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):

December 31, 2012

Steadfast Income REIT, Inc.

(Exact Name of Registrant as Specified in Charter)

Maryland	000-54674	27-0351641
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		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.):

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

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

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

o 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.

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.

Acquisition of Hilliard Grand Property

As previously disclosed, on September 11, 2012, Steadfast Income REIT, Inc. (the “Company”) acquired a 201-unit multifamily residential community located in Columbus, Ohio, commonly known as Hilliard Park Apartments (the “Hilliard Park Property”), and on September 28, 2012, the Company acquired a 208-unit multifamily residential community located in Columbus, Ohio, commonly known as Hilliard Summit (the “Hilliard Summit Property”). On December 31, 2012 (the “Closing Date”), the Company, through SIR Hilliard Grand, LLC (“SIR Hilliard Grand”), a wholly-owned subsidiary of Steadfast Income REIT Operating Partnership, L.P., acquired 100% of the membership interests (the “Membership Interests”) of Hilliard Grand Apartments, LLC (“Hilliard Grand”), an Ohio limited liability company, which is the fee simple owner of Hilliard Grand Apartments (“Hilliard Grand Property”). The Hilliard Park Property, the Hilliard Summit Property and the Hilliard Grand Property were acquired from the same third-party seller and are located in the same geographic area. For purposes of this Form 8-K, the Company views the acquisition of the Hilliard Park Property, the Hilliard Summit Property and the Hilliard Grand Property as a series of related transactions with respect to an acquisition of a portfolio of properties.

SIR Hilliard Grand acquired the Hilliard Grand Property through its purchase of the Membership Interests for an aggregate purchase price of $40,500,000, exclusive of closing costs. SIR Hilliard Grand financed the payment of the purchase price for the Membership Interests with a combination of (1) proceeds from the Company’s public offering and (2) the assumption of an existing mortgage loan from Red Mortgage Capital, LLC (“RMC”) in the principal amount of $29,322,700, as modified (the “Hilliard Grand Loan”). For additional information on the terms of the Hilliard Grand Loan, see Item 2.03 below.

The Hilliard Grand Property was built between 2010 and 2012 and consists of 38 two-story residential buildings situated on a 36.02 acre site. The garden-style property is comprised of 48 one bedroom/one bath units, 104 two bedroom/two bath units, 120 two bedroom/two and a half bath units and 42 three bedroom/two and a half bath units that average 1,192 square feet with an average monthly rent of $1,175. Unit amenities at the Hilliard Grand Property include attractive painted white woodwork throughout, custom birch kitchen cabinetry and bathroom vanities, fully appointed kitchens with Whirlpool appliances, granite-like laminate kitchen tops with backsplash, washer and dryer hookups, oversized walk-in closets and private patio or balcony decks. In addition, select units have vaulted or nine-foot ceilings. Property amenities at the Hilliard Grand Property include a lavishly decorated resort-style clubhouse, outdoor swimming pool, barbecue gazebo, outdoor lounge with fire pit, fitness center, yoga and pilates studio, community garden, car wash and vacuum facility, playground equipment and free clubhouse Wi-Fi. As of December 27, 2012, the Hilliard Grand Property was approximately 94.2% occupied.

An acquisition fee of approximately $815,000 was earned by Steadfast Income Advisor, LLC (the “Advisor”) in connection with the acquisition of the Hilliard Grand Property, which acquisition fee is expected to be paid to the Advisor subject to the terms of the Company’s Advisory Agreement with the Advisor.

The material terms of the agreements described herein are qualified in their entirety by the agreements attached as Exhibits 10.1, 10.2,10.3 and 10.4 to this Current Report on Form 8-K and incorporated herein by reference.

Management of the Hilliard Grand Property

On the Closing Date, Hilliard Grand and Steadfast Management Company, Inc. (“Steadfast Management”), an affiliate of the Company, entered into a Property Management Agreement (the “Hilliard Grand Management Agreement”) pursuant to which Steadfast Management will serve as the exclusive leasing agent and manager of the Hilliard Grand Property. Pursuant to the Hilliard Grand Management Agreement, Hilliard Grand will pay Steadfast Management a monthly management fee in an amount equal to 2.5% of the Hilliard Grand Property’s gross collections (as defined in the Hilliard Grand Management Agreement) for such month. The Hilliard Grand Management Agreement has an initial term that expires on December 31, 2013 and will continue thereafter on a month-to-month basis unless either party gives sixty (60) days prior written notice of its desire to terminate the Hilliard Grand Management Agreement. Hilliard Grand may terminate the Hilliard Grand Management Agreement at any time upon thirty (30) days prior written notice to Steadfast Management in the event of the gross negligence, willful misconduct or bad acts of Steadfast Management or any of Steadfast Management’s employees. Either party may terminate the Hilliard Grand Management Agreement due to a material breach of the other party’s obligations under the Hilliard Grand Management Agreement that remains uncured for thirty (30) days after written notification of such breach.

The material terms of the Hilliard Grand Management Agreement described herein are qualified in their entirety by the Hilliard Grand Management Agreement, a copy of which is attached as Exhibit 10.5 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.

Hilliard Grand Property Loan

In connection with the acquisition of the Membership Interests, SIR Hilliard Grand assumed the Hilliard Grand Loan and all obligations under the Mortgage Note, as modified (the “Hilliard Grand Note”), Loan Modification Agreement and the Open-End Mortgage Deed (the “Hilliard Grand Mortgage,” and collectively, the “Loan Documents”). As of the Closing Date, the outstanding principal balance of the Hilliard Grand Loan was $29,256,469. The Hilliard Grand Note was endorsed for mortgage insurance by the Secretary of Housing and Urban Development.

Interest on the outstanding principal balance of the Hilliard Grand Loan will accrue at a rate of 5.59% per annum, and a monthly payment of $153,038 will be due and payable on the first day of each month until the monthly payment due on August 1, 2052 (the “Maturity Date”). The entire outstanding principal balance of the Hilliard Grand Loan, plus any accrued and unpaid interest thereon, is due and payable in full on the Maturity Date. So long as any payment due under the Hilliard Grand Loan is not received by RMC for more than fifteen (15) days after such payment is due, Hilliard Grand will pay to RMC a late charge equal to 2.0% of the amount of the payment due; provided, however, that the interest rate in conjunction with the late charge is not in excess of the maximum rate of interest permitted by law. Hilliard Grand may voluntarily prepay all or part of the unpaid principal balance of the Hilliard Grand Loan and all accrued interest thereon and other sums due to RMC under the Hilliard Grand Note on the last day of any calendar month on or after August 31, 2015, provided that Hilliard Grand must provide RMC with at least thirty (30) days notice of such prepayment. Hilliard Grand may also be required to pay a prepayment fee to RMC calculated in accordance with the terms of the Hilliard Grand Note and as further described in the Hilliard Grand Note in connection with any voluntary prepayment of the Hilliard Grand Loan.

The performance of the obligations of Hilliard Grand under the Hilliard Grand Loan are secured by the Hilliard Grand Mortgage for the benefit of RMC with respect to the Hilliard Grand Property. Pursuant to the Hilliard Grand Note, Hilliard Grand will have no personal liability under the Hilliard Grand Note for the repayment of the principal and interest and any other amounts due under the Loan Documents or for the performance of any other obligations under the Loan Documents.

The material terms of the agreements described herein are qualified in their entirety by the agreements attached as Exhibits 10.6, 10.7, 10.8 and 10.9 to this Current Report on Form 8-K and incorporated herein by reference.

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 properties 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.

ExhibitDescription

10.1 Purchase and Sale Agreement and Joint Escrow Instructions, made and entered into as of November 2, 2012, by and between Steadfast Asset Holdings, Inc., Gary L. Schottenstein, Brett Kaufman and Clean Title, Inc., doing business as Hummel Title Agency, in its capacity as escrow holder

10.2 First Amendment to Purchase and Sale Agreement and Joint Escrow Instructions, entered into as of November 13, 2012, by and between Steadfast Asset Holdings, Inc., Gary L. Schottenstein and Brett Kaufman

10.3 Assignment and Assumption of Purchase Agreement, dated as of December 31, 2012, by and between Steadfast Asset Holdings, Inc. and SIR Hilliard Grand, LLC

10.4 Membership Interests Assignment and Assumption, made and entered into effective as of December 31, 2012, by and between Gary L. Schottenstein and SIR Hilliard Grand, LLC

10.5 Property Management Agreement, made and entered into as of December 31, 2012, by and between Steadfast Management Company, Inc. and Hilliard Grand Apartments, LLC

10.6 Mortgage Note, effective as of July 27, 2010, by Hilliard Grand Apartments, LLC in favor of Red Mortgage Capital, LLC

10.7 Modification of Mortgage Note, dated as of December 31, 2012, by and between Hilliard Grand Apartments, LLC in favor of Red Mortgage Capital, LLC

10.8 Loan Modification Agreement, made as of December 28, 2012, by and among Hilliard Grand Apartments, LLC, Red Mortgage Capital, LLC and the Secretary of Housing and Urban Development

10.9 Open-End Mortgage Deed, dated as of July 27, 2010, by Hilliard Grand Apartments, LLC to and for the benefit of Red Mortgage Capital, LLC

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:	January 7, 2013	By:	/s/ Ella S. Neyland
			Ella Shaw Neyland
			President

EXHIBIT INDEX

ExhibitsDescription

10.1 Purchase and Sale Agreement and Joint Escrow Instructions, made and entered into as of November 2, 2012, by and between Steadfast Asset Holdings, Inc., Gary L. Schottenstein, Brett Kaufman and Clean Title, Inc., doing business as Hummel Title Agency, in its capacity as escrow holder

10.2 First Amendment to Purchase and Sale Agreement and Joint Escrow Instructions, entered into as of November 13, 2012, by and between Steadfast Asset Holdings, Inc., Gary L. Schottenstein and Brett Kaufman

10.3 Assignment and Assumption of Purchase Agreement, dated as of December 31, 2012, by and between Steadfast Asset Holdings, Inc. and SIR Hilliard Grand, LLC

10.4 Membership Interests Assignment and Assumption, made and entered into effective as of December 31, 2012, by and between Gary L. Schottenstein and SIR Hilliard Grand, LLC

10.5 Property Management Agreement, made and entered into as of December 31, 2012, by and between Steadfast Management Company, Inc. and Hilliard Grand Apartments, LLC

10.6 Mortgage Note, effective as of July 27, 2010, by Hilliard Grand Apartments, LLC in favor of Red Mortgage Capital, LLC

10.7 Modification of Mortgage Note, dated as of December 31, 2012, by and between Hilliard Grand Apartments, LLC in favor of Red Mortgage Capital, LLC

10.8 Loan Modification Agreement, made as of December 28, 2012, by and among Hilliard Grand Apartments, LLC, Red Mortgage Capital, LLC and the Secretary of Housing and Urban Development

10.9 Open-End Mortgage Deed, dated as of July 27, 2010, by Hilliard Grand Apartments, LLC to and for the benefit of Red Mortgage Capital, LLC

EX-10.1

EXHIBIT 10.1

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

by and between

GARY L. SCHOTTENSTEIN, an individual,

and

BRETT KAUFMAN, an individual

(together, “Seller”)

as Owners of 100% of the Membership Interests in

HILLIARD GRAND APARTMENTS, LLC,

an Ohio limited liability company

(“Property Owner”)

and

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

(“Buyer”)

41893434 Hilliard Grand/Purchase and Sale Agreement

TABLE OF CONTENTS

		Page No.
1.	PURCHASE AND SALE	1
	1.1. Property	1
	1.2. No Warranty	2
2.	PURCHASE PRICE.	3
3.	PAYMENT OF PURCHASE PRICE.	3
	3.1 Deposit	3
	3.2 Remainder of Purchase Price	3
	3.3 Buyer Default; Liquidated Damages	4
	3.4 Seller Default; Specific Performance	4
4.	ESCROW INSTRUCTIONS	5
	4.1 Opening of Escrow	5
	4.2 Conditions to Close	5
	4.3 Recordation and Transfer	6
5.	CLOSING	6
	5.1 Generally	6
	5.2 Extension Options	7
6.	BUYER'S REVIEW	7
	6.1 Delivery of Documents	8
	6.2 Access	8
	6.3 Title and Survey	9
	6.4 Buyer's Due Diligence	10
	6.5 Buyer's Termination Right	10
	6.6 Contracts	10
7.	REPRESENTATIONS AND WARRANTIES	10
	7.1 Seller's Representations and Warranties	10
	7.2 Buyer's Representations and Warranties	16
8.	COVENANTS	17
	8.1 Seller	17
	8.2 Buyer	20
9.	ADJUSTMENTS AND PRORATIONS	21
	9.1 Generally	21
	9.2 Rental Income	21
	9.3 Proration Period	22
	9.4. Rent Ready	22
10.	CLOSING DOCUMENTS	22
	10.1 Seller's Deliveries	22
	10.2 Buyer's Deliveries	23
	10.3 Other Closing Documents	23

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41893434 Hilliard Grand/Purchase and Sale Agreement

	10.4 Closing Documents	24
11.	COSTS	24
12.	CASUALTY OR CONDEMNATION	24
13.	ATTORNEYS' FEES	25
14.	ASSIGNMENT	25
15.	WAIVER	25
16.	GOVERNING LAW	25
17.	NOTICES	25
18.	ENTIRE AGREEMENT	26
19.	COUNTERPARTS; COPIES	26
20.	AUTHORITY	26
21.	RECORD ACCESS AND RETENTION	26
22.	CONTRACT CONSIDERATION	27
23.	JURY TRIAL WAIVER	27
24.	COUNSEL	28
25.	EQUAL PARTICIPATION	28

EXHIBITS

Exhibit “A”	Real Property Description
Exhibit “B”	Parkland and Road Extension Description
Exhibit “C”	Personal Property Description
Exhibit “D”	TIF Declaration
Exhibit “E”	Due Diligence Documents
Exhibit “F”	Form of Assignment
Exhibit “G”	Form of Non-Foreign Certificate
Exhibit “H”	Form of Tenant Notice

SCHEDULES

Schedule 1	Leases
Schedule 2	Contracts
Schedule 3	Approvals
Schedule 4	Rent Roll
Schedule 5	Organizational Documents
Schedule 6	Statement of Liabilities
Schedule 7	List of Loan Documents

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41893434 Hilliard Grand/Purchase and Sale Agreement

LIST OF DEFINED TERMS

Agreement	1
Approvals	2
Business Day	3
Buyer	1
Close of Escrow	6
Closing	6
Closing Date	6
Closing Documents	19
Contracts	2
Date of Closing	6
Deposit	3
Due Diligence Period	8
Environmental Laws	6
ERISA	12
Escrow	4
Escrow Holder	2
Executive Order	13
Extended Outside Closing Date	6
Extension Deposit	6
Extension Option	6
General Assignment	18
Hazardous Substances	6
Initial Deposit	2
Intangible Property	2
Leases	1
Lenders	12
Loan
Loan Assumption
Loan Documents
New Title Matter	7
Objections	7
OFAC	13
Opening of Escrow	4
Outside Closing Date	6
Permitted Exceptions	8
Personal Property	1
Property	1
Purchase Price	2
Real Property	1

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41893434 Hilliard Grand/Purchase and Sale Agreement

Release	6
Seller	1
Seller Deliveries	6
Seller’s Cure Period	7
Settlement Statement	5
Title Commitment	7
Title Objection Notice	7
Title Objection Period	7
Title Policy	19

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41893434 Hilliard Grand/Purchase and Sale Agreement

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 23^rd day of October, 2012, by and between GARY L. SCHOTTENSTEIN, an individual, and BRETT KAUFMAN, an individual (together, “Seller”), and STEADFAST ASSET HOLDINGS, INC., a California corporation (“Buyer”), with reference to the following facts:

RECITALS:

A.Seller is currently the owner of 99% of the membership interests and will be, at or prior to Closing, the owner of 100% of the membership interests (“Membership Interests”) in HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability company(“Property Owner”).

B.Property Owner is the fee simple owner of that certain land with a multifamily residential project commonly known as Hilliard Grand, consisting of 314 units situated thereon, located at 5399 Grand Drive, Dublin, Ohio 43016, and more particularly described in Exhibit “A” attached hereto, together with all structures, improvements, machinery, fixtures and equipment affixed or attached to the land (collectively referred to herein as the “Real Property”), but excluding those certain parcels of land more particularly described in Exhibit “B” attached hereto, together with all structures, improvements or fixtures affixed or attached to such land (collectively, the “Parkland and Road Extension”), which shall not be part of or included in the Real Property.

C.Seller desires to sell the Membership Interests and all rights pertaining thereto, along with certain related personal and intangible property, to Buyer, and Buyer desires to purchase such Membership Interests and related rights 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.

1.1Property. 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, the Membership Interests and all rights, title and privileges of Seller relating thereto. The Membership Interests shall not include any claims that Property Owner or Buyer may have against Seller due to matters arising under the terms of the Organizational Documents (as hereinafter defined) or with respect to Property Owner or its property, assets or business prior to the Closing (the “Residual Claims”) it being understood and agreed that such Residual Claims shall remain an obligation of Seller; provided however, that in no event shall Residual Claims include claims by Buyer against Seller relating to the physical or environmental condition of the Property except to the extent such claims arise under this Agreement as a result of a breach of a representation or warranty by Seller, a default by Seller or an indemnification obligation of Seller, each as and to the

41893434 Hilliard Grand/Purchase and Sale Agreement

extent expressly provided in this Agreement. After the Closing, Seller will have no right, title or interest in Property Owner or any of its assets or property (including, without limitation, the Property, as hereinafter defined). Property Owner is the owner of the following (collectively, the “Property”):

1.1.1The Real Property;

1.1.2All easements, licenses, interests, rights, privileges, tenements, hereditaments and appurtenances on or in anywise appertaining to the Real Property;

1.1.3All equipment, tools, machinery, materials, furniture, furnishings, supplies and other tangible personal property owned by Property Owner and located on or used in connection with or arising out of the ownership, management or operation of the Real Property as of the date hereof, as more particularly described in Exhibit “C” attached hereto (collectively, “Personal Property”);

1.1.4All 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);

1.1.5Subject to Section 6.6 below, all service, maintenance, supply or other contracts relating to the operation of the Property in effect as of the date hereof (including without limitation all warranties and license agreements), which are identified on Schedule 2 attached hereto (collectively, “Contracts”);

1.1.6All licenses, permits, certificates of occupancy and governmental approvals relating to the Property, including without limitation those identified on Schedule 3 attached hereto (collectively, “Approvals”) and any plans, specifications, studies, reports or surveys relating to the Property; and

1.1.7All entitlements and intangible personal property in connection with or arising out of the ownership of the Real Property, including, without limitation, all trade names and logos, and, unless otherwise expressly agreed to by Buyer, all web domains, websites, and internet addresses relating exclusively to the Real Property or Property Owner but excluding any names of unit types such as “classic”, “estate”, and “arbors”, and excluding all intellectual property that is also used on properties owned by affiliates of Seller and excluding all payments from the Wilcox Road Residential TIF Fund that Schottenstein Real Estate Group (“SREG”) is entitled to pursuant to the Tax Increment Financing Agreement (“TIF Agreement”) entered into by SREG and the City of Hilliard, Ohio, dated February 8, 2010 (collectively, the “Intangible Property”).

1.2No Warranty. Subject to the representations, warranties and covenants of Seller set forth in this Agreement, Seller is selling and Buyer is purchasing the Membership Interests “AS IS WHERE IS” with all faults.

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41893434 Hilliard Grand/Purchase and Sale Agreement

2.PURCHASE PRICE.

The total purchase price (“Purchase Price”) to be paid by Buyer to Seller for the Membership Interests shall be FORTY MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($40,500,000.00), payable as set forth in Section 3.

3.PAYMENT OF PURCHASE PRICE.

3.1The Purchase Price shall be paid as follows:

3.1.1Deposit. As part of the Opening of Escrow (as defined below), Buyer shall deliver to HUMMEL TITLE AGENCY, INC. (“Escrow Holder”), which has an address of 2154 E. Main Street, Suite 301, Columbus, OH 43209, Attn. Murray Davis, the sum of FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000.00) (“Initial Deposit”) in immediately available funds as a good faith deposit. The Initial Deposit, the Extension Deposit (as hereinafter defined), if any, and all interest earned on any of the foregoing, shall be collectively referred to in this Agreement as the “Deposit”. At Buyer's discretion, Escrow Holder shall place the Deposit in one or more government insured interest-bearing accounts satisfactory to Seller and Buyer (which shall have no penalty for early withdrawal), and shall not commingle the Deposit with any funds of Escrow Holder or any other person or entity. All interest earned on the Deposit shall be included within the meaning of the term “Deposit” in this Agreement. If Closing occurs in accordance with this Agreement, the Deposit shall be applied against the Purchase Price. The Initial Deposit and all interest earned thereon shall be returned to Buyer within one (1) Business Day if (y) Buyer elects to terminate this Agreement in accordance with Section 6.5 below or (z) Escrow fails to close due to (i) Seller’s breach of this Agreement, (ii) the failure of a condition to close under Section 4.2 that is for the benefit of Buyer (for the avoidance of doubt, a failure of Buyer to deliver funds or instruments under Section 4.2.2, the existence of a matter described in Section 4.2.5 with respect to Buyer or a breach by Buyer under Section 4.2.4 would not constitute a failure of condition under Section 4.2 that is for the benefit of Buyer), or (iii) a casualty or condemnation event as described in Section 12 below occurs. In the event of a termination of this Agreement by either Seller or Buyer for any reason other than pursuant to Section 6.5, Escrow Holder is authorized to deliver the Deposit to the party hereto entitled to same pursuant to the terms hereof on or before the tenth (10^th) Business Day following receipt by Escrow Holder and the non-terminating party of written notice of such termination from the terminating party, unless the other party hereto notifies Escrow Holder that it disputes the right of the other party to receive the Deposit. In such event, Escrow Holder may interplead the Deposit into a court of competent jurisdiction in the county in which the Deposit has been deposited. All attorneys’ fees and costs and Escrow Holder’s costs and expenses incurred in connection with such interpleader shall be assessed against the party that is not awarded the Deposit, or if the Deposit is distributed in part to both parties, then in the inverse proportion of such distribution. As used in this Agreement, “Business Day” means any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in the State of California.

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41893434 Hilliard Grand/Purchase and Sale Agreement

3.1.2Loan Assumption. At Closing, Buyer (or its successors and/or assigns) will receive a credit against the Purchase Price in an amount equal to the Net Loan Balance, as defined below. For purposes of this Agreement, the term “Net Loan Balance” means an amount equal to (a) the outstanding principal and interest on the Loan, as defined below, as of 11:59 pm on the day prior to the Closing Date, less (b) the aggregate amount of all escrows (including any tax and insurance (including MIP) escrows) and reserves (including replacement, operating and working capital reserves, which operating deficit reserve is in the amount of $900,000 as of the Effective Date and is anticipated to be in the same amount as of the Closing Date) maintained by Property Owner pursuant to the terms and conditions of the Loan Documents, as defined below, as of 11:59 pm on the day prior to the Closing Date; the term “Loan” means that certain loan from Red Mortgage Capital, LLC (“Lender”) to Property Owner in the original principal amount of $31,800,400.00 (with the final loan amount subject to final cost certification by HUD); and the term “Loan Documents” means those certain documents identified on Schedule 7 attached hereto, which evidence, secure or otherwise relate to the Loan. Buyer acknowledges that the outstanding principal balance on the Loan as of the day prior to the Closing Date is anticipated to be approximately $29,310,000 and understands that the final outstanding principal balance will not be determinable until after the final endorsement is issued by HUD, as defined below. The parties understand and agree that, pursuant to the Loan Documents, the approval of Lender and the U.S. Department of Housing and Urban Development (“HUD”) (which insures the Loan pursuant to Section 221(d)(4)) will be required for the transfer of the Membership Interests contemplated herein to Buyer (the “Loan Assumption”), as set forth in Section 4.2.8 below. In connection with the Loan Assumption, Buyer and Seller hereby agree as follows:

(a)Buyer shall initiate the application process with Lender for approval of the Loan Assumption and shall complete and submit to Lender the “Transfer of Physical Assets Application” not later than ten (10) days after the date hereof (but will endeavor to do so sooner). Seller agrees to cooperate and to cause Property Owner to cooperate with Buyer in connection with Loan Assumption, including executing and/or delivering, or causing Property Owner to execute and/or deliver, any documents or instruments required by Lender in connection with the Loan Assumption; provided; however that such documents or instruments do not create additional obligations or liabilities for Seller if Closing does not occur or that continue after the Closing Date.

(b)Buyer shall pay all assumption fees required by Lender in connection with the Loan Assumption; each party shall bear its own legal fees with respect to the Loan Assumption.

3.1.3Equity. The Equity (as hereinafter defined) shall be paid in full in cash at Closing to a bank account of Escrow Holder, for the benefit of Seller. As used herein, “Equity” means the difference between the Purchase Price for the Membership Interests and the Net Loan Balance, as adjusted by credits and prorations provided for herein.

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41893434 Hilliard Grand/Purchase and Sale Agreement

3.2Buyer Default; Liquidated Damages. SELLER AND BUYER AGREE THAT, IF THE PURCHASE AND SALE OF THE MEMBERSHIP INTERESTS IS NOT COMPLETED AND THIS AGREEMENT TERMINATES BECAUSE BUYER MATERIALLY DEFAULTS UNDER OR MATERIALLY BREACHES THIS AGREEMENT (AFTER WRITTEN NOTICE AND A REASONABLE OPPORTUNITY TO CURE), 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 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 MEMBERSHIP INTERESTS.

SELLER’S INITIALS:

BLK

GS

BUYER’S INITIALS:

AMDR

3.3Seller Default; Specific Performance. If Seller is in default hereunder (including without limitation as a result of a breach of any representation or warranty of Seller expressly provided in this Agreement), Buyer may, as its sole and exclusive remedy, elect to either (a) terminate this Agreement by giving Seller timely written notice of such election prior to or at Closing and recover the Deposit and be reimbursed by Seller for any and all actual, documented, out-of-pocket costs incurred by Buyer in connection with its negotiation of this Agreement, examinations, inspections and/or investigations of the Membership Interest and the Property, or any proposed financing of the proposed purchase of the Membership Interests to date up to (but not exceeding) $200,000.00 plus, if said default occurs after the date on which the Buyer has deposited any required "commitment deposit", "rate lock deposit", "assumption deposit" or similar non-refundable deposit with Lender (provided that Buyer shall have given Seller not less than two (2) Business Days prior written notice of such commitment deposit, rate lock deposit or assumption deposit and provided further that such commitment deposit, rate lock deposit or assumption deposit is made no earlier than five (5) Business Days prior to the Closing Date), the amount of such deposit (which obligation shall survive any termination of this Agreement and Buyer shall be entitled to exercise any and all remedies at law or in equity to enforce), or (b) assert and seek judgment for specific performance to consummate the sale of the Membership Interests hereunder, or (c) waive said failure or breach and proceed to Closing without any reduction in the Purchase Price. Except as otherwise provided in the immediately preceding sentence or in Section 13 below, Buyer expressly waives its rights to seek any damages in the event of Seller’s default hereunder. Notwithstanding anything herein to the contrary, Buyer shall be deemed to have elected to terminate this Agreement if Buyer fails to deliver to Seller written notice of its intent to file a claim or assert a cause of action for specific performance against Seller on or before ten (10) Business Days following the Outside Closing Date or, having given such notice, fails to file a lawsuit asserting such claim or cause of action in the county in which the Property is located within two months following the Outside Closing Date. Buyer’s remedies shall be limited to those described in this Section 3.3 and Section 13. Notwithstanding anything in this Section 3.3 to the contrary, Seller shall not be liable to Buyer for Buyer's costs under subsection (a) hereof or for the amounts or Buyer's costs set forth in

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immediately preceding sentence as a result of (x) an Immaterial Disclosure Omission (as defined in Section 6.1), (y) an immaterial breach of a representation or warranty, or (z) an immaterial breach of a covenant under this Agreement (including under Section 21), if such failure or breach was unintentional and such document, representation and warranty or covenant would not have been material to a commercially reasonable public REIT purchaser in a similar transaction.

3.ESCROW INSTRUCTIONS.

4.1Opening of Escrow. Within three (3) Business Days after the mutual execution of this Agreement by Seller and Buyer, 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 by (i) Buyer delivering to Escrow Holder the Initial Deposit and (ii) Buyer and Seller delivering to Escrow Holder their respective executed counterparts of this Agreement (collectively, 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 17of this Agreement. This Agreement shall be countersigned by Escrow Holder 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.

4.2Conditions to Close. Escrow shall not close 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:

4.2.1Intentionally omitted.

4.2.2All funds and instruments described in Sections 3 and 10 have been delivered to Escrow Holder and Seller and Buyer have approved, executed and delivered a settlement statement reflecting the Purchase Price, all prorations, and all closing costs as required under this Agreement and in connection with the consummation of the Loan Assumption (the “Settlement Statement”).

4.2.3The title department of Leadership Title Company, LLC ("Title Company") shall have irrevocably committed to Buyer in writing to issue an ALTA extended owner’s policy of title insurance from First American Title Insurance Company, in form and content approved by Buyer before the end of the Due Diligence Period, and to the extent of any changes to such approved form made by Title Company from and after the end of the Due Diligence Period until Closing, subject to Buyer's approval of such subsequent changes in its commercially reasonable discretion, insuring Buyer’s fee simple title to the Real Property in an amount equal to the Purchase Price subject only to the Permitted Exceptions.

4.2.4Seller 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.

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41893434 Hilliard Grand/Purchase and Sale Agreement

4.2.5The representations and warranties of Seller and Buyer contained herein shall be true and correct in all material respects as of the date hereof and as of the Closing Date, except for representations and warranties made as of, or limited by, a specific date, which will be true and correct in all material respects as of the specified date or as limited by the specified date.

4.2.6There shall exist no pending or threatened actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings, against the other party that would materially and adversely affect that party’s ability to perform its obligations under this Agreement.

4.2.7The stabilized physical occupancy of the Property shall average 85% (or 267 occupied units) or greater for the past 90 days of occupancy with rents under any Leases executed or extended from and after the date hereof being not less than the current rents on the rent roll set forth on Schedule 4 attached hereto and with no free rent periods or other economic concessions during the past 90 day period.

4.2.8The Loan Assumption, as reflected in the “Transfer of Physical Assets” relating to the purchase and sale of the Membership Interests contemplated herein, has been approved in writing by Lender and HUD at or prior to Closing, and Lender, Seller and Buyer (and if applicable, Property Owner) have executed all required documents in connection therewith, which documents shall include a release of all obligations of Seller and any Affiliates of Seller other than Property Owner from all guarantees, indemnitees and other obligations relating to the Loan Documents first arising or accruing from and after the Closing Date.

4.2.9That certain covenant, substantially in the form attached hereto as Exhibit “D”, to be recorded against the Real Property as required under TIF Agreement (the “TIF Declaration”), has been approved by Lender and HUD and has been filed in the appropriate real property records at or prior to Closing.

4.2.10The conveyance of the Parkland and the Road Extension to the City of Hilliard and the corresponding partial mortgage release have been approved by Lender and HUD and such conveyance and partial mortgage release has occurred at or prior to Closing.

4.2.11Buyer approving in writing the final form of the conveyance of the Parkland and the Road Extension and the imposition of any maintenance and related obligations on Property Owner that may be required in connection therewith within five (5) days of Seller presenting to Buyer the final form of conveyance of the Parkland and Road Extension and a copy of the final maintenance and related obligations imposed or to be imposed on Property Owner in connection therewith.

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41893434 Hilliard Grand/Purchase and Sale Agreement

4.2.12Prior to the end of Due Diligence Period, Buyer shall have determined that the projected outstanding principal balance on the Loan as of the day prior to the Closing Date shall be $29,310,000 or such other amount as shall be acceptable to Buyer in its sole discretion, which condition shall be deemed satisfied at the end of the Due Diligence Period unless Buyer shall have delivered a written notice to Seller prior to the end of the Due Diligence Period indicating that such condition was not satisfied.  In the event that the Final Endorsement is not issued until after the end of the Due Diligence Period, this condition regarding the Loan Amount shall be satisfied or waived within 3 business days after the Final Endorsement is issued.

4.3Recordation and Transfer. Upon satisfaction of the conditions set forth in Section 4.2 above, Escrow Holder shall transfer the Membership Interests as follows:

4.3.1Intentionally omitted;

4.3.2Deliver to the parties entitled thereto the Closing Documents (as hereinafter defined); and

4.3.3Disburse all funds deposited with Escrow Holder by Buyer in payment of the Purchase Price for the Membership Interests (subject to applicable prorations) to Seller or, for closing costs, to the party entitled thereto, all as set forth in the Settlement Statement.

4.CLOSING.

5.1Generally. Escrow shall close upon the delivery and acceptance of the Assignment in accordance with the provisions of this Agreement (“Date of Closing“, “Closing Date“, “Closing“ or “Close of Escrow”). The Close of Escrow shall occur on a date selected by Buyer, subject to the reasonable approval of Seller, which date shall not be not earlier than the date on which Buyer and Property Owner have received written approval from the Lender and HUD that the Loan Assumption, the recordation of the TIF Declaration, and the conveyance of the Parkland and the Road Extension each have been approved, and not later than December 31, 2012 (or such extended date as may be provided under Section 5.2 or other express provisions of this Agreement) (“Outside Closing Date”) at the office of Escrow Holder (or such other location as may be mutually agreed upon by Seller and Buyer), unless otherwise extended (i) by operation of Sections 6.3 or 12 below, (ii) by Buyer pursuant to Section 5.2 below, or (iii) by written agreement between Buyer and Seller. Notwithstanding anything herein to the contrary, if Closing does not occur on or before December 31, 2012 as a result of the failure of any condition under Section 4.2 that is the obligation of Buyer to perform, or the failure of the conditions set forth in Sections 4.2.8, 4.2.9 or 4.2.10, Seller may immediately terminate this Agreement by providing Buyer written notice thereof on December 31, 2012. If Seller terminates the Agreement in accordance with the immediately preceding sentence, the Deposit shall be returned to Buyer and Seller shall reimburse Buyer within five (5) days for up to $150,000 of the actual third party costs incurred by Buyer in connection with the negotiation of this Agreement, the conduct of its due diligence of the Property and Membership Interests and the application process for the Loan Assumption.

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41893434 Hilliard Grand/Purchase and Sale Agreement

5.2Extension Option. Subject to this Agreement being terminated pursuant to the provisions contained herein, Buyer shall have the option (“Extension Option”), subject to Seller’s approval, which approval may be granted or withheld in the sole and absolute discretion of Seller, to request the extension the Outside Closing Date for a reasonable period of time, as determined in Buyer’s sole and absolute discretion (but not beyond April 15, 2013), in order to obtain the approval of Lender and HUD of the Loan Assumption, the TIF Declaration and the matters described in Section 4.2.10 (“Extended Outside Closing Date”). If Buyer desires to exercise the Extension Option, it shall provide written notice to Seller during the period beginning on December 1, 2012 and ending on December 15, 2012 requesting such Extension Option. If Seller has not affirmatively approved Buyer’s requested Extension Option by delivering written notice of such approval to Buyer on or before December 21, 2012, Seller shall be deemed to have approved such requested Extension Option. If Seller rejects Buyer’s requested Extension Option on or before December 21, 2012 and HUD fails to approve the Loan Assumption, the TIF Declaration or the matters described in Section 4.2.10 on or before December 31, 2012, Buyer shall have the right to terminate for a failure of a condition precedent and the Deposit shall be returned to Buyer and Seller shall reimburse Buyer within five (5) days for up to $150,000 of the actual third party costs incurred by Buyer in connection with the negotiation of this Agreement, the conduct of its due diligence of the Property and Membership Interests and the application process for the Loan Assumption. If the Extension Option is requested and approved pursuant to this Section 5.2, then, from and after said original Outside Closing Date, the Deposit (and any interest thereon) shall be non-refundable except as provided in Section 5.1 and in subsections (z)(i) and (iii) of the sixth sentence of Section 3.1 and subsection (z)(ii) of said sixth sentence only as it relates to a Seller default, as it relates to Section 4.2.3 or as it relates to Section 4.2.8 (it being expressly understood and agreed that any failure of the condition set forth in Section 4.2.7 that occurs after the exercise of the Extension Option is hereby deemed waived by Buyer.

5.BUYER’S REVIEW.

6.1Delivery of Documents. Within five (5) Business Days after the Opening of Escrow and to the extent not previously delivered or made available, Seller shall, at the sole expense of Seller, deliver to Buyer or, solely with respect to the items that are difficult or costly to copy (due to size or volume), make available to Buyer at the Property, copies (which may be in electronic format) of all documents pertaining to the Membership Interests and the Property that have been prepared by, for or at the request of Seller or are in the possession or control of, or are reasonably available to (without Seller or Property Owner having to create, produce or otherwise obtain any information that does not currently exist), Seller, including, without limitation, the documents listed on Exhibit “E” attached hereto and all organizational documents of Property Owner, including without limitation any operating agreement, articles of organization, membership certificates or other similar documents, all of which are described on Schedule 5 attached hereto (collectively, the “Organizational Documents”, and collectively with the documents listed on Exhibit “E”, the “Seller Deliveries”); provided, however, that notwithstanding anything to the contrary in this Agreement, Seller shall not be required to deliver or make available any of Seller’s individual tax returns except that Seller shall make available for review the 2011, when completed, and 2010 Schedule C (if and to the extent that any information thereon relates to Property Owner) and Schedule E of Seller’s federal tax return for and to the extent relating to the operations of the Property Owner.

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41893434 Hilliard Grand/Purchase and Sale Agreement

Seller hereby acknowledges and agrees that the following are in the possession of or control of, or are reasonably available to, Seller and will be provided as required in the previous sentence: monthly operating statements (year-to-date and 1-year historical); year-end financial statements (past 1 year); general ledger (year-to-date and 1-year historical); and copies of all Leases. Notwithstanding anything to the contrary in this Section 6.1, Section 21.1 or Section 21.2, or on Exhibit “E”, any requirement for delivery of item for a period longer than Property Owner has been in existence instead shall be deemed to require delivery of such item for the lesser of said period or the period of Property Owner's existence. In the event Seller unintentionally fails to deliver to Buyer any of the Seller Deliveries as provided herein and such Seller Deliveries would not have been material to a commercially reasonable public REIT purchaser in a similar transaction (an "Immaterial Disclosure Omission"), Buyer’s sole and exclusive remedy will be to either (a) terminate this Agreement and receive a refund of the Deposit if and only if Buyer discovers said failure prior to the expiration of the Due Diligence Period (as hereinafter defined) or (b) waive said failure and proceed to Closing without any reduction in the Purchase Price (whether Buyer discovers said failure before or after the expiration of the Due Diligence Period); it being understood and agreed that if such Immaterial Disclosure Omission is discovered after Closing, Seller shall have no indemnification obligation under Section 8.1.5(ii) with respect thereto.

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 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.

6.2Access. Commencing upon the execution of this Agreement by Buyer and Seller, Seller shall allow (or cause to be allowed) Buyer or Buyer’s agents, employees, contractors, lenders or representatives access to the Property for purposes of any non-intrusive physical or environmental test, study or inspection of the Property and, to the extent copies are not provided to Buyer by Seller pursuant to Section 6.1, review and copying of Seller’s books and records relating to the Membership Interests and the Property and any of the documents described in Section 6.1 above. Buyer shall also be permitted to review such other matters necessary in the discretion of Buyer to evaluate and analyze the feasibility of the Membership Interests and the Property for Buyer’s intended use thereof (provided, however that Buyer's right to review such other matters

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41893434 Hilliard Grand/Purchase and Sale Agreement

shall not be deemed to increase Seller's obligation to provide documents as required under Section 6.1, Section 21.1 or Section 21.1, or access as required under this Section 6.2). Buyer shall not conduct or authorize any physically intrusive testing of, on, or under the Property without first obtaining Seller’s consent as to the timing and scope of work to be performed, which consent shall not be unreasonably withheld, conditioned or delayed. Prior to any entry onto the Property for purposes of inspection or testing (as opposed to solely for review of materials provided under Section 6.1 above), Buyer shall provide Seller with evidence that Buyer maintains liability insurance with coverage in an amount not less than $2,000,000 and that each of Seller and Property Owner has been named as an additional insured under such insurance.

Seller hereby acknowledges and agrees that Buyer or Buyer’s representatives may communicate with any governmental authority or quasi-governmental authority for the purpose of gathering information in connection with the Membership Interests, the Property or the Seller, or the transaction contemplated by this Agreement. Buyer agrees that, until Closing occurs, all of Seller’s Deliveries will be kept confidential by Buyer and its affiliates except for Permitted Disclosures (as hereinafter defined); provided that Buyer and its affiliates may disclose information from Seller’s Deliveries to their respective employees, agents, representatives, accountants, attorneys, consultants or contractors in connection with its evaluation of the Property and Membership Interest and to any bank or lending institution (or underwriter or servicer therefor) that Buyer requests to provide financing for the Property or the Membership Interests, so long as Buyer informs the person to whom the disclosure is made of the confidential nature of such information and of Buyer's obligations in that respect under this Agreement and directs the person to whom the disclosure is made to treat such information confidentially and not to disclose such information to any person other than as authorized by this Section 6.2. Seller hereby expressly recognizes the need to disclose, and agrees to the disclosure of, certain aspects of this transaction to Buyer's (or Buyer's affiliate's) employees, agents, representatives, accountants, attorneys, consultants or contractors in connection with its evaluation of the Property and Membership Interest and to any bank or other lending institution (or underwriter or servicer therefor) that Buyer requests to provide financing for the Property or the Membership Interests. Buyer is not responsible for the actions of third parties as to the disclosure of confidential information, except with respect to its obligation in this paragraph to inform such persons of the confidentiality of such information. Except as provided in the preceding sentences of this paragraph, the existence and contents of this Agreement and the negotiations of parties with respect to the possible sale and purchase of the Membership Interests shall be kept confidential and shall not be disclosed to any third parties without the consent of both parties hereto, except for any disclosure (i) that may be required by law to be made to any applicable governmental or quasi-governmental authorities or any other person or entity, or (ii) of information otherwise in the public domain (the "Permitted Disclosures"). From and after Closing, either party may issue a press release describing the transaction, provided that neither of Seller or Buyer may include the identity of the other party in such press release unless such press release is approved in writing in advance by the other party.

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41893434 Hilliard Grand/Purchase and Sale Agreement

6.3Title and Survey.

6.3.1Within five (5) Business Days after the Opening of Escrow (or such longer period as may be reasonably necessary provided Seller has promptly requested such Title Commitment and is diligently attempting to timely obtain it), Seller shall cause Title Company to issue to Buyer a current commitment for an owner’s policy of title insurance in the amount of the Purchase Price on an ALTA 2006 form (“Title Commitment”) together with copies of all documents of record reflected therein as exceptions to title at Seller’s sole cost and expense (as provided in Section 11 below). Buyer shall have thirty (30) days following its receipt of the Title Commitment (“Title Objection Period”) in which to notify Seller in writing 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.” Subject to the limitations set forth in the penultimate sentence of this Section 6.3.1, Seller may elect, but will not be obligated, to remedy or remove all Objections (or agree irrevocably in writing to remedy or remove all such Objections at or prior to Closing) within fifteen (15) days following Seller’s receipt of the Title Objection Notice (“Seller’s Cure Period”). In the event 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 ten (10) days after the expiration of Seller’s Cure Period, shall deliver to Seller written notice electing, in Buyer’s sole and absolute discretion, to either (i) terminate this Agreement, or (ii) unconditionally waive any such Objections, failing which Buyer shall conclusively be deemed to have elected (i) above. 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, 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 6.3 (and the Date of Closing shall be extended commensurately (but not beyond the Outside Closing Date) 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. Close of Escrow shall be delayed as needed to accommodate such additional time periods, but not beyond the Outside Closing Date. Seller hereby agrees to remove at or prior to Closing (i) financing liens of an ascertainable amount created by, under or through Seller or Property Owner, such that Seller shall deliver the Membership Interests and the Property free and clear of any such financing liens, and (ii) any exceptions or encumbrances to title which are voluntarily created by, under or through Seller or Property Owner after the date hereof without Buyer’s consent. The term “Permitted Exceptions” shall mean: the mortgage securing the Loan and any other Loan Documents of record, the specific exceptions (excluding exceptions that are part of the promulgated title insurance form) in the Title Commitment that Title Company is not permitted to remove; other exceptions to which Buyer has not raised an Objection as provided herein or has subsequently waived such Objection in writing and that Seller is not required to remove as provided above; items shown on the Survey which have not been removed as of the end of the Due Diligence Period; real estate taxes not yet due and payable; and rights of tenants (as tenants only) under the Leases.

6.3.2Within five (5) Business Days after the Opening of Escrow and to the extent not previously provided, Seller shall provide Buyer with a copy of any existing survey

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41893434 Hilliard Grand/Purchase and Sale Agreement

of the Property in Seller’s possession or control. Buyer, at its sole cost and expense, may elect to obtain a new survey or revise, modify, or re-certify an existing survey of the Property as necessary in order for the title department of Title Company to delete the survey exception from title or to otherwise satisfy Buyer’s objectives.

6.4Buyer’s Due Diligence. Subject to Section 21 below, Buyer shall have until 5:00 p.m. Pacific time on November 13, 2012 (“Due Diligence Period”) to evaluate and analyze the feasibility of the Membership Interests and 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 the Membership Interests and operating the Property. If, during the Due Diligence Period, Buyer determines that the Membership Interests or the Property are not acceptable for any reason whatsoever in Buyer’s sole and absolute discretion, 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. Buyer agrees to indemnify and hold Seller harmless and defend Seller from and against any claims, liabilities, liens, cause of action, expenses, costs, or damages (including reasonable attorneys’ fees and personal injury claims) resulting from the inspection of the Property prior to the Closing Date by Buyer or Buyer’s contractors, employees, representatives, or agents; provided, however, that Buyer shall not be responsible for any losses or expenses resulting from the discovery of adverse information regarding the Membership Interests or the Property. In the event this Agreement is terminated for any reason, Buyer shall restore the Property to the extent of any physical change or damage made as a result of the conduct of any inspection or investigation of the Property by Buyer or Buyer’s agents, representatives or contractors to substantially the same condition that existed immediately prior to Buyer’s inspection and investigation. Any provision to the contrary herein notwithstanding, the provisions of the previous two sentences shall survive termination of this Agreement for any reason for a period of three (3) months and control over any provisions to the contrary herein.

6.5Buyer’s Termination Right. If Buyer exercises the right to terminate this Agreement in accordance with Sections 6.3 (including without limitation for any New Title Matter) or 6.4 hereof, this Agreement shall terminate as of the date the termination notice is given by Buyer (except as to such matters that are expressly specified to survive the termination of this Agreement), and Escrow Holder shall return the Deposit to Buyer. If Buyer does not exercise the right to terminate this Agreement in accordance with Sections 6.3 or Section 6.4 hereof, this Agreement shall continue in full force and effect and the Deposit shall become non-refundable except as provided in Section 3.1 above.

6.6Contracts. On or before the expiration of the Due Diligence Period, Buyer shall notify Seller in writing as to which of the Contracts Buyer elects to have continue after Closing, in Buyer’s sole and absolute discretion. For those Contract(s) which Buyer has not agreed to have continue after Closing, Property Owner, to the extent acceptable to it in its sole and absolute discretion, shall notify the vendors under such Contracts of Property Owner’s election to exercise its termination rights under such Contracts, if any.

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41893434 Hilliard Grand/Purchase and Sale Agreement

6.REPRESENTATIONS AND WARRANTIES.

7.1Seller’s Representations and Warranties. The representations and warranties of Seller in this Section 7.1 are a material inducement for Buyer to enter into this Agreement. Buyer would not purchase the Membership Interests without such representations and warranties of Seller. Such representations and warranties shall survive the Closing for one (1) year. Seller represents, warrants and covenants to Buyer as of the date of this Agreement and as of the Closing Date as follows:

7.1.1Gary L. Schottenstein is an individual whose state of residence is Florida, and Brett Kaufman is an individual whose state of residence is Ohio. Each Seller has requisite authority and legal capacity to enter into this Agreement and, subject only to the Redemption (as hereinafter defined) occurring, to perform this Agreement, including, without limitation, the authority and legal capacity to assign, deliver and transfer the Membership Interests as provided by this Agreement. Subject only to the Redemption occurring, all required consents and approvals have been duly obtained. This Agreement is a legal, valid and binding obligation of each Seller, enforceable against Seller in accordance with its terms. Subject only to the Redemption occurring, there is no agreement to which each Seller or Property Owner is a party or, to Seller’s knowledge, that is binding on either Seller or Property Owner which is in conflict with this Agreement. At Closing, Seller will convey good and valid title to the Membership Interests to Buyer.

7.1.2Subject only to the Redemption occurring, each Seller is the record and beneficial owner of its respective Membership Interests. As of Closing, each Seller will own its Membership Interests free and clear of any right, claim, lien, encumbrance, pledge or hypothecation thereof or interest in favor of any other person. Neither Seller has granted to any person other than Buyer (or to Seller under the Organizational Documents, all of which shall be waived as of the Closing Date) any options, rights of first offer, rights of first refusal or any other agreement of any kind to purchase or otherwise acquire all or any portion of its Membership Interests. Except for the Organizational Documents, Property Owner is not a party to, and no Seller is a party to, any voting agreement, voting trusts, proxies or any other agreements, instruments or understandings with respect to the voting of any of the Membership Interests, or any agreements with respect to the transferability of any of the Membership Interests. Subject only to the Redemption occurring, the Membership Interests represent all of the rights, titles and interests Property Owner. Subject only to the Redemption occurring, there are no subscriptions, warrants, options, conversion rights or other agreements of any kind to purchase or otherwise acquire or sell any membership or other ownership interest in Property Owner. Property Owner has no subsidiaries.

7.1.3The Organizational Documents (i) constitute all of the governing documents of Property Owner, and (ii) have not been amended or otherwise modified except as described on Schedule 5. Seller has delivered to Buyer on or prior to the date hereof true, correct and complete copies of the financial statements for Property Owner for the fiscal year ended December 31, 2011 and for the first quarter of the fiscal year 2012, which financial statements present all material assets and liabilities of Property Owner as of the dates thereof (the “Financial Statements"). The Financial Statements (including the notes thereto) have been prepared on a cash

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41893434 Hilliard Grand/Purchase and Sale Agreement

basis and present fairly, in all material respects, the financial condition of Property Owner for such periods. Property Owner has no material liabilities (including contingent or potential liabilities) and will have no material liabilities on the Closing Date not set forth on Schedule 6 attached hereto (the “Statement of Liabilities”) except for (i) liabilities reflected in the Financial Statements or (ii) commercially reasonable arm's length liabilities to third parties that have arisen after the date of the Financial Statements in the ordinary course of business. There has been no material adverse change in the financial condition of Property Owner as reflected in the Financial Statements since the date of the Financial Statements.

7.1.4All federal, state and other applicable tax returns required to be filed by or with respect to Property Owner have been filed and all taxes that are due and payable by Property Owner have been paid. No deficiencies for federal, state or other applicable taxes have been claimed or assessed in writing against Property Owner by any governmental authority. There are no pending or, to the knowledge of Seller, threatened audits, investigations or claims for or relating to any liability in respect of federal, state or other applicable taxes, and there are no matters under discussion between Property Owner, Seller or any affiliate of Seller and any governmental authorities with respect to federal, state or other applicable taxes that would reasonably be expected to result in an assessment of federal, state or other applicable taxes against Property Owner. Complete copies of all federal income tax schedules and reports relating to Property Owner and all written reports received by Seller or Property Owner from any applicable governmental authority relating to examinations thereof have been (or will be as provided herein) delivered to Buyer. Neither Seller, nor to its knowledge, any other party has taken any action, or failed to take any action, that would cause Property Owner to be taxed as a corporation for income tax purposes.

7.1.5There are no outstanding debts or liabilities between Property Owner and Seller or affiliates of Seller. Neither Seller nor any affiliate of Seller will have a contract, agreement or obligation to provide, or to cause to be provided, to Property Owner any products, services, equipment, facilities, or similar items after Closing, or any other agreement with Property Owner that will survive Closing.

7.1.6Property Owner is a limited liability company duly formed and validly existing under the laws of the State of Ohio and is in full force and effect under the laws of the State of Ohio. Property Owner has requisite power and authority to carry on the business it currently conducts and to own, market, sell, lease and use the Property.

7.1.7All of the Personal Property is described in Exhibit “C” attached hereto, which is a materially accurate and materially complete list of all tangible and intangible personal property owned by Property Owner relating to the ownership, management, operation, maintenance or repair of the Real Property. No tangible and intangible personal property relating to the ownership, management, operation, maintenance or repair of the Real Property is owned by Seller or any affiliate of Seller (other than Property Owner), other than intangible personal property owned by Seller or any affiliate of Seller (other than Property Owner) that does not relate exclusively to the Real Property and/or Property Owner but instead also relates to other property of Seller or such affiliate and the rights of SREG in the TIF Agreement. All of the Personal Property is located at the Real Property. Property Owner has good title to the Personal Property, free and clear of all

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liens, encumbrances, security interests and adverse claims of any kind or nature whatsoever, except for liens for taxes, assessments, reassessments and other charges of governmental authorities not yet due and payable, liens granted to Lender under the Loan Documents, and TIF Declaration (“Permitted Liens”).

7.1.8All 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. All of the Contracts are described in Schedule 2 attached hereto, which is an accurate and complete list of all presently effective contracts, agreements, warranties and guaranties of Property Owner relating to the advertising, promotion, design, construction, ownership, management, operation, maintenance or repair of the Real Property. All of the Approvals are described in Schedule 3 attached hereto, which is 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. Except for Permitted Liens, Property Owner 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. To Seller’s knowledge, all of the copies of the documents delivered to Buyer pursuant to Section 6.1 hereof are accurate and complete copies of all originals of the documents described in Section 6.1 hereof and are the documents that Seller and Property Owner rely upon in the normal course of Seller's and Property Owner's business with respect to Property Owner and the Real Property, respectively. With respect to any reports prepared by third parties delivered pursuant to Section 6.1, such reports have been provided in good faith but without any representation or warranty as to the accuracy thereof except as provided in the previous sentence and that Seller (without any investigation or inquiry) has no reason to believe such reports to be inaccurate or misleading in any material respect. With respect to any operating statements delivered to Buyer pursuant to Section 6.1, such operating statements are those that Seller and/or Property Owner relies upon for internal administration and accounting purposes and Seller has no reason to be them to be inaccurate or misleading in any material respect; provided, however, that Seller does not represent or warrant to Buyer that Buyer will be able to, or should be able to, operate the Property with similar results to those set forth in said operating statements.

7.1.9Except as disclosed to Buyer, to the knowledge of Seller, the Leases are in full force and effect and the full current rent is accruing thereunder. 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 set forth in the rent roll delivered to Buyer. No tenant under the Leases is entitled to interest on any security deposit. The tenants, to Seller’s knowledge, have accepted possession of their respective premises under the Leases and all improvements and construction required to be performed by the landlord under the Leases have been completed in all material respects. Except as set forth on the rent roll delivered to Buyer, to the knowledge of Seller, there is no existing breach or default by the landlord or by any tenant under the Leases and, to Seller’s knowledge, 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. To Seller’s knowledge, no event has occurred or condition exists which, with or without notice or the passage of time, or both, would

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constitute a breach or a default by the landlord or by any tenant under the Leases. To Seller’s knowledge, Seller has received no written notice from any tenant under the Leases claiming any breach or default by Seller under any of the Leases. To the knowledge of Seller, no money is owed to any tenant for improvements or otherwise under the Leases (other than security deposits that may need to be returned to tenants) and no improvement, moving, relocation or other payment or credit of any kind is presently owed to any tenant under the Leases or is payable in the future under the Leases as such Leases are in effect as of the date hereof and on the Closing Date. There are no leasing commissions or other commissions, fees or compensation presently owed with respect to any of the Leases or payable in the future under the Leases as such Leases are in effect as of the date hereof and on the Closing Date. Except for Permitted Liens, 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. To Seller’s knowledge, the information contained in the rent roll attached hereto as Schedule 4 is true and complete in all material respects.

7.1.10To Seller’s knowledge, Seller has no reason to believe that the roof, foundation and other structural elements of the improvements, and the elevator, mechanical, electrical and life safety systems of the improvements, are not in good working order and repair (subject to normal wear and tear). To Seller’s knowledge, the Approvals have been duly and validly issued, are in full force and effect, and 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 and/or Property have no reason to believe that Property Owner has not fully performed, satisfied and discharged all of the obligations, requirements and conditions imposed on the Real Property by the Approvals.

7.1.11Neither Seller nor Property Owner has received any written notice of any kind from any insurance broker, agent or underwriter that any noninsurable condition exists in, on or about the Real Property or any part thereof. Neither Seller nor Property Owner has received any written notice that the Real Property is in violation of any applicable building, earthquake, zoning, land use, environmental, antipollution, health, fire, safety, access and accommodations for the physically handicapped, subdivision, energy and resource conservation and similar laws, statutes, rules, regulations and ordinances or any covenants, conditions and restrictions applicable to the Real Property.

7.1.12To Seller’s knowledge, there are no Hazardous Substances present in, on or under the Real Property or any nearby real property which could migrate in violation of applicable Environmental Laws to the Real Property, and to Seller’s knowledge, there has been no Release of any Hazardous Substances in, on or under the Real Property that requires cleanup or remediation by Property Owner pursuant to applicable Environmental Laws. Neither Seller nor Property Owner has ever used the Real Property or any part thereof, or to Seller’s knowledge has ever 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 in violation of applicable Environmental Laws. To Seller’s knowledge, no underground storage tanks of any kind are located at 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, and neither Seller, Property Owner, nor any person

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using or occupying the Real Property or any part thereof is violating any Environmental Laws. To Seller’s knowledge, Property Owner 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. To Seller’s knowledge, Seller is in compliance with all such permits, licenses and approvals, and to Seller’s knowledge, all such permits, licenses and approvals are in full force and effect. No written claim, demand, action or proceeding of any kind relating to any past or present 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 to Seller’s knowledge is being threatened or contemplated by any person. Seller shall not be deemed to have breached the foregoing representations and warranties with respect to the safe and lawful use and storage by Seller, any tenant or any other person 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 Property, and (iii) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Environmental Laws (collectively, the "Lawful Substances").

7.1.13There is no litigation, arbitration or other legal or administrative suit, action, proceeding or investigation of any kind pending (including, without limitation, involving the federal Department of Housing and Urban Development) or to Seller’s knowledge threatened or being contemplated against or involving Seller or Property Owner relating to the Membership Interests, the Property or any part thereof. To Seller's knowledge, there are no outstanding Residual Claims. To Seller’s knowledge, there is no general plan, land use or zoning action or proceeding of any kind, or general or special assessment action or proceeding of any kind, or condemnation or eminent domain action or proceeding of any kind pending or threatened or being contemplated with respect to the Membership Interests, the Real Property or any part thereof. There is no legal or administrative action or proceeding pending to contest or appeal the amount of real property taxes or assessments levied against the Real Property or any part thereof or the assessed value of the Real Property or any part thereof for real property tax purposes. To Seller’s knowledge, no supplemental real property taxes have been or will be levied against or assessed with respect to the Real Property or any part thereof based on any of the following that have occurred before the date of this Agreement: (x) any change in ownership, (y) any new construction, or (z) any other event or occurrence relating to the Real Property, except any such supplemental real property taxes as have been paid in full and discharged.

7.1.14To Seller’s knowledge, all water, sewer, gas, electric, steam, telephone and drainage facilities and all other utilities required by law or reasonably necessary or proper and usual for the full operation, use and occupancy of the Real Property are installed to the boundary lines of the Real Property, are connected with valid permits, if required, and are adequate to service the Real Property and to allow compliance with all applicable laws, and the cost of installation and connection of all such utilities to the Property has been fully paid.

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7.1.15Seller is not “foreign person” as defined in Section 1445 of the Internal Revenue Code of 1986, as amended, and the Income Tax Regulations thereunder.

7.1.16No withholding of tax or reporting will be required with respect to the sale of the Membership Interests by Seller.

7.1.17Neither Seller nor Property Owner has made a general assignment for the benefit of its creditors, or has admitted in writing its inability to pay its debts as they become due, nor has Seller or Property Owner filed, nor does it contemplate the filing of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or any other proceeding for the relief of debts in general, nor has any such proceeding been instituted by or against Seller or Property Owner.

7.1.18Except for Hendricks & Partners, 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 Membership Interests to Buyer or this Agreement.

7.1.19There are no loans with liens affecting the Membership Interests and/or the Property other than the Loan. The Loan is currently in good standing and not in default.

7.1.20Neither Seller nor Property Owner holds any “plan assets” within the meaning of 29 C.F.R. Section 2510.3-101 (as modified by Section 3(42) of ERISA), of any “employee benefit plan” as defined in Section 3(3) of ERISA. As used herein “ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as amended.

7.1.21Neither Seller nor Property Owner is any of the following: (i) a person or entity that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing (effective September 24, 2001) (herein called the “Executive Order”); (ii)a person or entity owned or controlled by, or acting for or on behalf of any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (iii)a person or entity that is named as a “specifically designated national” or “blocked person” on the most current list published by the U.S. Treasury Department’s Office of Foreign Assets Control (herein called “OFAC”) at its official website, http://www.treas.gov/offices/enforcement/ofac; (iv)a person or entity that is otherwise the target of any economic sanctions program currently administered by OFAC; or (v)a person or entity that is affiliated with any person or entity identified in the foregoing clauses (i), (ii), (iii), or (iv).

7.1.22Property Owner owns no real property or personal property except for the Property and the Parkland and Road Extension. Seller owns no real or personal property located on or used in connection with the Property.

7.1.23To Seller’s knowledge, all of the Seller Deliveries provided to Buyer are true and complete copies of such documents.

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7.1.24All employees of Property Owner or Property Owner's property manager employed at or in connection with the Property have been paid their respective salaries and any fringe benefits (including vacation and, if payable, sick leave) accruing through the date hereof and will be paid in full as of the Closing Date.

7.1.25Schedule 7 is a true and correct list of all of the Loan Documents, true and correct copies of which have been delivered by Seller to Buyer. No notice of default has been received by Seller or Property Owner with respect to the Loan, and neither Seller nor Property Owner is in default of any of the terms of any of the Loan Documents, all of which are in full force and effect and unmodified. As of October 22, 2012, Property Owner has made all principal and interest payments currently due under the Loan.

7.2Buyer’s Representations and Warranties. Buyer represents and warrants to Seller as follows:

7.2.3Buyer is a corporation, duly formed, validly existing, and in good standing under the laws of the State of California.

7.2.4Buyer has all requisite power and authority to execute and deliver this Agreement and to carry out its obligations hereunder and the transactions contemplated 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. The execution and delivery of this Agreement by Buyer and the consummation by Buyer of the transactions contemplated hereby will not violate any judgment, order, injunction, decree, regulation or ruling of any court or applicable governmental authority or conflict with, result in a breach of, or constitute a default under the organizational documents of Buyer or other material agreement or instrument to which Buyer is a party or by which it is bound.

7.2.5Except for Hendricks & Partners, 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 Membership Interests or this Agreement.

7.2.6Buyer is not any of the following: (i) a person or entity that is listed in the annex to, or is otherwise subject to the provisions of the Executive Order; (ii)a person or entity owned or controlled by, or acting for or on behalf of any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (iii)a person or entity that is named as a “specifically designated national” or “blocked person” on the most current list published by OFAC at its official website, http://www.treas.gov/offices/enforcement/ofac; (iv)a person or entity that is otherwise the target of any economic sanctions program currently administered by OFAC; or (v)a person or entity that is affiliated with any person or entity identified in the foregoing clauses (i), (ii), (iii), or (iv).

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7.COVENANTS.

8.1Seller. Seller covenants and agrees with Buyer as follows:

8.1.7Between the date of this Agreement and the Closing Date, neither Seller nor Property Owner shall 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 not be unreasonably withheld by Buyer; provided, however, that any Leases which are either executed or renewed on a month-to-month basis or which are consistent with the current leasing practices of Property Owner, including, without limitation, current rental rates, shall be deemed to be automatically approved by Buyer, and provided further that any Contracts that are not terminable upon notice of thirty (30) days or less may be disapproved by Buyer in its sole and absolute discretion. Further, Buyer shall be deemed to have approved a proposed Lease if Buyer has not made an objection to such contract within two (2) Business Days of a receipt of a written request for approval. Further, Property Owner, in emergency situations or in situations that are critical to the operation of the Property, may enter into Contracts for goods and services without the approval of Buyer, provided that such Contracts must be terminable upon no more than thirty (30) days notice without payment of any penalty or fee. Between the date of this Agreement and the Closing Date, neither Seller nor Property Owner shall consent to any assignment or sublease requested by any tenant under any of the Leases without the prior approval of Buyer, which approval shall not be unreasonably withheld or delayed. Between the date of this Agreement and the Closing Date, Property Owner shall (i) manage, operate, maintain and repair the Real Property and the Personal Property in the ordinary course of business in accordance with Property Owner's existing practices (including, without limitation, maintenance of substantially the same advertising and marketing programs for the Real Property in effect as of the date of this Agreement), (ii) comply with the Approvals and all covenants, conditions, restrictions, laws, statutes, rules, regulations and ordinances applicable to the Real Property or the Personal Property consistent with past practice, (iii) consistent with past practice, keep the Leases, the Contracts and the Approvals in force, (iv) promptly give Buyer copies of all written notices received by Seller and/or Property Owner 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 Membership Interests, the Real Property or the Personal Property, and (v) consistent with past practice, perform when due all of Property Owner's obligations under the Leases, the Contracts and the Approvals in accordance with the Leases, the Contracts and the Approvals and all applicable laws. Between the date of this Agreement and the Closing Date, except to the extent consistent with past practice, neither Seller nor Property Owner shall (1) create or agree to any easements, liens, mortgages, encumbrances or other interests that would affect the Membership Interests or the Property or Seller’s ability to comply with this Agreement; (2) 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; (3) fail to pay when due and payable all taxes and other public charges assessed against the Membership Interests, the Property, Property Owner or, with respect to Property Owner only, Seller; (4) fail to keep current and free from monetary or material non-monetary default any and all secured financing against the Membership Interests or the Property; or (5) fail to pay in a timely fashion all proper bills for labor or services for work performed for or on behalf of Seller or Property Owner with respect to the

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Membership Interests or the Property. Between the date of this Agreement and the Closing Date, Seller and/or Property Owner shall keep in force property insurance covering all buildings, structures, improvements, machinery, fixtures and equipment included in the Real Property insuring against all risks of physical loss or damage, subject to standard exclusions, in an amount equal to the actual replacement cost (without deduction for depreciation) of such buildings, structures, improvements, machinery, fixtures and equipment.

8.1.8If, after the date of this Agreement but prior to the Closing Date, Seller or Property Owner obtains any information indicating that a Release occurred in, on or under the Real Property (or any nearby real property which could migrate to the Real Property) or that any violation of any Environmental Laws occurred at the Real Property, Seller shall give written notice thereof to Buyer with a reasonably detailed description of the event, occurrence or condition in question. Seller shall immediately furnish to Buyer copies of all written communications received, after the date of this Agreement but prior to the Closing Date, by Seller or Property Owner from any person (including notices, complaints, claims or citations that any Release or threatened Release of any Hazardous Substances or any violation of any Environmental Laws has actually or allegedly occurred) or given by Seller or Property Owner, after the date of this Agreement but prior to the Closing Date, to any person concerning any past or present Release or threatened Release of any Hazardous Substances in, on or under the Real Property (or any nearby real property which could migrate to the Real Property) or any past or present violation of any Environmental Laws at the Real Property. Seller shall not be deemed to have breached the foregoing covenants with respect to Lawful Substances.

8.1.9Seller shall use commercially reasonable efforts, in good faith and with diligence, to cause all of the representations and warranties made by Seller in Section 7.1 hereof to be true and correct on and as of the Closing Date. Seller will have acquired the 1% membership interest in Property Owner owned by Pizzuti Construction Services LLC as of the date of this Agreement so that Seller will thereafter own 100% of the Membership Interests in Property Owner (collectively, the “Redemption”).

8.1.10Seller shall promptly notify Buyer in writing of any litigation, arbitration, condemnation or administrative hearing before any court or governmental agency concerning Property Owner, the Membership Interests or the Property which is instituted after the date hereof, other than eviction or unlawful detainer actions that will be completed (or are expected to be completed) prior to Closing.

8.1.11Seller 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, (i) that may be suffered or incurred by Buyer if any representation or warranty made by Seller in Section 7.1 hereof 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 in any material respect, (ii) that may be suffered or incurred by Buyer or Property Owner as a result of Seller’s breach of the covenants contained herein in any material respect, (iii) that may be suffered or incurred by Buyer or Property Owner (but in each and every instance with respect to this subsection (iii), only to the extent paid or payable to a third party unaffiliated with Buyer)

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as a result of (a) fraud or misappropriation or misapplication of funds of Property Owner committed by Seller or any of its affiliates, (b) entering into, terminating or otherwise modifying any material contract to which Property Owner is a party by Seller or any of its affiliates in violation of the Organizational Documents, (c) theft by Seller or any of its affiliates, (d) gross negligence of Seller or any of its affiliates, (e) any other intentional misconduct, breach of a fiduciary duty or illegal acts not set forth above, or (f) any Residual Claims, and (iv) 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 Property Owner (or any event by Seller or Property Owner or condition which, after notice or the passage of time, or both, would constitute a breach, default or violation by Seller or Property Owner) under the Leases, the Contracts or the Approvals that occurs before the Closing Date, or any condition, event or circumstance relating to the Membership Interests or the Real Property that existed or occurred before the Closing Date, or any personal injury or property damage occurring in, on or about the Real Property before the Closing Date, except to the extent any such breach, default or violation under this subsection (iv) relates to the physical or environmental condition of the Property except to the extent such arising under this Agreement as a result of a breach of a representation or warranty by Seller in any material respect, a material default by Seller or an indemnification obligation of Seller, each as and to the extent expressly provided in this Agreement. Any claim of Buyer in connection with said indemnities shall be made within one (1) year after the Closing or shall automatically be null, void and of no force or effect whatsoever, and Buyer’s remedies for any such claim shall be limited to recovery of damages not to exceed THREE HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($350,000.00); provided, however, that there shall be no such monetary limitation on Buyer’s damages in connection with any third party personal injury claims and further provided that there shall be no right to bring an action against Seller for such claim until the aggregate amount of all liability and losses arising out of such breach, default or violation exceeds FIVE THOUSAND AND 00/100 DOLLARS ($5,000.00). Seller shall have no liability with respect to any of Seller’s representations, warranties and covenants herein if, prior to the Closing, Buyer has actual knowledge of any breach of a representation, warranty or covenant of Seller herein, or Buyer was provided with written notice from Seller of such breach in accordance with Section 17 of this Agreement, and Buyer nevertheless consummates the transaction contemplated by this Agreement.

8.1.12Between the date of this Agreement and the Closing Date, except as specifically contemplated by this Agreement, neither Seller nor Property Owner shall in any manner sell, convey, assign, transfer, encumber or otherwise dispose of the Membership Interests, the Property or any part thereof or interest therein.

8.1.13Between the date of this Agreement and the Closing Date, and other than as expressly approved or consented to by Buyer, Property Owner will not incur any obligations, or liabilities (contingent or non-contingent) for any long-term leases or unusual forward or long-term commitments.

8.1.14Seller shall pay all commissions, fees and expenses due to Hendricks & Partners in respect of the sale of the Membership Interests to Buyer or this Agreement. Seller hereby agrees to indemnify and hold Buyer harmless from and against any and all claims for

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41893434 Hilliard Grand/Purchase and Sale Agreement

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. The indemnification obligations of Seller set forth in this Section 8.1.8 shall survive the Closing or the termination of this Agreement for any reason for a period of one (1) year.

8.1.15During the period commencing on the Closing Date and ending on the date that is one (1) year after the Closing Date, Seller shall remain obligated for (i) any post-closing prorations under Section 9 below and (ii) any indemnity claim to Buyer under this Agreement; provided, 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 date such claim has been finally resolved as agreed to by Buyer and Seller or as determined by a court of competent jurisdiction.

8.1.16Seller and/or Property Owner shall make all regularly scheduled principal and interest payments under the Loan Documents and comply with all of the other terms of the Loan Documents so as not to be in default with respect to the Loan.

8.2Buyer. Buyer covenants and agrees with Seller as follows:

8.2.1All representations and warranties made by Buyer in Section 7.2 hereof shall survive the Closing for a period of one (1) year. 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 7.2 hereof 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 7.2 hereof 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.

8.2.2Subject to Seller’s representations, warranties and covenants set forth in Section 7.1 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 or the Contracts arising or accruing on or after the Closing Date and during Buyer’s ownership of the Membership Interests 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 or the Contracts that occurs on or after the Closing Date and during Buyer’s ownership of the Membership Interests except to the extent that such claims, demands, liabilities, losses, damages, costs and expenses arise out of or relate to the physical or environmental condition of the Property.

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41893434 Hilliard Grand/Purchase and Sale Agreement

8.ADJUSTMENTS AND PRORATIONS.

9.1Generally. All taxes (including, without limitation, real estate taxes and personal property taxes), collected rents, laundry income, parking income, furniture rental, charges for utilities (including water, sewer, and fuel oil) and for utility services, maintenance services, maintenance and service contracts, all operating costs and expenses, 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 pursuant to this Section 9.1 as of 11:59 pm the day prior to the Date of Closing. If the amount of said taxes, assessments, rents, income, costs, charges, etc. is not known at such time, they shall be apportioned on the basis of the amounts for the preceding year, with a reapportionment as soon as reasonably practical after the new amounts can be ascertained (which is expected to be in December 2012 upon receipt of the regularly scheduled tax bill, which tax bill shall be deemed to be final notwithstanding any appeal thereof by Buyer); provided, however, (i) the prorated amount for Seller's portion of the real estate taxes paid at Closing shall be Five Hundred Thousand and no/100 Dollars ($500,000) if the December 2012 tax bill has not been received, and shall be re-apportioned based upon receipt of said December 2012 tax bill, with Buyer paying to Seller, or Seller paying to Buyer, as applicable, the difference between said $500,000 and the actual amount that would have been paid if said December 2012 tax bill had been received prior to the Closing Date, (ii) to the extent that the Property is re-assessed for real estate tax purposes solely as a result of the acquisition by Buyer of the Membership Interests as provided in this Agreement, then Buyer shall be responsible for 100% of such re-assessment even if such re-assessment increased the taxes payable with respect to periods prior to the Closing Date, and (iii) if the Closing Date occurs after December 31, 2012, Seller’s obligation for the prorated taxes for the period from January 1, 2013 until the day prior to the Date of Closing will be calculated using the tax rates in effect for tax year 2012 at a valuation equal to the Seller’s final cost of construction with such proration being final as of Closing. For the avoidance of doubt, to the extent that any of the documents entered into in connection with the acquisition of the Membership Interests contemplated by this Agreement (or the terms and conditions of the acquisition of the Membership Interests contemplated by this Agreement) are used in connection with, or to support, any re-assessment of the Property, such re-assessment will be deemed to be solely as a result of the acquisition by Buyer of the Membership Interests as contemplated in this Agreement. Notwithstanding anything herein to the contrary, Seller will have the right to appeal or contest any assessment or re-assessment of the Property to the extent such assessment or re-assessment of the Property relates to any period prior to the Date of Closing at Seller's sole cost, and Buyer will cause the Property Owner to take any reasonable action, at Seller's sole cost, as may be reasonably necessary in order for Seller to appeal or contest such assessment or re-assessment. On the Date of Closing, Seller shall deliver to Buyer all inventories of supplies on hand at the Property owned by Seller or Property Owner, if any, at no additional cost to Buyer. All cash that Property Owner has on-hand as of 11:59 pm the day prior to the Closing Date will be paid to Seller at the Closing. Seller’s insurance policies will not be assigned to Buyer; it being understood that Seller will have no responsibility for maintaining any insurance policies with respect to the Property and Property Owner for any period from and after the Closing.

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41893434 Hilliard Grand/Purchase and Sale Agreement

9.2Rental Income. Rental income from the Property shall be prorated as of 11:59 pm the day prior to the Closing Date. Non-delinquent rents shall be prorated as of 11:59 pm the day prior to the Closing Date. Rents delinquent as of such time, but collected later, shall be prorated as of 11:59 pm the day prior to 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 or Property Owner's operation of the Property. With respect to security deposits, if any, that have not been applied to defaults pursuant to the terms of the Leases, Buyer shall receive credit therefor at Closing. Any leasing commissions with respect to the Leases shall be the sole responsibility of Seller, and shall be paid or discharged fully at or prior to Closing.

9.3Proration Period. If any of the items subject to proration hereunder cannot be prorated 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 item shall be reapportioned and such errors and omissions corrected as soon as practicable after the Close of Escrow and the proper party reimbursed.

9.4Rent Ready. Not more than forty-eight (48) hours prior to the Closing Date, a representative of Buyer and a representative of Seller shall conduct an onsite walk-through of the then unoccupied rental units on the Property to determine whether any of such unoccupied rental units are in “rent ready” condition. With respect to any rental unit which is vacated on or before five (5) days prior to Closing, 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 in the amount of One Thousand Dollars ($1,000.00) per such unoccupied rental unit. With respect to any rental unit that is vacated later than five (5) days prior to Closing, Seller shall have no responsibility or liability to put such unoccupied rental unit into a “rent ready” condition, and Seller shall not have to compensate Buyer if such unit is not “rent ready” as of the Closing Date. “Rent ready” condition shall mean the Property Owner's current practice of placing units in “rent ready” condition.

9.CLOSING DOCUMENTS.

10.1Seller’s Deliveries. Conditioned upon performance by Buyer hereunder, Seller shall execute and/or deliver, as applicable, to Escrow Holder or Buyer prior to Closing the following documents other deliveries:

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41893434 Hilliard Grand/Purchase and Sale Agreement

10.1.1Assignment. An assignment and assumption of Membership Interests executed by Seller and Buyer in the form of attached Exhibit “F” (the “Assignment”);

10.1.2Intentionally omitted;

10.1.3Intentionally omitted;

10.1.4Non-Foreign Certificates. Certifications that Seller is not a non-resident aliens (a foreign corporation, partnership, trust, or estate as defined in the Internal Revenue Code and Treasury Regulations promulgated thereunder), each in the form of attached Exhibit “G”; and

10.1.5Tenant Notices. Notices to the tenants under all Leases in the form of attached Exhibit “H”.

10.1.6Affidavit(s). An affidavit(s) as to construction, debts, liens and parties in possession in the form customarily used by Title Company, certified to Buyer and Title Company, identifying no construction, debts, liens or parties in possession (other than residential tenants disclosed to Buyer) that may affect the Membership Interests or the Property after the Closing Date.

10.1.7Possession. Sole possession of the Membership Interests and the Property, subject to rights of tenants in possession as tenants only under the Leases, and of all books and records of Property Owner and any other property and assets of Property Owner in the possession or under the control of Seller.

10.1.8Financial Statements. Financial statements for the period between January 1, 2012 and the most recent month ending at least 30 days prior to Closing, prepared in a manner substantially consistent with the preparation of the Financial Statements.

10.1.9Waiver of Rights Under Organizational Documents. If requested by Buyer in writing, an executed waiver by Seller of any options, rights of offer, rights of first refusal or any other right of any kind to purchase or otherwise acquire all or any portion of the Membership Interests that is contained with the Organizational Documents.

10.1.10Updated Rent Roll. A current rent roll for the Property in the form of the rent roll attached as Schedule 4.

10.1.11Release and Assumption Agreement. Deliver a Release and Assumption Agreement (“Release and Assumption Agreement”) and/or similar and related agreement(s), to be signed by Property Owner and Lender, relating to the Loan Documents in such form as the Lender may require; provided that such form effects a release of each Seller and any Affiliates of Seller other than Property Owner from all guarantees, indemnitees and other obligations relating to the Loan Documents first arising or accruing from and after the Closing Date; and

10.1.12Outstanding Balance; No Defaults. If not contained in the Release and Assumption Agreement, deliver confirmation from the Lender as to the outstanding balance of the Loan and that no defaults are continuing thereunder.

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41893434 Hilliard Grand/Purchase and Sale Agreement

10.2Buyer’s Deliveries. Conditioned upon performance by Seller hereunder, Buyer shall execute and deliver to Escrow Holder prior to Closing the Assignment, the Release and Assumption Agreement and all other documents reasonably requested by Lender to consummate the Loan Assumption.

10.3Other 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 and customary 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 or Title Company may reasonably request, and such conveyancing or transfer tax forms or returns, if any, as are required to be delivered by Seller or Buyer under applicable state or local law in connection with the conveyance of the Membership Interests. Each party shall deliver any additional documents that the other party or Escrow Holder or Title Company may reasonably require for the proper consummation of the transaction contemplated by this Agreement; provided, however, 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.

10.4Closing Documents. All documents to be delivered to Escrow Holder pursuant to this Section 10 shall hereinafter be referred to as “Closing Documents”.

10.COSTS. Seller shall pay the cost of the Title Commitment and any updates thereto, the cost of a standard ALTA Owner’s Policy of Title Insurance (the “Title Policy”), the costs of any endorsements to the Title Policy to the extent that such endorsements are necessary to cure any Title Objections that Seller agreed (or was required under the penultimate sentence of Section 6.3.1) to cure, and the cost of preparation of Seller’s Closing Documents. Buyer shall pay all real estate transfer taxes and documentary stamps (if any), the cost for any extended ALTA title insurance coverage, if desired, the cost of any endorsements to the title policy (if requested by Buyer), the cost of preparation of Buyer’s Closing Documents, and the cost of any updated survey, if desired. Seller and Buyer shall each pay one-half (1/2) of (i) Escrow Holder’s escrow fee (excluding charges assessed by Escrow Holder or Title Company for special services, which shall be paid by the party requesting or using such special services), and (ii) other closing costs. Each party shall pay its own attorney’s fees.

11.CASUALTY OR CONDEMNATION. During the period from the Opening of Escrow through Closing, all risk of loss from fire or other casualty or condemnation shall be borne by Seller. If, before the Closing Date, (i) the improvements on the Real Property are materially damaged by any casualty, as reasonably determined by Buyer, or (ii) proceedings are commenced for the taking by exercise of the power of eminent domain of all or a material part of the Property, as reasonably determined by Buyer, Buyer shall have the right, by giving notice to Seller within twenty (20) days after Seller gives written notice of the casualty or condemnation to Buyer, to terminate this Agreement, in which event this Agreement shall automatically terminate and the Deposit shall be returned to Buyer. If, before the Closing Date, (a) the improvements on the Real Property are damaged by any casualty, but not in a material manner, (b) proceedings are commenced

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41893434 Hilliard Grand/Purchase and Sale Agreement

for the taking by exercise of the power of eminent domain of less than such a material part of the Property, or (c) Buyer has the right to terminate this Agreement pursuant to the preceding sentence but Buyer does not exercise such right, then this Agreement shall remain in full force and effect and, on the Closing Date, one of the following shall occur, as applicable: (1) there shall be a credit against the Purchase Price due hereunder equal to the amount of any insurance proceeds or condemnation awards collected by Seller (or Property Owner if collected prior to Closing) as a result of any such damage or destruction or condemnation, plus the amount of any insurance deductible, less any sums reasonably expended by Seller (or Property Owner if expended prior to Closing) toward the restoration or repair of the Property, or (2) to the extent not theretofore received, the insurance proceeds or the condemnation award payable on account of the taking shall be assigned and transferred to Buyer and there shall be a credit against the Purchase Price due hereunder equal to the amount of any insurance deductible. Seller shall give notice to Buyer immediately after the occurrence of any damage to the improvements on the Real Property by any casualty or the commencement of any eminent domain proceedings. Buyer shall have a period of twenty (20) days after Seller has given the notice to Buyer required by this Section 12 to make the determination as to whether to terminate this Agreement. If necessary, the Closing Date shall be postponed (but not beyond the Outside Closing Date) until Seller has given the notice to Buyer required by this Section 12 and the period of twenty (20) days described in this Section 12 has expired. If necessary or appropriate for Buyer to evaluate its options or enforce its rights under this Section 12 following any damage to the Property, Seller shall promptly provide to Buyer on request a copy of Seller's or Property Owner's property insurance policies (or other applicable insurance policies) with respect to the Property.

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

13.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 Membership Interests at the Closing in accordance with this Agreement to any person or entity designated by Buyer in such notice; provided, however, Buyer will not be relieved of its obligations hereunder upon such assignment.

14.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.

15.GOVERNING LAW. This Agreement shall be construed under the laws of the State of Ohio (without regard to the principles thereof governing conflicts of laws).

16.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

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41893434 Hilliard Grand/Purchase and Sale Agreement

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:	Mr. Gary L. Schottenstein c/o Schottenstein Real Estate Group 2 Easton Oval Columbus, OH 43219 Attention: Mr. Gary L. Schottenstein Fax No.: 614-418-8920 Telephone: 614-418-8910 And Mr. Brett Kaufman c/o Kaufman Development 30 Warren Street Columbus, OH 43215 Fax No.: 614-299-9201 Telephone: 614-299-9200
With Copy To: To Buyer:	Lape Mansfield & Nakasian LLC 9980 Brewster Lane, Suite 150 Powell, OH 43065 Attn: William E. Nakasian, Esq. Fax No.: 614-467-3704 Telephone: 614-763-2314 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 Copy To:	Katten Muchin Rosenman LLP 2900 K Street, NW North Tower – Suite 200 Washington, DC 20007 Attn; Virginia A. Davis, Esq. Fax No.: (202) 339-8244 Telephone No.: (202) 625-3602

17.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.

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41893434 Hilliard Grand/Purchase and Sale Agreement

18.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.

19.AUTHORITY. The individual(s) executing this Agreement on behalf of each party hereto hereby represent and warrant that he/she has the capacity, with full power and authority, to bind such party to the terms and provisions of this Agreement.

20.RECORD ACCESS AND RETENTION.

21.1. 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, Property Owner 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. 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 Membership Interests and/or the Property, including (without limitation) income and balance sheet data for the Property, whether required before or after Closing. Without limiting the foregoing, (i) Buyer or its designated independent or other auditor may audit Property Owner's operating statements of the Property or Seller's statements of the Membership Interests, 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 21.1 shall be an on-going condition to Buyer’s obligation to close Escrow, and Seller shall maintain its records for use under this Section 21.1 for a period of not less than one (1) year after the Closing Date. The provisions of this Section shall survive Closing.

21.2    As requested from time to time by Buyer in writing during the Due Diligence Period, in addition to the items delivered pursuant to Section 6.1 (but subject to any restrictions contained in Section 6.1), Seller promptly shall provide to Buyer access to or copies of all such requested documents and information in the possession of Seller, Property Owner or its property manager(s) respecting the Membership Interests and/or the physical condition, operation, leasing, management, maintenance or repair of the Real Property, and the right at the cost and expense of Buyer to inspect the same and make copies thereof, it being acknowledged that such rights of access and inspection and right to receive or make copies is given without any express or implied representation or warranty made by Seller in any respect except as otherwise provided in Section 7 of this Agreement.

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41893434 Hilliard Grand/Purchase and Sale Agreement

Nothing in this Section 21 shall obligate Seller or Property Owner (or their accountants) to create, produce or otherwise obtain any information that does not currently exist.

21.CONTRACT CONSIDERATION. 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 obligation to deliver the Initial Deposit to Escrow Holder, constitute sufficient consideration for the other party’s execution, delivery and obligations under this Agreement, including without limitation, Buyer’s exclusive right to inspect and purchase the Membership Interests pursuant to this Agreement and all contingencies and conditions of Closing for the benefit of Buyer set forth in this Agreement.

22.JURY TRIAL WAIVER. EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH SELLER AND/OR BUYER MAY BE PARTIES ARISING OUT OF, IN CONNECTION WITH, OR IN ANY WAY PERTAINING TO, THIS AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE PARTIES AND EACH HEREBY REPRESENTS AND WARRANTS TO THE OTHER THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH PARTY FURTHER REPRESENTS AND WARRANTS TO THE OTHER THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OF ITS OWN FREE WILL, AND HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. THE PROVISIONS OF THIS SECTION SHALL SURVIVE CLOSING OR THE TERMINATION OF THIS AGREEMENT.

23.COUNSEL. EACH PARTY HERETO WARRANTS AND REPRESENTS THAT EACH PARTY HAS BEEN AFFORDED THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL OF ITS CHOICE IN CONNECTION WITH THE EXECUTION OF THIS AGREEMENT AND HAS HAD AMPLE OPPORTUNITY TO READ, REVIEW, AND UNDERSTAND THE PROVISIONS OF THIS AGREEMENT.

24.EQUAL PARTICIPATION. SELLER AND BUYER HAVE PARTICIPATED EQUALLY IN THE PREPARATION OF THIS AGREEMENT, AND, THEREFORE, THIS AGREEMENT AND EACH PROVISION THEREOF SHALL NOT BE CONSTRUED IN FAVOR OF OR AGAINST ANY PARTY TO THIS AGREEMENT BY REASON OF ONE PARTY’S BEING DEEMED TO PREPARED THIS AGREEMENT OR IMPOSED SUCH PROVISION.

25.IRS SECTION 1031 “LIKE-KIND EXCHANGE”.        Should Seller intend to complete a like-kind exchange in accordance with Section 1031 of the Internal Revenue Code (“like-kind exchange”), Seller may enter into a like-kind exchange agreement with a third party exchange accommodation titleholder or qualified intermediary and, in connection therewith, assign its rights under this Agreement to said third party provided that said Agreement shall be binding upon the assignee in all respects as to the obligations to the Buyer.  Buyer hereby agrees to reasonably cooperate with Seller in the like-kind exchange without any cost, expense or liability to Buyer and without reduction or alteration of the rights of Buyer under this Agreement and with respect to Seller; provided, however that Buyer shall not be required to undertake any liability or obligation

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41893434 Hilliard Grand/Purchase and Sale Agreement

and provided further that such like-kind exchange does not extend the Closing Date or be a condition to Closing.  As part of such like-kind exchange, Seller shall convey the Membership Interests directly to Buyer and Buyer shall not be obligated to acquire any other property or interests as part of such like-kind exchange.  Seller shall indemnify and hold Buyer harmless and defend Buyer from any and all claims, demands, causes of action, liabilities, losses, costs, damages and expenses (including reasonable attorneys' fees and expenses and court costs) of any kind and nature in connection with Buyer’s cooperation with Seller to accomplish the like-kind exchange for benefit of Seller.  Nothing herein shall release Seller of any of the obligations or liabilities under this Agreement.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

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41893434 Hilliard Grand/Purchase and Sale Agreement

IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed the day and year first above written.

SELLER:

/s/ Gary L. Schottenstein

Gary L. Schottenstein, an individual

/s/ Brett Kaufman

Brett Kaufman, an individual

BUYER:

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

By:	/s/ Ana Marie del Rio
Name:	Ana Marie del Rio
Its:	Vice President and Secretary

41893434 Hilliard Grand/Purchase and Sale Agreement

THE UNDERSIGNED HEREBY ACCEPTS THE FOREGOING PURCHASE AND SALE AGREEMENT AS OF NOVEMBER 2, 2012, AND AGREES TO ACT AS ESCROW HOLDER IN ACCORDANCE THEREWITH.

HUMMEL TITLE AGENCY, INC.

By:	/s/ Murray Davis
	Escrow Officer

EXHIBIT “A”

Description of Real Property

EXHIBIT “A”

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41893434 Hilliard Grand/Purchase and Sale Agreement

EXHIBIT “B”

Description of Parkland and Road Extension

EXHIBIT “B”

41893434 Hilliard Grand/Purchase and Sale Agreement

EXHIBIT “C”

Personal Property Description

See Attached

EXHIBIT “C”

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41893434 Hilliard Grand/Purchase and Sale Agreement

EXHIBIT “D”

TIF Declaration

EXHIBIT “D”

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41893434 Hilliard Grand/Purchase and Sale Agreement

EXHIBIT “E”

Due Diligence Documents

(it being understood and agreed that neither Seller nor Property Owner shall have any obligation

to create, produce or otherwise obtain any information that does not currently exist or is not in their possession or control of, or are reasonably available to Seller or Property Owner)

	CONSTRUCTION / REHABILITATION	SELLER TO INDICATE IF DOES NOT EXIST OR LIMITATIONS
1	Plans & Specifications: Site plan and most current civil, landscape, architectural, structural mechanical, electrical and fire protection plans, including elevations
2	Construction contracts, if any	only to the extent warranties remain in effect
3	Current capital improvements with schedule (past 3 years or such lesser period as property owner has been in existence) and, if available, capital expenditure budget for next 3 years (or such lesser period as may be available)	Budgets for future periods do not exist
4	Warranties in effect, if any (construction, roof, mechanical equipment, etc.)
5	Copies of all licenses and permits, including business license (with expiration date & annual costs) and building permits (for any construction occurring within last 24 months)	Building permits will not be provided to the extent Certificates of Occupancy are provided and then only if in Seller's possession (i.e., Seller will not pull copies from applicable governmental authority)
6	Certificate(s) of Occupancy for all buildings
7	List and description of tenant work in progress, if any
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	Only to be provided with respect to matters that remain outstanding
9	Maintenance records/work orders (and, if available, water intrusion log), for past 12 months or such lesser period as property owner has been in existence	Will be made available for inspection at the Real Property.
10	Operation & Maintenance (O&M) Manuals, if any, for maintenance of equipment
	FINANCIAL
1	Monthly operating statements, YTD & 3-year historical or such lesser period as property owner has been in existence (income statements and, if available, cash flow statements and balance sheets)
2	Year-end financial statements: Trailing-12 and, if available, audited statements, past 3 years or such lesser period as property owner has been in existence
3	Operating budget, current year and, if available, next year
4	Property tax bills and Assessment, current and past 3 years or such lesser period as property owner has been in existence, with proof of payment (including special assessments or districts and appeals)	Prior tax bills will be provided only if in Seller's possession (i.e., Seller will not pull copies from applicable governmental authority)
5	Utility bills for any master-metered utility expenses and any resident unit utilities paid by the Property, YTD and past calendar year
6	List of utilities paid by Owner/Residents and list of account numbers
7	List of meters and required deposits (if any / typically for gas, electric, water, phone)
8	Security deposit/resident ledgers, current

EXHIBIT “E”

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41893434 Hilliard Grand/Purchase and Sale Agreement

9	Name and version of accounting software
10	Tax returns, past 3 years or such lesser period as property owner has been in existence	Schedule C (if any information thereon relates to Property Owner) and Schedule E only
11	Loan documents (full closing binder) - For loan assumptions only
12	REIT Property Services Questionnaire (form for completion attached hereto at end of Exhibit E)
13	General Ledger, prior year, most recent quarter-end and YTD (in Excel format if available)	No quarterly reports exist
14	Trial Balance, prior year, most recent quarter-end and YTD (in Excel format if available)	No quarterly reports exist
15	Bank Statements and Reconciliations, prior year, most recent quarter-end and YTD (monthly)	No quarterly reports exist
16	Cash Disbursement Journal, prior year, most recent quarter-end and YTD	No quarterly reports exist
17	Check Register, prior year, most recent quarter-end and YTD	No quarterly reports exist
18	Current Accounts Payable Aging Detail
19	Aged Delinquency Report (showing total rent outstanding) with status of any files placed for eviction or collection – current period only – Live Systems Report
20	Rent and expense selections, prior year, most recent quarter-end and YTD (25 respective selections to be made by Buyer’s independent REIT 3-14 auditors based upon items received for #12-16 above)
21	Payroll selections, prior year, most recent quarter-end and YTD (2-months of selections with detailed support to be made by Buyer’s independent REIT 3-14 auditors; detailed support to be requested may include inputs, timecards, reimbursement calculations, agreements or contracts as necessary, to support and recalculate the payroll amounts shown in the financial statements)
	MANAGEMENT/LEASING/OPERATIONS
1	Monthly rent rolls, prior year and YTD, in Excel (format should include unit square footage, monthly rent, deposits, financial concessions, lease term, and extension options) – format previously provided by Seller is acceptable	Historical rent rolls do not exist
2	Market rent survey (comparison of subject w/other properties)	Only one that exists was previously provided by Broker
3	Occupancy history, monthly for past 3 years and current YTD
4	Current leases for all tenants with all available tenant correspondence files (including amendments/letters/agreements/default notices given or received)
5	Current or former lease selections, as the case may be, prior year and YTD (25 selections to be made by Buyer’ s independent REIT 3-14 auditors)
6	Current form of lease with all addenda
7	List of leases under negotiation or currently out for signature
8	Current tenant contact sheet (name, address, phone number)	Does not exist
9	Current staff list (names, titles, hire dates, salary, unit information)
10	Inventory of personal property on site, including items such as furniture, supplies, appliances
11	Property brochure
12	Current list of all vendors utilized at the property (name, function, contact information)
13	Copies of all operating and management service contracts, including but not limited to:

EXHIBIT “E”

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41893434 Hilliard Grand/Purchase and Sale Agreement

	a. Advertising
	b. Alarm monitoring
	c. Cable/TV (if none, please indicate so in writing)
	d. Copier and any other equipment leases
	e. Elevator, if applicable
	f. Equipment leases (such as copier, etc.)
	g. Fire extinguisher
	h. Furniture rental, if applicable
	i. HVAC
	j. Janitorial services
	k. Landscaping
	l. Laundry, if applicable
	m. Pest control
	n. Phone (landlines, cell phones, pagers)
	o. Pool
	p. Property management agreement; indicate whether entity is related party for disclosure purposes
	q. Security
	r. Trash
	PHYSICAL ITEMS
1	Property information, including number of pools, spas, dumpsters (with size), buildings, storage units, laundry rooms
2	Marketing photos , including aerial photos if available
3	Parking: indicate carport, garages, or open spaces and how many of each
4	Unit floor plans with sq. footage
5	List of model units, if any (apt. #, bedrooms, rent loss)
6	List of fire safety equipment, such as smoke sensors, suppression devices, etc. (including system type, rating, map of locations, etc.)
7	Current insurance certificates: Evidence of Commercial Property Insurance and Certificate of Insurance
8	Insurance loss run history, past 3 years or such lesser period as property owner has been in existence and YTD
9	Copies of insurance policies, past 3 years or such lesser period as property owner has been in existence
10	All existing third party reports, if available, including, but not limited to:
	a. As-built ALTA Survey
	b. Appraisal (if dated w/n 24 months)
	c. Asbestos, if any
	d. Engineering study or inspection (structural or otherwise)
	e. Lead Based Paint report, if any
	f. Mold, if any
	g. Phase I Environmental
	h. Physical Needs Assessment, if any
	i. Operations & Maintenance (O&M) Plans, if any

EXHIBIT “E”

Page 3 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

	j. Radon, if any
	k. Soils/Geotechnical
	l. Termite
	TITLE AND AGREEMENTS
1	Title Insurance Commitment and all recorded documents referenced therein
2	Zoning: any reports, compliance letters, maps, ordinances, amendments, CC&R’s, special use permits, etc.
3	Pending litigation information, if applicable
4	Any agreements impacting the property: city or county development agreements, bonds, etc.
5	Condo / Association documents, if applicable (articles of incorporation, bylaws, CC&R’s, Declaration of Horizontal Regime, etc.)
	OTHER DOCUMENTS SPECIFIC TO MEMBERSHIP INTERESTS TRANSFER
1	Resolutions of the members of Seller authorizing the transaction and from any general partner (if applicable)
2	Incumbency certificates for the officers authorized to execute certain documents
3	Any minutes of meetings of the members or written consents in lieu of such meetings
4	Any letters from legal counsel delivered to auditors or any auditors reports
5	Confirmation that no changes in the accounting methods throughout the history of Seller have occurred
6	Any outstanding Power of Attorneys
7	Any governmental agency inquiry or reports, including, without limitation, from the EEOC, OSHA, or EPA.

REIT Property Services Questionnaire follows.

EXHIBIT “E”

Page 4 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

REIT PROPERTY SERVICES QUESTIONNAIRE

MULTI-FAMILY APARTMENT PROPERTY

Property Information

Name of the property: ___________________________________________________

Location of the property: _________________________________________________

Description of the property: _______________________________________________ ______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are the on-site employees employed by the owner or by the property manager? ______

______________________________________________________________________

Property Manager Information    

Name of property management company: ____________________________________

Name of person completing this checklist and telephone and e-mail contact: _________

______________________________________________________________________

1. Is the amount of any rent received under any lease of space in the property based or determined in full, or in part, on the “net” income or profits of the tenant or any other person? [Note: rents based on a fixed percentage or percentages of gross receipts or sales are not based on “net” income or profits.]

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 5 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

2. Are there any leases where the FMV of the leased personal property (e.g., furniture, equipment, appliances, etc.) represents more than 15% of the total fair market value of both the real property and personal property that is leased under the lease?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

3. Are there any leases in which the property owner owns, directly or indirectly, 10% or more of the ownership interests in the tenant?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 6 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

4. Please indicate whether the property owner provides any of the following services to its tenants by checking the “Service Provided” box. Check the “Customary” box if the service is usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located. Also indicate (by checking “D” or “IK”) whether the owner provides the service directly through its employees (D) or indirectly by contracting with an independent contractor (IK) to provide the service. Check the “Separate Charge” box, if the owner separately bills and collects a charge for the service.

Service                Separate

Provided    Customary    D    IK    Charge

a. Utilities (electricity, gas, water, sewer)     ooooo

b. Air conditioning, heating, lighting     ooooo

c. Telecommunication services (e.g.,     ooooo

telephone, internet, cable, etc.)

d. Repair and maintenance of building     ooooo

and building systems

e. Repair and maintenance of individual units    ooooo

HVAC, ceiling, floors, walls, appliances

f. Security of building common areas,     ooooo

including security guards

g. Fire protection and sprinkler systems     ooooo

h. Key and security card replacements     ooooo

i. Lock-out, lock changing service, rekeying    ooooo

j. Grounds maintenance and landscaping     ooooo

k. Janitorial/cleaning and maintenance    ooooo

of common areas

l. Trash removal from designated locations    ooooo

m. Washing exterior windows    ooooo

n. Pest control    ooooo

o. Provision of parking spaces    ooooo

p. Organizing social activities    ooooo

EXHIBIT “E”

Page 7 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

5. Please indicate whether the property owner provides any of the following amenities to its tenants by checking the “Amenity Provided” box. Check the “Customary” box if the amenity is usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located.

Amenity                

Provided    Customary    

a. Fitness center, health club     oo

b. Locker facilities, showers    oo

c. Towels    oo

d. Other recreational facilities    oo

e. Business center    oo

f. Clubhouse, party room    oo

g. Car wash area    oo

h. Coin-operated laundry machines (through    oo

a lease/license with a vendor)    

i. Coin-operated vending machines (through     oo

a lease/license with a vendor)

j. ATM (through     oo

a lease/license with a vendor)

k. Pay telephone (through     oo

a lease/license with a vendor)

l. Shoe shine booth (through     oo

a lease/license with a vendor)

m. Mail and express mail drop boxes    oo

n. Loading dock    oo

o. Dry cleaning drop-off & pick-up location    oo

p. CPR training, blood drives    oo

q. Seasonal/holiday parties, events, displays    oo

If any services are provided in connection with the amenities (other than electricity and general maintenance and cleaning of the area where an amenity is located), please explain. For example, explain the duties of any attendants involved with the business center. Also indicate whether these services are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located.

EXHIBIT “E”

Page 8 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

(Note: fitness centers and other recreational facilities are addressed in more detail in a following question.) ______________________________

__________________________________________________________________________________________________________________________________________________________________________________________________________________

______________________________________________________________________

______________________________________________________________________

6. Please indicate whether the property owner provides any of the following courtesies to its tenants by checking the “Courtesy Provided” box. Check the “Customary” box if the courtesy is usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located.

Courtesy                

Provided    Customary    

a. Fax, copier    oo

b. Loaning jumper cables, tools    oo

c. Loaning vacuum cleaner, sports equipment    oo

d. Accepting tenant’s packages, flowers    oo

e. Notary public    oo

f. Distribution of promotional materials    oo

for third party

If any special services are provided in connection with the courtesies, please explain. Also indicate whether any special services are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located. ___________________________________________________ ______________________________________________________________________

__________________________________________________________________________________________________________________________________________________________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 9 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

7. Does the property owner provide maid service within any apartment unit (other than “corporate” or “guest” units which are addressed in the following question)?

YES o NO o(If yes, answer the remaining questions)

If “yes”, please explain who provides the maid service, and explain the contractual relationship pursuant to which the maid services is provided – e.g., whether the property owner or tenant contracts with the maid company. _____________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are the maid services that are provided of a kind that are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located? YES o NO o

Please provide (i) the estimated annual amount of income received or earned by the property owner that is attributable to the maid service (e.g., any separate charge received by the property owner for the service, or the amount of rents received by the property owner that is attributable to such service) and (ii) the estimated annual amount of direct costs incurred by the property owner in providing the maid service. Also provide the estimated annual gross revenue derived at the property. ________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 10 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

8. Does the property owner lease “guest units” or “corporate units” where maid service, linen service and other services are provided within fully furnished units?

YES o NO o(If yes, answer the remaining questions)

If “yes”, please explain who provides the maid service and linen service, and explain the contractual relationship pursuant to which the maid and linen services are provided. Also identify all services provided that differ from services that are provided to a tenant of a regular unit._________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are each of the maid and linen services and other services that are provided of a kind that are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located?

YES o NO o

Please provide (i) the estimated annual amount of income received or earned by the property owner that is attributable to the maid, linen and other services provided (e.g., any separate charge received by the property owner for such services, or the amount of rents received by the property owner that is attributable to such services) and (ii) the estimated annual amount of direct costs incurred by the property owner in providing the services. _______________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

9. Does the property owner provide security services at the property?

YES o NO o(If yes, answer the remaining questions)

Are the security services (including duties of the security personnel) of a kind that are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located? YES o NO o

EXHIBIT “E”

Page 11 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

Are the security services provided for the general property, and not include specialized security services for a particular tenant? YES o NO o

10. Does the property owner provide parking spaces to its tenants (other than by net leasing the parking facilities to an unrelated person, who in turn, operates the parking facilities as part of its own business)?

YES o NO o (If “yes”, answer the remaining questions)

Check the box or boxes that describe the parking facilities (check more than one box if applicable):

• Open lot or garage (circle one) with no gated entry

• Open lot or garage (circle one) with gated entry

• Open lot or garage (circle one) with gated entry and cashier / parking attendant on duty

• Reserved parking

• Public parking available for a hourly, daily or monthly charge

Are the parking facilities located in or adjacent to the property, and are the parking facilities appropriate in size for the number of tenants and their guests, customers, and subtenants who are expected to use the facilities? YES o NO o

Does the property owner provide any services in connection with the parking facilities (other than maintenance, repair, and lighting of the facilities)? YES o NO o

If “yes”, please explain. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are the services provided in connection with the parking facilities of a kind that are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located? YES o NO o

Do tenants make separate payments for the use of parking spaces? YES o NO o

Are certain parking spaces reserved for use by particular tenants? YES o NO o

If “yes”, are recurring functions unique to the reserved parking spaces (other than assigning and marking such spaces), such as towing illegally parked cars, performed by an independent contractor? YES o NO o

EXHIBIT “E”

Page 12 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

Are parking attendants provided at the parking facilities to facilitate parking by the general public for a parking fee? YES o NO o

If “yes”, are the parking attendants employed by an independent contractor who operates the parking facilities under a management agreement with the property owner?

YES o NO o

Are the services provided by the independent contractor usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located? YES o NO o

If the independent contractor provides any services (other than maintenance, repairs, and cleaning of the parking facilities; collecting parking fees; parking cars to achieve the maximum capacity of the parking facility or for reasons of safety or security) please describe (e.g., indicate if the independent contractor provides or arranges for automobile detailing, washing, oil changes and repairs etc.). ________________________________

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

Are these additional services provided by the independent contractor usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located? YES o NO o

11. Are all repair and maintenance services provided within the individual units (e.g., repairs and maintenance of HVAC, plumbing, walls, ceilings, doors, floors, and appliances) of a kind that are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located?

YES o NO o(answer the remaining questions)

Are there any other services provided within a unit (excluding repair and maintenance services described above and maid and other services addressed in the preceding two questions)?

If “yes”, please describe the additional services provided. ________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

____________________________________________________________________________________

EXHIBIT “E”

Page 13 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

Are each of these additional services provided of a kind that are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located? YES o NO o

12. Does the property owner provide coin-operated laundry machines and vending machines?

YES o NO o (If yes, answer the remaining questions)

Does the property owner lease/license space to the owner of the laundry and vending machines and receive rental/license fees that are not based on “net” income?

YES o NO o

Does the property owner provide any services other than electricity and cleaning and maintenance of the area where the equipment is located? YES o NO o

If “yes”, please describe the additional services provided. ________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are each of these additional services provided of a kind that are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located? YES o NO o

Does the property owner own any of the laundry or vending machines?

YES o NO o

If “yes”, please provide details of what is owned. ______________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 14 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

13. Has the property owner entered into agreements (generally a license or lease agreement) with telecommunication providers that permit the providers to wire the building and provide telecommunication services (e.g., telephone, cable, internet, data transmission, etc.) to tenants pursuant to which the property owner receives fees, or does the owner otherwise directly provide telecommunication services (specify which applies)?

YES o NO o(If “yes”, answer the remaining questions)

If the owner directly provides telecommunication services to its tenants, please explain the arrangement. ________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are the telecommunications services offered to the tenants of the type usually and customarily offered or provided to tenants of similar class properties located in the same geographic market in which the property is located?

YES o NO o

14. Does the property owner provide any “concierge” services (e.g., ordering food, running errands, making restaurant reservations, ordering theatre tickets, picking up dry cleaning, etc.) to the tenants?

YES o NO o

If “yes”, please describe the type of concierge services provided and by whom (employees or independent contractor). ______________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are each of the concierge services of the type usually and customarily offered or provided to tenants of similar class properties located in the same geographic market in which the property is located? YES o NO o

EXHIBIT “E”

Page 15 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

Please provide (i) the estimated annual amount of income received or earned by the property owner that is attributable to the concierge services provided (e.g., any separate charge received by the owner for such service, or the amount of rents received by the property owner that is attributable to such service) and (ii) the estimated annual amount of direct costs incurred by the property owner in providing the concierge services. ____

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

15. Does the property owner provide a fitness center or other recreational facilities at the property?

YES o NO o

If “yes”, please describe the type of fitness center or other recreational facilities provided at the property (e.g., fitness center, gym, basketball court, swimming pool, etc.). __________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are the recreational facilities and equipment provided therein of the type usually and customarily offered or provided to tenants of similar class properties located in the same geographic market in which the property is located? YES o NO o

Do tenants pay a fee to use any facility or is any facility open to non-tenants for a fee? YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 16 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

Does the property owner provide any services in connection with the facilities (other than electricity, lighting, and cleaning and maintenance) including for example, any attendants on site proving fitness instruction or other services? YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are these additional services of a type usually and customarily offered or provided to tenants of similar office properties located in the same geographic markets where the properties are located? YES o NO o

Please provide (i) the estimated annual amount of income received or earned by the property owner that is attributable to these additional services provided (e.g., any separate charge received by the owner for such service, or the amount of rents received by the property owner that is attributable to such service) and (ii) the estimated annual amount of direct costs incurred by the property owner in providing these additional services. _______________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

16. Are there any services, amenities, or courtesies provided to tenants that are not of a kind usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located (“noncustomary services”) and that have not been identified in previous questions.

YES o NO o

If “yes”, please describe. __________________________________________________ ______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 17 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

For each noncustomary service, please provide (i) the estimated annual amount of income received or earned by the property owner that is attributable to the noncustomary service (e.g., any separate charge received by the owner for such service, or the amount of rents received by the property owner that is attributable to such service) and (ii) the estimated annual amount of direct costs incurred by the property owner in providing the noncustomary service. Also provide the estimated annual gross revenue derived at the property. ____________________________________________ ______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

17. Does the property owner provide any of the services listed below?

YES o NO o(If “yes”, please circle the services provided.)

• Provision of food service (e.g., including a cafeteria) either directly or through a management agreement with a food service provider

• Transportation services, shuttle bus

• Day care or health care services

• Full service conference center services

• Secretarial services

• Real estate brokerage

• Pick-up, shipping of goods, logistics

• Interior design & decorating

• Plant care/watering within tenant’s space

• Assisting tenant in move-in/move-out

• Coffee butler services

• Automobile detailing, washing

• Automobile oil change, repairs

EXHIBIT “E”

Page 18 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

If the property owner provides any of these services, and the services have not been reported as “noncustomary” services in Question #16, please describe details associated with the service, and provide (i) the estimated annual amount of income received or earned by the property owner that is attributable to the noncustomary service (e.g., the separate charge received by the owner for such service, or the amount of rents received by the property owner that is attributable to such service) and (ii) the estimated annual amount of direct costs incurred by the property owner in providing the noncustomary service. Also provide the estimated annual gross revenue derived at the property. ____

______________________________________________________________________

__________________________________________________________________________________________________________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________________________________________________________________________________________________________

18. Are there any other services, amenities, or courtesies offered or provided to tenants which have not been covered or identified in the previous questions?

YES o NO o

If “yes”, please describe and indicate whether each service, amenity, or courtesy is usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located. ________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

19. Does the property owner have a below fair market lease with any tenant (e.g., a restaurant, cafeteria, or health club tenant) at the property that is intended to subsidize the provision of that tenant’s services to other tenants at the property, or does the owner actually pay any subsidy to a tenant?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 19 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

20. Are there any leases/licenses of property involving a term of less than 30 days?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

21. Are you aware of any lease agreement with terms that are not usual, ordinary, and customary?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

22. In cases where the property owner offers or provides any services by contracting with an independent contractor to provide such services, does the property owner receive or derive any income from the independent contractor – e.g., through the receipt of interest from a loan to such independent contractor, dividends from an investment in such contractor, rents from leasing space to such contractor, etc.? [Please consider whether a parking company that has been engaged to operate a parking facility is paying rents to the owner under a lease of a parking facility or other space at another property.]

YES o NO o

If “yes”, please describe __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 20 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

23. In cases where the property owner offers or provides any services by contracting with an independent contractor to provide such service, does the property owner have any ownership interest in such independent contractor, or does the independent contractor have an ownership interest in the property owner, or are you aware of any other related-party ownership between the property owner and the independent contractor?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

24. Does the property owner receive a fee, commission, incentive payments, or any other type of payment from any independent contractor that is providing services to the tenants?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

Are the services that are provided by the independent contractor of a kind that are usually and customarily offered or provided to tenants of similar class properties in the same geographic market in which the property is located? YES o NO o

25. Does the property owner receive any amounts for selling any goods or services (other than tenant services addressed in the preceding questions) to its tenants or other parties?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

EXHIBIT “E”

Page 21 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

26. Does the property owner receive management fees for providing services to properties that are not owned by the property owner or properties that are only partially owned (e.g., through a partnership) by the property owner?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

27. Are you aware of any other sources of property income not identified through the previous questions (e.g., referral fees from 3^rd parties, advertising income, etc.)?

YES o NO o

If “yes”, please describe. __________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

28. Has the property owner made any loans to a tenant, vendor, or other parties or otherwise received a promissory note?

YES o NO o

If “yes”, please describe __________________________________________________

______________________________________________________________________

______________________________________________________________________

_____________________________________________________________________

EXHIBIT “E”

Page 22 of 20

41893434 Hilliard Grand/Purchase and Sale Agreement

EXHIBIT “F”

Form of Assignment

MEMBERSHIP INTERESTS ASSIGNMENT AND ASSUMPTION

THIS MEMBERSHIP INTERESTS ASSIGNMENT AND ASSUMPTION (this “Assignment”) is made and entered into effective for all purposes and in all respects as of the ___ day of _______, 2012, by and between GARY L. SCHOTTENSTEIN, an individual, and BRETT KAUFMAN, an individual (collectively, “Assignor”) and [_____________] (“Assignee”).

RECITALS:

A.    Assignor is the owner of 100% of the membership interests (“Membership Interests”) in HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability company (the “Company”), the fee simple property owner of that certain land with a multifamily residential project commonly known as Hilliard Grand, consisting of 314 units situated thereon, located at 5399 Grand Drive, Dublin, Ohio 43016. The Company exists as of the date hereof as an Ohio limited liability company pursuant to that certain Certificate of Formation filed with the Secretary of State of the State of Ohio on [___________], and is governed by that certain Limited Liability Company Agreement of Hilliard Grand Apartments, LLC, dated as of [___________] (as may be amended, the “Operating Agreement”).

B.    Assignor is the sole member of the Company and owns all of the limited liability company interests in the Company.

C.     Assignor is conveying various assets to Assignee on even date herewith (including, without limitation, the “Assigned Interest” (as hereinafter defined)) pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions, dated as of August __, 2012, by and between Assignor and Assignee (as may be amended from time to time, the “Purchase Agreement”).

D.    In connection with the transactions described above and in the Purchase Agreement, Assignor desires to transfer and assign to Assignee the Assigned Interest effective as of the date hereof, and Assignee desires to accept the transfer and assignment of the Assigned Interest upon the terms and conditions provided herein.

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged, it is hereby agreed as follows:

Section 1.Definitions. As used herein, the term “Assigned Interest” means all of the Membership Interests in the Company held by Assignor, and all rights, title and privileges of Assignor relating thereto, which also constitutes 100% of the “Percentage Interests” (as such term is defined in the Operating Agreement), including, without limitation, all rights to all capital, profits, losses, allocations and distributions, and rights to vote and grant or withhold consents and other

EXHIBIT “F”

41893434 Hilliard Grand/Purchase and Sale Agreement

rights and privileges under the Operating Agreement and the Ohio Limited Liability Company Act appurtenant to Assignor's Membership Interests assigned hereby.

Section 2.Assignment and Acceptance. Assignor does hereby transfer, assign and deliver unto Assignee, and Assignee does hereby accept the transfer, assignment and delivery of, the Assigned Interest. Assignee hereby accepts the Assigned Interest and hereby assumes all obligations and liabilities arising or accruing in connection with the Assigned Interest from and after the date hereof.

Section 3.Joinder to Operating Agreement. By execution of this Assignment, Assignee shall be deemed joined as a party to the Operating Agreement and shall be bound by all of the terms and conditions thereof as if Assignee had executed the Operating Agreement. It is the intention of the parties that immediately after giving effect to the consummation of the transactions contemplated by this Assignment that Assignee shall be the sole member of the Company.

Section 4.Survival; Representations.    This Assignment is being delivered by Assignor and Assignee pursuant to Section 10.1.1 and 10.2 of the Purchase Agreement, respectively, and is given in accordance with the requirements of the Purchase Agreement. The obligations of the parties thereunder, including any representations and warranties made by the parties therein, shall survive the closing of the transaction of the Purchase Agreement as provided therein.

Section 5.Incorporation of Recitals. The recitals set forth herein are hereby incorporated by reference and made a part of this Assignment.

Section 6.Further Assurances. Each of the parties agrees to and shall execute and deliver further assurances of the transfer, assignment and delivery of the Assigned Interest, and the acceptance and assignment of the same, as the other party shall reasonably request to effectuate the terms of this Assignment.

Section 7.Interpretation. This Assignment shall be governed and construed in accordance with the internal laws of the State of Ohio, without regard to conflicts of interest considerations.

Section 8.Miscellaneous. The captions in this Assignment are inserted for convenience only, and do not define, describe or limit the scope or intent of this Assignment or the provisions hereof. Assignor and Assignee agree that this Assignment shall be interpreted and construed in accordance with its plain meaning and without reliance upon, or implication, inference or assumption arising from, the fact that this Assignment may have been drafted, in whole or in part, for or on behalf of any party hereto. This Assignment represents the parties’ entire understanding with respect to its subject matter and supersedes all prior communications, understandings and agreements with respect thereto. This Assignment may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument. This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective successors and assigns. If any term or provision of this Assignment or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Assignment or the application of such term or provision to the persons or

EXHIBIT “F”

WAS01_41893434v3_342673-00016 10/23/2012 9:41 AM

circumstances other than those as to which are held invalid or unenforceable shall not be affected thereby, and each term and provision of this Assignment shall be valid and enforceable to the fullest extent permitted by law.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

EXHIBIT “F”

WAS01_41893434v3_342673-00016 10/23/2012 9:41 AM

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

ASSIGNOR

___________________________________

GARY L. SCHOTTENSTEIN, an individual

__________________________________

BRETT KAUFMAN, an individual

ASSIGNEE

[__________________]

By: _________________________________

Name: _________________________________

Its: _________________________________

EXHIBIT “F”

41893434 Hilliard Grand/Purchase and Sale Agreement

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 _________________________ (“Transferee”), that withholding of tax is not required upon the disposition of a U.S. real property interest by [Gary L. Schottenstein] [Brett Kaufman] (“Transferor”), the undersigned hereby certifies to Transferee the following:

1.    I am not a nonresident alien for purposes of U.S. income taxation;

2.    My U.S. Social Security Number is _____________; and

3.    My home address is _________________________________________.

I understand 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, I declare that I have examined this certification and to the best of my knowledge and belief, it is true, correct and complete.

Dated as of ____________________, 2012.

__________________________________

[GARY L. SCHOTTENSTEIN] [BRETT KAUFMAN], an individual

EXHIBIT “G”

Page 1 of 1

41893434 Hilliard Grand/Purchase and Sale Agreement

EXHIBIT “H”

Form of Tenant Notice

[**DATE**]

TO: All Valued Residents of Hilliard Grand

Re:    Notice of Change of Address

This letter is to notify you of a change with respect to Hilliard Grand, 5399 Grand Drive, Dublin, Ohio 43016 (“Property”).

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 Hilliard Grand and mailed to [**COMMUNITY LEASING OFFICE ADDRESS**]. In addition, all questions or other matters regarding your lease should be directed to the property manager at [**COMMUNITY LEASING OFFICE PHONE NUMBER**].

Thank you for your cooperation.

Very truly yours,HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability company

By:

Name:

Its:

EXHIBIT “H”

Page 1 of 1

41893434 Hilliard Grand/Purchase and Sale Agreement

SCHEDULE 1

LEASES

See Rent Roll attached at Schedule 4

SCHEDULE 1

41893434 Hilliard Grand/Purchase and Sale Agreement

SCHEDULE 3

APPROVALS

TYPE OF APPROVAL	DATE ISSUED	EXPIRATION DATE	ISSUING AGENCY
Certificate of Occupancy - Final Permits	June 2012	None	City of Hilliard*
Plats/Plans	7/28/2010	None	City of Hilliard
Building Permit [only if recently constructed]	2010 and 2011	None	City of Hilliard
Elevator Permit	N/A	N/A	N/A
Pool Permit	9/30/2010	None	State of Ohio
Business License	N/A	N/A	N/A
Retention Pond Approval	7/28/2010	None	State of Ohio

* No physical certificates available

SCHEDULE 3

SCHEDULE 4

RENT ROLL

See Attached

[INTENTIONALLY OMITTED]

SCHEDULE 4

41893434 Hilliard Grand/Purchase and Sale Agreement

SCHEDULE 5

ORGANIZATIONAL DOCUMENTS

1. Operating Agreement of Hilliard Grand Apartments, LLC, dated as of January 5, 2010, between Gary L. Schottenstein, Brett L. Kaufman and Pizzuti Construction Services LLC.

2. Articles of Organization of Hilliard Grand Apartments, LLC filed with the Ohio Secretary of State as of January 5, 2010.

SCHEDULE 6

STATEMENT OF LIABILITIES

None.

SCHEDULE 7

LIST OF LOAN DOCUMENTS

See Attached

SCHEDULE 7

41893434 Hilliard Grand/Purchase and Sale Agreement

EX-10.2

EXHIBIT 10.2

FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“Amendment”) is dated as of November 13, 2012, and entered into by and between GARY L. SCHOTTENSTEIN, an individual, and BRETT KAUFMAN, an individual (together, “Seller”), and Steadfast Asset Holdings, Inc., a California corporation (“Buyer”).

RECITALS

WHEREAS, Seller and Buyer have entered into that certain Purchase and Sale Agreement with Joint Escrow Instructions dated as of November 2, 2012 (the “Purchase Agreement”).

WHEREAS, Seller and Buyer desire to modify the Purchase Agreement as set forth in this Amendment.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1.Loan Assumption. Subsection (b) of the second sentence of Section 3.1.2 of the Purchase Agreement is hereby amended and restated as follows:

“(b) the aggregate amount of all escrows (including any tax and insurance (including MIP) escrows) and reserves (including replacement and operating reserves), which operating deficit reserve is in the amount of $900,000 as of the Effective Date and is anticipated to be in the same amount as of the Closing Date) maintained by Property Owner pursuant to the terms and conditions of the Loan Documents, as defined below, as of 11:59 pm on the day prior to the Closing Date, other than (i) the working capital reserve in the original amount of $636,008.00 and (ii) the escrow for demolition in the original amount of $44,362.00 (provided, however, if any portion of the escrow for demolition is not refunded to Property Owner prior to Closing, then to the extent such amount is paid to Buyer or Property Owner after Closing, Buyer shall, within 2 business days of receipt of such amount, pay such amount to Seller);”

2.Conditions to Closing. A new Section 4.2.12 of the Purchase Agreement is hereby added as a condition to Buyer’s obligation to close as follows:

“4.2.12        The final endorsement shall have been issued by HUD, the related closing of the permanent loan shall have occurred and Seller or Property Owner shall have paid all costs relating thereto.”

1

3.Corresponding Amendments. The third sentence of Section 5.1 and the first and fourth sentences of Section 5.2 are each hereby amended to insert “or Section 4.2.12” immediately following “4.2.10” in each instance.

4.Miscellaneous.

a.Definitions. Capitalized terms used in this Amendment that are not otherwise defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

b.Partial Invalidity. If any term or provision of this Amendment or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Amendment, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each such term and provision of this Amendment shall be valid and enforced to the fullest extent permitted by law.

c.No Waivers. No waiver of any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed an extension of the time for performance of any other obligation or act.

d.Binding Effect. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.

e.Entire Agreement; No Other Modification. This Amendment is the final expression of, and contains the entire agreement among, the parties hereto with respect to the subject matter set forth herein and may not be modified other than by an agreement in writing signed each party hereto. Except as expressly modified by this Amendment, all terms and conditions of the Purchase Agreement, together with any and all exhibits thereto, shall remain unmodified and are in full force and effect and enforceable in accordance with their terms. In the event of a conflict between the Purchase Agreement and this Amendment, the terms and provisions of this Amendment shall control.

f.Counterparts. This Amendment may be executed in counterparts, each of which shall constitute a separate document but all of which together shall constitute one and the same agreement. Signature pages may be detached and reattached to physically form one document. A signature scanned and sent by facsimile and/or e-mail shall be binding as an original signature.

<Signatures follow on next page(s)>

2

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first set forth above.

SELLER:

/s/ Gary L. Schottenstein

GARY L. SCHOTTENSTEIN, an individual

/s/ Brett Kaufman

BRETT KAUFMAN, an individual

BUYER:

Steadfast Asset Holdings, Inc.,

a California corporation

By:	/s/ Ana Marie del Rio
Name:	Ana Marie del Rio
Its:	Vice President and Secretary

S-1

EX-10.3

EXHIBIT 10.3

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 HILLIARD GRAND, 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 November 2, 2012, (as may have been amended or may hereafter be amended, the “Purchase Agreement”), between Gary L. Schottenstein, an individual and Brett Kaufman, an individual (collectively, the “Seller”) and Assignor for the purchase and sale of that membership interest relating to that certain real property located in Dublin, Ohio, 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 December 31, 2012.

	ASSIGNOR:
	STEADFAST ASSET HOLDINGS, INC.,
	a California corporation
By:	/s/ Ana Marie del Rio
	Ana Marie del Rio,
	Secretary and Vice President

ASSIGNEE:

SIR HILLIARD GRAND, LLC

a Delaware limited liability company

By:     Steadfast Income Advisor, LLC,

a Delaware limited liability         

company, its Manager

By:	/s/ Ella S. Neyland
	Ella S. Neyland, President

EX-10.4

EXHIBIT 10.4

MEMBERSHIP INTERESTS ASSIGNMENT AND ASSUMPTION

THIS MEMBERSHIP INTERESTS ASSIGNMENT AND ASSUMPTION (this "Assignment") is made and entered into effective for all purposes and in all respects as of the 31st day of December, 2012, by and between GARY L. SCHOTTENSTEIN, an individual, and BRETT KAUFMAN, an individual (collectively, "Assignor") and SIR HILLIARD GRAND, LLC, a Delaware limited liability company ("Assignee").

RECITALS:

A.     Assignor is the owner of 100% of the membership interests ("Membership Interests") in HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability company (the "Company"), the fee simple property owner of that certain land with a multifamily residential project commonly known as Hilliard Grand, consisting of 314 units situated thereon, located at 5399 Grand Drive, Dublin, Ohio 43016. The Company exists as of the date hereof as an Ohio limited liability company pursuant to that certain Certificate of Formation filed with the Secretary of State of the State of Ohio on January 5, 2010, and is governed by that certain Operating Agreement of Hilliard Grand Apartments, LLC, effective as of January 5, 2010 (as may be amended, the "Operating Agreement").

B.     Assignor is the sole member of the Company and owns all of the limited liability company interests in the Company.

C.    Assignor is conveying various assets to Assignee on even date herewith (including, without limitation, the "Assigned Interest" (as hereinafter defined)) pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions, dated as of November 2, 2012, by and between Assignor and Assignee (as may be amended from time to time, the "Purchase Agreement").

D.     In connection with the transactions described above and in the Purchase Agreement, Assignor desires to transfer and assign to Assignee the Assigned Interest effective as of the date hereof, and Assignee desires to accept the transfer and assignment of the Assigned Interest upon the terms and conditions provided herein.

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises set forth herein, and other good and valuable consideration, the receipt and sufficiency of which hereby is acknowledged, it is hereby agreed as follows:

Section 1.     Definitions. As used herein, the term "Assigned Interest" means all of the Membership Interests in the Company held by Assignor, and all rights, title and privileges of Assignor relating thereto, which also constitutes 100% of the "Percentage Interests" (as such term is defined in the Operating Agreement), including, without limitation, all rights to all capital, profits, losses, allocations and distributions, and rights to vote and grant or withhold consents and other rights and privileges under the Operating Agreement and the Ohio Limited Liability Company Act appurtenant to Assignor's Membership Interests assigned hereby.

Section 2.Assignment and Acceptance. Assignor does hereby transfer, assign and deliver unto Assignee, and Assignee does hereby accept the transfer, assignment and delivery of, the Assigned Interest. Assignee hereby accepts the Assigned Interest and hereby assumes all obligations and liabilities arising or accruing in connection with the Assigned Interest from and after the date hereof.

Section 3. Joinder to Operating Agreement. By execution of this Assignment, Assignee shall be deemed joined as a party to the Operating Agreement and shall be bound by all of the terms and conditions thereof as if Assignee had executed the Operating Agreement. It is the intention of the parties that immediately after giving effect to the consummation of the transactions contemplated by this Assignment that Assignee shall be the sole member of the Company.

Section 4. Survival; Representations. This Assignment is being delivered by Assignor and Assignee pursuant to Section 10.1.1 and 10.2 of the Purchase Agreement, respectively, and is given in accordance with the requirements of the Purchase Agreement. The obligations of the parties thereunder, including any representations and warranties made by the parties therein, shall survive the closing of the transaction of the Purchase Agreement as provided therein.

Section 5. Incorporation of Recitals. The recitals set forth herein are hereby incorporated by reference and made a part of this Assignment.

Section 6. Further Assurances. Each of the parties agrees to and shall execute and deliver further assurances of the transfer, assignment and delivery of the Assigned Interest, and the acceptance and assignment of the same, as the other party shall reasonably request to effectuate the terms of this Assignment.

Section 7. Interpretation. This Assignment shall be governed and construed in accordance with the internal laws of the State of Ohio, without regard to conflicts of interest considerations.

WASOI_ 41896897 _342673"00016

Section 8. Miscellaneous. The captions in this Assignment are inserted for convenience only, and do not define, describe or limit the scope or intent of this Assignment or the provisions hereof. Assignor and Assignee agree that this Assignment shall be interpreted and construed in accordance with its plain meaning and without reliance upon, or implication, inference or assumption arising from, the fact that this Assignment may have been drafted, in whole or in part, for or on behalf of any party hereto. This Assignment represents the parties' entire understanding with respect to its subject matter and supersedes all prior communications, understandings and agreements with respect thereto. This Assignment may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument. This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective successors and assigns. If any term or provision of this Assignment or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Assignment or the application of such term or provision to the persons or circumstances other than those as to which are held invalid or unenforceable shall not be affected thereby, and each term and provision of this Assignment shall be valid and enforceable to the fullest extent permitted by law.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

WASOI_ 41896897 _342673"00016

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

ASSIGNOR

/s/ Gary L. Schottenstein

GARY L. SCHOTTENSTEIN, an individual

/s/ Brett Kaufman

BRETT KAUFMAN, an individual

ASSIGNEE

SIR HILLIARD GRAND, LLC,

a Delaware limited liability company

By: STEADFAST INCOME ADVISOR, LLC,

a Delaware limited liability company,

Its Manager

By:	/s/ Ella S. Neyland
Name:	Ella S. Neyland
Title:	President

WASOI_ 41896897 _342673"00016

EX-10.5

EXHIBIT 10.5

PROPERTY MANAGEMENT AGREEMENT

THIS PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of December 31, 2012 (the “Effective Date”), by and between HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability company (“Owner”), and STEADFAST MANAGEMENT COMPANY, INC., a California corporation (“Manager”).

ARTICLE I

DEFINITIONS

Section 1.1Definitions. 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.

“HUD” means the U.S. Department of Housing and Urban Development.

“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.

“Regulatory Agreement” means the Regulatory Agreement for Multifamily Housing Projects dated July 27, 2010, between the Owner and HUD, relating to operation of the Property.

“Security Deposit Account” has the meaning given in Section 2.31.

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

ARTICLE 2

APPOINTMENT OF AGENCY AND RENTAL RESPONSIBILITY

Section 2.1Appointment. 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.

2

Section 2.2Owner’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, with a copy to Thomas Hollingsworth, Vice President, Steadfast Asset Management. Any Owner’s Representative may be changed at the discretion of Owner, at any time, and shall be effective upon Manager’s receipt of written notice identifying the new Owner’s Representative.

Section 2.3Leasing. 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 2.4Manager’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 3.1Expense 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:

3

(a)Costs and Expenses. All costs and expenses incurred by Manager on behalf of Owner in connection with the management and operation of the Property, including but not limited to all compensation, including the cost of benefits, payable to the employees at the Property and identified in the Operating Budget and taxes and assessments payable in connection therewith and reasonable training, travel and expenses associated therewith, all marketing costs, all collection and lease enforcement costs, all maintenance and repair costs incurred in accordance with Section 3.5 hereof, all utilities and related services, all on‑site overhead costs and all other costs reasonably incurred by Manager in the operation and management of the Property, excluding, however, all of Manager’s general overhead costs, including without limitation, all expenses incurred at Manager’s corporate headquarters and other Manager office sites other than the property management office located at the Property (i.e., office expenses, long distance phone calls, postage, copying, supplies, electronic data processing and accounting expenses), general accounting and reporting expenses for services included among Manager’s duties under the Agreement; and

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

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

Section 3.2Covenants 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.

4

Section 3.3Employment of Personnel.    Manager shall use its diligent efforts to investigate, hire, pay, supervise and discharge the personnel necessary to be employed by it to properly maintain, operate and lease the Property, including without limitation a property manager or business manager at the Property. Such personnel shall in every instance be deemed agents or employees, as the case may be, of Manager. Owner has no right of supervision or direction of agents or employees of Manager whatsoever; however, Owner shall have the right to require the reassignment or termination of any employee. All Owner directives shall be communicated to Manager’s senior level management employees. Manager and all personnel of Manager who handle or who are responsible for handling Owner’s monies shall be bonded in favor of Owner. Manager agrees to obtain and keep in effect fidelity insurance in an amount not less than Two Hundred Fifty Thousand Dollars ($250,000). All reasonable salaries, wages and other compensation of personnel employed by Manager, including so-called fringe benefits, worker’s compensation, medical and health insurance and the like, shall be deemed to be reimbursable expenses of Manager. Manager may allow its employees who work at the Property and provide services to the Property after normal business hours, to reside at the Property for reduced rents (or rent fee as provided in the Operating Budget) in consideration of their benefit to Owner and the Property, provided such reduced rents are reflected in the Annual Business Plan.

Section 3.4Utility 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 3.5Maintenance 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.

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Section 3.6Supervision 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.

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 3.7Insurance.

(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.

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

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

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

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(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 3.8Collection 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 3.9Manager 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 3.10Use 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, including the Regulatory Agreement, 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 3.11Annual Business Plan.

(a)Submission. Not less than 60 days prior to the end 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 3.12Records, 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 3.13Financial 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.

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Section 3.14Compliance with Governmental Requirements. Manager shall comply with all laws, ordinances and regulations relating to the management, leasing and occupancy of the Property, including the Regulatory Agreement and any other regulatory or use agreements relating to the Property. 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 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 4.1Fees 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 Two and One-half Percent (2.5%) 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 4.2Term. 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.

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Section 4.3Termination 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. In the event of a default under the Regulatory Agreement, this Agreement shall be subject to termination without penalty, on the 30th day after written notice of such termination from the HUD Secretary. Any notice given pursuant to this Article 4, shall be sent by certified mail.

Section 4.4Duties on Termination. Upon any termination of this Agreement as contemplated in Section 4.4, Manager shall be entitled to receive all compensation and reimbursements, if any, due to Manager through the date of termination. Within 30 days after any termination, Manager shall deliver to Owner’s Representative, the report required by Section 3.13(a) for any period not covered by such a report at time of termination, and within 30 days after any such termination, Manager shall deliver to Owner’s Representative, as required by Section 3.13(b), the statement of cash flow for the Fiscal Year or portion thereof ending on the date of termination. In addition, upon termination of this Agreement for any reason, Manager will submit to Owner within 30 days after termination any reports required hereunder, all of the cash and bank accounts of the Property, including, without limitation, the Security Deposit Account, investments and records. Manager will, within 30 days after termination, turn over to Owner all copies of all books and records kept for the Property. If Manager desires to retain records of the Property, Manager must reproduce them at its own expense.

ARTICLE 5

PROCEDURES FOR HANDLING RECEIPTS AND OPERATING CAPITAL

Section 5.1Security 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.

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Section 5.2Separation 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 5.3Depository 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 5.4Working 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 5.5Authorized Signatures. Any persons from time to time designated by Manager shall be authorized signatories on all bank accounts established by Manager pursuant to this Agreement and shall have authority to make disbursements from such accounts. Funds may be withdrawn from all bank accounts established by Manager, in accordance with this Article 5, only upon the signature of an individual who has been granted that authority by Manager and funds may not be withdrawn from such accounts by Owner unless Manager is in default hereunder.

ARTICLE 6

MISCELLANEOUS

Section 6.1Assignment. 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.

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Section 6.2Notices. 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 Hilliard Grand Apartments, LLC, c/o Steadfast Companies, 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 6.3Entire 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 6.4No 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 6.5No 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 6.6Severability. 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 6.7Captions, Plural Terms. Unless the context clearly requires otherwise, the singular number herein shall include the plural, the plural number shall include the singular and any gender shall include all genders. Titles and captions herein shall not affect the construction of this Agreement.

Section 6.8Attorneys’ 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 6.9Signs. 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.

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Section 6.10Survival 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 6.11Governing 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 6.12Competitive 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 6.13Set 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 6.14Notice 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 6.15Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original.

[Signature page follows.]

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

OWNER: HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability companyBy:    Steadfast Income Advisor, LLC, its Manager

By:	/s/ Kevin J. Keating
	Kevin Keating, CAO

MANAGER: STEADFAST MANAGEMENT COMPANY, INC.,

a California corporation

By:	/s/ Ana Marie del Rio
Name:	Ana Marie del Rio
Title:	Vice President

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EXHIBIT A    

ESTIMATED PASS-THROUGH AMOUNTS

Benefits Administration                         3.0% of total employee costs

IT Infrastructure, Licenses and Support                At cost and expense

Marketing/Training/Continuing Educations                 $20.00 p.u.p.y.

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EXHIBIT B

THE PROPERTY

Property Address: 5399 Grand Drive, Dublin, Ohio 43016

The real property situated in the City of Dublin, County of Franklin, State of Ohio, and described as follows:

The Property consists of 38 two-story buildings with 314 units. Site amenities include resort style clubhouse, swimming pool, fitness center, Yoga and Pilates studio, car wash and vacuum facility and outdoor lounge with fire pit. It is comprised of 36.02 acres and it was built in the years between 2010 and 2012.

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EX-10.6

FHA FORM NO. 4165-D (CORPORATE)
Rev. November 1974                                                                                                                      EXHIBIT 10.6

MORTGAGE NOTE
$31,800,400.00	Columbus, Ohio
	as of July 27, 2010

FOR VALUE RECEIVED, the undersigned, HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability company, promise(s) to pay to Red Mortgage Capital, LLC, a limited liability company, of the State of Delaware , or order, at its principal place of businessat Two Miranova Place, 12th Floor, Columbus, Ohio 43215, or at such other place as may be designated in writing by the holder of this Note, the principal sum of Thirty-One Million Eight Hundred Thousand Four Hundred and No/100 Dollars ($31,800,400.00), with interest from date at the rate of five and 59/100ths per centum (5.59%) per annum on the unpaid balance until paid. The said principal and interest shall be payable in monthly installments as follows:

Commencing on the first day of August, 2010 and continuing on the first day of each month thereafter up to and including August 1, 2012, interest on the outstanding principal balance. Commencing on the first day of September, 2012, monthly installments of interest and principal shall be paid in the sum of One Hundred Sixty-Five Thousand Nine Hundred Sixty-Eight and 81/100 Dollars ($165,968.81) each, such payments to continue monthly thereafter on the first day of each succeeding month until the entire indebtedness has been paid. In any event, the balance of the principal, if any remaining unpaid, plus accrued interest shall be due and payable on August 1, 2052. The installments of interest and principal shall be applied first to interest at the rate of five and 59/100ths percent (5.59%) per annum upon the principal sum or so much thereof as shall from time to time remain unpaid and the balance thereof shall be applied on account of principal.

See Rider to Mortgage Note attached hereto and incorporated by reference herein.

This Note is secured by Mortgage upon real estate in the City of Hilliard, Franklin County, Ohio, and is to be construed according to the laws of the State of Ohio.

If default be made in the payment of any installment under this Note, and if such default is not made good prior to the due date on the next such installment, the entire principal sum and accrued interest shall at once become due and payable without notice, at the option of the holder of this Note. Failure to exercise this option shall not constitute a waiver of the right to exercise the same in the event of any subsequent default. In the event of default in the payment of this Note, and if the same is collected by an attorney at law, the undersigned hereby agree(s) to pay all costs of collection, including a reasonable attorney's fee.

RIDER TO MORTGAGE NOTE

This Rider to Mortgage Note (this "Rider") is attached to and made a part of the Mortgage Note (the "Note") from HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability company (the "Maker"), to RED MORTGAGE CAPITAL, LLC, a Delaware limited liability company, dated as of July 27, 2010.

1. Prepayment. (a) Except as hereinafter set forth, Maker shall not have the right to prepay the indebtedness evidenced hereby in whole or in part at any time. Maker shall have the right, on or after August 31, 2015, (the "Lockout Termination Date") to prepay the indebtedness evidenced hereby in whole or in part on the last business day of any calendar month on or after such date during the term hereof upon at least thirty (30) days prior written notice to the holder of this Note, which notice shall specify the date on which the prepayment is to be made, the principal amount of such prepayment and the total amount to be paid. In the event of any prepayment of principal at any time on or after the Lockout Termination Date, the Maker shall concurrently pay to the holder of this Note (i) interest on the amount prepaid through and including the last day of the month in which the prepayment is made and (ii) a prepayment premium equal to the following designated percentages of the amount of the principal of this Note to be so prepaid with respect to any prepayment which occurs during the following indicated time periods:

from August 31, 2015 through August 30, 2016	7.0%
from August 31, 2016 through August 30,2017	6.0%
from August 31,2017 through August 30, 2018	5.0%
from August 31, 2018 through August 30, 2019	4.0%
from August 31, 2019 through August 30, 2020	3.0%
from August 31,2020 through August 30, 2021	2.0%
from August 31,2021 through August 30,2022	1.0%
from August 31, 2022 and thereafter	0.0%

Notwithstanding any partial prepayment of principal made pursuant to the privilege of prepayment set forth in this Note, without the prior written consent of the holder of this Note (which consent such holder shall have no obligation to give), the Maker shall not be relieved of its obligations to make scheduled monthly installments of principal and interest as and when such payments are due and payable under this Note.

(b) Notwithstanding any prepayment prohibition imposed and/or premium required by this Note with respect to prepayments made prior to August 31, 2021, the indebtedness evidenced by this Note may be prepaid in whole or in part: on the last business day of any calendar month without the consent of the holder of this Note and without prepayment premium if the Federal Housing Commissioner (the "Commissioner") determines that prepayment will avoid a mortgage insurance claim and is therefore in the best interests of the Federal Government. The holder of this Note understands that the Commissioner would consider exercising its right to override the prepayment prohibition and/or prepayment premium contained herein only upon satisfaction of all of the following terms and conditions:

(i) Maker has defaulted under this .Note and the Commissioner has received notice of such default, as required by 24 C.F.R. §207.256;

(ii) The Commissioner determines that the project financed with the proceeds of this Note has been experiencing a net income deficiency, which has not been caused solely by management inadequacy or lack of interest by Maker, and which is of such magnitude that Maker is currently unable to make required debt service payments, pay all project operating expenses and fund all required HUD reserves;

(iii) The Commissioner finds there is reasonable likelihood that Maker can arrange to refinance the loan evidenced by this Note at a lower interest rate or otherwise reduce the debt service payments through partial prepayment; and

(iv) The Commissioner determines that refinancing the loan evidenced by this Note at a lower rate or partial prepayment is necessary to restore the said project to a financially viable condition and to avoid an insurance claim.

In addition, the Maker shall not be charged any prepayment premium in connection with the partial prepayment of the Loan required by the Commissioner in connection with the partial release of mortgage resulting from the dedication of a portion of the mortgaged premises to the City of Hilliard for a public thoroughfare.

(c) Notwithstanding the provisions of Paragraph lea) above, the provisions of Paragraph l(a) shall not apply, and no prepayment premium shallbe collected by the holder of this Note, with respect to any prepayment which is made by or on behalf of the Maker from insurance proceeds as a result of damage to the mortgaged premises or condemnation awards which, at the option of the holder of this Note, may be applied to reduce the indebtedness of Maker evidenced hereby pursuant to the terms and provisions of the Open-End Mortgage Deed (the "Mortgage") of even date given by Maker to the holder of this Note to secure said indebtedness. Any prepayment made pursuant to this Paragraph 1 (c) shall be deemed to have been made on the last day of the month in which such payment is received by holder and shall include interest on the amount prepaid through and including the last day of the month in which the prepayment is made.

(d) Notwithstanding the provisions of Paragraph l(a) above, the provisions of Paragraph lea) shall not apply, and no prepayment premium shall be collected by the holder of this Note, in the event that the maximum principal amount of this Note is reduced (or a partial prepayment is made) solely as the result of a mortgage reduction (or a partial prepayment) required by the Commissioner based upon any cost certification or other report required to be provided by the Maker to the Commissioner subsequent to the date hereof. Any prepayment made pursuant to this Paragraph 1(d) shall be deemed to have been made on the last day of the month in which such payment is received by holder and shall include interest on the amount prepaid through and including the last day of the month in which the prepayment is made.

2. Late Charges. In the event any installment or part of any installment due under this Note becomes delinquent for more than fifteen (15) days, there shall be due, at the option of the holder of this Note, in addition to other sums due hereunder, a late charge in an amount equal to two percent (2%) of the amount of principal and/or interest so delinquent. Whenever, under the law of the jurisdiction where the property is located, the amount of any such late charge is considered to be additional interest, this provision shall not be effective if the rate of interest specified in this Note, together with the amount of the late charge, would aggregate an amount in excess of the maximum rate of interest permitted and would constitute usury.

3. Method of Payment. All payments to reduce the principal balance hereunder, other than regularly scheduled payments of principal, and all late charges and other amounts required to be paid hereunder, other than regularly scheduled installments of interest, shall be made to the holder of this Note in immediately available Federal Funds. Payments received after 12:00 noon Eastern time will be deemed to have been received on the next following business day.

4. Non-Recourse. Notwithstanding any other provision contained in this Note or the Mortgage to the contrary, it is agreed that the execution of this Note shall impose no personal liability on the Maker hereof for payment of the indebtedness evidenced hereby and in the event of a default, the holder of this Note shall look solely to the property described in the Mortgage and/or any security agreement and to the rents, issues and profits thereof in satisfaction of the indebtedness evidenced hereby and will not seek or obtain any deficiency or personal judgment against the Maker hereof except such judgment or decree as may be necessary to foreclose and bar its interest in the property described in the Mortgage and all other property mortgaged, pledged, conveyed or assigned to secure payment of this Note except as set out in the Mortgage.

IN WITNESS WHEREOF, the undersigned Maker has executed this Rider as of the date first above written.

MAKER:

HILLIARD GRAND APARTMENTS, LLC,

an Ohio limited liability company

By:	/s/ Gary L. Schottenstein
	Gary L. Schottenstein, Managing Member

EX-10.7

EXHIBIT 10.7

Hilliard Grand Apartments

Hilliard, Ohio

FHA Project No. 043-35522

MODIFICATION OF MORTGAGE NOTE

made by

HILLIARD GRAND APARTMENTS, LLC

payable to

RED MORTGAGE CAPITAL, LLC

dated as of July 27, 2010

in the original principal sum of $31,800,400.00

THIS MODIFICATION OF MORTGAGE NOTE (the "Modification of Note") dated as of December 31, 2012 (the "Effective Date"), is made by and between HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability company, having its place of business at 2 Easton Oval, Suite 510, Columbus, Ohio 43219 (the "Maker"), and RED MORTGAGE CAPITAL, LLC, a Delaware limited liability company, having its place of business at Two Miranova Place, 12th Floor, Columbus, Ohio 43215 (the "Holder").

WIT N E SSE T H:

WHEREAS, the Maker owns certain real property located in the City of Hilliard, County of Franklin, State of Ohio on which is constructed a certain multifamily housing project known as Hilliard Grand Apartments, FHA Project No. 043-35522 (the "Project"); and

WHEREAS, Maker previously executed a certain Mortgage Note (the "Note") dated as of July 27, 2010, in favor of Holder in the original principal amount of Thirty-One Million Eight Hundred Thousand Four Hundred Dollars ($31,800,400.00). The Note is secured in part by a certain Open-End Mortgage Deed (the "Mortgage") to Holder dated as of July 27, 2010 and filed for record July 27, 2010 in Instrument Number 201002720094998 in the Official Records of Franklin County, Ohio (the "Records"); and

WHEREAS, the Note was initially endorsed for mortgage insurance by the Secretary of Housing and Urban Development ("Secretary"), acting by and through the Federal Housing Commissioner ("HUD"or the "Commissioner" as ·the context may require) under Section 221 (d)(4) of the National Housing Act, as amended (the."Contract of Insurance"); and

WHEREAS, as of the Effective Date, the Note was finally endorsed for mortgage insurance by the Secretary; and

WHEREAS, HUD has determined that the maximum insurable amount of the Note is $29,322,700.00, and the parties have therefore agreed to decrease the amount of the Note from $31,800,400.00 to $29,322,700.00, and to modify the terms of the Note and the Mortgage to reflect a decrease in the monthly principal and interest payment from $165,968.81 to $153,037.50. The parties have entered into that certain Loan Modification Agreement of even date herewith to conform to the terms of this Modification of Note, which Loan Modification Agreement is being recorded in the Records.

NOW, THEREFORE, for and in consideration of the above premises, the sum of Ten Dollars ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the parties hereto, the parties, for themselves and for their respective successors and assigns, do hereby agree that the terms of the Note to which this Modification of Noteis appended are hereby amended as follows:

1.    The foregoing recitals are hereby incorporated by reference as if set forth fully herein. All capitalized terms not defined in this Modification of Note shall have the same meanings ascribed thereto in the Note.

2.    The principal amount of the Note is hereby modified to be $29,322,700.00. In each place where it appears, the amount "$31,800,400.00" is hereby deleted and replaced with "$29,322,700.00".

3.    The first paragraph of the Note is hereby amended to replace the words, "Thirty-One Million Eight Hundred Thousand Four Hundred" with the words, "Twenty-Nine Million Three Hundred Twenty-Two Thousand Seven Hundred".

4.    The obligation of Maker under the Note to make monthly payments of principal and/or interest is hereby amended by deleting in its entirety the full section of the first paragraph of Note immediately after the words "as follows:" commencing with the words "Commencing on the first day of August, 2010 ... " and inserting in lieu thereof:

"Commencing on the first day of August, 2010 and continuing on the first day of each month thereafter up to and including August 1, 2012, interest on the outstanding principal balance. Commencing on the first day of September, 2012, monthly installments of interest and principal shall be paid in the sum of One Hundred Fifty-Three Thousand Thirty-Seven and 50/100 Dollars ($153,037.50) each, such payments to continue monthly thereafter on the first day of each succeeding month until the entire indebtedness has been paid. In any event, the balance of the principal, if any remaining unpaid, plus accrued interest shall be due and payable on August 1, 2052. The installments of interest and principal shall be applied first to interest at the rate of five and 59/l00ths percent (5.59%) per annum upon the principal sum or so much thereof as shall from time to time remain unpaid and the balance thereof shall be applied on account of principal."

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5.    Maker acknowledges and affirms to the Holder and the Secretary that, as of the date of this Modification of Note, there are no defenses, set-offs or counter-claims, whether legal or equitable, to Maker's obligations under the Note, and Maker hereby waives the right to raise or assert any such defenses, set-offs or counter-claims which Maker may have had with respect to any suit, proceeding or foreclosure action under the Note that the Holder, or any of its predecessors in interest in and to the Note, mayor could have brought against Maker prior to the date hereof.

6.    Maker and Holder acknowledge and agree that the terms of this Modification of Note are subject to the approval thereof by the Secretary, which approval shall be evidenced by the written consent of the Secretary affixed to this Modification of Note where indicated below. Maker and Holder further acknowledge and agree that the terms of this Modification of Note shall not be deemed effective unless and until the Secretary executes the consent as aforesaid.

7.    Notwithstanding any provision of this Modification of Note to the contrary, Maker and Holder hereby acknowledge and agree that the Secretary and the Holder retain all rights and remedies arising under the Contract of Insurance under Section 221(d)(4) of the National Housing Act, as amended, and all regulations and administrative guidelines promulgated by the Secretary thereunder.

8.    From and after the date hereof, the Note and this Modification of Note shall be taken and read together as one, single and continuing instrument evidencing a single debt owed by the Maker to the Holder in the amount set forth hereinabove, as may be unpaid from time to time. Nothing contained herein shall be taken or construed to create a novation or new agreement by and between the Maker and the Holder; it being the intention of the parties solely (a) to reduce the amount of principal advanced, evidenced, and payable under the Note, and (b) to revise the amount of monthly installments of principal and interest payable thereunder as a result of such reduction in principal, as reflected by this Modification of Note, and for no' other purpose. Furthermore, nothing herein contained shall in any way impair the Note or the security now held for such indebtedness, or alter, waive, annul, vary or affect any provision, condition, covenant herein except as herein provided, nor affect or impair any rights, powers or remedies of the Holder under the Note, it being the intent of the parties that the terms and provisions of the Note shall continue in full force and effect except as modified hereby.

9.    Notwithstanding anything herein contained, if anyone or more of the provisions of this Modification of Note shall for any reason whatsoever be, held to be illegal, invalid, or unenforceable in any respect, such illegality, invalidity, or unenforceability shall not affect any other provision of this Modification of Note, but this Modification of Note shall be construed as if such illegal, invalid, or unenforceable provision had never been contained herein.

10.    Maker and Holder agree to execute such other documents as may be necessary to implement the terms and provisions of this Modification of Note, and the transaction evidenced thereby, including but not limited to that certain Loan Modification Agreement of even date herewith executed by the Maker and the Holder.

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11.    From and after the date hereof, all references contained in the Note to the "Mortgage" or "mortgage" shall hereafter be deemed to refer to and include the Mortgage, as amended.

12.    The Note, as amended by this Modification of Note, may not be further amended except· by an instrument in writing executed by each of the parties hereto.

13.    This Modification of Note shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

14.    This Modification of Note may be executed in any number of counterparts and all counterparts shall be construed together and shall constitute but one agreement.

[SIGNATURES APPEAR ON SUCCEEDING PAGES]

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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be

executed as of the day and year first above written.

MAKER:

HILLIARD GRAND APARTMENTS, LLC,

an Ohio limited liability company

By:	/s/ Gary L. Schottenstein
	Gary L. Schottenstein, Managing Member

5

HOLDER:

RED MORTGAGE CAPITAL, LLC, a Delaware limited. liability company

By:	/s/ Edward H.R. Tellings
	Edward H.R. Tellings, Senior Managing Director

6

CONSENT TO MODIFICATION OF MORTGAGE NOTE:

The undersigned hereby consents to and approves the foregoing Modification of Mortgage Note.

HUD:

SECRETARY OF HOUSING AND URBAN DEVELOPMENT, acting by and through the Federal Housing Commissioner

By:	/s/ William E. Hughes
Name:	William E. Hughes
Title:	Acting HUD Director

7

EX-10.8

EXHIBIT 10.8

COVER PAGE TO

LOAN MODIFICATION AGREEMENT

BY AND AMONG

HILLIARD GRAND APARTMENTS, LLC,

RED MORTGAGE CAPITAL, LLC,

AND

THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT

After recording return.to:

William D. G. Baldwin, Esq.

Vorys, Sater, Seymour and Pease LLP

P.O. Box 0236

Cincinnati, Ohio 45201-0236

Hilliard Grand Apartments

 FHA Project No. 043-35522

LOAN MODIFICATION AGREEMENT

THIS LOAN MODIFICATION AGREEMENT(this "Agreement") is made as of December 28, 2012, by and among HILLIARD GRAND APARTMENTS, LLC, an Ohio limited liability company (hereinafter called "Mortgagor"), RED MORTGAGE CAPITAL, LLC, a Delaware limited liability company (hereinafter called "Mortgagee"), and the SECRETARY OF HOUSING AND URBAN DEVELOPMENT, acting by and through the Federal Housing Commissioner (hereinafter called "Secretary"), who is entering into this Agreement to effect the modification of the Regulatory Agreement (hereinafter defined).

Recitals.

A.     Mortgagor is the owner of a project identified in the records of the Secretary .as Hilliard Grand Apartments, FHA Project No. 043-35522 (the "Project") situated on the real property described on Exhibit A attached hereto and incorporated herein by reference (the "Property").

B.     The Mortgagor has financed the Project with a mortgage loan (the "Mortgage Loan")made to the Mortgagor by the Mortgagee in the original maximum principal amount of $31,800,400.00.

C.     The Mortgage Loan is insured by the Secretarypursuant to Section 221(d) (4) of the National Housing Act, as amended.

D.     The Mortgage Loan is evidenced by a Mortgage Note dated as of July 27, 2010 in the original principal amount of $31,800,400.00 executed by the Mortgagor in favor of the Mortgagee (the "Note")and is secured, interalia, by (i) an Open-End Mortgage Deed executed by the Mortgagor in favor of the Mortgagee (the "Mortgage "), which Mortgage was recorded on July 27, 2010 in the Official Records of Franklin County, Ohio in Instrument Number 201002720094998 and (ii) a Security Agreement dated as of July 27, 2010 executed by the Mortgagor in favor of the Mortgagee (the "Security Agreement").

E.     In connection with the Mortgage Loan, the Mortgagor and the Secretary entered into a certain Regulatory Agreement Multifamily Housing Projects dated as of July 27, 2010 and recorded on July 27, 2010 in the Official Records of Franklin County, Ohio in Instrument Number 201002720094999 (the "Regulatory Agreement").

F.     The Note, Mortgage, Security Agreement, Regulatory Agreement; and all other documents executed by the Mortgagor in connection with the Mortgage Loan are hereinafter referred to as the "Loan Documents".

G.     The maximum 'insurable mortgage amount, as determined by the Secretary, with respect to the Mortgage Loan has been reduced from $31,800,400.00 to $29,322,700.00.

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H.     A portion of the Property has been conveyed to the City of Hilliard for roadway and green space purposes, after which the legal description of the Property was modified to be as described on Exhibit A-1 hereto. "

Statement of Agreement.

NOW, THEREFORE, for One Dollar ($1.00) and other good and valuable consideration, mutually exchanged, the Mortgagor, the Mortgagee, the Trustee and the Secretary agree as follows:

1.     Recitals. The foregoing recitals are hereby incorporated by reference as if fully set forth herein.

2.     Amendments to Note.

(a) The amount of the Note is reduced from $31,800,400.00 to $29,322,700.00. All references in the Note to "Thirty-One Million Eight Hundred Thousand Four" Hundred and No/100 Dollars" shall be amended to read "Twenty-Nine Million Three Hundred Twenty-Two Thousand Seven Hundred and No/100 Dollars." All references in the Note to "$31,800,400.00" shall be amended to read "$29,322,700.00".

(b) The obligation of the Mortgagor to make monthly payments of principal and/or interest as set forth in the Note is hereby amended by deleting the paragraph of the Note beginning with the words "Commencing on the first day of August, 2010 ..." and inserting in lieu thereof:

"Commencing on the first day of August, 2010 and continuing on the first day of each month thereafter up to and including August 1, 2012, interest on the outstanding principal balance. Commencing on the first day of September, 2012, monthly installments of interest and principal . shall be paid in the sum of One Hundred Fifty-Three Thousand Thirty-Seven and 50/100 Dollars ($153,037.50) each, such payments to continue monthly thereafter on the first day of each succeeding month until the entire indebtedness has been paid. In any event, the balance of the principal, if any remaining unpaid, plus accrued interest shall be due and payable on August 1, 2052. The installments of interest and principal shall be applied first to interest at the rate of five and 59/100ths percent (5.59%) per annum upon the principal sum or so much thereof as shall from time to time remain unpaid and the balance thereof shall be applied on account of principal.

(c) The Note is hereby amended so that all references to the "Mortgage" or "mortgage" contained in the Note shall be deemed to be references to the Mortgage, as modified by this Agreement.

3.     Amendments to Mortgage, Regulatory Agreement and Other Loan Documents.

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(a) All references to the amount of the Mortgage Loan, Note and/or Mortgage which are contained in the Mortgage, Security Agreement, Regulatory Agreement, or any other Loan Document are changed from $31,800,400.00 to $29,322,700.00.

(b) The Mortgage, Security Agreement, Regulatory Agreement, and other Loan Documents are modified to delete the legal-description of the Property attached as Exhibit A, as applicable, and substitute in lieu therefor the legal description of the Property attached as Exhibit A-I hereto.

(c) The Mortgage, Security Agreement, Regulatory Agreement, and other Loan Documents are each hereby amended so that all references to the "Note" or "note" contained in any of said documents shall be deemed to refer to the Note, as modified by this Agreement, and any reference to the "Mortgage" or "mortgage" contained in any of said documents shall be deemed. to refer to the Mortgage, as modified by this Agreement, and any reference to the "Regulatory Agreement" or "regulatory agreement" contained in any of said documents shall be deemed to refer to the Regulatory Agreement, as modified by this Agreement, and any reference to the "Security Agreement" or "security agreement" contained in any of said documents shall be deemed to refer to the Security Agreement, as modified by this Agreement.

4.     Non-Waiver.

Nothing in this Agreement shall waive, compromise, impair or prejudice any right the Secretary may have to seek judicial recourse for any breach of the Regulatory Agreement that may have occurred prior to or may occur subsequent to the date of this Agreement. In the event that the Secretary initiates an "action for breach of the Regulatory Agreement and recovers funds, either on the Secretary's own behalf or on behalf of the Project or the Mortgagor, 'those funds may be applied, at the discretion of the Secretary, to the payment of the delinquent amount due under' the Mortgage or as a partial prepayment of the Mortgage debt.

5.     Other Provisions.

All other provisions of the Loan Documents are hereby confirmed and ratified according to their terms. Nothing herein contained shall in any manner impair the Note or the security now held for said indebtedness, or alter, waive, annul, vary or affect any provision, condition or covenant therein, except as specifically provided herein, nor affect or impair any rights, powers or remedies under the Note or Mortgage, it being the intent of the parties hereto that the terms and provisions of the Note and Mortgage shall continue in full force and effect except as modified hereby.

6.     Multiple Counterparts.

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

IN WITNESS WHEREOF, Mortgagor, Mortgagee, and the Secretary have executed this Agreement as of the date fIrst set forth above.

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[SEE COUNTERPART SIGNATURE PAGES ATTACHED HERETO]

5

COUNTERPART SIGNATURE PAGE TO LOAN MODIFICATION AGREEMENT

MORTGAGOR:

HILLIARD GRAND APARTMENTS, LLC,

an Ohio limited liability company

By:	/s/ Gary L. Schottenstein
	Gary L. Schottenstein, Managing Member

STATE OF FLORIDA	)
	) ss:
COUNTY OF PALM BEACH	)

I, Vince Gasso, a notary public of the above county and state, certify that Gary L. Schottenstein personally came before me this day and acknowledged that he is the Managing Member of Hilliard Grand Apartments, LLC, an Ohio limited liability company, and that he as Managing Member, being authorized to do so, executed the foregoing on behalf of the limited liability company.

Witness my hand and official seal, this the 24 day of December, 2012.

/s/ Vince Gasso

Notary Public

Name: Vince Gasso

My commission expires 4-12-13

6

COUNTERPART SIGNATURE PAGE TO LOAN MODIFICATION AGREEMENT

MORTGAGEE:

RED MORTGAGE CAPITAL, LLC,

a Delaware limited liability company

By:	/s/ Edward H.R. Tellings,
	Senior Managing Director

STATE OF OHIO	)
	) ss:
COUNTY OF FRANKLIN	)

I, Julie A. Moore, a notary public of the above county and state, certify that Edward H.R. Tellings personally came before me this day and acknowledged that he is the Senior Managing Member of RED MORTGAGE CAPITAL, LLC, a Delaware limited liability company, and that he as Senior Managing Director, being authorized to do so, executed the foregoing on behalf of the limited liability company.

Witness my hand and official seal, this the 27th day of December, 2012.

/s/ Julie A. Moore

Notary Public

Name:

My commission expires

7

COUNTERPART SIGNATURE PAGE TO LOAN MODIFICATION AGREEMENT

SECRETARY:

SECRETARY OF HOUSING AND URBAN DEVELOPMENT,

acting by and through the Federal Housing Commissioner

By:	/s/ Chris Cook
Name:	Chris Cook
Title:	Authorized Agent

STATE OF OHIO	)
	) ss:
COUNTY OF FRANKLIN	)

I, William W. Cusack, a notary public of the above county and state, certify that Chris Cook personally came before me this day and acknowledged that he/she is the duly appointed Authorized Agent of the Federal Housing Commissioner and that he/she as Authorized Agent, being authorized to do so, executed the foregoing on behalf of the Federal Housing Commissioner, for the purposes therein expressed.

Witness my hand and official seal, this the 26th day of December, 2012.

/s/ William W. Cusack

Notary Public

Name:

My commission expires

This Document prepared by:

William D.G. Baldwin

Vorys, Sater, Seymour and Pease LLP

P.O. Box 0236

Cincinnati, Ohio 45201-0236

(513) 723-4000

8

EXHIBIT A

Legal Description

Tract I -1.546 Acres

Situated in the State of Ohio, County of Franklin, City of Hilliard, lying in Virginia Military Survey Number 3022, and being all of the 1.547 acre tract conveyed to Jeannie M. Thivener by deed of record in Instrument Number 200702160028236 (all references are to the records of the Recorder's Office, Franklin County, Ohio) and being more particularly described as follows:

BEGINNING at a magnetic nail set on the centerline of Wilcox Road, on the westerly line of Virginia Military Survey Number 3022 and on the easterly line of Virginia Military Survey Number 3012, at the southwesterly comer of said 1.547 acre tract and at a northwesterly comer of that 33.619 acre tract conveyed to Beverly J. Wilcox, Successor Trustee by deed of record in Instrument Number 200702020020042, reference Franklin County Geodetic Survey Monument Number 6649 found South 06° 02' 50" East a distance of 379.76 feet at an angle point on the centerline of Wilcox Road;

Thence North 06° 02' 50" West, with the centerline of said Wilcox Road, the westerly line of Virginia Military Survey Number 3022 and the easterly line of Virginia Military Survey Number 3012, a distance of 274.95 feet to a magnetic nail set at the northwesterly comer of said 1.547 acre tract and at a southwesterly comer of said 33.619 acre tract, reference Franklin County Geodetic Survey Monument Number 4461 found North 06° 02' 50" West a distance of 1473.05 feet on the centerline of Wilcox Road;

Thence with the line common to said 1.547 acre tract and said 33.619 acre tract, the following courses and distances:

North 83° 56' 41" East, a distance of 244.97 feet, to a 3/4" iron pipe capped "Hockaden & Assoc." found, passing over a 3/4" iron pipe capped "Hockaden & Assoc." found at 30.00 feet;

South 06° 02' 50" East, a distance of 274.95 feet, to a 3/4" iron pipe capped "Hockaden & Assoc." found;

South 83° 56' 41" West, a distance of 244.97 feet, to the POINT OF BEGINNING, passing over a 3/4" iron pipe found at 215.03 feet, and containing 1.546 acres of land, more or less of which 0.189 acre is located in the right-of-way of Wilcox Road.

Iron pins set, where indicated, are iron pipes, thirteen sixteenths (13/16) inch inside diameter, thirty (30) inches long with a plastic plug placed in the top bearing the initials EMHT INC.

The bearings herein are based on the Ohio State Plane Coordinate System South Zone as per NAD83 (1986 Adjustment). Control for bearings originated from the Franklin County Engineer's Centerline Survey Plat of Wilcox Road, Drawing 0040-01, dated March 3, 2003 showing the bearing between monuments FCGS 4461 and FCGS 6649 as being North 06° 02' 50" West, established by the Franklin County Engineering Department, using Global Positioning System procedures and equipment.

This description is based on an actual field survey performed by or under the direct supervision of Michael O. Wanchick, Registered Surveyor Number 7854 in September 2008.

Tract II -34.472 Acres

Situated in the State of Ohio, County of Franklin, City of Hilliard, lying in Virginia Military Survey Number 3022, and being all of the 33.619 acre tract conveyed to Beverly J. Wilcox, Successor Trustee by deed of record in Instrument Number 200702020020042 (all references are to the records of the Recorder's Office, Franklin County, Ohio) and being more particularly described as follows:

BEGINNING at a magnetic nail set on the centerline of Wilcox Road (width varies), on the westerly line of Virginia Military Survey Number 3022 and on the easterly line of Virginia Military Survey Number 3012, at the northwesterly comer of said 33.619 acre tract, reference Franklin County Geodetic Survey Monument Number 4461 found North 06° 02' 50" West a distance of 710.00 feet on the centerline of Wilcox Road;

Thence North 83° 39' 38" East, with the northerly line of said 33.619 acre tract, and the southerly line of Lot 1 of "Britton Central Riggins Road, Wilcox Road, Lots and Easements Dedication Plat" of record in Plat Book 109, Pages 60-63 and Instrument Number 200607110135255, a distance of 931.48 feet, to a 5/8" rebar capped "H.G. Eng. & Surveyors" found at the southeasterly comer of said Lot 1 and on the westerly line of Lot 2 of said "Britton Central Riggins Road, Wilcox Road, Lots and Easements Dedication Plat", passing over a 5/8" rebar capped "H.G. Eng & Surveyors" found at 30.09 feet;

Thence South 06° 20' 41" East, with the westerly line of said Lot 2, the westerly terminus of Riggins Road (100 feet wide) the westerly line of Lot 4 of said "Britton Central Riggins Road, Wilcox Road, Lots and Easements Dedication Plat" and the westerly line of that 10 acre tract conveyed to Hazel J. Sanderson and James E. Sanderson by deed of record in Instrument Number 199802180036269, a distance of 1527.56 feet, to an iron pin set at a southwesterly comer of said 10 acre tract, and on the northerly line of that 4.242 acre tract conveyed to Barbara Trueman by deed of record in Official Record 6580I19 and the Northern Trust Company by deed of record in Instrument Number 200212060313779, passing over a 3/4" iron pipe found at 1061.87 feet;

Thence South 61 ° 56' 06" West, with the northerly line of said 4.242 acre tract and the northerly line of that 2.340 acre tract conveyed to Stephen T. Boles, Trustee by deed of record in Instrument Number 200007170140764, a distance of 681.24 feet, to an iron pin set at the southeasterly comer of that 0.834 acre tract conveyed to Stephen T. Boles, Trustee by deed of record in Instrument Number 200201070006463, passing over a 3/4" rebar found at 385.31 feet;

Thence North 39° 32' 11" West, with the easterly line of said 0.834 acre tract, a distance of 102.45 feet, to a point in a creek and passing over an iron pin set on the bank of the creek at 82.45 feet;

Thence South 71 ° 47' 15" West, with the northerly line of said 0.834 acre tract, a distance of 257.43 feet to a magnetic nail set on the centerline of said Wilcox Road, on the westerly line of said Virginia Military Survey Number 3022 and on the easterly line of Virginia Military Survey Number 3012 (reference Franklin County Geodetic Survey Monument Number 5542 found South 05° 59' 25" East a distance of 347.75 feet at the centerline intersection of Wilcox Road and Hayden Run Road) and passing over an iron pin set at 226.73 feet on the easterly right-of-way line of said Wilcox Road;

Thence with the centerline of said Wilcox Road, the westerly line of said Virginia Military Survey Number 3022 and with the easterly line of Virginia Military Survey Number 3012, the following courses and distances:

North 05° 59' 25" West, a distance of 329.22 feet, to Franklin County Geodetic Survey Monument Number 6649 found;

North 06° 02' 50" West, a distance of 379.76 feet, to a magnetic nail set at the southwesterly comer of that 1.547 acre tract conveyed to Jeannie M. Thivener by deed of record in Instrument Number 200702160028236;

Thence with the perimeter of said 1.547 acre tract, the following courses and distances:

North 83° 56' 41" East, a distance of 244.97 feet, to a 3/4" iron pipe capped "Hockaden & Assoc." found, passing over a 3/4" iron pipe found at 29.94 feet;

North 06° 02' 50" West, a distance of 274.95 feet, to a 3/4" iron pipe capped "Hockaden & Assoc." found;

South 83° 56' 41" West, a distance of244.97 feet, to a magnetic nail set on the centerline of said Wilcox Road, on the westerly line of said Virginia Military Survey Number. 3022 and on the easterly line of Virginia Military Survey Number 3012, passing over a 3/4" iron pipe capped "Hockaden & Assoc.", found at 214.97 feet;

Thence North 06° 02' 50" West, with the centerline of said Wilcox Road, the westerly line of said Virginia Military Survey Number 3022 and the easterly line of Virginia Military Survey Number 3012, a distance of 763.05 feet, to the POINT OF BEGINNING, containing 34.472 acres of land, more or less of which 1.012 acres are located in the right-of-way of Wilcox Road.

Iron pins set, where indicated, are iron pipes, thirteen sixteenths (13/16) inch inside diameter, thirty (30) inches long with a plastic plug placed in the top bearing the initials EMHT INC.

The bearings herein are based on the Ohio State Plane Coordinate System South Zone as per NAD83 (1986 Adjustment). Control for bearings originated from the Franklin County Engineer's Centerline Survey Plat of Wilcox Road, Drawing 0040-01, dated March 3, 2003 showing the bearing between monuments FCGS 4461 and FCGS 6649 as being North 06° 02' 50" West, established by the Franklin County Engineering Department, using Global Positioning System procedures and equipment.

This description is based on an actual field survey performed by or under the direct supervision of Michael O. Wanchick, Registered Surveyor Number 7854 in September 2008.

EX-10.9

EXHIBIT 10.9

OPEN-END

MORTGAGE DEED

In The Maximum Principal Amount of $31,800,400.00

KNOW ALL MEN BY THESE PRESENTS, That HILLIARD GRAND APARTMENTS, LLC, a limited liability company, organized and existing under the laws of the State of Ohio (hereinafter with its successors and assigns referred to as the Mortgagor), for and in consideration of the sum of Ten Dollars ($10) to it in hand paid by RED MORTGAGE CAPITAL, LLC, a limited liability company, organized and existing under the laws of the State of Delaware, whose correct address is Two Miranova Place, 12th Floor, Columbus, Ohio 43215, the Mortgagee (hereinafter with its successors and assigns referred to as the Mortgagee), receipt of which is hereby acknowledged, does hereby grant, bargain, sell, convey, and warrant unto the Mortgagee the following described premises to wit:

For legal description, see Exhibit A attached hereto and incorporated by reference herein.

Together with the privileges and appurtenances thereunto belonging, and all the rents, issues, and profits which may arise or be had therefrom; and all the estate, title and interest of said Mortgagor either in law or equity in and to said premises, together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon and all fixtures and articles of personal property of the Mortgagor now or hereafter to be attached to or used in and about the building or buildings now erected or hereafter to be erected on the lands herein described which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including, but not limited to all dynamos, engines, pumps, elevators, all awnings, screens, venetian blinds, shades, fixtures, and all plumbing, heating, lighting, cooking, ventilating, refrigerating, laundry and incinerating equipment; all cabinets and fixtures and appurtenances thereto and such other goods and chattels and personal property as are ever used or furnished in operating a building or the activities conducted therein, similar to the one herein described and referred to, and all renewals and replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to said building or buildings in any manner. All of the foregoing shall be deemed to be, remain and form part of the realty and are covered under this mortgage. If the Mortgagor shall, after the date hereof, acquire any additional real or personal property which would, if owned by the Mortgagor, be subject to the terms of this Mortgage, it shall notify the Mortgagee and the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner, of such acquisition, stating the nature, quantity, or amount of such property so acquired and the interest of the Mortgagor therein. All such property or the interest of the Mortgagor therein shall, upon acquisition by the Mortgagor, forthwith and without further act, become subject to this mortgage; and

Together with all building materials located on the premises and intended to be incorporated in the buildings or other improvements.

TO HAVE AND TO HOLD the said premises and above-described property to the said Mortgagee, its successors and assigns forever, for the uses and purposes herein expressed:

WHEREAS, the Mortgagor is justly indebted to the Mortgagee in the principal sum of Thirty-One Million Eight Hundred Thousand Four Hundred and No/100 Dollars ($31,800,400.00), evidenced by its notes of even date herewith, bearing interest from date on outstanding balances at five and 59/100ths per centum (5.59%) per annum, said principal and interest being payable in monthly installments as provided in said note with a final maturity of August 1, 2052, which note is identified as being secured hereby by a certificate thereon. Said note and all of its terms are incorporated herein by reference and this conveyance shall secure any and all extensions thereof, however evidenced.

AND WHEREAS MORTGAGOR COVENANTS, PROMISES AND AGREES HEREBY:

1. That it will pay the note at the times and in the manner provided therein;

2. That it will not permit or suffer the use of any of the property for any purpose other than the use for which the same was intended at the time this mortgage was executed;

3. That the Regulatory Agreement, if any, executed by the Mortgagor and the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner, which is being recorded simultaneously herewith, is incorporated in and made a part of this mortgage. Upon default under the Regulatory Agreement and upon the request of the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner, the Mortgagee, at its option, may declare the whole of the indebtedness secured hereby to be due and payable;

4. That all rents, profits and income from the property covered by this mortgage are hereby assigned to the Mortgagee for the purpose of discharging the debt hereby secured. Permission is hereby given to Mortgagor so long as no default exists hereunder, to collect such rents, profits and income for use in accordance with the provisions of the Regulatory Agreement.

5. That upon default hereunder Mortgagee shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the property described herein and operate same and collect the rents, profits and income therefrom;

6. That at the option of the Mortgagor the principal balance secured hereby may be reamortized on terms acceptable to the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner if a partial prepayment results from an award in condemnation in accordance with provisions of paragraph 9 herein, or from an insurance payment made in accordance with provisions of paragraph 7 herein, where there is a resulting loss of project income;

7. That the Mortgagor will keep the improvements now existing or hereafter erected on the mortgaged property insured against loss by fire and such other hazards, casualties, and contingencies, as may be stipulated by the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner upon the insurance of the mortgage and other hazards and liabilities as may be required from time to time by the Mortgagee, and all such insurance shall be evidenced by standard Fire and Extended Coverage Insurance policy or policies, in amounts not less than necessary to comply with the applicable Coinsurance Clause percentage, but in no event shall the amounts of coverage be less than eighty per centum (80%) of the Insurable Values or not less than the unpaid balance of the insured mortgage, whichever is the lesser, and in default thereof the Mortgagee shall have the right to effect insurance. Such policies shall be endorsed with standard Mortgagee clause with loss payable to the Mortgagee as interest may appear, and shall be deposited with the Mortgagee; the insurance carrier shall be selected by the Mortgagor, subject to approval by the Mortgagee, which shall not be unreasonably withheld.

That if the premises covered hereby, or any part thereof, shall be damaged by fire or other hazard against which insurance is held as hereinabove provided, the amounts paid by any insurance company in pursuance of the contract of insurance to the extent of the indebtedness then remaining unpaid, shall be paid to the Mortgagee and, at its option, may be applied to the debt or released for the repairing or rebuilding of the premises;

8. That it is the owner in fee simple of said premises; that it is in peaceable possession of same and has full power to convey the same and the title so conveyed is free, clear and unencumbered except taxes not due and payable;

9. That all awards of compensation in connection with condemnation for public use of or a taking of any of that property, shall be paid to the Mortgagee to be applied to the amount due under the note secured hereby in (1) amounts equal to the next maturing installment or installments of principal and (2) with any balance to be credited to the next payment due under the note. That all awards of damages in connection with any condemnation for public use of or injury to any residue of that property, shall be paid to the Mortgagee to be applied to a fund held for and on behalf of the Mortgagor which fund shall, at the option of the Mortgagee, and with the prior approval of the Secretary of Housing and Urban Development, either be applied to the amount due under the note as specified in the preceding sentence, or be disbursed for the restoration or repair of the damage to the residue. No amount applied to the reduction of the principal amount due in accordance with (1) shall be considered an optional prepayment as the term is used in this Mortgage Deed and the note secured hereby, nor relieve the Mortgagor from making regular monthly payments commencing on the first day of the first month following the date of receipt of the award. The Mortgagee is hereby authorized in the name of the Mortgagor to execute and deliver valid acquittances for such awards and to appeal from such awards.

10. To commit or suffer no waste of said property, to maintain and keep the buildings, fences and other improvements to be erected on said premises in good condition and repair and promptly to effect such repairs thereof as Mortgagee may require;

11. That, in order more fully to protect the security of this mortgage, the Mortgagor, together with and in addition to, the monthly payments under the terms of the note secured hereby, covenants and agrees to pay to the Mortgagee beginning the first day of the first month after date hereof and continuing until the said note is fully paid, concurrently with payments of interest or principal and interest the following sums:

(a) An amount sufficient to provide the mortgagee with funds to pay the next mortgage insurance premium if this instrument and the note secured hereby are insured, or a monthly service charge, if they are held by the Secretary of Housing and Urban Development, as follows:

(I)     If and so long as said note of even date and this instrument are insured or are reinsured under the provisions of the

National Housing Act, an amount sufficient to accumulate in the hands of the Mortgagee one (1) month prior to its due date the annual mortgage insurance premium, in order to provide such Mortgagee with funds to pay such premium to the Secretary of Housing and Urban Development pursuant to the National Housing Act, as amended, and applicable Regulations thereunder, or

(II)         Beginning with the first day of the month following an assignment of this instrument and the note secured hereby to

the Secretary of Housing and Urban Development, a monthly service charge which shall be an amount equal to one-twelfth of one-half percent (1/12 of 1/2%) of the average outstanding principal balance due on the note computed for each successive year beginning with the first of the month following such assignment, without taking into account delinquencies or prepayments.

(b) A sum equal to the ground rents, if any, next due, plus the premiums that will next become due and payable on policies of fire

and other insurance covering the premises covered hereby, plus water rates, taxes and assessments next due on the premises covered hereby (all as estimated by the Mortgagee) less all sums already paid therefor divided by the number of months to elapse before one (1) month prior to the date when such ground rents, premiums, water rates, taxes and assessments will become delinquent, such sums to be held by Mortgagee to pay said ground rents, premiums, water rates, taxes, and special assessments.

(c) All payments mentioned in the two preceding subsections of this paragraph and all payments to be made under the note secured

hereby shall be added together and the aggregate amount thereof shall be paid each month in a single payment to be applied to Mortgagee to the following items in the order set forth:

(I) premium charges under the Contract of Insurance with the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner or service charge; .

(II) ground rents, taxes, special assessments, water rates, fire and otherinsurance premiums;

(III) interest on the note secured hereby;

(IV) amortization of the principal of said note.

12. Any excess funds accumulated under (b) of paragraph 11 remaining after payment of the items therein mentioned, shall be credited to subsequent monthly payments of the same nature required thereunder, but if any such items shall exceed the estimate therefor, the Mortgagor shall without demand forthwith make good the deficiency. Failure to do so before the due date of such item shall be a default hereunder. In case of termination of the Contract of Mortgage Insurance by prepayment of the mortgage in full, or otherwise (except as hereinafter provided), accumulations under (a) of paragraph 11 hereof not required to meet payments due under the Contract of Mortgage Insurance, shall be credited to the Mortgagor. If the property is sold under foreclosure or is otherwise acquired by the Mortgagee after default, any remaining balance of the accumulations under (b) of paragraph 11 shall be credited to the principal of the mortgage as of the date of commencement of foreclosure proceedings or as of the date the property is otherwise acquired; and accumulations under (a) of paragraph 11 shall be similarly applied unless required to pay sums due the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner under the Contract of Mortgage Insurance;

13. That it will pay all taxes, assessments, water rates, and other governmental or municipal charges, fines or impositions, for which provision has not been made theretofore by deposits with Mortgagee, and in default thereof the Mortgagee may pay the same; and that it will promptly deliver the official receipts therefor to the Mortgagee;

14. That the Mortgagor will give immediate notice by mail to the Mortgagee and the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner of any fire damage or other casualty to the premises;

15. That no waiver of any covenant herein or of the note secured hereby shall at any time thereafter be held to be a waiver of the terms hereof or of the note secured hereby;

16. That all payments made by the Mortgagee to remedy a default by the Mortgagor as aforesaid and the total of any payment or payments due from the Mortgagor to the Mortgagee and default shall be added to the debt secured by this mortgage and shall be repaid to the Mortgagee upon demand. Any such sum and interest thereon at the rate specified in the note shall be a lien on the premises, prior to any other lien attaching or accruing subsequent to the lien of this mortgage;

17. That it will not voluntarily create or permit to be created against the property subject to this mortgage any lien or liens inferior or superior to the lien of this mortgage, it further will keep and maintain the same free from the claim of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on said premises;

18. That the improvements about to be made upon the premises above described and all plans and specifications comply with all municipal ordinances and regulations made or promulgated by lawful authority, and that the same will upon completion comply with all such municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association, or office. In the event the Mortgagor shall at any time fail to comply with such rules, regulations, and ordinances which are now or may hereafter become applicable to the premises above described, after due notice and demand by the Mortgagee, thereupon the principal sum and all arrears of interest and other charges provided for herein, shall at the option of the Mortgagee become due and payable;

19. That the funds to be advanced herein are to be used in the construction of certain improvements on the lands herein-described, in accordance with a building loan agreement between the Mortgagor and the Mortgagee dated as of even date herewith, which building loan agreement is hereinafter mentioned; if the construction of the improvements to be made pursuant to said building loan agreement shall not be carried on with reasonable diligence, or shall be discontinued at any time for any reason other than strikes or lock-outs, the Mortgagee, after due notice to the mortgagor or any subsequent owner, is hereby invested with full and complete authority to enter upon the said premises, employ watchmen to protect such improvements from depredation or injury and to preserve and protect the personal property therein, and to continue any and all outstanding contracts for the erection and completion of said building or buildings, to make and enter into any contracts and obligations wherever necessary, either in its own name or in the name of the Mortgagor, and to pay and discharge all debts, obligations and liabilities incurred thereby. All such sums so advanced by the Mortgagee (exclusive of advances of the principal of the indebtedness secured hereby) shall be added to the principal of the indebtedness secured hereby and shall be secured by this mortgage and shall be due and payable on demand with interest at the rate specified in the note, but no such advances shall be insured unless same are specifically approved by the Secretary of Housing and Urban Development, acting by and through the Federal Housing Commissioner prior to the making thereof. The principal sum and other charges provided for herein shall, at the option of the Mortgagee or holder of this mortgage an the note secured hereby, become due and payable on the failure of the Mortgagor to keep and perform any of the covenants, conditions, and agreements of said building loan agreement. This covenant shall be terminated upon the completion of the

improvements to the satisfaction of the Mortgagee and the making of the final advance as provided in said building loan agreement;

20. The Mortgagor hereby represents and warrants that no work has been commenced or materials furnished to or in connection with any improvements on the mortgaged premises at the date hereof and will not be commenced or furnished until after the date of the recording of this mortgage;

And the parties hereto further agree that the addresses of the Mortgagor and the Mortgagee are correctly stated in this mortgage;

21. The Mortgagee hereby covenants that upon compliance with all covenants and agreements by the Mortgagor, it will disburse the entire principal amount of the mortgage debt to, or for the account of, the Mortgagor;

22. That in the event of default in making any monthly payment provided for herein or in the note secured hereby, and if such default is not made good prior to the due date of the next such installment, or in the event of a breach of any other stipulations, agreements, conditions and covenants of this mortgage; then in either or any such event, the said aggregate sum mentioned in said note then remaining unpaid, with interest accrued to that time, and all moneys secured hereby, shall become due and payable forthwith, or thereafter, at the option of said Mortgagee, as fully and completely as if all of the said sums of money were originally stipulated to be paid on such day, anything in said note or in this mortgage to the contrary notwithstanding; and thereupon or thereafter, at the option of said Mortgagee, without notice or demand, suit at law or in equity, may be prosecuted as if all moneys secured hereby had matured prior to its institution. The Mortgagee may foreclose this mortgage, as to the amounts so declared due and payable, and the said premises shall be sold to satisfy and pay the same together with costs, expenses, and allowances.

23. The covenants herein contained shall bind, and the benefits and advantages shall inure to, the respective successors and assigns of the parties hereto. Whenever used, the singular number shall include the plural;

24. That so long as the Mortgage Deed and the said note secured hereby are insured or held by the Secretary of Housing and Urban Development under the provisions of the National Housing Act, it will not execute or file for record any instrument which imposes a restriction upon the sale or occupancy of the mortgaged property on the basis of race, color, creed or national origin.

25. Notwithstanding any other provision contained herein or in the note secured hereby (the "Note"), it is agreed that the execution of the Note shall impose no personal liability upon the Mortgagor for payment of the indebtedness evidenced thereby and in the event of default, the holder of the Note shall look solely to the property subject to this Mortgage and the Security Agreement between Mortgagor and Mortgagee of even date and to the rents, issues and profits thereof in satisfaction of the indebtedness evidenced by the Note and will not seek or obtain any deficiency or personal judgment against the Mortgagor except such judgment or decree as may be necessary to foreclose or bar the Mortgagor's interest in the property subject to this Mortgage and all other property mortgaged, pledged, conveyed or assigned to secure payment of the Note; provided, that nothing in this condition and no action so taken shall operate to impair any obligation of the Mortgagor under the Regulatory Agreement herein referred to and made a part hereof.

26. Ohio Revised Code Section 1311.14. The Mortgagee may, at its option, do all things provided or permitted to be done by a mortgagee under Section 1311.14 of the Ohio Revised Code, and any amendments thereto, for the protection of Mortgages interest in the mortgaged property.

27. Construction Mortgage. This Mortgage secures unpaid balances of obligatory loan advances to be made by Mortgagee to Mortgagor pursuant to the terms and provision of the Building Loan Agreement of even date herewith between Mortgagor and Mortgagee, the terms and provisions of which are incorporated herein as if fully rewritten. Said Building Loan Agreement obligates Mortgagee to advance to Mortgagor certain sums under definite and certain conditions, in a particular manner and at the times set forth therein, the total outstanding principal indebtedness of which, at anyone time, is not to exceed $31,800,400.00. The Building Loan Agreement may be inspected by interested persons at the offices of the Mortgagee. This Mortgage secures an obligation incurred for the construction of improvements to the mortgaged property and, as such, is a "construction mortgage" as said term is used and defined under Article 9 of the Uniform Commercial Code as adopted by the State of Ohio.

28. Future Advances.

(a) Mortgagor and Mortgagee intend that this Mortgage shall secure the unpaid balance of loan advances made by the holder hereof after this Mortgage is delivered to the Franklin County, Ohio Recorder for record to the fullest extent and with the highest priority contemplated by Section 5301.232 of the Ohio Revised Code. The maximum amount of all loan advances, in the aggregate and exclusive of interest accrued thereon and protective advances made as contemplated in subsection (b) below, which may be outstanding at any time, is Thirty-One Million Eight Hundred Thousand Four Hundred and No/IOO Dollars ($31,800,400.00). If and to the extent applicable, Mortgagor hereby waives any right it may have under Section 5301.232(C) of the Ohio Revised Code.

(b) In addition to the loan advances referred to in subsection (a) above, Mortgagee shall have the right, but not

the obligation, to make protective advances with respect to the property for the payment of taxes, assessments, insurance premiums, repairs, and maintenance costs, if any, and other costs incurred in the protection of the property as contemplated by Section 5301.233 of the Ohio Revised Code, and such protective advances, together with interest thereon at the rate specified in the Note from the date of each such advance until it is repaid in full, shall be secured by this Mortgage to the fullest extent and with the highest priority contemplated by said Section 5301.233 of the Ohio Revised Code.

[SIGNATURES ON FOLLOWING PAGE]

EXHIBIT A

Tract I -1.546 Acres

Situated in the State of Ohio, County of Franklin, City of Hilliard, lying in Virginia Military Survey Number 3022, and being all of the 1.547 acre tract conveyed to Jeannie M. Thivener by deed of record in Instrument Number 200702160028236 (all references are to the records of the Recorder's Office, Franklin County, Ohio) and being more particularly described as follows:

BEGINNING at a magnetic nail set on the centerline of Wilcox Road, on the westerly line of Virginia Military Survey Number 3022 and on the easterly line of Virginia Military Survey Number 3012, at the southwesterly comer of said 1.547 acre tract and at a northwesterly comer of that 33.619 acre tract conveyed to Beverly J. Wilcox, Successor Trustee by deed of record in Instrument Number 200702020020042, reference Franklin County Geodetic Survey Monument Number 6649 found South 06° 02' 50" East a distance of 379.76 feet at an angle point on the centerline of Wilcox Road;

Thence North 06° 02' 50" West, with the centerline of said Wilcox Road, the westerly line of Virginia Military Survey Number 3022 and the easterly line of Virginia Military Survey Number 3012, a distance of 274.95 feet to a magnetic nail set at the northwesterly comer of said 1.547 acre tract and at a southwesterly comer of said 33.619 acre tract, reference Franklin County Geodetic Survey Monument Number 4461 found North 06° 02' 50" West a distance of 1473.05 feet on the centerline of Wilcox Road;

Thence with the line common to said 1.547 acre tract and said 33.619 acre tract, the following courses and distances:

North 83° 56' 41" East, a distance of 244.97 feet, to a 3/4" iron pipe capped "Hockaden & Assoc." found, passing over a 3/4" iron pipe capped "Hockaden & Assoc." found at 30.00 feet;

South 06° 02' 50" East, a distance of 274.95 feet, to a 3/4" iron pipe capped "Hockaden & Assoc." found;

South 83° 56' 41" West, a distance of 244.97 feet, to the POINT OF BEGINNING, passing over a 3/4" iron pipe found at 215.03 feet, and containing 1.546 acres of land, more or less of which 0.189 acre is located in the right-of-way of Wilcox Road.

Iron pins set, where indicated, are iron pipes, thirteen sixteenths (13/16) inch inside diameter, thirty (30) inches long with a plastic plug placed in the top bearing the initials EMHT INC.

The bearings herein are based on the Ohio State Plane Coordinate System South Zone as per NAD83 (1986 Adjustment). Control for bearings originated from the Franklin County Engineer's Centerline Survey Plat of Wilcox Road, Drawing 0040-01, dated March 3, 2003 showing the bearing between monuments FCGS 4461 and FCGS 6649 as being North 06° 02' 50" West, established by the Franklin County Engineering Department, using Global Positioning System procedures and equipment.

This description is based on an actual field survey performed by or under the direct supervision of Michael O. Wanchick, Registered Surveyor Number 7854 in September 2008.

Tract II -34.472 Acres

Situated in the State of Ohio, County of Franklin, City of Hilliard, lying in Virginia Military Survey Number 3022, and being all of the 33.619 acre tract conveyed to Beverly J. Wilcox, Successor Trustee by deed of record in Instrument Number 200702020020042 (all references are to the records of the Recorder's Office, Franklin County, Ohio) and being more particularly described as follows:

BEGINNING at a magnetic nail set on the centerline of Wilcox Road (width varies), on the westerly line of Virginia Military Survey Number 3022 and on the easterly line of Virginia Military Survey Number 3012, at the northwesterly comer of said 33.619 acre tract, reference Franklin County Geodetic Survey Monument Number 4461 found North 06° 02' 50" West a distance of 710.00 feet on the centerline of Wilcox Road;

Thence North 83° 39' 38" East, with the northerly line of said 33.619 acre tract, and the southerly line of Lot 1 of "Britton Central Riggins Road, Wilcox Road, Lots and Easements Dedication Plat" of record in Plat Book 109, Pages 60-63 and Instrument Number 200607110135255, a distance of 931.48 feet, to a 5/8" rebar capped "H.G. Eng. & Surveyors" found at the southeasterly comer of said Lot 1 and on the westerly line of Lot 2 of said "Britton Central Riggins Road, Wilcox Road, Lots and Easements Dedication Plat", passing over a 5/8" rebar capped "H.G. Eng & Surveyors" found at 30.09 feet;

Thence South 06° 20' 41" East, with the westerly line of said Lot 2, the westerly terminus of Riggins Road (100 feet wide) the westerly line of Lot 4 of said "Britton Central Riggins Road, Wilcox Road, Lots and Easements Dedication Plat" and the westerly line of that 10 acre tract conveyed to Hazel J. Sanderson and James E. Sanderson by deed of record in Instrument Number 199802180036269, a distance of 1527.56 feet, to an iron pin set at a southwesterly comer of said 10 acre tract, and on the northerly line of that 4.242 acre tract conveyed to Barbara Trueman by deed of record in Official Record 6580I19 and the Northern Trust Company by deed of record in Instrument Number 200212060313779, passing over a 3/4" iron pipe found at 1061.87 feet;

Thence South 61 ° 56' 06" West, with the northerly line of said 4.242 acre tract and the northerly line of that 2.340 acre tract conveyed to Stephen T. Boles, Trustee by deed of record in Instrument Number 200007170140764, a distance of 681.24 feet, to an iron pin set at the southeasterly comer of that 0.834 acre tract conveyed to Stephen T. Boles, Trustee by deed of record in Instrument Number 200201070006463, passing over a 3/4" rebar found at 385.31 feet;

Thence North 39° 32' 11" West, with the easterly line of said 0.834 acre tract, a distance of 102.45 feet, to a point in a creek and passing over an iron pin set on the bank of the creek at 82.45 feet;

Thence South 71 ° 47' 15" West, with the northerly line of said 0.834 acre tract, a distance of 257.43 feet to a magnetic nail set on the centerline of said Wilcox Road, on the westerly line of said Virginia Military Survey Number 3022 and on the easterly line of Virginia Military Survey Number 3012 (reference Franklin County Geodetic Survey Monument Number 5542 found South 05° 59' 25" East a distance of 347.75 feet at the centerline intersection of Wilcox Road and Hayden Run Road) and passing over an iron pin set at 226.73 feet on the easterly right-of-way line of said Wilcox Road;

Thence with the centerline of said Wilcox Road, the westerly line of said Virginia Military Survey Number 3022 and with the easterly line of Virginia Military Survey Number 3012, the following courses and distances:

North 05° 59' 25" West, a distance of 329.22 feet, to Franklin County Geodetic Survey Monument Number 6649 found;

North 06° 02' 50" West, a distance of 379.76 feet, to a magnetic nail set at the southwesterly comer of that 1.547 acre tract conveyed to Jeannie M. Thivener by deed of record in Instrument Number 200702160028236;

Thence with the perimeter of said 1.547 acre tract, the following courses and distances:

North 83° 56' 41" East, a distance of 244.97 feet, to a 3/4" iron pipe capped "Hockaden & Assoc." found, passing over a 3/4" iron pipe found at 29.94 feet;

North 06° 02' 50" West, a distance of 274.95 feet, to a 3/4" iron pipe capped "Hockaden & Assoc." found;

South 83° 56' 41" West, a distance of244.97 feet, to a magnetic nail set on the centerline of said Wilcox Road, on the westerly line of said Virginia Military Survey Number. 3022 and on the easterly line of Virginia Military Survey Number 3012, passing over a 3/4" iron pipe capped "Hockaden & Assoc.", found at 214.97 feet;

Thence North 06° 02' 50" West, with the centerline of said Wilcox Road, the westerly line of said Virginia Military Survey Number 3022 and the easterly line of Virginia Military Survey Number 3012, a distance of 763.05 feet, to the POINT OF BEGINNING, containing 34.472 acres of land, more or less of which 1.012 acres are located in the right-of-way of Wilcox Road.

Iron pins set, where indicated, are iron pipes, thirteen sixteenths (13/16) inch inside diameter, thirty (30) inches long with a plastic plug placed in the top bearing the initials EMHT INC.

The bearings herein are based on the Ohio State Plane Coordinate System South Zone as per NAD83 (1986 Adjustment). Control for bearings originated from the Franklin County Engineer's Centerline Survey Plat of Wilcox Road, Drawing 0040-01, dated March 3, 2003 showing the bearing between monuments FCGS 4461 and FCGS 6649 as being North 06° 02' 50" West, established by the Franklin County Engineering Department, using Global Positioning System procedures and equipment.

This description is based on an actual field survey performed by or under the direct supervision of Michael O. Wanchick, Registered Surveyor Number 7854 in September 2008.