFAST INCOME REIT OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
By:	STEADFAST INCOME REIT, INC., a Maryland corporation, its General Partner
	By:
	Name:
	Title:
STEADFAST INCOME REIT, INC., a Maryland corporation
By:
Name:
Title:

Address(es) of Guarantor(s):

STEADFAST INCOME REIT OPERATING

PARTNERSHIP, LP

and

STEADFAST INCOME REIT, INC.

c/o Steadfast Asset Holdings, Inc.

18100 Von Karman Ave., Suite 500

Irvine, California 92612

Signature page to Guaranty

ACKNOWLEDGMENT OF GUARANTOR

STATE OF	)
	)	ss
COUNTY OF	)

On this the      day of March, 2012 before me, the undersigned Notary Public, personally appeared                     , proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commission Expires:

ACKNOWLEDGMENT OF GUARANTOR

STATE OF	)
	)	ss
COUNTY OF	)

On this the      day of March, 2012 before me, the undersigned Notary Public, personally appeared                     , proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person or the entity upon behalf of which the person acted, executed the instrument.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My Commission Expires:

Signature page to Guaranty

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

SPRING CREEK OF EDMOND IN EDMOND, OKLAHOMA

IRVINE, Calif., Mar. 15, 2012 – Steadfast Income REIT, Inc. announced today the $19.35 million acquisition of Spring Creek of Edmond, a 252-unit community in Edmond, Okla., a city ranked first in CNBC’s 2011 list of “Perfect Suburbs” due to its strong public schools, low unemployment, educated workforce and diverse economy.

“Both the community of Edmond and the larger Oklahoma City area have enviable statistics for unemployment, job growth, average household incomes and education,” said Rodney F. Emery, CEO and president of Steadfast. “We believe the strength and diversity of Oklahoma City’s economy will favor a tightening apartment market for the foreseeable future.”

Spring Creek was built in 1974 and underwent an extensive $5.4 million renovation in 2010 that replaced roofs and windows and added unit upgrades including granite countertops, new kitchen and bath cabinetry and vinyl wood flooring. The garden-style property is 95% occupied with a mix of one-, two- and three-bedroom apartments and townhomes that average approximately 1,050 square feet and have in-place monthly rents that average $820.

Residents enjoy amenities that include fully equipped kitchens with stainless steel appliances, private balconies or patios, washer/dryer connections, two pools, a clubhouse and a fitness center. In addition, select units have wood-burning fireplaces.

(more)

2-2-2 Steadfast Income REIT Acquires Spring Creek at Edmonds Apartments

Spring Creek is located less than 15 miles from downtown Oklahoma City in a predominantly single-family residential area of southern Edmond. The property is adjacent to the local high school and middle school and the University of Central Oklahoma is less than a mile away. The city of Edmond touts an unemployment rate of 4.9%. Additionally, 99% of the public school students graduate high school and over 50% of the population has at least a bachelor’s degree.

Spring Creek is the REIT’s 11th acquisition and its first in Oklahoma. It also owns properties in Missouri, Iowa, Kentucky, Kansas and Illinois.

About Steadfast Income REIT

Steadfast Income REIT is a real estate investment trust that intends 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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